All Forum Posts by: Jon Reed

What is your credit score? And do you know why it is low? If so, then fix your credit score then shop around for HELOCs (don't stop at asking one bank). If you don't know why, then pull your own credit score and history and start researching on how you can fix it. There are A TON of credit fix blogs out there to read.

Your options are endless... you have to decided what you want to do. I would also say, go talk to other banks because that loan does not look like a good deal. With our local banks we are able to get 80% ARV, 5-6% interest, over 20 years.

You should make sure you set aside and account for the legal fees and time it will take to evict that tenant. The amount/time is all variable depending on what state, county, and even city you are buying in (especially during COVID). I would talk with your lawyer in detail about the eviction process and how COVID has affected it. If the tenant can show that they are unable to pay due to COVID (which is super vague) then they can be under another umbrella of protection and draw out staying in the unit even longer.

So... this story is for SW Missouri.. not sure how it works out in your area.

Just recently had a family member deal with part of their neighbors house actually being on their property. They purchased 7 acres and closed without issue. Everything closed fine because the lender and title company didn't require a survey before closing. Once they closed on the deal they worked with the neighbor and the city to have the property lines re-drawn so that the neighbors lot now included their full house plus 6' of setback that is required. 

I believe my family member 'sold' the little section of lot to the neighbor for $1.00 as long as the neighbor covered all the survey and titling expenses.

@Sarah Brown hit the nail on the head... it all comes down the numbers. What kind of ROI will you get based on the rent you can charge for the home? Can you get a better ROI by selling the property and using the equity to purchase a better property?

Sounds like you need to start crunching numbers. 

Get with a realtor and start figuring out the ROI of new build vs. purchasing.

Start interviewing banks to determine the best financing option.

It will be darn impossible for someone to give you a solid advice on this forum based on the details given and the situation you are in. There is a lot of leg work you need to do first to find out the facts and figures for your specific strategy, in your specific area, with your specific financial situation.

You should first make yourself an LLC which then purchases the property. Then all of the if-then issues are handle within the LLC and not based on how you have the property titled.

Also, if you are married then your assets are one-in-the-same. What yours is hers and what is hers is yours. But... that is a whole different soap box on marriage that I probably should not get up on right now.

So... if you are treating your marriage as a legal partnership then you should treat this investment the same way. If any two people were to purchase a property together then they should first create an LLC together which will handle all of the details on what to do with any assets held by the LLC in situations like death, buy outs, etc.

I would get a second opinion from a foundation repair company and have them take photos of what they are seeing (or go down there yourself with them and see).

The support pillars under a home should not be eroding at all... eroding foundation is usually caused from repetitive water exposure and pillars under a home should not have any water exposure. If they really are eroding then I would walk way form that deal because there probably is bigger issues which caused the erosion to start with. 

There is no one-size-fits-all perfect offer format. It all depends on the person you are dealing with. Some people want to do it all over the phone... otherwise want to do a face to face negotiations.. some want to do it all formally in righting back and forth.

The only constant is no matter how you get to the final agreed price, get it in writing on a formal real estate purchase contract.

There is no real benefit for one of your LLC to purchase property from another LLC that you own. It just costs extra since you have to transfer title and funds around. I would purchase the properties with the buy and hold LLC and then run the renovation expense through your rehab LLC and charge back to the buy and hold LLC.

However... you could also just have one real estate investing LLC and purchase/renovate everything through that one LLC. This would make account and taxes much easier.

Then... if you want to do work for other people create a separate LLC which only handles work done for external customers.

Ohh! And also, you should probably not just have a cash side business of doing handyman work. You should already make an LLC for this and run all the income and expense through it. If you have an LLC for this small handyman side work you could expense a ton of things (tools, mileage, materials, insurance, and more) and probably end up with a net loss at the end of each year and it will actually reduce your overall tax bill. Also, the LLC will give your personal assets a bit of protection verses just doing all the work directly in your own name. (not a tax/accounting/legal professional... just my opinion)