All Forum Posts by: Kyle Simmons

I'm glad I posted this! I knew there were a lot of restrictions but I was not aware of the disqualified person rule. We never set up the self directed as the sole intention was to lend to my LLC. My father would make a nice chunk of change in interest over the life of the loan. I could have an advantageous interest rate while interest rates are high currently with the ability to refi if they drop in the upcoming years to regain access to the funds again for future property acquisition/renovation etc.

We do have interest in setting one up to lend to outside investors as well but would most likely use a reduced amount.  So with that being said - any recommendations for self directed ira's.  For PA

 No one has approved, this was a strategy I was going to attempt to use as way way to diversify his retirement monies as well as make access to cash for myself a little easier.  

 Thank you for this info!!!!

I have completed several BRRR's and flips recently and my father is recently retired. He is allotting about $300-400k in a self-directed IRA to lend for my LLC's real estate transactions. I have had a couple recommendations on companies/custodians for this type of account but I'm not super confident in the recommendations. I'm looking for recommendations of where he can park the money and most likely these will be long term lending plans to subisidize his other retirement. Going to lend 125-150K per property and set up on a 20-25 year note for repayment. Thanks in advance!

Investment Info:

Office Space buy & hold investment in Murrysville.

Purchase price: $105,000
Cash invested: $45,000
Sale price: $260,000

Extremely successfull Commercial BRRRR!!!

This is my first commercial purchase and my first purchase in my LLC rental portfolio. I purchased 105k with two private lenders simple interest 11%. I got one additional private lender at 15% for 15k to help fund renovations. The additional renovation cost came out of pocket and some personal credit cards. After all closing cost, interest, renovations, and additional holding cost, I was ALL IN around 150k on the nose. My intention as always was to do a cash out refi ASAP to pay back private investors (no prepayment penalty on our 2 year contract) and recoup most if not all of my investment. The building appraised at 260k on comparable sales approach and 265k on the income approach! I split this old bakery into small office space for small business owners and I was fully rented out before Feb 1st which is when my tenants all moved in! $2750 in total rents monthly. My cash out refi allowed me to get a loan for 208k which allowed me to pay back all of my investors, pay off every ounce of CC debt (all accumulated in the last 2.5 years due to renovating 3 properties) and STILL WALK away with a 47k check payable to my real estate entity! My new mortgage is $1160. Extremely pleased with how this turned out to say the least!

Some before and after photos below!

____________ Original Post from November 2020_______
This is my first purchase in my rental portfolio LLC. I also am an insurance agent so I will be the anchor in the building. I have two additional leases signed for $500 each totaling $2100/month. I will have one additional space that I anticipate getting $400/month for totaling $2500/month in rent. I found private money investors to purchase building cash and fund about half of the renovation. The remainder will come from me personally. I just purchased mid October and should be up and running first couple weeks of January! Photos to come.

What made you interested in investing in this type of deal?

I own an insurance agency and always wanted to own my own office and didn't need/want a lot of space. I found this and it was on the market for nearly 2 years. Negotiated a great price and knew my worst case scenario was that I was going to anchor the office and my agency's rent would cover any mortgage. So relatively low risk. With great upside potential with how I visualized the space after repairs.

How did you find this deal and how did you negotiate it?

It was on the market for nearly 2 years. I looked at it about a year prior to buying but also was looking at a different property. Ended up coming back to this one after the other fell through (Thank God) and found out who the owner was through a friend of a friend and got the owner on the phone to negotiate.

How did you finance this deal?

Originally had it under an owner financing 'verbal' contract and after going back and forth with the attorneys, the owner got cold feet on owner financing. So I got creative and spoke with a few friends who I knew loved and invested in real estate and asked them to lend me the money to acquire the building. Interest only financing at 11%. No prepayment penalty with a 24 month contract balloon payment. With a contingency of increasing interest to 18% up to an additional 24 months

How did you add value to the deal?

Building was outdated and needed updates. Split the building into 4 units. Complete gut job. Exterior paint, new windows, new concrete ADA pad for 2nd entrance. High end interior wood doors with glass panels. new carpet, all new electrical. new bathrooms. breakroom for all tenants. New high quality LED light fixtures. The whole 9.

What was the outcome?

Cash out refi appraised at 260k, 208k loan. Paid back 125k to investors, paid off every ounce of CC debt with the closing (accumulated 35k over past 2.5 years due to acquiring and renovating 3 properties) and walked with 47k in cash. Paid off some other things, and left with 25k cash and consumer debt free.

Lessons learned? Challenges?

this was my third renovation in the last 2.5 years. I've personally did majority of the renovation with A TON OF HELP from friends and my DAD. I've learned what I'm good at, what I like to do and what can save me a ton of money doing. Otherwise, I found out how beneficial paying licensed professionals to do work is. I've learned a little more and a little more each renovation.

