All Forum Posts by: Ty Coutts

Hey Eddie,

I am a loan officer in CO, licensed in Colorado, Arizona, Arkansas, California, Florida, Kansas, North Carolina, Tennessee, Texas and Wyoming. However, we have numerous officers here at Aslan Home Lending licensed in Minnesota. We work with over 80 investors, a majority of which are wholesalers. Please feel free to reach out to me directly if you would like to discuss!

Hey Manas,

The Tenant Improvement (TI) allowance is typically negotiated between the landlord and tenant and is used to cover the costs of customizing or renovating the space to fit the tenant's needs. Here’s how TI allowance is commonly calculated:

Determine Total TI Cost:

Estimate the total cost of improvements needed for the space. This includes construction, materials, labor, permits, and any other associated costs.
Negotiate TI Allowance:

Landlord and tenant negotiate the TI allowance amount based on the estimated total cost of improvements. The allowance is often expressed per square foot of the leased space.
Per Square Foot Basis:

TI allowance is typically calculated per square foot of the leased area. For example, if the negotiated TI allowance is $20 per square foot, and the leased space is 1,000 square feet, the total TI allowance would be:
TI Allowance = $20/sq ft \times 1,000 sq ft = $20,000
Lease Term Consideration:

Longer lease terms (such as 5 years or more) can sometimes result in a higher TI allowance because it provides the landlord with stability and longer-term rental income.
Special Considerations:

In some cases, TI allowances may be structured differently, such as a lump sum payment upfront or spread out over the lease term. The specifics should be clearly outlined in the lease agreement.
Documentation and Approval:

Document the TI allowance in the lease agreement, specifying any conditions or restrictions. Ensure both parties agree on the scope of improvements covered by the allowance.

Feel free to reach out to me directly if you need!

Hey Tiia,

In the DFW area, landlords often use a rule of thumb that a tenant's monthly income should be around 3 times the monthly rent to qualify. Here’s how you can calculate the income requirement:

Monthly Rent: $1,680

Income Requirement Calculation:

Multiply the monthly rent by 3 to find the minimum monthly income required:

1,680×3=5,040

Therefore, a tenant should ideally have a monthly income of at least $5,040 to comfortably afford a rent of $1,680 per month in the DFW area. Keep in mind that individual landlords and property management companies may have slightly different criteria or additional requirements, such as credit score, rental history, and debt-to-income ratio. These factors also play a role in determining a tenant's eligibility. Please feel free to reach out to me directly if you need!

Hey Joey,

Cost Segregation and REPS: Yes, you can perform a cost segregation study once your wife qualifies for Real Estate Professional Status (REPS) and use accelerated depreciation to offset your W2 income in subsequent years of renting the property.

Purchasing Another Property: It can be beneficial to purchase another rental property within the first 5 years to continue maximizing depreciation deductions. This strategy helps offset W2 income effectively. The decision to acquire additional properties depends on your financial goals and management capacity.

Continuation of Strategy: Continuing to acquire properties and utilize cost segregation makes sense if you want to offset W2 income. There's no set point to stop; it depends on your investment goals and tax strategy.

Considerations: Consult with a tax professional to tailor this strategy to your specific financial situation, investment goals, and long-term plans. They can provide personalized advice based on current tax laws and your individual circumstances.

Please feel free to reach out to me directly if you need!

Hello Brian, when you own a property "subject to" the existing mortgage and are considering reselling it using the same method, there are several important considerations and potential restrictions you need to be aware of.

Due-on-Sale Clause:

Most mortgages contain a due-on-sale clause, which allows the lender to demand full repayment of the loan if the property is sold or transferred. This clause is a significant risk because if the lender discovers the transfer, they can call the loan due.
Although many lenders do not routinely enforce this clause, especially if payments are current, it is a risk you and the new buyer must understand and accept.

Disclosure:

Full disclosure to the new buyer is crucial. They must understand the "subject to" arrangement, including the risks associated with the due-on-sale clause and the fact that the mortgage remains in the original borrower's name.
It’s advisable to have all agreements and disclosures in writing to avoid future disputes.

Buyer’s Financial Stability:

Ensure the new buyer is financially stable and capable of making the mortgage payments. Since the mortgage remains in the original borrower’s name, any missed payments could affect their credit and lead to foreclosure.

Legal and Regulatory Compliance:

Verify that reselling the property "subject to" complies with state and local laws in Texas. Consulting a real estate attorney experienced in creative financing methods can help ensure compliance and protect your interests.
Texas has specific regulations regarding real estate transactions, and certain creative financing methods might be subject to additional scrutiny.

