All Forum Posts by: Mary El

Deal analysis has been done, with exacting detail, which is why we have won tough deals in the past.

The spread is based on 2 options for the rebuild, with our go-to construction company and 2 competitor 'fast quotes'. One of the competitors is the firm who did the build for 3 of the 11 other sites that replaced $88K, sub-1,000 sq ft homes with $800K - $1.2MM ones.

The long tail (~3 years) was a seller stipulation. The owner of the subject property was/is in no rush to sell but finally came around and put a premium price on this tiny, 1-level ($11K demo cost) duplex.

Thanks for helping the BP community with advice to focus on fundamentals. 

As for our open question, any responses will have to help for a future deal. The property is already under contract for $175K over list, against 23 other offers. We were never going to pay $475K for this residential "lot" 🤦 

I've found a duplex that is one of those "do whatever it takes to get it" opportunities. Is it worth it to beg, borrow, 'steal' to get it?

Any creative financing suggestions/tips for going in when you're up against brutally well-heeled competition and the seller doesn't have any incentive to be creative?

Thanks BP community!

P.S. The rents are juuuust enough to cover the expenses + mortgage. The big opportunity is redevelopment, which could net us $500-750K in under 4 years.

P.P.S. The property is probably already under contract but it will be good for me to know for next time.

@Marina Kedrub I'm using a DST as my third property for my 45-day list, just in case my 1st two fall through.

**No affiliation disclaimer and I haven't closed a deal with them (yet)** but I like 1031Crowdfunding (DST) because they buy 1st and then crowdfund. As compared to (also no affiliation) CrowdStreet that tries to crowdfund first and then buy, which can be tricky for you as a 1031 exchanger.

Raleigh and Charlotte, North Carolina are great / appreciating cities but we just don't have many of 2-4plexes, sadly. Plenty of small to medium commercial properties though! I use citystreet dot com (no affiliation) to look for properties. Its not a perfect source but its pretty good.

@Dan Moe, @William Beck I am also not a tax expert but my sister is. In the accruit.com blog post it says, "Remember that the IRS considers a single owner trust, a single member limited liability company or a husband and wife owned partnership as a disregarded entity."

FYI - the husband and wife part (generally) only applies in community property states. My sister says, "In a community property state, ... spouses are considered a "single member LLC" [i.e., disregarded entity] therefore reporting LLC activity on their joint tax return. In a non-community property state the LLC would be a partnership which would file a partnership return reporting the LLC activity."

If you aren't in a community property state, double check with your local CPA.

Townhouse was bought and mortgaged by M&J, a married couple. M&J formed Parent LLC as a partnership. The townhouse was deeded to Property, LLC (sole proprietorship, wholly owned by Parent, LLC). Mortgage still in M&J's name.

If the Property, LLC flows into the Parent, LLC and Parent, LLC flows to M&J ... isn't the end result that M&J own the property?

Great call-out Luke. The property will be in the "property LLC" for at least 5 months before the exchange. Is that enough time?

@?Dave The good news just gets better! Thanks, Dave

the @ mention doesn't work on my phone 😟

@Bill... option 1 is PERFECT. Thank you!

I have an investor who wants co-invest with me on an upcoming 1031 exchange. Since my LLC currently holds title to the property, and the investor is not currently a member of the LLC (or the parent LLC), how does she/her LLC bring new cash to the deal and get in on the replacement property investment?

@Dave Foster, thanks for the reply! The property LLC has a single entity, which is a parent LLC. The parent LLC is a partnership with the original two owners of the townhouse as members/managers. The property LLC's tax designation is sole proprietor.

So, I think we're good :D