Need Advise Prior To My First Deal
Hi,
I am looking at four plex unit. The apparent income and the expense the seller is quoting looks favorable. However I cannot take his word for sure. Before analyzing the numbers I would like to ask for documents that will be authentic e.g the income and expense fund that he furnishes to IRS.
I am not sure what document to ask prior to my analysis to see the cash flow. I would appreciate some help and direction in this matter. Since this is my first investment I would like to be careful and go ahead with informed decision rather than be sorry after the deal. Regards and thanks.
[ Edited by gamaz on Date 08/02/2009 ]
[ Edited by gamaz on Date 08/02/2009 ]
Ask for Schedule E on their personal return. For LLCs, ask for Forms 8825 and Form 1065. Try to get the last two years of taxes.
Given the ease w/ which kake returns can be produced, I would request audit finances n a release to get the returns from the IRS directly.
Thanks folks for the nice advises. I appreciate it.
So, was it him?
have you tried zaba search
At this point see if you can by the note.
That way you get paid back or get the place REO. There might be a legal mess later if he or his family surface.
Beware of the right to cure laws on residential properties.
Have you asked them about signing as a guarantor in addition to the partnership? I think everything would still be in the entity name that way.
you might look for lender that will loan to LLC for SFRs. They will look at the business owns credit to underwrite the loan.
4. Forget renting and speculative investing. Buy yourself a nice home with a 40% to 50% discount compared to 2006 prices.
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One con I can think of, if you get sued by a tenant the judge will hold you to a higher standard and will possibly be less forgiving regarding RE laws.
Licensure laws vary by state. In general, I recommend obtaining a license. Whether you get a commission on your own property depends on your agreement with your broker.
As a licensee, you have more access to property information and are regarded as more of a professional than someone who is not licensed. Buyers and sellers know that you can be sanctioned for violation of and rules or ethical standards and have more confidence in dealing with you.
Of course, your commission on your own purchases and sales just add to your profit margin.[ Edited by drowens on Date 08/26/2009 ]
See also http://www.thecreativeinvestor.com/ViewTopic65816-20-9.html
For answers, #1 depends on your state. When self-dealing in NC, be real careful and know your state law. Search this forum for more (e.g. http://www.thecreativeinvestor.com/modules.php?st=self+dealing&name=Search&cat=forums) In NC, you will need to disclose that you have a self interest; if not and you get caught you will be a pin-up in the REC Disciplinary Action Report. As for #2, you are either a licensed broker or you are not. Your licensure history is not material IMO. As for #3, I personally do not work with broker/investors. I would ask your trading partners to get their opinions.
Patrick,
It has been awhile since we talked.
Yes, I am still out there doing Sub 2 deals and mentoring my students. So just drop me an email and we can go from there.
John $Cash$ Locke
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