All Forum Posts by: Shane M

Any tips or advice on how to negotiate with banks? Is it even worth the time or are there tried and true methods? I'm looking at a foreclosure that I want to take off their hands, but it wouldn't be worth it if they won't take 20-30% less! Thoughts, suggestions?

How heavily do you weigh previous sale prices when looking at a property in its current market? I guess you would need to look at the context of the sale and even then there may have been other things happening that you weren't aware of. So is it best to just ignore it and just look at comps?

I am looking at a banked own property for 57K, I'm looking at 2 comps that have sold for 50 and 54 as well as 3-4 for 90-110 in the same time frame. I guess the key would be to go look at these home to see their condition. Is it likely that other investors have scooped those properties up intending to resell them at the retail rate? More due diligence is required for sure.

In regards to my question, this home sold for 75K in 2004 and according to the graphical market information from the comp websites like cybehomes and eppraisal, the market was at the same place in this area in 2004 as it is now (which I thought was odd anyway). Eppraisel evaluates the property at 88K as being medium price, 75K on the low end (although I'm not sure how accurate that is either). There are currently homes priced at 119K but I doubt they will sell.

Thanks!

Hey everyone I've been reading through the posts about the various rules and strategies for calculating deals and I was wondering if there was a catchall post that I missed with all of these. Thanks!

Thanks for the spreadsheet and the tip on heading to that forum!

Local real estate investing clubs are a good place to start, I'm still looking myself actually!

I appreciate your positivity, but there are also factors that are outside of your control. And you could probably be successful with or without any of these factors, but I would say that these would increase the likelihood of your success (not guarantee it).

Typically if you claim to have a set of reasons as to why people are successful you provide an amount of data to prove it is accurate. But that would require research, interviews with successful people, etc. And even if you do find some consistencies in what those people say, there are so many other factors (that could be the real reasons they were successful, but that you aren't aware of) your data may be totally skewed anyway.

I agree that you should pursue the things you are passionate about, but life is more than just passion and sometimes it requires you to do the things you don't love. Actually a lot of times it requires you to do those things. Those things are called responsibilities and remain constant passion or not.

Passion is just one element of the equation. I would say that intelligence/knowledge is probably more valuable than passion (assuming you still have the drive to get something done despite lacking passion).

You shouldn't be discouraged if you fail at something either. What you should do is analyze what went wrong, make the appropriate changes and try again. And you will fail at some point :).

Hey everyone I am just starting out as an RE investor. I've been starting out for the past year and half and still haven't managed to put a deal together :(. I've been digesting as much information as I possibly can, but I am a true believer in learning through experience as well.

I've been off to a slower start because I run my own non-real estate business that takes up a lot of my time! Even so, I am trying to find a deal to get my feet wet because I am so interested in the RE world.

My ultimate goal is to have my current business operating without me having to be there to give me the time and flexibility to focus on other business and RE opportunities.

My name is Shane by the way and I look forward to participating in some interesting RE discussions with you all!

Hey everyone, I'm curious what the actual process is for this. Do you go to the bank and get financing for your LLC (to purchase a property) and then sign a personal guarantee? Or can you get financing yourself and just transfer (sell) the asset to your LLC?

Or can you do all of the financing in your personal name and if you rent it out require the renter make the check to the LLC?

Would any of these completely void your LLC status?

S-Corps do offer tax savings when it comes to payroll, not income tax. An S-Corp is a special election for small businesses designed to save them some dough when it comes to pulling their money out of the company. Being an S-corp also increases the chance of an IRS audit (something your accountant should have told you) because of the additional tax savings it offers. It also has strict rules because it is truly designed for small businesses.

An S-Corp assumes you are a small business owner and are going to be taking a salary from your business. The salary has to be reasonable or you may be flagged by the IRS. Don't pull a salary of $2 or something obvious. But every distribution you take outside of that salary (which for some small business owners is every last cent) you completely avoid the payroll taxes of FICA/medicaid.

It still acts as a pass-through entity like an LLC taxed as a partnership but affords you the payroll tax advantage. If you intend to leave a lot of your money in the business and not pull it all out, than an S-Corp election isn't necessary.

The legal protection that everyone talks about entirely depends on rulings in your state. Some states, especially those with heavy democrat leadership, routinely favor the consumer over the business in court proceedings. California is probably known for this more than any other state. But some states supposedly offer bullet proof protection (although this has changed over the years). I believe Nevada and Utah were both good at one time, but I am unsure as to their status now.

My understanding about a traditional Corporation as a real-estate investment tool is not a good idea because you lose all of the pass-through entity tax savings. They are also more difficult to maintain and no legal entity (LLC, SCORP, CORPORATION) offers legal protection if you don't maintain them properly. A corporation requires meetings of the shareholders, notes of all meetings, etc. If you can produce these things in the event of a lawsuit, great, otherwise stick with something simpler like an LLC or an SCORP. They exist because of their simplicity

Also, another strategy to increase your asset protection would be to form a holding company for your real estate properties. Putting another barrier in between you and the lawsuit. Another strategy is to form separate LLCs for separate properties. That way you don't have all of your eggs in one basket.