All Forum Posts by: Travis Limbocker

@Larry Fried @Brian Eastman thanks for clarifying. It's funny to me how much this topic is discussed and yet, there's never a black or white answer. I had a conference call with a few mainstream crowfunders this morning and they still couldn't give me a straight answer. 

@Brian Eastman thanks for paining a clear picture on the UBIT and UDFI subject. I've been digging around the forums and looking into the crowdfunding with SDIRA's and Solo(k)'s and there seems to be a difference between debt-financed and equity investments when it comes to UBIT. You mention a solo(k) would be subject to UBIT (not UDF) if the investment is into an LLC. What if the crowdfunded investment is equity-based, free of debt-financing? Would UBIT still apply to the rental income generated by such assets?

@Jonathan Schneider thanks for the input on Manheim Park. @Dylan Brauner to echo John's comment, I would be surprised if your grace period was < 6-12 months at a minimum. All the more reason to star investing as early as possible.

@Kim Tucker@Mike D'Arrigo @Dylan Brauner what do you think of Manheim Park for MF? We took a look at a few larger MF's and the returns looked good, after some substantial rehab though. I mean if Brad Pitt is focusing on revitalizing the neighborhood, there must be something special about it - Make it Right Foundation

Despite some of the delays the foundation is having, it seems as if there's a lot of potential in that area of the City given it's proximity to the Plaza. 

@Dylan Brauner first off congrats on graduating and getting your Master's at a young age. If I could go back and start the REI journey while finishing my Master's degree, I most certainly would.

I endorse @Kim Tucker suggestion on finding a way to acquire a small MF around the university, live in one unit, and rent out the others. The rental income would offset your mortgage (if you buy right), and you will gain valuable knowledge on how to landlord a property. Good thing about about the student housing strategy is stability: students will ALWAYS need a place to live and the parents will be averse to stop paying rent and risk their children not finishing college.

The Plaza is an awesome area. Price point is high, so I'm not sure if it's a viable option for you; nevertheless the suggestion of AirBNB and creating furnished rentals is a great niche IMHO. If you can do it, more power to you.

I have acquired MF properties with the subject-to / 100% seller finance and if you can find a seller who's open to this setup, it's a diamond in the rough! 

I agree with @Jeff Sheraton and @Mike D'Arrigo that the student loan interest will be negligible vs the return you could receive in the KCMO area; enough to pay off your debt even while you're still knocking out your Master's.

Best of luck and congrats again on making the decision to invest at such an early age. It'll pay off no doubt.

@William S. We own a few properties in that and surrounding zips. Happy to share information. Sending you a DM.

Touche @Account Closed

BP Gang,

But I am reaching out to my fellow investors to get your input and thoughts on the following scenario:

• Currently own a 6-unit Apartment complex in San Jose, CA held in an LLC formed in beautiful CA
• Own another 6 units across 2 separate properties in Kansas City, MO (KCMO), of which the title is held by myself, my wife, and our partner.
• KCMO properties have $2mil in liability insurance coverage each, with another $5mil over a blanket policy

I tend to agree with the folks on BP who WOULD say, that in this scenario, it's not worth the initial and ongoing costs to establish another LLC for the KCMO properties. I just don't think we're that sophisticated yet, and more importantly, the asset protection for those two properties is covered by liability insurance. I mean, we got a smokin' deal (IMHO) that provides a $5mil umbrella for only $1,300 / year, on top of the $2mil primary policy.

In 2017, we're planning on scaling the business by acquiring at least a few apartment complexes (20+ units) in other states while still living in CA. BTW - I still have a W2 job, most likely for the next 5+ years (CA living expenses make the freedom number a bit larger). 

So, my question is: assuming our RE investments continue to take place out of state, what are everyone's thoughts / suggestions on a proper asset protection / entity structure? 

Loaded question...absolutely. Really just looking for the folks who've taken this path and what your opinions are on protecting yourself through the magic of entities?

Hi BP Community,

My partner and I have recently acquired a 6-unit apartment complex in the downtown San Jose area, with a Willow Glen area code (95125). The property sits on a sizable lot (13k sq/ft), which has a ton of potential, specifically adding 3x more units. 

Wanted to reach out to the community and get connected with some commercial developers in the area. Interested in having a candid conversation around what the options could be for a lot of this size, as I believe there's a lot more opportunity given the location.

Let me know if you;re interested in connecting.

Thanks folks

Good morning BP,

Wanted to get a fresh discussion going on hard money lending (HML) specific to large MF apartment properties.

To date, I've acquired < 10 unit MF properties using a mix of traditional financing and 100% seller financing. Like most novice investors living in the Bay Area, we're "forced" to find creative ways to finance larger properties due to the barriers to entry (i.e. capital on hand) l in our local area. So I've turned my focus to educate myself on HML.

I wanted to get some feedback from HM folks, particularly in the West Coast markets on what we could expect to see with rates, terms, fees, etc.. for larger (20+) apartment purchases. For some context, and to give you would-be advisors a bit more detail, here's a brief summary of our investment strategy:

• Focus is on purchasing 20-100 unit apartment complexes
• Our strategy isn't ground-breaking or substantially unique; we simply look for properties with long-term owners and usually a good chunk of deferred maintenance, in the $1m-1.3m (list) range, that we can BRRRR
• These properties typically need a good amount of cosmetic work and are under-performing for the area
• If we CAN'T acquire via seller financing, we're typically staring at a 20-25% down traditional loan + the cost of rehab, which is typically $75-$100k+
• With these properties, we're looking to bring up to market rents within the first 12 months
• Net of it, we COULD need to borrow between $200k-$400k

So for some of you hard money lenders out there, or folks who've used HML to finance these types of asset, what could I expect in terms of lending terms, rates, fees, etc..?