All Forum Posts by: Vijaianand Thirunageswaram

Howdy? I have situation where 2 friends are planning to purchase a property. Property is already under contract under both their name. When we are trying to get funding from lender, we were thinking about putting both of them under the loan. But mortgage broker suggested by uncessary adding liability on both their credit lines. Why can't one person buy it and be responsible for the loan and create a LLC later to move the property to LLC and tackle the partnership later.

I talked to CPA and she is said that's not going to work. One guy owns the liability and LLC owns the property and he sells the share to another partner for 50% of the LLC which is 50% of the down payment. She says, still the Partner A has full liability on the property and Partner B only paid part of down payment and owns 50% of the LLC is not fair as per tax.

What is the right way to do? Since the property is already under their contract and title will be in both their name. We want to see how finance responsibility can be split as well. We don't want to create LLC and getting loan on LLC won't be easy. That's ruled out and that's why we are going as individual loan/.

Any thoughts and suggestions?

I would have to disagree with @Thomas S. I have few rentals my self and one of them we lived in it and rented out later when we moved to different house. I also owners who does the same and having good results. If the numbers works out, you are sure to get 7-10% on COC depending whether you have mortgage or not. It surely depends on the rental income and area.

Sahegin, see the attached HardMoney worksheet from BP which outlines some of the expenses including points, holding cost etc., This might help a bit.

@Tony D. Not all property manager are made equal and not all property managers like to work with small investors. It all depends. 8-12% is percent charged by many big property mgmt companies. Some also charge flat fees which not many companies charge flat fees. We do have property management company which is investor friendly with investors out of town and out of country as well. We are flat fee company and has clients all over Houston. We are not suppose to self promote. If you want, you can page me and we can discuss. 

There are few meetups around town. We go to Fort Bend Real Estate Investor meetup happens every first Tuesday at RUdy's BBQ house around 59 & 99 junction. Just check on the meetup and you will find more.

@Jay Hinrichs You are absolutely right!! Agents don't want touch deals which are low value and not safe places. They want to play it safe. 

@David Walls That's right, make connections. REI is not about what you know or who do you know, it's all about who knows you.

Tenant burnt the kitchen and stove and all messed up with water. House was left with full of trash. Had to remodel the kitchen to get it rid of all the junk to get rid of it. It's aweful how they don't even respect the place they live

@Jesal Shah You need to be patient. Good deals don't come very often. Please try to use this excel which might help you to see the numbers better. I found this really helpful instead of doing hand or otherways. You numbers are not too far. I have few rentals myself and manage few for  my investors near 249 area and they are doing good cash flow. 

http://www.smarthoustonrealestateagent.com/download/SFH_Rental_Analysis.xlsx

@Naeem Kapasi You said you got the contract done. What happened after that?

Please don't get me wrong. Wholesalers put all they got to find a deals.  They drive all day, they send post cards, follow up which are really painful. They are building sweat equity and play key role in real investing. 

My point is, do not only depend on them because there is so much demand out and every investor is fighting for the same property and its tough to compete. MLS is still has lots of deals which you just need to work to find it. Example, short sales, you can find great short sale deals by working with realtor and making it happen.

Do you agree with me? Anyone has similar pointers, please share.