All Forum Posts by: Ghassan Jabali

Hello Austin,

I hope you're doing well. It does sound like you have done your research on the property and that it is viable for the cash flow. However, when it comes to Foundational Work, you may want to consider not paying the Seller to make the repairs--unless it would affect the marketability of the title you are obtaining--but rather hire the contractors yourself to do the work. This has an advantage of it being done correctly and for the Seller not to cut corners.

Alternatively, if you are concerned about not wanting to engage with the contractors directly but have the Seller handle it, then you will want to ensure that the contract is written to include those repairs and that reviewing the renovations to ensure they are of quality work as part of the contingency to purchase the property is included.

Acquiring it can help increase your assets and allow you to have consistent tenants with college students.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Hello Chike,

I hope you're doing well. That is great to hear about your major goal and the plan you have in place. One thing I may recommend as you begin your search to do your first BRRR deal with a friend is to establish expectations with your friend about responsibilities each of you will have, how decision making will be done with the two of you, and any potential exit strategy should there be a falling out. We may recommend this to be done in writing and depending on the level of commitment between the two of you with an agreement or the formation of an LLC.

Additionally, since you are looking at the Indianapolis market, we may recommend forming an Indiana LLC to engage in the renting of the business, and potentially a holding company beneath it if you both are concerned about any personal liability exposure and/or anonymity.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Hello Kaden,

I hope you're doing well. That is very excited to hear how determined you are.

Generally, when engaging in House Hacking, we do recommend making sure to have a good lease agreement, preparing the premises for the kind of cohabitation you are planning on having, and making sure you have good insurance in case of liability being triggered.

Due to the inherent nature of using a personal residence for a business purpose, it would be considered mix use property. We may not recommend using an LLC exactly but rather putting your personal residence inside of a trust to at least offer some anonymity from other creditors or individuals.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Hello Stephen,

I hope you're doing well. Generally, students can either be very good tenants as they focus on their schooling diligently or they can be very unreliable. I myself benefited by renting while going through law school and had no issues. Fortunately, student tenants in my properties have also brought up no issues.

Having a 650 credit score can be a good start but if you are wanting to adjust your requirements to include employment or longer history then you absolutely can during your tenant application process. If you are particularly concerned you could see if they are willing to have a guarantor sign also on the lease agreements, or do a short lease such as 3 months to test them out and then a longer lease afterwards.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Hello Jordan,

I am sorry to hear about your current situation. Generally, part of lease agreements is the right of quiet enjoyment of the premises being leased. However, when it comes to duplexes, tenants also need to help facilitate the cooperation between each other. We would approach very cautiously and even seek local counsel because she has threatened to file a lawsuit against you. Any communications with her could be used against you if you admit any liability for her supposed burns and/or heart attack. Based on the facts that you provided she has had constant issues with all other neighbors and is determined to get her way or make claims up against you. We recommend documenting everything from any water investigations you have done as well as the removal of the extra tenants. It will be up to you whether you want to no longer want to not renew any lease you have with her or not renew the lease with the new tenant. Any number of factors could have led to her supposed heart attack and so we would approach the situation cautiously and recommend seeking local counsel to advise you on your state specific rights that you have and that they have.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Hello Lake,

I hope you're doing well. Generally, you are able to have an Umbrella Policy and Package bundling when it comes to having Insurance on the properties. We would recommend making sure to discuss with the Seller what the minimum standard they require and/or if they will require themselves to also be on the policy as an additional insured if there are any mortgages on the properties that you are purchasing subject to. Additionally, we do recommend if these homes are going to be used for investment that you title them inside of a Trust and/or LLC and have those named on the insurance policy for both insurance protection and business protection.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Hello Amir,

I hope you're doing well. Typically, what I have seen with many deals having critical issues is either at the very beginning of making the deal or right when trying to close. At the very beginning, finding deals that a Seller with a property that meets a person's range of criteria to flip can be difficult, especially prior to trying to secure inspection and insistence on "As Is" Provisions. For wholesaling, the beginning can also be difficult if the Seller understands that a person is wholesaling by ensuring that there is rights to assign the contract or makes an offer with the term "And/Or Assigns." One solution is to make sure to send Memorandums of Understanding or being very clear in Offer Letters to be upfront and prevent Sellers from feeling deceived or that you are making a large amount of money off of their property.

Additionally, near the end if financing. I have heard many 11th hour phone call stories of the Lender suddenly threatening to pull out of a deal because one document is missing, their underwriters demanding additional information, or confusion around a business structure. If dealing with residential property, one solution is to keep it as simple as possible and close in a personal name and then transfer it into a trust which may then be connected to an LLC. As long as the property is classified as residential it is usually exempt from acceleration or due-on-sale, even if the intent is to renovate and flip. This reduces issues around complex closings and helps streamline the process.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Hello Sean,

I hope you're doing well. Generally, it could be ideal to try expand your policy with State Farm and leverage the existing policy so you could get preferential rates, rather than having to acquire a separate policy with another insurance provider. If State Farm doesn't offer earth movement insurance, then you could check locally around the nearest town or city to the property for a specific policy provider that covers earth movement, before trying nationwide searches or googling insurance companies that specifically focus on earth movement policies for construction and residential use.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication

Hello Thomas,

Generally, House Hacking can be a good way to create extra funds from a personal residence. Typically, those that do engage in House Hacking tend to own the property, but just like with Short Term Renting, you can Arbitrage is you are wanting to rent the property yourself and then sublease. You will need to get the owner's permission so that you do not violate the lease terms. Additionally, please be aware that the very nature of House Hacking does expose you to more potential liability, even if you do provide proper structuring as it will be seen as mixed use property with both personal and business liability exposure. It can still be potentially a lucrative way to generate money for other flipping and investing, but we would definitely recommend having a strong lease agreement and insurance.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Hello Umar,

I hope you're doing well.

Generally, there are strong restrictions when it comes to what you can or cannot engage in while on an H1B Visa. We always recommend working closely with your immigration attorney before engaging in any deals as they will be the most familiar with your application and anything you are allowed to engage in.

Typically, Rehabs with Fix & Flips and Managing Properties can be seen as active business ventures, which can violate your immigration status. We would be very cautious about engaging in those type of business activities while on an H1B Visa as they may be prohibited. Lending money may be more allowed and be seen as passive depending on how many loans you are engaging in. Additionally, renting one property can also be seen as passive, along with stock trading and syndication investing as a limited partner.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.