All Forum Posts by: Sean Bramble

Hey @Mike Schoonover, seems like your goal is to maximize your return .. here are a few out of the box ideas:

- short term rental (if it’s legal in your area) … and if you don’t want to operate it yourself you could master lease it at a higher rate to a str operator

- medium term rental (same as above- can diy or master lease)

- sober living home or assisted living home (you would want to find companies in your area who do this and master lease to them .. likely at a way higher rate than LTR)

- lease option to a prospective buyer. You could lock in the same payments as a seller finance arrangement with at least some probability the buyer wouldn’t actually end up buying, and you could collect an option fee from them. Plus you can structure it in a way that all repair/ maintenance is covered by your tenant 

- cash out refi or heloc when interest rates normalize a bit and invest in other RE w/ the proceeds) works with all 4 above strategies)

***also, you should 100% consult with a RE CPA before the end of this year and conduct a cost segregation study so that you can deduct accelerated depreciation on your taxes. This is the last year for a 100% accelerated deduction 

I'm new to RE and just learned about the 12 nonrecourse states. Couple of questions:

- if a borrower defaults in a nonrecourse state, will an LLC protect them from a big hit to their personal credit?

- are DSCR loans in these states also by definition "nonrecourse"?

- can loans in these states "become" recourse loans if the lender simply asks the borrower to also sign a personal guarantee?

Thanks everyone!

Depends on the acquisition price of the home vs revenue upside of the pool. Check actual comps yourself to see how much they’re earning, and assume homes without them will see more of a decline in an airbnb recession. Might seem counterintuitive, but you might find a home without a pool that has a better yield if you’re willing to accept volatility in hard times. Or the reverse may be true - homes with pools may be trading at a discount to others when you consider revenue potential. Check comps yourself and make an informed decision based on data and your own underwriting. No one on here can do that for you. Good luck!

Listen to the others on here who are far more knowledgeable than me - I’ve never actually done a cost seg. Seems like your timing is on the money though. Best of luck!!

 Thanks @Billy Daniel. I'm curious - is your lender a DSCR lender? Do they underwrite the deal based on the payments of both loans combined compared to projected revenue?

Hi BP - I've posted about this topic before, but wanted to ask an open ended question instead. I have a seller who is willing to finance down payment funds, but my lender does not allow for a second lien on the property. How can I legally do this deal while still giving the seller the property as collateral? Is it possible?

Thanks everyone for your input! I did a bit more digging on the topic ... it seems the better way to do this is different than I originally described the "second leg" of the txn ... instead of bringing the seller into the LLC itself, you instead create a note and pledge your interest in the LLC as collateral (w/ a UCC filing w/ the state showing this)

Pretty sure this is the last year you can claim 100% accelerated depreciation ... if you can do a cost segregation before eoy you'll be in good shape. I think the maximum deduction next year is only 75%. Could be other tax considerations though, so consult your CPA

I understand sub to, seller finance, and hybrids at a very high-level - enough to discuss with and pitch to sellers. But I have absolutely no clue how to structure these deals legally in a way that protects both parties. Who do I need to talk to to actually understand these transactions in more detail, and actually complete one?

Apologies for the naive question ... gotta start somewhere :)

I’m in a similar situation - might have an interested seller who is willing to do a seller finance/ subto hybrid, but am scratching my head on how to actually get the deal structured legally …