All Forum Posts by: Peter Mckernan

Hello @Sikder Qais welcome to the site! This site and the people on it will teach you a lot!! 

Hello @Sheryl Gurvey you should connect with Dmitriy Fomichenko. He is on BP, and he would be able to give you some better insight! 

Hello @Ryan Wright 

@Michaelina Stathakos is right about getting into deals that are bigger than four units. The bank/lender will ask for all the financials on the property, check the income verse expenses, and many different aspects regarding the building a the project income and the historical treads in the area of the deal.

You will not have to provide pay stubs, credit checks, employment checks, debt ratios, or anything the banks do while looking at a SFR deal.

@Account Closed Great insight! Thank you! I will reach out if I hit some walls.

@Account Closed Congratulations on getting into investing in apartment buildings! That is a major goal of mine as well! What was your biggest challenge of getting to invest in that eight unit apartment?

@Anthony Johnson That’s exactly it. You give them a way out of where they are, and typically giving those people that way out saves them from a lot more heartache. This is because you as the investor/buyer gives them a way out of the dark place they are in (i.e. foreclosure, the verge of bankruptcy). If the numbers/margins work you can give them a great reset to their current life position.

Hello @Anthony Johnson

A motivated seller would be someone that is in a bad situation realizes it, and wants to do something about it. Examples could be pre-foreclosure, tax lien, loss of job, death in the house/family, divorce, high medical bills, drugs, rental property gone bad, or anyone that was diagnosed with a severe medical condition. Many times people in these situations do not want to sell, so when a buyer gets a person ready to sell it is a motivated seller.

In these situations the person in any of those situation mentioned above may have more debt on the house than what the value of the home is, or the value of the home after rehab and purchase still will not give the investor as much return on their money that would make sense since there is not enough equity.

Hey @Fletcher Shawn welcome to the site!!! This is where you should be to ask these types of questions.

I take the pronoun you use is we as it is your wife that you own this property with? If that is the case, and you lived in that property two of the last five years calling it a owner-occupied property, than the capital gains will not hit you on anything up to $500,000 ($250,000 if single/not married). So, you should be good there. Capital gains will not occur if you rent the property only sell it.

As far as the loan through your company paying off the debt that you are in at 4.5%, that would just be moving the debt from one area to another, so technically you would still be in debt, but at a lower interest rate. 

I suggest you sell the property, walk away with the cash at right around $150,000 after sellers fees, pay off the debt that you are in, and then keep the rest to purchase a property when you get back into the states for either living/renting. The other reason is if you see the area as a bad area, unless you are seeing big improvements in the commercial area (i.e. revitalization), then the area may get worse before it gets better. 

Good luck! 

Hey @Jose Castillo I agree with @Justin Gonzalez on this one. You should jump onto Legalzoom and form the LLC. An attorney is good to have in your pocket of course if some sticky situations happen; however, something like this could be avoided for now.

If it’s a bigger company (i.e. multiple partners, a larger company) I would get the attorney involved. Even if the company starts off as a  small company/just you, you can always go back and change the verbiage with the attorney and pay him that fee then. 

Hello @Karl Wertz

For something that revolves around developing real estate it would be best to have an attorney form the entity for you. The is also advantageous if there are going to be multiple partners in the business because you want to have an operating agreement that is lined out to everyone's liking, and they agreed upon. The operating agreement between partners/investors in an LLC/business is the road map for the company.

If you had a goal of forming an LLC for only a couple rental properties for yourself I would suggest using Legalzoom, or another online company like theirs to help you form the entity. The reason I say that is because there is not as much red tape with that type of entity as there is with the amount of money is needed for development and the investors/partners that are needed.

Good luck!!