All Forum Posts by: Stacy C.

more $ isnt the issue, just finding a deal / getting myself to DO it is...

the thing I didn't account for w/ this though is a management fee, this would be an easy one to manage myself, but if I decide that's not something I want to do after a year and want to pay 10%, that eats up pretty much all the cash flow in that deal. So probably NOT the best idea.

Hello, been wanting to get into either a flip or rental for a long time. Spent lots of hours listening to podcasts and reading things, etc.. and I'm finally in an action taking mood..better late than never.

Anyways came across something local.. did the math on it and its definitely not a great deal but seems like it would be something easy to manage myself, good location, ready to rent, etc.  but it's a 1 BR w/ a loft, single car garage.

W/out knowing more details, any general reasons to stay away? for my first one I would think I should be looking for something better, but I could put a measly $5k down and my cash on cash return is almost 20% if it rented for what it currently was (tenant leaving now).. only cash flowing $100 though.

Being a 1 BR it seems like if I ever want to sell it would be to an investor only. any reasons not to pursue it, or could this be something good to get my feet wet? $1200 a year isnt anything to be excited about, but I'm sure w/ some tax benefits, and the priceless experience..it could be a good thing for me?

Thanks!

Hello, I'm looking to get a HELOC and I believe there's not a ton of comps in the area and afraid they will only go off the last sale of the home which was 2 years ago. The house was completely redone so the value is a good bit higher than what I'm thinking the appraisal will be. I went down this path about a year ago and a couple banks said they'd only do drive bys unless I pay $400 or more for the full appraisal.

Is anyone aware of any banks that do a full appraisal as standard procedure, or that i can request one at no additional cost? I hate to spend the $ and then have it not come back where I need it anyways....

Thank you!

Getting a mortgage in the name of a new LLC would require that llc to have already established some credit though, correct? I assume it would not be easy for a brand new llc to get a mortgage?

One can purchase it and transfer to LLC later on, right? Or is that not a great way to go about it due to the costs of transferring?

Hello, hoping someone can give me some simple guidance / advice on how to approach our situation.

I've done my fair share of googling and there's so much info,  it's hard to really sort it and make sense of each scenario. I'm sure someone here can provide all of the info I'd need in a few sentences!

I'm looking to do my first deal. Either flip or rental, am open to both ideas. Have put a few offers in but no luck yet..but want to start getting more aggressive and want to make sure i am fully prepared once it does happen. I have someone to partner in either of these efforts. We are both in the same boat financially and with what we can bring to the table as far as time, management skills, repair knowledge, etc.  so this would be a 50/50 split of both costs,  work, etc

Not sure that it matters but we both have access to enough cash to pay cash for the right deal, or access to heloc, 401k loans, credit cards, etc...  depending on deal it may be a buy cash now, do delayed financing after, or if its a flip just do all cash.. not sure that any of it matters but just throwing out all the info i can. Also, probably important, both have excellent credit scores and credit history.

My question is about the partnership and how to structure it. If our first purchase is a rental that we intend to hold, and should we decide to say do the delayed financing for this example...

Some ideas I had - do we do an LLC or scorp, put the house in the 'business' name then? Or do we both apply for mortgage in both our names because we both have great credit - or would that be dumb due to the 10 house per person limit with mortgages and it may count as 1 for each of us? Do maybe 1 of us do the loan, but title it to both people? Or do we just leave 1 person out of it on the books.. not sure how that works come tax time when we both want to get some deductions....

Looking for the best overall scenario as far as cost effective, tax benefits, keeping accountant happy, etc and of course w/ the llc there is the liability protection.

Any info would be appreciated, sorry this got so wordy!!!! 

@Jorge Ruiz thanks for the reply. Regarding the podcast - are you sure its #3, as in 003 from a few years back? I've started listening to it, more than half way through and no mention of an appraiser yet... thinking I've not found the right episode.

If you have a link by chance that'd be great. 

Thanks!!!

Hello, new investor looking to get into properties asap. Have enough cash for my first one, so a line of credit is not critical to me moving forward. However I was really dead set on using a HELOC just so that I do not tie up all of the $ I do have in my first property, I would be more comfortable having my cash available in case I need it for my own home, repairs, or other deals that might come up.

I've only applied one place so far and the problem is that the appraisal came back very low. I haven't owned the house 12 months yet, so some banks will ONLY use the last purchase price of my home, which was $225k. However upon purchasing the property I did a lot of work inside and out, and believe FMV should be around $275k or more.

The bank did just a drive by appraisal, after discussion they said in my area where its more rural / less comps to pull, most of that number will come from the last purchase price. I have the option to pay for a full apprisal if I'd like but I don't want to waste that $, the bank really talked me out of it, saying that I would have had to put 200k into my house to see that much change on the appraisal.

It appraised at 237k when I purchased it. I owe 200k on it. So at a 226k value, I do not have enough equity to get cash from a HELOC. At 275 or maybe hopefully a little more, the numbers would work to get me 40k or so which is all I really want anyhow.

