All Forum Posts by: Navid A.

I got wrapped into an informal partnership on a real estate flip project that we are about to sell after 3 months of rehab. We split the costs 50/50 and we are about to close soon. Since the partnership/deal wasn't under a LLC structure, I'm not sure what the proper way is to get paid from this deal. The property is under my partner's name and I technically don't have my name on anything. I paid my cut of the expenses directly from my personal account to his personal account. He wants to pay me directly upon close on the HUD and I'm not sure whether to take payment directly under my personal name or take payment using my existing LLC. I'm trying to mitigate my tax burden on this deal. Any advice?

Hey BP,

I got wrapped into an informal partnership on a real estate flip project that we are about to sell after 3 months of rehab. We split the costs 50/50 and we are about to close soon. Since the partnership/deal wasn't under a LLC structure, I'm not sure what the proper way is to get paid from this deal. The property is under my partner's name and I technically don't have my name on anything. I paid my cut of the expenses directly from my personal account to his personal account. He wants to pay me directly upon close on the HUD and I'm not sure whether to take payment directly under my personal name or take payment using my existing LLC. I'm trying to mitigate my tax burden on this deal. Any advice?

Evening BP,

I'm transitioning out of the military in a year. Curious how difficult it will be (or not) to continue buying properties using the BRRR method when I leave my full time job. I have built up enough cash over the years to buy more property in cash and refi, but will the banks grant me the refi without having a full time job? For clarification, I have a LLC and have a small rental property portfolio. I intend to "work" full time for myself buying rental properties and making my money work for me. Any insight or feedback on this? I know banks will generally accept rental income as a form of income, but this typically doesn't kick in until about 2 years from what I've researched so far. How can I continue buying properties without a W2 or a source of income aside from my cash savings and small rental portfolio? Any and all comments are welcome as I'm trying to plan out my transition. Thank you all in advance!

-Navid

Evening BP, 

I'm transitioning out of the military in a year. Curious how difficult it will be (or not) to continue buying properties using the BRRR method when I leave my full time job. I have built up enough cash over the years to buy more property in cash and refi, but will the banks grant me the refi without having a full time job? For clarification, I have a LLC and have a small rental property portfolio. I intend to "work" full time for myself buying rental properties and making my money work for me. Any insight or feedback on this? I know banks will generally accept rental income as a form of income, but this typically doesn't kick in until about 2 years from what I've researched so far. How can I continue buying properties without a W2 or a source of income aside from my cash savings and small rental portfolio? Any and all comments are welcome as I'm trying to plan out my transition. Thank you all in advance!

-Navid

Good evening BP,

I started a new LLC for my buy and hold properties and I'm trying to figure out how I should "properly" fund it. I opened up new bank accounts under the LLC and want to move funds from my "personal" account over to the LLC now that I have completed my quitclaim deeds on the properties. Can I simply transfer money from my personal accounts over to the LLC or is there a more formal/official method of doing this? I'm meeting with a CPA in 2 weeks, but I'm trying to stay ahead as much as possible.

Thanks in advance!

Good evening BP, 

I started a new LLC for my buy and hold properties and I'm trying to figure out how I should "properly" fund it. I opened up new bank accounts under the LLC and want to move funds from my "personal" account over to the LLC now that I have completed my quitclaim deeds on the properties. Can I simply transfer money from my personal accounts over to the LLC or is there a more formal/official method of doing this? I'm meeting with a CPA in 2 weeks, but I'm trying to stay ahead as much as possible.

Thanks in advance!

Good evening BP!

Came across an 8 unit property and I'm really close to pulling the trigger on my first multifamily deal, but before I do...thought it would be best to check in with my favorite online community. Any suggestions and/or thoughts on the deal would be appreciated. Here are the details:

All units are fully occupied, 1 BR/1BA x 8

Listing Price: $250,000

• Gross Rent: $3,495/mo or $41,940/yr
• *Operating Costs: $1,130/mo or $13,560/yr
• Net Profit without financing: $2,365/mo or $28,380/yr
• Fair purchase offer would be...? (I'm thinking no more than $236k)

The building is all brick and has a new roof installed. Rent is currently under market at about $436 each, market rate is currently $475.

*Operating cost includes management fee, maintenance, and accounts for an 8% annual vacancy loss.

I'm seeking commercial financing for the property. Since this will be my first commercial loan, I'm not too familiar with this side of the game. Would I still need to put down about 20% typically? What purchase price would make this deal enticing? The figures mentioned above don't account for financing, property taxes, and insurance which I've estimated to be about $1,600/mo on a 20 year note at 5.2ish%. What should I consider when negotiating this deal, I'm sure there are aspects to commercial real estate that I wouldn't be able to think of off the top of my head. Would love to hear your experience and wisdom before I make an offer on this property.

Thank you all in advance,

Navid

Good evening BP!

Came across an 8 unit property and I'm really close to pulling the trigger on my first multifamily deal, but before I do...thought it would be best to check in with my favorite online community. Any suggestions and/or thoughts on the deal would be appreciated. Here are the details:

All units are fully occupied, 1 BR/1BA x 8

Listing Price: $250,000

• Gross Rent: $3,495/mo or $41,940/yr
• *Operating Costs: $1,130/mo or $13,560/yr
• Net Profit without financing: $2,365/mo or $28,380/yr
• Fair purchase offer would be...? (I'm thinking no more than $236k)

The building is all brick and has a new roof installed. Rent is currently under market at about $436 each, market rate is currently $475. 

*Operating cost includes management fee, maintenance, and accounts for an 8% annual vacancy loss.

I'm seeking commercial financing for the property. Since this will be my first commercial loan, I'm not too familiar with this side of the game. Would I still need to put down about 20% typically? What purchase price would make this deal enticing? The figures mentioned above don't account for financing, property taxes, and insurance which I've estimated to be about $1,600/mo on a 20 year note at 5.2ish%. What should I consider when negotiating this deal, I'm sure there are aspects to commercial real estate that I wouldn't be able to think of off the top of my head. Would love to hear your experience and wisdom before I make an offer on this property. 

Thank you all in advance, 

Navid

@Jill F.

My wife is not being "paid" nor will I be claiming "management fees" on the Schedule E at year end. I'm just trying to figure out how to properly fill out the NC leasing agreement...I may just need to sit down with a lawyer! haha

@Mike McCarthy

In NC, you can only manage properties that you own without a broker's license. This made me question whether this would cause a legal issue if my wife is not on the deed and managing the property. Any thoughts?