All Forum Posts by: Ryan Scott Isacksen

This thread is a little old, but thought I would jump in.
I'm currently signed up on the a program which gives me access to the training platform until the next conference being hosted.

I do not directly work in sales, I run the maintenance end of a property management company.
I would say that one month on the program, using techniques taught on the platform, I have almost doubled my productivity. 

My calling is more efficient and I get results.  I have much better interactions with clients.

I used them for my first purchase.  They made a deal work that wouldn't have otherwise due to the property having too many vacancies for standard financing.

I just advise when you are finishing with the loan that you really double check details on the closing statement.

They did all the charges up front and interest only.
There was a 1% fee at close that would be waived if closed under 9 months.
I closed and refinanced roughly 3 months after the loan and was still charged the 1% fee.

I am still happy I was able to get into the deal even if the fees were more than promised or agreed upon.

Wrap around mortgage with a company setup to make sure monthly payments are made.

Steve Peterson of Infinity Investments has done this kind of deal in the past.  He may be able to help you if you look him up and contact him.

I am not a legal expert, but I looked up the California LLC code.

Owning an LLC for out of state property looks like it is clearly a foreign LLC. Simply owning or being a member of an LLC is not considered doing business in the state.

Entering into contracts that must be accepted out of state, maintaining property, maintaining a bank account for a foreign LLC company are all clearly excluded in the code.

See the items below (sorry copy and paste seems to have colored text in a weird way I can't fix):

https://leginfo.legislature.ca.gov/faces/codes_dis...

Noted at: 17708.03.

"...activities of a foreign limited liability company that do not constitute transacting intrastate business in this state include all of the following:

(1) Maintaining or defending any action or suit or any administrative or arbitration proceeding, or effecting the settlement of those, or the settlement of claims or disputes.

(2) Carrying on any activity concerning its internal affairs, including holding meetings of its members or managers.

(3) Maintaining accounts in financial institutions.

(4) Maintaining offices or agencies for the transfer, exchange, and registration of the limited liability company’s own securities or maintaining trustees or depositories with respect to those securities.

(5) Selling through independent contractors.

(6) Soliciting or procuring orders, whether by mail or electronic means or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts.

(7) Creating or acquiring indebtedness, evidences of indebtedness, mortgages, liens, or security interests in real or personal property.

(8) Securing or collecting debts or enforcing mortgages or other security interests in property securing the debts and holding, protecting, or maintaining property so acquired.

(9) Conducting an isolated transaction that is completed within 180 days and is not in the course of a number of repeated transactions of a like nature.

(10) Transacting business in interstate commerce.

It also states in the section following the above excluded items:

(c) Without excluding other activities that may not be considered to be transacting intrastate business in this state within the meaning of this article, a foreign limited liability company shall not be considered to be transacting intrastate business in this state merely because its subsidiary transacts intrastate business in this state, or merely because of its status as any one or more of the following:

(1) A shareholder of a domestic corporation.

(2) A shareholder of a foreign corporation transacting intrastate business.

(3) A limited partner of a foreign limited partnership transacting intrastate business.

(4) A limited partner of a domestic limited partnership.

(5) A member or manager of a foreign limited liability company transacting intrastate business.

(6) A member or manager of a domestic limited liability company.

(d) A person shall not be deemed to be transacting intrastate business in this state within the meaning of this article merely because of its status as a member or manager of a domestic limited liability company or a foreign limited liability company registered to transact intrastate business in this state.

(e) This section does not apply in determining the contacts or activities that may subject a foreign limited liability company to service of process, taxation, or regulation under the law of this state other than this article.

(Added by Stats. 2012, Ch. 419, Sec. 20. (SB 323) Effective January 1, 2013. Operative January 1, 2014, by Sec. 32 of Ch. 419.)

@Robert DeForge,

People responded about the mentor situation, but I just wanted to comment about picking out finishes / paint colors.

