All Forum Posts by: Scott Lieberg

Consult your attorny and accountant. Do it right.

Your comment 'I have gotten my license so I could buy / sell / invest for my self as well as work with clients on the side'. 

First, if your intent is to run your own portfolio commission free through KW, that begs the question, what do you bring to your broker ? 

Second and more troubling "as well as work with clients on the side". On the side of what? Outside of your KW contract? Outside of your AZ state regs governing you as a licensed agent of your broker? Outside of your REALTOR ethics? Outside of your E&O?

At some point, sooner or later, you might reconsider why you licensed in the first place. Meanwhile, pay your broker the commissions due and run everything by the book. Good luck.

The federal plan to rezone the Suburbs to higher density Multi-Family Housing was outlined on Fox News by Tucker Carlson this evening, using federal dollars, awarded or withheld, as leverage. 

The comment was made about joining MLS. If your Broker is an MLS member, you likely will be required to join. If your Broker is not an MLS member, you probably won't be allowed MLS membership. I do not know of any areas operating MLS differently, but it's a big world.

MLS has public access links, so if this is your only driver to being licensed, maybe evaluate your needs to license.

For real estate practices focused on business opportunity sales, C and I, large units, tract land, and other niche markets, likely MLS will be an un-neccessary tool and expense.

Congratulations on your first deal.

You are right to be concerned about asbestos, lead paint, the rent moritorium, and septic issues. 

Lead paint and asbestos should be inspection contingency issues. Have the costs in hand to mitigate before releasing your contingencies. Septic inspection is routine and just needs to be evaluated on cost to repair / replace. Explore the tax credits of energy efficient windows as a partial offset to the retrofit of those items.

Any rent moritorium is beyond your control. Is it local, Covid, or what? If the outcome is not apparent, consider changing markets. Again, congratulations for having the courage to step up. 

I was a contract FEMA inspector after Katrina and Wilma. Also on an SBA Federal Disaster Recovery team in Iowa, Upstate NY, Hurricane Ike and plenty of other Presidential declared disasters.

First know how deep the water was. In some parts of hurricane surges, people drowned in their attics. Assuming the water was less severe, look in the water heater closet for the water mark. Rising water seeks it's level through out the neighborhood - ask 2 or 3 (or 10) other owners. Wall plugs are at 12 inches. Floor heat, crawl space, hardwood floors, AC units on pads are all considerations. Drywall needs to be stripped out and comes in 4x8 sheets. if the damage is less than 4 feet, strip out the drywall to 4 feet and start there. Heavy flooding can bring settling and structural problems. Don't miss Kitchen cabinet replacement. Mold and mildew are almost a given.

Seepage can compromise basements, windriven rain can cause incredible roof damage. 

Unless you have deep pockets, are in your investment for the cleared land costs, are a licensed General Contractor or have magic powers, consider alternative investments, upsides and ROI. Post Disaster, the wind and flood maps may be redrawn and re-rated for insurnce. Can you even rebuild? what will the RE market look like? Do you have schools, jobs, services, neighbors?

I was in Slidell, LA after the BP Oil Spill and they just dedicated their new high school, 5 years post Katrina. Bolivar Pennisula, TX is rebounding, albeit completely different from pre-Ike 13 years ago.

In the Flip side, housing that can be put back in service quickly, may be renting and selling at above market with premiums due to so many residences lost or off-line. 

I don't know your situation or risk tolerance, but be aware, be informed, be successful. Good luck.

Your plan sounds good, providing you can replace your current housing and qualify for the new loan. Usually your conventional lender will also underwrite your stable income and discount or not consider your unseasoned rental income. Get prequalified with your lender on your replacement housing before you offer you primary residence as a rental. Hope your plan runs smoothly,

Use your equity in your primary residence through a HELOC to buy and sell your rentals and flips. These funds coupled with the non-owner conventional loan were at a much lower combined rate and costs than private or hard money. I closed 3 rentals in Texas in about 45 days with the same lender. Wired the funds for the down out of my HELOC. Vvery simple, straightforward.

A good accountant can save you enough in taxes and entity structure to pay for your lawyer. I use my accountant to stay on top of my quarterlies, LLC Payroll taxes and SEP contributions.

Most of the time, your RE agent will use standardized purchase agreements already legally vetted and the Title company / escrow will draw the deeds and vesting documents. These standard practices frequently minimize the need for lawyers in acquistions. I recently closed 3 personal transactions as a Seller in Texas, which requires attorney closings. This is a flat rate charge and a just another transaction cost.

My attorney reviews our LLC transactions, drawing drawing the purchase sale agreements and Private Placement Memorandums for most of our equity LP/GP transactions and we monitor his involvement closely throughout the process to control sunk costs.

There is a place for both in your real estate practice, but drive your nails with the right size hammer. Good fortune.

Todd Dexheimer - Thanks for your https://www.biggerpockets.com/...comments. I didn't understand your frame of reference for your advice. Specifically, "They may tout their platform as having so many accredited investors and that they have raised millions upon millions, but the fact of the matter is that this is still a trust and relationship business. I don't mean to discourage you from using those sites, because they will help you bring in some funds, but understand their limitations, so don't expect to have them bring you $5MM to $20MM."

Our frame of reference is that for the particular project we contacted them on was a $100MM value add for 240 MF units. We had $70MM debt equity in place. With our track record of raising $1.1B, and 100 years combined experience between the 4 of us, and combining with capable Co-Equity GPs (with Billion dollar plus annual investment needs), we do expect raises of $5MM to $20MM by these companies on our behalf. As to trust and relationships, like with every investor you establish and build your brand. Their participation going forward, as with any Sponsor, will be a series of progressive raises based on success.

Can you share your experience tapping the crowd sourcing capital channel, as you have certainly enjoyed earned success? Thank you.