All Forum Posts by: G W

Very creative ideas revinv! I like the ideas of inexpensive rewards for good tenants. Thanks for that reply!!

I would LOVE to get into a 20 unit, but I have not learned enough tricks of the trade in "creative financing" to pull that off yet.... down the road, I hope so.

I’ve dealt with one bad tenant that did some dumb things like set an iron on new carpet in a bedroom, stained several spots in the living room, broke the lease and left early, etc… ended up keeping her security deposit so the damages were sort of evened out. The current tenant has been great so far and inspections of the property show she is taking care of the place.
I’m looking at a couple of 2-units and wondered what you folks have dealt with; relative to your single family rentals? Most of the 2-units I’ve seen seem to have a “higher risk” type of tenant, but on paper they look like they will cash flow Much better.
I know much of this can be sorted out through screening of tenants, picking up the rent in person (then glancing around to make sure things are OK), etc…
What have been your experiences??

Hey Ken,

http://www.postlets.com/res/425383...........1817 I saw this yesterday on craigslist.com

Looks like Harrisburg has some good oportuities.

Yes, the rental we have is in Lancaster City. We are looking at some multi-units in the city for the next purchase. Looking to pull the triger on something in 2-3 months max. Just want to buy right... not sure if combing through the MLS's is the way to go, or if it is worth looking into REO's and stuff like that. But Hell, I just figured out what REO stands for last week :lol: let alone trying to figure out the "insider" way of getting leads on some of these great deals.
How have you come accross your REI's?

Good luck on the property under contract aly0705!

The first rental property was purchased by me and my business partner. I would consider this first property a lesson on what NOT to do. I’m fortunate enough to have come out in a good position, with a sound property & positive cash flow.

Most of the following info is copied from a post in the “starting out” section of the forum.

Two years ago myself and a friend purchased a distressed single family home and rehabbed it. We purchased the home & rehabbed it with cash and unsecured loans, ie personal loans, credit cards, etc... A quick break-down of the numbers look like this.

Purchase price: $20K
Rehab costs: $30K

The rehab took about 4 months with us working nights and weekends. Our intention of flipping the house failed. Our listing agent thought we could confidently list & sell the property at $75K. It just did not pan out.

So, we kept it as a rental. It’s been about two years and I am pleased with how the “landlording” thing is working out.
Rent is at $700/month which created $128.00/month positive cash flow for 2007 (taking into account the tax return for 2007)

In order to clean the financing up on all the unsecured loans he and I had out on the property, everything was rolled into a fixed rate mortgage. HERE IS THE CATH: Due to my recovering credit score, I was not able to be listed on the deed or the loan. Instead we drew up a promissory note and formed a LLC.

Also, me and my BP closed on a second REI today. It is a two car garage block building on a nice lot. We got it for $20K with a true market value of about $30K. We are going to use it for personal storage as neither of our homes have a garage. We are paying cash to avoid financing issues stemming from my credit score. About $10K each.
We got a commercial insurance policy Friday for the block building (on paper, this building is showing as the LLC's office building) and the LLC was put on the deed. This garage is not an income producing rental yet, but like I said, It's a nice lot with every home on the street valued at $100K+ detached single family homes. Easy to demolish it and drop a modular home or build onto the existing structure in a year or two. Plus, to make things fair for my BP I will finance the deal on the next rental property and of coarse the LLC will be on the deed, thus evening out the financial contributions.

Thanks again for the comments.
Take care all!

REI,

Oddly enough I proposed exactly what you mentioned in scenario #2. Today we closed on our second REI that I described in the first post, each contributing half on a cash deal. On the next deal we do, I'll finance the property but the LLC will go on the deed, thus bringing things equal.

On a side note for anyone reading this: The settlement company told us today that to move the rental property into the LLC would require a 2% transfer tax and the LLC needs to be two years old. They also advised talking to a real estate attorney about it, which we'll be doing asap.

Sorry, I should have been more clear: I want to assume equal financial risk. How can I do that?

Yes- I could be in a swell position. We had the terms drawn up by a lawyer stating that he and I have 50/50 ownership of everything in the LLC regardless of who has what leverage against personal assets. The same with the promissory note: It states that regardless of financial contributions ownership is 50/50.

I am just looking to do the “right thing” and place the burden financially as it should be: 50/50.

Christian, John, and Joshua: Thanks for the welcome. From just the past couple of days I’ve been here, I’ve gained new and interesting perspectives from at least one topic each one of you have commented on.

Cheers!

John,

Thank yhou for the reply, but there has to be a way for both of us to be on a loan for this property, right?
What if I we refinance the property, the previous mortgage (in his name)is paid off by whomever we refinance through and we are then both on the new mortgage......right?

Welcome!!
16 Views and no replies? Very similar to my introductory post? I see your in Columbus, GA. I was stationed at Ft. Benning, GA in 1995-1998. Beautiful state you live in.
Good luck!! :D

Two years ago myself and a friend purchased a distressed single family home and rehabbed it. We purchased the home & rehabbed it with cash and unsecured loans. A quick break-down of the numbers look like this.

Purchase price: $20K
Rehab costs: $30K

The rehab took about 4 months with us working nights and weekends. Our intention of flipping the house failed. Our listing agent thought we could confidently list & sell the property at $75K. It just did not pan out.

So, we kept it as a rental. It’s been about two years and I am pleased with how the “landlording” thing is working out.
Rent is at $700/month which created $128.00/month positive cash flow for 2007 (taking into account the tax return for 2007)

In order to clean the financing up on all the unsecured loans he and I had out on the property, everything was rolled into a fixed rate mortgage. HERE IS THE CATH: Due to my recovering credit score, I was not able to be listed on the deed or the loan. Instead we drew up a promissory note and formed a LLC.

FINALLY, MY QUESTION: As soon as my credit score qualifies me to be on a loan, we are going to "sell" the property to our LLC with both of us being on the loan. I monitor my credit every month. The three credit bureaus look like this 620, 620, 600. :crying:
What sort of loan would you recommend? Are there any that would be more appropriate for this sort of scenario to ease “closing costs, etc…”

Also, me and my BP are closing on a second REI tomorrow. It is a two car garage block building on a nice lot. We got it for $20K with a true market value of about $30K. We are going to use it for personal storage as neither of our homes have a garage. We are paying cash to avoid financing issues stemming from my credit score. About $10K each.
We got a commercial insurance policy Friday for the block building (on paper, this building is showing as the LLC's office building) and the LLC is going on the deed tomorrow at closing. This garage is not an income producing rental, but like I said, It's a nice lot with every home on the street valued at $100K+ detached single family homes. Easy to demolish it and drop a modular home or build onto the existing structure in a year or two.

Answers, comments, questions much appreciated!!!