All Forum Posts by: Samuel Glantz

Hey everyone.  I am slowly but surely starting my journey into long term buy and hold rentals for cash flow.  I am going to partner on this with my father.  We have both agreed to terms verbally and have full faith and trust in each other.  Most of the money will be put up by him as time goes on but in the beginning it should be close to a 50/50 thing.  Our intention is to purchase 2-4 family homes in cash, renovate and refinance them.  Possible delayed financing with the hud loophole I learned in a bp podcast. However, our first purchase will be more of a turnkey or a prop needing little renovations, maybe some paint and appliances to get our feet wet.  We want to get a feel for out of state investing before going all in. 

I would like to know how we should be going about this partnership.  Getting my father to an attorney to sign partnership agreements seems like it would be more trouble than it is worth.  My primary concern would be obtaining loans from a bank.  Our Credit scores, income and debt to income ratios are solid.  I am just not certain how banks will take to loaning money to us if say only my name is on the loan but the money comes from him.  If we are able to put 10 in my name and then 10 in his, that allows us to obtain 20 properties before we need to look into portfolio loans.  Well 18 if you take out our primary residences. 

So do we need to get a partnership agreement drawn up or is it not needed? Do we need to form an LLC? I know both of us would prefer to do neither but we are both willing to do what is needed to move this venture forward. If we need to do this, would we need an attorney in the state we are investing in or our home state? We both live in AZ. Any info and or advice is much appreciated.

@Ryan Keenan you can tie your Reno budget into the initial purchase. It will go into escrow and draws can be set to have the escrow company release to the contractor. The delayed financing rule allows you to refi 100% of the HUD plus closing costs. That is how you can get your Reno costs back without seasoning. Basically in the HUD, put in your Reno plus purchase price. Please note that I am not an attorney,tax professional, or other. Please do your own research to verify the accuracy of this post. Hope this is helpful.

I don't know the specifics as I have not done one myself, it's just stuff I have learned from reading BP and watching pod casts on YouTube.

@Jordan Redar, try delayed financing. You technically need a down payment but if the equity is there you can refinance up to 100% of the HUD plus closing costs.

@Pedro Jean anytime you can offset an expense or put cash in your pocket it's likely a good deal (within reason) Let's say you put 5% down. Mortgage payment not counting taxes and insurance is roughly $1020 per month assuming a 5% rate. Also assume you just get rent of $1000 per month. That means each year you save $12,000 in a payment due to the rent offset. Which means you get a cash on cash return of 120%. Yes it's a good deal. House hacking is about eliminating as much of the mortgage as possible not profiting on top of that. If you make money above the mortgage then right on, but it's no biggy if you don't. If you like the area and home and can see yourself there for at least 2 years then buy it.

Shepard's Construction. They tend to be booked out a few weeks but the owner is good to work with, does quality work, prices are very reasonable.

15% to 30% ?????  RUN.  plenty of markets offering less than 8%.

in our leases we have it so the tenants cover the first $65 in repairs, this mitigates nuisances like this.  We do not enforce it on legit problems just the ticky tack ones

I deal with hoa's here in PHX and they are a pain, me personally I would not consider a multifamily that has an HOA unless the deal is AMAZING. That being said, your numbers look good to me. If you like the property and the HOA doesnt have any stupid by laws regarding rentals then it could be worth it for this one. You might even try to use it to your advantage and get the owner to knock a little more off. say $2400 and that would cover the first year of HOA fees.

Hey everyone. I am in the process of gathering due diligence in regards on where to start investing next year. I understand the basics, but I am having a lot of trouble on pin pointing a good City to get started in.  Kansas City is one of the top ones I'm considering.  

I'm looking for a place with reasonable taxes, growth, abundant multifamily opportunities, and good cash flow. I am also considering Saint Louis also as it does appear to be a lot more affordable but perhaps there is a reason. If anyone can shed light on how they feel about KC in regards to a new investor I would like to hear it.  I am looking to brrrr so I can add value, but am open to a retail purchase if the numbers for cash flow and cash on cash return are there. My end goal is to create enough passive income to retire within the next 5 to 10 years.