All Forum Posts by: Ty Coutts

Hello, Melissa Kirk, here are my considerations. 

Legal and Regulatory Steps:

Establish an Association: You'll need to create a condominium association and draft the necessary declaration and bylaws (condo docs).

City Approval: Obtain the necessary approvals from the local government or zoning board. This can involve public hearings and meeting specific requirements.

Surveyor: Hire a surveyor to map the property and define the boundaries of each condo unit.

Legal Counsel: Work with a real estate attorney to ensure all legal requirements are met and the condo conversion is properly documented.

Financial and Operational Considerations:

Condo Fees: Determine the monthly condo fees for maintenance, repairs, and other communal expenses.

Insurance: Ensure proper insurance coverage for the condo association and individual units.

Reserve Fund: Establish a reserve fund for future repairs and maintenance.

Tax Considerations:

Initial Purchase with 1031 Exchange: 1031 Exchange Basics: By using a 1031 exchange, you defer capital gains taxes on the sale of your previous property by reinvesting the proceeds into a new like-kind property.

Down Payment and Financing: You're putting down $220,000 and financing the remainder at 8% over 20 years, resulting in a monthly payment of $2,593.
Converting to Condos and Selling Units:

Capital Gains Deferral: The 1031 exchange allows you to defer capital gains on the initial exchange. However, when you sell the individual condo units, capital gains tax will be triggered on the gains attributable to those sales.

Allocation of Basis: The original purchase price and any improvements made should be allocated among the individual condo units to determine the basis for each unit.
Gains Calculation: When selling a unit, the gain is calculated based on the difference between the allocated basis and the sale price of that unit.

Partial 1031 Exchange: You may be able to use another 1031 exchange to defer gains on the sale of individual units if you reinvest the proceeds into other like-kind properties. However, this requires careful planning and adherence to 1031 rules.
Holding and Renting Units:

Retained Units: For the units you retain (one for your business and one for rental income), you will continue to benefit from rental income and potential appreciation.

Depreciation: You can continue to depreciate the retained units, which provides additional tax benefits by offsetting rental income.

With these considerations, this approach allows you to leverage the benefits of a 1031 exchange while maximizing the potential of your investment in the commercial property. Hope this finds you well!

Hello, Vanessa Pacheco, I understand your skepticism. ServiceLink Auction is a credible platform for purchasing properties through auction. Ensure you perform thorough due diligence, understand the auction process, and have financing ready if needed. If you're new to property auctions, you might also consider consulting with a real estate agent or attorney experienced in auctions to guide you through the process. Here's what I do and don't like. 

Pros:

Potential for Bargains: Auctions can offer properties at lower prices than traditional listings.

Speed: The auction process is usually quicker than traditional sales, with a defined timeline for closing.

Transparency: The bidding process is transparent, and you can see competing bids in real-time.

Cons:

As-Is Condition: Properties are often sold "as-is," meaning no repairs or warranties.

Limited Inspection: There may be limited opportunities to inspect the property before bidding.

Financing Challenges: Securing financing for auction properties can be more challenging and may require quick approval.

Auction Fees: Be aware of any additional fees, such as a buyer's premium, that could affect the total cost.

I hope this helps you out!

Hey @Dana Kennedy, great question!

Obviously there is a lot to discuss on this topic, but for a very quick glance, here are a few pro's and con's to consider when thinking about section 8 rentals:

Pros:
Guaranteed Rent Payments -> The government pays a significant portion (if not all) of the rent directly to the landlord, providing a reliable and steady income stream.
High Demand -> There is often a high demand for Section 8 housing, reducing the risk of long vacancy periods.

Cons:

Inspection and Compliance -> The property must pass an initial inspection and comply with health and safety standards set by the local housing authority. This can mean additional costs for repairs and maintenance to meet these standards.
Administrative Burden -> There can be significant paperwork and administrative work involved in maintaining compliance with Section 8 requirements.

Please reach out to me directly if you want to go deeper into the subject, especially on the financing/loan side of things! Hope this helps!

Hello, Cliff Benner, in addition to BizBuySell, LoopNet, CREXi, and Horse & Hearth, here are some other listing sites that feature campgrounds and resorts for sale:

LandWatch

Overview: A comprehensive site for buying and selling land, including campgrounds and resort properties.

Website: landwatch.com

Land And Farm

Overview: Specializes in rural property listings, including campgrounds, resorts, and equestrian properties.

Website: landandfarm.com

RV Park Store

Overview: Dedicated to listing RV parks, campgrounds, and resort properties for sale.

Website: rvparkstore.com

Campground Marketplace

Overview: Focuses on campgrounds and RV parks for sale across the United States.

