All Forum Posts by: Travis Henry

@Tim Crosby Gotcha. Your growing family could definitely be an option for multiple FHA loans; however, I think there's also an LTV requirement to qualify for this exception (don't quote me on that). It seems like your best course of action would be to speak with a lender (or several) to determine what hoops you would need to jump through to qualify for an exception.

@Tim Crosby Based on what you provided in your post, it doesn't sound like you would be eligible for an exception to have more than one FHA loan outstanding (though it is possible). Have you done any work on your current duplex? Wondering if you would have enough equity for a refinance into a conventional mortgage to make sense. If so, this might be a way to free up your FHA slot.

@Kipling Beck Things I would tell my 20-year old self:

• Stop worrying what other people think of you.
• Be incredibly patient. Stop thinking in 1-3 year increments and start thinking in 5-, 10-, 20-year increments.
• Strategies and tactics are cool, but the ability to adjust your perceptual map is a game changer.

Books I would recommend (in no particular order):

• Cash Flow Quadrant by Robert Kiyosaki
• Grit by Angela Duckworth
• How to Win Friends and Influence People by Dale Carnegie
• Atomic Habits by James Clear
• The ONE Thing by Gary Keller and Jay Papasan

@Tony Marcelle Regarding your question on whether the deal or money comes first - Money!

My recommendation would be to put together a sample deal package for your potential private lenders. Ideally, the sample deal would be representative of the types of deals you're targeting, and would include things like capital contributions, investment term, expected returns, etc. Michael Blank talked about this in his book on apartment investing and it's helped me to find a couple of the private lenders I'm working with.

Needless to say, as @Jeff Kao mentioned, all of this will stem from personal relationships. Are you able to leverage 2nd or 3rd degree connections through your existing network - like a friend of a friend? Or a parent of a friend? 

@Bill Plymouth If you haven't done so already, leverage your existing network. Even if the private lender ends up being relatives/friends of a friend, at least they're a degree closer to you and there's some preexisting credibility. It might be helpful to create separate lists for friends, family, co-workers, teammates, a gym family, a church family, etc. Good luck!

@Cara Kennedy I've heard great things about Big Shifts Ahead by John Burns. It's come up multiple times in discussions around demographic patterns and migratory shifts. Haven't read it myself, but it's on the list!

@Dean Letfus Thanks Dean! I was able to get some clarification on my attorney's strategy this afternoon. It seems like this would only make sense if you were self-managing the properties (which we're not), but here was his response if you're at all curious:

"The benefit you get from the LLC when the property is still in your name is that you have liability protection as it pertains to the lease itself. So let's say that you own the property personally and someone gets hurt. They are likely to sue you personally AND also the company that is renting the property to the tenant. In that case, the LLC shields you from liability as it pertains to you as the landlord, but not you as the property owner. Additionally, since you would be leasing the property to a tenant, any legal issues that may arise from a breach of that lease would provide you liability protection. 

I always like to side on having as much liability protection as possible. You could certainly just do a partnership and rent the property that way, but you have 100% personal liability exposure to everything."

A partner and I are closing on a quad in Clarksville later this year. My attorney, who is also an investor himself, is encouraging me to hold title in our personal names and run the rental income through our existing member-managed LLC. Apparently this is what he and his dad do for the properties they pick up around town with a $5 million umbrella insurance policy.

From my understanding, the only upside here is that they don't have to pay the franchise tax (0.25%), which is tied to the value of the assets held in the LLC. However, they would still be on the hook for the excise tax (6.50%) since that's based on the net earnings of the LLC during the year. If that's the case, then I'm not sure I understand what the point of the LLC was in the first place since it doesn't provide liability protection with the asset being held in our personal names. What am I missing?

Aloha Investors!

Come join us for our monthly REI Professionals Lunch in Downtown Honolulu! These casual lunches are designed to bring Honolulu real estate investors (at any stage) together for networking and discussion. There will be no pitching of any products or services.

Our speaker this month is Mr. Lucas Love, Partner at Carlsmith Ball LLP. 

He will be giving us a presentation on:

Qualified Opportunity Zone Funds: A new tax deferral strategy for real estate investment that can provide better benefits than a 1031 exchange.

Lucas will also touch on LLC formation and basic tax considerations for real estate investors, with time for Q&A to follow.

Parking is available at Aloha Tower Marketplace. Gordon Biersch is located in the back facing the waterfront.

To save your spot, please click "attend" above and RSVP here:

https://www.eventbrite.com/e/r...

If you have any questions, feel free to send me a DM or email at [email protected].

_________________________

About Lucas:

Lucas Love is a Partner at Carlsmith Ball LLP in the firm's Honolulu office and a member of its tax practice group. His practice includes tax planning for business transactions, international tax planning and compliance, tax controversy and audit defense, estate planning for large estates and small business owners, trust and estate administration, and non-profit organization formation and administration.

Prior to joining Carlsmith, Lucas was an associate with Baker & McKenzie in Palo Alto, California, where he advised some of Silicon Valley's largest companies on a variety of international tax planning and federal tax controversy matters.

Prior to law school, Lucas was an accountant at Ernst & Young in Honolulu, Hawaii, where he audited the financial statements of some of Hawaii’s largest companies. In addition to his law degree, he has a master's degree in accounting and is a Certified Public Accountant (not in public practice).

@Robert Jones Sorry we missed you today! I'll be sure to keep you posted on the details of the September meetup!