All Forum Posts by: Richard Davis III

@Anthony Dooley Land Contracts are extremely common in WI for investors to use and there are a lot of them out here making a ton of money on them. They differ state to state. Plus I also specifically say "Or a similar creative financing vehicle". 

You need to contact a competent CPA. From what I am reading you could face significant tax penalties by withdrawing in the same year. 

Have you read the BRRRR book? If not, listen to BP Podcast #327, then consider getting the book.

That said, The whole point of BRRRRing is that you do it if you don't have a ton of money using PML or HML. So this sounds like a good strategy for this situation.

You could also do seller financing if you're not comfortable with the HML. Either a land contract or a similar creative financing vehicle with your uncle where you come to an agreement that he lets you do the rehab with HML and when you refi it is when you pay him. 

Good luck. let us know how it goes. Cheers.

Most of the Flippers I know use a "shares" method with their PMLs where they sell 1000$ shares of the flip to multiple investors. The investors are paid back their original investment and a profit (Sale price-project costs-management fee) in correlation to their % of shares held. 

I have been told I cannot do this because its too close to syndication. Or that it is illegal in some way. I want to do a BRRRR and only have smaller investors (3 or 4 40k investors). Is there not a way to do this legally or is it too much like syndication. Im not an expert at syndication, but that is what people have told me is why I cant do it.

As an example, 2 separate investors would invest 40k each for a total of 80k into a BRRRR and after the refi I would pay them back separately.

Thoughts? I will likely connect with a local RE Lawyer, but wanted to get a better grasp of things first.

Also - Bigger Pockest podcast 327 is the BRRRR episode.

If you want to keep it read David Greene's BRRRR book. That is the refi strategy you're hinting at. He goes over PMLs and how to pay them.

The short answer is yes you can pay them back on the REFI. 

@Logan Splinter Has interviewed several PM companies in our area. And might offer some insight.

One of the biggest things in a PM I look for is current day systems. How are they placing people, running background checks, accepting rents, etc? I want a company that lives in 2020 not 1982. I also want a company with multiple employees, not a 1 person outfit. If the Company owner gets sick or leaves the country there needs to be a system in place for that. 

I personally would let them go. But some landlords may disagree. Do you have a PM or self managed? JW. 

Good luck whatever you decide!

 Did you ever go through with this deal? JW

Corina does great PM work. I refer her to all of my clients. :)