All Forum Posts by: Suzanna Lam

Hi,

Out of curiosity, has any one had this situation before?

Borrower purchased a SFH 2 months ago as investment property, took the project subject to a 1st loan of $100K and a HELOC of $100K and the rest in cash of $500K. Did a rehab of $50K. Property is now appraised at $1M. Borrower would like to do a refi CO now to pay off the existing 1st and 2nd and pull out some cash (as much as possible). Delayed financing doesn't work because the subject property has two liens on it. Any other ideas how to structure this refi CO now instead of waiting another 10 or 4 months for title seasoning under Freddie's guidelines? Thanks folks.

Suzanna

@David Cheung, I can't say we consistently get big fish but this kind of fish requires lots of patience and lots of focus including but not limited to: negotiation skills, quick math ability, lots of financial tools such as annuity, installment sales, tax knowledge (to inform seller how much in capital gain tax they must pay when they sell the property outright). At the end of the day, one of my coaches told me this "being a successful RE investor is having the ability to solve the seller's problem that no realtor or anyone out there can solve for them and believe or not all sellers have some type of problem they're trying to get rid of. If you ask the right questions, they will reveal their problems and bam you will get the big fish if you present a suitable solution to them". To that end, there's a lot to learn beyond throwing a bunch of cash to get the deal on an MLS. I find myself learning every single day so have an open mind is the secret of success in whatever you do.

I'll be there. Anyone wanna see our latest acquisition in Cupertino? Got in at $660K, ARV $930K. Cash into the deal $425K. Refi CO $500K 2 months later. We're throwing an open house this Saturday from 5pm-7pm so all local investors can come in and check it out and network. I won't be there because I'm stuck at a meeting from 1pm-11pm but my hubby Tien will be there.

@Johnson H.  I didn't say investment that pays 15% no risk.  I said "Find a vehicle that gives you up to 15% interest risk free for your cash while you're waiting for opportunities".  While I love flipping real estate, it was more fun doing it back in 2009-2011 than it is today because everyone nowadays jumps on the wagon while back then only the courageous went against the flow and scooped up cheap finds.   So while I'm waiting for the next party, I'm putting my cash temporarily in a vehicle that gives me a very reasonable upside potential mirroring the changes of the market while protecting my growth and principle if the market goes south.  It is a long term solution and is not something you can set up and get the money go to work right away.  I'd say give the vehicle at least 5 years for the money to work its engine.  

Too bad I can't be there but my hubby will be.  

@Johnson H -  cash is king but keeping it in a CD or bank ain't the way to go since inflation is eating away at least 3% year.  Find a vehicle that gives you up to 15% interest risk free for your cash while you're waiting for opportunities.  

@Kevin D.  There is a vehicle that can make you average 7%-8% for the past 40 years no market risk but you need to know the right person to talk to.  No tenants or toilets involved.  

Danny,

it may work. Since he's a RE broker, he knows how to run a CMA. Ask him to run one for you to support his claim that his house is worth 1.2M. Just ask casually how he came up with $1.2M. Does he own this house free and clear?

Alternatively, you may even call any local RE agent and tell them you're doing marketing and have a lot of leads which you can't usually do deals with, and you want to send them these leads. RE agents love this. Go to Zillow, type in the subject property's address, in the right hand corner Zillow typically gives you the addresses of properties around your subject property, pick one closest to your subject property (in size, amenities etc..), give that address of that property to the RE agent and ask her to run a CMA for that property as though it were never sold. Hope this helps with your question about the value of your subject property. Good luck.

Seller is separating from husband who's gonna file a personal BK soon. Both seller's and husband's names are on the deed and on the loan. LTV is 93%. Loan term is adjustable 1 year ARM. Monthly payment is $2,700 PITI. Looks like a sandwich lease option or could be sub2 and lease option. My dilemma is the imminent of husband's BK. Can I ask him to deed his interest over to his wife then do the sandwich lease option? Any other better options?

Suzanna

Thanks, J. Appreciate your response.

Thanks, J. Appreciate your response.

I just recently open a solo 401k for my business (single member LLC with me and my hubby being the members) with me being the trustee. So I am in control of my checkbook. So far so good.

My understanding is that I can contribute up to $49K of my earned income into this solo 401k. Fine I can do that.

Now, if I buy and flip, my earned income is subject to self-employment tax at 15% because of the flow through nature of the LLC. However, if I do my buy and flip in an S corp, that same income isn't taxed at 15% but 7.5%, give or take because the S-corp will pay the other 7.5%. Question is: should I elect to treat my single member LLC as an S corporation for tax purposes so that I personally wouldn't have to pay the 7.5% self-employment tax? The issue I'm running into is that if I elect to be treated as an S corp. my ability to contribute up the the max allowed for solo 401k is diminished because now I am an employee of an S corporation not a sole proprietor.

Does any one have any input? Thanks.