Thank you for the response! My appraisal went phenomenal! I had the property cleaned to the max and staged pretty well since the building is not 100% complete (minor finishes still needed). It is a commercial property bringing in $2750/month in rent on 4 units. Purchased for 105k, renovations of about 35k, all in around 150k with renovations, closing costs, holding costs, and the purchase price. Appraised at 260k! Getting 208k cash out refi, pay back my private investors and walk with about 100k CASH! Insanely successful commercial BRRR!!!

I recall listening awhile back to an episode where the gentleman also had an appraisal business. He gave great pointers on how to get the best appraisal and I'm looking for some good episodes to listen to. I used private money to invest into a small commercial office building and essentially BRRR'd the building. I want to ensure I do everything possible for the best appraisal. Can anyone point me in the right direction on episodes to listen to? TIA

Investment Info:

Office Space buy & hold investment in Murrysville.

Purchase price: $105,000
Cash invested: $25,000

This is my 1st purchase in my rental portfolio LLC. I also am an insurance agent so I will be the anchor in the building. I have two additional leases signed for $500 each totaling $2100/month. I will have one additional space that I anticipate getting $400/month for totaling $2500/month in rent. I found private money investors to purchase building cash and fund about half of the renovation. The remainder will come from me personally. Just purchased in October, planning on opening in Jan.

What made you interested in investing in this type of deal?

I own an insurance agency so I wanted to own my own building rather than rent. I currently pay $700/month for rent. Once I'm done BRRR'ing this commercial property my PITI will be between $900-1000. I will also collect total of about $2000-2500 in rents/monthly.

How did you find this deal and how did you negotiate it?

I found this deal in March, it has been up for sale for nearly 2 years. Originally asking for $189k in 2018. Building was purchased for $103k in 2003 by prior owner. I had it under a owner financing agreement at $110k and owner got cold feet and bailed. They were in negotiations with another buyer about 2-3 weeks later and I found two private investors to lend me $105k to swoop in and buy cash.

How did you finance this deal?

I got two private investors at 65k and 40k 11% simple interest interest only payments for 24 months . I also got one additional private investor at 15% 10k simple interest for 12 month term. I spoke with a bank and should be able to cash out refi relatively easily in a few months. I anticipate the property appraising for a minimum of $150k but most likely 175k +. Cash out refi and pay back my investors. I negotiated no prepayment penalty as well.

How did you add value to the deal?

I brought about 5k to the table to close and will contribute about 15k in renovation costs as well. Me personally occupying the space gives my investors some level of security knowing the property will not go completely vacant.

What was the outcome?

Only 1 month into this deal, was just excited to get it up on my profile!

Lessons learned? Challenges?

knock on wood, nothing challenging has popped up yet. I'm sure I will run into some hurdles soon. I did do two single family residence renovations for a rental and my own home recently so I'm using those lessons to maneuver this renovation as efficiently as possible!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I have a real estate agent/flipper I use for reference and I also used a real estate attorney for all of my personal notes and closing.

Investment Info:

Office Space buy & hold investment in Murrysville.

Purchase price: $105,000
Cash invested: $25,000

This is my first purchase in my rental portfolio LLC. I also am an insurance agent so I will be the anchor in the building. I have two additional leases signed for $500 each totaling $2100/month. I will have one additional space that I anticipate getting $400/month for totaling $2500/month in rent. I found private money investors to purchase building cash and fund about half of the renovation. The remainder will come from me personally. I just purchased mid October and should be up and running first couple weeks of January! Photos to come.

What made you interested in investing in this type of deal?

I own an insurance agency so I wanted to own my own building rather than rent. I currently pay $700/month for rent. Once I'm done BRRR'ing this commercial property my PITI will be between $900-1000. I will also collect total of about $2000-2500 in rents/monthly.

How did you find this deal and how did you negotiate it?

I found this deal in March, it has been up for sale for nearly 2 years. Originally asking for $189k in 2018. Building was purchased for $103k in 2003 by prior owner. I had it under a owner financing agreement at $110k and owner got cold feet and bailed. They were in negotiations with another buyer about 2-3 weeks later and I found two private investors to lend me $105k to swoop in and buy cash.

How did you finance this deal?

I got two private investors at 65k and 40k 11% simple interest interest only payments for 24 months . I also got one additional private investor at 15% 10k simple interest for 12 month term. I spoke with a bank and should be able to cash out refi relatively easily in a few months. I anticipate the property appraising for a minimum of $150k but most likely 175k +. Cash out refi and pay back my investors. I negotiated no prepayment penalty as well.

How did you add value to the deal?

I brought about 5k to the table to close and will contribute about 15k in renovation costs as well. Me personally occupying the space gives my investors some level of security knowing the property will not go completely vacant.

What was the outcome?

Only 1 month into this deal, was just excited to get it up on my profile!

Lessons learned? Challenges?

knock on wood, nothing challenging has popped up yet. I'm sure I will run into some hurdles soon. I did do two single family residence renovations for a rental and my own home recently so I'm using those lessons to maneuver this renovation as efficiently as possible!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I have a real estate agent/flipper I use for reference and I also used a real estate attorney for all of my personal notes and closing.