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All Forum Posts by: Cory Melick

Cory Melick has started 7 posts and replied 22 times.

Post: Rentals, Relocation, and Taxes, oh my

Cory MelickPosted
  • Charlotte, NC
  • Posts 22
  • Votes 4

Hey BP,

I have another newbie question. I own two, newer rental properties in WV. I will be relocating to Charlotte, NC by the end of 2014. I would lose money if I sold the properties and neither of them are in any business entity.

Can I wrap those two properties into an LLC formed in NC once I acquire a few rentals in NC? If not, which would be better

1. Keep WV rentals in my name and treat as personal property

2. Form LLC in WV to hold the properties as business assets

Thanks in advance for the advice!

Post: My first deal

Cory MelickPosted
  • Charlotte, NC
  • Posts 22
  • Votes 4

Awesome work Joe. The quality looks amazing.

I will be closing on my first rental property in July. We'll have to do a toast when we get our first rent checks!!!

Wow! These are fantastic! Great work to all, I cant wait to show my wife some of these photos, she loves before/after photos of remodels.

p.s. Did someone add a dog to their kitchen, lol!

Post: Model Units

Cory MelickPosted
  • Charlotte, NC
  • Posts 22
  • Votes 4

I actually talked to the bank yesterday and I qualify for for an unsecured loan for 20% of the purchase price of some model units around here. Terms aren't to terrible (9.5%, 5yr). Well, I guess its time to see of the developers will lease back their properties at market rents, if so, the numbers make sense at 100% financing. Unbelievable!!

Post: Model Units

Cory MelickPosted
  • Charlotte, NC
  • Posts 22
  • Votes 4

Thanks @Karen Margrave. I knew I couldn't have had an original thought, haha. I'm glad to hear that other people have had success with this! Hopefully my banker agrees.

Forgive my lack knowledge, but what exactly does it mean to get the developer to carry back the 20%? Does this mean I give them a promissary note and they give me the 20% cash?

Post: Model Units

Cory MelickPosted
  • Charlotte, NC
  • Posts 22
  • Votes 4

Hello BP,

I have an idea that seems fairly easy to make easy money, so I assume there is something wrong with it or it will be difficult to pull off. I'm sure someone from the community has thought of this already.

There are a lot of developments going up in my area (west of DC) and the developers always complain that they can never sell their model unit (which they intend to keep for a couple years during the development).

I'm tapped out for cash. So my question is, has anyone tried taking an unsecured loan as their 20% down, get conventional financing (I only have 2 mortgages) to buy the model unit and lease back to the developer. It would seem like you would have an easy tenant for a few years, meanwhile the value of the property rises as they develop the neighborhood.

Is this too simple? Is an unsecured loan a unicorn? (im talking to my banker today on this) Thoughts?

Post: 1st Deal Ever - in twos

Cory MelickPosted
  • Charlotte, NC
  • Posts 22
  • Votes 4

Thanks @Brandon Turner. The wife and I have been pouring over the BP tenant selection guide and talking to other local investors. HERE WE GO!!!

Post: 1st Deal Ever - in twos

Cory MelickPosted
  • Charlotte, NC
  • Posts 22
  • Votes 4

@Neal Downey I'm excited to hear that you are taking action and picking up the phone. I have a lot of friends who love to talk about side businesses or starting their own business. They will look into something for a few months and talk non stop about it. After the new wears off, they are on to the next shiny object. I myself have looked at several options, but I always call people, I go look at the powerwash setup they have, I talk to the owner of the laundrymat. It seems like real estate is what will stick with me.

What will seperate you from the perpetural dreamers is that you take action. Excited to hear about your first call and hopefully that will be the first of many more which will bring you deals!!!

