All Forum Posts by: Steve Vaughan

Sorry, I don't know much about LLPs @Brandon Hicks . I do know I wouldn't blend my current LLC into a new property with new partners. I would set up a separate one for that property and for every subsequent property that involves new or different partners. Keeps things cleaner.

It's supposed to go exactly the way @Bill Gulley states.  Hopefully it will be seamless for you. When I do sub2's, I make the payment directly to the mortgage co.  The seller can look online to make sure I paid it.  Heard stories of the seller not making the payments to the mortgage co after you have made the payment to them! Keep that in your control best you can.

Congrats, @Brandon Hicks ! You have more than most. Way to stick with it. I would probably establish an LLC with an operating agreement that is new investor-friendly. Probably create it with this one specific deal in mind, yet have a cookie-cutter Op Agreement where you can change the name and re-use in the future. I would discuss that with my attorney when we meet. Buy the building in the name of the LLC and allow your investors to purchase membership certificates. On a more important note, I would not buy on a land contract. Even if that is the prevailing form of seller financing in your area, it does not put the property into your name (or your entity name) until you pay it off or refi. In the meantime the seller could get into trouble and get a lien attached to it. Here we use a note and deed of trust or a Real Estate Contract. In both cases, the title transfers to the buyer upon closing.

Nit-picker tenants that are also helpless.  The kind that call/text you for every little ant they see, for instance.  Outside even! Or the kind that tell you the sink is 'broke' to only find the drain throat clogged with their own hair.  Maybe have them take some kind of short personality assessment or what would you do in this situation type of thing?   I now go through a couple scenarios when showing the property.  See what they say.  Don't want a slob, but the nitpickers can kill ya!

Do you mean your offering price?  If so, then they would have to get bank approval for  a short sale to not have their mortgage paid off in full with your offer. (Unless you are buying subject to that existing mortgage. Doesn't sound like it.) They would need to be behind on their payments and prove hardship to the bank.  It can be a long process.  Your offer won't necessarily be 'eliminated'.  Just rejected by the seller.  A no response from the seller in your time period allowed in your offer is considered a rejection or denial.

Congrats on locating a motivated seller and locating what appears to be a great deal, @Chris Puglisi .  Are you funding this conventionally with a mortgage?  Is this your first purchase period, or do you own your own home?  When I am hesitating on pulling the trigger on something, I ask myself the why question.  Why am I doing this?  Is it to improve my current or future situation?  Will this decision matter in 5 years?  Why gets us past this pay period.  Before you close, have a quality home inspection done.  Might ease some of the fears you have of too good to be true.  Good luck and keep us posted!

Typically I would try and buy a $0 equity property subject to the existing mortgage, but never with a heloc.  The due on sale clause being activated is so much more likely with the heloc. If you are not a licensed agent in your state and therefore not able to be the PM on a property you don't own, I would lease the property from the homeowner for very little, and sub-lease it to the end renter for more, putting a little management fee in your pocket.   Sounds like the main reason you are doing a 'deal' on this is because it's adjacent to your property?  Could be a lot of headaches and some out of pocket for nothing or nothing much.

From what I understand, total payments in a calendar year less than $600 do not need a 1099.  Payments above $600 made out to a corporation do not require a 1099, either.  All payments made to attorneys require a 1099.  Be sure and use only the IRS scannable 1099s you receive directly from them.  I order them from irs.gov.  No tax advice, just what I do regarding these.  Please correct me if my $600 number is outdated!

From what I understand, the deals where a seller will accept nothing down  are few and far between.  I have done deals with small consideration, but none with no considerations.  Better to save some money.  Budget and cut back on some non-necessities. You can still get creative, but you won't need to spend years chasing that one elusive no money down deal you may be over-paying for anyway.

Hi @Thomas Morlan .  Sounds like your accountant has your best interests at heart.  That's great!  You obviously have a relationship with him as well to seek their advice regarding RE investing.  Folks like accountants and attorney's where all they see pretty much is the messes people can make over-leveraging themselves in RE would tend to believe that.  I think I would to.  Sounds like he is only speaking from a position of fear for you, though, not as an informed or experienced investor.  I know of Dave Ramsey and his form of no debt, ultra-conservative investing.  I used his debt snowball plan to purge myself of all consumer (non-mortgage anyway) debt as a matter of fact.  Your first option is to punch your student loan debt in the nose.  Cut your lifestyle to scorched earth and throw everything you have at it. Paying it down is a risk-free, tax-free, hassle-free return.  No tenants, no toilets, no risk.  Keeping it around for the interest deduction is not sophisticated.  Option 2 may be to house hack.  Cut back enough to live in one of the units of the 2, 3 or 4-plex you buy.   I'm your age with family also and don't see that happening.  If I were to invest in your situation I would do it in my backyard, making sure I am getting a good value and having my 25% down saved already.  I would get a good broker to help me buy and possibly a good PM because I am busy doing what I love as a full-time job.  Best wishes!