All Forum Posts by: Jeff V.

I'm no expert but thats the same information that I've been reading all over the forums.  I believe Fannie or Freddie program has a maximum of 4 and the alternate will do up to 10.  I can't remember which has the higher...

Either way your definitely limited in your investing by using Fannie Mae and Freddie Mac financing institutions.  The answer your looking for lies in Portfolio Lenders.  I live in a small town and have 2 portfolio lenders so I don't think they are hard to find if you look. 

Here is a link to why a Portfolio Lender is your best bet:

http://www.biggerpockets.com/renewsblog/2008/07/10...

I don't think this answers your specific question, but may prove useful to avoid the situation all together and may hellp someone else in your situation.

Thanks,

Jeff V

I don't know if this will answer your specific question, but as @Rebecca Peters 

suggested the 203k loan program has features that include the rehab in the original loan. With that being said you should be able to bypass the "straight FHA" loan and just use the 203k and fully fund the rehab with the same loan.

I'm no expert, just passing along information that I'm familiar with.  I hope this helps.

You mentioned that you have a partner... would I be correct to assume that you have a partnership of some sort such as LLC, S-Corp or C-Corp with a valid operating agreement or partnership agreement?

If thats the case, why would you not deposit the cash into the above mentioned Entity tagged as "Member/Owner Contribution" and purchase the property in the Entity's name.  Then rehab the property using the deposited cash and have the Entity obtain financing with your partner guaranteeing the loan?

It seems this would achieve the same result and be less shady looking.

The cash out loan proceeds could then be pulled back out via Member/Owner Draw to get your cash back out of the deal plus any profits agreed upon.

The end result is you have your cash back you and your partner own the entity with whatever split you agree upon.  The Entity owns the fully renovated property with a mortgage in tact and the partner is personally signed for the debt.

Either way this is a viable alternative to what your suggesting.  You might even save a few recording fees.

@Carole G. 

Thanks for the Link, it will be most helpful in setting up a budget within quickbooks!

@Dave Toelkes has suggested along with an EQUITY account in the Chart of accounts such as "ESCROW for Repairs" and "ESCROW for Vacancy".

Thanks everyone, with all of your advice I am able to create a complete custom solution to the challenge of tracking Vacancy and Repairs and staying on the right track.

I appreciate your help!

v/r

Jeff

No I have not, but most of those homes can be found through public sites (free) such as:

http://www.hudhomestore.com/

https://www.homepath.com/

http://www.realtor.com/

I have recently found a site that offers an investor/home buyer/seller basically the same level of access to the MLS as an Realtor except of course you have read only access. Working to get a free account now myself. The account has to come from a Realtor. The link is below.

http://www.listingbook.com/

For all of the moderators out there, I'm in no way shape or form affiliated with any of these sites.  I have no vested interest in providing these links other than to share with a fellow BP investor.

Thanks,

Jeff

Let me say first,  this may be in the wrong forum but this seems to be the closest to the topic at hand.

The question is, "How does one account for Vacancy and Repairs?"  The question is specifically related to Quickbooks and is probably intended for a CPA or bookkeeper.

Some background information as to why I'm asking the question.  I read an article recently on budgeting for a major maintenance item such as a roof that will be needing to be replaced in say 5 years.  They recommend putting aside for a 5k roof replacement $1000 per year for 5 years.  What is the best way to track this and "earmark" those funds for that category in the Quickbooks program?

This got me thinking, most every "Deal Analysis" spreadsheet accounts for Vacancy and Maintenance as a percentage of the income generated.  Once the money comes in are you also supposed to tag that portion of the income to the underlying category "Vacancy" and/or "Maintenance" so that you know its reserved for those categories, OR are those numbers just used for a preliminary "Is this a good deal" check?

I have searched the forums for similar questions and haven't found any on this topic.  They all discuss the front end "Deal Analysis" ect but not the back end of the business or bookkeeping side.  

As a Recap the questions are:

1) How does one account for Vacancy and Repairs?

2) What is the best way to track this and "earmark" those funds for that category in the Quickbooks program?

3) Once the money comes in are you also supposed to tag that portion of the income to the underlying category "Vacancy" and/or "Maintenance" so that you know its reserved for those categories, OR are those numbers just used for a preliminary "Is this a good deal" check?

Any advice in this area will be greatly appreciated.

Thanks,

Jeff

@Chris Heeren 

Hey Chris,

I know this thread is a few months old but thought I could contribute to the topic. This is basically the same plan that I'm following. One thing to grease the wheels is that I've found a local "Portfolio Lender" that the loans are in house loans and not backed by Fannie Mae or Freddie Mac. This means they do not have to follow their 4 refi and 10 max loan rules. It sounds like that you have stumbled upon one as well. However, the issue your running into "When talking to them about a conventional loan they said this could not be done if I was purchasing the property through an LLC" sounds like this is a bank policy specific to the bank your dealing with. For example the bank I'm using specifically said that it does not matter if your taking title in an LLC because as a new business you have to sign personally to guarantee the loan as well.

With that being said, you may want to shop around for another portfolio lender in your area that does not have a problem with you buying property in an LLC. You may want to mention in the process that the LLC "is for estate planning purposes" and you will still be signing for the loan personally. It may grease the wheels to getting approved.

Jeff

@Ken Morris

I'd like to agree with the other posters here. If the Agent has helped in the process he/she is right to request a commission. This being a FSBO, the seller is not responsible for that commission, you are.

Now with that being said, unless a realtor brings you the FSBO as a lead that they worked and couldn't get the property listed or something, you generally do not want to use a realtor on FSBO properties.

If the properties you are working on obtaining are on the MLS then by all means, use a realtor after all the seller is paying for them already so they are a free service to you the buyer.

However, as a wholesaler, your best deals will not be coming off of the MLS. They will be coming from your marketing efforts to motivated sellers.

@George Kelley 

Welcome to the group.  There is lots of good information here and so far everyone seems friendly and willing to share their experiences.

I'm also from DeRidder, LA south of you a few hours.

Cheers,

Jeff Vincent

@Jeff S. 

You mentioned "Really, it's always amazes me why anyone would pay for a list of dubious lender names when most credible lenders pay to get on legitimate lists themselves. These lists are free and easily obtained."

I would be interested in knowing how to obtain this free legitimate list, could you explain?

Thanks,

Jeff