All Forum Posts by: Tanner Sherman

I wouldn't expect it to have a major impact, but they could appraise it as a duplex I guess. A lot of banks are not doing full appraisals depending on the LTV.

Since he makes his money by building, I would assume the answer you are looking for is doors. Refinancing is a strategy of operators but the go-to for creating wealth is acquiring more doors, or in the case of developers, building them.  

You can use a realtor for an off market deal, you just might have to pay their commission as the buyer. A real estate attorney is always an option, but they might advise you that it would be cheaper to use an agent instead. 

I would start by establishing a rapport with the owner. Find out how she got into real estate, how she likes it, and what her future goals are in real estate. Then find a way you can be of service to her. After providing value, you could talk about your interest in buying the property from her. 

In today's market it is very difficult to find 1% deals, but they are out there. Also, the 1% rule is a guideline for you to be able to look at a deal and decide if it will be worth underwriting further. I think if you underwrite a few deals that come close to 1%, say everything where the rent is .6% of purchase price and higher, you will underwrite fully. You will then figure out what is and is not a good deal in your market. 

You won't "get heat" for asking a genuine question like that on here. President Trump has created his wealth through commercial real estate development. I think you already have the answer, you just need to figure out how many doors you need to quit your job and focus on real estate full time. Maybe getting from 1-15 doors will take you 2 years, 15-50 will take you 1 year, and then you find a way to live off that 5k per month, and can scale from 50-300 doors in another 4-6 years. So in less than 10 years you are financially free. There is no instructions manual to getting to financial freedom, just tools that you can combine with each other. Like selling a property to 1031 into a bigger property, or refinancing a property to get 3 more properties. The most important thing is taking action and doing something. 

If you were to get sued for any reason the LLC would protect the members' personal assets from being seized in the case you lose your lawsuit. The damage is limited to just the property owned by the LLC. I would ask your attorney for clarification when setting up your LLC

Consume as much information as possible. Reading, podcasts, forums; all of it will help you get to where you want to go. 

I will start with the standard disclaimer that the best person to answer all of these questions would be a qualified real estate attorney, so please consult with one prior to making any decision regarding the entity structure you will form. 

My personal opinion is to form the LLC especially because you have multiple people involved, so that you can have a crystal clear operating agreement and everyone knows their roles and responsibilities.

As far as lending goes, if you can qualify for a loan in your personal name alone, you should have no problem getting approved for a loan with your partners on it as well. Before you have the history with your LLC, it will likely be recourse meaning you and your partners will have to personally guarantee the loan.

Even if you pay cash for a property, an LLC is still necessary in order to protect your personal assets from your investment property.

I typically charge 7% to manage projects for my clients. 8.5% is not bad at all, I would take into consideration the costs potentially incurred by not paying him $5k to manage it. Make your expectations and communication timelines extremely clear, and pay him in draws the same way you would pay a contractor.

Congrats! What was the hold time and did you have to put anything into it or was this natural appreciation?