Website: campgroundsforsale.com

United Country Real Estate

Overview: Specializes in rural and lifestyle properties, including campgrounds, resorts, and equestrian properties.

Website: unitedcountry.com

Hey Jamie,

It's great to hear that your family LLC has been steadily growing and maintaining a strong portfolio. Tapping into the equity of your mobile home portfolio can be challenging, but there are several approaches you can take:

Home Equity Line of Credit (HELOC):

Primary Residence: If you own a primary residence with substantial equity, consider taking out a HELOC to fund additional investments or improvements to your mobile homes. This can be a temporary solution until you find more favorable financing options.
Private Lenders and Hard Money Loans:

Alternative Financing: Private lenders and hard money lenders may be more willing to offer loans secured by your mobile home portfolio. These loans typically have higher interest rates but can provide quick access to capital.

I am a loan officer in CO, so I may be able to help you, as well as advise you on how you can increase your appeal to lenders. Please DM me if you have any further questions or if you would like to discuss your options further. 

Hey Nico,

It sounds like you have a solid foundation for your project in central Maine.

Navigating Incentive Programs/Tax Strategies:
State and Local Programs:

Efficiency Maine: Check out Efficiency Maine for incentives on energy-efficient upgrades like windows, insulation, and heat pumps.
MaineHousing: Look into programs offered by MaineHousing that might provide financial incentives or assistance for multifamily rehabs.
Federal Programs:

Federal Tax Credits: Explore federal tax credits such as the Low-Income Housing Tax Credit (LIHTC) if applicable.
Energy Efficiency Incentives: Investigate federal incentives for energy-efficient improvements through the U.S. Department of Energy.
Consult a Tax Professional: Work with a tax professional who specializes in real estate to ensure you are maximizing all available tax benefits and incentives.

Finding Local Contractors:
Local Contractor Networks:

Angi (formerly Angie's List): Use Angi to find reputable contractors in your area. Look for those with experience in multifamily properties and read reviews from other property owners.
HomeAdvisor: Similar to Angi, HomeAdvisor can connect you with local contractors who specialize in the specific types of work you need.
Referrals: Ask for referrals from other local property owners or real estate professionals who have undertaken similar projects.

RFQ/RFP Process: Issue a Request for Qualifications (RFQ) or Request for Proposals (RFP) to gather detailed bids from contractors. This process helps ensure you find qualified professionals who can meet your project requirements.

I am a loan officer in CO so if you need referrals I could help. Please feel free to DM me if so. 

Hello, Dean Valadez, I think the best way is to weigh your options then take it from there. 

Option 1:

Pros:
Simplicity: You avoid the potential complications of alerting the lender.
Maintains Low-Interest Rate: Since your loan is at 3%, you continue benefiting from this favorable rate.
Avoids Immediate Full Payment: You won’t be forced to come up with $45k immediately.

Cons:
Risk of Detection: If the lender identifies the payments coming from an LLC, they might call the loan due.
Potential Consequences: If the lender enforces the due on sale clause, you might be forced to pay the remaining loan balance quickly.

Option 2:

Pros:
Transparency: Being upfront might build trust with the lender.
Possible Flexibility: Given your solid payment history, the lender might agree to the arrangement.
Legal Compliance: You avoid any potential issues with violating the terms of your mortgage agreement.

Cons:
Risk of Loan Acceleration: The lender could still decide to call the loan due, forcing you to pay the remaining balance.
Potential for Higher Payments: If forced to refinance, you might end up with a higher interest rate.

Given the pros and cons of each option, but a cautious approach might be best:

Consult a Real Estate Attorney: This can give you a clear understanding of your legal standing and potential risks.
Evaluate the Importance of the 3% Rate: Weigh the benefits of keeping your low-interest rate against the risks of potentially having to pay off the loan early.
Consider a Gradual Transition: This method allows you to continue benefiting from the low-interest rate while reducing the risk of triggering the due on sale clause. Hope this helps!

Hey Ethan,

Welcome to the world of real estate investing! It is truly the best way to build generational wealth so props to you for taking the first steps. Here are some steps to help you get started:

Education and Learning:

Read Books: Start with foundational books like "Rich Dad Poor Dad" by Robert Kiyosaki and "The Millionaire Real Estate Investor" by Gary Keller. 

Online Courses and Webinars: Platforms like Udemy, Coursera, and BiggerPockets offer courses specifically tailored to new real estate investors. Look for beginner-friendly courses to build your knowledge base.

Networking and Mentorship:

Join Real Estate Forums: Engage with online communities such as BiggerPockets, where you can ask questions, share experiences, and learn from seasoned investors.

