All Forum Posts by: Joshua Houchins

@Matt Fish 

No you can not pay taxes on money you have not made yet? What if you default and then they actually sell it? They would pay capital gains tax twice. You only pay tax on revenue you have received not accounts receivable . The Hey are still paying it but over time not at once. 

Furthermore this is the angle you take to sell the deal. As I have explained in other forums most owner fin deals you can land are current landlords they have a portfolio that has already paid for itself years prior to you coming into the picture.  They know there is not a mass of people who are lining up with cash or able to get fin to by there properties.  Approaching these sellers is  great they understand the business and you don't have to re explain the wheel.  There life style is already set up to receiving monthly payments. So instead of dealing with tenants they just collect an interest and principle payment from you every month, avoid a tax hit while still generating cash flow on the investment with little time involved.  These sort of people are your target market. 

@Matt Fish 

  seller fin is a great option but the hardest part is selling the deal.  Getting you sales pitch in line is the most important.  If you explain the benefit to the seller ie : amor chart and they can see what exactly they will make over time and not just taking a hit on capital gains taxes pretty easy sell depending on the sellers situation.

Typically on your questions if the die.  It should be structured in the note. But it if falls to the heirs and you are not in default per terms of the note there is not much they can do.  The property is deed to you or you entity not the lender who has passed.  The heirs could continue taking payments or sell the note.  Hope that helps.

@Erique Gibbs I don't see how you fit in the picture using a realtor?  The numbers don't make sense and they don't lie.... You will need to find the deals and buyers to make it work.

@Aaron Xie as stated above broad question without any other details.  I would invest a portion and lend a portion to other investors at 5 point 15%.....

@John Horner I have been self employed for over 10 years it is very true 2 years of returns is a must for conv fin.  Pre 2008 I could walk into numerous banks and get a loan almost instantly .....but no anymore. As I did and many others have had to do you might just have to bite the bullet on a few deals and go the hard money route until you build up some capital.  Once you build up some assets that you can use to collaterize a line of credit or some other sort of conv fin you will obviously save a lot of money.  As I preach to people flip a house take a portion buy a rental repeat for several years it is a sure way to build real wealth.

Even now on some deals I use Hml I get a better rate because of repeat business and they know what I can do. Being an investor / developer access to capital is crucial to success. Hard many is not that bad if you can get in and out of deals. I have also found that even when you can get a conv loan it still takes time to close. If you get the deal for cheaper by closing faster hml makes sense.

As stated above finding a bank/ loan officer who gets it is very important you will more than likely get a lot of no's but keep trying.  Personally I also structure raising capital as if I was on the opposite side of the table how secure is the lender? What kind of track record do I have? How good is this deal? Etc etc.

As far as the personal house same criteria per tax returns I would suggest if you can of afford it obviously by a new personal home prior to leaving your current employer.  

Most banks say 2 years etc but the truth is only time will tell it has really taken me a decade of increased tax returns to "prove" or make a lot of conv lenders understand what I do and that my income only improves from year to year.  

But local banks are always the best way to form a real relationship and get on track to have access to conv capital faster.

Good luck

@Account Closed I am not sure if there are any actual builders in your area on BP maybe there are I don't know. But find some local builders who have experience and tell them you are "looking to build spec" trying to do some DD on a potential upcoming project.  Get some numbers that way.  They can range greatly depending on the geographic location, soils, finishes, wind, just some friendly advice if you are not fimiliar with construction/building and you don't have a builder you can truly trust I might pass until you get more experience. Please don't take this the wrong way building new construction will take 6-9months from start to finish so if you do not have everything lined correctly there is a good chance of no or a slim profit margin.  I encourage you to get out and take risk in development and investing but make them calculated risks.  Good luck.

@Jeff G. yes you should form an llc. As noted above if you are paying cash I would form two llc one that owns the house and one that is the lender and has a dot on the property.  So in very simple terms llc 1 is the owner llc 2 is the lien holder.  Once you acquire a larger number of properties this will make more sense from a liability stand point to you.  Your attorney will understand.  As long as you run the company exactly how your operating agreement states you will be fine and protect yourself. 

Second if you are getting a loan some banks will allow you to buy in your llc name as long as you personally gurentee the note.

@Jay Helms when you purchase property the taxes will be paid in full on the hud up to the date of the closing and pro rated for the current year.  Since the property has changed ownership with all taxes current there will be no auction. If the owner can not pay them the proceeds on the sellers side will be payed out to the appropriate claim holder. So you will have clear title at closing.

@Steven Tierney one other thing to add I forgot consider having a local land planner look at the parcel to see if he can figure an angle on a possible variance.  If the property is close to meeting the requirements for your town they will more than likely allow it. Reason is a new home will bring more tax revenue than a lot that is at this point not buildable.  Also I am not sure of the lot size of the rehab property but maybe a combine then re divide might work.  It is hard to answer this question exactly without a lot of missing info.  In short get a land planner throw him a few beans and figure out your options. 

@Steven Tierney the easement issue would be the first question I would find out.  you can determine this at the register of deeds office some cities have this available online you just need the parcel id.  Since the lot can not be built on I would assume it has very little value.  I would check into the option of a varience to see if you could build on it as well.  I would also assume this property is not land locked?  

I would find some comps that have a similar lot sizes with adding the adjacent lot. Determine if it adds any value at all.  Say if it adds 50k in value offer the owner 15k and add 25k or so to your asking price. This is all theory you must justify with reasonable comps in your area.  The numbers don't lie!  My point is if you can't buy it at 20-30% of the value I would pass. I would assume you would not make much money with the land but I am sure it will appeal to the back end buyer by having a larger lot.

Hope that helps good luck