All Forum Posts by: Christopher Blanco

I think the thing you need to ask yourself honestly, is what are her skills and how can she move your business forward. Can she deal with contractors to do a flip? Does she have enough construction background to ask the right questions? 

Also, be careful making someone whom you do not have a long term commitment to an integral part of your business. I know nothing about your relationship, but just be careful and be smart. In a startup I was involved in, I seen a 21 year old girl get involved with my CEO and tank the whole business because he made her director of Marketing with little or no experience. I am not inferring that your girlfriend is like that, just be careful. 

Now you are starting to see why I have revisited and changed my views on traditional buy and hold. I do not feel there is real money in long term buy and hold. Not wealth building money. I am sure there are some exceptions to the rule, but for the most part your cash flow is eventually going to get eaten up in tenant turnover, cap ex and repairs.

I am not sure you can say this is a good deal just from purchase price and gross rent. What are your operating expenses? What is the cost of money? 

I would recommend you talk to you CPA, but I was taught this:

1) One entity that is an LLC with an S-Corp election. This entity will be your marketing arm, flipping arm, and wholesaling.

2) One entity that is an LLC as a partnership. Use this for rentals. Inside of this LLC you can have sub llc's for individual rentals. You want to keep less than $500K of value in the individual LLCS

3) The only time the two meet is on your personal tax return.

You are going to need a lawyer and a good CPA to have this set up properly. 

If you use your car for business and expense the mileage, that $500 could make you several thousand in one year. 

I work with probate cases, and yes you are "low balling" and paying below market value for deals. You are doing this so that the seller doesn't need to jump through the hoops of putting a house on the market. I am not a wholesaler, but as an investor, here are some "services" I provide:

• Quick closing
• I will clear out the house for the seller
• I will take the house as is and rehab it to sell
• I will assist in moving the property through probate. 
• I will pay the closing costs
• If I cannot do the rehab myself I will find a buyer who will

I do all of those things for a fee. That fee is the discount I can get the house for. I can justify the costs by subtracting from the as-is value the retail value of each of those services. That is not taking advantage of someone that is performing a service for a fee.

I live in Cleveland, market is good here as long as you stay West of Cleveland or East of East Cleveland. 

I would look for at least 350, but thats me and they are not easy to come by. I am treating my rentals as long term flips, so I only buy in high owner occupied areas, do a full renovation, and work on converting my tenant into a buyer, so my views might be skewed a little.

Do a background check, if they come out clean and meet all your requirements better than any other tenant I would go for it. I would feel better if they were newly married, though. 

Thank you all for your replies! I cannot agree with you more. Hopefully I can find some more wholesalers in near future who are interested in doing deals, not playing games.