All Forum Posts by: Steven Gesis

Suppose a Checkbook SDIRA holder invests in a Syndicated LLC, which then purchases a piece of commercial property (i.e. Apartment Complex) using leverage that cash flows for 2-3 years before being sold due to appreciation and distributing the gains from the sale proportionately to the Syndicated LLC members.

In this case, and from my 'layman's' 30,00 foot view, it would appear that the SDIRA LLC is simply investing in another 'Company' and receives dividends. The SDIRA LLC is not directly investing in real estate and is not directly using non-recourse leverage. As such, it would seem that it is not expected to pay UBIT (pretty much a given) but UDFI is a bit more fuzzy. What are your thoughts? What are the IRS's thoughts?

My wife and I would like to purchase a Duplex in our area in Sacramento, we are currently living in our single family home that we are still paying our mortgage on. Is it more advantageous to move into the duplex and rent the other unit and move tenants into our single family home or continue to live in our home and rent both sides of the duplex?

So the police want to keep the apartment untouched until after they get the results of the autopsy from my deceased single tenant. After googling how long autopsy results take that could be 4 plus weeks. Can they do that? They said they had concerns about how she was when she was found. This is a 4 unit apartment building in Minnesota My tenant was on assistance and was on a lot of prescription drugs. She was found during a welfare check since her caretaker wasn’t able to contact her and hadn’t heard from her in a couple weeks. When found she was in a chair and had been deceased “for a quite a while”. Can I say no to the police? Can’t they take pictures or do what they have to do? How do I get back possession of the property? She had 2 daughters that she rarely spoke to and hadn’t seen in a very long time. I spoke with one and they have asked to go thru her stuff.

If this has been well answered elsewhere please point me there, I couldn’t find it.

If I’m look at small mf deals that require more than one additional partner, so in my area more than $500,000 per say. These would be 10 or more units. I suppose the same principle ultimately applies to any size though. I would be self managing. 

Would you account in a management cost that would pay to you plus than the true profit percentage split on the back end, or would you design it somehow else?

For example: I account in 9% as a management fee total for both lease ups and everyday mgnt. Then as well  my 2 other cash partners and I agree to a 3 way split of all profits. Is that how it’s typcially structured?

I do understand you can structure it anyway you want to, but a typical well balanced approach is what I’m looking for. I’m trying to figure out analyzing the next size of property.

Thanks!

Hey BP,

I'm thinking of going for a MSRE (Masters in Real Estate), specifically, I'm looking at NYU but I am open to other ideas. I was wondering if anyone has knowledge of that and if its a worthwhile endeavor. I imagine it puts me on a path to have to work at a firm doing acquisitions for a couple of years, but the idea is that would give the background to jump into syndicating larger multifamily buildings down the line. I currently have my real estate license and I am working as a property manager to learn the business from the bottom up. But, I feel like a MSRE will open many doors on the REI front, and what better way to make money to invest in Real estate than from the inside.

Please share your thoughts!

Thank You

Hi all, found a property I'm close to ready to moving on. Seller and I are about 4k apart in purchase price but I'm using their selling price for number eval:

Neighborhood: C+/B-, I would live here if I needed to. Its a quaint older town near public transportation and very close to a bridge into Philadelphia. Buying for cash flow, I don't expect much appreciation in the area.

Property: Basic property, seems to be in very good shape. Won't need anything for a bit but I will check with the inspector. CAPEX is set to 10% just in case.

Purchase Price: @125,000, Cash down is 25% (31,250), assuming 5% in closing costs ($4,687.50), 30 year fixed mortgage @ 4.5%.

Income: Rents 2 units (a 3 bedroom and 2 bedroom) for $1060 per month, each. I think this is low for the area; the 3 bedroom should be 1200 per month. But lets assume we don't change this - $2120 per month in income.

Monthly Expenses:

• Mortgage:  479
• Insurance:  80
• Taxes:  349.67
• CAPEX (10% of rent): 212
• Vacancy (8% of rent):  169
• Maintenance (8% of rent):  169
• Heating:  89
• Electric:  59
• Water:  89
• Property Management (10% of rent):  212 (I am managing it for the foreseeable future)

Income - Expenses = Cash Flow

2120 - 1908.87 = 211.13 per month, 105.57 per door. If I keep the property management for reinvesting, cash flow is actually $423.13 per month.