You really shouldn't have to use your time doing face time about paint colors or finishes.  A PM should know what colors work for units in your market and possibly has a set of colors that all their units are painted.  

The time to have an appointment face time about the counter color or paint color is lost time in rent.  Cabinet and granite companies give a no-brainer pallet combination so contractors don't waste time on that.

Lenders may require an LLC formed to help establish that this is clear business use and not something you claim as personal residence to use foreclosure protection.

@Quan Chen

I work in property management as well as some of the other people that responded.

I think a full month of rent is pretty steep for a leasing fee.   That is what I would expect on a single family home or duplex manager.  You need to make sure you have a building that is attractive to long term stays with that kind of fee.  Smaller 1 bedroom buildings or something in a more transient area will eat up your profits in regular turnover.  

I would strongly advise looking for someone that focuses on apartment buildings and the class of apartment buildings that matches yours.  A small agent that manages houses needs those bigger margins to make the hassle worthwhile.  A more established management company hopefully can do better for you than that.

Someone that charges those fees had better be on top of current rents and be maximizing your returns.  I would ask for client references and ask specifics about how often there are turnovers and the average length of tenancy. 

Check on the rate that companies are charging if they have an in-house maintenance person and what rates the companies they work with charge.

I spoke to one company in the mid-west that charges more per hour for in-house maintenance than contractors that I work with charge in the hot bay area market of California.  That company also rents the landlord the "for rent" sign that gets put out in front of the property.  

I would expect some kind of project management fee for something like a roofing project or other improvements that are outside of normal maintenance calls.

The PM is an important person in your team.. talk to a lot of people and find what seems to be the trend for the area and find the balance of price and what your expectations are.

@Juan Jimenez,

Welcome, sorry it looks like some of the messages are more solicitation than advice.

It sounds like you have a handle on evaluating property and could apply that to finding something that makes sense to invest in.

I would suggest selling if the place is losing money.  The other option would be to figure out how to increase the income of the place to make it work.  

You don't need to continue to lose money just to ride out the mortgage.  

Would refinancing to a 30 year mortgage change the way the numbers work?

Are you able to somehow divide up the levels to rent out sections?

Best of luck!

@Ken Nyczaj I would be very hesitant to dive into that.

The politics of 2 people having a lot of sway in the community (ie votes to change rules etc) adds on even more of a challenge beyond the foreclosures.  The reluctance of people to buy also means that the exit strategy if things don't go well could be difficult.

Here are some due diligence things I would suggest doing on the association if you are really interested in pursuing this:

1. Talk to the 2 people that own the large amount of inventory.  You will need to look at them as partners in your investment in that community since your investment will be affected by their actions.  The lender you know may need to put you in touch with them.

2. See if there has been a reserve study done that tells where things are at in the replacement cycle and how well things are funded.

3. Look at the CC&Rs for rules about renting / tenants.

4. Look at what the CC&Rs show the HOA responsible for as well. A unit that shares walls and a roof with another unit will also be paying towards items such as the roof.

5. Find out the history of special assessments and if there is one planned for the near future.

(I have worked with an HOA that did the maximum allowable special assessment without a vote required every year as part of their tactic to keep from raising the dues. They thought that 5 years of no increase in dues showed some kind of grand fiscal management.)

Banks that foreclose on condos seldom pay the monthly dues.  They hold the place until a sale and at that point dues that were due from the point the bank took  over may be collected in escrow.  The large number of foreclosures means that the needed money probably isn't being collected.

I did a bunch of research on the area when I was considering investing there.

Fancher Creek Center is being built in the area south of Clovis.
There are a few other developments the city is working on as well as some rezoning of the West Fresno area.  This is part of the area that @Allen Maris mentioned that falls in the Clovis school district (very good rating) but you probably want to look into the redistricting that @Brad Roltgen mentioned.

There are some other developments going on as well around the city.

I wanted to invest there but margins were to small for my goals and I purchased out of state.
A big concern for me was that code enforcement is really lax and you can have some long deferred maintenance for buildings hiding problems.