All Forum Posts by: Mike Neubauer

@Dalton Elliott, this same thing happened with my insurance lapsing in the summer of 2020. Then, my taxes were paid late in November, and now they forgot to pay an insurance policy again. 
In my experience, this seems to be very typical. I have literally never dealt with a more incompetent company in my entire life. And, the same problems continue to arise. I could see an insurance payment getting missed one time, but this has become a common occurrence. This is also the only lender I have ever dealt with that was not able to provide a monthly statement of the account. Last time I asked about a monthly statement, I was told it is being worked on. What kind of financial institution doesn’t provide a statement? 

I have talked to multiple people who claim to be a manager. I already filed a complaint with the Secretary of State. Next, I will be contacting the department that holds provides Lima One’s lending license. 

I am sick of these weak “standard” responses of “we will look into it.” Everyone “looks into it” and no one actually does anything to solve the problem. 

Someone commented on my other post and said that they had the same problem with Lima One not paying their property taxes on time. 

This is my experience with Lima One. I highly, highly recommend you find any company except Lima One. 

Just a forewarning to save yourself a million headaches. DO NOT use Lima One for any financing. There are a million other options, Dominion, Lending One, Visio. Use anyone EXCEPT Lima One. They have failed multiple times to make insurance payments from my escrow account. They also paid the county property taxes late from escrow so I incurred penalties. This has literally happened multiple times in 1 year. Unfortunately, I did a portfolio loan with them so multiple properties are involved and getting screwed up. Lima One is a total joke.

This is in additional to changing my rate the day before closing, and almost tanking the entire closing because they didn't have all the documents ready the day before closing. 

Just a forewarning to save yourself a million headaches. DO NOT use Lima One for any financing. There are a million other options, Dominion, Lending One, Visio. Use anyone EXCEPT Lima One. They have failed multiple times to make insurance payments from my escrow account. They also paid the county property taxes late from escrow so I incurred penalties. This has literally happened multiple times in 1 year. Unfortunately, I did a portfolio loan with them so multiple properties are involved and getting screwed up. Lima One is a total joke.

Just a forewarning to save yourself a million headaches. DO NOT use Lima One for any financing. There are a million other options, Dominion, Lending One, Visio. Use anyone EXCEPT Lima One. They have failed multiple times to make insurance payments from my escrow account. They also paid the county property taxes late from escrow so I incurred penalties. This has literally happened multiple times in 1 year. Unfortunately, I did a portfolio loan with them so multiple properties are involved and getting screwed up. Lima One is a total joke.

What lender did you use for the refi?

I guess I should specify my goals as well. I am looking to turn my profits into long term cash flow. 

Right now, we turn those profits into rental properties. I am considering if seller financing our sales is better than taking our profits and turning them into long term rentals. 

Fred, I guess that’s what I am trying to figure out. Where is that break even point? When is it more beneficial to carry the note on the equity rather than cash it now...knowing that I am paying 6% on my capital. 

Let’s say I am into a property for $175k at 6% 

I can seller finance it for $225k at 7%

Am i better taking the $40k(net profit) now or carrying the note and leaving $50k of equity invested in a note? 

I calculate a $437 monthly cash flow on that spread. To me that seems to outweigh the risks.

I’ve been listening to Mitch Stephen’s podcast and seller financing seems like it’d be a good fit for our business. 

Can someone share their insight on the financials of carrying a note vs getting the big pay day now. 

It seems to make the most sense to delay the profit today and take it over a period of time, collecting cash flow. 

I am not limited by capital. I pay 6% for my capital. I figure I can seller finance between 6-10%. 

My typical profit on a fix and flip is $25-30k. I figure I will get the same sale price, but be able to cut out about $10k in closing costs and commissions if I do seller financing. 

Looking for reasons why one option is better than the other. 

Dmitriy Fomichenko Correct. Sorry, should have specified that. I only use Roth accounts so didn't even think of it.

Dmitriy Fomichenko hit the exact point I was going to make. If you are looking to set this up for future fund allocations, you may want to heavily consider a self directed 401k instead of an SD IRA. The IRS regs on much less stringent on 401k funds and you can even use debt in some cases without triggering UBIT. If you have funds already in an IRA and are looking to transfer them to a SD one, you can't roll them into a 401k so your kind of stuck.