COCR: 7.05%

Cap Rate: 20.35%

Am I missing anything? Seems like a solid deal for cash flow and if I can improve rent to 1200 for the  3 bedroom, 2260, its even better.

I HAVE A BUYER IN PLACE WHO WANT THE HOUSE I HAVE UNDER L/O WITH SELLER. WILLING TO PUT DOWN 5% OF PURCHASE PRICE AND PAY MONTHLY RENT A MONTH. I PUSHED IT TO HIM FOR 10K MORE THAN I HAVE WITH THE SELLER. WOULD I REPLACE THE OWNERS NAME WITH MY NAME AND THE AMOUNTS BETWEEN ME AND T/B TO GET MY FEE UP FRONT AND CATCH THE 10K ON THE BACK END. THEN TURN ALL PAPERWORK INTO TITLE COMPANY TO TAKE CARE OF THE REST CORRECT? I BELIEVE IM ON THE RIGHT TRACK JUST WANT TO VERIFY.

Hi Everyone, I am a residential flipper in Atlanta, GA and I have a few questions regarding private money lenders. I have personally flipped 2 homes, but I am now in the process of developing a business plan to solicit outside private money lenders. I have covered most of my bases by gathering info from BiggerPockets and other online sources. 

I am in the process of developing the details of our promissory note and gathering intel to speak intelligently on how the lenders funds will be held and how it is used. Our lenders will fund a % of the asset purchase, and they will fund a % of the renovation costs. Obviously, the lender will wire funds at closing for the purchase, BUT how does my LLC hold the funds the lender is contributing to the renovation? The money will be used in draws, but the total invested money for the renovation will be contributed by the lender up front.

Does the lender simply cut our LLC a check and the promissory note state that we owe them X dollars with X percent interest? Are the funds held in a special bank account? How would you structure the holding of the funds to give the lender the most confidence and make is easy for the LLC to access when needed?

Thanks for your help and knowledge!

My wife and I just moved to San Jose and we are trying to buy our first primary residence in Milpitas, to start a family. We earn a bit more than $225K combined and we only have about $120K in cash. Therefore, we are only able to put down 10%. We qualify for a loan of about $820K. We are finding it extremely difficult to buy anything, not even a townhouse. 

The market here is insanely hot and our agent is telling us that we pretty much have to put in an offer without any contingencies at all AND offer free rent back to the seller. The costs just pile up and up. 

I am most concerned about the appraisal contingency. Our agent is saying that there is pretty much no data to estimate what the appraisal will come in at, so it is completely gambling without this contingency in. I always analyze our finances in detail to value the property and calculate what we can afford to offer. Without the appraisal contingency, my affordability analysis is pretty much useless.

Is it advisable to remove the appraisal contingency? I am concerned that if I don't, I'll never be able to purchase a home, but I really can't get past the risk of opening ourselves up to a cash shortfall. I feel like I am already strapped for cash as it is. 

thank you for any advice!

Hello BP community
 

I Wanted to take the opportunity to see what advice anyone had to offer on investing in Out of state markets. I currently live in a hot market (the SF-Bay Area) , where finding property isn't an impossible task but just unlikely to meet ones goals just starting out  in today's market climate without High income or moving to an undesirable location.With this  also will be my First deal so I am just trying to do my Due Diligence and reach out to the masses and get an opinion . Also I have the book on Long-Distance Real Estate Investing (along with many other real estate books From referrals and Podcast mentions) which on shed light on the pros and cons of out of state investing and now would like to put it to the test, being that I have about 50k to invest and looking to starting obtaining my real estate goals. So with a brief overview, the bottom-line  to where I'd like to get input on is...

-what are your opinions about markets  such as Cleveland,OH and Memphis,TN?

-Any Good Reputable Real Estate Brokers that can be referred in these areas?

-Pros and Cons on personal experiences?

-Any referrals?