All Forum Posts by: Nina Grayson

 Thanks @Manolo D. ,  These partners wanted a Multi-Fam, but I think they are better off doing a Fix & Flip.  As passive investors, I think it's less of risk to depend on the market from 1-3 yrs. for a modest return when they have enough to flip a property in 6-8 months for a much higher return.  Thanks, NG

Thanks @Manolo D. 

It is scary, right?  Yes, $200k is enough for a 20% dp, but I was trying to increase the income to make it more attractive.  Also, this would allow all parties to get in on the deal.  As for the "what ifs," there is a contingency in place.  Three year commitment.  And when someone want's out, the equity share is calculated based on the % of initial investment.  So if one goes in at 8% and the others go in at 46% each of the total down, and the 8% party wants out in three years, each initial investment is amortized over the three years to determine each parties equity.  But yeah, it's scary.  

Thanks, 

Nina

I have two investor partners  who want to do a deal that includes one partner owner-occupying a unit.  Do you think this structure is a good deal?

Location:  Los Angeles County

Partner 1 (P1)

- P1 wants to owner-occupy with family of four (spouse and two children)

- Prequaled self (not including spouse) for $435k.  Lender ran numbers assuming a duplex, with 2nd unit as income.   

- Down $80k

- $435k would only get P1 properties in South LA, which does not meet P1 standard of living, so P1 decided to get one or two more partners to increase buying power for a better location.  

Partner 2 (P2)

- P2 is an Agent and will use commission as carry 

- Maximum purchase price $1.2 mil.

- Comm. is approx. $20k. 

Partner 3 (P3)

- P3 will take out up to $200k from equity in SFR for down

Partners will form an LLC for the purchase

-6 plex, Two 2Br, Four 1Br

- Total Down = $300k (25%)

- Loan Amt. = $900k

-Terms = 30 year, 4.5%

- Monthly payment = $5600

- Monthly Expenses = $1000

- Rents = $9600

Thanks @ Aikane Belez. Yes, I know FHA is only for owner-occupied. I was looking at FHA as an option if I or another investor lived in the property - say a duplex. Yeah, FHA's are unlikely at $150k, and that price is most likely a tear-down or like I said, in the Valley (and Lancaster is so far away from LA proper, it would be a challenge to find renters). I had not thought of doing an off-market deal and using my comm. as part of my carry. I'll have to run some comps for projected comm. and performance on Income properties to see how the numbers look. Thanks!

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I had a good cash buyer deal.  

After offer, they put down $3000 earnest, the offer was only on the table for 20 days, after inspection, I dropped the price by only $5000 due the cumulative repairs needed, and I got them to pay some of those escrow fees.  

And I'm not opposed to keeping the earnest money if they try to milk the contingency.  They made a cash offer, if they cannot stand by it, there are consequences.  

David, 

This is a program through LA County that provides a $60k down payment grant. They limit the DTI. I have money for a down, and a great credit score. They just limit the amount if you are only putting down 1% earnest and using the grant.

My intent is not to make a financial partner a guinea pig. I only will go into vehicles that have Market and Rent analysis that shows a strong ROI.

It is my understanding that investing with low or no money down is achieved with partners who have the funds but do not have time to do the leg work of finding the deals. I was simply seeing if I could bring something to the table with an FHA. Apparently, using an FHA with partners is not possible.

It is possible to by a property in LA County for $150k or less.  However, you have to go East or North into the Valley. Although, there are not many duplexes or in-law properties in those areas that I've seen in that price range.  I'll have to bring cash to the table and do an Limited Partnership commercial loan with partners.

Thanks Bob.

I thought it was the LLC commercial mortgage, but was not sure.

So (in very basic steps) I would have to:

1. Bring in partners

2. Form an LLC

3. LLC puts down 25% (partner funds)

4. LLC commercial loan approval

If some of the partners do not have cash to contribute to the 25%, but lets say they do some of the leg work, is it a normal practice to obtain the down from Hard Money Lenders or is it best to have some partners put the 25% down?

Hey Josh, 

I'm a newbie too, but I sold my home in less than thirty days because I got a cash offer for not much less than my listing price.  The benefits to me as the seller:

1. Faster sale, less paperwork

2. Less risk - cash buyers have the funds and can provide a higher earnest money deposit, borrower's might lose funding and cancel

3.  Leverage - My RE Agent and I tried to leverage the cash offer and counter other buyer offers who were using loans.  It can work if someone really wants the house, but the other offers had a threshold, so the cash offer stood

4.  Desire - Cash buyers see great value in the property and want it, so they will make a cash offer to overcome any pending or future offers

There are other benefits, but these were the most relevant in my experience. 

As I have been educating myself on REI, I wanted to know how much of a mortgage loan I could get approved for right now on my own. With one lender I was approved for $150k at 4.5%. I know it's peanuts for the CA market, but it gave me an idea of what I can get solely on my own. Of course, I want to invest and I need a bit more to get into a 4 plex or more. So I need others' money to do it. My question is, can I use the individual loan and get others to bring in their funds and have it all under my name or should we get the loan under an LLC? I'm not sure how my own loan approval would work with adding others' money to the mix. Thanks for clarifying this for me...