All Forum Posts by: Richard Balsam

I don't think the tax benefits have anything to do with with the registered agent address - just where the LLC is located for income purposes. As for anonymity - you are right - just like I do not have my own address listed anywhere- I have a mailbox store address for this reason. But- assuming a tenant is smart enough to know where to look and how to look at a secretary of state web address to look up registered agents...(a rare feat!) I have not experienced anyone driving by my house - even those that I evict and foreclose upon. If someone wanted- they could find where we all live. If they couldn't - they could hire a private detective - they would find each of us very quickly anyway. Almost every LLC has a registered agent with their address shown on the web site. Of course- there will always be others that disagree - just like those that feel a Trust would protect them...just ask any good lawyer!

In a word...no. I have four LLC's for the last 13 years. I am the registered agent. I had my attorney be the agent when I started - and he never had to do anything! So- when I made the switch ( you do that when you pay the annual registration fee to the state) I have noticed...nothing. I don't get any "official" mail that I know of - just property tax bills from each county, and the annual registration post card from the state. My personal address is listed - but it shows me as a registered agent- not as the "owner" of the company ( Yes...I am officially a "Member" of each company. Certainly not worth the $120+ fee for others to be the agent.

You might be better off seeing what the house will appraise for - and get a non-owner occupied investor loan from a bank that may lend up to 70% - and pull some money out. Take the funds and buy another home and refinance that as well (BRRRR strategy). I don't know if a bank will offer just a LOC on an investor property. Doesn't hurt to ask - but shop different banks. Some may go higher than 60%. I'm working with a local bank offering up to 70% of after repaired appraisal.

I belong to a small agency that has a few plans based on production. Since I do not show other homes like a RE agent (only list my own investment homes, and do research before buying any), my broker knows this and doesn't mind my small activity. I am not aware of any training program that they have though. Years ago I belonged to one of the large firms and went through their 25 hour training - didn't pertain to investing - and I was not impressed with their sales tactics of (if we can't sell your home- we'll buy it). Yeah right...!!

Welcome to BP. There are a lot of us in Cumming/Alpharetta. If you have the time - we can meet when your schedule allows. I've been investing -mostly buy and holds since 2004. I can answer a few questions! -Richard

To learn the local market - I would start at the simple things and work up from there. For example- pull up Zillow - enter Fresno in the search field, and play with it. You will see the town, roads, etc - so you know what you are looking at. There is a feature where you can see what houses have sold for in the past( on a map), the estimated property values, etc. Be careful with the Zestimate- it's computer generated- and a starting point only -with house prices. Click around and you will see much more information. You will even see ads for local real estate agents - if you have questions- find one that is investor friendly. 

Once you know the area, and want to dig deeper - visit your local REIA - attend the meetings, you can even watch youtube videos ( with a lot of "views" - not smaller cheap looking stuff) that pertains to your market. You can attend a foreclosure auction to see how it's done and see cash buyers. You can also buy books, and read everything you can online. Good luck!

The way I see wholesaling is twofold: 1. The ugly house and 2. The "pretty house" model. I can understand what you are saying - but in my mind- it relates to #2. I'll explain.

All industries have profits to be made by bringing a good or service to the market - we all know this. In the case of the ugly house - the "good or service" is easy to see: locating someone that owns an ugly, broken down, tired house (in my mind) does not deserve market prices when compared to its neighbors - assuming the neighbor houses are in better shape...they care for their house, made repairs when necessary mow the yard, etc. They all deserve top dollar and help contribute to their neighborhood ARV that investors must calculate before any rehabbing is done. If any seller agrees to a lowball offer from a wholesaler - who "beats them up" so to speak - it's a value their mind decided they should accept to rid themselves of this tired home - that they may have contributed to the negelect over the years ( yes- I know not all homeowners live in it... for example purposes only). I have no problem with this- the neighbors will eventually thank the rehabber for their service to this house, and the market will reward them for a job well done. This is capitalism at it's best - fixing what's broken and profiting from it.

