All Forum Posts by: Ray Li

Hi, in 2018 I moved some of my properties under my personal name to a single member LLC in the middle of the year. Should I be reporting rental income & expenses separately during the two time periods, (before and after moving them to LLC) or can I just report the whole year of income & expense together under the LLC?

Thanks,

Ray

I'm trying to buy a property where the seller wouldn't provide a land survey report or pay for one. Weird. So I contacted a land survey company immediately after due diligence myself to have they come out. The seller also asked for a quick closing, so I didn't have much time for inspection.

I talked to the land survey company on Tuesday, and they said they will come out to take a look and then give me a report by the following Monday. I needed the report by Wednesday that week, before due diligence period ends, so I thought that would be fine.

 I called again on Monday to see what's the status, and they said they missed something when they first went out, and have to go out again the next day. I told them I needed the report by Wednesday, and they said okay. I called again on Wednesday, and they said they're still working on the report. I told them I needed the report by end of day. I didn't get a report until Friday. By then I've already terminated the contract with the seller because they wouldn't renegotiate based on other issues I found with the property.

And the land survey company still demanded a full payment after they delivered report late.

Is it normal for land survey to take this long? Am I being too demanding asking it to be done faster?

Everything with the land survey company was done verbally on the phone. Next time I will know to have it done in writing, including the deadline I need it by.

@Peter M. I talked to a few of the local banks, and most of them wouldn't lend to out of state investors. That's why I'm trying to see if I can qualify for a Fannie Mae loan.

@Michael Swan Thanks for the advice. I've actually read Multifamily Millions a while back, but I will definitely re-read it again sometime soon. If I invest in a syndication as a passive investor, would I be able to participate or join in on the purchase and due diligence process? That's why I prefer to buy as an active partner, that way I can l actually go through the process with somebody experienced.

Thanks,

Ray

@Peter M. From what I heard, commercial loans require you to have a net worth of at least the loan amount. If I get two loans with an amount of a million each, does that mean I need a net worth of $2 million?

@Account Closed Yea that's one of my options, the issue is to find a local partner with just the right amount of experience. People with too much experience wouldn't bother to work with small fishes like me.

@Max Gradowitz Thanks! I will definitely take a look at that area. My issue with California is the tenant-friendly laws right now.

@Ian Ippolito Thanks for the input. I am definitely planning to invest in a few syndication deals. I would really like to do both at the same time though, this way I can learn about how larger deals are syndicated, and at the same time buy my own smaller apartments for the operating experience.

Thanks,

Ray

@Jeff Kehl

Thanks for the reponse!

The way I see it is that if I get a commercial loan either by myself (#2) or with a partner (#3) I'm putting down around $300k plus some rehab costs, that's still around half of my liquid asset and net worth.

I'm also planning to invest small amount in different syndication deals, as a way to learn how larger syndications are structured.

Thanks,

Ray

I sold my personal residence in California last year, and I'm looking for the best way to invest the money. I have two other residential investment properties, and I'm thinking about investing in commercial multi-family (5+ unit) properties out of state at this point. I'm not sure what's the best approach for me though.

I currently have about ~1.1 million of net worth, with about $750k of liquid assets. The way I see it I have the following options.

1. Purchase a small apartment complex (5-10 units). I should have enough cash, and I can maybe get some private loans if necessary. This way I won't have to worry about commercial loans, and I can get a few years of commercial property experience when I buy my next property. 
2. Purchase a 15-20 unit property, around 1 to 1.5 million. I've talked to a few DUS lenders, and they said that if the property is good enough, I should be able to get a Fannie Mae commercial loan, given my financial situation, even if I never had a loan before. Even if I put down a 25% down payment, I would still have 30-40% liquidity in terms of my total net worth, which should be pretty strong.
3. Find a local high net worth (or at least around the same as me) local partner, familiar with the area who also has some experience with small apartment complexes and commercial loan. We would split the initial capital 50-50%, and split the equity structure 40-60% (with me being 40%, since I don't have that much experience). Is this a fair structure? This way we can aim for a 40-50 unit property around 2-3 million purchase price.

Let me know what you guys think. Which approach makes the most sense for somebody in my financial situation?

Thanks,

Ray

@Nick B. @Anderson Schulle

Great! Thanks for the information! Definitely appreciate it. I'll try reaching out to them

Thanks,

Ray

Is there a limit on the number of loans on a property? For example, if I take a loan from 10 different friends and family members, all secured by the property that I'm buying, is this something the title company would accept at closing?

Thanks,

Ray

Hi, I'm looking for a commercial real estate agent in the San Antonio area who specializes in small apartment buildings. I currently own a few residential properties, and I would like to start looking at 5-10 unit properties as a way to learn more about commercial real estate investing.

Let me know if you guys know anyone you'd recommend in the area who can help me with purchasing.

Thanks,

Ray

Hi, I'm looking for a commercial real estate agent in the Dallas / Fort Worth area who specializes in small apartment buildings. I currently own a few residential properties, and I would like to start looking at 5-10 unit properties as a way to learn more about commercial real estate investing.

Let me know if you guys know anyone you'd recommend in the area who can help me with purchasing.

Thanks,

Ray