All Forum Posts by: Account Closed

It is hard to live life and not learn something of value that you can share. We all have experiences and learn in many different ways. I've gone to traditional schools, but I have learned as much or more from the school of hard knocks.

Bigger Pockets is a great place to learn, but I believe it is so much more.

There are experienced wholesalers, landlords, CPAs, accountants, tax professionals, attorneys, financers, flippers, authors, programmers, social media types, web designers, and the list goes on. Lot of opportunity to learn and connect with such a multitude of talent.

So what are you hoping to learn or do here?

In my opinion there never is a bad time to buy as long as any property makes sense.

It makes sense if it meets your overall goals.
It makes sense if the property is a deal as defined by your goals.
It makes sense if you have adequate funding either from liquid assets and/or financing.

My business plan considers location, value add opportunities, cash flow, neighborhood demographics and bottom line how it will impact my future retirement goals.

What doesn't make sense is overreaching and putting all your assets at risk. If you are buying to hold you need adequate reserves to cover eventual repairs and potential long term vacancies. In my experience landlords eventually run into tenants that cause substantial damage and you have to plan for this as well.

The other day I was giving thought to this question, "Why visit and participate on Bigger Pockets?"

For me there are a number of reasons.
1) It is an opportunity to share what I have learned and help where I can
2) It is an opportunity to learn from others experiences, knowledge and wisdom built on knowledge
3) It is a great place to meet other professionals and aspiring professionals
4) It is a place to ask questions

I'm curious why others visit. I'm not sure that I understand why some would rather hide in the shadows and not draw on some of the greater benefits of the site. Please share what you hope to get out of Bigger Pockets - why you are here.

It sounds like this will be a good learning experience.

I have to wonder if there wasn't more that could be done during your due diligence period. It seems like there are a lot of issues that could have been uncovered in a good inspection and a careful review of current financials.

If you don't know your state's landlord tenant laws now is the time to get very familiar with them.

It may be to late to talk to your tenants, but it seems there were many issues from the previous landlord.

Unfortunately this sounds like a situation were your repair costs may be horrendous. The tenants sound as if they feel screwed or otherwise harmed and are going to take it out on the property.

It may prove cheaper to do a cash for keys deal with these tenants before greater harm is done.

I hope you share your ongoing experience so other new landlords and not so new landlords can learn from your experience. Thanks for sharing this painful experience.

The 3.8% will effect net rental income. Jose Ramos I think the greater effect will be the increased medicare tax in your situation and the high likelihood that capital gains tax rates are probably going up.

Sounds like you might qualify for an SBA 504 loan on the real estate for the business. Quite likely you could qualify for a 90% loan and may or may not be required to hire new employees. A minority owned business is not subject to some of the additional restrictions. The loan rate is often higher than a conventional loan and often will take longer to complete.

You also may be eligible for the SBA 7 equipment loan.

Regardless like Adam F suggests you still want to make sure the numbers pencil. I would not confine your due diligence though to the numbers. There are other qualitative issues to consider. Are you planning to stay here long term? Have you considered the stability of these existing tenants and the ability to bring in new tenants? Will you be doing your own property management or hiring all or part of this responsibility out? What is the zoning for the property and how will they impact your choice of tenants? Do you have adequate parking for the types of businesses that you might consider? This only a start, there are many more things to consider.

Not necessarily. It does mean though that it will be ordinary income. These will definitely be considered flips if the investor ran them through his existing flip business.

The LLC will be impacted, but it depends on the nature of your LLC. Are you holding the foreclosed property in the LLC as Chris Martin is suggesting? Is this the only property being held by the LLC? If the property is held in the LLC it will be impacted in many ways.

If the LLC is unrelated to real estate and doesn't hold this property it will still be impacted because personal guarantees may carry less weight. The impact will be much less though.

Jon Holdman the gain on sale makes sense to me if this investor is at least a good flipper. I would expect the exit value to be more than the purchase price, repairs, holding and closing costs. If not the investor is in for many more surprises down the road.

The rental income and expenses wouldn't factor into a gain or loss. The big assumption here though is can this activity qualify as passive rental activity considering the investor has been flipping and is carrying on an active business. I have no idea how he set it up the business. The short holding period will be problematic as well.

Depends on what you mean by finding you the deals. What exactly are you asking them to do?

Are they doing a lot of the due diligence?

Your deal criteria would make a difference as well.

I've considered using a wholesaler and I would be willing to pay them well if they actually delivered a distressed property within the guidelines I give them. My experience though has been that wholesalers have trouble delivering.