All Forum Posts by: Tyler Gibson

@Philip C. You may want to touch base with @Sean Myers . He is an investor/broker in Orlando that has a property management division with his partner. 

@Juan Alvarez I am not sure if this will help you or not but here goes. I actually owned a home when I purchased my first rental property. I like you did not have enough money to qualify for traditional lending. Luckily for me, I have family that has some money. I approached my family and asked them about being a private lender. We worked out the details I basically put 3% down about $5k and now I have a mortgage with them. The property is in my name and I am responsible for everything. We recorded a deed of trust which is a form of a mortgage here in Florida. 

If you have never purchased a home before you might qualify for an FHA loan which could be as little as 3.5% down.

@Kevin Romines Your response is pure gold. I have been looking at doing something like this but have had some questions that are holding me back. Your response has been enlightening really appreciate it. 

@Joshua D. Some of the other responses have touched on this but I figured I will pile on and re-enforce their thoughts.

You said the business nets $7000 a month but that it goes back into the business to pay mortgages, lines of credit, and construction costs. Sounds like the business does not net $7000. Net would be what you have left after you pay for everything. I could be misunderstanding and you are simply putting the money back in when you don't have to. 

Someone already said it but I will repeat it. Find an accountant to help you figure out what expenses you have that the business could pay for. Specifically, your truck, fuel, cell phone, and working lunches if you have any of those.

If at all possible you want the revenue your business generates to pay for as many of your bills as it legally can. You are paying for expenses with before-tax money as opposed to having your wife's paycheck pay for the expenses with after-tax money. If at all possible you want to not pay for expenses with after-tax money. 

Someone mentioned starting a property management business or realtor business and that is a great idea. It would allow you to continue to do the type of work you are loving and make some extra money that can pay for expenses with before-tax money. 

Don't get me wrong I don't mind paying my taxes but I don't want to pay any more than I legally have to. 

I started a photography business on top of my fulltime job and rental business not because I think I am going to quit my job or because I think I am going to make a fortune taking pictures of people but because I want to buy some awesome photography gear and I want to pay for it with before-tax money. I also can write off some of my homes square footage as a home office and if the photography business loses money (which it will on purpose for the first couple of years) I can write the loss off of my W-2 taxable income.

I am not saying that you need to go get a W-2 job but you should re-evaluate your business and what it is really making or paying for. 

@Joshua Dees what @Caleb Heimsoth is saying is that before agreeing to sell the contract to a cash buyer you may have wanted to know about the title issue. You have no money in the deal and so if it doesn't go through you won't lose any money. Unfortunately, if you can't make it happen, then you have an issue where you might lose credibility with the cash buyer who is already taking action as if this is a done deal. 

Also if you had gotten the title search before you got the house under contract, you might have been able to use the issue with the title to negotiate an even better deal since the family obviously doesn't want to deal with "Bad Grandpa".They would have to if they wanted to sell to anyone else and would have given you more leverage in negotiations. Doing the title search beforehand would have at least given you a chance to either walk and not damage your reputation or get it figured out before bringing in the cash buyer. Either way a good lesson to anyone that reads this post. 

I hope it works out and I would try offering more than $100.00. If you are going to make 23k then you can do better. 

@Mariah Sanchez Florida is a pretty good rental market. Here in Orlando, there is a shortage of available apartments compared to what the demand is. The prices in Orlando are climbing making it more difficult to find a deal that makes sense. I have heard that Jacksonville and Nashville are both good markets where deals are available. Unfortunately, I do not know any contacts in those areas. Sorry I couldn't be of more help. 

@Bernie Huckestein what time does this event start? The times I am seeing is 7pm-9am and that seems like a really long meetup. lol

@Tairsa Mathews I can't speak to the seller financing but I can speak to the working with Family/Friends portion. I have done 2 deals and both of them involve my father in some way. The first was a SFH home that I wanted to buy but didn't have enough Cash to get traditional financing. So I got a private money deal from my Father. The first thing he said to me when we started talking about it was "I'm not doing you a favor this is a business deal". It is a good deal for him because he makes interest on his money and the loan was secured by the property with a deed of trust. He and I both understood that If I don't pay him he will foreclose on the house.

The Second deal we are partners on and again we both went in understanding this is business. We put our agreement of how the business would operate and the terms of the deal in writing. 

Put it on paper so that you both have something to look back at and know that you both agreed to the terms. 

I have some family I would not be comfortable doing a deal with because I don't think they have the emotional temperament required to compartmentalize the Family/Business. 

I hope that my thoughts on the matter help you come to a decision about doing business with friends or family.

@Heidi Kenefick Double check your contract with the PM. The contract I have with my PM stated that if they weren't able to fill the unit in 60 days I could walk with no penalty. I suspect there is something like this in the contract.