All Forum Posts by: Brian Kantor

Hi, Hoi. I ended up finding a private money lender looking for a low-risk option to provide steady cash-flow. So with him, I was able to borrow 75% LTV at 4% interest over 30 years. If I handnt had this lender, I was able to find a broker who would let me do it. In short the process is like a double quit-claim. I buy the property in my LLC in cash, quit claim it to my own name for the refinance, take out the refinance mortgage in my personal name, and then quit claim it back into the LLC. DM me if you'd like that contact.

Hi, Hillary. I have 2x long-distance properties and have had to do this twice now.

I had included in my deal with my agent that I would pay him a $2500 bonus after the rehab was completed following the closing and the first tenants moved in. As a part of that deal, I had him agree that he'd do a walkthrough of the project once at the mid-point and again at the end.

You may have already closed, but you could still consider asking your agent what she or he feels is a fair price to do this. You could also make the same offer to your property manager.

Good luck!

It's worth noting that interest rates are super-low right now; about 0.5% for a high-yield savings and not much better in the bond market.

Older Americans with cash in the bank who are leery of investing in the stock market at their age may perk up at the chance to invest with you by "being the bank" on a 20 or 30 year mortgage at ~4% compounding interest paid monthly.

It's worth pitching the idea to people in your network and if someone bites, have an attorney and/or title company draft up the documents giving them a lien on your property.

Hi there. I have 4 doors under my belt that my wife and I have funded on our own through a mix of cash and traditional mortgage.

As I have grown in success, many in my network have asked if they could partner with me on a future deal. I am at the point where I am out of liquid assets, and have left my W-2 job to focus on real estate and a side business, so I cant get another traditional mortgage, and a deal like this could really be helpful with my current situation.

So my question: What are some good ways to structure an equity partnership with 1 or more outside partners in which they provide all, or almost all of the cash, to fund the deal, and I do all the work?

Would love to hear some different perspectives on this and how people have found success where all partners are happy.

Thanks!

Hi there. I have 4 doors under my belt that my wife and I have funded on our own through a mix of cash and traditional mortgage.

As I have grown in success, many in my network have asked if they could partner with me on a future deal. I am at the point where I am out of liquid assets, and have left my W2 job to focus on real estate and a side business, so I cant get another traditional mortgage, and a deal like this could really be helpful with my current situation.

So my question: What are some good ways to structure an equity partnership with 1 or more outside partners in which they provide all, or almost all of the cash, to fund the deal, and I do all the work?

Would love to hear some different perspectives on this and how people have found success where all partners are happy.

Thanks!

Thanks, @Yoann Dorat! Will do.

Hi, everyone! Happy Monday.

A few people in my network are looking for steady low-risk returns that beat today's worthless "High Yield" savings accounts.

As such, they have offered to "be the bank" for me with a cash-out refinance on one or more of my existing properties. They'd charge me equal to or a slightly-higher interest rate than I would from a conventional bank, but they would not charge me the high origination fees or place the same restrictions on me with regards to minimum loan amount. (For reference, one of my rentals is a ~$50k SFH in Detroit, and most banks won't refinance anything worth less than $100k.)

So with that in mind, do any of you have any experience in doing this or something similar? Anything I need to be mindful of? Can anyone refer an attorney who could help draft the loan documents?

Thanks in advance!

-Brian

Thanks so much, @Melissa B. Please don't hesitate to reach out if you ever have any questions.

Right, but if you don’t sell and mom moves into a new place, you’ll need to cover the mortgage or rent there :)

Hey, @Justin Seaverns. This is one of those "it depends" situations without a clear cut answer, so with that in mind, here are a few things to think about.

1. Do you or your mom want to be in the business of managing a short-term rental? While it doesnt need to be a ton of the work, it does still involve liaising with tenants, cleaning the home, furnishing the home and dealing with repairs. If the toilet overflows at 3am, you need to have a plan in place to deal with that.
2. Just because your resort town does have Airbnbs in place, are you sure that they are fully legal? Many municipalities have laws against STRs or that limit who can operate one. Just because people operate them today, and perhaps the local government isnt actively enforcing these possible laws today, doesnt mean suddenly tomorrow things can't change. Do some homework on this in advance for peace of mind.
3. Be prepared to get STR-specific insurance. It's more expensive than homeowners insurance. Not a dealbreaker, but worth noting.
4. Would your mom benefit from a lump payout right now or perpetual income over a long period of time? Even if she downsizes, she's still going to need to buy or rent that new property, so make sure she has enough to cover the payments and that you/she can cover the potential mortgage if you have a period of no tenants and/or the law changes and you need to cease operations.
5. You mentioned $25k in 4 to 5 months. Is that GROSS or NET after expenses? What about the other 7 to 8 months per year? Will the house be empty because the resort town is very seasonal? Can you cover her new mortgage, plus taxes and utilities on both properties on $25k/year less expenses?
6. What could you get if you sold the property in today's market? How much is a "down-sized property" going to cost? What will your closing costs be on the potential sale?

You get the idea. There are a lot of things to consider; probably more than I rattled off her, but think about things like this and weigh both options.

At the end of the day, if the numbers do make sense for this to be a rental, you need to go back to my question of "do you actually want to run an Airbnb business?". If the numbers make sense, the laws are favorable, and you're OK putting in the work, a cash-flowing rental property is a nice thing to have.