All Forum Posts by: Katie Neason

You would need a strong plan B. I would not take on debt for the flip and the flip would have to work as a rental that you could refi and cash flow. 

We have the same set up to help minimize self employment taxes. We basically looked at the job of the LLC as a project manager so we asked a couple of local GC's what they pay their project managers. We also were concerned with not knowing how many projects we would end up with in a year and not wanting to be stuck with a salary without income. We settled on a payment of 10% of our minimal project profit goal per project.

It can be done many ways. Are you being paid as the contractor or are you putting sweat equity in along with your cash investment? 

When we partner up on flips we look at it as 3 different components: 1. Finding the deal 2. Managing the construction 3. Equity in the deal. If one of the partners was a realtor and wasn’t getting paid a realtor fee it could be a 4th component. 

With 3 pieces we weigh each one as 33.3% and then we divide profits/losses by the prorata share contirbution. If you bring 100% of equity you get 33% ownership. If you bring the deal you get 33%, etc. 

It is all realative, but the rental market here is weaker than it has been in many many years. There are a lot of new units that have come online. The unveristiy and college here are both still growing so the general belief is that the new units will be obsorbed, but it could be pretty soft for the next 3-5 years. Be cafeful in what you buy and the market you are trying to serve. Leave room in your numbers for rents to go down and know if you do not get it rented it in the summer you with have to cut your rents possibly in half for the next 12 months. The property values here hold pretty steady because it is a relaitively consistent market (albiet, if there is a student debt crisis we could be hurt horribly) but cash flowing student rentals can be tricky to come by because a lot of investors will “park” their money rental housing with little cash flow. Again there are many segments to even the student rental market, so know who you are trying to serve, what they can pay and where they want to live so you don’t get burned assuming $500/bedroom rents in a $1,200/house neighborhood. 

If you are getting "a lot" of interest and multiple offers maybe they are not low ball. If you are getting a lot of offers from people who do not "understand it's true potential", maybe you are marketing to the wrong people. What is the property worth as is (not the tax appraised value or what you paid for it)? What is the ARV? What are the repair costs? I am not familiar with your market, but in my market, good deals are hard to find so if there is one it sales FAST (within hours). People are even willing to over pay to put their money to work, so if this were my deal in my market, I would spend some time on what the as is value of the property really is. If it is a great deal and no one can see it, put the money in it and sell it fpr a profit. If you are unsure you cannot get value out of doing the repairs repairs it may be too much to ask for someone else to do it.

Congrats! What complex is it?

Outside transformation looks awesome! 

Add an eat in island in the middle. Move the sink and DW in the island put cabinets and fridge where sink is and leave all the walls the way they are. I did a quick sketch up but I have no idea how to attach it. 

Not sure what part of the country you are in so it’s hard to say. Best way to know is get two more quotes. 

Call the city planning department, tell them you need a curb cut and find out what the requirements are to get the curb cut and what materials are allowed for a driveway.