All Forum Posts by: Brian Gibbons

  This is the way I do it, 

I enter into a lease and a separate option and a letter of intent with the seller with the intention of selling my interest in the  contract.

 Then the tenant buyer for 3% of the purchase price places a check into escrow, check paid to escrow co

I have a new separate agreement that both the seller and the new tenant buyer sign that allows me to collect 3% for an option release fee, an option release agreement.

A new lease and the new option is created for the seller and the new tenant buyer.  I collect my 3% fee and the seller and the buyer new agreements.

Hi @Lori Agajanian

12 month lease, 12 month option, right to extend after 12 mo,

3% option fee if you are owner, 

option fee does not apply to purchase price or down payment, 

use collection service like

http://notecollection.com/faq

Get tenant to mortgage coach, I use

http://upgrademycredit.com/categories/

OPM3 Syndications and Limited Partnerships

Sometimes one additional investor does not provide enough financing power for the venture you have in mind. True, you can always wait for a smaller deal to come along-one better suited to your resources.

But often, a larger, more secure commercial investment makes better sense.

In such a case, syndication is often the answer.

Syndication is a method of buying property whereby a sponsor or syndicator -- you, in other words -- sells interests to other investors.

The syndication may take various forms, including that of a limited partnership, a limited liability company, or a corporation.

As each of these forms has its own unique structural, benefits, and drawbacks, it pays to briefly examine each in turn.

A limited partnership is a form of ownership in which there are two types of partners.

Limited partners provide financial backing, but have no role in the management of the property and no personal liability for its debts.

But general partners, who are responsible for managing the property, have unlimited personal liability. This means that if someone is a general partner in two or more limited partnerships, and .one partnership fails and creates a liability, the general partner's creditors can seek to attach all of his interests in all of his limited partnerships.

A limited partnership has pass-through taxation, (See IRS Page) meaning that the income or loss created by the syndication passes through to the individual partners for use on their respective tax returns.

A limited liability company, or LLC, is a combination of a corporation and a partnership.

The term "limited liability" refers to the fact that like a corporation, the LLC limits personal liability to each of the parties involved, so that members cannot lose more money than they contributed.

Personal assets can never be touched.

Like limited partnerships, LLCs s allow each party to buy units in a property according to the funds he has available.

Moreover, members benefit from pass-through taxation.

The corporation is a state-chartered business or organization formed by one or more people, and having rights and liabilities separate from those of the individuals involved.

Like the members of the LLC, the members of a corporation are generally not liable for the corporation's debts.

Therefore, while the assets of the company may be seized and sold, the assets of the investors can't be touched.

However, the corporation differs from the LLC and limited partnership in that it can sell shares of easily transferable stock.

Not all corporations are alike, however,.

The S-corporation has pass-through taxation, but the C-corporation is a separate taxable entity, meaning that the profits and losses are taxed directly to the corporation at a corporate income rate. Then, distributions made to shareholders are taxed at the rates of the individual shareholders.

Because of this double taxation, the returns on any investment may be lower.

The earnings of S-corporations, limited partnerships, and LLCs are taxed only once.

Clearly, every form of syndication discussed above multiplies your investment. power by adding other people's resources to your own.

It's. worth mentioning that each also increases your investment power by allowing both you and other investors to use all money you have in your Individual Retirement Account (IRA). You can even combine discretionary funds (savings) with IRA funds-as long as you follow a few simple rules.

What type of syndication would be best for your particular investment? When choosing a syndication form, keep in mind the benefits you want for both the syndicator and the investors who will participate.

In all forms of syndication, one member- a general partner, a managing member, or a. president - is ultimately responsible for obtaining loans and for the actions of the syndication.

The corporate form exposes the participants to the least number of risks and responsibilities. When it comes to the loan, however, an individual, rather than the corporate entity, must sign as the responsible party.

Limited liability companies have become popular everywhere because of the limited liability provided for everyone involved, and because of the pass-through taxation-a benefit shares with S corporations and limited partnerships, of course.

Moreover, the LLC, unlike the corporation, does not require yearly shareholders meetings and various other formalities.