Attend Local Meetups: Look for real estate investment clubs or meetups in your area. Networking with local investors can provide valuable insights and potential mentorship opportunities. You can sign up for these on a great website called Meetup.

Financial Preparation:

Evaluate Your Finances: Understand your current financial situation, including savings, credit score, and any potential sources of funding.

Create a Budget: Establish a budget for your first investment. This should include down payment, closing costs, potential rehab costs, and a reserve for unexpected expenses.

Market Research:

Choose a Market: Decide on a market where you want to invest. Consider factors like job growth, population growth, and rental demand. Start with your local area if you are more comfortable.

Analyze Properties: Use online tools like Zillow, Realtor.com, and Redfin to analyze potential properties. Look for properties that meet your investment criteria.

First Steps in Investing:

Start Small: Consider starting with a smaller investment, such as a single-family rental property or a duplex. This will help you gain experience without taking on too much risk.

Get Pre-Approved: If you plan to finance your first investment, get pre-approved for a mortgage. This will give you a clear idea of your budget and make you a more attractive buyer.

Continuous Learning:

Stay Informed: Real estate is an ever-changing field. Stay updated on market trends, new investment strategies, and changes in real estate laws.

Seek Feedback: Learn from your experiences and seek feedback from other investors. Continuous improvement is key to long-term success.

Please feel free to DM me if you want to discuss further and potentially get your investing started! Hope this helps. 

What's up Jay,

Given your situation, here are a few strategies you could consider to secure the rehab budget while respecting the seller's desire to maintain a first-position lien:

Home Equity Loan or HELOC:

If you own your primary residence or another property, consider tapping into its equity through a Home Equity Loan or Home Equity Line of Credit (HELOC). This would allow you to secure funds without placing a lien on the new property.

Personal Loan:

Investigate personal loans from banks or online lenders. These typically don't require collateral but come with higher interest rates. Ensure the monthly payments are manageable within your budget.

Private Lenders or Hard Money Loans:

Approach private lenders or hard money lenders who may be more flexible with lien positions. While interest rates might be higher, they can offer quicker access to capital.

Seller Financing Adjustments:

Negotiate with the seller to see if they are willing to adjust terms slightly. For example, propose a smaller initial down payment and larger monthly payments, which could free up some capital for the rehab budget.

Partner-Investor:

While not your preference, finding a partner-investor could be a viable option. Given your expertise as a contractor, you might find an investor willing to fund the rehab in exchange for a profit share or interest on the loan.

Cash-Out Refinance:

If you own other investment properties, consider a cash-out refinance to pull equity from those properties to fund the rehab.

I work for Aslan Home Lending and we have a HUGE variety of loan products, including the ones mentioned above. Please feel free to DM me if you would like to discuss your options. Even if I am unable to help, I could refer you to people who can. Hope this helps!

Hey Ane,

Welcome to real estate investing! It truly is the best way to achieve generational wealth. Here are some steps and considerations for ensuring your LLCs are compliant from a legal perspective:

For Your SDIRA LLCs in Florida:
LLC Registration: You have filed the foreign LLCs with the State of Florida, which is essential.
FINCEN Registration: Registering with FINCEN (Financial Crimes Enforcement Network) was a necessary step for compliance with the Corporate Transparency Act.
Ongoing Compliance:
Annual Reports: Ensure you file annual reports for your LLCs with the Florida Department of State.
State Taxes: Check if there are any state-specific taxes or fees you need to pay for the LLCs.
For Your Non-Retirement LLC in Nevada Buying Property in Michigan:
LLC Registration:
Foreign LLC Filing: Once the purchase is finalized, file your LLC as a foreign entity in Michigan.
FINCEN Registration:
Corporate Transparency Act: As of 2021, the Corporate Transparency Act requires LLCs and other entities to register with FINCEN. If this LLC was formed after January 1, 2021, it needs to be registered with FINCEN.
Ongoing Compliance:
Annual Reports: File annual reports with both Nevada and Michigan to keep your LLC in good standing.
State Taxes: Check if you need to file state taxes or pay fees in both Nevada and Michigan.
General Compliance Tips:
Local Business Licenses: Depending on the city or county, you may need a local business license for operating your LLC.
Registered Agent: Ensure you have a registered agent in each state where your LLC operates. This is typically a requirement for maintaining good standing.
Record Keeping: Maintain meticulous records for each LLC, including operating agreements, minutes of meetings, and financial records.

You should probably consult with a CPA or attorney just to make sure you meet all compliance guidelines. We have a compliance division here at Aslan and I can answer any further questions you may have. Please feel free to DM me if you need any further assistance.