All Forum Posts by: Travis Sperr

@Adam Duncan you either need to have the owner and tenant put a lease in place, a lease you provide or approve of, or you should have the owner serve them notice to quit and you will close when the property is vacant. Third option is to sign up your eviction attorney now an buckle up. Evicting someone without a lease is not something you want to go through. 

My knowledge is limited and there are obviously variables in location, size of units, amenities, expenses, TI, etc. But based on a couple office buildings in the same zip code I pretty familiar with that rent seems high for that class of office. Happy to connect and discuss further.

Great question for an attorney and a look in the mirror. All depends on your risk tolerance and willingness to keep separate books, tax returns, etc. I have 15 rentals in the same entity, carry large umbrella and try not to do anything dumb. I know people that do every property in a sperate llc and others that own a whole portfolio in their personal name. No perfect answer. If you have 2 properties at 80% LTV, not a lot to worry about, if you have 10 free and clear properties, it could be worth exploring.

The licensing is the absolute least of a landlords worries right now. Senate Bill 21-173 is far worse for landlords statewide and could dramatically change the landscape for rental property owners. 

https://leg.colorado.gov/bills... 

 

It is my understanding on a cash out refi, fannie and freddie are limited to the 70% of value. If you find an outlet for 75% you will likely pay for it in the rate, potentially outweighing the benefit. Depending on what you need the cash for there are some great terms on personal loans that are not secured, I've heard with rates as low as 6%. You would have to do the math, but the blended rate would likely make sense.  

@Julie Sisnroy you can have your agent represent you and treat the cash buyer as a customer (as defined by the Colorado Real Estate Commission Docs). You do not need ot pay 6% unless your sellers agent agreement states that, and even if it does, everything is negotiable. I often make offers on MLS listed properties directly to the listing agent and ask they treat me as a customer, in order to provide a higher net price to the seller, making my offer more attractive.

@Kyle McGeough The best advice I can give is to spend less and live in an area you wouldn't normally. It is going to be difficult to cashflow a $450k house on a whole house lease, much more doable at $300k ish. I fully understand that that price point is difficult, but the less you spend the greater your ability to do it over and over. I see people all the time that "want to buy rental properties" but then get a mortgage that requires all of there savings down and eats up their DTI to a point they can't buy another property. Go get uncomfortable for 2-3 years and buy your "home" when you have 3 - 4 rentals under your belt. While all your friends are living it up in RINO, you can build wealth in Aurora or Montbello. It's not sexy, but it works, and cash flow is sexy.

As complicated as this is, it is relatively simple, you could handle via a contract or an entity with an operating agreement. Contract is probably cleaner as you could more clearly define defaults and remedies in the agreement that would allow for a breakup. The partnership is easier to capture items like capital calls and change in equity. The way the money flows is pretty simple, all the equity invested is returned first - this could be down payments, interest payments, construction costs of overages, etc. Then any preferred return if part of the agreement ( you mention interest on investment). Then profits are split according to the agreement. 

I have never understood why investors partner with builders or GC's, unless the  GC is bringing money or signing on the loan. A profit split will almost always cost more than just paying the GC fee, and I would never pay a GC fee and split profit, unless they brought significant value to the deal- financing, cash, land, the deal, etc. 

Ultimately you need an attorney involved. 

@Bill S. said it well. True private money lenders are great to work with, creating those relationships take time and a solid track record. I typically see our clients start with hard money and slowly graduate to private money lenders over time. With any lender money is finite so you may find a blend of private and hard money lenders if you have multiple projects going at once. 

@Maria N. you might try being a little more specific to get responses. Colorado covers more than 100,000 square miles. If there is a metro area you want to be in, or a distance from work that would be acceptable, it would help narrow the search considerably.