All Forum Posts by: Mike Moran

@Steve Hall- thank you very much. I need to really sit down and figure all of this out. I suppose my question is - if the partnership LLC flips 4 properties a year (and also holds RE for passive income) & makes $100,000 profit. Can we each contribute $6,000 to a SEP? What about a SEP 401k? Can we become employees of our own partnership and contribute $19,000 as individuals to the 401k and the night provide a 100% company match? For a total of $38,000 x 2 orb $76,000?

Good morning BP!

I work full time and have a 401(k) through my employer. I also have an Roth IRA personally that I contribute to. However, I utilize a disregarded entity to own and manage several small apartment buildings (single-member LLC); have a partnership that practices BRRRR & flips; and another partnership that holds a small apartment building.

What are my options for SEP IRA? The disregarded entity? The BRRR partnership? Both?

Thanks!

Mike 

totally valid - would definitely need to chat with the zoning board - and have a lot to consider. Thanks for your response!

I have a unique opportunity to purchase a 4-unit property With VERY large units (1450 SF each).  the market rent for an 750-850 SF 2 BR is ~ $800/mo whereas these units only fetch $950/mo (law of diminishing returns). My question is - had anyone ever converted a 4 unit into an 8 unit?  Essentially cutting the units in half and keeping the common hallway where it is. 

Costs? Ballpark?  Any insight or info?

Hi all - I come with a story that currently has no ending, hoping someone can learn and also hoping someone may be able to help. Long story short, I've gotten a taste for larger mumtifamily and decided to sell my 6 units (3 duplexes) to roll into a 30-unit property. The market being what it is, I was hamdsomely paid for my 6 units and had/have ~$220k to roll into the 30-unit. Well, the 30-unit failed inspection atrociously and now I am stuck potentially having to pay tax on about $150,000 of that $220k. So two things: 1) learn from my mistake and put contingencies in your sale contract if performing a 1031 exchange as I may Be left with nearly no passive income (1 small multifam left) and a hefty tax bill. 2) If anyone has or know she of any well-managed 8-10cap multi family properties in the $800k-$1.5M range; somewhere no between 12 And 30 units, please share!

Thanks

Mike

thank you all for the input. I am trying to get "out" of the smaller investment properties and into larger ones. The reasons I have are numerous, but I just prefer multifamily. Also - you will make less per door, likely, in MFH; but on a 14-unit building I have 1 roof, 1 lawn, 1 property to manage; and I can control the value (to an extent) vs 1-2 families that are more market-driven. This, plus greater financing %s available. My Monthly cash flow is after all expenses including vacancy, maintenance, reserves and management - the reason for so little cash flow is due to me purchasing with only $4k down. SO my ROI is great - but I have $75k in equity just basically being wasted on $325 a month - so my ROE is atrocious.

Hello - I am currently in a position to sell my first duplex rental (that I lived in) in a market that is fairly topped off I feel and use the equityand profit to purchase a 14-Unit "complex" if you will. Some particulars - the duplex after all expenses (including vacancy, maintenance and reserves) and debt service nets about $325/mo. The 14-unit should make $2300/mo. However: 1) it is located in a fairly rural area, which is a bit concerning - however various employers with no major reliance on a single employer. 2) it is located 45 minutes from my home. I've always been hands on (currently own or co-own 12 units) so will be relying on a property manager (feel very comfortable, currently manages property and is VERY reasonable - referred by my broker whom I trust)

3) Concerns - it is rural; sewage is septic; plumbing is crawl space and exposed a bit to the elements. 

Looking for feedback, advice, anything that may be useful. My goal is 150 units by 2021 and his would put me at 24; of which with %s I'd own 20. 

Thank you all so much in advance. I appreciate the community. 

the  biggest issue with this one, is the 20 year loan term from the bank, and the 1.5% payment structure from the 0% offer every month. The property is in good condition and would only need approximately $1000 per unit, and only when a tenant moved out, to bring it up nicely and most certainly increase the rents.  The issue is, I am not getting a lot of cash flow upfront, but instead I'm getting principal paydown because the long term is so short. I am essentially buying my equity stake with a 0% offer instead of saving $60,000 over 18 months, I am using that $60,000 now and paying it back over the same 18 months. I don't foresee any large expenses, and I can use the rental profits of my other properties to offset the lack  of cash flow on this one. The $100-$150 per month cash flow is based on current rents and not taking an increase in rent into account. The expenses at 50% take into account maintenance, reserves, and vacancy.

on Kenmore Ave - near st joes. Lake shore savings. They don't always do 80% - but consider it. 

I have an opportunity to purchase an 8-unit in a solid area of buffalo NY. I currently own 3 duplexes and want to make the jump to multi. Long story short, the bank loves this apartment, giving me a 10 year loan, 20 year am with 5 year reset @ 80% LTV and 4.5%. However I don't have the funds for 20% down, so I'm planning to use a 0% credit card offer for $60K to cover it - the repayment terms for the $60k will make payments $900/month for my down payment; and after my note payment ($1744) and then 50% expenses, I'm left with only $100/mo cash flow - a combination of borrowing almost the entire purchase as well as a 20 year note. I can increase rents a total of about $250 fairly quickly - the cap rate is 9.6%; ROI if you count the down payment as my money is about 17.7%. Looking for feedback as the first 5 years or so I'd really only be gaining principal pay down of both my down payment and the bank loan.