All Forum Posts by: Ali Boone

Whooo Atlanta! Grew up there, invest there, just moved from there 3 years ago. Still go back tons though!

I had a landlord one time that I just found out recently, years later, that she was in fact the owner. The whole time I thought she was just the manager. Ha. Totally tricked me. She talked some about her reasons for the trickery and they all made very good sense to me. The main being that she said her tenants didn't hold her to having so much (if any) power in terms of things they wanted. Like if a tenant tried to convince her different carpet should be in there, she said they were much quicker to get off it if she said she'd 'have to check into it' instead of them knowing good and well it was up to her, so they wouldn't let up.

There are pros and cons for sure. I think I'd veer the way of not claiming to be the owner. Even good tenants may try to push harder knowing you have all the power. Also, from a liability standpoint, it's always better the less someone knows about who owns what.

Whichever way you go, I would recommend not using your name in the company name because even if you start out telling your tenants you are the owner, you may change your mind later but you'd be kind of stuck if your name is in the company name. Plus, again, the less anyone knows about the ownership of a company, the better.

I can't speak for the specific insurance companies, you'll need to call around (although I recommend not skimping out on insurance by going with whoever is cheapest), but if you are going to do an umbrella policy in lieu of an LLC, make sure you get the one with at least $1M in liability coverage. I think that is the standard amount, and that's what I have on mine. And the umbrella policy is really cheap too, so totally worth it.

I go through USAA but you have to have some kind of military affiliation to use them.

Hi Mason, I agree that it depends on what kind of investing you are wanting to do, but the biggest factor I consider is population. If the population of a market has steadily been increasing over the last 10-20 years and continuing to increase, that's a great sign. Somewhere like Detroit where it's decreasing, bad sign. Industry is a big thing too. How many industries are in the market? If it's only one, how likely could that industry tank, meaning leaving the market/state for bare? ie the auto industry in Michigan.

My best advice is to network and find out where everyone else is investing, then use those markets as a starting point to look at. While not everyone will be right in the markets they choose, if all the big boy investors are in one market, there is probably a reason and you may want to consider looking at that one. There are professionals whose jobs are to analyze markets, so don't hesitate to piggyback off their research.

I didn't put a lot of thought into the numbers to say this for sure, but it doesn't seem like a bad gig to me on the surface. (oh, and thanks for mentioning me in the article :) ). I said 8% as a reference, but anytime I find something with near zero vacancy, I suddenly become way more flexible on that number. I'd leave your conservative vacancy and repair amounts in there, but also calculate with less conservative so you can see the differences. If you are still positive cash-flowing with the conservatives in there, you're doing pretty well and it may be worth it.

With all that said, the only hold up for me personally would be the $650k price tag....not because it may be higher than it should, but because you're looking at investing over half a million dollars into ONE property, and all for 2.5% return. Eek. Do you know how many single-families you could buy with $650k and make anywhere from a 10-30% cash-on-cash? There are other investments for cheaper than that price tag as well that could bank a lot more.

I think I'd need the seller to give me a price tag that would give me a 10% cash-on-cash, minimum, to go for this one.

I almost always preach against banking on appreciation, but if there really is major potential with this one, assuming some rehab, that may be another avenue too. But remember, your pool of buyers you'd be able to sell it to will be minimal also.

Hey Jackie, I'm with you on offshore investing! I'm huge in Nicaragua right now. Well, I'm not personally huge there, I just do a lot down there. I bought down there myself a couple years ago and now work with another development (who is 10,000x better than the one I bought in) helping to promote Nicaragua as a country and of course the development. I LOVE going down there! I usually go 2-4 times a year right now and it may pick up. Haven't been to Panama yet but heard a lot about it. I'm hoping at some point to chicken bus it around to every country in Central America, and eventually make it all the way through South America.

There are tons of deals in the states, people are right, and I'm buying there too, but it's so much more fun and adventurous to make it out of country! Worth every minute of it.

I'm not Canadian but I work with a ton of Canadian buyers. You absolutely want to make sure the tax and entity structuring is correct before any buys are made. Like, Canadians should not form an LLC as most would think because the tax penalties are really strong. I believe it's an LLP (?) they need to form instead? The bank accounts should go through certain banks as a lot will make promises and not keep them.

If you qualify for a mortgage, you might think about just using them as cash partners and keeping their names off the buys and just use yours.

Hey Mary, if it helps at all, I'm from Atlanta, all my properties are in Atlanta, and I was in Atlanta (from LA) for 5 months over the holidays working with investors. Both the good and the bad news is, your property is no different than any other one in Atlanta right now. Appraisals are coming in low left and right, which is partially why the city has become such a feeding ground for investors (primary home buyers typically don't have the extra cash to make up for a low appraisal so they can't buy, but investors often pay all cash anyway so it's fine for them).

The thing to understand, and this is specific to Atlanta when I say it but may likely pertain to other markets, is that the appraisals are coming in low, not because the properties aren't worth the purchase values, but because the appraisal system is currently broken. Most appraisers are scared to start not including foreclosures and short sales in their comps, so they keep them in there. So if you are trying to buy a freshly rehabbed amazing house, and there is a beat up foreclosure down the street, that foreclosure comp is unfortunately going to get used.

People have been fighting this problem for a couple years now, and I wish I could tell you there's a better chance, but if the house is worth it and you can do it financially, I'd say go ahead and buy it. I very comfortable bought a few houses for more than their current appraised value because of the known issue. You can try to hang it over the seller's head, but with how Atlanta has been lately, I doubt anyone is going to feel for you. Every investor there wishes they could get a better appraisal.

I'm from Atlanta, own properties there, and was there for about 5 months over the holidays working with investors. I guarantee you, there is a huge difference between a $25k house and a $100k house, and I'll go for the $100k house over the $25k house any day. Even if you aren't in a horrible area with the cheaper house, it is most likely that the house needs extensive work, or is older, or something. Even more of a guarantee is if it's listed on Trulia for sale, something is major wrong with it. Especially in Atlanta right now, the inventory is getting so thin and there are so many big boy buyers there right now scouting for all of it, if there is one left over that has made it as far as Trulia, it means the big boy professionals passed it up, so it's fairly safe to assume you should too. And they are ones who can rehab quickly and extensively, so that means something is reeeeally wrong with the house. Further, you have to consider the tenants of a $25k house. That is where your investment can fail. I'd be very leery about a $25k house getting $900 in rent, I'd double-check that with an agent or manager.

And yes, the benefit to rental properties is the passivity, the extreme tax benefits, and potential equity rolling.

What market/city do you live in? That makes a big difference as far as your (good) investing options.

My other question would be, if you only plan to be there 3-4 years, why buy for yourself at all and not just invest that money? Most often, it takes a minimum of 5 years to even make a home purchase worth it (and even then it's debatable) because of the closing costs and interest.

I'd say forget about buying for yourself. Go live somewhere fun and that you will like, rent there, and use the buying money for more investments.