All Forum Posts by: Ryan C.

@David M.

Right now I’m below market rate. I would be bringing it up to market rate.

You’re right only one person did say something about it being illegal, which it’s not. It’s messy, sure. But legal.

I didn't think this was illegal. It's just one of my businesses paying another one. It's no different if 2 separate names on the LLC's. Maybe if I give some real numbers it'll help.

The building I leased for $107k, and will own at the end of the term.

I currently owe around $65k.

I want to use the equity in the building as the down payment and transfer the title into ABC, LLC.

I want to rent the building to XYZ, LLC (which is the current business in the building and has been for 5 years, and is a real business) for $2600/month. This is more then my current lease amount of $600, but it's astronomical.

This makes my NOI $24k/yr ($2600/month - $600/month payments, the business renting the space pays everything else) and at a 6% cap, that puts the value at $400k. Now, can't I refi and leave 25%, or a 75% LTV in the building, minus the $65k current still owing?

400k - 65k = $335k

75% of $335k = $251,250

The I can use this ~$250k to purchase another building or more equipment.

Everything I have read, or heard about CRE is this is how you force appreciation and buy more properties. I don't understand why this particular situation I'm being told is illegal, and I'll go to jail. The current business in the building can handle the rent.

If there is something illegal about this please tell me exactly which law I’m breaking. So I don’t do that. But if you just ‘feel’ like I’m breaking the law….well, that’s not how laws work.

@Bud Gaffney

Not the goal. Quite the opposites actually.

@Sergey A. Petrov

The business that's in there is legit. I want my real estate LLC to buy the building and rent it out to my LLC that has been in there for 5 years already. This would instantly put the buildings value up and the monthly rent would be what I basically pay now. This would be a normal transaction, except my name is on both LLc's.

@Jim Pellerin

I appreciate your response.

The business in the building would be able to cover the rent. I am trying to extract more equity out of my current property to be able to deploy the capital into other cash flowing assets. Over leveraging would not be an issue. As long as this is legal, that’s all I need to know.

Thanks again!

I'm wondering if I'm allowed to purchase a commercial warehouse with my LLC, rent it to my other LLC for $XX/month to increase my NOI and increasing the property value, and then doing a refi on the property to buy another property and/or more equipment for my business?

@Chris Seveney

There was a specific one to the Philippines they have talked about on the podcasts before.

@Chris Blackburn

These are great looking! Who’s the architect that designed these?

I have heard them talk about a site the use before. What’s the site?

Well no, I am stuck. I'm stuck at this particular part in the my journey of real estate. All my business loans to date have been built out or for machinery, not for a house. So I am trying to learn the process. Here's the questions to your answers: Conventional loan. How much do I know about real estate? Compared to you, not much, I am sure. That question is relative, and can't be quantified in a sentence. Yes, I can estimate repairs, and estimate the ARV. Do I have cash reserves to fix repairs, yes. I don't have an agent. I've used an agent to buy a house, but have I ever "had" one? Like having a lawyer on a retainer? No. The reason for the off market deal is because I drive past this place every day and I know it has potential. I'm trying to find someone to help me, that's why I'm posting here.