All Forum Posts by: Sheik H.

Hi,

In a lease option assignment, how does the seller account for the option fee (that was assigned to me, the investor) on the HUD1?

I mean, the full purchase price will be on the HUD1 along with the option fee (which was applied to the purchase price), but the seller never received the option fee. Looks like the seller will be paying income taxes on the option fee which he never received!

Am I off base here?

Thanks

Thanks @Account Closed,

I meant partners as in my LLC partnering with partners. They will not become members of my LLC which is just a single member LLC.

Agree with your consultation advise. Just thought a discussion would benefit as well.

HI all,

I'd like to get some feedback of partnership strategies.

I have been buying for cash for my own portfolio and I now have some folks interested in partnering on deals with me.

Since i have to move fast when I find a deal, it's cumbersome to get the funds ready from partners at the time of purchase. So I've been thinking about doing the following to bring in a partner:

1. My LLC purchase the deal with my cash initially - this way I can move fast.
2. Have a partner buy into the deal after closing by paying me 1/2, 1/3 (or what ever) and he now becomes part owner (a new deed will be recorded showing new ownership percentage)
3. Set up an agreement between partner and my LLC regarding profit splitting/management fees etc (partner is passive)

What do you guys think? 

Some questions:

1. Do I need to set up a formal partnership for this? (I'd like to keep it as simple as possible)
2. What are the tax implications of the partner buying into the deal (if any)?
3. other issues??

I know I can just do a debt based loan and pay the partner interest without putting him on the deed (use a DOT instead) but I prefer asset based investments.

Appreciate any input.

Thanks

@Rick Harmon

Waking up this post again. Can you elaborate on your past comment (above) as to why you think probates don't make good candidates for wholesaling? I assume you buy and hold with owner financing/LO/rental as your exit strategy? Thanks.

-sheik

Direct mail experts - 

For lists that are less time sensitive - e.g. OOS owners, probates and the like - have any of you ever tried standard postage?

Is it worth the savings?

@Rick H.

Exactly.

In TX we have a TREC contract (from the TX RE Commission) - the sister of the California C.A.R form. This is what I use with - like you said - minor mods.

The goal is to keep the seller and related parties as comfortable as possible with the process.

@Neil G.  @Rick H. 

Same here - I was deciding how to formulate a reply.

Rick,

Can you comment on my post above? 

thanks.

@Rick H.

Thanks!

I especially like the early pay off strategy you alluded to. Talk about discount the discounted!

In another post you made back in January....

"Probates often don't make good targets for wholesaling.

Why? The attorney is going to strongly advise has/her client to list property, probably with an experienced trust and estate specialist that will assure maximum market exposure."

I don't see how probates would not make good target for wholesaling - I mean, how would the seller/attorney know you are wholesaling? They would(should) only know that the property is being wholesaled come closing, right?

Am I missing something?

Thanks.

@neil G.

The probate info is online in my area. Decedent/Executor name/address. However, there are no info whether the probate has real property so I search the online county records to see whether the decedent owned property.

I send letters to the Executor only as they are the ones who can act on behalf of the estate.

@Rick H.

BTW, I have to tell you. I really like enjoy your style of writing - tongue in cheek/satire, whatever one would call it.  :-)