All Forum Posts by: Grant Kemp

The reason I wasn't going 1099 is because, as far as I can tell, the IRS wouldn't let me qualify them as such since I "have the right to control what the worker does and how they do their job". Because of their definition of "employee" it seems I need to w-2 her. Thus the conundrum

I've started a property management company and need to hire on an employee to help handle the load, but I'm having trouble figuring out HOW to actually hire them. I have the person already lined up and ready to go, but I want to do this the right way.

So far it seems I will make them a w2 employee, but I want to be able to pay them according to how many properties they're working on, and not pay them hourly. We're obviously just starting out, and I only have about 20 properties ATM, which does not allow me to pay them enough to qualify as an exempt/salaried employee. Is the only other employment option "hourly"?

In short, how should I structure my employee's pay when I want to pay them 3% per property they help manage? (in Texas)

Thanks!

Okay, so if your priority is truly just to purchase we need to probably look at what you want your monthly payment to be and go from there to structure the deal.

You know you can get the owner to finance some, so that means you should be able to get them to finance it all. Interest is your bargaining chip at this point.

I just closed on a property that I took down OF with 4% down and a 20 year note at 5%. You need to gather the seller's motivation and use that to your advantage.

The thing is-if you're okay with mixing conventional lending in, you'll have a better payment and less interest paid out. Ive never miced the two though, so i dont know how the banks will want to handle that. The flip side being the fact that your down payment will be much larger thru the bank (most likely)

So now we're back to your priority- now we know down payment is a factor just as much as getting the house. How much do you want to pay for your DP?

I'm always a big fan of trying to keep your personal name off of debt as much as possible.

Whereas my priority is keeping all business in my entity's name- what is your priority? Why are you trying to owner finance in the first place?

People seem to forever that the second amendment was put there SPECIFICALLY so we could fight against the government. America would not exist if we weren't able to Arm ourselves against England.

People seem to think that gun rights have something to do with hunting or sport and that's not why the 2nd is there

Welcome to the world on RE investing! I hope you have great success!

The absolute best way to get a price on what a property would sell for is to start a relationship with a realtor and have them give you a BPO (Broker's Price Opinion). You can usually get a realtor to give you comps (or comparable prices) pretty easily if it's someone who's investor friendly or someone you may have worked with before.

When trying to negotiate the price on an owner financed opportunity, I usually take what it would sell for on the open market, and subtract 10% from it. The 10% is because that's what it takes for a seller to sell retail (6% of their sales price goes to the realtors [3% for the seller's and 3% for the buyer's agent] and 4-6% goes from the seller to the buyer for closing costs [at least that's how it is in my market])

What I do is offer them about 10% below market value, and offer it to them at maybe 5-6% interest on a 20 or 30 year note. They generally want shorter terms, so 20 usually works. The key here is the money they'll be making on interest. 5% on a 100,000 dollar note over 20 years amortizes out to 158,390 dollars.

Ask them what they would've done with the cash if they were to have sold it retail? Where would they put it? Somewhere that can guarantee them 5-6% returns for 20 years solid? Very doubtful. The market is too volatile for that.

And yes, you will want to figure out an investor friendly RE attorney in your area and get the contracts from him. I'd offer our help, but we're in DFW and I don't know the laws in your area.

Try, if you can, to get this all done as your LLC and without your name on it. Of course, you want to be a person of your word, but in our business the less liability you can get away with having- the better!

I'm glad to help out any way I can, and I know you'll find some other great advice on here. Good luck!

I'm selling a few notes of ours that are in San Antonio and our note buyers want comps and a BPO, but our connections down there are not coming through. Is anyone on here willing to give me 3 BPOs for properties in San Antonio?

Thanks a ton!

I will gladly meet you out there. I'll give you a call.

Be sure of your ability to get that mortgage though before getting into the deal.

at the very least, you'll need to have multiple exit strategies on something of this nature.

Have you considered living in one half and renting the other half? That may be a good way to build up some equity in this property while having someone else almost pay your house payment for you. That way you can appropriate that $800/mo to other investments?

This is assuming your numbers to be true. I am with joel, however. Foundation can ruin a property real quick. You need to be absolutely sure on this one.

Foundation companies do free estimates for repairs often times. I'll have foundation companies come give me estimates on the repairs on properties I look at. It's free to me and gives me a real idea of what's going on.