All Forum Posts by: Alecia Loveless

@Scott Cash Hopefully you have an exit clause in your LLC documents that lays out what will happen if one or more members wants to exit the deal.

If it were me I would only leverage enough to buy out the member leaving you with a 50/50 partnership. If there’s no exit clause I’d take this opportunity to add one.

Then I’d use the cash flow to leverage future deals. I know this is a slower process than you might like but $3.3M in debt is a lot for most people. I think if you leverage 70% of it you’re going to seriously cut into your cash flow and personally if I was going to have $7M in debt I’d prefer it to be spread over several projects built slowly.

@Steve L There’s certain expenses that are just part of the process. Inspections are one of them. I’ve had deals under contract where I’ve done building inspections, septic inspections, and had a lawyer look at the easements and then terminated the deal.

If you don’t have a certain amount of funds set aside for these situations as well as your portion of closing costs and some extra reserves for once you close then you’re likely not financially ready to be buying things.

@Sami Gren I would not recommend accepting rent through a random App that you did not set up yourself.

That being said I do accept rent from all the major electronic services. My philosophy is the first time a tenant claws back a payment I will evict them. So far it hasn’t been a problem.

It’s also a red flag to me that they only want to pay $800 of the $1200. You definitely need to ask where the other $400 comes from.

And I have tenants that make multiple small payments every month because after they’ve moved in they’ve had their finances screwed up from what they were when I screened them. And I can tell you that as the months go by and you’re receiving multiple payments it starts to get confusing as to what payment goes with which month and if they’re even ever paying the full amount. Maybe this won’t be a problem if you’ve got just 1 unit but I’ve now got 4 tenants paying $200-$400 multiple times per month and it gets confusing.

@Charlie Krzysiak Hi Charlie, I don't like condos or anything in an HOA because of the potential for fees and assessments AND you have to have approval before you can do anything.

I'd recommend finding an affordable rental somewhere and saving more money for a downpayment on a SFH that you can house hack.

Call me fiercely independent but I don’t want other people arbitrarily telling me what I can and can’t do with my hard earned property.

One of the most important lessons in real estate is that you never fall in love with the deal. It clouds your better judgment and leads to bad decisions.

What you need to do is sit down and make a list of your 3 month, 6 month, 1 year, 3 year, 5 year, 10 year goals. And then work backwards to achieve them.

If you're just graduating and don't really even have a job lined up then I think it would be foolish to rush into the purchase of a property right now. Currently you have a STR lease and can effectively move anywhere the job market takes you.

I’m not sure where you’re from or how long you’ve lived in Texas but I highly recommend moving out of state and out of your comfort zone while you’re young enough to easily be able to do so. It will help round you into a more complete individual as you continue to develop and mature.

Moving to NYC from Dallas when I was 20 was the best decision I ever made.

Until you’re more established I would recommend waiting and saving to make a purchase.

@Matthew Mclean I use an accountant my spouse uses TurboTax.

If you just have one rental you can probably get by with generic tax filing software. It should give you prompts to put in mortgage interest, repairs, big CapEx, and other things.

You will likely miss some deductions using the commercial tax software but it’s the cheaper option and starting out a couple hundred dollars in deductions missed likely isn’t that big of a deal.

If you decide to go the accountant/CPA route be sure to ask up front how much it will cost.

I’ve used H&R Block for 30

Years. I had the owner of my local branch doing mine. Block charges for every form you have to input. So 2 W-2s, two charges. 3 P&Ls from different properties, 3 charges. 4 inputs for interest bearing accounts, 4 charges.

This adds up very fast. My guy used to lower my charges because he was the owner and thought all my inputs were ridiculous. Now he has sold the company and is more of a flat rate charge based loosely on how long it takes him to prepare the return.

So just ask how you’ll be charged.

@Jenn Kabahit Hi Jenn, unfortunately I feel like this is a little bit Buyer Beware.

You should have been the one who hired the building inspector. Whenever possible I attend the inspection and follow the inspector as he conducts the inspection and ask him questions during the process.

