All Forum Posts by: Maugno M.

@Matt P. Well that's obvious that i will. Want advice from others and how they have approached it.

@Dennis Dahlberg If she is added as a member, she is also an owner ?

I just closed on a flip today and spoke to the attorney about setting up an LLC. Ive done several flips now and have rentals so i think its time. They suggested i do two LLC'S so that i have one for my rentals, and one for my flips.
Also, I just got married last month. How would my wife come into the equation now since this has been my business from the start?
I operate here in Texas.

Just sharing my experience with my first ever cash out property.  I have been posting questions on BP since i bought this property in December of 2017 and finally finished it in Sept 2018 and did the cash out. With the cash out, i immediately bought a foreclosure and just put it under contract with a cash buyer for a quick turn around and profit. Story, numbers and pics below.

Purchase Price: 25,100
Closing Costs:1300
Repairs:21,000
Holding costs:2000

Appraisal : 98,000
Cashout: $74800

The terms on the cash out are not so favorable, but my exit strategy is to sell this house in 5 years. I got an ARM 5/1. Interest rate is 6.6%. Fixed rate 5 years and then market rate per year after that. 20year amortization. This is a SFR with 1300 sqft. it also has a separate apt that is nearly 600sqft. Its more like a guest house but each property has its own address, they are just on the same deed. Both houses combined will rent for around $1400/month (850 big house/550 small house). My mortgage payment is $770 so that'll leave me with a positive cash flow of over $600/month before expenses.

Immediately after i did my cash out, i went to courthouse steps. I intended to do a repeat to do another BRRRR, but a buyer approached me, and really wanted the property i had just purchased. I put in under contract for sale one week after i bought it from the trustee. All cash purchase which we should close in the next two weeks. It's a nice quick turn around with a nice profit without me having to really lift a finger other than to go purchase prop from trustee. Pic below of house.

@Ashish Acharya In your opinion what is the best way to run Flips ? Are we suppose to pay capital gains or SE ? I do both Rentals and Flips but haven't set up an entity yet.

hell yeah trucks come in handy. Or like others pointed out here, a utility trailer.

@Jeremy Hanson @Daniel Y. Yes a mortgage broker is good. They told me they could get me approve on exactly what i wanted. 30 year fixed rate cash out. BUT... They were stricter on the home and details needed. They also wanted me to put my fiance as part of the deal to count her income. I wanted to do everything on my own before i get married. Whatever me and her do after can be community.

I am going with my bank i mentioned at first. They approved me for conventional all on my own without needed to add anyone to back up my income. It will be an ARM 5/1. 6.6% interest. 20 year. It will be an Inhouse loan to my understanding which means they wont sell it.

@Michael Enriquez Sounds good ima see all my options. But this bank im working with is pretty fair and right about mortgages so i might have to deal with this. It might not be a long term hold so i might sell as an exit strategy at the 5 year mark. 

I bought this property December of 2017 @Victor S.

@Greg H. Any thoughts on this since you know the markets here in Texas ? Yes LTV max on home equity is 80%ltv but the interest on this ARM seems very high. I was hoping for a fixed rate.