All Forum Posts by: Jason Eyerly

Hello BP,

I'm just wondering if wholesaling and fix/flipping is possible under an LLC. For example, can contracts be assigned to and assigned by an LLC or one of it's managing members? If we decide to start flipping homes, can the LLC obtain Hard Money Loans and buy/sell property just as any other person would? Or would the LLC be able to hold the deed to the property, but one of the managing members such as myself able to take out the HML? What process/procedures change when operating under the LLC?

Best Regards,
Jason Eyerly

Keep in mind if the tenant makes reasonable requests for repairs and you don't comply within x time then they can usually bring action against you or move out. I personally love my ice maker and wouldn't buy or rent somewhere that it wasn't included. If you're going to need to replace the fridge, why not do it now with one that has an ice maker and save yourself future trouble and give your tenant what they reasonably expect? Don't be a cheap skate, be a land lord.

I'd let it keep going personally, maybe consider talking to her about the issue. I don't believe going behind someone's back without giving them a chance to explain is a good way to go about things.

Wish I had you around here. I like that a lot!

Good luck! Let me know what happens, and let me know if you score that deal! I'm interested to see how it works out, I'll be incredibly jealous.

Fannie Mae will only waive the 6 month seasoning period if you didn't finance your purchase with a mortgage. Such is not the case if you use a HML. I'd recommend just throwing and offer out there and checking in every once in awhile to see if he's interested. All he can do is say no! Question is, does your seller have any motivation? Enough to make him sell at a discount? Check out this article I started on the Cash Out Refi HERE. It's pretty lengthy I'll admit, and there's a lot of conversation going on but a few of the guys Albert Bui especially lays out the details of a cash out refi and whether or not your income will qualify with your obligations and the properties income, etc. I actually book marked it because there was so much information and I believe Albert went on to write a blog you can find on his profile.

Well, in short I personally don't think that a HML is the way to go. Why not do the FHA or use a conventional loan? If you did it conventionally you could use some profits for a year or so to do any rehab and repairs.

I'd like to think you could reduce or remove the management expense completely.

Have you seen the income and expense sheets for the property? If your gross income is $47k, you assume 50% will go to expenses, and that leaves you $23.5k less the mortgage, insurance, taxes, HOA. What are the numbers on your loan? Keep in mind you will need to hold the property for 6 month seasoning period before any bank will let you refinance to cash out. Have you calculated your holding costs properly for this 6 month holding time? It helps that the property is already rented and cash flowing that you can take to the bank.

Consider using some of the BP Spreadsheets HERE or the REI Calculators HERE to further analyze your numbers to be sure you're getting exactly what you want and know what you're getting into, should be comfortable offering, etc.

Have you considered Seller Financing? Require more (30%?) cash down, and offer him a decent rate, even with his dings. This gives you some cash to cover any chance of him defaulting, and you could reasonably give him an interest rate of 4%-5%. If you have to foreclose you'll have made the down payment free and clear to take care of any damage that may be done, and you'll be getting twice the rate that you're paying. Plus, you may be giving him a competitive rate compared to what any bank would. Private Money/Hard Money is usually 10%+ but I think that may be unreasonable. I've never done this before so that's just my two cents.

Fannie Mae only waives the 6 month seasoning exception if no mortgage was used to purchase the property. Such would be the case if using say HELOC to buy it out, but in this instance the HML is a mortgage so it wouldn't qualify.