All Forum Posts by: Tony Savage

Anthony,
 Do not, I repeat do not take motivation from someone that tells you that you can't succeed in this business. Obviously that person does not have your best interest at heart.  This would be one of the quickest ways for you to loose a lot of cash.  

It's time to part ways with that negative energy and surround yourself with like minded folks!

Good luck on your journey bro!

I tell all of my tenants that I'm the property manager for Balboa Management which is my C-Corp.  I agree with Michael, nothing positive can come from you telling the tenants you're the owner. 

I blame everything on Balboa which takes the responsibility off of me when I tell them Balboa said no or when Balboa has to raise the rent, which Balboa is going to do this summer!

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $95,000
Cash invested: $185,000

This is a flip that I purchased in the name of an LLC I formed with two partners. This is our second flip in Chattanooga. P.P was 95K and rehab is 90K.

What made you interested in investing in this type of deal?

The numbers worked for the return that I wantedN

How did you find this deal and how did you negotiate it?

A good friend of mine who is now one of my partners had contacts in Chattanooga

How did you finance this deal?

Cash

How did you add value to the deal?

Replacing pretty much everything... new roof, kitchen, bath, AC and flooring

What was the outcome?

In Progress

Lessons learned? Challenges?

Still learning, no big challenges yet

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, I have an agent in Chattanooga that works with investors.

I have section 8 tenants and I always use the name of my LLC and the ein number on the W-9. I have the housing commission auto-deposit the rent into my LLC business account.

What a coincidence! I just came across a video on youtube called How to structure you real estate flipping business with Toby Mathis.  Toby is one of the owners/founders of Anderson Business Advisors of which I'm a client of. Anderson forms all of my entities.

Be careful flipping in an S-Corp. If you're doing a lot of flips, you will be considered a dealer since the income from an S-Corp passes through to your personal tax return. 

My advisors had me set up a c-corp and I form an LLC for every state that I flip in. The respective LLC"s are attached to my c-corp and the tax implications are not nearly as bad. After I have completed 4-5 flips in an LLC. I shut it down and form another LLC.

It all depends on your strategy.

I would fire him and look for another GC. Square up with what you owe him/her, then move on. Be professional about informing the G.C that you need to part ways. You're going to waste a lot more time trying to deal with mediation.  

Get a few referrals for a contractor from someone you know really well and go from there.  Now you know what you need to do when interviewing G.C's.  If they can't execute on your expectations move on. It's worth spending the time finding a G.C then worrying about mediation.

Kyle, 

Have a separate account for each property. If you're ready, you can form LLC's for each property and open the account in the name of the LLC's. Pay your expenses for each property out of the respective LLC' account; ideally these should be business accounts. You should set up a separate account for your cap x expenses and your annual vacancy rate. If you're not ready to deal with LLC's just open them in your name.

All of my rentals are in the name of my LLC's. Keep all accounts with the same bank.

Good luck on your journey, it's a fun ride!

It could mean that the neighborhood is gentrifying, if it was a lower income neighborhood in the past. It's a good thing for appreciation in that sub-market

Short sales take a very, very long time to close.  Not only do you have to get the seller to agree to P.P and terms.  You have to get the bank to agree as well.  Waiting for the approval from the bank is what takes a very long time.

The home could be in good condition.  You just need to ask yourself is it worth waiting 3, 6 in some cases 12 months to get an answer from the bank.

If you have the capital and the time to wait, go for it. The other option is find a home that's not a short sale.