All Forum Posts by: Mike Dorneman

@Daniel Hans Move on. Find a title company that will work with you. I view my title company as a partner in my business. They are very accommodating, move quickly and accommodate tight turnarounds and schedules to get us to closing. Lots of great ones out there, ask for referrals from your local REI group.

@Terry McPherson Congrats, great problem to have! Depends on you goals and future plans. Have you thought about renting it for a year, then selling it? This way instead of paying about 30% capital gains, you’ll only pay 15%. Or you could sell and 1031, however you’ll have to stick to a strict timeline with your next purchase to avoid the big tax hit.

@Shanae Williams Sure. It varies by county. In mine, properties are sold at tax sale once they hit 3 years of delinquency. What specifically would you like to know about?

@Jonathan Norris LLC without question. This creates separation between your personal assets and your business. For example, let’s say something goes bad with your rental and you get sued and lose. If you own it in your name, then get ready to pay out of your personal checkIng account and potentIally lose your own home amd have your wages garnIshed.

@Shiloh Lundahl That’s awesome congrats to both of you! I’ve got 3 daughters (9 yo and 6yo TwIns) and they all own their own rental properties. What’s amazing is they all ask about their properties often and love driving by the check on them. Keep going! 😁

@Shanae Williams Depending on how many properties, I like to send hand written letters for these. Very briefly, introduce yourself, explain why you’re writing and clearly layout how they can get in touch with you. Not always, but I often find homeowners in this situation aren’t the most professional or put together people. It’s sad but often people with drug habits and no jobs (at least in my experience). With these, I try to explain to them what happens if they don’t pay, most often they have no idea of the process. We then offer to pay the back taxes, pay for their move and depending on the value of he property, throw them a few thousand. This is a quick and easy way to get the property and avoid having to bid against other investors at the tax sale.

@Brett Wagner Completly up to you. Simply put, if you don’t do the last R, (repeat) you stop there.

@Stepheni Larson depends on what your goals here are. Also depends if you want to cash out your purchase + rehab cash. If you mortgage it, you’re looking at the down payment and rehab costs. If you use the echo sting HELOC to find the purchase and rehab, you can then Refi the house once rented and (assuming you selected a property with room for forced appreciation) get all your cash back out (up to 80%) LTV. The later is the BRRRR strategy. It works great a and it’s exactly how I find each and everyone one of my deals. I like having the cash on hand because you never know when a great deal is going to come up and you need that cash immediately.

@Shelly Cavin You’re at that magical number, 4. Meaning, you can still work with most banks and obtain a conventIonal loan, or you can also work with some banks that consider a 4 unit a commercial property. Pros and cons or each based on what you are trying to accomplish. For arguments sake, let’s say you want the lowest monthly payment / best interest rate. You would want the conventional personal 30/yr loan. I on the other hand would take the commercial loan. Higher rate and usually 20 year term loan. However the benefit is that the bank won’t appraise this based solely on comps for this loan option. A bank will View this as a cash flowing business and the appraisal / amount of loan, will be based of future revenues. If you are trying to build a portfolio and leverage this property to purchase others in the future, you may want to consider the commercial loan. Hope this helps.

@Sean McKie Connect with a local bank that offers ARV loans (after renovation value). They’ll loan you 80% of the purchase and rehab costs. Usually on a 20 year note. (These are typically commercial loans with your personal guarantee)