All Forum Posts by: Robert Leonard

Ben, don’t feel bad about not understanding the ABC’s of neighborhoods. This is one of my pet peeves here on BP, because it is all made up. There are such classes of commercial properties, but in residential it is totally subjective and all made up. If each person has their own definition and has to explain what it is, you may as well just say what you mean from the start. I think it is much easier if you stick to the numbers. 

When I say, I buy houses to rent for $1,000 or more per month, that’s pretty easy to verify and is not a matter of my opinion. I digress.

We are in the same market. We can grab coffee or lunch one day to talk more about the subject.

Welcome to BP @Jonathan Duhon!

This is really a question of asset protection that is best answered by a legal advisor who you can confide in about the details of what assets you need to protect. Feel free to reach out to me for a local attorney recommendation.

Here's how I see the numbers you presented: 

$170k = ARV

$130k Purchase Price = 76.5% of ARV

~$30k of Repairs. Where is it coming from? You said two different things: "we can cover the repairs" and "use a construction loan to cover the purchase and construction." Which one is the actual case?

If your parents owe $90k, the only way they get the "chunk of funds" is if you pay them $130k and then do the repairs. That would mean you put $160k (94%) into a $170k property.

If the property is worth $170k, you can borrow up to 80% ($136k) of the value of the property. There will be transaction costs (appraisals, closing costs, loan fees, etc.) that all come out of what you can actually "take out" when you refinance.

Where will the equity come from to buy the next investment?

Just FYI, when you first start doing this, repairs usually run twice what you expect on cost and time.

@Victor Menasce will you be in LC Monday (9/23/19), by any chance?

As always, we will have investors at all levels, from seasoned investors to those looking to learn more about real estate investing.

Bring your notepad, bring a deal and bring a friend.

The "meeting after the meeting" is TBA.

Get more details here: 

https://www.meetup.com/BPACADIANA/events/264788696/?isFirstPublish=true

Wow! Thank you @Reuben Gathright for providing those actual tax bill examples showing exactly what you described. I appreciate that!

This is one for a Louisiana attorney to answer, but I certainly would not mess with the fence if it's keeping livestock under control.  There could be a serious liability issue if somebody caused livestock to be at large and get hit on a roadway. People totally destroy vehicles or even die from hitting livestock on a road!

I happen to be a big fan of DR, but the whole "debt is dumb" is just too extreme, IMO. I get that he lost a fortune and had a traumatic experience with debt and many others have too.  Water or fire can kill you if you are irresponsible with them, but nobody goes around calling swimming or owning a house with a fireplace dumb. 

I think if a person has the discipline to follow what DR teaches, they have the discipline to handle debt responsibly.  Whether or not to use debt or how much is a safe amount boils down to risk tolerance. We each have to make that decision for ourselves as adults.  Or with our spouse. ;-)

Check my profile for the details. If I post the details here, my message will get deleted, because we are “not in the networking forum.” It would be so easy if I could just post a link right here, but that’s not allowed.