All Forum Posts by: Thomas Sulz

Hi All,

I am currently putting together a business plan and am trying to figure out what partner splits would make most sense in the scenario described below. We are looking to BRRRR properties in the Florida market. The overall responsibilities and roles of the four partners would be as follows:

Partners 1 & 2 = Deal finding process, rehabbing process, refinance process, tenant process + funding for costs associated with all the items mentioned

Partners 3 & 4 = Funding for purchasing of the property + closing costs

Through the rehab we will try to force as much appreciation into the property as possible so when it comes time to refinance we can pull out all or most of the cash that was invested into the deal. In a likely scenario where we can not pull out the full amount, partners 1 & 2 would be paid out in full for their funding and the remaining balance would be paid out to partners 3 & 4. The amount of cash left in the property after refinance (20-25%) would essentially be the remaining cash that was fronted by partners 3 & 4 that is locked into the property due to refinancing reasons.

How would you approach a partner split in this case? I know many people will recommend that partners 3 & 4 just be treated as hard-money lenders and collect their interest on the loan but we are not willing to explore that avenue. The split we are leaning towards looks something like this...

Partners 1 = ~40%

Partner 2 - ~40%

Partner 3 - ~10%

Partner 4 - ~10%

*Partner 3 & 4 eligible for more equity depending on how much cash is left in the deal after refinance.

As described above, Partners 3 & 4 would be eligible for slightly more equity (almost like a sliding scale) based on the amount of cash they have remaining in the deal after refinance.

Any feedback or advice anyone could offer would be greatly appreciated!

@Michael Haynes @Christopher Rice

@Christopher Rice

Hi All,

I recently purchased a condominium in the Florida Keys and plan on renting out the unit this upcoming December. The condo is part of a HOA and the HOA requires that all potential tenants go through a background screening before the Board of Directors are able to approve or deny them.

Is this common? I am more concerned to know if this is even legal in the state of Florida??

Any help would be greatly appreciated!

- Tom

I want to bump this thread as I am also interested in buying and renting out condos in this area. 

Did either of you find out any additional info? @Shanthi Palayankottai @Tanvir Sattar

Hi All, 

Below is a pic of the inside of a small condo located in Marathon Florida that I am looking to rehab and flip. The property was a hand me down from my parents after a long-term tenant had recently passed away. As you can see, the place needs a lot of work. I am planning to replace the carpets with luxury vinyl flooring in both the living space shown in the picture and the bedroom. My main concern is the wooden paneling being used for the walls. I have two options: 1) I can leave the paneling and apply a fresh coat of paint over it or 2) Remove all the wood paneling and replace it with sheetrock and paint. In my opinion the conventional sheetrock and paint is more aesthetically pleasing but would be the much more expensive option. Does anyone know if leaving the wood paneling would have any "negative" consequences on the property other than it giving the place somewhat of an outdated look? Same question would apply to the drop ceiling shown in the pic. Is the cost of demoing the place and replacing with conventional sheetrock typically worth it in cases like this?

Any feedback would be greatly appreciated. Thanks! 

Hi Nicholas, 

@Nicholas Aiola

I was hoping you could help me out with a tricky situation I have going on. I would like to take a withdrawal out of my employer provided 401k for about 11k. All my contributions are after-tax so I wouldn't owe taxes on anything but I am mostly concerned about the 10% penalty I would face from the IRS.

Here is my thought process behind trying to avoid paying the penalty and was hoping you could provide your feedback on this and let me know if my understanding is correct... Instead of taking out a regular withdrawal for the 401k (11k) I would take out the contributions that I made earlier this year into my 2019 and 2020 Roth IRA accounts. Since my contributions are after-tax I don't think I would have any taxes or penalties due on the contributions (not withdrawing any earnings in the accounts). After I moved the contributions out of these accounts I would then rollover the after-tax contributions I had made into my 401k into both the 2019 Roth IRA ($5,500) and 2020 Roth IRA (Remainder up to $6,000). I believe by doing this I could avoid the penalties associated with a regular withdrawal.

If my understanding is correct, are there any things I should keep note of? A few things I have heard is you are only allowed one rollover per year, the rollover must be done within 60 days of taking a withdrawal on the Roth IRA contributions, etc.

Any feedback you could offer would be greatly appreciated.

Thanks,

Tom

Hi All,

I am looking to purchase my first investment property but was hoping someone on the forums could provide me with some insight or direction on how to get started. I am looking to purchase a SFH with the goal of obtaining passive income via cash flow. My price limit would be around $250k and I would be putting a downpayment of 20% on a conventional 15 or 30 year mortgage for financing purposes.

I am 26 years old so for the past couple of years my main focus has been saving cash, raising my credit score (780+), and eliminating my student loan and credit card debt (which I now have paid off in full). This being said, I am looking for some guidance on which real estate markets may be upcoming at the moment that have properties that are returning good cash flow and fall under my 250k mark.

Any feedback would be greatly appreciated.

Thanks!

Hi All,

My mother is looking to sell a condo that she has owned for 20+ years in Marathon, FL. She is estimating that the value of the condo is approximately $200,000. 

Her plan after the sale is to give the money to my brother and I as a cash pool to start investing in real estate with. I had a few questions that I was hoping could be answered through the forums on here:

1. What steps does my mother need to take in order to transfer the money to us? I'm assuming it is not as easy as just transferring the money into our bank accounts. What kind of legal issues might we run into here?

2. I believe that the condo is in a trust that is already in my brother and I names. Based on what I know about trusts, the asset would not be transferable to us until after death. Is this correct? Does the fact that our names are in a trust for the property make it easier for us to access the cash that results from the sale?

3. Are there any recommendations of resources on this topic that are readily available to the public? I would like to learn as much as possible before making any potential mistakes.

Thanks in advance for any feedback that anyone might be able to offer!

Regards,

Tom

Hi Benedict,

I am a tax consultant and although 401k's are not an area I specialize in, I am almost certain that if you have already taken out a 50k loan then you will not be able to take out another. The IRS only allows up to a maximum of $50,000 to be taken out of your 401k for a loan.

You can always withdraw the money out of your 401k but you will obviously be hit with penalties. This may not be the most ideal way of accessing the money but if the gains from your REIs are expected to outweigh the loss your going to take in penalties then it may be an option you want to consider.

Hi All,

By way of introduction my name is Tom Sulz and I am new to the BiggerPockets forums. I am 24 years old and have been interested in learning about real estate investing for the past couple of years. I just recently started my full-time job as a tax consultant a little over a year and a half ago and have saved up a good amount of money. In my free time I try to educate myself as much as possible on REI (Listening to podcasts, reading books, etc.)

Between the foundation of knowledge I have built and money I have saved over the past couple of years, I believe I am close to starting my real estate investing journey by buying my first rental property. I am looking to utilize the BRRRR strategy for my first property and will be searching in the Long Island, NY area. My mother has also recently become a licensed real estate agent so she has access to New York State's MLS.

Some of the questions I have and other information I was hoping to receive are as followed:

• How to identify a "good deal" amongst hundreds of listings?
• For others to share their stories about their first BRRRR property.
• Any other tips/advice.

Thanks!