All Forum Posts by: Joshua Manning

Also I do have income I’ve been on my job for approximately 2 yrs now

Hey guys I’m looking for advice on my situation

I have a rental property I’ll be finishing renovations on in a month or so I paid for it cash and own it free and clear I’m looking to refinance it but I’m also in the process of rebuilding my credit (part of the reason to refinance is to pay off some debts)

how can I refinance this house with bad credit I've been doing some research and non-recourse refinancing at a low LTV sounds like a option but I don't know any lenders who specialize in these?

Thank you all for all your advice I just wanted to make sure creating a syndicate would still be the best way to go for me and there wasn’t an easier route> I feel a lot better informed now, Thank you all!

Thank you all for all your advice I just wanted to make sure creating a syndicate would still be the best way to go for me and there wasn’t an easier route

Okay so the more I look at the two options the more they start to seem more and more similar. in both situations Investors are giving their money to a central figure (Operator/Sponsors) who goes and invests in real estate with that money.

However, for some reason a Real Estate Syndication is required to register with the SEC and a company with a Blind Pool is not? What's up with that?

Why are syndicated deals required to be considered securities and blind pools are not.

And how can I go about starting a Blind Pool Investment company that isn't mistook for a Unregistered Real Estate Syndication?

I appreciate any feedback that any of you here can offer me.

Hey BiggerPockets,

I've recently decided to go to enlist in the National Guard for various reasons and become a weekend warrior. Afterwards I will be a veteran and eligible for a VA loan with 0 down. When I realized this I started getting an idea for a new Investment Strategy that if done correctly will allow me to use almost none of my own money to rehab a property.

The first step would be to get pre-approved from a VA Loan with 0 money down following the rules and regulations with that. I should have no trouble getting pre-approved after I join the guard since I will have money saved up from Basic and AIT as well as my $20K enlistment bonus that I have been offered by the Guard, I will be in a very good position financially. But the bottom line is that the Bank will pay for the House.

Now for the cost of the rehab, I have been talking with many friends/family who have money saved up I have walked them through my business plan and strategy for house flipping. They believe I have a sound strategy, and as a Finance Major graduate I think they would be open to investing with me. (I know the whole saying of don't use family's money etc. etc. but you have to start somewhere) But anyways the bottom line here is that I would use outside investors to loan me the money for the rehab at a higher rate of interest than the Bank to be paid back when the property sells.

So if all goes according to plan I will have financed the entire project at virtually no cost to me. I will still be responsible for paying for Holding Costs, and Closing Costs and any loan or Bank fees but the bigger costs like the down payment and rehab will already be taken care of. 

So what do you guys thoughts could something like work? I don't know much about VA loans except that they are 0 money down so there might be something I'm missing here.

Hey Guys, 

So I've been trying to discover a way to raise capital for real estate investing using other peoples money. And after consulting with multiple lenders I now know that most banks wont lend on a property if there are also 2nd Position Gap lenders providing funds to the property as well as this might be considered money laundering. (Did I mention I hate banks). However if the people lending the money have a stake in the business itself then it would fine. So I have constructed what I hope to be a sound business model that may be a solution. I ask that anyone with sufficient knowledge of LLC's and business in general and take a look at this business models.

Essentially this business model relies on me and my business partner (who did not want to be named) making the key decisions for the LLC and be the main ones representing the company and be the actual ones investing in real estate. The other members would more less be silent cash Partners.

Responsibilities of Main Members (The Two Of Us)

- Run the LLC

- Choose which properties to invest in

- Apply For Loans

- Inspect Properties

- Conduct Rehab 

- Divvy out Payments to all other memebers

- Etc.

Responsibilities of Silent Cash Partners

- Almost none really

Equity Financing Outline:

Approach Potential Silent Cash Members of the LLC and ask for them to become members of the LLC.

Requirements for S.C. members:

- Minimum $1000 Cash buy in Per Member into the LLC

Benefits of being S.C. Member:

- Return of the Initial Investment plus percentage of profits for first completed project after joining. (profits would be proportional to initial investment amounts)

- Plus a small percentage of profits from subsequent completed projects (Have chosen a percentage yet somewhere between .5% and 2.5%)

So basically this business model would be greatly similar to that of a publicly traded company with shareholders.

I know that i would need to be careful of how many partners I would invite into the LLC otherwise I meant end up owing more than %100 of profits to the S.C. members may main concerns are...

1. Legality of this business model ( I assume that business can choose their requirements for members of their LLC and as well as have different claims to profits of the business among the members but I may be wrong)

2. Credit check for applying for loans ( I know either me or my business partner would be the main borrower on a loan but would banks still run credit checks on all members of the LLC, and if so would a potential members bad credit jeopardize a deal, and could having too many members complicate things as well?) If so I could probably just set a credit check requirement for membership as well.

3. Profit distribution - I would have to consult with a business attorney probably but I Imagine to would be quite complicated to arrange the specific type of payment structure I have in mind with a LLC with a lot of owners.