All Forum Posts by: Rachel Luoto

@Chris Seveney thank you for the input! What I had in mind was more along the lines of me doing the work, but using my 50% as a sort of "fee" to pay an experienced flipper for their mentorship in finding and analyzing deals, learning how to manage a project and contractors, etc. I'm not sure how else I would incentivize an experienced flipper to give me the level of mentorship I'm looking for.

My cash partner would know that's our plan from the beginning - he is an entrepreneur who at one time had a multimillion dollar construction business, so we aren't playing with grandma's retirement money here :)

I've got J Scott's books I've started reading through, and have been listening to the podcasts and connecting with my local REIA contacts. We will get started in about 6 months, so that is our lead time to get a clear, documented structure and meet with a lawyer and tax strategist.

Hi!

I haven't seen anyone do this yet...

I have a friend who wants to be my cash partner. I have some real estate experience but would like some more guidance before tackling a full blown flip, especially with someone else's money.

I figured I would make an equity partnership where my cash investor gets 50% and puts up 100% of the cash, and I bring in an experienced flipper who gets what otherwise would be my 50%, in exchange for mentoring me through the process.

My friend gets the security of a seasoned professional handling his investment. The flipper gets an infite ROI and has a financial stake in making the deal profitable. I get the knowledge and experience to do the next deals myself.

Can you see any pitfalls I don't? Our next REIA meeting is in two weeks and I know flippers will be there!

Good morning BP!

A friend has approached me to be my silent money partner! Yes!

They will provide 90-100% of the money, I would do all of the work - I currently have a flip and two rental properties

Rather than be a debt partner, my friend is interested in equity splits - he's an entrepreneur with a high risk high reward mentality and has prior real estate experience in the development niche

Where would we be best positioned with this dynamic? Options as follows:

- Buy and hold in cash, split cash flows each month and split equity gains upon eventual sale

- Buy and hold with a mortgage, split cash flows/equity as above, use leverage to pursue higher priced small commercial deals

- Traditional flip

- BRRRR, with or without the refi aspect

What's your favorite stategy? This is the opportunity to get out of my 9-5 and be full time in real estate in a much shorter timeline than I had thought possible :) Thank you in advance for the feedback!

@Andrew Postell thank you for the clarification! It was actually the recommendation of my loan officer to keep churning these flips as FHA, before we looked at the occupancy clause, so I hope that means no penalty to him.

That said, I've unexpectedly been approached by a cash partner, so I don't think I'll need to do another FHA in the future :)

@Christopher Phillips thank you for the input! Luckily I've got a few exit strategies so not matter what I'll come out ahead, just selling quickly would be my preference.

Good morning!

I am in the middle of an FHA owner-occupied live in flip. I was talking with my lender and he pointed out the following wording on my loan:

"This offer is being submitted that I/we will occupy the property as my/our primary residence for at least 12 months"

My thought was the statement above applied toward having an intention to not rent the property out, but now I'm wondering if it applies to my intention to sell as well.

I was considering selling after 6 months (as an owner occupied property there are no capital gains taxes, so it doesn't matter from a tax perspective when I sell)

Has anyone else come across this? Would I be penalized for selling early?

Thank you in advance!!

@Travis Toler, funny I work in Seattle too! If we take the same ferries we could meet up on board :)

Hi Travis, I invest in Bremerton. Do you come to REAPS? Lots of wholesalers to connect with there and people to partner with, or mentors willing to help look over deals with you. I've been beat several times before getting the offer accepted too 

@Colleen F. thanks, I will be talking to a property manager about it before I list. Unfortunately historic rents won't be much help, since rents have been skyrocketing in the last year as our area quickly gentrifies. I hadn't heard of a relocation agent, that could be interesting to check out! There's a lot of military families who might use someone like that.

Hi everyone,

I am putting my home up for rent shortly. It's a 3/1 valued around $270K, water and mountain view, well maintained (currently used as an air bnb)

Using the .08% rule of thumb, this should rent for $2,160/month

The issue? My neighborhood is best in town, so many of the houses are owned rather than rented. All my rental comps are from less desirable areas across town, in the $1,600 range. 

How much of a mark up do you think the prime location and view are worth? $100 more a month? $200? Am I justified in listing at $2,160/month?