What are my options? Try more banks? Dont want to keep running credit for nothing. ANother idea is just to pay cash, use delayed financing and get a loan on the house. I'm just not sure at the moment whether the first house will be a flip or a rental, I'm really looking for both. A rental I wouldn't mind a conventional mortgage but a flip I'd rather use a line of credit. Another would be to skip both and hopefully find a deal that will allow me to do a cash out refi to roll that into property #2, but I've heard that's not so easy on a new purchase.

Just looking for anything I may have missed, I surely can't be the first person to try to get a heloc on a house that came back w/ a low appraisal that they know is worth much more!

Thank you in advance.

Hello, newbie looking to get into first rentals and or flips... have some questions that I'm hoping I can get some advice. I've done a lot of searching and just as soon as I think I have it figured out, I get more confused by something. I do plan to speak to an accountant soon but want to be more informed coming into the conversation. As you're about to see I'm very scatter brained at the moment and trying to ingest as much information as possible! Therefore I have a lot of thoughts & questions!!!

First off, what I'm looking at doing... originally wanted to flip, more so lately persuaded more into rentals. I foresee a combination of both, mostly rentals, with a couple of flips here and there. Currently with 0 rentals, I'm not sure how quickly I plan to grow as I still work a full time job, but would love to quit some day!

I also do some random side work here and there unrelated to real estate (it consulting), ebay sales for home made products, so the idea was to create a general company that covers everything I'm doing, so that I can report it all, get my deserved deductions and write offs, etc. I know paypal will send me a 1099 once I hit 20k and that will definitely happen next year as I plan to ramp up those efforts.

My first thought was LLC taxed as scorp so that I can pay myself a salary and avoid some SE tax. However I then read that that is bad for rental properties (dont fully understand why yet)

Some extra info that I feel may be needed: I'd like to finance them to leverage my $ across multiple properties but I do have some cash saved up to use for down payments, or a cash flip, etc.  I plan to purchase a new home for my primary residence in the near future and dont want any of this to put that financing at risk as well.

So my 2 questions, if i still have your attention:

1. Am I better off with a regular LLC due to me wanting the passive income that rentals will provide me with? Or is an scorp still a decent option even if i plan to buy and hold some? Or neither at this point?

2. If i go the route of an LLC (scorp or not)When purchasing my first rental property.. do I do it under the LLC's name? I read its hard to get financing under the LLC, and that it can be hard to transfer from personal to LLC? Theres a limit of 10 to personal, right? If purchasing under the LLC does the financing still go under my credit? I have over an 800 score and absolutely want to be able to use it to get excellent rates. Does LLC give me protection if the property is under my personal name? Does the LLC lease it out then, even though its in my name?

I feel like some may say skip the LLC and get an umbrella policy, and purchase all myself but that does not help me with my other side work, I'd like to be able to write off some of that stuff under it as well (now im questioning if i even need the LLC to write that stuff off?, like vehicle expense, travel, advertising...this is where the CPA convo will be handy)

3..I guess I need a number 3 to tie it all together.. so in summary am I better off buying everything in my own name, if I hit the 10 limit, do an LLC and transfer to llc (quit claim if the bank allows it?), or get the LLC now and do it all that way? Just want to make sure Im getting the best tax advantages possible, and also the liability protection as well, and setting myself up properly for growth in the future.

If you've taken the time to read this, thank you. If you can provide some information to any piece of it, an even bigger thank you!

Hello - quick intro, I've been taken to this site on many occasions when doing research and stuff, and now have a specific situation I'm hoping I can get some info / advice from someone with experience and knowledge. I'm looking to get into flipping or rentals, so will be here a lot to learn in the future.

However while looking I came across a property that I'm interested in myself to live in. It's up for foreclosure auction sale at the county sheriff auction.

I've done as much research as I could, so please correct me where I'm wrong. And I apologize ahead of time if this gets long winded, I really want to understand this and especially because I have great interest in making this property my home if it worked out.

The auction site showed a title report, showing a few mortgages and a lien from the IRS of 1.8 million!!! Its only a ~260k house) From what I can tell, the order of liens is whats important. The IRS lean is about somewhere in the middle. So I understand they have 120 days to claim/rebuy the property as a junior lien.

However in this situation, the foreclosed bank is the most recent mortgage. So this would make the first mortgage and the IRS senior to it.

So does that mean, anyone buying this at the auction will take on 1.8 million in IRS debt as well as whatever is left on the first mortgage?

Also - what if nobody buys it? (who would!!). My thought is that the only way this house would be available ever, is if the first bank foreclosed..that would wipe out everything beneath it.

But in this situation - what happens? Not even the foreclosing lender would want to buy it back, right? My thought was the original first bank may buy it, but just because they are the first one, doesnt mean it would wipe all the liens below, does it? They would still have to be the bank foreclosing?

Also one other question, I got confused looking at county records online. I saw several of the banks listed from the title report, but one for example would just show the grantor being the home owners, AND the bank, the grantee being another bank. Is this them getting another mortgage, or did they sell the current mortage off to another lender? I just want to make sure I interpret the records properly, and that there is in fact multiple mortgages on the home as I suspect, and not that those records are just showing that theres a new lender in place of the old?

Thanks for any info, much appreciated!!!!!!