All Forum Posts by: Roger Poulin

@Cynthia K. Anderson Do not spend that kind of money on a so called expert. Even worse, when you sign up for the coaching program, you don't get to talk to the expert.  You talk to a guy that is reading a script, and they say. "since you have done A, B, and C, now you should do D." Save your money for finding and doing deals.  There a is a great group here in town that has all the resources you need. They will tell you the same as the guy with the script, and even more. The web site is REINTN.ORG and I would suggest starting by going to the general meeting on the second Monday of each month (Aug. 8 is the next one even if it is not on the site yet).  I will be glad to meet to there and introduce you to a few people. 

How far away are the comps?  There are parts of Memphis that that go from very nice to war zone in less than a quarter mile.  What are the codes issues? Is there other rehabs in the area?

I ask because a number of people have bought MF in Memphis thinking they would fix it up, only to learn that nobody that can afford to pay will move in because the area is unsafe. 

You will have to show you can cover the payments to the owner and on the rehab (at least the interest).  Do you have a plan for that?  Where is the property in TN?  If one of the bigger cities, what neighborhood?

You should call the local water authority for that. It can very greatly from town to town, because there is a water authority / company / board for each town usually. 

BTW - $50k / unit seems high for rural Tennessee, unless it has some other amenity (i.e. they are new, or include extra land or retail space you didn't mention.  Verify all the numbers you are getting from the seller.

@Albert D. you are correct. If your corp, LLC, LP, or whatever owns a property in TN you will have to pay Franchise and Excise tax regardless of where that entity is formed. If it is out of state (Delaware) you will also need to register as a foreign corp. and incure that extra expense. You can avoid the F&E by owning it your own name, but that makes you personally libel. If you own Property A and someone breaks a hip because the hand rail on the steps was not secure they could sue you you and go after assets in your name (Property A, Property B, Property C, etc.) until the debt is satisfied. This is not true if each asset is held in a different entity (Prop A LLC, Prop B LLC, Prop C LLC). Doing this can get expensive, so you may want to hold a few properties in each but limit exposure. BTW, the people I know the have multi-fam, are all in LLCs.

I now a good CPA in Nashville that does a great deal of work with RE investors.  Message me if you want his contact info.

My list may be old. When I google them, it comes back with KnoxREIA. I was going by a printed list in the back of a book.  Sorry.

All the above advise is sound. Invest time in your education. There is a group in your area called Knoxville Real Estate Investors Group (KREIG), I suggest you look them up in Google and attend a few meetings before you take action. Collect lots of business cards; especially cash buyers, private lenders / hard lenders. 

The buyers may become your customers once you find a good deal. You may be able to assign the contract to one of them and collect a fee without ever owning the property (called wholesaling). You want to do that a couple times a year though, because the board of realtors may come after you as an unlicensed agent.

The private and hard lenders will loan to anyone quickly, if the deal is a good one.  Side benefit is you get an experienced opinion on your deal.  They charge big fees, but if the deal is good enough it is worth it.

Go to a small-ish regional bank, and get pre-approved. Tell them what you want to do, and say you want to be able to act quickly. Do the application. Have them pull your credit, job history, etc. and they will tell you how much you can barrow and the terms. When you find a deal, they will add the property price and address to the application, and process it in no time flat.

Finally, call your insurance agent and ask about financing. I know it sounds odd. State farm gave me incredible terms on a single family rental a few weeks ago. My mind was blown.

Good luck

I am also in the Nashville area. When things were slow a few years back you could close a cash deal in 7 days and have time to get a home inspection, title search with insurance, etc.  Things are much busier now. Many of the title companies are requiring 14 - 21 days if title insurance is wanted, and yes it is wanted unless you know going in and repriced accordingly. For a major rehab I would still get a termite inspection.  If you are new to construction, and your rehab is more of a refresh (paint, floors, and appliances), then you may want a full property inspect to make sure you get what you are expecting. If it is a tear down and build new then just get the title insurance. To be safe I would allow "up to 30 days" to close.  It is better to have too much time than not enough. It the seller complains you can trim it back.

Move to Tennessee, avoid the CA Franchise tax + no income tax. Visit beautiful CA often.