All Forum Posts by: Ronald Isgate

I agree with Greg above - from a liability/asset protection standpoint you should own in separate LLC's, plus you have the ability for deductions/tax benefits from the corporate entity. Insurance is great, and would most likely protect you 99% of the time, but it only takes one catastrophic event of liability and all your assets would be at risk if owned all in your personal name.

A HML is definitely not a long term solution. The only time it would make sense is if speed is a factor - meaning you can get an amazing deal on the property but must close super quickly - something most banks simply cannot do. You would have to work out the math to see if paying the points and higher interest rate on the HML would be worth it of course, but if the value is there and makes sense from an overall profit standpoint, a HML could be useful to buy it quickly with the aim to Re-Fi it out as quickly as possible.

Fair is in the eye of the beholder - however, what it boils down to in my opinion is ROI. What is your partner/cousin expecting regarding a return on his investment - both in a regular cash flow sense while you keep and operate the property as well as factoring in what he expects return wise on a sale or potential refi (not sure if this is a long term hold for you all or a shorter horizon type of arrangement). He may get his desired return at a 50/50 split, or a 95/5 split - but since he is putting in the capital, I would assume (hopefully) that he/she has a return in mind that they are looking for. Its tough to say what would be fair b/c we dont know what expectations are. I would recommend having a talk with your cousin and finding out what exactly they are looking for return wise - that way you can almost work backwards to find an arrangement/split that works, or in the alternative, discover that no real split is even possible given revenue (or lack there of) generated by the property.

Best of luck 

Generally yes - as a rule of thumb small local banks and credit unions only lend in their general geographic areas.  The catch is there that many are not what you would consider "aggressive" with their programs/terms.  Typically more regional sized lenders are the ones providing more options program wise, but it only takes one local community lender with a good program to make it work.  I would approach both the local lenders in that area as well as larger regional lenders to get a good overall feel for your options.

Robert - you absolutely need to get out of that higher interest rate loan if you are going to keep it long term.  Commercial loans in general are alot slower, but of course that is all relative.  We work with alot of lenders that tend to move the needle alot quicker than your normal bank, and have market rates.  Feel free to shoot me an email or pm - would love to chat with you to see if we could help you out.  

@Nick Rini - believe me, I get that all the time!  Feel free to reach out anytime if you ever need any advice - it definitely is a small world though!

Welcome to BP!  The resources and knowledge here is a tremendous resource.  The Lehigh Valley is a great investment area - best of luck with your first purchase.

Congrats Ryan, looks great!