All Forum Posts by: Tyler Carpenter

Well with this being said, how do you know when a good deal is a good deal and you can make it work? Because a generalization of just 45-50% is a nice generalization but what is looked at into detail to determine if you can make the numbers work?

What percentage do all of you experienced investors use as numbers for the following compared to the full loan amount? Any information would help.

-vacancy rate
-maintenance
-utilities
-property mgt
-other
-property tax
-insurance

With this being said, if I buy a property under an LLC and lets say the LLC tanks (worst case scenario), would it go against me personally and completely ruin my credit as well?

Thanks so much for taking the time to clear that up for me Jon. Your knowledge is much appreciated.

Actually Im a little lost after reading that into more detail. Basically in a chopped down example. Lets say I want to buy a house for 40K, and I need to put a rehab of 20K in. My expenses are 60K. I get the house/apartment appraised at 125k. There is 65k in equity or value there. I would want to refinance so that way I can take that 65k and put it as payment towards my next purchase. Would this be more like a cash out or a rate and term? Also if I did this approach could I use the 1031 exchange? This is all taking into consideration that I have some cashflow even after the refinanced loan is taken into consideration.

Also last question: If I wanted to pursue down that path with the economy and the way banks are loaning, then is it that I will realisically only be allowed to take about 70-80% of the value out? So in the example from above if I had the 65K in equity value I would only actually be able to refinance for 87.5k if I was able to refinance on 70% of the 125K value? Hope that isnt too confusing.

Would the bank usually make the purchase and rehab as one loan or would they be two seperate loans. My goal overall is to go more a long the lines of rate and term refi instead of cash out refi.

So what happens if it drops to zero? Would this make the mortgage rates jump way up or way down? Long term that is?

Figured I would ask in this forum since it pertains to rehabbing. Does anyone suggest a good book for rehabbing/ foreclosing that has good information but also shares examples so that I may have a better grasp at areas that I may be a little hazey on right now? Thank

Would/ Can you form an LLC before you buy a property. I was told that most banks wont loan to an LLC real estate if you dont have a lot of business history with the banks. What my mentor said was once I bought a property in my name for my first property was to get a "deed of transfer"? to move the property under the LLC. Also once in the LLC, what would the advantages of switching it right away to the LLC? Security? Credit Score? Im a little hazey in this area of the real estate. BTW, I plan to buy my first property in Chicago, IL in the next 6-8 months; so this is my time frame. Am I too early to think about LLC?

Rich Dad Poor Dad is by far the most inspiring book to me. Another great book I own is called Weekend Millionaires Mindset: Investing in Real Estate. Both great books. I am a newbie by all means, but has been very informative and helpful in my spirits and looking at different angles. To me to really get started is to believe in yourself and have the belief that you can make anything happen and Rich Dad Poor Dad gave me that.