All Forum Posts by: Charles Carillo

@Felix Piper

If everyone is truly active, it can be a simple joint venture. If there are passive investors, it is now a security, and you need to speak with an SEC attorney.

@Kiley Harris

I would get a separate bank account right away. This will help you separate your property's funds from personal funds. Start depositing all of the rent into that account while paying expenses for that property out of that account. That will solve a lot of the confusion. Next, you could use rental tracking software, but really, 3 people are paying you monthly (plus what you pay every month); software might not be required at this point.

@Dominic Richardson

Private money lenders typically want a property with great potential and an LTV that secures their principal.

@Korey Greene

We have partners who are foreign investors. DM me and I will send you contacts for; attorneys, lenders, and accountants they have previously used. It is important that you hire professionals who have experience working with foreign investors.

@John O'Brien

I would search for some independent insurance agents in your area. I have had my best luck working with agents who work with many insurance companies.

@Santhosh Kumar

We have partners who are foreign investors. DM me and I will send you contacts for; attorneys, lenders, and accountants they have previously used. It is important that you hire professionals who have experience working with foreign investors.

@Thurben James

Cash flow should never be used for CAPEX.

Some first-position lenders do not want to deal with a 2nd position lender. You need first to verify they are okay with this.

You must be very careful since if any investors are "passive," it becomes a syndication, and then you must consult an SEC attorney.

It sounds like your investors will pool their funds together (they probably will create one LLC) and become a 2nd position lender. Most 2nd position lenders will want the investor to have skin in the game (invest their own money) AND be paid a double-digit return.

When you purchase property, you ALWAYS need to have reserves, but in this scenario, you really need to have reserves since you will need to make 2 large debt payments every month. These are debt investors, so in most situations, you will be paying them from the beginning and unable to skip a month. One benefit of equity investors is that you can tell them that distributions won't start for 3, 6, 9, or 12 months after you close, giving you breathing room to get the property on the upswing before distributing cash.

@Corazon B.

I have found that not many agents are also real estate investors. In addition, if they are real estate investors, they might not have the funds available for every good deal. A listing that has been on for a while might be an opportunity in disguise. I have purchased properties that were on the MLS for 4+ months before.

@Travis Dalke

There are 3 main parts to a seller financing deal: down payment, interest rate, and price (4th would be the term). When speaking to the owner (building rapport), your main goal is to figure out which of these main 3 is most important to them. Once you learn this, you can tailor the offer to meet their needs. For example, if they really want $500k for a property, maybe offer a purchase price of $500k but a lower down payment and interest rate (and a longer-term). They are getting what they really want, and you are crafting the deal to where it will still make sense for you.

One potential issue is if what is most important to them is also important to you. For example, if they want a large down payment, and you only have enough for a 5% down payment, that is an issue. Or if they want a high-interest rate, and your numbers will not work at that interest rate, or if they really want a crazy high price where it will be difficult to cash flow and refinance in the future. This is where you need to really start working the numbers, but hopefully, you can craft a deal around what they want.

@Billy Farley

If you are aggressively paying them off (less than one year), I would avoid balance transfers. The 3% or 4% fee sounds good, but if you are paying them off quickly, the actual interest rate you are paying is over 10%.  Maybe you could look into a consolidation loan but honestly, if you pay $3,000 - $4,000 per month towards them, the interest rate doesn't matter much since they will be gone in months.