All Forum Posts by: Jay Dean

@Account Closed  - If the sister is determined to cash out and you can't buy her out maybe this would not be the end of the world.  Get your cash, set aside any taxes, and then buy in your local market.  This will give you a chance to be close to your rental and have a better idea what is going on in addition to saving on property management fees.

Welcome to the community @William Stitt    

If they are a borderline hoarder, then they have already trashed the place.  Non-renew and move on.

I don't have much experience with wholesalers, but I hear that they sometimes list properties that they don't really "have".  There was a recent BP podcast that mentioned this but I don't remember which one.

Welcome aboard!  You are in a great place to learn.

I think you are skinny on your cap ex, repairs, and vacancy in addition to needing to add property management whether you intend to use a service or not.

I'm conservative, so I use 10% for each of these for a total of 40%.  I think this would put you cash flow negative.

When analyzing the deal, I recommend a more conservative estimate of expenses.  If you over estimated expenses then the additional upside will be a pleasant surprise.  If you under estimate expenses you are potentially in for a nasty surprise.

Cash out refinance to create the funds needed to buy the sibling out?

With any refinance, model the additional expense of the loan against your normal income and expense items.  You may not want to keep it if it returns minimal net income.

@Dan Smith - Not sure of your living / family situation but explore the possibility of a house hack if that is a possibility.  There is a huge opportunity in my opinion for younger single people that have the ability to go down this path.

There is extensive information on hacking in this forum.

I am not very experienced with this sort of thing, but I like the idea of hiring a home inspector or an Architect to walk through the home with you to give you an idea of what violations exist and the estimated cost of becoming compliant.

I would definitely stay away from asking the City building permit department, etc.  No point in drawing any undue attention to the property.

Also consult with a Tax Advisor if you haven't already done so.  There may be taxes on the inheritance.

Also, keep in mind that if you inherited it and own it free and clear (no mortgage) you may have an opportunity to do a cash out refinance for the purpose of paying taxes and / or doing the improvements.

The primary purpose of an LLC is to protect your personal wealth outside of the entity. If you have anything worth protecting, it is well worth the modest investment of time and / or money.

Make sure that in addition to forming the entity you correctly understand how to properly operate within that entity during your day to day work.  It is easy to "pierce the corporate veil".  You can read about that on forums like this or do the wise thing and talk to an Attorney.