All Forum Posts by: Chris K.

@Kim Uradnik

Pennsylvania does not have Series LLCs yet. Even if it did, there is still a good amount of uncertainty due to a lack of case law. 

@Tom Strong

LP/LLP arguably offers more protection for a limited partner. But if @Jacquelin Featchurs and her husband have any role as a general partner, it's a moot point. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Jacquelin Featchurs

I agree with the above posters. LLPs have their place but unless you are working on a big project, I don't think the attorney's fees and costs will be worth it. I also fail to see what benefits an LLP will provide for you guys if you and your husband are the only partners. You could play around with trusts and do all these fancy legal maneuvers. But that would only be appropriate if you already have a serious net worth.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@C M. 

I would go find a lawyer to talk about it since no one can answer your question based on the amount of information you provided. Also when asking questions about probate (or any legal matter for that matter), you always want to explain what state the matter is from. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Warren Golston

What state/jurisdiction are you in? 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Russell Gronsky 

In theory, you could get a more "accurate" evaluation using NPV (or one of the many IRR variants). But that requires you to be precise about your assumptions including the discount rate. I'm not sure how a syndicator could do that for every single limited partner participating in a given project.

Thoughts @Ben Leybovich? 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Tim Mason

Another vote for @Jillian Sidoti and her team. Her team helped us purchased around $50 million worth of real estate in the past two years.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@BJ Min

It would depend on your current situation. For example, I qualify as a real estate professional under the IRS eyes. Depreciation matters a lot more to me than the average investor. So I would focus on projects that I could cost seg and 1031 when the accelerated schedule runs out. 

You may also want to ask how much time you can realistically spend on a given project. Generally speaking, projects that require you to be active have better returns at least on the pro forma level. The problem is that when it comes time to do the actual work, people struggle to balance their actual career with the time/effort required for the actual project. I've made this mistake many times. And so I'm trying to get better at being realistic with my time commitment.  

One last thought: try to see if there is a niche field that you can do well in. I have a partnership with a nonprofit that allows an investment property to generate around 1.25 to 1.75 times the average rental income in my area. It has its own set of complications but the projects are going well and the cash flow is great even with the road bumps. It's not a niche that I would dump millions in. But it's great at a smaller scale. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Gerry O'Donoghue

I own a construction company (glass/glazing and metalwork) and also own various real estate investments. As an owner, the set of insurance you need for the construction phase is different than the post-construction phase. Working with an experienced insurance broker is generally the best here as the coverage needs would vary drastically depending on your specific situation. Note that many policies for project owners require you to hire a GC and subs that already have their own policies. Our construction company, for example, has to carry GL, automobile, excess, workers comp, and commercial property insurance to meet the insurance requirements on a job. 

It's a fairly complicated topic with a lot of specialized services. If you are in NY, you may have run into a construction project that requires you to qualify for the Labor Guard program as a contractor. All these third party services try to ensure that a construction project has all the insurance coverage it needs. Not sure what scale of projects you will work on but it might be worth taking a look. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Jordan Graham

In my county and the surrounding counties, getting Section 8 is like winning the lottery. And because the tenants do not want to lose their Section 8 status, they tend to very well behaved when it comes to their share of the rent and any standard tenant issues. In our area, many experienced landlords prefer Section 8 tenants over the "average" low-income to mid-low-income tenant. 

Thus, the issue is not so much that there are not enough Section 8 properties. The issue is that there are not enough Section 8 tenants.

So I guess the question is whether the Section 8 Tenants could get a better 3BR unit for $4500 than a mobile home unit. No idea what your market is like. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Vitino Errico

The market cap rate for Scranton and the surrounding areas have historically been around 10%. While cap rate isn't technically the correct metric for valuing small multi-family, most sell for around that price. So the properties should cash flow if you buy them correctly. 

Note that everyone drives around in this area. So you should look in the suburbs as well. They have lower taxes and less burdensome regulations/ordinances. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.