All Forum Posts by: Crystal Smith
Crystal Smith has started 65 posts and replied 2754 times.
Post: What are you looking for?
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Sam McCormack:
Simple question, what are you looking for in a city to invest in?
Is it the potential growth an area is facing? The cash flow on hand when you buy? Your backyard?
I am curious to know what YOU are looking for in an area to invest in!
1. Diversity of opportunities & Multiple submarkets-
2. Multiple paths of progress evident
3. Cost to enter the market
Post: Recommend LLC or Keep Under Living Trust
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Danielle Tran:
Hello BP Community,
I'm exploring options for a commercial property in Long Beach, CA currently held in a living trust. I've noticed many investors choose to transfer such properties to an LLC for legal reasons. If a property is transferred to an LLC, would that trigger a new appraisal for property tax? Would it be better to keep the current structure under a living trust or pursue the LLC route? I appreciate any advice!
Thank you,
Danielle
Transferring the property to an LLC should not trigger an appraisal requirement.
I'd examine why the property is inside a living trust now. It's there for a reason and I'd discuss with the person in your family that established the living trust.
Post: Fix And Flip Gone Wrong
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Mario Martinez:
HELLO BP FAMILY!
I COMPLETED MY SECOUND FIX AND FLIP FOUR MONTHS AGO, BUT AFTER NOT SELLING AFTER TWO MONTHS I DECIDED TO RENT. MY TENANT LOST THEIR JOB IN THE FIRST MONTH, AND I HAD TO EVICT THEM. I PURCHASED THE PROPETEY AT 125 AND INVESTED 50,000. MY BREAK EVEN POINT RIGHT NOW WILL BE 210 BUT I DO NOT THINK I CAN GET THAT. MOST COMPS NOW ARE COMING IN AT 180 WHICH WILL PUT ME IN THE HOLE ABOUT 30K. SHOULD I JUST TAKE THE LOST OR DOES ANYONE HAVE ANY OTHER RECOMMONDATIONS? I TRIED TO PITCH IT TO FRIENDS AND FAMILY TO BUY AND HOLD, BUT THE INTREST RATES ARE SCARYING OFF MANY POTENTIAL BUYERS. AT THIS POINT I JUST WANT TO GET RID OF THE HOME. HELP! IM USING HARD MONEY SO THOSE MONTHLY INTREST ONLY PAYMENTS ARE KILLING ME ASWELL
A strategy we often use on properties like this is Rent to Own or Lease with Option to Own. Using this strategy your tenant-buyer must put up at least a 3.5% downpayment (required for an FHA loan), non-refundable. Then pay your rent until they exercise the option to purchase. The best way to work this strategy is to partner with a loan officer who can vet potential tenant buyers to see if they will be able to qualify for a loan in a short time. Or partner with a credit counselor. The strategy can potentially open up the aperture of potential buyers for your property.
Post: Can I sell a house with Squatters?
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Rachel Degennaro:
I have a townhouse in clairton, Pittsburgh. (I moved to another state) I had a guy with a verbal agreement to live there and fix the place up a little so I could sell it. Well he did not hold up his end of the bargain, so I had him move out. The house was empty. After a few months he must of told his friend that the house was empty (and I was out of state) and gave then the key he stole.
Apparently they've been there for 3 months or so and I was able to get her phone number and was trying to be nice and give her the chance to leave willingly before involving police/court. She said she was going to leave but wants a month to do so. I don't know if I can trust her or if in a month she will change her mind or come up with an excuse to not leave.
police won't remove her for tresspass since she was given a key, even though it was by someone who had no right and wasn't even a tenant at the time.
I have trash and sewer utility bills in my name from them. Although they say they are paying gas and electric. I am not sure if thats true.
At this point I just want to be done with this property. They are trashing the place. Im too far away to deal with this and its getting expensive.
What is the course of action here? Can I just sell the house (with the squatters) to someone local that feels like dealing with it?
Can I sue them for "unpaid rent" and the ultities? Sewage in this town can be put as a lien.
