All Forum Posts by: Randy King

Sorry up front for this, I just had to respond.

It's a good think Steve Jobs, Woz, Bill Gates, Larry Page, Sergey Brin and Mark Zuckerberg did not know what they did not know. Sometimes you just have to jump in and learn as you go. Whether you get your inspiration from the Gurus, BP or elsewhere, as Nike sez "Just Do It"!

I download the HUD inventory for my area on a daily basis, both Actives and Solds, into a spread sheet. Over time you will see the tendencies of each asset manager for your area. How many DOM before they deduce the price, how much they reduce at each price reduction and what discounts they will take at each price reduction.

We use them when renting SFHs. We have the prospect drive by and then call for the code if they want to see the inside. I replace it with a regular knob and change the battery with each use. The feedback on Amazon when I purchased them was to make sure you replaced the battery regularly.

I use the Schlage digital locks. We were using the lock boxes with the 4 dial codes, however we had problems with people not resetting the code to 0000 and anyone could access the key if the dials were not moved. We had one key stolen while on vacation and had to call a locksmith and rekey. The Schlage digital locks are working GREAT. I would get the ones without a switch to turn off the auto lock. The auto lock in 5 seconds is a good feature. They are expensive, however Amazon has them at a reduced price sometimes.

Here is a link for locating HUD registered agents.

http://www.hudhomestore.com/Listing/BrokerSearch.aspx?sLanguage=ENGLISH

Just enter the state and city.

We have 3 asset managers in our area and each are a little different. It is mostly 12-15% off list net to HUD during the early stages of listing. After a number of days, HUD will reduce the price, usually about 10%. They usually increase the discount they will take to 20%. Then if still unsold, they will reduce another 10% and discount usually goes to 30%. Hardly any lasts longer that the 2nd price drop. These are not exact numbers, just my experience.

@Kamau Kenyatta

I forgot to @ you above and it would not let me edit it.

Some of the tax experts may want to jump in but why we are setting it this way is so the LLC is a pass through entity so the long term holds will pass to our personal tax return. The S Corp will collect all the real estate commissions and the income from the flips and fund the 401 K and balance can be split into W2 income and dividends thereby minimizing taxes and FICA. Also 2 entities so as to separate the long term from the short term. I don't know if an LLC can be taxed this way.

Who are some of the national companies that provide blanket liability policies. I do not have a local insurance agency and the blanket policy I have now is a personal policy through Geico and they will only cover 6 rental properties.

On topic, I have an LLC for our buy and holds and in process of setting up S Corp for flips. I am sole member of LLC and my wife, which is a real estate agent, will be only stockholder in S Corp. so as to max out solo 401K, minimize FICA and kinda separate flipping from long term holds. We had another business that was structured this way and it worked great.

Anyone have experience buying an REO as your replacement property in a 1031 exchange? The language that has to go into the buy contract allowing the 1031 will probably not be allowed by HUD or FNMA. Any ideas?