All Forum Posts by: Tom Meade

Hi Patrick- check out this thread: http://www.biggerpockets.com/forums/521/topics/116195-jv-partnership-feedback-those-w-experience-please-weigh-in Good feedback there. Shoot me an email if you want I can send you an operating agreement for an LLC where I'm managing member and have two money partners. Somewhat similar to your situation and probably a good starting point.

Buy it and rent it back up as a rooming house. Maximum cash flow for minimal rehab and puts you in the best position to have the big boys anxious to buy you out. If you don't have rooming house experience, consider partnering with someone who does. If not, find a manager with real experience that you can trust (easier said than done in that business). Realize rooming houses are whole different animal than land lording apartments but there is serious cash flow potential, even with higher management costs. On the back end, don't be greedy - just because a national restaurant or retail chain is buying in the area, don't hold out for every last dollar. Those guys are ruthless and they will wait you out if necessary. Negotiate a fair price and hire a good attorney. Good luck!

I love the Pay it Forward sentiment...I know you said you can't read any more posts, but this one from LinkedIn is seriously worth the read: http://www.linkedin.com/today/post/article/20131101150259-658789-pay-it-forward-give-and-ye-shall-receive

Multifamily is scorching hot right now. We're seeing a ton of acquisition business as well as RE-fi / repositioning plays. There is a lot of money chasing deals, so cap rates in major markets remain at or near historic lows.

Good advice from @Chris Martin -- bringing a list of items to discuss is a great way to focus the meeting. You may also get to discuss some high level stuff for "free" at an initial/interview type meeting if you plan on meeting with multiple professionals before choosing one (always a good idea in my view).

Definitely talk specifically with estate planning attorneys. I'd start there, and they can usually refer you to a CPA well suited to your situation - in this case with some expertise in real estate.

Great post, interesting topic. I worked in the trades myself for a while, and the guy I learned the business from REFUSED to go to HD or Lowes. We did relatively small time general contracting - residential remodeling, additions and some new construction. He was set in his ways and always went to a supply house or lumber yard. He was the type of guy who was always busy, even during tougher times. He was a really good carpenter, and a good business man, which is a fairly combo in the trades. But here's the thing - he charged a premium for his work. He was worth it, for homeowners who wanted a guy they could trust to do the job and do it right. Investors don't want to (and many times cannot make a deal work if they have to) pay "retail" prices/rates for subcontractors... I think that may be genesis of the suggestion to try and meet guys at the home improvement stores. You're definitely more likely to meet "investor friendly" contractors there. Great suggestion though about walking larger job sites to scout for talent, I'll definitely put that in my bag of tricks when looking for new subs!

Seems like you're asking two separate questions...first, is borrowing (or leaving financing place) at a long term fixed rate a good strategy right now? I think YES. If the long term rate of inflation is 2-3% (and the Fed has taken extraordinary measures in recent times to try and induce that), and you're locked in at 4.0%, you're borrowing money at an effective rate of 1-2%. If you believe (as you seem to, and I do as well), that we'll see higher than targeted inflation over the next several years, then it seems like a no-brainer to leave in place your fixed rate financing, as you'll be borrowing at or below the rate of inflation for some period (free money!). All while enjoying rising rental rates and property values. Then, if I'm the hypothetical guy with the $750k, and I've decided (as above) that I like the long term fixed rate leverage play, then I have to ask myself, do I continue to allocate dollars to RE investments, or do I diversify? I have an undergrad degree in finance and worked in the mutual fund industry earlier in my career. Now I'm in real estate (day job and personal investing) and my wife is a financial advisor. We have some interesting "conversations" about what we'd do with my 401k rollover if I leave my day job. Even with (actually, probably DUE TO) my earlier experience with the stock market I'm all about a checkbook SDIRA....she'd love to get it all into the stock market but the thought of that literally makes me sick to my stomach!

Thomas Alexander I may be able to help you RE-fi your deals. Shoot me an email or PM.

house was built in 1840 (yes, like 174 years ago) but I'm doing a gut rehab. I just looked and its really tough to tell, but it looks like the back corner of the house in in the flood zone. The map is marked - "1% annual chance flood discharge contained in culvert"

do you know what that means? I bet that's why my quote was "only" $4500 and not the crazy $10k plus that you hear about in the coastal areas around here.

@Bobby Beard , yes I realized after I posted that this might be one area where living in Boston may actually give me an advantage on the price of something. Survey work is much more straightforward up here, plenty of locus points (is that the right term?) and recorded land plans etc for civil engineers to work with.

Thanks for the heads up on locating the actual structure in relation to the flood zone...I'm still in due diligence on this deal, the closing is keeps getting pushed for other reasons, so I haven't sharpened my pencil on all the numbers, insurance etc. I'll need to do some more research for sure. I looked pretty closely at the maps, and don't think the structure is in the flood zone - there's a brook that runs through the backyard in a culvert underground - and I didn't realize that if my structure isn't actually in the flood zone I may not need to carry it... Thanks again!