All Forum Posts by: Trever Good

I’m looking at an older 5 unit, three story apartment building located on a city corner lot.

I realize my maintenance costs will be higher than if it were a row house due to the added exterior materials & windows, extra sidewalk to maintain, etc.

Does anyone have any input on wether or not a corner building affects the rental rates? Obviously you’ve got more windows in the units than row homes (a bonus for tenants?) but also more traffic noise (minus for tenants?)

Is there an impact, either +/-, on rental rates or am I just overthinking this??

@Greg Dickerson Interesting point. From the buyers perspective it makes perfect sense. But what about the seller? What concerns might I need to address with them?

I’ve got a MF property that seller is willing to carry up to 70% of purchase price for 8 years. I’m trying to be creative to get a 30% DP without tying up capital so I can start slowly improving the property over the first year. Rents are currently way under market, but it would still cash flow on day 1.

Any advice is appreciated....

Trev

@Dmitriy Fomichenko Thank you Dmitriy! I will not be pursuing this avenue. Certainly there will be a better, cleaner way to make this happen. I appreciate your advice.

@Daniel Dietz Thanks for the advice. I am not ready to attempt something like this. Appreciate the heads up!

@Carl Fischer Absolutely, will do.

Am I correct that my LLC could partner with my SDIRA if it were a purely passive investment, like a turnkey property managed by pm that I put no sweat equity in? Understanding that each entity controls its initial % of income & expenses, etc.

@Carl Fischer Excellent, thank you for the thorough explanation, particularly on the DQ'd LLC! That's helps me understand the basic mechanics.

Good morning BP, I’ve poked around the forums for a couple days trying to find a specific answer to this, and while I have found answers to parts of my question I’d like to see how they all fit together for my circumstance.

Say that I use my SDIRA to supply the down payment on a five unit property. The seller has agreed to carry the note on a 10 year term. The building itself is way under market with its rental rates. It needs some light cosmetic work to improve the overall appearance, but otherwise it is in pretty solid shape. The seller is an older gentleman that has managed the building for the past 20+ years and is ready to retire.

My original thought was to use my SDIRA money as a down payment, have the seller carry the note for 10 years, but when the rent comes back up to market, look for a commercial refi through my sole owner LLC (different industry, 20+ year track record) and pay the seller off completely. Buy & hold.

Here are some dummy numbers:

Sale price - 100k

Down payment from SDIRA - 20k

Rehab costs come from LLC - 10k

ARV with current market rental rates - 200k

So seller carries 80k note, SDIRA has 20k down, LLC has 10k rehab in.

1. Is it as simple as LLC obtaining commercial refi after seasoning period?

2. If so, how is the SDIRA/LLC partnership structured?

3. Can the LLC "buy out" SDIRA after refi or is LLC a disqualified party?

4. Who receives the mortgage interest expense tax benefit?

5. What am I missing?

Thanks,

Trev

Hello, BP community!

I’m a new investor, still soaking in all the knowledge and input that this wonderful site has to offer. The support and guidance offered is impressive, and I’m sure I’ll be leaning on many of you as I progress.

I'm located in beautiful Lancaster County, PA. I've got a couple decades of small business entrepreneurial ship under my belt, and am looking to carry some of those skills into REI.

Please feel free, and any and all times, to reach out for any reason, as I will be doing the same!

Looking forward to hearing from the BPers out there.