Hard money lender How did you add value to the deal?

Hello all,I'm seeking advice on achieving a higher ROI in real estate investments beyond the 1% rule and maintaining around 35% of monthly operational expenses (including Cap-ex, maintenance, property tax, and vacancy).To the best of my knowledge and abilities, the 1% rule with 35% operational expenses seems to be the best I can achieve today.

For example:A quadruplex at $500,000 with 0% down and an interest rate of 5.75% with property taxes of 0.6%, $4,000/year in home insurance and $5,000/year in repairs will have a total out of pocket of $3,980.60/month.

you'll lose money. 

Let's break down the pros and cons of each approach:Forming an LLC in the State Where the Property is Located:Pros:Compliance with Local Laws: Establishing an LLC in the state where the property is situated ensures compliance with local regulations and laws specific to that jurisdiction.Legal Clarity: It provides clear legal jurisdiction and may simplify any legal proceedings related to the property in that state.Perception: Operating with a local LLC may give tenants and local authorities confidence in your commitment to the community.Cons:Additional Costs: Setting up and maintaining an LLC in another state means incurring additional registration fees, taxes, and possibly hiring local legal counsel.Administrative Burden: Managing multiple LLCs across different states adds complexity to your administrative workload, including extra paperwork and compliance requirements.Tax Implications: You may face tax obligations in both the state where the property is located and your home state, potentially leading to double taxation or complexities in tax filings.Managing Through Home State LLC:Pros:Simplified Management: Handling all properties under a single LLC streamlines administrative tasks, reducing paperwork and simplifying tax filings.Cost Savings: Avoiding the need to establish multiple LLCs in different states saves on registration fees, legal expenses, and ongoing maintenance costs.Consistency: Uniformity in management practices and legal structures may contribute to efficiency and ease of operation across your real estate portfolio.Cons:Legal Exposure: Operating out-of-state properties under a home state LLC may expose your personal assets to the laws and liabilities of the other state, potentially diminishing the liability protection the LLC offers.Compliance Challenges: You'll need to ensure your home state LLC meets the legal requirements for conducting business in other states, which could involve additional filings and fees.Perception and Credibility: Some tenants or local stakeholders may prefer dealing with a landlord who has a local presence, which could impact your reputation or relationships in the community.Ultimately, the decision depends on your specific circumstances, risk tolerance, and long-term goals.

They would like for me to send the money before they will draft a loan..."

I'm a wholesaler/flipper and it's been going well but I'm now trying to start grabbing prospects from the tax deliquent list that I grabbed from my county.

They are on the hook for the earnest money whether they deposited it or not.

A property was vacant for 40+ years, tax lien sale on courthouse steps happened last december and someone won that. 

But, with any hard money lender don't dilly dally with your projects. :)