All Forum Posts by: Steven Tawresey

I need your help BP!

I am going to be taking a week long road trip during the week of August 3rd or August 10th. I am interested in seeing:

Cleveland, Pittsburgh, Columbus, Cincinnati, Louisville and Indianapolis. Anyone have bad things to say about these places?

My goal is to buy B/C-type turn-key properties in younger "hipster' neighborhoods. Can anyone recommend some possible neighborhoods in the cities listed above? Anyone want a few drinks on me in these places? help me get to know your town?

My plan is to spend a day or two in each city. I would like to meet as many buyers agents, property managers, contractors and of course, turn-key providers as possible. Anyone have any recommendations?

Looking forward to any help you can give. Thanks!

~Steve

Exactly what I was thinking @Wayne Brooks. Since my name wouldn't be on the title, I need a solid contract with my potential partner outlining the deal. How would you structure such a deal?

So I've referred a couple first time buyers to my realtor. Recently, she sent me a property and asked if I knew anyone interested. It is a Homepath, owner occupant first look, cash-only property in a great location in Denver. So I sent an ex-coworker over. He is looking for an investment and has cash. 

He looked at it and liked it. A lot. But the reno is over his head. A day later, he called me and asked if I want in , 50/50.

I went over there with him, we put together an estimated project cost and worked out a conservative estimated ARV. Turns out, the asking price is right in line with the 70% rule (110k asking, 65k fix up w/20% contingency = 80k , 275k ARV conservatively). Lately Denver sellers are getting over asking price but I can't imagine there's too many owner occupants with 110k cash to throw down on a place they can't actually live.

So now i'm interested. But as per the Homepath rules, he has to live there for at least a year, his name has to be on the deed, and besides, I don't want my cash tied up for that long anyway. 

So here are the basics of the deal we discussed.

• 50/50 initial investment and fix up costs
• 50/50 profits ( ARV - Initial - Fix Up - Misc.)
• Buy Out (Coworker only) - 30 days notice, based on projected ARV and % project completion.
• Pay Back (Me) - Personal equity in full after refinance or sale, Initial + Fix up due 6 months after close, will float profit for 16 months.
• I would take 1st Lien position

So my questions:

• Is this legal? To be investing in a Homepath property through another person?
• How long does he have to wait before he can refinance with a post flip ARV?
• Are there any other provisions we should add to the contract?
• Would you do a deal like this?

Thanks for the input

~Steve

Interesting discussion guys. Thanks for the input.

If I'm following correctly:

1) An LLC (set up and managed correctly) holding a title with a personal guarantee WILL NOT protect your personal assets if you personally manage the property and are negligible (i.e. forgot to de-ice)

2) An LLC (set up and managed correctly) holding a title with a personal guarantee WILL protect your personal assets if you use a licensed and insured property management company / contractors.

Thanks @Travis Sperr. I fully intend to ask my attorney the same question. Just trying to get myself informed so I can ask any follow up questions intelligently. 

So I understand LLCs. I'm not looking for a lesson on the benefits. I am 1 fax away from having an attorney set up my multi-member entity, Operating Agreement, etc.

I also understand the reasons why banks don't like lending to new LLC's and why they need a personal guarantor when using a commercial loan to the LLC.

My question is, doesn't that ruin your separation of liability? For example, the LLC buys a property using a commercial loan guaranteed by my personal credit. If that LLC gets sued for whatever reason, can't they come after my personal assets?

I'm looking at out-of-state buy and holds in particular. Living in Denver doesn't give me many options currently.

Thanks for the responses everyone. After digging into it a little bit, it looks like this is the 3rd time the owner has foreclosed in the last 3 years. The first two were on the original note of $165,000. She cured her debt before it went to auction each time. In 2013, The outstanding balance on the original note was $79K.

The note being foreclosed on now looks like a 2nd or possibly a 3rd lien. When I add up all the visible liens, there is still major profit in the deal. $150k +!!!

Maybe since the place is a wreck, the owner doesn't know she can sell? Maybe she knows exactly what she's doing and plans to settle for less than she owes. I don't know. 

I'm going to call today, but I doubt I'll get any straight answers.

So I've had my eyes on a vacant apartment in Denver for quite some time, but only recently started to look into it more. I used to live in the building so I have a bit of inside info on the property. It needs a full fix and flip (I put together an estimate and have an ARV) and the potential is substantial. My initial plan was to contact the owner to make a deal. However, in my research, I learned the property is going to auction in 10 days!

Does this mean the bank has taken possession and the auction is inevitable? Or could I still make a deal with the owner? 

What could/would a deal like that look like?

Unfortunately, my job is taking me out of state next week and I won't be able to attend the auction even if that was the only way.

Any advice to get the property before it goes to auction? Thanks!

I'm in. 

Interested to know why its BRRR, Buy-Rent-Rehab-Refi and not BRRR, as in Buy-Rehab-Rent-Refi like I have the strategy defined in my mind.

See ya there.