All Forum Posts by: Gaspare U.

I have a duplex and one water meter. I use a point system. Adults are 2 points, and below 18 are 1 point.

Example $90 bill. Apt 1 has 1 adult and 2 minors, Apt 2 has 2 adults and 1 child.

Apt 1: $40 (2+2= 4)

Apt 2: $50 (4+1=5)

@Sirun Vartanyan that’s a very good concern. I would look at it as I may need more time to rent the units out. So something that typically takes 1-2 months to rent may be vacant for 3-4 months. 

Increase your vacancy rate, and run the numbers with a longer time to rent. Also increase your reserves. To offset this realize rates have come in a bit. 

How’s this deal looking now? Have enough staying power to get over the first year?

@John Blanton my goals and my investors goals are long term. If it’s a good property and not a managerial nightmare I would hold. Perhaps consider longer term financing. Again that’s just my objectives for goals. 

I've used it and like it. In the end you would still want to create your own spreadsheet or one that is a bit more complex. But great way to "back of napkin" calculations.

I know this is a year old post, but was wondering if anyone has gone through with this?

To be totally honest... We do not, but was looking into it. We're placing the properties into a Trust. So once that is completed, I will seek umbrella insurance. I was originally told umbrella insurance does NOT cover properties owned by an LLC. Once I heard that I just put it off to the side until the Trust is completed.

@Calvin Thomas Hey Calvin thanks for the heads up. So I can't withdraw funds from one property as an owners dividend let's say and then use personal funds as an owner's investment?

Perhaps I'm wrong, and I'm not insisting but from what my accountant said it's a net wash as I'm filing personal. At the end of the year I profited X from property 1 and lost Y on property 2, it's a net wash/zero sum game.  

My goal with this is so funds are not commingled and protected with lawsuits. Again, if I'm wrong I will not post this going fwd.

Gaspare

There really is no reason why you shouldn't. Each property I have has a separate bank account under the LLC. Please deal with any extra paperwork or headache this may offer and keep them 100% seperate.

I won't even transfer funds from one LLC account to another LLC account. I will withdraw into my personal, and then send funds from my personal into the other LLC account.

Good luck and follow the advice offered here. 

@Jon Guy I spoke to a hard money lender this week and they offer bridge loans. They loan you money when the banks will not. Some will have a LTV as low as 10%, others up to 30%. This is not a debt instrument used for long term.

It’s an option when there is a great opportunity and the bank can not close due to 1. Time constraints (they can close much quicker) 2. Occupancy Rate (banks typically want a higher OR 80-85%+ 3. Piecing out the construction/rehab draw for funds needed.

This isn’t an option where you’re buying a $1MM property and get $100k from investors, $200k from Bridge Loan and $700k from a bank. Hard money lenders will want to be 1st on the stack (the order where investors/lenders are paid in case things go wrong).

You use this to purchase a $1mm property with 40% occupancy. A rehab budget of $500k. You use hard money to borrow 1.2mm use 300k down and begin to rehab the units. You begin paying interest on the 700k used for the purchase. You then have access to $500k for rehab and only pay the interest on the $500k as use use it. Once the property is up to bank standards you then can refinance or sell and pay back the bridge loan. Also note, bridge loans are short term 1-2 years with options for extensions. 

I have not spoke to banks in regards to bridge loans, but this is one tool you can use with hard money lenders.

Good luck

Gaspare

@Elana Greer if you don't get any recommendations here, why not look at apartments.com and look at some properties that match what you are looking to have managed. Then reach out to those PM and see how they conduct themselves. Perhaps find one that manages a property that you wish to transform yours into. 

Just an idea... good luck!