All Forum Posts by: Rajat Chopra

I have a few real estate properties that I rent out. I inherited these rental properties from my family. I am thinking to add more if possible in the future as well.

Is it possible to create a Trust that will own these real estate properties. If so, do I need any special document or to meet with a lawyer to create the Trust document?

Also once the Trust is created, how do I create a bank account? Do I simply tell the bank I want to open a Trust account and show them the Trust document?

Are there any special considerations to know about? Thanks in advance for your help

I have been investing in different kinds of real estate vehicles - mostly passive ones and have sort of stumbled upon an idea.  I was thinking to put together an Investment Offering of sorts but wanted to get initial feedback from others on whether this is something that would be appealing as an Investment Offering or not. 

General Overview

An RE Investment firm ("Firm") creates private mortgages with individual home buyers.  The Firm targets home buyers who do not have good credit but generally speaking they have cash savings and good jobs or businesses.  The program would allow such Home Buyers to find their own home that they want to live in.  Then the Firm would purchase that home and create a 30-year Note to lend the home to them at 9.9% Interest.  Once the Home Buyer finds the home they will put 15% down payment in escrow to express their interest in the home.  The Firm will seek to source the remaining capital from Investors to purchase the home to create the Note to lend to the Home Buyer. 

Investors will receive 8% Return paid out monthly.  The duration of the investment will be for 30-years - or until the Home Buyer pays off the Note, whichever comes first.  The Firm will make sure the investment is secured by Trust Deed and Promissory Note thereby securing the Investor's investment as well. 

Just wanted to see if this idea has any merit and if anyone thinks that investors might be interested in this type of investment.

Most of my income is currently W2 income from my companny. However next year there will be a portion of my income which will also be interest income (simple interest received on 1099s or maybe K1s). So if I decide next year to purchase a home using an FHA loan, will I be able to show my interest income from 1099s as additional income to help me qualify for a higher home price? Additionally, what if I get to a situation where more than half of my income comes in on 1099s and K1s (rather than W2)? Will FHA allow me to qualify for a new home purchase based on the mix of my W2 and 1099 income? Will they only count my W2 income or will they look at all sources of income on my tax return and qualify me based on all sources of income?

I am getting ready to file my taxes for 2016.  I am filing them late due to a few reasons. I think my accountant will file them by mail (paper filing method). 

Does anyone know how long it will take for the IRS to have received, processed and entered my tax return?  I may apply for a home loan and want to know about how long it will take for the return transcripts to become available. 

@Nikos Michalakis wanted see if you had any updates. I think the year you invested has ended  so just wanted to ask you overall experience with them now that you have been with them for a while. 

Did they deliver everything to you that you expected?  Did they ever miss a payment or scheduled communication update or anything else?  Would you do another deal with them or would you recommend them to others?

The water bill includes sewer and trash

Yes I forgot to put down vacancy and maintnenance - thanks

There are 2 points made about rent increases. I want to have cashflow right away from the beginning so I am hesitant to increase rents right away as a new owner. I interviewed several people that live in that neighborhood and they all told me the same thing - that new owners always increase rent and they would move out if a new owner came in and increased rent. When I told them I would not increase their rent they seemed to listen and said they would not have any problem staying on. 

So because of that my plan is to keep rents the same. I dont want to have added expense right away of fixing up a vacant unit and losing out on rent.

I do see the advantage of increasing rents however. Especially being a new owner with a property producing below market rents. I still have not closed yet so I may reconsider with my agent and property manager.

I am looking to purchase a 4 Plex that looks as follows:

Purchase Price - $249,000

Rent Collected = $3,150 / month

P&I - $955 / month

Taxes - $400.50 / month

Insurance - $218.67 / month

Water - $160 / month

Property Management (optional) = $315 / month

Landscaping - Handled by Renters

Deal Structure - 20% Down and Conventional Financing 

Projected Cash Flow = $1,100.83 / month

This is the best deal I have found in the price range I am looking for so far.  Since the renters are already in place, I hope that with a smooth transition I can take over as a new landlord.  I would promise them no changes in rent since they handle the landscaping already. My only concerns would be the renters themselves - I hope they will pay rent on time each month - but I won't find that out until I am the owner. Also the area is not the best - probably a C- or so - but I grew up around there so I am familiar with things already.   

As they move out, I plan to renovate each unit with vinyl plan tile, fresh paint and update bathrooms and kitchens.  I believe there is room to increase the rent and these upgrades would justify that for any new tenants. 

Even if they do not move out for a while, this is still the best deal I have found so far. 

Would appreciate feedback on this deal, how it looks and if there is anything I should do further checking on. 

A few months ago I was interested in a multifamily I found on the MLS. I called the seller directly and he told me it was a good property but would only accept cash because the original buyer's funding did not come through.

Fast forward a few months later and I saw the same property listed for $11,000 less.  Now I have an agent and I asked the agent to call.  The agent told me the property was in need of repairs and that the seller would only accept cash because if any  mortgage company gets involved they would not sanction the loan due to the property not appraising as high.  So for that reason the seller did not want to get any buyer with a loan only cash.

These 2 stories are very different and I am a little surprised. 

I'm a little confused about How/Why the seller could avoid telling me about the repairs needed but instead tell the agent more detailed information.  Also I am wondering if this means that I should not contact sellers directly about the properties and just use agents to get my information?