All Forum Posts by: Jamie Brayton

@Jeremy Marek This is super helpful. Any resources you recommend in addition to having our attorney look at it? He looked at an earlier draft and didn't add much value. The core of our lease seems fine, but it really is the rules and regulations that are lacking. 

We are closing on our first property Friday and have plans to rehab and rent it ASAP. We have drafted (and re-drafted and re-drafted) our first lease using the NOLO landlord book and other resources. Is there anything you have added over time you wish you had included in your first lease?

We are closing on our first property Friday (a single family home that needs some renovating before renting). What should I be thinking about now? 

We have an accountant, attorney, contractor, and insurance lined up. We have renovations budgeted for. We plan to put an old vehicle in the driveway while we rehab. We have a lease drafted and have had conversations with a potential tenant. Are there less obvious things I should be thinking about?

@Samantha Klein This is great advice. He came highly recommended, but by people earning traditional salaries that own additional personal properties. Various feedback I'm getting this morning makes me think we need to prioritize finding the right team to work with. Any tips on how to do that? It looks like the REIA group in my area is no longer active and google isn't yielding much. I did sign up for a few local meetups, but they look like they are trying to sell some sort of service. Perhaps they are worthwhile just for the networking opportunities?

Thank you SO much, Jessica. 

Honestly, I think this is new territory for our attorney and he is learning with us. His concern was that the offer was made solely in his name and we would be REQUIRED to have his as a named partner or as part of the LLC. There was an assumption he couldn't simply assign the offer to us.

I just shared this information with him. Our plan was to be a little more equipped with this sort of knowledge before our first deal, but this one fell into our laps. 

Thanks again.

Thanks, Anthony. Can I clarify your thinking? I may have left out some important details.  We have one property nearing closing that is fully funded. It is not traditional, but the money is there. We could have purchased this one ourselves and I think we could have easily secured a traditional mortgage (I think we still can when we are ready). Instead, we have a personal loan for this one. That means we still have the original cash we saved for our first investment property that could cover a down payment on most properties, and we will eventually have cash flow from this first property. We already have an interested tenant at $1000/month (the house is $60,000 and we have about $20,000 in renovations). Of course, we won't be pocketing all of that. My husband's family owns a construction company, so rehabbing isn't a serious concern. 

It might very well be true we are not in a financial position to get the second 3-unit property. It is definitely true that these two opportunities were presented to us sooner than we would have asked them to be. What we know about this property it already brings in income, it is VERY well-priced, and we know how it has been cared for. We haven't shopped lenders, but we absolutely will. We wanted to be armed with any other possible strategies, as well, particularly because there is no plan to ever officially list this house (it would be staying within the family).

An equity partner is also a strong option because we have family members that invests. One of my concerns is that if we have too many properties without traditional financing we might not be eligible for it in the future. Perhaps I'm getting ahead of myself?

It sounds like the first step is to shop lenders. Is it reasonable to start doing this before I have an actual listed property to present them with?

This is so helpful. Our original plan was to use traditional mortgages and our new accountant advised against it when possible. His thinking is that we will end up ahead when we are paying less in interest. While this is probably true, we are really new and I don't think we will get particularly far without using the bank. Thank you!

I should start by saying I just joined the forum and posted two situations that make us unlikely candidates to qualify for a mortgage (I think). We are very green. We do have EXCELLENT credit and have a mortgage on a personal home, but have wacky personal financing for two other potential properties.

In case we ever could qualify for a traditional loan, I’m wondering how many of you recommend it. I think we understand the benefits of good debt, and we also have hopes to pull our money out of properties once they are up and running smoothly (fingers crossed).Our first two deals are in the works, but we are trying to avoid rookie financing mistakes. We have a great account and we read a ton and listen to the podcasts, but it seems everyone has a bit of a different strategy with this.

I recently made my very first BP post about a complicated personal loan agreement with my father-in-law for our first property. It appears we are near to closing on that property and we have another equally complicated property we don’t want to pass up.

This is a three-unit rental home that is owned by my mother-in-law and her sister, who has been living in and taking excellent care of the property for 40 years.  We won’t have any income, debt, or mortgage from our first property, but it seems unlikely that any bank would have interest in funding this project. I think it is very likely we could enter into a personal loan agreement with my mother-in-law for her half of the property, but we would need half of the property cost (approx. $80,000) for her sister. She is moving to a retirement community and will be counting on that money for living expenses.

We do have savings set aside for investing, but nowhere close to $80,000. Another glitch in financing may be that they would never actually list the property.

Any and all creative strategies are greatly appreciated!

My husband and I have been diligently studying in order to buy our first single-family rental home and were hoping to close on our first property in 2017. My well-intentioned father-in-law (a long time investor and developer) scooped up a foreclosure at a great price ($60,000) and plans to roll this property over to us via a personal loan. We’ve talked to a real estate attorney and accountant well versed in investment properties, but we still feel a little stumped about how to proceed with the fewest unfavorable implications. Here are some details about the transaction:

-My FIL offered all cash in his name only.

-We are currently creating an LLC.Our attorney suggests including my FIL in the LLC and then having him pull out later. I think this will make this a partnership for the time being? This isn’t the goal. He would like to be free of the property completely.

-Our attorney would draft a loan document between the three of us.

I suppose my questions are:

-What am I not considering?

-What tax/financial implications will this have?

-Must we be a partnership?

-Will this arrangement hurt our chances of getting a bank mortgage in the future? We have our eye on equally complicated second property that would require us to get some financing or large amount of cash fast.