All Forum Posts by: Varinder Kumar

Does anyone have experience with SBA loan qualifications? Looking for $2M financing. I'm familiar with the general of what a lender looks for but for this amount does anyone know in general how much liquid is needed etc down payment? Looking for SBA 7A loan. Any input would be greatly appreciated. Thanks

@Deon Hamilton

Even with 6 residents you’re going to need more than 1 nurse. You will need at least 5 employees. Payroll can while out your profits. You’re payroll on 5 employees can be north of 10k a month.

@Brent Salazar

Yup! Well if you’re in a appreciation market then it’s time to take advantage of the market right now sell and maybe look for or move into a strong rental market area, since your objective at the end of the day is to cash flow and have passive income. Over time those assets too will build equity.

“Live where you want, invest where it’s smart”

@Brent Salazar

And I would caution against LLC for the following reasons:

First off don't use an LLC when house hacking, because it may prevent you from getting the financing you want. For instance, low-money-down, Fannie Mae, or FHA-backed mortgages can't be held under an LLC. As a first-time home buyer, you're able to put down as little 3.5 percent with an FHA loan. But this type of loan is available only to people purchasing primary residencies aka under your personal name.

The same bank that would allow you to purchase a property for just five percent down may require 20 percent down for you to buy using your LLC. Think about the type of investing you want to do before starting an LLC.

Plus, you might be able to get lower interest rates when purchasing a property as yourself, not an LLC.

“Special tax breaks”

Interest on a mortgage for a primary residence is tax-deductible on your personal income. And if you opted for an FHA loan with a low down payment, your mortgage insurance is also tax deductible.

You might not be able to claim either of these tax breaks on your personal tax return were you to move the property into an LLC. These tax breaks are especially important to highly leveraged owner-occupiers—like house-hackers—who pay lots of interest and mortgage insurance each month in the first few years of ownership. Even in pass-through entities, like single-member LLCs, these tax breaks are minimized because investors can't leverage as much. Putting down five percent or less through an LLC is a rare feat.

“Tax-free capital gains”

Assuming that you live in the property for at least two years—and assuming that the property appreciates over that timeframe—you can sell your investment for a tax-free capital gain. This gain caps at $250,000 for a single person and is limited to primary residences only. Unlike a 1031 exchange, the money is truly tax-free and can be spent on your next vacation, manicure, or other non-real estate assets.

Assuming that your property appreciates 10 percent over the next two years, I’m looking at a cool $20,000, instead of perhaps $13,000 after taxes. That’s a meaningful difference to me.

@Brent Salazar

Really the focus should be RRRRB - with the end in mind, but people focus so much on acquisition that it becomes the center of everything...

@Brent Salazar

See this is one of the things that people don't touch up on when it comes to the BRRRR strategy and its that the most important part of the BRRRR is the refi part, because you want to make sure you can repeat it and keep it going. Like having a rabbit farm and you keep eating the rabbits. You have run into the very same thing in a way. Read the blog below and it might be able to give you some insight, hopefully a solution as well. Good luck! And I'll do some research and see if I can come up with anything I'm the meantime - as I'm sure you won't be and aren't the only one who will is facing and will be facing the same scenario.

https://www.biggerpockets.com/blog/conquer-common-refinance-issues-brrrr

@Mike Moore

slim to none. As enticing as it may seem, beware of these joker brokers.

@Rafael Hoefel Pozas

Hi Rafael please check your inbox for my personal message. Thanks

@Joe Homs

Thanks Joe I will definitely reach to him.

I am wanting to build a Adu in my backyard and am having trouble finding reputable contractors who know this niche particularly well. Can anyone recommend any general contractors they may know or have experience with. Thank you.