Despite the current preference for LLCs, limited-partnerships remain an excellent tool for syndication because of the limited liability provided for the investors. But because the general partner is exposed to liability, the transaction must offer sufficient benefits to warrant his risks.

When forming a syndication, it's imperative to seek the counsel of a good attorney and an experienced accountant, who will make sure that the transaction is a legal one. Certain properties, far instance, are not eligible for S corporation status. Qualified professionals will provide the guidance you need to select the best form of syndication for your property, and will create an operating agreement that will serve both you and your co-investors.

@Effram Barrett

Read about selling on a wrap in Texas

OPM2. Joint Venture Partners (for down payments, purchase price costs, rehab costs, holding costs, and other costs.)

When talking to wealthy people that want to invest into real estate as a silent JV partner, where you the Real Estate Investor find the deal, negotiate the terms, fix for resale or long term hold, and when ultimately sold, splits profits (50 50 or some other terms), you want to keep it simple.

My first JV deal was with a wealthy 60 something and I was 26. Silent Investor bought with all cash, improved with his cash, we sold it, and I got 40% of profit. That was over 30 years ago. I believe it was over $20K for my profit.

So we are off to OPM!

OPM1. Private Lenders Primer

Here is a Private Lender Glossary of Terms

You want to understand retirement plans, the IRS with retirement plans, how brokerage services make money and disguise fees, and how to give a basic Private Lender Sales Presentation.

As I coach Private Lender Marketing and have been a Financial Planner, I understand Financial Planners and CPAs.  So here are some pointers!

- Go to CPAs and ask for an appointment to discuss your business of buying, fixing and reselling properties.

- Have a business plan (here is a business plan template from SCORE.)

- Have a sample deal you have done or could do if you have the money (complete with before and after rehab pictures, costs to buy and rehab and resell)

- Verbiage to the CPA 

"I typically borrow the acquisition funds from a private individual, non-recourse, x% interest only payments, 5 yr term. My monthly interest payment is $x dollars per month."

"I can "seller finance" this property for $X with $x cash down and finance the balance of $x @ x% for x yrs... creating an income of $x per month Principle + Interest payment."

"I intend to pick up $x positive income for 5 years. During that 5 yrs I intend to get my Buyer/Occupant to re-finance OR sell the note to a local note buyer."

"Do you see any problem with this scenario?"

Learn the basic sales objections and you can get CPAs to assist you in referrals to Potential Private Lenders!  But be prepared to see 10 to 20 CPAs over a few months.

Next is OPM2. Joint Venture Partners (for down payments, purchase price costs, rehab costs, holding costs, and other costs.)

@Robert Duncan

You may want to get your re sales lice in CT and specialize in MF.  That will get you respect in the community.  Find the biggest MF broker you can find and hang your re sales license there.

My favorite - OPM!

Let us get some basics out of the way.

An IRA - Traditional or Roth - Most common vehicle for retirement investments.

Traditional IRA

Roth

Tax deferral - Traditional IRA grows tax deferred - pay income tax as you take out distributions. Grows faster because of tax deferral.

Forced Distributions - See IRS page

Self Directed IRAs - These are special IRAs that have a custodian approved by the IRS and the DOL. The custodian sets up the IRA and assists in the paperwork. They do not give investment advice.

I will on the next post give an example.

I love OH Land Contracts to buy.

Get on title.

Resell on Lease to Own (Lease w ROFR or Lease w Option)

Help the renter get financing FHA in 12 mo.

There is a shortage of cheap houses. 

Go buy on terms!

Look up 

https://www.biggerpockets.com/users/ctimothymurphy

An attorney and investor in OH.

Download OH Land contracts info.

C2 Hard Money

I found a house that needed a lot of work and I was broke, and I was 25 years old.

I went to a hard money lender and they gave me 55% of ARV (after repaired value) at 10% interest only payments monthly and 12 points rolled into the loan, with a 12 month call (balloon)

I fixed the property and resold it with an agent and made $16,000+_ plus in 90 days, after all expenses, including commissions and closing costs.

See this video on HML breakdown.

https://www.youtube.com/watch?v=oIXyrUZtWXo