All Forum Posts by: Jason W.

Great question. I have always assumed that the state health dept operating license that says how many lots you can have is the governing document. But there could be some additional hurdles / approvals at the local level in some areas. 

Each city/county has their own zoning laws, so to be safe I would check with the city/county by calling or reading their local codes / zoning online during due diligence. If you find the answer, please post here! 

You should get advice from your CPA and attorney about how to do this correctly in your location and for your specific entity. Don't try to save a few bucks by getting advice on a forum like this. It's probably a five minute phone call with your CPA, so not cost prohibitive.  So, keep in mind that this is not legal or tax advice, it's just my opinion (and my opinion could be wrong). 

That being said, loaning money to your LLC is pretty simple. Just like if you were loaning money to an LLC you didn't own. Or if your LLC was borrowing money from someone who wasn't you. You set up the appropriate account in the LLC's books to track the funds as you put them in (the loan) and then when you take them back out (the loan repayment). The loan would be a balance sheet liability account for the LLC. You can name it "member loan" or "shareholder loan" or something. Any interest paid to yourself by the LLC would be assigned to an interest expense account for the LLC.

On the personal side, you'd create an asset account that represents the outstanding loan, and an income account for the interest received. 

You can use a written promissory note so that the terms are spelled out in writing. That's both for your own info (in case you forget details) and in case you ever need to show documentation (like for an audit). As for whether to pay yourself interest on the loan, again, ask your CPA.  Hope that helps!

Congrats on your accomplishments! Please keep us posted on further developments and new deals!

This is great Collin. Congratulations on your success and thank you for sharing!

@George Carnicle, you wrote: "My return on investment for just the month of November was 103.9%. I paid in $213.04 and saw my cash value grow to $221.43."

Sorry, but I don't understand your math here. If I buy something for $1, and then the value goes up to $1.03, that is not a "103% gain". It's a 3% gain.

You paid in $213.04, if your cash balance was then $213.04, your return would be zero. Because all that is there is what you paid. The additional $7.39 on top of what you paid in would equal a 3.5% return ($7.39 divided by $213.04). 

Am I missing something?

That makes sense. Good to know the difference. Thank you for pointing out this distinction Tom!

Check your state laws and consult with an attorney of course, as I am not one. But the easiest solution may be to have the property deeded with both of you listed as "Tenants In Common" or "Joint Tenants with right of survivorship". When one of tenants in common dies, the remaining one automatically becomes the sole owner. No will, no probate, no further legal or court fees, etc. 

Hi Matt,

Here's my two cents:

1) Yes, there is no question that you should thoroughly inspect and document the condition of all the homes. Odds are you will get some of them back at some point and have to resell them.

2) You might want to have your attorney review the lease to own contracts to make sure they are SAFE act compliant (unlikely). If the previous owner was using illegal contracts, you do not want to assume that liability. You may have to get new agreements in place. 

Good luck to you!

You could do this easily in Quickbooks. Just set up a recurring invoice to the tenant and then apply the payments as they come in. 

This is an old thread. Did you ever find a solution you like?

Hey Kenneth,

There are opportunities in Indy for sure but lots of areas I avoid. Much harder to find deals than it was a few years ago. So, learn the neighborhoods that will work for you. Building a team of agent(s), contractors, PMs, etc. is also key. I am using the plural but one good one is enough. 

You are so close in Chicago, it would be worth a few visits to really learn the parts of town you’d be comfortable with. Then you will have some real world touch points to help assess things you see online. 

This is not a comprehensive list of course. But one last point. Be ready to analyze and pull the trigger fast. Indy is no longer an undiscovered market. The really good deals go very fast. 

Good luck. Feel free to message me with follow up questions. I’m a private investor like you. Happy to help you if I can. 

Best,

JW