All Forum Posts by: Charles Carillo

@Vinh Nguyen

I am not an attorney but as I understand it, if cash is accepted as a portion of a home sale that isn't reported to the government, it is considered tax fraud. I would walk from the deal. Too many things can go wrong with a seller like this, and a wholesaler in between.

https://www.silive.com/news/2015/08/cash_under_the_table.htm...

@Harsh Mahatma

Are you thinking of purchasing a rental property, or are you looking to flip a property?

@Amin Akhmadi

I might add more information to your post for interested potential partners. What market are you focused on? How many deals have you completed? What is the experience of your team? Do you have a third-party property management company in this market, or do you self-manage? Do you focus on light or heavy value-add deals? 

@Dan Kim

This will be more difficult since the private lender will have a 2nd position on the property. Obtaining this from friends and family might be easier unless you have a long track record. Do you have funds available for the renovation, holding costs, etc.? Even if the lender is covering the renovation costs, they usually work off of a draw schedule where you perform the work, and then you are reimbursed.

@Glen Wiley

We don't rent appliances to our tenants; we include appliances in the tenants' rent. We determine the rent of our units by reviewing comparable rentals in the area. In my experience, we usually charge $50-$75 more per month when there is a washer/dryer in the unit. If that combo is $1,200 installed, it takes less than 2 years to recoup our investment. Is there a reason you won't just include it in the rent and increase it by $30-$50 per month (or the market rate)? 

@Kieran Dowling

I have found that local banks and credit unions are the best lenders on these types of properties. If you are doing a heavy value-added deal, maybe borrowing money from a local hard money lender or private money lender might be the best course of action, followed by refinancing with a bank or credit union. 

Obtaining the loan with a low down payment is another hurdle since a mixed-use property might not be considered as liquid as, say, a 3/2 house that can qualify for FHA financing, so some lenders might be hesitant in the first place to lend on it if they need to foreclose on it in the future.

@Travis Nachman

Yes, LLCs are important for holding rental property, but I would focus on closing, renovating, and renting out your first deal. You can quitclaim the property into an LLC after you refinance (consult your attorney about possible due on-sale clauses).

@Derek Morrison

Usually, we will submit an LOI to the property owner that will outline all deal particulars (price, financing, terms, etc.). Once it is signed, we (as the buyer) will bring that to our attorney to have them draft the purchase and sale agreement/mortgage, etc.

@Caleb Rehg

I would hire an accountant to assist with tax planning and filing your taxes. It will allow you to focus exclusively on growing your real estate investing business.

@Benjamin Sawicki

I would suggest cleaning the place while completing any renovations you were planning on and then re-renting it. After being a landlord since 2006, there isn't much you can do. Yes, if you spent the time, you probably could get a judgment against them, but you need to find them and this takes time and money. Secondly, once you get the judgment, how are you going to collect from "very low-income" tenants? I would make ready the unit and rent it.