All Forum Posts by: Wade Sikkink

What about a signature loan or equity line against your primary residence? These might be options for small loan amounts as well.

Using multiple LLC's is unnecessarily complicated. The point of the entity is to protect your personal assets, which one properly maintained, arms length LLC will do. I would argue that most people with multiple LLC's probably don't properly maintain them. For example, each LLC has to have it's own banking and separate books, etc. If all this is not properly maintained then it will be easy for a laywer to pierce the corporate veil and you've lost the protection anyway.

Also, as your business grows, there are benefits of becoming a large, well known business in the area. People want to do business with you and you can get preferred terms, etc. You don't get this benefit if every property is a seperate business.

J Scott has a very detailed, real time thread of a tear down and rebuild in Atlanta last year. Its in the General Real Estate Investing forum. He has all his estimates and actual expenses on the project. Its a gold mine of info.

I would tag J but the @? doesn't seem to work on my tablet. :-)

Agreed. The numbers will give you your answer. Before making an offer you should know your walk away number and your BATNA (best alternative to a negotiated agreement). If their counter is above your walk away, then move on to your BATNA which is probably to look for another deal.

Good luck!

I agree with @Michael Seeker , one LLC, if correctly structured and maintained at an arms length is enough corporate veil protection. There is a lot of benefit in having a recognized company that people (bankers, contractors, etc.) want to do business with.

All multiple layers of LLC's does is make work for lawyers and accountants.

On the 14 plex we bought last year, we saw the inside of 2 typical units before we made the offer. The offer, however had an inspection contingency. We hired a full building inspection done, then after that was done we personally walked through every unit with the inspection report in hand and looked at everything cited. Of course, a few of the tenants were home and fussed a bit. Others realized, "Hey, this is the new owner," and were very friendly.

After the inspection and our walk through we submitted an addendum to the offer reducing our offer price based on the list of items identified in the inspection report. We gave the seller the choice of fixing everything on the list before closing or reducing the purchase price. He took the lower price and the deal was done.

I would not, however, buy a multi-family unit without personally seeing inside every unit. I suppose if you were buying a 100 unit complex that wouldn't be feasible, but anything less than 20 units or so I would see in them all.

The loan on our apartment building is a 20 year amortization with a 5 year balloon. I expect to refi at the 5 year point.

Try Farm Bureau. We have a policy through them called BusinessMax that includes liability insurance for our business as well as property insurance for our apartment building. I know that's not the same as house flipping but probably worth checking with them.

Good luck.

Inherited tenants will test you, especially if the previous landlord let things slide. We had one we just evicted that was trying to pay half the rent on the first and the other half on the 15th. We said no because we knew she would always be a problem in collecting and I simply don't have time to chase tenants around for their rent payment.

She started complaining that we needed to fix stuff, then she would pay. We said no, and served her with a 3 day pay or quit notice. On the third day after continued discussions that she needed to get out, we contacted our attorney about filing for an eviction. Our attorney said that she would file the paper work the next morning and our court date would be in 10 days. We notified the tenant that we had a court date set. 7 pm that night she called to say she was out of the apartment. We called our attorney and they didn't file the paperwork.

Once they know you are serious, most will move on. However, if they don't, you will need a good attorney on your side.

Good luck!

I actually ran into the previous owner this weekend and asked him about the holes. He said they were from a termite treatment years ago.