All Forum Posts by: Robert Mack

Jason I don't think there is a simple answer to whether to include your spouse or not.

in NJ my CPA told me that if I have more than 2 people as members of the LLC that it costs $150 per person to file per year I believe, but if you have only 2 then it is $125 total.
I am one member and at first a husband and wife were going to be the 2nd and 3rd members.
Since they file their taxes together, tax wise it doesn't affect them if only one person is on the LLC both still get the benefit the way I understood it. So we just had the wife sign as a member of the llc because she is the one who does the accounting and check writing.

The husband however now can't sign anything for the llc etc..

Consult with your REAL ESTATE EXPERIENCED attorney & CPA and explain exactly what you are trying to accomplish with your business structure. They should have a much better answer for you.

If you don't know of any find your local REIA's and ask around to see who everyone is using.

J scott has some good interview questions to ask your CPA on his blog 123flip

Make It Happen

Just Do it

I agree with Brian. The basic standard formula is 70% of arv - rehab = max purchase price. If you're wholesaling take out your profit also. BUT as Brian also said, everyones going to have a bit of a different way of looking at deals so get to know your buyers.

When you'r evaluating a deal, always look at a worst case scenario and see if you can live with that.
You say it COULD sell for $60k. What if it doesn't? Figure out the firesale price of the property - what'd it take to sell asap and then where would you be if you had to sell at this firesale price, sinking or swimming?

B and E

I am currently looking into both for myself.

Originally posted by nationwidepi:

Robert,
Unless you are sure you can get out in 3 months, don't make it for that short of a term. Make it for 6 months letting them know you usually get out in 3.

Are you usually on the hook for the 6 months even if you get out in 3.
If you are on the hook for all 6 no matter what, have you ever negotiated a contract where you just pay 1% monthly with lets say a 3 month minimum and 12 month maximum and then pay the investor for just the months you had money borrowed?

This is probably a dumb question, but lets say I want get a loan of $100k for 3 months. That 12% is an annual rate, so I'd be paying the private money guy 3% or $3,000 for this money? What if I go over the three months and it ends up taking 4 months to get his/her money back? Do private investors usually like to have a penalty for that or will I just pay an extra $1k and owe $4,000 total?

Thanks.

Like everyone else said, there is no profit in these deals.

What is the median and average SALES (not list) price in your farm area? Do you know what people are buying and at what price range?
I'd personally target homes that are in the price range of first time home buyers for your area. These are the people who are not underwater now or in foreclosure. They are also more likely to get financing.

Originally posted by Tod Radford:

Thank you all for your words of wisdom.

I assume I would have a separate lease for each tenant, acknowledging that there are other tenants?

Our landlord made us sign one lease with all our names on it, and he wanted once check from us. This way he wasn't chasing around 8 kids and getting 8 different checks for one property.
Just make sure you clearly explain and that it's in the contract that just because one person doesn't pay doesn't mean you send in $400 less dollars that month and that one person gets a late fee.. it's all or nothing and eviction...

I'd try to find some current landlords in the area and take them out to lunch.

Every college and college town is going to be different. I haven't heard of colleges making students live on-campus for two years, but I have heard of colleges, mine included running out of space and needing hotels to accomodate students...

You can start getting familiar with the college now, check the admission rates, student size, what students are renting etc..

Rutgers is my school, and we always signed 1 year leases June-June and rents basically go for about 400-500 per person depending on the quality of housing.

I personally wouldn't buy in a college town if I had it set that I was going to sell in 4-5 years because what if the market is still sagging and it is not profitable to sell? If you are OK with holding longer then I say try to find something - if you can find something.

Vacancies in the Rutgers area are also very low because demand is high. My landlord while I was in college hadn't had a vacancy for over 10 years and other I have talked to said the same..

I think what you can gather from all the posts is every college town is going to work differently, you need to figure out how your specific target area runs.

I think you should start out part-time until you get more than two months worth of savings.
I don't do wholesaling but I think as with other parts of REI, there is a learning curve and it can take a little time to get going, but after you've done a couple deals and have your systems and processes in place, it gets easier and easier.

I also think it's very realistic to start part-time and then when you have at least 6 or more months of savings maybe think about going full-time.