All Forum Posts by: Robert Leonard

Welcome aboard Johnny! Read, read, and read some more. You have to do your homework.

I highly recommend you listen to the podcasts and take notes while you do. Hover over "Learn" on the top tool bar and click on "Podcast." They are like short courses on different investment strategies and philosophies of active investors. I didn't check this, but I think its show 11 that's about "The Ultimate Beginner's Guide" - that would be a good place to start.

How did you come up with your ARV?

You use the term ARV - after repair value, how are you estimating the repair costs?

How did you find the property?

What is your exit strategy - do you want to buy and hold the property?

What type of loan are you trying to get? If you want to buy and hold, you will need to have some credit unless your family member wants to be the bank and offer you long term financing. It may be worth it to them if they have their money in low return accounts like CDs or money market accounts at less than 2%.

One clear lesson from this situation is "Be very clear about what items are RESERVED (not sold with the property) when listing a property for sale."

An addendum is a document used to make a change to the terms of the purchase sale agreement. It's signed by both parties and prevents the need to rewrite the whole contract for this type of change in terms.

Your seller friend has to explain the oversight of this item that is very significant to the buyer. Then offer an allowance of maybe $1800 for the purchase of another washer/dryer?

Look for a way to make the deal work, not a way out of the contract. Even if he has to pay up $2500 dollars, how much will it cost him to hold the property another 2-3 months?

That's excellent advice from @Brandon Turner

Congratulations Sir, and welcome to LA. I retired in DEC 2012, after 24 years, and I'm now a full time REI here in LA. I've owned rental properties over the last 20 years and always knew I was going to be in the RE business when I retired. I live in Lafayette, but I recently purchased a couple properties in CENLA and I'm spending a good bit of time here during the rehab. If you would like to check out my project or just grab a coffee and talk strategy, drop me a message at [email protected]

CSM (RET) Robert Leonard

Licensed LA Realtor

This is just another example of the "devil is in the details" Ky. There are two parts of your question that I'll address separately.

The first part is about your family member who has a "retirement account" who wants to lend to you. Is it a 401k, IRA (Roth, Traditional, SEP, etc.), 403b ... there are a lot of different kinds of retirement accounts and the best answer is going to be determined by which type of retirement plan they have?

How is this possible without going through an intermediate? Well, that's where the ways different custodians or trustees (that's the intermediate you're talking about) set up self directed IRAs. This is where you'll have to do some homework to find out which option is best for the type of plan you have and your investment objective(s). An SD-IRA service company, like ETC, sets up the account owner's account where they hold the funds and you submit requests for funds when you want to make a real estate investment. That's why I prefer the way Guidant Financial does it. They set up a custodial account, then my funds were transferred to an account (that I opened at a local bank) owned by my SD-IRA owned LLC. As the SD-IRA account owner, I manage my funds like any other LLC, but within the limitations of SD-IRA rules. I don't have any fees for every transaction I make.

This is an advanced investment strategy and if you found that difficult to follow, you may not be ready for this yet. To the novice, it sounds complex, but it just requires attention to detail and the ability understand and follow the rules. In LA, the annual fee is $30 for an LLC, so I'm not dealing with any outrageously high costs of maintaining an LLC. It's extremely efficient the way it works for me.

I've never bought a mobile home, but as I understand it, it works like an automobile and with automobile sales in LA, the owner has to sign a bill of sale and the title in the presence of a notary. Hopefully someone with mobile home experience can give you the right answer, but that's all I know. Good luck!

I use Guidant Financial for my SD IRA. I like that you have a thorough training/education component to start. Plus they include a mandatory legal consultation as part of account setup. Their upfront account setup fee is higher but it's a fixed cost. Thereafter you have a low annual fee($150) that's not based on the value of your assets. I write a check at the moment I need funds from my SD IRA owned LLC's checking account - I don't have to fill out paperwork to ask somebody to please send me some money. It is definitely a "big boy" account and you have to know the rules. But I am confident that Guidant Financial did a great job setting me up for success!

Joe,

I was in agreement with that idea until I listened to, BP Podcast 028: Note Investing and Raising Private Money with Dave Van Horn (if I were a little smarter, I would have hyperlinked this?) and I looked at a lot of the material on Dave Van Horn's website. I like the idea of using some of his strategies primarily because of his focus on diversification. His strategies offer a lower entry price point too.

Marion D, I definitely recommend you check out that podcast here on BP if you haven't already!

I took his 4-day course in June and I would recommend it. His course covers the full gamut of 1st, 2nd, Performing and Non-Performing Notes. I haven't bought any notes yet, but I definitely will when I'm not tied up with other projects. I think it's an advanced level of investing and you should only get involved in it if you are very good with determining market value of properties any where (either on your own or with the help of realtors).

The notes come available nationwide and you will see "deals" that have sketchy valuations. That same thing (questionable valued deals) happens in all kinds of real estate deals you'll come across, but it's just easier for you to get burned if you are trying to invest nationwide.

As you can imagine, there are buyers that are way ahead of us who cherry pick the most desirable notes. Scott is a trustworthy guy who will give you a very good grasp of the processes and the business of note buying. His class was full of people who are active note buyers that will give you a network of note investors as a bonus!