All Forum Posts by: Justin Koehn

Timothy, Great job on the live-in flip! I have used this strategy twice, and with a the help of appreciation in the lats 8 years, I have done very well with these. I would encourage you to keep track of all of your photos - especially before and after so you can create a nice presentation to future partners or lenders that highlights your work. It is easy to forget this in the stress of selling and moving, but it is very important. Also, before you forget any numbers, try to capture all your costs (closing, lending fees, construction materials, closing costs, etc) and all profit made after the sale. These records will add to your "portfolio"  of work completed, but also start to give you numbers to help judge costs on other flips to come. I know I can easily misplace or forget these numbers if I don't record them quickly. 

Great work and good luck to you in your future investments - it sounds like you are making some wise, live-changing choices while still pretty young. Good for you!

@roy n thanks the reply. I'll keep watching and see how things go in the next few years.

Hi Bp,

As I read more about the Canadian housing market, I am becoming very interested. Not because there are currently good deals, but because on MANY accounts it sounds like that market looks a lot like the US in 2007. If they are close to an epic crash, it could leave another "once in a lifetime window" for investing. 

However, as a US resident, I don't know anything about buying properties in Canada with US dollars. My questions are:

Do US lenders lend on properties over the boarder? 

Do Canadian lenders ever lend to US citizens?

Or, would a US investor need to make cash purchases?

Also, would you end up paying double taxes on any gains made in investments in Canada?

Thanks!

Hi BP!

I just found a cash-flowing Triplex in my area but I don't want to finance the entire deal myself. So, following Brandon's lead, I am looking around my network for partners to lend me their lend-ability, ie, I need their ability to qualify for financing. I know several of you wise investors will caution me to not get into an investment if I have bad credit. To focus this discussion, let me say that my credit is fine, I have the capital to put down 25% or more by myself, and would qualify for the loan to do this deal. However, I don't want to tie up that much capital in this one deal, and I have another project that I am saving my personal debt-to-income for. 

The deal:

Listed for $280,000. Would need about $80k invested, assuming 25% down, closing costs, and some initial rehab. It would cashflow $730 a month after I allowed for 5% vacancy, 5% repairs, 5% capex, 10% management, insurance and taxes (Thanks BP Calculators!)

I put in $40k, set up deal, set up entity, and manage.

Other investor puts up $40k and has the note in their name. 

To stabilize, I put in an additional $15-20K in a reserve account at 5% interest (I sort of loan it to the deal) and all cashflow, maintanence, and capex (about $1200 each month) go into this account until it reaches $20k (about 1.5 -2 years). I then recoup my $20k with 5% interest that I had loaned to jump-start the reserve account.

I receive the 10% management fees AFTER stabilized and we split cashflow and any sale proceeds 50/50.

1. Does this arrangement sound reasonable? 

2. What entity sounds best suited here? LLC, GP, etc? I know this is an attorney question, but I would like to have a vague sense of what I am doing before I call them up.

Thank you BP!

Again, awesome response. Thank you again for the information and direction!

Great info, Albert. Thank you! I'm curious what you mean by file tax returns strategically. I know I should talk with a CPA, but I'm curious what you're thinking is on that.

Thanks @Ike Hobbs for the great recommendation. 

@Albert Bui - I'll PM you about my situation more specifically. 

Appreciate the input from all. 

Question to you all - What is the best way to start building those relationships that will pave the way for a long-term lending relationship? I am planning (with a little luck and work) to be applying for WAY more debt than my income will facilitate on its own, so I want to seek out and work with lenders who understand REI and are willing to do portfolio and asset-based loans.

@Tyler Blackwell @Nghi Le

Thanks Tyler and Nghi. I will definitely give those guys a call and look into opening personal and business accounts with Oly Federal. The 6 month seasoning is definitely something I am interested in. 

Hi BP!

I'm looking to buy a primary residence (sorry Grant!) in the Olympia, WA area, but also am looking at buy-and-hold deals and flips in and around the South-Sound area. I want to start establishing long-term relationships with a lender so that when I need portfolio or other loans, I have already built that relationship.

Any recommendations for local lenders for conventional mortgages and also any good hard-money lenders in the area?

Thanks BP!

April, 

I'm sorry no one has answered this post yet! I know it was 5 months ago, but if you are still looking, you should give Steve at James Contractor Services a call. Steve is my brother-in-law, and he is an amazing guy - he can fix basically anything, VERY hard worker and honest. I have employed his help on multiple house projects and he is awesome. He is local to Olympia. PM me for his phone number.