Insurance and Taxes:

Ensure that property insurance and taxes are kept up to date. The new buyer should be responsible for these payments, but you must ensure they are made to avoid issues with the lender or tax authorities.

Reselling a property "subject to" can be done, but it comes with risks and requires careful planning and execution. Consulting with professionals, fully disclosing all terms to the new buyer, and ensuring compliance with all legal and regulatory requirements are crucial steps to successfully completing the transaction. I hope this helps!

Hey Brian,

Here are some key considerations if you're looking to re-sell the property under the same "subject to" arrangement:

Due-on-Sale Clause: Most mortgages have a due-on-sale clause, which means that the lender can demand full repayment of the loan if the property is sold or transferred to a new owner. When you sell a property "subject to" the existing mortgage, technically, this clause could be triggered because ownership is transferring to a new entity or individual. However, enforcement of due-on-sale clauses can vary, and some lenders may not immediately call the loan due if payments are current and the sale does not trigger other concerns.

Disclosure to Buyer: When selling a property "subject to," it's crucial to disclose this arrangement to the buyer. They need to understand that they will be taking over responsibility for making mortgage payments while the loan remains in your name.

Legal and Ethical Considerations: Ensure that all aspects of the transaction comply with local laws and regulations regarding real estate transactions and disclosures. It's advisable to work with a real estate attorney who is familiar with subject-to transactions to navigate any legal complexities.

Risk and Liability: As the original borrower, you retain liability for the mortgage even after selling the property "subject to." If the new buyer defaults on payments or otherwise breaches the terms of the mortgage, it could impact your credit and financial situation.

Market Demand: Consider the market demand and potential buyer pool for properties sold under subject-to arrangements. Not all buyers may be comfortable or eligible to take over an existing mortgage in this manner.

Feel free to reach out directly if you have any other questions!

Hey Scott,

To start discussing investment opportunities for purchasing the assisted living facility:

Prepare a Business Plan: Outline your vision, financial projections, and strategy for improving the facility's performance. Include details on the current market conditions, the potential impact of the solar farm, and your experience in the industry.

Network with Investors: Reach out to potential investors who are interested in healthcare or real estate investments. Attend industry events, join investor networks, and leverage your existing contacts in healthcare and real estate.

Seek Professional Advice: Consult with a commercial real estate broker or investment advisor specializing in healthcare properties. They can help structure the deal, assess the financial feasibility, and connect you with potential investors.

Due Diligence: Conduct thorough due diligence on the facility, including financial records, operational history, regulatory compliance, and potential for growth. Investors will need this information to assess the investment opportunity.

Present Your Proposal: Prepare a compelling pitch highlighting the opportunity, your expertise, and the potential returns for investors. Be transparent about risks and mitigation strategies.

Negotiate Terms: Once you identify interested investors, negotiate terms that align with your goals and their expectations. Consider equity shares, profit-sharing arrangements, or other creative financing structures.

Legal and Financial Structuring: Work with legal and financial professionals to finalize agreements and ensure compliance with regulatory requirements.

If you have any other questions, just want to discuss, or need a loan officer please feel free to reach out to me directly!

Hey Fisher,

Yes, you can live in your garage and rent out rooms in your house, provided that the garage is properly converted into a habitable living space according to local building codes and regulations. Ensure it meets safety and zoning requirements before using it as your primary residence to avoid violating any laws or terms of your owner-occupied loan. 

If you have any other questions/want to discuss feel free to reach out directly!

Here's concise advice based on your situation:

Timing of Selling NC Property: Consider holding onto the NC property due to its stable rental income and equity growth. Evaluate market conditions closer to your next move to optimize the timing for a 1031 exchange.

HELOC for Investments: Utilizing a HELOC could provide funds for a down payment on an Airbnb or potential flip. Evaluate interest rates and terms carefully to ensure it aligns with your investment strategy.

Continued Property Purchases: Given your military moves every 3 years, continuing to purchase homes with each move can gradually build your portfolio. Look for properties with potential for rental income that covers expenses.

Long-Term Strategy: Plan strategically for future moves, leveraging VA loans and other financing options to expand your real estate portfolio while maximizing rental income and equity growth.

By strategically managing your current properties and leveraging financing options like HELOCs and VA loans, you can effectively expand your real estate investments over time. I am a loan officer licensed in multiple states so let me know if you want to discuss some options. Also, if you have any questions please feel free to reach out to me directly!

Hey Darius, 

I am a loan officer in CO but I am licensed in Colorado, Arizona, Arkansas, California, Florida, Kansas, North Carolina, Tennessee, Texas and Wyoming. Good luck on your move! If you want to discuss or have any questions feel free to reach out to me directly!