I’ve never had a realtor go over one of my inspection reports with me. My inspector emails me the report and then I dive in and do the heavy reading. Then if I have additional concerns I call in an expert to get further information and an estimate on what the repair will cost. THEN I contact the agent and ask for concessions if I feel the needed repairs or costs go excessively above and beyond the price I’ve already negotiated.

To be honest in today’s market I’m not seeing nearly the amount of wiggle room in renegotiating a price based on repairs.

Honestly after I did my first deal I was in a similar position as you are. My contractor and I were expecting a $15,000 cosmetic repair and ended up with a $75,000 total renovation. We discovered that there were a ton of exposed and illegally spliced wires in the attic under the blown in insulation and had to remove it all to find all the wiring. This was about $30,000 5 years ago, so things were much cheaper then.

At the end of the project I started asking different questions to my realtor, who I still use. I asked which building inspector was the most thorough, wrote the most detailed reports, and which was the one he’d use if he was buying his own property. Immediately the recommendation changed and now my inspector leaves no stone unturned. His reports are regularly 150 pages long and I go over them with a fine tooth comb.

I now know what is actually a “red flag problem” and what can wait months, years, or indefinitely to repair. I also take my contractor to all first showings to try to find the problems before we go under contract. My contractor does these visits for free because he gets ALL my work, the construction, the plowing and the mowing. He’s multi faceted.

I’m sorry you’re going through this. If you think there was negligence or misconduct definitely complain. You can find out what association the inspector is affiliated with or complain to the state licensing department. You can complain to the Realtors managing broker.

Hope this helps.

@Allison Cutlip I’d choose whatever account has the most flexibility and the least amount of fees. If it earns interest that’s a bonus.

I personally have a separate account for each property I own.

Some people like having just one account for all their properties.

I find it easier to analyze my metrics with the individual accounts.

@Benjamin Larabee My accountant recommended I get a bookkeeper to organize my records as I am still building my portfolio.

Through a comedy of errors I have found a good one. I would be happy to recommend her. She uses QBO and is linked to my online banking and a couple of credit cards.

I’m spending around $350/month on the bookkeeper and FINALLY have useful information and data that is helping me analyze my portfolio and see what is working and what isn’t.

For reference I’ve got 8 properties and 31 units. Depending on how big your portfolio is it might be more or less expensive for you.

@Jared Goldwasser Not necessarily a question for the agents but my thoughts on something you should be looking at when you evaluate properties.

I always like to look at several years worth of property taxes. Not just the current year amount on the listing.

In several markets I follow there has been a HUGE increase in taxes year over year for the past several years.

While the taxes on the listing may seem reasonable if it turns out they’re 300% more than they were two years ago just because the community has increased its spending this is a trend that will quickly make your cash flow evaporate.

@Alex Schumer I’ve always done my own bookkeeping but after preparing my taxes for year 2022 my accountant urged me to get a bookkeeper.

Through a comedy of errors I had to file an extension on my 2023 taxes and was finally able to hire a great bookkeeper in June of 2024. She prepared my books from 2023 and I got those filed. Since then we have focused on my 2024 books and I’m all ready to file my taxes now which is months ahead of my previous timeline.

My only question is what took me so long to hire the bookkeeper? I’m averaging about $350/month with the bookkeeper and we’re working with 8 properties and 31 units and 8 sets of accounts as I have one per property.

Obviously if your portfolio is smaller you should spend less.

The accurate P&Ls made it so much easier for my accountant to prepare the 2023 taxes. He was grateful I’d hired the bookkeeper.

If you’ve got property and aren’t well-versed in an accounting software I’d recommend starting with a good accountant and quickly adding a good bookkeeper. I see various large bookkeeper options at about $100/month if you want to go that route. It’s not necessary to stay local for these services as long as you have online bank statements or a solid way to get them to the bookkeeper.

For the first time I’m able to look at accurate P&Ls each month and KNOW what my portfolio financials look like.