All Forum Posts by: Thomas Franklin

BJ Everson There are two SEC Rules that you need to consider and which one would be applicable, to your REI Endeavors. I highlighted the primary differences below. Investor Definition: The current standard for an individual Accredited Investor is a net worth of more than $1 million excluding the value of their primary residence or an income of more than $200,000 annually (or $300,000 combined income with a spouse). A Non-Accredited Investor is anyone that does not meet the above standards. A Sophisticated Investor is a type of investor who is deemed to have sufficient investing experience and knowledge to weigh the risks and merits of an investment opportunity. SEC Rule 506(b) *Permitted Investors: Accredited Investors and up to 35 Non-Accredited Investors, as long as the Non-Accredited Investors are “Sophisticated Investors.” *Information Required: -If the offering includes on Accredited Investors, no Information is required by law, although it is recommended that information is provided, to inform Investors and avoid Rule 10b-5 liability. -If the offering includes even one Non-Accredited Investor, the law requires the issuer provide a lot of information. *Advertising: No advertising of actual deals is permitted. Sales may be made, to Investors, with whom the issuer has a pre-existing relationship. SEC Rule 506(c) *Permitted Investors: Accredited Investors only. *Information Required: -No Information is required by law, although it is recommended that information is provided, to inform Investors and avoid Rule 10b-5 liability. *Advertising: Advertising of of any kind is permitted such as TV, radio, leaflets, etc.

Karen Lovelady When you find a Cash Buyer, I advise that you vet them. Ask him/ her, for Proof of Funds (a Bank Statement dated within the past 30 days). If he/ she is using a Hard Money Lender, request a Pre Approval Letter dated within the past 30 days. Regarding what information you should provide I would suggest the complete Street Address, photos of the interior and exterior, the ARV, Comps, and estimated repairs. Make certain your ARV and Comp numbers ARE ACCURATE! Too many Wholesalers over-inflate the ARV and underestimate the repairs, to make the property appear to be a great deal. I would also encourage you to do a Double Closing because having a property under contract, with no intent to purchase, and marketing the property is illegal in many states.

Kyle Ransom There is upside and downside, to having a Multifamily Property offering strictly Airbnb Rentals. The obvious upside is you will command higher rents. The downside is you will have a higher turnover rate (Vacancy Rate) which means you will incur extra costs for Marketing/ Advertising, Screening Procedures, possible repairs needed, painting, cleaning units to make them move in ready for the next tenant, etc. You should know these costs, so you can determine if higher Airbnb Rents are worth the the time, energy, additional expenses, and effort that will be needed verses having Annual Leases.

Omar Santaella Welcome to the community, of BiggerPockets! Be sure to check out the forums, the blogs, podcasts as well as other parts of this amazing website and like minded community. The people here have a vast amount of knowledge and are more than willing to share their experience and provide sound insight and advice. Do not hesitate, to post questions and bounce ideas around in applicable forums. I am a Rehabber as well as a Buy and Hold Investor. Please free to reach out, to me, if you feel I may be of assistance, to your Real Estate Endeavors. Much to your success!

Andre Crabb you and I already spoke, by phone.

Pedro Sibiea Welcome to the community, of BiggerPockets! Be sure to check out the forums, the blogs, podcasts as well as other parts of this amazing website and like minded community. The people here have a vast amount of knowledge and are more than willing to share their experience and provide sound insight and advice. Do not hesitate, to post questions and bounce ideas around in applicable forums. I am a Rehabber as well as a Buy and Hold Investor. Please free to reach out, to me, if you feel I may be of assistance, to your Real Estate Endeavors. Much to your success!

Jose Diaz Welcome to the community, of BiggerPockets! Be sure to check out the forums, the blogs, podcasts as well as other parts of this amazing website and like minded community. The people here have a vast amount of knowledge and are more than willing to share their experience and provide sound insight and advice. Do not hesitate, to post questions and bounce ideas around in applicable forums. I am a Rehabber as well as a Buy and Hold Investor. Please free to reach out, to me, if you feel I may be of assistance, to your Real Estate Endeavors. Much to your success!

Leo Maldonado I can provide you references, for both a CPA and a Real Estate Attorney. If you want inexpensive and cut corners, do not contact me.

Luke Spooner I am not a fan of purchasing a Residential Multifamily Property known as "House Hacking." If you are looking to owner occupy, you may want to consider starting out, with buying a Duplex, TriPlex, or a Four Plex. Many Realtors will suggest purchasing a property using a FHA Loan, to reduce your out of pocket money. If the property requires rehab, the Realtor and/ or Mortgage Broker will suggest applying, for a FHA 203k Loan. A FHA 203k Loan is where the purchase price and rehab costs are rolled into a single loan. Assuming you have a respectable FICO you can buy, with a FHA Loan (3-5% down, a 30 year amortization schedule, and a residential loan rate). You live in one unit and let your tenants pay the mortgage and other property expenses. This will give you experience as both a Landlord and Property Manager. The downside is you will need to live there, for a minimum of one year (to satisfy FHA Requirements); AND because you closed personally, you will not have Asset Protection, in the form of closing in the name of a LLC. What happens if one of your tenants has a slip and fall, on your property, or something else happens to them? You are on the hook and can be personally sued, for everything you own. Some people will say, "Take out a quality Insurance Policy and you will be protected." Ambulance chasing attorneys know their way around and can legally navigate around Insurance Policies. Another downside is you loose on the advantages, of the Federal Tax Code, by not closing in the name of a LLC. If you want to close in the name of a LLC, Mortgage Lenders will offer you Commercial Loan Terms (25-30% down, a 15-25 year amortization, and a ballon due in 5-7 years). This is what I am encountering, in the current Mortgage Industry. If you think you will go FHA, Conventional, FHA 203k, etc. and then Quit Claim the property, to a LLC, or a Land Trust you run the risk of the lender discovering a Title Transfer occurred and activating the "Acceleration Clause" or "Due on Sale Clause" that requires the loan to be paid in full, within 'x' number of days. These clauses are contained, in all Promissory Notes nowadays. Many Realtors and/ or Mortgage Brokers will not tell you this information. Many, but not ALL are only focused on the commissions he/ she will earn and not focused, on your best interests. You may be asking yourself what can I do? Locate a Motivated Seller that will consider Seller Financing. You may have to put more money down (10-15%), but you can close, in a LLC, with no worries about banks. I have a lengthy Legal Opinion, from my seasoned Legal Team regarding this matter.

Ben Narro If you Quit Claim the property or properties that have existing mortgages in your name, to a LLC, or a Land Trust you run the risk of the lender discovering a Title Transfer occurred and activating the "Acceleration Clause" or "Due on Sale Clause" that requires the loan to be paid in full, within 'x' number of days. These clauses are contained, in all Promissory Notes nowadays.