All Forum Posts by: Aaron W.

I am in Northern VA, so I am not familiar with Hopewell. However, it is near Richmond which is a very good and competitive real estate market.

Best of luck!

@Megan Semler Network, network, network. Being involved in these forums and joining local REI groups can also help.

For value, you should take a look at what you are naturally good at and can apply to real estate. Deal analysis is a must no matter what role you play. You don't have to be an expert, but be capable. Depending on where you live, you could drive properties for investors, etc.

Best of luck!

@Taylor D. Jenkins If you pay cash, then there are no seasoning requirements. You can do delayed financing when you are ready to finance the property. There's a good BP forum post about this:

https://www.biggerpockets.com/...

Best of luck!

@Dan Passarelli With a partnership, there is not standard way to do one. It is definitely possible for one partner to take out the mortgage. The most obvious risk if only one partner is on the mortgage is that partner is responsible for the payment. Should anything go wrong, then the partner whose name is on the mortgage is going to be affected.  The partner not on the mortgage should absolutely be doing something else to provide value to the partnership. 

Best of luck! 

@Adam Campbell For a GP, most of the money is going to be made at the sale of the property. You will make some with the acquisition and ongoing asset management fee. 

Also, you will make some with the equity split AFTER the preferred return (pref) is reached. Most of the time it may not happen until a couple years down the road on the investment, but may start from day 1 if you find the right asset.  You could structure it where the distributions go toward paying down the investor's invested capital, so with time, more of the cash flow will be going to the GP.  There are many other ways to structure this.

We typically structure our investments with a 7%-8% pref and a 70/30 equity split. The invested capital from investors are only paid down through a refinance or sale.

Not sure if this answers your question. Best of luck!

@Juan Chavez I believe the answer to your question will depend on your family member. Do they want to go through the process of adding you to the loan then refinancing out later?  It's not hard to do. 

Also, if they are going to be hands-off once you take over and you somehow default on payments, the family member may also be negatively affected.

Best of luck!

@Malachi Hoots One option you could consider is short-term bridge financing for the project. The advantage of a bridge loan is they typically emphasize the deal in their underwriting. If it looks like a good property, then they will be more likely to fund the project. The bridge loan can also include rehab costs and can be interest only payments during the rehab period.

The downside is the interest rates may be a little higher than a conventional lender. 

Best of luck!

@Jose A Perez What was the reason the lender gave for refinancing after 2 years?  What timeline do you have for refinance? I'd talk with other lenders and find one who will be able to meet your timeline or at least will be far less than 2 years.  There should be plenty that will do that.

Best of luck!

@Weena Mae Molina Once you've figured all of that out, then start researching the types of real estate investments out there. There are a lot of different options, such as buy and hold, flips, short term rentals, etc. Are you interested in residential properties, industrial, commercial, etc.?  You'll want to find something that interests you then focus on it. Too many people bounce around from one to the other to the other, which makes it harder to find success. 

Best of luck!

@Duke Choi If you know how to create an LLC then do it yourself. It is not that complicated. However, if you aren't comfortable doing yourself and want to make sure it is done correctly, I'd go with a service. LegalZoom is fine, but they charge more. I've used IncFile before and they were fast and well priced.

You'll want to have landlord insurance. It comes in different names. I've also seen it called rental property insurance as well. This is to protect you if the tenant destroyed it or was injured on the property.

Make sure you open a bank account and credit card solely for your rental business. Do not comingle funds or transactions. This could put your personal assets at risk if you comingle, even with your LLC setup correctly.

Best of luck!