All Forum Posts by: Steve Oswald

Hey @Kyle N.,

Interested on how its going with your quit claim to your LLC? I'm looking to partner with a friend and use conventional financing to get it started, then transfer to our LLC.

Thanks,

Steve

@Dave Foster, thanks for the summary.  So selling the 95% interest would be what I'm exchanging, correct?  The other 5% would not be subject to taxes since I am essentially keeping that interest in the property.

Hello BP,

I'm considering selling one of my properties in a 1031 exchange. What I'm looking to possibly do is on the sale keep some money in the property I am selling to retain say 5% ownership likely structured in an LLC. But the rest of the proceeds would go toward another purchase. Does anyone have experience in this or does anyone know if this is allowed? I could see it going either way.

Thanks,

Steve 

@Raul Cesar cortes First it is great that you are trying to find balance in all areas.  Some people get so laser focused in one direction, its easy to let life pass you by. 

Regarding your dilemma, I would first make sure that if you plan to buy and hold (which is what I would recommend if the property cash-flows properly) I would make sure that new leases aren't being put together now locking you in for another year at those rates. That could significantly impact your NOI. Second, I am in full agreement with @Chris Szepessy, that if you are able to buy the property and use the income to pay for a financed pool, you'll get the best of both worlds. Equity being built up while you are making your mortgage payments and the pool payments, and when the pool payments are done, you can either roll that into that house to further pay it down to have it paid off by the time your son goes to college.  Then you can use the strategy that @Brandon Turner and @David Greene have talked about:  refinancing the property and pulling that money out tax free to fund at least part of your son's college (who knows what college costs will be in 12 years!). 

I started in 2009, without any real knowledge of how to invest in real estate.  Wish I had the knowledge at the time to understand the time we were in!   Over the first three years I used personal funds I had in mutual funds and savings to get my first 4 properties.  Then used 401K loans to get my next couple.  Took a year and a half away from real estate, and have combined refinancing, 401K loans and personal funds to get my next 4 or 5.  I was buying 1 a year, basically.  But the last couple years I've bought 2 - 3/yr, even though prices are higher than they were...mostly through refinancing and pulling money out.

Thanks @Todd Dexheimer and @Lennon Lee for the insight.  I've got to call some more lenders to find out what products they offer.  Lennon, thanks for the link.  

  @Jeff Kehl I agree that deals are more likely to be found in that range, just gotta keep the nose to the grindstone.  I always try to see if rents are below market or if work is needed to get them up to market.  If they are below market, I won't shy away as long as I can get them up within the year.

@Maurice D. I shoot for 10% Cash on Cash for it to be a good deal, which is around $4182/yr.  That's at $175/per unit per month.  Also keep in mind I factored in 9% between CapX and repairs, assuming the age on the major systems isn't too old.  Also factored in an additional $600 for additional maintenance, like lawn care, or pest control.  If it looks like I can definitely up rents within the year to get it over that margin, I'll take the risk getting it below that 10% threshold. 

Hello Everyone,

Got a question concering MF 5 +.  What are typical lending terms for smaller MF investments (<20 units) upon purchase.  I've only dealt with a Credit Union and I'm only able to get 5 year term, 20 year amortization.  I had something line up with WF, with a 30 year amortization, but that fell through and I couldn't get the deal to work on a 20 year amortized schedule.  Just trying to get a feel for what is typical.  Thanks for the input!

@Mike G. Great you have experience in so many different arenas.  I like what Ken Corsini said in one of the latest BP podcasts.  He has changed with the market and what was profitable at the time.  Very much worth the listen.  

Seems like buy n hold w/ refinancing or 1031 exchange to the next property to create that snowball in real estate is arguably the best ways to accumulate wealth in real estate.  Though as many have said, there are many ways to skin the RE cat.

@Shasky Charles Welcome and glad you're taking the real estate path to buidling financial freedom

Some critical books I'd say are as follows:

1.  The ABC's of Real Estate Investing (Ken McElroy)

2.  Investing in Duplexes, Triplexes, and Quads (Larry Loftis)

3.  The Book on Investing in Real Estate with No and Low Money Down (Brandon Turner)

Not real estate specific, but great mindset books.

4.  Rich Dad, Poor Dad (Robert Kiyosaki)

5.  Richest Man in Babylon (George S. Clason)

Two others that are great overall resources:  

1.  What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures (Frank Gallinelli)--Great book on calculations

2.  Long Distance Real Estate Investing (David Greene)--important for managing process from afar.  

I often read bits and pieces of all of these books to refresh concepts and also to help re-enforce the wealth building mindset.  Good Luck!