Any advice greatly appreciated thank you.
My first recommendation is to consult an attorney in the area where the home is located.
We have purchased homes with squatters in them. The only reason we did it was because the numbers were good enough that we were willing to pay the additional cost to get the squatters our. So the answer to your question can you sell a home with squatters is yes.
If I was in your situation I'd file an eviction notice on public record to get them out. The police will only move to get the squatters out if they get an order from the court. I'd also turn all utilities in my name off on the property. Once the squatters are out the property should be secured with something like DAWGS
Post: Transfer newly acquired investment property into my existing LLC? Why or why not?
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Paul Malandrinos:
I have an existing LLC that was used for a couple of fix and flips in the past. A week ago I closed on my first investment property. It's a single-family condo purchased by me the individual with conventional financing. I anticipate that it will be rented in a few weeks. I have not established an insurance policy - yet - to supplement the condo's master policy. Is there any specific value - or downside/risks - to deeding the property to the LLC? I assume that as long as the mortgage is kept current, the lender will not be an issue.
I sense that since I already have the LLC, why not move the property under the LLC's ownership...? And if true, does it matter what order I do the following? Establish insurance, rent, transfer to LLC, make first mortgage payment...?
The first thing you need to do is sit down with your accountant to discuss the proper entity for holding properties. I mention this because we designated the entities we used for flips as S-Corps. Our long-term holds are not however inside on an S-Corp. If the LLC you used for flips is an S-Corp have the conversation with your accountant about whether or not you should use it for long-term holds.
Since I'm a proponent of not having our names on a public record I support purchasing inside of LLC and even better inside of Land Trusts. But the cat's out of the bag for you because the public record shows you made the purchase & even if you quit deed the property to your LLC you're still not protected. If your accountant can show you a financial benefit then do the transfer. Make sure the due on sale clause does not apply if you do such a transfer.
Post: Looking for negotiation advice
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Hector Serna:
Hey guys going to try to make this as short as possible. So there was a SFH listed for 225k in which the seller relayed that he was willing to take care of all the town inspection requirements if necessary (They conducted a town inspection in April in which it had passed but had now expired so another one was needed prior to closing). Upon checking out the home, I felt comfortable offering 240k and no credits due to my prior experience of checking out homes in the area. I knew there was no way the home was going to sell at that low of a price in that area and I knew that the new inspection would require a few things. Well the seller, today, just received the town inspection report and no longer wants to take care of the requirements (and it was part of the contract that he would). Everything has been done in the process, this was the last step, I don't want to miss out on this home, and I see a big opportunity to negotiate. My thing is, what exactly, how exactly should I negotiate??? Also, the home appraised at 241k. All advice is appreciated! Thank you.
If it's part of the contract that the seller will take care of all of the village inspection items and now he's refusing then your attorney (if your using one) should be communicating to the seller that he will be in breach of the contract if he does not take care of the items. You can try and force the seller to comply using the contract.
If the seller still will not comply you can file a notice on public record that's equivalent to a lien that would prevent the seller from being able to sell the home to anyone else. You should speak to attorney about this option.
If you really want the home and want to avoid the drama then you should review the report, see if the items are something you can handle on your own and either close on the home AS IS or ask for a price reduction then close AS IS.
Post: Finding off market deals.... wholesalers?
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Jordan A.:
My business partner and I have been searching for our first deal using an agent and searching the MLS ourselves. We have had some luck finding leads and analyzed quite a few from afar, but want to maximize our efforts. Most of the houses we are finding on the MLS are priced too high for the numbers to work on a fix/flip. Are most investors using wholesalers to find off-market deals? We have done some searching ourselves and started sending out letters to generate leads, but we're curious if using a wholesaler would be a better option. We understand we are going to have to analyze quite a few properties before we land on one that will work, so we want to get our eyes on as many deals as possible.
You should have leads coming in from as many sources as possible including wholesalers.
Post: 25 Year Old with 500K in liquid Cash. Wanting to build duplex - all the way to quad
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Jacob Hancock:
I have a chunk of money I am wanting to put into real estate. I am wanting to get some advice on what to do. I do not currently own any investment real estate.
