All Forum Posts by: Wilson Jing

I entered a fix and flip deal with a partner 50/50. I have a LLC and he has a LLC, for this property we did not form another llc, just drew up a joint venture contract. My LLC bought the house 20k on 5/15/2017, we split purchase and rehab 50k 50/50, and sold the house on 2/1/2018 for 90k. 1. When I report this property on my balance sheet this yea 2017 do I report the full purchase price and the full rehab or just half? 2. When I report the sale of the property in 2018 since we don’t have a joint llc how do I report only 1/2 of the income came to me and 1/2 went to him? Just thought about this as I’m finalizing my 1065. Thank you for the help and insight!

@Susan Maneck I will definitely try the online application, I think you might on to something because that branch off of Ridgewood didnt exactly help me out with my business line of credit very much. I had to take a lot of initiative talking to the business division over the phone to finally get that done and it was only for $10K. When you say teaser rate, what % + prime were you getting? What is the regular rate? I think my business LOC is like 5.85 + prime. Thanks for relying to me so quickly.

@Anthony Gayden Currently I would like to use that 100k for mutli family in the Class C / D areas. I know those rates definitely isn't the most competitive but there aren't just many options at this point with the banks. Also part of my dilemma is continuing full steam ahead with class C / D or to diversify the risk with some class B. As we all know although the cash flow is great at the C level, there are certain draw backs: 1. tenants (late rents, high evictions, hard on property etc) 2. high turn over (esp since I hire PM) 3. little or no appreciation. So with the 100K i am timid about using all of it for class C. 

@Susan Maneck

@Susan Maneck Hi Susan, thats awesome you are able to get HELOCs on your properties. I have Wells Fargo too but when I discussed taking out a line of credit with my investment property the banker straight up said they don't do that anymore. My question is are the properties under your personal name and that's why WF would give you a HELOC? Or am I just not talking to the right banker at WF? Totally agree with you regarding Jackson real estate we are definitely off the bottom.

@Anthony Gayden Currently I would like to use that 100k for mutli family in the Class C / D areas. I know those rates definitely isn't the most competitive but there aren't just many options at this point with the banks. Also part of my dilemma is continuing full steam ahead with class C / D or to diversify the risk with some class B. As we all know although the cash flow is great at the C level, there are certain draw backs: 1. tenants (late rents, high evictions, hard on property etc) 2. high turn over (esp since I hire PM) 3. little or no appreciation. So with the 100K i am timid about using all of it for class C. 

Hi everyone,

I am with @Chris Fincham I would be interested to monthly / quarterly event after 5pm.

Thanks! Wilson

Thank you everyone for chiming in the discussion. Bigger pockets is always so good at getting perspective. 

@Melvin List I am definitely leaning towards the fixed option. Also just to clarify two 15 year loano ptions  were offered to me by my local bank. 

1. 5 year fixed 6% with a balloon at the end of that or

2. 5/1 ARM, fixed 6% for first 5 years and adjustable rate ceiling of 8% and flooring of 4% each year afterwards

Currently I relocated to Jacksonville NC for my job (US Navy) and is away from my home market of Jackson MS. Unfortunately at my new location I just don't see the same cash flow opportunities I see in Jackson, which makes me a little more timid on pulling the trigger on new deals at Jacksonville. I am taking on the loan however to hold cash for any good deals that pops up (which there is still at Jackson MS) and to have as reserve for the near future < 3 years which I feel the real estate market will have another adjustment and position myself with cash necessary to close deals. The real problem is in the future would be when the rate shoots up in a economic downturn after 5 year fix is up, but I feel with the 8% ceiling the worse case scenario would be manageable. 

@Kizzy Robb I think what Melvin is trying to say with any LOC is that rate is adjusted each year when you apply again. So this means that in a year or two that rate could easily be higher (from Dec 2016 to now they have) and its better to lock in the interest rate long term for now. Another thing to consider is that if your portfolio is under performing, economy pressures, or even bank's own risk exposure at the time could be reasons for the Bank to deny LOC which will cut off your access to funds.

@Michael Plante Yes ~30K / year. It is low partly because there are a few properties that I am still trying to stabilize. Also it is because the class C/D purchase price of the properties which is lower than the financed B class. But I hope at the end of the year all of the properties would be rented out and bringing cash and meet the pro forma number of 54.5K a year. 

Honestly regarding the loan, I found my loan officer at the local real estate meeting by luck when I was talking to him. I sort of gave up on financing because I have tried to talked to various local banks around town, Trustmart, Copiah and even my national bank WF and no one now will underwrite class C/D properties where I hold my rentals. Currently I am getting my loan through Southern Bancrop and my loan officer is Rials McWilliams. And I mentioned previously Rials is an investor as well, I think loans about 6 SFR. Hope I can bring good people together.

Hi Trevor, 

The South Jackson market is definitely cash flow heavy C/D class properties. I would say for rentals you should be looking at 20-25 cap easy. I agree with Susan this is a retail deal, but it seems like all the rehab was completed for you. Do you have inside pictures? Also what's your plan for management? That's the real question, these class of properties are more management intensive. 

Good evening everyone. So I own 13 free-and-clear SFH in C/D class neighborhoods net income of 30k. With 6 properties as collateral local bank offered me 100k with 6% interest. (this portfolio lending I think) My options are 1. 100k line of credit. 6k origination for 1st year (includes appraisal fees, title searches, bank fees etc) and subsequent years 2.5k 2. 100k 15yr loan with 5yr at 6% and ballon payment at the end of 5 years 3. 100k 15 yr loan with 5yr fixed 6%, 10 yrs variable with 4% floor and 8% ceiling Currently I do not have any properties in the pipe line for purchase. So far in my real estate investing career I had the good fortune of not having to take on debt so refinancing sort of intimidates me. For the future of my business I would like to expand to multi families. So the good people of bigger pockets I would like your advice. 1. Would you take the 100k refinancing? More importantly why 2. Which refinancing option would you take? I'm leaning towards 15 yr 5yr fixed and 10 yr variable Thank you in advance for the advice.

Hi Andrew,

I'm from Belmont and actually my parents still lives there. I am here for residency and I have quite a few properties there. Jackson MS cashflow like @Susan Maneck said can't be beat. I believe anywhere you look for great cashflow but no appreciation you would have to have a great team in place. We are talking about D / C properties there in Jackson. If you are still interested in investing here in Jackson MS. I can get you connected to my PM. As for culture shock, its not too bad if you enjoy the outdoors and don't mind a simple life. I have lived in the bay area most of my life and when to LA for 4 years of school. Living in MS now for almost 4 years and I am just loving it!

lol Julie! I was brought up the same way and it's so funny that is the way that my wife is too. Honestly I don't think it's a "problem" at all that you are frugal. As real estate investors we under the power of money and see money as tool of our trade instead of payment for our next indulgences. It's so rewarding to have a treat such as going to a buffet for my wife and I we have such a blast! Also we often think of being a frugal as a game. We often give each other high fives for great deals like on groceries ($1.99 for 2 crab cakes! Score! Or 49 cents for dozen of eggs!) I think it's so funny that when I talk to my renters and they complaint living paycheck to paycheck and I see the luxaries they view as necessities. For example new car (mine is 2001 camary) on lease, cable tv and decorations for Christmas time all just seems so excessive to me. So yea live a little but I wanna give you a high five for having the discipline to be frugal!