With the pretty house owner "getting beat up" so to speak - their reasons to sell must be far greater than the loss of the equity they will be receiving. In a perfect world- they will try and get top dollar and anyone who reduces that amount- sounds like they are "evil" and taking advantage of them... but are they? Why aren't they selling with a real estate agent - there are millions of them - in every town. The reason must be compelling enough that they are willing to part with a good chunk of equity to do so - after their liens are paid off. The free market devised a way to help them out of their situation, using an alternative selling method. That's their choice. The market found a way to profit by offering the seller a way out. Again- I do not see any problems with it - unless they are under severe duress, mental illness, etc- and they feel they are helpless and being taken advantage of. I assume this happens periodically - but it isn't the norm with wholesaling. 

I look at the whole concept of wholesaling as a way to "dig up" rough gems to later be polished by rehabbers and sold to end users who want that sparkle! 

You may have found a good deal- if you want to deal with Lithonia. I have a few properties across the county line in Gwinnett- and the reason I get so many potential lease option clients when they are vacant- is due to the mess that is known as Dekalb county. Many people are aware of the problems with Dekalb county schools, the Dekalb CEO fiasco, all those indictments of top officials, etc. All this has created a poor investment climate mostly in central Dekalb ( as compared to Dunwoody and Decatur areas - close to other hot areas), and property values really haven't kept up with the surrounding areas ( not that the surrounding areas are topping the charts - but have been improving nicely over the past few years).

That said, even in slow areas with crime, poor schools, etc- people still want to live there- or all the houses would be vacant! So- if you can find a legitimate deal in the $50K's - and the home is worth $100k+ you may have found a money maker. You really have to pull close comps, drive the neighborhood to get a feel for location, neighbors, etc. If the home is near the mall, easy access to I-20, etc- it may be a much quicker flip than further out. But...if I were you- I'd go so far as to pull crime statistics of the area in question. I wouldn't worry as much in most of Decatur or especially Dunwoody ( both located in Dekalb), but to be safe as an investment, as well as your workers there.

I have mixed opinions as to renting higher priced houses, and adding friendship to the mix. Many reasons are stated above. Here's my two cents:

I live just north of the areas you mentioned. In most cases, the higher the price point of the home, the greater the chance of full time owners - not renters. Owners are paying for location, schools, etc. Renters usually want location. The schools are lower on their list for the exact reason they are renting- its temporary. What I would look out for are HOA restrictions on renting. Some HOA's go so far as to limit the number of renters per year. If your friend leaves, and you re-rent, and this tenant stops paying - or worse, you evict, and possible cannot rent again for the year. Not saying this will happen- but it depends on the HOA rules.

The second point I have is the ROI on higher priced homes. A good starting point ( it varies based on location) is: The first $100K - you can expect 1% of the value in monthly rent ($1000/mo) The next $100K - you can expect half this amount ( $500). The third $100K - much less...I've heard up to another $300-400/month. Now- this changes based on hot locations, etc. But- to be used as an "average" starting point - which shows the reduced rental amount each successive $100K returns. Compare this to three $100K homes bringing in $1000/month.

The final point I want to make: I did exactly this to my first home I had in south Florida many years ago. My friend and his new wife rented for two years, with the understanding that I do not want an empty house when they move out- I wanted (her) experience as a real estate agent to help me sell the home when they are ready to move out. Never happened. House was so filthy when they moved out that it took me a full day ( only 1600 sq ft) to clean, and had to hire painters at $1500 to clean up all the walls. Took me three months to sell at $1000/month (back in '95!) making my clean up and holding costs $4500 back then. And...this was a friend with good intentions. Just be careful- outcomes can be different than expected especially mixing friends and business.

If you can locate a home with well defined bedrooms and baths for college kids near the college - great! Perhaps it's a house near a bus stop that takes the kids to school- great! If it's a house just in the town, where the kids have to get a parking permit to keep their car on campus- it may be somewhat challenging to keep all the rooms rented. Depends on the school, parking availability on campus, bus routes, etc.

I speak from experience. I was thinking about it too- but after two daughters at UGA - I prefer not to. School is in session 8 months per year, with 12 month lease contracts. It's fine if the kids continue paying while home for the summer. If not- collections may become an issue. Also- the parking situation at UGA is far from ideal. Houses not near a bus stop - forget about it! I'm sure other campuses are similar- parking is tough on campus ( Ga Southern, Kennesaw, GCSU, State, etc). But - for houses located along the route - and you can get the house at the right price- it might be good. Just remember- kids do not take care of a house - just the opposite! So- property management is important.