All Forum Posts by: Samuel S.

Yeah, I should've figured the bank would pay the delinquent taxes way before letting someone foreclose without near as much interest.  Thanks a lot guys!!

Hey BP Folks,

So I am looking to get into the tax lien arena, and was wondering how this strategy would play out:

Say I purchase a property tax lien at an auction, and the current owner ends up "defaulting" on the lien, and therefor I can foreclose on the house.  

Does this mean that I can technically keep the property?  What if there's an existing mortgage on the property for $100K?  My understanding is that the property tax lien takes priority over the mortgage, but I can't imagine that I would be able to keep the property and the bank would be left out to dry? 

Any advice would be greatly appreciated!! 

Thanks a lot guys!!

Hey BP Folks,

So I am planning to use an FHA loan to purchase a duplex. Say for instance I get approved for 100K, and the bank decides that I can afford $800 per month max (PITI). Since I would be living on one side while renting out the other for $800 a month, could I have a valid argument with the lender to approve me for roughly double the initial amount? To where my total monthly payment equals $1600? Because technically I would still be able to make my max affordability payment of $800 a month, even though it would be contingent upon the renter paying their portion.

I am just curious on if this scenario would work or not/if anyone has done it before.  Not that I would necessarily use it.  Any input would be greatly appreciated!!

@Mark Nolan Honestly I would rather do it through retirement accounts (SDIRA's etc) because in my situation, the individuals I know would be more open to investing through them.  But I feel as though it would get much more complex, and wouldn't I 100% need to get a PPM in that case? 

@Chris Soignier Thanks! That's what I assumed.  Since I would be making the sole investment decisions, could that simply be spelt out in the operating agreement?  By stating that the other investors are passive partners, where as I would be the only active partner? Also in terms of doing cash out refinances, in this scenario, could I still be the only personal guarantor?

@Bryan Hancock It wouldn't be more than $5K, which I know is not much at all..

Thanks for your quick response Bryan!

No, the others would not have control in the project. 

I guess the main question I am asking is if there's a way to raise a small amount of money (100k or less) without having to file for a PPM, due to the heavy costs..

Hey BP Folks,

So I am going to be starting a syndication to raise $100K, where there would be no more than 10 investors, all of whom I would know personally.  Some would be accredited investors, whereas other might not be.  We would each be putting in $10K, so I will have some skin in the game.    

The goal of the fund would be to:

• Buy a distressed multi family property
• Add value
• Rent out
• Appraise, cash out refi, and rinse/repeat

Would this strategy require a private placement memorandum?  I would not plan to add any other investors into the group, and those investing would not be willing to personally guarantee anything.  They would simply be looking to receive a return on their investment, similar to an "angel investor".  

My understanding is that I would need set up an LLC, where I would be the only active manager, and thus the only one personally guaranteeing any refinance loan.

Any advice would be greatly appreciated!!

Agreed Jd!

Didn't even think about looking at it from the sellers perspective.  I think for those reasons alone, going all cash and then refi makes more sense.  Plus like you mentioned, the closing costs will be relatively similar in either scenario. 

Do you have any advice on the type of business structure to use for something like this? I imagine it would be different, depending on whether the funds come in via SDIRA or cash..

Thanks, J Beard!

The goal was for all 7 of us to become partners in an LLC, where we would all receive the same % payout since we are putting the same amount in. But since I am the one syndicating, I was also planning to property manage, in which case I might also receive a % of the rents on top of my % payout.

The offers would be written in the name of the LLC, along with the notes. Ownership would be split 7 ways.