All Forum Posts by: Christian Smith
Christian Smith has started 5 posts and replied 15 times.
Post: Just got an LLC. Looking at what to do next
- Posts 15
- Votes 3
So my friend and I decided to start a side business. We both work in construction. Both of us worked in the union as drywall finishers and now work in management roles. We want to do side work and maybe even eventually get into flips.
After some research (and help from people on here) I decided to get an LLC. Well that's done. Now I'm looking at bank accounts but after that, I feel like I'm quickly going to be in over my head. I've basically volunteered to be in charge of money and I have no idea what I'm doing. How do we get paid? What percentage should go back into the company? How do I be sure I'm ready for taxes? etc.. So what should I focus on after opening a business account?
Post: Do we need an LLC for side work and flips?
- Posts 15
- Votes 3
@David M. Wow! I would have never expected someone to take the time you did to type all that out. Really appreciate that. Gave me a dang good start on further things to look into. So basically if it's my business and I pay taxes and all, I can't just give him his cut after taxes?
For the record @Fred Shatzoff @Michael Ablan, we are currently working on financing as well but I'm trying to figure that out on my own. There is a hard money lender in my area who I don't believe requires LLC's but I jumped on here to figure out if I needed an LLC before I tried that route. We have a couple of potential private money lenders but it kinda of sounds like as a partnership, we may need an LLC regardless of it it's required by the lender, correct?
Post: Do we need an LLC for side work and flips?
- Posts 15
- Votes 3
Thanks in advance for clicking into this. Appreciate your time. I'll try and be short but not leave too much out.
My friend and I work in construction and want to start making some extra cash. He already has some possible deals lined up finishing some basements. We also want to get into flipping. Since there are two of us, do we need an LLC or would it just be easier to put it all under one of us and split the profit?
Post: Fair rates using friend for Private Money Lending (with xlsx)
- Posts 15
- Votes 3
I guess in my head, the stock market roi is usually around 7% and that's annual. So I was thinking even though it's 10% interest, that is annually and the loan period was only 6 months.
Post: Fair rates using friend for Private Money Lending (with xlsx)
- Posts 15
- Votes 3
Originally posted by @Kenneth Garrett:
Your return is double that because the money was only used for 6 months. If you think about it the interest rate is 10% plus one point. The return cannot be less than 10%. Prorate the return on an annual basis is 12%.
Ohhhhh ok thanks
Post: Fair rates using friend for Private Money Lending (with xlsx)
- Posts 15
- Votes 3
I have a friend who is interested in funding my flip. I'm working at figuring out what's fair for both of us but it's making my head hurt. I keep coming up with him only getting like a 6-8% return on his money which seems low but maybe i'm doing something wrong. Can someone please look at my spreadsheet and see what I have wrong. I threw in guestimate numbers so don't judge the flip numbers. Just the percentages and such. Thanks!
https://docs.google.com/spread...
Originally posted by @Jim K.:
None of this matters and you're gonna end up dead in the end no matter what. Best case scenario, you get a macabre, overpriced box to rot undisturbed in the ground in. Worst case scenario, your funeral and interment is handled by a director with very unsavory personal ethics and kinks.
Reflect on that for a bit and see if it helps you put your analysis paralysis in perspective. It doesn't matter, dude. There are no winners in the end.
That's a very good point
Originally posted by @Chris Coleman:
@Christian Smith
Have you established clear investment criteria? That is, have you decided what neighborhoods you want to invest (and live) in? Have you decided what type of property you want - duplex/tri/quad? Have you set your purchase price range? Have you decided how much rehab you’re willing to do, if any? Have you set your minimum cash flow that you’ll accept?
If you have clear answers to these questions, then find properties that match your answers, and move forward on the best one.
That's a solid response and you're right. I haven't nailed down details. Would be way easier to sort through places if I had that so I'll get that done right now. Thanks!
Originally posted by @Cameron Tope:
@Christian Smith everything @Craig Curelop stated above is 100% accurate and you should implement those items. But, you won't know who to talk to or what education to ingest if you don't have a solid vision or goals.
It sounds like you're scared of making the wrong move or going down the wrong path. Having a clear vision of what you want real estate to do for you will reduce or even eliminate your anxiety.
When I get stressed (which happens to newbies and seasoned investors alike), I try to take a step back and remember my goals and why I'm doing what I'm doing.
Simon Sinek said, "if you have a strong enough why you can endure almost any how."
That's a very good point. I have a general idea of what I want to do but really need to nail down numbers! Appreciate your response!
Originally posted by @Craig Curelop:
@Christian Smith - For getting over the analysis paralysis, there are a few things that you can do:
1. Surround yourself with people who are doing exactly what you want to do. You'll see that they are successful and so can you be.
2. Educate yourself. Education breeds confidence. Confidence breeds action. Action is the cure to analysis paralysis.
3. Build a team of people that know what you want to do. Whether that be a house hack or invest traditionally.
1. I have two meetings next week and maybe a third.
2. I listen to bigger pockets a lot throughout the day and keep trying to google and youtube as much stuff as I can. I'm a big research nut but I'm trying to not get stuck here.
But I can always do more and try harder! Part of why I posted this was for exactly that reason. Just getting more people pushing me and throwing wisdom at me so appreciate you taking the time to respond!