All Forum Posts by: Chris Schlechta

Looking for other lenders to add to our list for 100% funding deals for purchase and rehab costs in Wisconsin.

This would be for a multi-member LLC with personal credit scores between 620-810.

Looking for either;

1). 100% funding of purchase price only

2) 100% funding of purchase price and portion of rehab costs up to your ARV% ceiling

3) 100% funding of purchase price and rehab costs up to 70-75% of ARV.

Trying to widen our net to get the best terms.

@Alexander Sadeghi it depends on your market. Historically in WI the tax assessed value lagged behind market value. Sometimes by a little, sometimes by a lot. Some municipalities, including the one I live in moved to a more market price based approach to valuations.

In my town the real estate market is red hot. By the time the municipality updates the assessed value it almost 1yr old but still closer than the old method. While our tax valuation went up, our actual taxes decreased (more valuation for the municipality without a corresponding increase in cost of services, reduces actual tax bill).

The tax assessed value is just one metric to use for determining market value, but I wouldn’t rely on it for much more than a foot note. It’s a more telling indicator when the property being offered for sale is under the assessed value.

Greetings, We are working with a new wholesaler and trying to structure an assignment of contract (our first purchase from a wholesaler). The current contract the wholesaler has is not assignable, however he will correct that with the seller. He originally entered in to this agreement for himself as a BRRRR, but then found out he had too much on his plate to continue and wanted to wholesale it.

Once the purchase contract is assigned to us and we enter into the assignment contract with the wholesaler, are the wholesalers fees then paid out at closing and documented on the HUD-1? If the purchase price from the seller is $115k, the wholesaler's fee is $10,000, is our purchase price reflected as $125k on the HUD1? We will be financing this purchase, so we need to roll in that wholesale fee to the loan. I understand that typically a portion fo the fee is paid on execution of the assignment contract with the balance at closing, but to get this transaction to work the wholesaler will be paid his fee at closing.

We could do a double-close but we threw this out as an option to the wholesaler to put a little more money in his pocket and save his portion of the buyer/seller closing fees on the AB side of the transaction.

Any direction would be appreciated.

@Dennis Tierney

Could I use my own SDIRA to issue a non-recourse loan to an LLC of which I'm a minority shareholder (33%)? This note would be a 2nd lien position behind another lender.

Can you use a SDIRA to issue a note to an LLC in which you have a minority ownership stake (33%)? The LLC would use that note in conjunction with other financing to purchase, remodel, and sell a property.

If that scenario is a prohibited transaction, are there services that would permit me to issue a note to another investor, and allow another SDIRA custodian to issue my LLC a note on an unrelated property? I would think this would avoid any potential appearance of commingling, but not sure if that's an option.