All Forum Posts by: Pepper Bradford

Reading the "case studies" from the Rich Dad books, where someone forms a C Corp and then become an employee with a salary always left me with the question of...how can I be an employee when I just start out and have little to no cash flow. 

It may be of more benefit in the future, but not now, it seems. Can I ask for those who have replied...when you started out and you only had 1 property, was it in your personal name, an LLC, or something else?

I stipulate that any information that I receive will be for educational purpose only, and will not be taken as legal advice in any way.

Where in Mississippi are you located? I'm in central MS myself, and also a newbie.

I understand that when we finally make our first deal, that property will be in its own LLC. But regarding the ownership of that LLC, my questions are:

1) Do we need to go ahead and form a Corp now before we have any property? 

2) Once we buy a property and place it in an LLC, can we own that LLC (or portion of it) personally for a while and then transfer to a Corp once we have enough income for that to make sense?

In case you're wondering why I'm stuck on a Corp instead of LLC, after reading the "Own/Run your own Corp" Rich Dad series, we're decided that we want a C Corp to maximize the fringe benefits. I don't think there'll be any income left to "double tax" for a while.

Pepper...

Will there be any other meetups this year? I'm new to this and missed the last one. 

Quote from @Joel Case:

As stated before, someone would team up with you on a deal because you bring value. You brought the deal, perhaps you plan to manage the property. Perhaps you are handy and can handle the repairs yourself. Maybe you do the books, there are a variety of reasons, but you have to determine where your highest and best use is and play on that. 

 Is there any danger of showing someone a deal and having them take the info and do it themselves, without me?

Quote from @Aaron Gordy:

Joint venture. The most important thing is the ability to close the deal from the broker side. We, (brokers/agents) don't want to waste time and effort. If you don't have the credibility nor the money to pull the deal off, find a partner or partners who does have it. There are many ways to pull off a deal btw. 

 I'm assuming that my best (or possibly only) asset at this point will be the deal itself. Which brings me to one of the biggest questions I've had so far. A deal is just information. Once I present it to someone with means and experience, why do they need me anymore? Can't they just do it themselves at that point?

Quote from @Scott E.:

- If that 10 unit deal has been on the market for a year, and they have dropped the price by over 30% and its still not selling, then that's almost guaranteed to be a deal you want to stay away from. While there is opportunity in situations like this, it's probably not suited for a beginner. There is a reason that nobody else is buying it.

Thanks for all the amazing advice. I have to agree that part of your advice goes contrary to what I've read here. We're supposed to be able to buy a million dollar property with No Money 😄. My goal is to take a job on the coast & transfer my state retirement into a 401k that will enable me to borrow. My comment about "no money" would be better stated "not enough cash on hand". Most of what I can effectively use for real estate investing is stuck in a "no borrowing for any reason" state pension. 

Your comment about the property was my #1 concern when I saw the age of the listing. Still, my hope is that being on the market that long will make them desperate enough to be willing to talk to me. Even if all I get out of this are true rent rolls and financials, it will be a great practice experience. 

Quote from @Joel Case:

@Pepper Bradford Welcome! Good to see another Mississippi person in the forum. I know of the 8 unit in Long Beach, but I am not sure I am familiar with the particular property you are looking at. If you feel comfortable, shoot me a PM with the listing or address and I will take a look and give you my opinion. I have a few lenders, one in Slidell that I met at the local REIA who has some nice options for financing. Speaking of, you should come to the REIA meetings on the first Tuesday of the month, they are a great opportunity to network with other investors on the coast and pick their brains.

Where are the REIA meetings held? I'd love to attend. I'm still up in Central Mississippi, but it won't take much to convince my wife that we should take monthly trips down there! Will DM you about the property, as well as the one you mentioned.

Quote from @Charles Seaman:

@Pepper Bradford 
With a deal this size, it seems primed for a JV opportunity. This means that you can start looking for money partners (they could be equity partners or they could be private lenders that provide debt). You want to do that on an ongoing basis so that you have money lined up for future deals. Having a deal that you're looking at now or actively working on gives you something to talk about and it makes you more attractive to people that might want to work with you. Use the opportunity to network more and to meet new connections that could be money partners for this deal and for future deals.

Thanks for this...I admit I was stuck in "chicken and egg" land: can't look at a deal without money, can't get money without a deal. At the risk of showing the depths of my inexperience, may I ask for what "JV" stands?

To introduce myself, I've been on this educational journey for about 2 months now, from first reading of Rich Dad Poor Dad in October to joining BP last week. I feel like I'm trying to do it all at once: learning, practicing, researching, putting together deals. In my effort to analyze a "deal a day" I came across an apartment complex of which I'm familiar on the Mississippi Gulf Coast (the area on which I'd like to concentrate). Small multi family is what I'm interested in. I was originally thinking of house hacking a 4-plex, as that seemed the easiest (though it would require me to wait until I'm ready to move to the Gulf Coast). Also I didn't think that I should jump straight into commercial multi family as my first purchase. But then I found a 10 unit (all 2BR, 1BA) in an area that I visit a lot, and have actually seen before. I ran the numbers I could easily obtain through the Rental Property tool and the retuen looks too good to be true, which tells me I don't have the right numbers (or have missing numbers). My main concern is that the property has been on the market for almost a year, and the asking price has been reduced by a third in that time. 

The 2 things holding me back right now are the question of financing, and the fear of wasting people's time. Why go through the process of putting together a deal before I know where I will get financing? Isn't that just wasting everyone's time? Right now I have no money for a down payment, and no idea where to get it. Why would a realtor or broker or even the current owner bother to talk to me if I don't have any money? 

I do understand that right now I'm struggling under the weight of "I don't know what I don't know" mentality. And that I have to start somewhere. But I don't want to torpedo potential future relationships by wasting people's time. 

Any advice? 

Pepper...