All Forum Posts by: Tanner Johnson

I am operating as a sole proprietor at 22 years old with 22 units grossing about 160000 netting about 80000 and needing to know what the best route is to protect myself, currently have some liability insurance but I want to know what others do, especially with quite a few units under a sole proprietor, to control their liability. Thanks  

 As of now we are just trying to do a private transfer of the property between us two without him having to fall on the sword to do me a favor, the idea of him keeping ownership and “leasing”  it to me is something we have talked about and him leaving it to me through inheritance but it would help a ton if I could claim depreciation and I don’t think I can.

We were thinking something like that, possibly a self cancelling note. The only thing about that is I can’t claim depreciation which is a big blow, right?

 Thank you! So far have hit a bunch of dead ends with it and just don’t want to waste all of my cash paying their gains tax. any ideas super appreciated 

I’ll keep it short, I am 22 as of now own 4 doors, my grandfather has several small apartment buildings he is selling off and I am buying one of his 18 unit buildings and it will be done under seller financing terms. He has owned this one for 40 years and it was fully depreciated. The payments towards the property are going to be made to a trust that will be distributed to his children upon death. We are trying to avoid paying capital gains as much as possible. We are both open to creative ideas. We are not getting far with our accountant. If anymore info is needed I will provide asap, thank you!

I am doing the exact same thing you are doing now. I have struggled with finding financing especially through conventional banks and am now working with a dscr lender. If you are doing a lot of the work yourself and using cash you can really make a lot of money this way, as I built for about 1/3 of the appraised value and you can't really realize your gain on the project without doing a cash-out refi. But if you dont have a normal w2 or may not qualify at a bank, save yourself the headache and get some numbers from a dscr lender. Even with 8-9% rate property is still cashflow positive so I am realizing about 1 300% gain by doing it this way as rents easily make the payment with 65% cash out. Am in the early stages working with Easy Street and they seem very promising.

If you are capable of doing a lot of the work yourself and are friends with contractors you can really drive the price down on a new build and be at your own will when buying materials and timeliness of project, honestly building a house as your own GC can be a great side hustle if your willing to look for deals on materials and do a lot of the work on your own and you can build it for about half of what the value will be when you're done. But this is absolutely not attainable for the normal investor. As well as if there is growth or opportunity in developing in your area but this usually requires a lot of capital and relationships. Otherwise buying is more attainable and cheaper.

 It's in midwest Kansas, pretty far from any metropolitan areas, but the city has seen amazing growth in the last decade and I looked and population is around 29-30,000. The property is a brand new construction that I own outright and the rental market in this city is very strong as of now there is quite the shortage. The Dscr ratio is no problem, the only thing holding it back is the rural designation. It seems that the criteria they are using ( the consumer financial protection Breau) designates entire counties as "under served or rural". 

So I have been having a lot of trouble getting a cash out loan on one of my properties I own outright, and I thought DSCR lending was going to be my saving grace. Well turns out pretty much my entire investing area is considered "rural" even though this specific property is right in the middle of a 30,000 population town and most DSCR lenders will not loan on it because of this. Has anyone ever found a way around this as I really need this to happen if I am going to scale. Conventional lending is not really an option as I am a college student and dont have much W-2 income at this time.

 The answer I was looking for. Where can I find REPUTABLE lenders that could do something like this? Thanks