All Forum Posts by: Rhett Z Begley

@Nicholas H. I’ve been working with Christian Phillips at ReMax for about ten years now and he’s fantastic. Knows the market, always gives his honest, non-sugar coated opinion. Definitely give him a call, www.christianjphillips.com. Let me know if you have any specific questions or would like to hear more about my experience with his team. 

@Natalie Kolodij thanks for the clarification! That’s much better news!

@Natalie Kolodij thanks for the reply. I was under the impression that under the new tax laws HELOC interest was only deductible if the HELOC was against your primary residence. Is there more to it than that?

@Dave Foster thank you for the detailed response, I just want to make sure I correctly understood what you explained. Just to use easy numbers, say the house is worth 200k, I have 100k equity, and a 50k HELOC. I'm planning to list the house for sale (to do another 1031X) toward the end of the year, maybe November. I'd like to use 30k of the HELOC in the next 30 days for either a downpayment on another property or toward a rehab. So if I spend 30k, then I sell the house for 200k it would pay off the primary note for 100k, then the HELOC for 30k, and leave me with 70k to put down on the next property? And that next property just needs to have a purchase price of more than 200k?

BP, I have a property bought using a 1031 and I’m looking to do another 1031 to upgrade to a small multi-family. I currently have a zero-balance HELOC on it. If I use the HELOC (say, 20k of a 30k HELOC), can I still sell the property and do a 1031 or do I have to pay off the HELOC first? Thanks! Best, Rhett

Good morning BP! As we ramp up our real estate investing business (LLC), are there any SEC regulations to consider? I’m specifically concerned about the following: 1) Compliance with state/federal regulation of investment advisers. (determining the best fit for potential investors, e.g. based on their apetite for risk and how long they’d like to invest, would a rehab or a longer term buy and hold be more appropriate?) 2) Whether or not advertising on my own website constitutes a general solicitation to the public for a securities offering. 3) Whether or not I need to be registered as a broker-dealer for providing investment advice with respect to recommending the purchase or sale of securities. I absolutely plan to consult my attorney on these questions but I’m also looking for some experience based answers and a place to look some of these things up in black and white in order to have a more productive and informed discussion with my attorney. Thank you everyone! Best, Rhett

Skyler,

I went to a BP meetup hosted by @Melanie McDaniel (they’re great, I recommend going) and the topic was contractors. There were three there and it seems that on the lower end, a new construction house would run about $75 per square foot, but I’d lean closer to $85 -$90 to stay on the safe side. Your goal is laudable and I’ve often casually contemplated the same question. If you’d like to discuss it further I’d be happy to chat.

Best,

Rhett

Lisa,

Good choice, @William Brown is absolutely correct. We ran the numbers, they looked decent then drove by the place and through the neighborhood. That relatively short drive was rather illuminating; the neighborhood was pretty bad and the place needed much more than just a roof. Monthly expenses will always be low when you don’t take care of a property, which was clearly the case. 

Happy hunting!

Rhett

@Alina Trigub thanks for the advice on syndicates, I believe my use of the term shows my inexperience. We are looking to purchase the property with an existing LLC (or transfer it to the LLC after purchase) with the investors (and the LLC) combing funds to total the 30% down payment. The LLC will pay out investors a monthly interest payment which will go on the books for the LLC as an expense. Based on the responses I don't think that what I've described is a syndicate.

@Taylor L. I've been in contact with an attorney but not yet specifically about this deal since it just came up this weekend. I saw that the down payment (~30%) on an 850k asking price was about 255k and wasn't confident that I'd be able to scrape together enough funds, but luckily I've fostered some pretty good relationships and it wasn't as difficult as I thought. I'll be contacting my attorney tomorrow about it to get smart on the structure and legal considerations. I have a solid property manager that I've been using for ten years, and the reno is relatively minimal at this point (haven't been into the units yet but based on the the pictures it would be minimal repairs and updating as desired), mostly cosmetic stuff outside and in the common areas. We plan to use all of the net from the LLC to renovate the units over a few years. I don't think we're going to be able to come up with enough capital to do it in one shot. I don't have much experience determining property classes, but my best estimate would be a Class C based on the fact that it was built in the early 1900's. Although it's Class C, it's in a wonderful neighborhood (I actually lived there about 10 years ago) only a few blocks from some of the more popular bars and restaurants in Norfolk.

@Cory Hoffman I would be very grateful to speak with you about how to work a deal like this since I think that what you've described is more in line with what we're trying to accomplish. I don't start my new job for another week or two so I'm pretty flexible. Please PM me so that we can coordinate a time that works for your schedule. 

BP,

We've found an 8-unit with great numbers and we've got enough investors lined up to make the 30% down on the property. 

Now what? I'm looking for some help with what happens next, as in what will the banks be looking for, how the loan will actually be structured, how do I actually accept everyones money and pool it for the down payment, etc. If you are local to the Norfolk/Virginia Beach area I would love to take you out to lunch or dinner to discuss. Otherwise I'd really appreciate getting on the phone with someone. 

Thanks for the help!

Best,

Rhett

I don’t see a date anywhere...