All Forum Posts by: Benjamin Aaker

Hi @Ryan Van Duyne and welcome. You will have to decide how the split works. I'll assume when you say 70/30 you mean 30% to the GP and 70% to the investors. You asked about cash flow so you are talking about any money left over after all expenses, taxes, and debt service is paid. If that is $100 then $30 goes to the GP and $70 is split among the LPs. That money is prorated based on their percentage interest (ownership) in the deal. If 5 investors each put in 10k then they would each have 10k/50k or 20% of the deal. They would then get 20% of the $70 LP share each, or $14. Your investors might put in different amounts, so it all depends on their percentage interest 

@Guy Idan also complete your Bigger Pockets profile. A lot of potential partners might miss you as they don't know where you are located. I found a great partner on BP who lives in the same area. We talked a while on the site and later had a meetup.

You don't need to form an LLC just to invest but I'd recommend doing so. Your liability shouldn't change because it is limited to your investment as @Taylor L. has stated. The LLC helps you keep anonymity and helps you keep track at tax time, assuming you are making multiple investments from the same corporation. When you fill out the subscription agreement for a syndication you will have to give your SSN if in your name or EIN if in your LLC. I'd rather not give out my SSN whenever possible. Also, you may not want other investors to know that you personally are involved in the deal. The LLC helps alleviate this.

For questions 2 and 3, You'll need to check the state where the property is located to determine.

Hi Frank,
Have you considered working for a developer in your area? You could get some great experience on the job. If that's not an option for you, then I'd recommend taking the course to become a real estate agent and focusing on land deals, as that is where a developer has to start the project.

I think you should inquire a little more deeply with your insurer. In most areas, greater than one month is long-term. I suppose your insurer could classify however they want.

Do you really want to do a month-to-month lease? The tenant will be able to leave whenever they want with 30 days' notice. Let's say they fail to pay rent and cite a COVID-related cause. You non-renew them, having to give 30 days' notice. Now, they aren't paying rent for that whole month. At the end let's say they don't leave because they believe the eviction moratorium protects them. You will then have to evict. True, the moratorium specifies for inability to pay rent and you will claim that the infraction is not leaving after the lease expires. But the cost of the month's rent loss plus eviction outweighs the benefit in my mind. And you do have the sticky situation of explaining why you went month-to-month from the get-go.

I recommend you research the renters' assistance programs in your area and help them get on these plans, while keeping them a long term tenant. Your insurance headache will go away, at least.

Hi Carlos,

Nice question. Start walking through prospective purchases and bring a big notebook along. Get some rough measurements of the areas needing repairs. List the things you think need work and begin calling contractors. You should be able to get a picture of the per square foot cost for labor, such as flooring or painting.

It seems like you have a good start. Move on to actually purchasing one of these that you have evaluated. You will learn the most from this.

The only rule of thumb I have for you is to overestimate the costs for each step of your project, at least when starting out. Good luck.

Have a look at the lease. Better yet, have your attorney do so. If it is palatable for the remainder of the lease, you can inherit it along with the tenant. You will need to follow the lease's stipulations just as the tenant does. The other way would be to speak with the tenant and show them your new lease. Once you close, you could both sign a lease termination agreement and a new lease that suits you both.

Welcome to Bigger Pockets, Andrew. Nice to meet you and good luck investing in Memphis!

Hi Lance and welcome to Sioux Falls! Hope to see you at a meetup soon.

Call your local multifamily housing association, become a member, and ask for some advice specific to your area. Billing back is the easiest, but has the lowest return. Separately metering is the most expensive but most effective long-term.