All Forum Posts by: Sharon Tzib

As a wholesaler, you rarely take title to a property, so I think this is an unnecessary expense. However, once you start flipping, absolutely get an LLC and title your houses into them for the duration of the hold. This is not only good for liability but tax strategy as well.

As always, you should be consulting a CPA in your state for the final word.

Contractors/handymen aren't employees, so it's not like he lied on an application. And I'm sure it never came up in conversation or you would have mentioned it in your intro, so it doesn't seem like he was hiding it intentionally from you.

Everyone makes mistakes in life. The fact is, he's being doing fine work for you before this. He probably has learned his lesson and just wants to move forward. Stopping his livelihood will not help him do that.

I would, however, do two things. First, let him know what you've found out and get his side of the story. At the very least, he is now on notice that you know so that he can be sure to perform even better than before if he wants to keep his job. Second, make sure he is bonded/insured. If anything should happen, you don't want it on you.

If you just can't sleep at night over this, then keep using him on the flips only and not the student projects. Let us know what happens.

Well to be truthful, an experienced landlord would have never bought the building without conducting a unit by unit inspection, at which time they would have discovered the obese tenant and existing damage. At this point, all they can do is proceed as Andrea above so competently outlined.

I'd tread very carefully here. Attempting to evict anyone due to their weight could be considered discrimination in some states.

One idea that pops into mind is perhaps if the tub area does have water damage and needs to be pulled out anyway for repairs is to perhaps install a shower with a seat instead. Easier for the obese tenant to access and use a shower than a tub, I imagine, and eliminates the strain his weight is putting on it and future risk to tenants below, as long as it's not too cost prohibitive. Having one unit with a shower only I'm sure won't be a total deal breaker for future rentability.

Good luck.

Awesome advice, Robert!

@Michael Power where are you finding Theresa's book for free?

Kevin, are you asking if you bought a multi family with a loan that had a 5 year balloon, what would your exit strategy options be? Please clarify - your question is a bit confusing.

Ok, so basically you're selling it for FMV less your commission, correct? I think most investors are going to want more of a discount than that to take it off the seller's hands quickly, as-is, for all cash so she can be on her way to her new job, imho.

It definitely cash flows, especially if someone pays all cash (and even if they don't, but then again I assume your target buyer isn't getting a loan, or the seller may as well put it on the MLS and get the highest and best bid). Your target buyer is definitely a buy and hold landlord since there's no value add, which will limit your pool.

Personally, I'd try to get her down another $10K if she really wants to sell quick.

Thanks for responding to my questions, Brian. I'm so glad to hear C Classes aren't trading for $45K per in Houston (I almost had heart failure and was gonna start looking for a new area lol!). I had been told about $20-25 avg, so $10K and up is wonderful - I'll probably stick to C+'s cause I'm w/ you on area. My bad for doing the math with an "all in" number.

Now that I know what you paid, the impounds don't sound low at all. I was using a much, much higher PP when I calculated that. Makes perfect sense now. Again, really appreciate you breaking this down - exciting stuff for you!

Hector, what are the comps? Can't really answer your question until we know that. Thanks!

Wow, Brian, congrats! $45K/door for a Class C. Is that the range you're seeing in Houston now for this asset class?

Can I ask some ?'s re your expenses:

1. I imagine if this wasn't a Reg 506D your entity formation and legal fees would have been less?

2. Why did you have to pay legal fees for the lender?

3. Was the lender's impound account for interest? It seems too low for taxes in TX.

4. How much would you set aside for reserves, and what portion of that would come from security deposits?

5. How long from start to finish did this deal take you?

Thanks for taking the time to share.