All Forum Posts by: Matthew Ries

Welcome Kevin!  I sent you a message. Have a great day, Matt.

Feel free to message me, I know someone that can help you with finding solid investment properties in Texas. Good luck on your search!

I’d be interested in knowing the answer on these questions as well.

Are you lending any right now? I might know someone in state who is interested. PM me the details.

Thanks

Send me a PM and I can give you a few recommendations.

I am involved in a partnership. We have an LLC, but were told we can't get a conventional loan in the LLC's name.

So, we bought a property with cash in the LLC's name (bad idea in retrospect because we can't cash out refi it and it hurt our scalability).

Now, when we buy a property - it's bought with a conventional loan in one of our name's and the other parties involved transfer money into the LLC account (then into the buyer's account). This has drawbacks too, when the mortgage company looks for the origin of the money.

Hindsight is 20/20...I wish I had been more patient and just started investing in real estate by myself.  @Tim Shiner once gave me some good advice..."A couple friends can rarely agree on the same place to eat dinner, let alone make decisions to run a business/invest in real estate!"

Definitely would not do the 0% loan.  The IRS has specific language about minimum interest rate, and then of course all the tax hassle.

I personally like the $15k tax-exempt gift (and if you have a spouse, they receive the gift too) and just pay it out over 4 years.  

@Lance Lvovsky has the best advice, and that's to consult a CPA.

I think the biggest question is.....what is your intentions/goals in real estate?

If it's buying single family homes, the $15-30k/yr is a down payment on anywhere from 1-3 houses (depending on location in the country, price range, etc).

If you goal is to buy a smaller MF (ex. 20 unit apartment), then you would likely need the full $100k for down payment and cash reserves.

If your goal is to buy into a syndication, or invest in a publicly traded REIT....you might be able to do so with either payout method (lump sum investment, or spreading it out over several years in different deals and funds).

Good luck, I wish I had your "problem!"

This may be a silly question, but if it's a cost thing in the short term...could you build multiple pads < 5000 sq ft and avoid the engineering costs/permits?  

Sounds like the PM is trying to avoid the tough conversations that come with raising rent and explaining to tenants (once they get to talking) why one's rent is different than another. By the PM's logic, you shouldn't be in this predicament because all the units would've been rented for the same amount?!

It is my understanding, you can raise rent on month-to-month tenants whenever you choose.  However, it would be common courtesy to give them a written X-day notice (I'd give 30 days, and if they wanted to give you their move out notice, then they'd have that option.)

Any update on the Lubbock REIA?

I reached out to the president of the REIA quite some time ago, and never heard back. I'd be interested in a meetup.

Thanks

@Gino Barbaro Thanks Gino.

So the asking price is $220k (55k/unit).

I know a quad is technically "residential" for financing and comps, but I prefer to consider the cap rates and per unit cost when analyzing them.

The electric is already individually metered.  The 2 places I saw to increase monthly income is:  1) get all 4 units up to $650/mo rent (the $550/mo tenant is a 10 yr+ tenant --- is it worth upending a long term tenant? maybe slowly increase his rent to get to market rates and 2) partially bill back the sewer/water that is ~$250/mo and owner paid.

My fear is this:  if my numbers and the ask price as this far apart (profitable at $130k vs 220k), and I want to land at my number - I'd have to start lower than $130k and come up to it.  However, you and others have suggested running the numbers and providing an offer based on what my analysis shows.  I agree this is what I should do, but it will more of a "take it or leave it" type offer - which I shouldn't feel bad about either.

I appreciate everyone's assistance.