All Forum Posts by: Anthony B.

Hi,

My name is Anthony.

About myself:

I am 22 years old. I have two parters in a Montana LLC being created as we speak. I am interested in commercial property, and wholesaling property to build capital to invest. Although one of my partners has a lot more knowledge in REI than I do, I do not want to rely 100% on information from her. I would like a mentor whom I can get unbiased information and help from, and in return I will show my gratitude by working diligently to compensate time spent.

Although I would like a mentor who I can see in person, I do not mind having a long distance mentor. I do not know how I would be able to work for you, but if you have any ideas then let me know.

Thank you.

I have been calling around inquiring how much it cost to form contracts necessary for wholesaling. The least expensive rate so far is $175 an hour at 3 hours minimum charge. I called another attorney who was more savvy with the wholesaling process. He will charge me $2,000-$5,000 to draft the LOI, Purchase Agreement with Owner, and the assignment contract with the investor.

At the moment I do not have enough funds to pay an attorney that much money. If anyone knows of a more effective/efficient way please chime in with your knowledge. Until then, I will keep calling attorneys up and get more information.

The RE Agent just called me and this is a REO.....can I still wholesale this?

I found a garbage house in what is a decent neighborhood. The surrounding properties are not perfect, but farrrrr better looking than this gem. Property is vacant, the listing agent's cellphone is turn off or something, and his voicemail box is full....How else do I send an offer to the owner, find my own agent to help me? I never thought I would be so excited about ugly houses =] I'm going to a real estate networking event this wednesday to build a list of investors. This would be my first property I will be sending an offer to. From what I understand, I make my offer at 65% of ARV, correct? So if the ARV is 420,000 I would offer 273,000? Are there any instances where I would offer a higher price? $147,000 is a large margin... As for as my assignment fee, what number do I base the fee off of - the ARV? If anyone would chime in, I appreciate it.

I found some interesting info on it so far. (seriously this house is ugly)

Property:
San Diego, CA
Last sold March 1st, 2007 - $390,000
Listed July 19th, 2007 - 359,000

So recently after reading a lot of threads here I started looking for duplexes and such. I use the 2% rule for how much rent the property should get. When I run the numbers on mortgage etc, I run it off a 20 year note using 8%. I also use the 50% rule on gross rent to find the operating expenses. I apply 70% of the asking price to become the price I would want to offer on the property. Also 10% down payment. I have all this on an excel sheet so all the numbers come up fast and I can just do this on a lot of properties quickly. I look at a site where it has the properties listed, and how much the units are renting for. None of the properties I have crunched the numbers come relatively close any cashflow. Mostly all show negative numbers, if they dont, they show like 10 dollars cashflow a unit. How much of a lowball offer do you have to make to see good numbers? Am I running the numbers correctly, or too conservative? Or do I just need to keep searching until I finally find the right property?

Thanks

I am going to start purchasing investment properties and before I do I am going to learn a lot of things.

First in question: When you were beginning did you form an LLC on your rental property? If not why? If you did, or did not, would you do it differently if you started from square one again?

Second: When did you form a corporation to hold your properties?

I know I did some reading on the property taxes. If I remember correctly that is 100% tax deductible on a rental property because it is thought of as a business expense? If I am right on that, must I have to form a business around the rental property in order to have this tax benefit?

I am also looking at ways to finance my first rental property. I heard that some banks will give a line of credit to beginning businesses. If this is true, what would be the case if I incorporated and asked for a line of credit to use as a down payment on a property? Is this smart? Would the bank just laugh or take me seriously?

Should I focus on going the seller-finance route?

Just to give you an idea of where I stand: I am 21, roughly 20k bad debt. I have done a lot of reading of real estate books like Trump and Kiyosaki, but book smarts doesn't cut it for me. So hopefully I can have all my questions that are unclear answered here.

Thanks for the time and I look forward to learning a wealth of information here!

-Anthony