Post: 1st Deal Ever - in twos

Cory MelickPosted
  • Charlotte, NC
  • Posts 22
  • Votes 4

Hey BP Community,

I've been a little silent here since I introduced myself a few weeks ago. For those who might not have read my introduction, my wife and I are looking to jump into real estate investing. Her style is CDs, I like small cap stocks (opposites do attract). So I've been gleaming everything I can from the BP mastermind and looking for a 1st deal that will be a good compromise and ease us into landlording as poison of choice is buy and hold.

So our first deal is a pretty safe and conservative deal. We looked for about a month and couldnt really find anything where the numbers worked and that was a good location (numbers for me, location for her). Of course, as dumb luck would have it, I was on my way home from work and listening to one of the BP podcasts and they happened to be ripping on @Brandon Turner for being on a roof. I was enjoying the podcasts so much that I missed my turn and ended up in a part of my rural area that I hadnt previously been before. And low and behold they were developing a new neighborhood. I'll spare you the boring details but the next day me and wife looked at the new construction townhomes and put in an offer for one of the next set they are building. Offer has now been accepted.

Purchase price - 110K. 4/2.5 2100 Sq Ft

Comps-140K local rent - $1400

This area definitely has a strong demand for townhomes (seen them fly off the shelf) and renters are typically young families that will stay several years. Its not an amazing deal (1.25%) but as a first deal to ease me and the wife into things, learn the ropes, and not have to replace a roof in a year, we'll take it.

Now, why it came in twos. In the week between the offer and the acceptance, I was helping a buddy of mine install a steel building on his property. This would be the second 3 bay building on his lot. He rents the bays out to folks to work on cars, store cars, store equipment, whatever. He had two units that werent rented on the building we were working on and he explaining how he wanted to build a 6 bay on the other side, but he wouldnt even start thinking about that until this one was fully rented. 5 minutes later a guy shows up and rents the last 2 for him and buddy to work on cars together. 10 minutes later a renovator shows up wanted to rent 3 units because he has like 9 mini storage units rented and they are not near each other and it makes his life difficult. Of course my buddy turns him down but mentions that he will keep the renovator in mind with his next building.

So naturally I ask him when he would start on the next building. He explained that he didnt have the cash now, and he wasnt willing to take a loan. After a quick discussion and a call to the wife, she and I are financing his next 6 bay building (ground breaking to happen in May). We'll be in at ~$26K and collect $1000/mo in rent (provided they stay rented)!!!!

To any new person reading this, you will hear over and over and over again, you can educate yourself all you want, but without action that education will not amount to much. I spent probably 5 months stalking about the BP before I finally introduced myself and a month later (and about 16 viewings later) I have two deals put together! Keep educating yourself but also take action! To the experience folks out there, I owe a great amount of thanks for allowing me to learn soo much in so little time from this very open and encouraging community. Couldn't have done it without yall.

Sorry for the long winded post!

Post: Play it safe in the begining?

Cory MelickPosted
  • Charlotte, NC
  • Posts 22
  • Votes 4

I'm not sure if this is the correct place for this question, but here it is anways.

So i'm very new to real estate. I've been gaining a silent education the last few months on BiggerPockets and other sites/books. I do own a townhouse as my primary residence and my wife and I are looking to purchase rental townhomes in popular neighborhoods near us.

The issue I face is, my appiate for risk is pretty high and I want 1% rule, 50% rule properties. My wife on the other hand shops for CDs. When we discuss real estate, we both like the same neighberhood that is wildly popular, low low vacancy rate (we used to live there, these houses are like hotcakes), but they only have a 12-15% cash on cash return (after mortgage, insurance, taxes, 10% vacancy, 10% maintenance, 10% capex).

So my question is: should we wait for a better deal in an area we can both agree on, or since the properties do cash flow, purchase the safer, lower risk properties now and start learning the ropes, get known by the local real estate industy (pay the dues so the speak), etc?

I want to jump in as soon as possible, but the ADHD side of me wants a higher return at the same time.

Any guidance or advice or personal stories are greatly apperciated. Thanks!