All Forum Posts by: Benjamin Aaker

Your first great move was posting on BP! Another option would be to drive around and look for for rent signs and write down the name of the property managers. Contact them and ask the question. They are likely to either be agents who invest and manage or can refer you to a good one.

U.S.-centric answer here: With that kind of cash for a down payment, you should be able to get a nice property in most locations. Since you are looking to get started, house hacking is my recommendation. Find a 4-plex and buy it in your name. Live in one unit and rent the other three. You should be able to get a low down payment this way.

Sounds great for those looking to buy some rentals. How about those of us looking for multifamily properties? Pay per list, or only by the year? How do you go about getting your data?

I'm not an attorney, but if I had accepted a security deposit, wherever that came from, it would be in the name of the tenant. The tenant would be the one to receive the deposit back at the end of the lease (or not, if there were damages). I think you did the right thing by making it out to the estate and I would not recommend making it out to anyone else without a probate order.

Hi Kyle, thanks for the questions. 
1. I do syndications for multi-family deals. I do what I call medium mulifamily, 5 units up to 75. Bigger than that is what I call large multifamily. I make the distinction because the bigger guys don't want the medium ones as they are more difficult to manage from afar because they don't support a dedicated on-site manager and handyman.

2. How I got started: I built my wife her dream home and we bought a REO (foreclosure) and did all the repairs ourselves, then lived in it as our home was being built. Planned on selling it but our real estate agent told us about some people who needed a rental and gave a great review on them. We moved them in and have been landlording since.

3. What would I do different: I would have moved into multifamily sooner. I did a flip once and lost some money but more importantly, it took a year of my time. Much better economy of scale is found in multifamily.

4. Resolve. Make a decision and don't second guess yourself.

5. I'm still working a day job. I'm at 64 units now but I hired third party management. The syndications take a lot of time to administer though. I'm slowly transitioning out of my day job but I still love it so not ready to quit.

Good luck in your investing!

Hi @Andrew Casco and welcome to BP! Can you start by giving a brief overview of what you do currently with property data lists?

Not an attorney here but: Putting a house in your name can be cheaper as the loan terms are better if you can get an FHA loan. Having the house in your name exposes your personal finances to liability should a slip-and-fall happen at the property. Consider a big umbrella policy with your insurer if you plan to do this. Additionally, the house that you will be moving out of will become a rental, which is a business. FHA doesn't like this. They audit banks sometimes and your bank may recall your loan, forcing you to pay back the entirety of the principal, or refinancing with a commercial loan. This could be very stressful.I recommend talking to your banker about it first.

Nice work finding ways to make money from the home you are living in. You first have to determine if you must have that cash flow to support yourself. If that money is currently going into the bank or investments, then you have some flexibility. Where do you go from here to add properties? Go to your bank and ask for a commercial banker. See what kind of deal they can give you on a purchase. Commercial loan typically require 20-25% down, so decide if you have that available. If so, then purchase your next property with a commercial loan.

If you don't have the cash but can spare the current cash flow, then a line of credit is a good idea. I like LOC because it costs little to get it set up and it waits for you to find a deal. With your current loans, you might even be able to get a HELOC (home equity line of credit), which has a lower interest rate than a business line of credit.

A refinance is also possible, but you better have a deal ready or you will be paying interest on money that just sits in the bank making very little.

Hi @Juhi Banerjee. The new single family home construction will likely cause some appreciation in the value of the duplex, but the housing type is different, so it might not be a whole lot. With 4 plexes and below, the sale value is based on the market approach, so potential buyers will look for sale prices of other duplexes in the area. 

Builders of single family homes in a development are usually building to sell them to homeowners, not rent to tenants. I don't expect there will be much rent competition due to the construction. The new homes might even make your duplex more desirable.

As a rental, I'm not always big on fancy fixtures. Tenants don't value these items quite as much but your competition won't be from the houses, but from other rentals in the area. If they have the upgrades, than you should consider putting them in.

As far as the 1 acre land, you should talk to your municipality first regarding whether you can split the parcel and sell it. Talk to the builder as well and see if they are interested in buying a piece of your land. 

When starting out, set up a new account for capital expenditure. Repairs are part of your typical expenses and vacancy comes out of the income, so those don't need a separate account. As you get more sophisticated, your bookkeeping can keep track of a cap ex account in software rather than a bank account. When starting, it's easy to spend the cap ex dollars on non-cap ex things if the money is not separate.