All Forum Posts by: Paul Jamgotch

I met a gent on BP. He purchases homes from HUD, rehabs, and sells. On 1/13/2014 I provided the funds for him to purchase a home that happens to be about 800 miles from me. He is covering modest rehab. I am a 1st lien holder with no payments & 6 month balloon. He will list through local agent. We will split anything left 50/50. This was my first deal other than two local buy & holds that I sold on LC a couple years ago.

No problem @David Beard . I need to vet this stuff out. Keep in mind we didn't end up doing this. Since I have a job not related to RE in 2014 I was planning on reporting on Schedule D via form 8949 and selecting (c); I think I'll be safe but would understand if IRS challenges me. My guess is I will do no more than three of these (finance with profit share) in 2014. 2015 will require more planning as I hope this activity constitutes 60% or more of the bacon I bring home.

@Dmitriy Fomichenko Thanks for your input (as well as others). Who do you have your solo 401k with? Also, from my investigation, it seems that I might not be eligible since I do not have a 'business'.

From the experience of others, would a simple, personal LLC where I lend money on projects and report proceeds as income or short-term capital gains constitute a 'business' and make me eligible for a solo 401k? I'm trying to avoid paying SE taxes since I am not actively managing/working at these projects.

I'm juggling a few balls and plan on getting with @Steven Hamilton II once I know status of employment. Was hoping to get this retirement account going before that though.

@Mike Bryant Thanks for posting. Have you experienced the slowness of funding or CS inquiries that others on BP have reported?

$50 – application fee

$525 – annual administration fee ($90k-125K)

$95 – transaction fee

$30 – wire fee

I plan on funding 1-2 flip projects at a time (I'll be hands off other than visiting property before purchase). I'll be protected via 1st position and given mortgage/DOT. What are others paying? Thanks.

@David Beard I was going to be on title so was planning on reporting this as a short-term capital gain.

@Karen Margrave This was a very astute observation. We ended up not doing the deal once I found out how big of chunk the HML was taking from the deal (5 pts and $2K+ in fees over first three-months plus .92%/month (11%). At the end of the day, my risk outweighed my potential gain.

Looks like link in OP includes a period at the end. Site looks fine when I remove that. Best of luck.

Hi @Gwendolyn Bryant , site not working for me.

Many parks don't allow landlords. If on private property the lease may not be long enough which means a home move is in your future. How much is the payoff (not just payment)? How does that price compare to SIMILAR homes (year, size, quality, and foundation/slab) in the SAME park or location?

So, IMHO,

Step 1: If applicable, speak to park management or land owner to see if they accept landlords. Also check lease terms to make sure home will never require moving.

Step 2: Make sure loan is actually assumable and get payoff to determine price of home.

Step 3: Determine what similar homes rent & sell for in that park/area to make sure you are not assuming a loan that is higher than value of home and that you can actually make money.*

*hint: many retail buyers pay to much for their MH and might be why they are willing to walk away.

I'm not a MH investor so hopefully others will add their insights. In the mean time, I suggest you add some details if you want to receive quality, professional insights.