All Forum Posts by: Shu Zhu

My previous primary residence, now a rental, narrowly escaped flooding during Harvey, so I am thinking of selling it. I will need to sell it by the end of November to enjoy tax-free profit from the sale. Given there is a tenant, and there might not be enough time to sell the house, I am wondering if I could sell the property first to my LLC at current market price, and use the LLC to sell the house on the MLS next year, so as to take advantage of the tax free appreciation of the primary residence. I am not sure if this strategy is legally sound, as I do see potential for abuse. For instance, if I sell the house to my LLC at above market price, then use the LLC to sell it at market price, I will create artificial loss to lower my tax. Is there already a law that bars this kind of maneuver? Or, shall I just transfer the house to my LLC, and use current market value as the basis for calculating profit when the LLC sells the property?

Thanks in advance for your insights. 

@Amit Shukla @Jim Adrian FEMA website doesn't seem to make it easy to find the information, and I am still struggling with it. But here is a link from Texas Tribute showing some a damage map from FEMA.

https://apps.texastribune.org/harvey-fema-damage-analysis/

Thanks to Harvey, my rentals located in 500 year flood zone are now flooded. What are the things that I need to do now? 

Thanks for organizing this. @Account Closed I may be 30min late as flying back to Houston that afternoon. 

@Yingchun Li I am a lender in Houston. Pretty new in lending but learning a lot as I do deals. On the other hand, I have been a realtor for a long time so can evaluate if ARV makes sense pretty quickly.

This is a great read. Thanks @Brian Foster

Thank you all for your insights. Another beginner's question, since I'm a one man show, am I my underwriter then? I assume that means in addition to evaluating the property value, I also need to check the rehabber's credit, and what else? As for personal guarantee, should it become necessary to enforce that guarantee, will it be through the court system and how long would that take? 

Thank you. I'm not a flipper, instead I'm exploring to be a lender. Here is what I'm confused based on your example: in this scenario, the lender is out $45,000+$45,000=$90,000 at closing? But the property at this point is worth only $50,000, since no repair is done yet. Then isn't the loan much greater than the value of the collateral at closing? Hypothetically if the rehabber went into bankruptcy right after closing on the purchase, then the lender would already be $40,000 in the red. If the property can be rehabbed by someone else for another $50,000, that leaves only $9,000 margin, not counting all the expenses, which means the lender will still lose money. Am I wrong in this thought process?  Or the key is to manage rehabber/developer risk?

Hi All, I'm exploring to be a private or hard money lender. Went to a meet up today and learned that a developer, who seems to have a good track record based on his own account, usually borrows at 70~75% LTV of ARV for rehabbing projects. My reaction is the loan amount could then be well above the acquisition cost of the property. Does this make sense? Or because it's an established developer so more favorable terms are expected?

 Thanks a lot. Very helpful.