All Forum Posts by: Steve Hall

@Nik Moushon

Everyone has issues. Do you have a policy? If you only looked at everything on paper, does she meet all of your policy requirements? DTI, credit check, income, no pets, non-smoking, etc? If so, then rent it to her.

It sounds to me like she may have failed to disclose being arrested. On my application, failure to disclose = immediate disqualification.

If she did disclose the arrest, and it's a domestic, I would overlook it as long as the husband is out of the picture. Lot's of people have domestics. 

To answer your other question: Yes, if both parties have bruises or are bleeding when the cops show up, and the cops can't figure out who started it, they will often arrest both parties and let the courts settle it. If only one has bruises, the other one usually gets arrested.

@Zuleidy Benitez

DO NOT sign it. A dual agent is NEVER a good idea. Go find another investor friendly real estate agent.

Welcome to BP @Daryl Thomas

Rule #1: Learn to use the search feature

Rule #2: Don't ask a question that's already been asked before.

Since you don't know where to start, I will tell you:

• Start saving money today
• Read these 21 books
• Listen to all the BP podcasts
• Listen to all the money podcasts
• Watch these videos
• Attend the webinars

Then you will know where to start...

First, good catch on my error. I added an update to that post and corrected the language to read: 

The $130,000 goes back to him FIRST. He spent $30k on rehab, but only got $20k back. That means he only got back 67%. (now you split the 67%, so you get 33.5% equity stake.)

Now to answer your question on why I suggested only splitting the savings on the rehab cost in order to calculate your equity: This is a BRRRR. The strategy only works if an investor can get back 100% of their invested capital so that they can "Repeat" the process over and over. Before buying a property, you and your investor would discuss all of the numbers and agree whether you thought it could be done or not. If you both agree, then any savvy investor is going to EXPECT their purchase capital back (100% of it). They will also want you to complete the rehab for the budgeted amount. (You are basically the project manager.) You are not entitled to any of the investment capital because you did not put in a dime. Your "value" to this JV is executing the BRRRR strategy efficiently. (e.g. buying at the right price, computing an accurate ARV, hiring the right contractors, ensuring the project is completed on time and within budget, renting it, and refinancing it.)

This is just the way I would structure a deal like this. There is no "right way" to structure a deal like this. In fact, if I were advising you, I would tell you to TRY to structure it the way you first explained it where you could still have 42.5% equity even if you came in $10k short on the BRRRR. It's up to your investor to negotiate his side. If's he not a sophisticated investor, he might just agree to your plan.

@Marko Zavala

I guess you didn't read my posts (or the posts of other savvy investors) about not going into business with friends or family. Here are 15 reasons you should not start a business with friends or family. You should also read this article in Entrepreneur magazine, written by an attorney (hint: free legal advice), explaining why what you did was a bad move.

This was an inexpensive life lesson for you. Get out of the deal with him and don't do ANY more deals with him or other friends.

@Jeremy K.

Congratulations... you've done well for yourself.

There are several options you are not considering. I will advise you on just one option that you haven't considered:

Remember in Monopoly what happens when you have 4 green houses?  Well Jeremy, you have 8 green houses! It's time to trade up. 

If you have 8 houses with 8 LLC's, (which is the right way to own them for asset & liability protection) you've got a lot of overhead. Plus, you have to know landlord/tenant laws in 2 states (i.e. 2 different leases). You have to manage 4 different PMs! Do you see where this goes if you continue on your current path?

If I have 1 apartment complex with 8 units, I have the same income as you do, but my expenses are lower. Plus, I have only 1 LLC and 1 PM to manage. I also have only 1 roof, 4 walls, 1 mortgage, 1 lease template, 1 insurance policy, 1 electric bill, 1 tax payment, 1 set of laws to know, same vendors for HVAC, plumbing, etc.

@Tom Liu

If the crime isn't solved and there could be a serial rapist on the lose, I can't believe that you would consider moving your family to that neighborhood.

If the crime was solved, and the person has been caught, then the only concern would be with a rental (i.e. potential tenants scared to rent there.) or resale value. Since you are not renting it out, nor do you plan to sell anytime soon, then go for it. Just make sure your wife is really ok with it.

@John Huber

I already answered this question on your previous post which asked the same question?

I have no idea why @Nate Halliday up-voted your question. Is he a friend of yours?

Are you just fishing for someone to tell you it's ok not to use and a LLC?

You need to consult an attorney and an accountant.

@John Boonphitak Weclome to BP. 

This has been answered dozens of times.

Please learn to use the search feature.

@Patti Robertson

Great advice, but as much as you may want to, you can't save stupid people.