All Forum Posts by: John Hagen

@David Miller Thank you for commenting, i look forward to directly contacting you when the time comes.

@Dave Foster I see you specialize in 1031's do you offer services for the drafting of such partnerships? 

@Dave Foster Thank you for the information. What it sounds like you are saying is the best way to do this is for the WC partners to buy the property and then the property be their "buy in" to the new LLC or LP, and my local team will contribute funds for the rehab. If this is done how would that affect the future sale of the property as it is deeded to only some of the partners?


Thank you for the great information

@Jacqueline Gardiner Thank you i'll look them up contact them for more information.

A common issue I find with BRRRR is people spend too much on rehab. I have a friend from High School who is also investing in my local market and we talk about our investments, we buy properties for roughly the same amount but he spends 3x as much as I do on rehab. When we are both finished with the rehabs his properties are worth only 10%-15% more than mine and his rents are only 10% more. While I have a contractor as a partner that works for less we also don't do high end replacements like my friend does. We use vinyl plank not real wood, cheap counter tops, repaint tubs rather than install new, minimal outside work. In our market a 1000 sq ft 2 bed apartment can only rent for so high.

Example: we both bought a triplex

Mine: $37,000
Rehab cost: $30,000
Value when done: $103,000
Rents: $1485/m
cash flow: $150 a door

His: $32,000
Rehab cost: $75,000
Value when done: $121,000
Rents: $1,680
Cash flow under: $100 a door

My partners and I in Illinois are teaming up with some west coast (WC) investors to buy a decent sized apartment complex in rural Indiana. We’ve done some syndications and we done partnerships before but this time we have an issue, I need some help from the community to properly understand and structure this new partnership.

Our WC partners are looking to 1031 a sell into this property. From my understanding they have to be deeded on this new property and not just members of a new syndicate or partnership to get the tax benefits. Several post on this topic mention Tenant In Common or TICs but I can't seem to find any post that explain how a TIC is structure of how they are formed.

One thought I had, but no clue if it will work, is for the WC partners to buy the property and then from a partnership that contractually has the rights to rents and proceeds.

If anyone has any experience in TICs please help

Thank you

Too bad no one has answered.

@Addison Guyse

I'm glad my story has helped inspire you. As you are looking to get back I  what kind of properties are you looking for?

Thanks @Fahim Siddiqui things are running smooth our biggest problem now is the local market is drying up for rentals. I bet San Antonion is booming with so many people moving to Texas.

I’m not usually the one to post on here about our success, I usually leave that to my business partner @Michael Beeman. I usually ask questions to mine the community knowledge to solve problem we are facing. That said we just closed on our 19th property yesterday and this is the close of our 19th month in business.

We started the 1st of now 5 companies last spring by pooling some money and forming an LLC. We started with a total of $50,000 from 3 partners and a promise of an additional $30,000 from one of the partners. I think some of the keys to our growth was the initial cash, a plan to grow not just play catch up as we grow, and willingness to bring on new partners as we grow.

We also caught a lot of lucky breaks along the way like: a very friendly banker, access to private loans from partners and family, baby booms looking to move out of state and off load property at cost. But the most important lucky break we caught was finding a very talented contractor who saw a future with us and a willingness to make an investment of time and sweat in us to grow our business so his business could grow. He is now an equity partners in 7 of our properties. We are all fans of the saying “the harder I work the luckier I get” while true, sometimes you just get lucky when people and opportunities pass your way.

While I say we’ve gotten lucky, hard work has played a role, while we have a friendly banker it took work to make him love us, and it took a few project done right to get on the radar for boomers to call us up to off load their properties. If you talked to me last summer when I was sanding glue off wood stairs I would have told you this is going to be a long hard haul, but that hard work opened a lot of doors rather quickly.

Open doors are not always enough, you have to be willing to walk through them. In our partnership, I’m the methodical one, I do the books, run the backend like building and implementing the company SOPs. @Michael Beeman is the one looking at properties, talking to sellers, and even getting his real-estate license to help find more deals. I’m not one to sit on an opportunity for very long and analyze it to death but Mike sees and opportunity and just lunges for it. For Example on a Saturday morning this past winter Mike and I went and looked at a 10 unit building, we walked through it went to sit down with the seller and all of a sudden to my horror I hear Mike say “If I give you $500 right now can we buy it for asking price”.As it turns out the seller got another asking price offer that afternoon but he already took our money. That property is now fully rented out, cash flowing more than $2,000 a month and led to the purchase of another building and my partners new home.

Everybody has their story of success and their advise for how to make it work, in this business there are many paths to success.Our current and hopefully future success has been built on team work, hard work and proper planning for future expansions.