All Forum Posts by: Paul OBryan

A few like-minded friends and I are considering pooling our resources and purchasing a piece of raw land in a desirable area (Malibu) and are wondering if a syndication with a LLC shell might be the best entity for this. I use the term "non-investment" because the land would be for future development and use by the investors and would not be principally a vehicle for making money. Of course, there is always the possibility of liquidating the property at some undetermined future date and splitting the proposed profits on appreciation, but this is not the stated goal.

The goal is to develop some living quarters and communal space which friends and family can use for their enjoyment with the probability that any number of the partners may retire there at some point. I know, it maybe sounds like some hippy commune real estate nightmare scenario, but we want to try to realistically work out a solid, grounded scenario that we envision. 

I read a BP forum post from a few years back that provided some general guidelines into setting up a syndication (thank you @Lew Payne): https://www.biggerpockets.com/forums/311/topics/18...

"You set up such syndication entities by clearly establishing their purpose and goals, the benefits to investors, the exit strategy, the management strategy, and the processes for handling disputes, change in membership due to estate or bankruptcy of a member, the process for winding-down a series, and the overall exit strategy. Once you've done that, you confer with an attorney experienced in real estate syndication, and retain him."

I'm wondering if anyone else has any thoughts or insights to share.

Thank you

Paul O'Bryan

@Bryan Zuetel @Basit Siddiqi Hey Guys, Thanks for this. I've been trying to figure it out myself. I am based in CA, have a Delaware LLC which is invested in a Nevada LLC (syndication). My Delaware LLC has a CA bank account attached to it and all three partners are in CA. I thought we were free from FTB taxes but we may not be because it looks like we are "doing business" in CA.

BTW we did not register our DE LLC with CA but my tax returns will show what we are doing. Below is a link that makes the case against us, particularly this:

In addition, an out-of-state LLC is "doing business" in California if:

• The LLC is commercially domiciled in California (i.e., California is the place where realistic control of the LLC's functions is centered).

https://www.corporatesecuritieslawblog.com/2014/07...

I would love to hear your thoughts if you know otherwise.

@Brian Stieler. Hey Brian. 

I'm trying to figure out how to structure an equity partnership similar to yours and found this thread very helpful. 

Do you have any updates on your partnership arrangement? Did you ever transfer the property to the LLC?

Thank you

Thanks, @Thomas S. I will consider that for the future. What do you recommend for finding an honest, reliable broker? Of course, asking on BP is a good start.

I just read up on cash out refinancing. Yes, must keep in mind closing costs and make sure I get a better interest rate. Thank you for your insight. @Harjeet Bhatti

@Harjeet Bhatti. So would I go back to my original lender, tell him I want a new appraisal based on the ARV, and then request refinancing? Would you briefly describe the steps. Thank you.

My wife and I just got prequalified for the first time in our lives and are planning on making our first small multifamily purchase this Spring. Before we got prequalified I had a long conversation with our lender about our plan, which is basically to follow the BRRRR method. He is an investor himself and understood exactly what I was talking about.

After we received our approval letter last week, I emailed him about a possible construction loan with his institution and his response surprised me.  He said:

"The loan product that the bank has you approved on is for rental property in good to excellent condition, where tenant can move right in. Unfortunately Fannie Mae – Freddie Mac do not offer any construction loan of this type. My suggestion is to look for property in relatively good condition where you can get it rented right away." 

I thanked him for his response but it got me wondering about the Refinance part of BRRRR method. Once we buy and rehab our property, do we try to get a loan based on the ARV from our original lender or from someone else?

I would like to have an ongoing relationship with this lender. Is there protocol around this that I should know about.

Thank you

Paul O

Good post! My wife and I are looking to purchase our first investment property, a small MF buy and hold in the Cincy area. We are just beginning the team building process. I'd would love to get any recommendations for solid, trustworthy, efficient GC's. Thanks.

@Tracy Z. Rewey & @Jay Hinrichs, thanks for sharing. I am learning so many details about how the note biz works from you two and others on the forums here. Tracy, I love your daily case studies, even if I don't yet understand everything you are posting about. The detail is fantastic. And Jay, some of your posts are so good they intimidate the novice that I am. What I mean by that is I feel even more like a novice with some of the seasoned pros, like you, weighing in on various topics. I don't know squat! That said, I am excited about doing my first JV deal but have not pulled the trigger with anyone yet. Cheers!

Bob, thanks for this unsettling news. Seriously, I'm glad to know what's going on despite it being a big bummer. I'm just getting ready to dive into the notes biz and buy my first note (JV). With many new investors and a tightening of inventory I hope the future holds some promise.