My question is, with the cash that I have what would be the best route to go? Duplex, triplex, or even quadplex?
*how much is the costs to build each of these?
- ideally I would like to do two bed two bath or maybe even one. not opposed to 3 bed two bath.
I would like to build new.
-I have good connections with a local contractor that could do it. Mind you on these I would use mini splits.
secondly, would you recommend a barndomenium style, brick with vinyl siding, or all vinyl?
Im not scared to leverage but on my first investment I would like to do half down to limit risk and build more knowledge before I started leveraging more.
any tips or ideas are most certainly welcome. Thank you so much guys.
Best,
Jake
The cost of building is regionally dependent and it also depends on the style, finishes and final use of the property. Would you be building to sell or build to rent?
Also in your post you state "ideally I would like to do two bed two bath....." This statement tells me you are not ready to do a project like this. As a builder, you should be doing what the market wants or needs in your area. Suppose the market need is for 3 bedroom/2baths.
Before you spend any of the $500K you've saved, research what the market need & get a good handle on the cost to fill that need.
Post: In need of advice
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Karliz Ramirez:
Hello guys, I'm brand new in the investing world, but I'm trying to learn and educate myselfas much as I can.
I have a question or several: I currently work, I have a w2, and almost 20k saved. I rent an apartment and I'm approved for 275k for an FHA loan. Then I met An investor recently and he offered me the opportunity to invest with him in some flips that he is doing or that he might have coming up.
With the FHA I'll be putting the money as a 3% down payment and I'll rent rooms (house hacking) or with the investor I'll invest the money with a hard money loan going 50/50 with this guy. Honestly, I don't know which route to take whether to invest the money in a flip with that guy or get an FHA loan on my own and get a house since no matter what I need to find a place to live (either renting like I do or a house) or should I take the risk and do both or simply neither of the two. 😬 thanks for answering.
I'm going to go against the grain of the advice you've been given thus far of not going with the investor on a house flip Why? You haven't given us any information about the investor. While purchasing a home and renting rooms is nice- you learn absolutely nothing about evaluating an investment opportunity; vetting a potential partner, understanding what it takes to do a successful flip......
In my opinion, your next step should be researching the investor who has asked you to invest. Check on their previous projects. If they don't have any experience are they working with someone with experience? Research how to put together a Joint Venture Agreement or find an attorney who would be able to act on your behalf. Take time to understand the numbers associated with the project. The acquisition price, the renovation cost, the projected ARV, the impact of the days on the market on the profit........ I'm not advising you to invest with this person but use it as an opportunity to learn what you cannot learn by just purchasing a home using FHA and renting out the rooms.
Post: Robert Kiyosaki Real Estate Game & Real Estate Shark Tank
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Ready for the next Cashflow Game? If you want a fun way to hone your investing, finance, partnering, and other skills needed for real estate and finance in general, then join us. We'll play Cash Flow at first but then we will move to our Real Estate Shark Tank.
During Shark Tank- If you have a deal you want to promote or are looking for partners to take down a deal then during Shark Tank you'll have a few minutes to make your elevator pitch.
Thanks to Landon Hoon and A&N Mortgage for being our space host. Food will be provided by Daniel's Test Kitchen.
As a treat, we have food to enjoy while we play.
Robert Kiyosaki's Cashflow game is a great way to learn about real estate and investing while hanging out with other entrepreneurs and investors.
Landon Hoon (A&N Mortgage)
NMLS No. 1512629
#1 MORTGAGE ORIGINATOR IN IL UNDER THE AGE OF 40
For most people, the home-buying process is often the single largest purchase in your life. As a mortgage consultant, I will cover your lending needs from start to finish and will make sure you obtain the best loan for your unique circumstances at the best rates available.Daniel's Test Kitchen
I'm Daniel, founder of Daniel's Test Kitchen. Based in Chicago, we're inspired by global comfort food! We provide catering services, virtual cooking classes and pop up events!