All Forum Posts by: Devon Angle

I ran across something that caught my attention that had to do with getting a mortgage for an LLC. Say if the only way to get a bank to loan to the LLC that holds the rental property was to personally guarantee the loan, does that break the protection of the LLC say if it was sued by a tenet for getting injured. Like what if the Insurance policy isn't enough to cover the damages, can the tenet then go after the owner of the LLC personally since they guaranteed the loan with their own finances if the LLC couldn't make the payments??

The lender hasn’t ever done a loan like this either, so neither one of us is familiar with the process, but I want to use a loan servicing company so that there is a track record of payments an a middle man to deal with all the details. But I’m mostly concern with how the taxation part works when using a loan company.

So I’m looking at doing a deal with a private money lender that Iv know for awhile. But I’m extremely new to the concept. I want to use a loan servicing company with the lender being first on the title. But my biggest question is about the tax part. Will the loan servicing company give me an my lender our tax stuff, like me for interest payments Write off An them for money gain taxes. Actually not even sure if it’s a money gain that the lender would be taxed. I haven’t hired an attorney yet to go over this with me just wanted to get some basics together so I know what I’m talking about.

 It was basically a generic question. Do not have numbers, but the thought of doing a deal this way seems appealing. 

So good deal with sellers financing ->get private money for rehab->do rehab ->get mortgage after seasoning. This kind of stuff happens frequently?

So I came across a Multi-Family that is currently being rented out, but the build needs a ton of work. Has anyone ever done sellers financing, then done rehab, an turn around an get a mortgage under your own name? Feel like there is a lot of risk to this, but also a lot to gain. Just looking for thoughts. 

Originally posted by @Cameron Novak:

Sounds a bit ridiculous to be honest. You have no cash, but want to keep the person coming in with ALL the cash from controlling any of the finances.

In your opinion, which one of you have poorly managed their finances to date?

I'm more focused on Investors who are more interested in bring in a continuous paycheck vs actually running the rental property. I know there are various LLC setups that allow such a thing to happen, just not really sure how to structure it. We all know that money needs to be left aside for taxes, repairs, an other potential issues, so I'm assuming in the agreement there would have to be something about this issue, where money is left for this case in point. As much research I have done, I can not find a draft agreement example of such a scenario. I guess my biggest problem at this point is that I have not found a good attorney yet that focuses on business set-ups (Its defiantly on my to do list).

1. I’m currently working on some aspects of the area I’m planning on doing business in, but for the most part it’s all checking out. This area I’m looking into is also happens to be my home town so I know a lot of people that have the connects about what’s coming. 2. My point about not looking for extreme profit gains on a joint adventure was more towards the fact that I’m new, don’t have my name out there yet An have no proof that I can do as I say. Basically the same thing a bank does, if you have hardly any credit history, they give you an outrageous rate because you are more of a liability. That was what I was meaning by starting out. I know exactly how much I’m worth, but no one else does presently. So I’m more focused on building a reputation then coming out high gains currently, specially when I’m playing with someone else’s money. Once I have a few Buy & holds under my belt, got an actual portfolio as proof, I can then in turn say “Hey Ladies An Gentlemen, I have these deals lined up, the ground work as been done, who wants in on theses deals, An are you going to be a good fit for my company An it’s goals.” The validation of my work as been done by the deals I have worked my butt off getting, An completing. It’s sounds like arrogance but that is not at all what I want to imply. But first And for most I have so much I An need want to learn, An that partnership set up is kinda on top of my list because that’s most likely the route I will need to travel for a few deals.

So I have a question. Currently I do not have the funds nor will I have the funds for some time for the deals that I have found recently. Been doing a lot of foot work, an things make sense to more forward. There is a high demand for places to rent in the neighborhood, rent prices are pretty reasonable to make a profit, taxes are not expensive an the town is currently building big bushiness in or around the area. So the only reasonable solution would be to find a money partner, someone who just wants to unload cash into real estate but doesn't want to do the leg work an wants a return. There are plenty of cheap houses that need rehabbed that would have equity in them as soon as they were finished, there is a good property manage company that I have already questioned an they seem to me like a good fit from the various sources I'v read from. Now how in the world would I set this up once I found a lender who was interested in what I had to offer? I know starting out I am not planning on profiting much on the actual profits, maybe 20 to 40% depending on the situation, even that could be asking to much starting out. I just want to build a good reputation before going after really big profit margins. So say I found a place, I could rent for $1000 a month, and I wanted to keep 40% of the rent in the account for Insurance, PMC, Taxes, Repairs, an other unexpected things. That would leave $600 profits on the table. Now how exactly do you legally set this up so I would get my 20% they get their 80% without being able to touch the other cash for expenses. Basically I just want to run the show without them being able to meddle, but want to pay my partner/lender their share as agreed fairly. 

Then also there is the Depreciation that you would get over 27.6 years on the house, not sure if that would be considered profits, or since i only own 20% of the house/LLC i would only be entitled to that 20% margin, or I could be so way off base that I don't even know what I'm talking about when it comes to the depreciation.

Sorry for the long winded post but I really want to get educated before I start really Networking. I want to get everything figured out so that when I move forward, people would look at me like "This guy knows what he is doing an knows his stuff". Your help and advice is greatly appreciated. Hopefully I can take what I learn from this an help others down the road in the same situation as I am currently in. 

So I have a question. Currently I do not have the funds nor will I have the funds for some time for the deals that I have found recently. Been doing a lot of foot work, an things make sense to more forward. There is a high demand for places to rent in the neighborhood, rent prices are pretty reasonable to make a profit, taxes are not expensive an the town is currently building big bushiness in or around the area. So the only reasonable solution would be to find a money partner, someone who just wants to unload cash into real estate but doesn't want to do the leg work an wants a return. There are plenty of cheap houses that need rehabbed that would have equity in them as soon as they were finished, there is a good property manage company that I have already questioned an they seem to me like a good fit from the various sources I'v read from. Now how in the world would I set this up once I found a lender who was interested in what I had to offer? I know starting out I am not planning on profiting much on the actual profits, maybe 20 to 40% depending on the situation, even that could be asking to much starting out. I just want to build a good reputation before going after really big profit margins. So say I found a place, I could rent for $1000 a month, and I wanted to keep 40% of the rent in the account for Insurance, PMC, Taxes, Repairs, an other unexpected things. That would leave $600 profits on the table. Now how exactly do you legally set this up so I would get my 20% they get their 80% without being able to touch the other cash for expenses. Basically I just want to run the show without them being able to meddle, but want to pay my partner/lender their share as agreed fairly. Then also there is the Depreciation that you would get over 27.6 years on the house, not sure if that would be considered profits, or since i only own 20% of the house/LLC i would only be entitled to that 20% margin, or I could be so way off base that I don't even know what I'm talking about when it comes to the depreciation.

 Sorry for the long winded post but I really want to get educated before I start really Networking. I want to get everything figured out so that when I move forward, people would look at me like "This guy knows what he is doing an knows his stuff". Your help and advice is greatly appreciated. Hopefully I can take what I learn from this an help others down the road in the same situation as I am currently in. 

Thanks Chris will send P.M.