All Forum Posts by: Sam Crochet

Quote from @Account Closed:

With your experience and track record, 20% equity seems fair, especially since you're bringing a lot to the table in terms of finding the deal, managing the rehab, and handling the buy/hold. 

Since you're also getting a management fee, it seems like a reasonable arrangement. As long as you're both happy with the agreement and trust each other, that's what matters most.

Thanks Lance. Is your point that the management fee helps make 20% seem "fair"? At first glance, 20% does seem slim to me since my partner will get most if not all of their initial investment back through re-fi in 1-4 years (probably). My management fee would be probably 10-12% of the rents ($400-500/mos) likely.

Thanks Michael. Yes, goes without saying we'll have an operating agreement drawn up. My issue here is the equity and unforeseen issues that may arise. Appreciate the point on 20% being slim. 

I also wonder how our interest in re-financing out of the property in 1-3 years (i.e. to get his money out of the deal), suddently leaves me with a lopsided short end of the stick. Wondering if it's conventional that a management fee address the ongoing work I'll do why he doesn't have money in the deal. Wondering whether this variable (re-financing and getting his money out) makes it sensible for me to ask for more equity. 

Thanks again.

I should add that he is also obtaining the financing on the property (i.e. the loan is in his name). That's why I'm not just borrowing the money from him at a set interest rate. It goes without saying one of the reasons he's interested is that he wants equity and cash flow.

Hey everyone,

My friend and I are partnering on a deal in Atlanta where he brings 100% of the up front cash (i.e. 20% down payment and $50K-ish for a rehab) and I find the deal, manage rehab, run numbers, and am the brains of the operation (and I manage the buy/hold on the back end) and assist downstream with refinancing. Essentially, he wants zero responsibility at all times and I'm not supposed to even call him re the property unless it's seriously urgent.

We expect the end result to cash flow nicely. I've got plenty of experience investing on my own and in partnerships where I bring 50% of the cash. This the first time I've brought no money down and am using solely "other people's money". We've agreed to split cash flow 60/40 (in his favor). I want some equity on the deal and am thinking 20% would be appropriate. For this circumstance (where I've got enough of a track record where he trusts me, but I'm still a small multi-family investor without major deals under my belt and he knows I've never used solely OPM before--should I expect to get more than 20% equity? Less? Am I right on the mark here?

I'm also getting a small monthly management fee on the back end (a few hundred bucks).

Anyone got any advice? We've got full trust in each other and he knows I know what I'm doing with value add/cash flowing small multi family properties.

Thanks in advance!!

Hi Everyone! My siblings and I are interested in buying a lake house for family use, but would like to rent it out on Airbnb on the weeks we’re not using jt (probably 75% of the time at least). Does anyone have experience doing STRs on Lake Oconee?? Based on basic Airbnb data it looks like this County does “well” but I’m hoping to chat with someone or get feedback from someone who’s Had boots on the ground!

Any insight would be greatly appreciated!

Sam

4047020998

Hi!

I received a threatening letter from an attorney regarding an accident that apparently occurred at a home I used to own. I seller-financed the home to the buyer a few years back and had a contract in place clearly naming the buyers as the new owner. Our contract gave me the right to hold onto the deed until the new owners make their final payment (which they have not yet done). I still have my old mortgage on the home as is often the case with seller-financing situations (we make a few hundred bucks in cash flow per month, which is one of the perks of seller-financing). The new owner pays the insurance/taxes into an escrow account, but the home owner's insurance policy is still in my name. Obviously, my position is I'm not the legal owner of the house and have not controlled the home since I sold it. 

Has anyone dealt with this scenario before? Any idea if I'm in the clear? Any recommendations on what to do?

Thanks!

Sam

Hi!

I received a threatening letter from a lawyer regarding an "accident" that happened at a house I used to own. I  owner-financed the house to the buyer (who now lives there and, from what I understand, is clearly the legal owner in light of our land sales contract), but my name is still on many of the public records as I have the deed (our contract allows me to hold on to it until buyer makes final loan payment) and still pay my old mortgage on the home (I make a few hundred bucks per month cash flow). The new owner pays all the escrow (insurance + taxes) and principal/interest each month. However, the insurance policy is still in my name.

Has anyone dealt with an issue of being sued for an incident on a home they used to own years after selling it via owner-financing? I assume the new owner will be recognized as such and will be considered in "control" of the property for whatever accident took place there after he bought it. Somewhat worried as my name is on the insurance policy (of course, they're the ones paying for that policy).

Thoughts? Any idea if I'm in the clear?

Thanks!!

Sam

All great intel. Anyone familiar with West Lake/Hunter Hills neighborhood (just north of MLK Jr. Dr.). It's further west than the West End. Some decent flips on zillow. Thoughts?

Hello!

Does anyone know of a San Diego Airbnb/short term rental expert I could take out for a steak dinner (serious)? I network with real estate professionals a lot, but have found it difficult to get short term rental expertise. I run a couple of short term rentals, but want to make it a larger size of my portfolio and would love to chat it up with someone in the area. Serious on the steak dinner offer (anywhere you want!).

Thanks,

Sam from San Diego.

Thank you for the input thus far. I am certainly aware of the debate. Importantly, even if the rule does come into effect, it won't be until July 2019. There is some risk I suppose of a 12 month master lease starting now, but in reality this issue will probably be litigated and I think SD City Counsel overstepped their boundaries to the point too many people are countering the new measure. Also, if Airbnb gets 35,000 signatures none of this will happen.

Sam