All Forum Posts by: Michael Moikeha

Thanks everyone for your responses. 

So my take away seems to be that the two main options for protecting assets are a combination of Land Trusts and LLC's.

Thanks @Brandon Diaz for the suggested reads. There is so much conflicting information on this topic, it would be great to read more in depth about it.

I know what I am asking is "legal advice" but I am not seeking legal advice at this point, just a general direction I should be heading or looking in as a way to protect different assets.

Thanks again.

PROTECTING ASSETS FROM OTHER ASSETS FAILURE

(I meant to change the post topic but it won't allow me too)

I've had a crazy awesome year, and I am looking to do a better job with protecting my assets. Last year I bought 9 properties, turned two into rentals, and although my numbers are small compared to many, I want to start thing right and begin to protect those rentals from any future failures with flipping that could take everything down.

For example, Trump owns tons of real estate, files Bankruptcy in one or four of his companies, but maintains his personal assets and wealth, as well as protects his other companies from any attack from lenders on the failed ventures.

I'm not looking to file bankruptcy, but I am looking protect myself and my other assets. I want to play the game like the big boys do. 

Can anyone help explain to me how to property protect different assets and entities. I've been told that owning a property in another LLC doesn't perfectly protect it from being attacked in a suit or something to that fact.

I would love anyone input!

Thanks,

@Jay Hinrichs

Thanks for the insight. If we lock down a refi, then we will get the ball rolling on the lot splits.

The reason we are not going with a bank is because we are too young of a company. We have looked into a few different bank options, but they need to "check" their boxes, and we don't fit that box. We don't show enough of a profitable history in our 2 1/2 years business.

If you know of any local banks/credit unions that are flexible and would look at a something like this, feel free to pass along some contacts!

@Robert Laird

IRR - 16.4%

ROI - 9.8%

APY - 4% - 5%

We like to hold onto properties that have expandability. Holding onto a rental property is great if it can cash flow even just a little, but holding onto a cash flowing rental that is on a double lot, or a dividable lot in the Portland area is money. Being younger investors, we want to sit on that till the next cycle. Right now construction costs are through the roof. We are late to the building game for this cycle, but we have prime real estate and time on our side. 3 of these 4 properties have expandability.

The 4th project, we already expanded, the SE Portland property. We added an ADU with street level access. Portland will only continue to grow with no room to build, increasing the value of properties in its boundaries year after year.

We know what we are asking for is not a Hard Money, or even an active investors bread and butter, but we are looking for someone interested in slowing down their investments and locking them into longer terms.

I have an opportunity that may work for someone interested in diversifying their lending partnerships, or locking up their money at a decent rate as the market starts to shift.

We know that times are changing and if anyone is looking to secure funds in guaranteed long term holds in a great market (Portland), check out what we have below.

We have 3-4 properties we are looking to refinance as rental properties and we would rather work with partners/lending partners rather than banks. We would love to work with one partner rather than multiple, but if you are interested in this option but don't have the funds for the full portfolio, contact me and we will see what we can do.

We have 4 properties that we are currently interested in refinancing. Below are the numbers.
Property 1  

• $900,000 Value
• SE Portland property
• $5,300+ rental potential
• $700,000 lending wanted
• 77% LTV
• Prime Portland

Property 2

• $430,000 Value
• Oak Grove (Portland)
• $3,300 rental potential
• $301,000 lending wanted
• 70% LTV
• Large Dividable lot

Property 3

• $175,000 Value
• Lincoln City Beach house
• $1600 rental potential
• $122,500 lending wanted
• 70% LTV
• Double lot

Property 4

• $250,000 Value
• East Portland property
• $2,000 rental potential
• $187,500 lending wanted
• 75% LTV
• Large dividable lot

Total Value - $1,755,000

Total lending - $1,311,000

Totally LTV - 74.7%

@Lisa Marie

So imagine a 50/50 JV Agreement. 50% goes to the person who finds the deal and manages the project beginning to end, and the other 50% goes to the money parter who fronts 100% of the financing.

Now if the contractor is fronting cash for the project and he found the deal and will manage it till it sales, you are the primary equity investor, he is the 50% boots on the ground guy. If their bid was $50,000 (labor, materials, AND overhead) they carry that debt till the property sales. If the total investment was $200,000, and you front $150,00 for the purchase, you are 75% equity partner and the contractor is 25% equity partner. 

You turn around and sell it for a profit of $75,000, you take your $150,000 back and profit $50,000 for lending money. They get $25,000 for lending their $50,000, on top of getting the $50,000 back. 

I hope that helps 

See if your aunt will be willing to carry the contract or sell it to you sub2 for 6 months, this will save you financing costs. Also, you're going to lose at least $50,000 in closing and realtor costs. That's a small budget. I do that for a $300,000 project. Your friends money would be better spent on multiple projects than tied into this one in my opinion. Then if you get this place from your aunt and you can avoid paying her off till you sell the property, the. Your friend only needs to bring in $50,000 and you can offer him 50% returns on his investment and he should be more than happy with a 50% return on 6 months. (Shouldn't take more than 2 weeks for $50,000 rehab budget and 4 months on the market to sell)

Sent you an Email @Reginald Truss

You really don't have anyone options, in my opinion, other than the ones you outlined. Is there a reason you can not finish out the bathroom to make it financeable? 

I would say your best option is to finish it out to get the most money on resale, as well as giving you your only real option to hold the property, which would be bank financing.

The other option would be to find someone trying to relocate 1031 exchange funds. Often times these people are short on time and would throw it into anything as it is better than paying the taxes, then they have the time to find a new place to move it to afterwards.

Good luck on finding a way to stay in the home, but your best option is to let the emotional ties go, finish out the investment for the best profits and know that you will find a new property that will work out for you to hold onto

@Isaac Blocher- Plan on it! Any way you can help me make it happen?