All Forum Posts by: Mark S.

@Nicholas Potocki,

Congrats on the deal.  Can you break down the numbers further?  What’s the monthly cash flow?  What numbers are you using for reserves, etc.?

Inspector says potential standing water issue during heavy rains.  Top pic shows his concerns and are the “before” photos.  Turnkey company “made the repairs” in the bottom two photos by installing gravel so that water supposedly easily travels away from the house (encouraged by the slight slope from back to front of the home).

Should I be concerned?  I’m days away from my rate lock expiring, loan is clear to close, turnkey provider saying it’s resolved, and inspector who was supposed to go back out to check on it for me is unreachable. 

Thoughts?

@Lynnette E.,

Thank you for your feedback, however, I would be very careful about the legal advice you’re essentially giving here.  

My understanding is that a revocable living trust does not provide any asset protection. I have an LLC for that. The reason I had the revocable living trust set up is for estate planning purposes. Investing in a syndication as a limited partner, as I do, with my revocable living trust (for estate planning purposes) does not provide any liability concerns for me. My single family rentals, on the other hand, are held by my LLC and also have great liability insurance with the LLC listed as an additional insured. Two completely separate things.

There are many types of trusts out there and perhaps you're referring to something other than a living revocable trust, but I am not worried about any "co-mingling" of funds between my personal name and my revocable living trust (as it's not an asset protection issue) like I would be with my personal name and my LLC (which is set up for asset protection).

I had my attorney create a revocable living trust for me several years ago for estate planning purposes.  I use this same trust to hold my real estate syndication investments (again, for purposes of estate planning and easy transition upon my death). 

I've asked my attorney on several occasions to confirm that I am able to write a personal check (from a personal checking account) to fund these syndication investments and still be able to use my trust.  He confirmed on multiple occasions that yes, I am able to do this, so I did.  My personal accounts have a POD/TOD beneficiary, so for purposes of easy transition upon my death (and to keep things simple - at least that was my goal) they effectively function the same way as a trust account would (only they're not technically trust accounts).

Most of my periodic cash flow from these syndications comes back into my personal checking account via ACH.  It's never been an issue.  One of the syndications just exited and they are mailing checks back to the investors.  I'm guessing my check will be titled in the name of my revocable living trust (instead of me personally, since that's how I structured the investment).

My question is whether or not I will be able to deposit a check made out to my revocable living trust into my personal checking account.  I am the trustee of the trust.  Will I simply be able to just sign my name, trustee, Mark S's revocable living trust and deposit to my personal account? 

My fear is the financial institution may require me to have and deposit into a trust checking account instead.  Not the end of the world, except I wouldn't really ever use said account other than for situations like this and I'd rather keep it simple.  A couple of the credit unions I use are out of state and are picky about certain things; I have a feeling I may not be able to open up a trust account remotely.  I could always ASK THEM, but then I feel like it's asking for permission vs foregiveness.  What I want to avoid is depositing it into my personal account, it get rejected, and then I have to go back to the syndicator to get them to cut another check. 

Has anyone had a similar experience before?  I feel like it shouldn't be so complicated.  Yes, I can go to a local credit union and just open up a trust checking account, but I'd rather not do that if I don't absolutely need to.  Thanks in advance for any feedback.

@Jordan J. Osborne, look to complete a balance transfer on those credit cards to one with 0% and pay them off ASAP. 

@Peter Ricca, see my post above from 18 hours ago

@Kalen Jordan, I thought I was buying from Memphis Investment Properties, but it turned out it was James Wachob.com.   The property was priced very fairly in terms of rent to price ratio, but it’s not been without its fair share of problems.  

Immediately after closing, there were two repair bills, one of which occurred prior to close.  I had the property management company, which is a third party property management company by the way - NOT in house, have the seller pay for the one incurred prior to close and I just sucked it up and paid the one that supposedly happened right after close.  I have had more (HVAC) repairs  on this property in the 7-8 months I’ve owned it than all my other SFRs (3 of them) combined.  Could be random luck, but I’m of the belief that the rehab just wasn’t as thorough as MSHB.  

His team used to call me when trying to sell me a property.  Now that they’ve sold me one, I barely hear from them - I think only two emails letting me know they plan to connect with me soon (but that hasn’t happened yet).

The third party PM company doesn’t communicate as well as MSHB, but I’m trying to make it work.   Also wasn’t aware that the tenant was Section 8 until the very end.  Not a bad thing in and of itself necessarily, but would have been nice to know sooner.

They earned a $5K marketing fee to sell the property for another investor. Again, not a bad thing and it was disclosed in the documents, but I initially was under the impression they sold THEIR properties that came with THEIR in-house property management.  That’s not the way it worked out.

@Donald DiBuono, @Ronald Isgate, @Jennifer Gligoric,

Is this state specific?  I have had my title company quitclaim to my SMLLC in TN and transfer tax was never an issue.  

@Blake Edwards

Absolutely.

I max out 401(k) / Roth 401(k) each year (depending on my projected income, I move between pretax and Roth). I get a 9% employer match and my highest expense ratio fund is 7 bips (0.07%), so it’s basically free. 100% equities.

I max a backdoor Roth IRA each year as well. Expense ratio of 3 basis points (0.03%). 100% equities.

I (minimally) use my brokerage account. Expense ratio of 3 bips (0.03%). Yup, you guessed it: 100% equities.

I invest heavily into a real estate note fund with non-qualified funds (10% and 12% preferred returns).

I invest in multifamily syndications with non-qualified funds (8% preferred, 75/25 or better splits on most; 6% targeted and 65/35 on one very small investment more for fun).

I invest in international agricultural real estate, like coffee (10-12% IRR) and cacao (yes, chocolate - 11% IRR). I use a self-directed ROTH IRA for cacao and non-qualified funds for coffee.

I invest in turnkey buy-and-hold SFR properties with non-qualified funds.

I save fairly aggressively in high yield savings accounts with specific purposes for each account.

I am planning to utilize the infinite banking concept / whole life insurance in the next couple of years. I am also looking to invest in additional syndications for cash flow.

Like others, I believe in the benefits of the stock market as well as real estate and I like to balance that out with a diversified approach. Cash flow from real estate for “early retirement” and qualified plans for my later years. Everyone has what works for them; this seems to be working really well for me.

What do YOU do?

I would probably pay the car loan off, take the monthly savings and plow into student loan, take the cash you have and get in REI. I buy turnkey, so my strategy is a lot different than many on here.