All Forum Posts by: Tristan Gardner

In my opinion, you have to justify why what you did was legal. 

I'm sure you're going to get a lot of "1031 has to be a like-kind exchange and selling a business isn't the same as real estate". I'd justify that by saying the business I sold is buying into my "other" business that happens to invest into real estate. SInce the business holds the properties, I say it's legal but I'm just a guy.

I like option 2 personally for the refinance option. I'd keep refi until I have a large portfolio 

@Taufic Mezher

Short-term rentals may be something you want to steer away from on your first deal. The money is great and all, but it doesn't seem like you have the reserves for repairs and management costs.

I'd highly recommend checking out the BRRRR method. https://www.biggerpockets.com/...

@Robert Kohnfelder

I've had "interesting" appraisers do some weird stuff to me. I honestly think it's up to the individual appraisal and their "mood of the day"

Overall in my area, I feel they appraise based on similar homes (size, beds, baths, updates) both in my neighborhood and in the surrounding area. Once I had an appraisal come from about 5 miles away in what was your typical neighborhood setting on a property that was nothing special.

Rob, 

Yes indeed you'd increase your mortgage thus decreasing your cashflow, but don't stop the thought there. 

Let's say you reduce your cashflow $100 by refinancing your current duplex, then use that capital to go buy another duplex that cashflows +$300. Now you've recaptured that $100 and have another asset that's probably appreciating over time, more doors so less overall vacancy, and a larger portfolio! 

Play the long game my friend and you'll go far.

Hey @Abraham Alemnew

I have two ideas:

1. I'd consider partnering up with someone and offering management, lead generation, cleaning, turning, renos, etc for either free or a low rate to understand the game and build up that network. This will get you in the game and help you understand it without risking anything but your own time. It's going to be hard to dive in without wanting to relocate yourself and limited funds flying solo. Maybe you'll even pick up a partner along your way of giving your time who will go in on a deal with you.

2. Check out lease options and subject to deals. These are some super powerful seller financing tools that can help with your current situation. It'll take some work, but will pay off in the end

I'd figure out the amount of money you can leave in the deal that makes sense and still cashflow the amount you need depending on your goals.

I personally am in the game for the long-term appreciation of multiple assets and take a slightly lower cash flow each month to do so.

Leaving 10-15k in a deal that's worth 500k sounds like at least a 3 base hit to me!

Since it's family and you want them to get into the game, why not split ownership of the asset either:

1. proportionally based on the total asset value

2. Spilt it up 80/20 (for example) since you'll do most of the work

The numbers can get hard to think about because we're leveraging debt and converting to total ownership percentages.

Example 1 - Spilt proportionally based on Down Payment Contribution

I'm assuming you're putting 25% down here so the total asset is 240k. The total down payment is $60k in this example

Your contribution is 40k, you get 66.6% of the asset (DP contribution / total DP)

Brother 1 - 10k: 16.66%

Brother 2 - 10k: 16.66%

Carlan,

I love the seller financing option! 

1. I like the idea of buying the asset personally then transferring it into my LLC

2. I don't think it matters, but this is a question for your insurance company. They could have some clause that would prohibit this

3. You could be if it can be proven you didn't take action of something that caused their injury. For example, you knew the handrail was broken and didn't replace it causing the tenant to fall and break their hip (it's always the hip lol). Get adequate insurance for this. A good umbrella policy is also a good idea

4. A third party is usually a good idea in most cases to protect all parties in the transaction

5. The deed will pass to their surviving heirs. I'd make sure this is spelled out in the contract to ensure it avoids probate

6. Continue to run all the scenarios (good and bad) in your head and put them in the contract. You got this!

I've used Appfoliio as a tenant before, but not as an owner. I know it's a bit pricey, but it handles everything from leases, electronic signatures, rent collection, maintenance requests, and accounting