All Forum Posts by: Evan Scott

I meant for the 'unforeseen' circumstances (moving & new job in this case) @Wayne Brooks . Thanks!

@Wayne Brooks , I will be taking another job and moving, which is why I'm selling rather than keeping it and buying another place/refi/etc. I perhaps should move the dates to make it possible. What forms must be additionally filed for this?

Gotcha. I have lived in it as a SFH, I should have edited that above, not as a rental property. I converted it during this period. I'll also have to investigate into how the basis is calculated...

Thank you all very much for the info.

@Gautam Venkatesan , could you provide more details? Thank you!

@Josh,

I've heard the same thing.

I bought a 3 flat in December of 2012. I have lived in it since that date. I am looking to sell my place at a profit of ~$150,000. I technically will have had it as my primary residence in 2013 & 2014, but it has not been 2 calendar years since I have bought. Will I have to pay cap gains on the profits from the sale or does this still qualify as having lived in it for '2 years'? Thanks!

I'm in a similar situation, so how about some specifics and we can develop a plan in theory:

A. I have around $50k cash to invest, but will likely have much more in 6-12mos (I have a $150k/yr salaried job that pays a large bonus in addition to that, but I'm young and just finished paying off college debt, so low savings). I'm 24 with no debt/kids/expensive wife/etc.

B. I'm looking for the highest absolute returns possible and I am okay with high risk (losing entire principal is acceptable) to get these returns. I would prefer less risk than that, but at this point I will always accept higher risk/return over less risk/return.

C. I live in the Chicagoland area, but do not restrict myself to that area. I would prefer Chicago, but am open to Charlotte, Austin, Dallas, the rest of the Rust Belt (Pittsburgh/Cleveland/Michigan/etc.).

D. My target is to be receiving as high of cashflows as possible with little interest in speculative buying. I like SFHs in decent/working class areas that easily rent and may participate in some upside should the economy turn around. I have 0 interest in flipping or gut rehabs, but am okay with places that need some plastic surgery / cosmetic work.

My current plan is as follows:
-Buy as many SFR or 2-4plexes as my cashflows and debtload can handle, while meeting the 2% rule.
-Continuously reinvest income through an LLC to buy more SFRs or multi-family properties.
-I may do an FHA loan on a place I would live in that would also be a multi-family 2-4plex, but in a nicer area/non-warzone (less upside, but still a decent investment).

The goal would be to have 50+ rented units and/or 25 SFRs within 5-6 years.

Any thoughts/concerns/etc.?

Just to clarify, part of the reason we do not wish to have to put up this cash immediately is because we will be losing a significant amount of interest and return, while we do not need the entire amount all at once. The purchase of the property will be approximately $1mm, but the rehab will be a bit more lengthy process and it makes no sense to us to put up this amount if we are being handed it back anyway and not receiving interest during that period.

Hello everybody,

This forum has been incredibly helpful lately. I was looking to get some more information/help from people experienced with the SBA 7(a) loan process.

My business partner and I recently formed an LLC in the state of Illinois and we are looking for a loan to purchase commercial real estate that will be used as our HQ (which is what 7(a) loans are intended for).

What is confusing to us at the moment is how collateral and LTV are looked at in this picture. The property we are looking at will require significant rehab, which is allowed for within the 7(a) loan terms. The total cost of the purchase and rehab will be around 1.4-1.6mm (based on numerous estimates). With these numbers, is the loan not to exceed 90% of this amount, for example (ie 90% LTV), or are we supposed to somehow prove that we have at least 10% of that amount in cash/liquid assets on hand (say $160k).

Both myself and my business partner have enough cash on hand to cover 10% of the loan, but if possible, we do not wish to have to put this into an escrow or transfer the cash for various tax reasons. The vague wording is confusing as to whether we need to put up this 10% into some account in advance or whether this is simply a number thrown around. It would not make much sense to have to post this amount, only to receive a much larger amount of cash immediately after.

I hope my wording here wasn't too confusing and I could get some help with the topic. Small business financing, at the moment, is not my area of expertise so any help is greatly appreciated.