All Forum Posts by: Brandon Callahan

We are both attorneys haha. 

I had someone that I trust and respect approach me about becoming a partner in some real estate deals, but I have some questions about what would be a fair in terms of ownership given this potential partner's proposed partnership/ownership structure. The proposed structure would be as follows:

-We would create an LLC to hold the property, with both myself and potential partner as members .

-LLC would get a line of credit for purchasing and rehab. Potential partner would sign a personal guaranty securing the line of credit for the LLC.

-I would do most (if not all) of the rehabing and landlording.

Now the Question: Because the potential partner is only providing access to capital (not the capital itself) by acting as the guarantor and not doing any of the other work, what would be a fair equity percentage for the potential partner in the LLC?

Thank you!

I'm a new investor currently in the process of analyzing deals in my area (Texas). For the other investors in Texas, what is the average price range for insurance on a rental property? 

Sorry if this has already been asked, but what does your 50/50 LLC agreement look like with your brother?

@Matthew Couto

Well said. Thank you.

Suppose you get a seller to agree to seller financing, and part of the reason the seller agrees is because the seller wants the tax advantages of not getting all the sale proceeds all at once.

Now suppose you want to refinance with a bank at a later time. Is this refinance going to mess up the seller’s plan of getting paid out over time? Additionally, is it common for all seller financed deals to allow for refinancing?

Seems like bad form if you spent time pitching a seller on the benefits of seller financing only to refinance the deal and the bank pays off the balance of the note all at once.

When first starting out and resources/cash flow are limited, what are some good strategies or rules of thumb to ensure that things like vacancies or costly repairs don’t render you unable to pay the loan or mortgage on the property? I’m just starting to learn more about RE investing and I keep thinking, “what if i had 5 empty properties with 5 mortgages all due at once?” Obviously I’m thinking worst case scenario.

Any advice or strategies on how much someone should have in reserves to protect themselves from major repairs or extended vacancies?