All Forum Posts by: Ben D.

Thanks Tom. If I can't find someone closer within the next month or so I'll probably be asking for your guy's info.

Can anyone recommend a good CPA and/or financial planner in the Fort Worth area? I've reached the point where I need some professional input on tax planning and general strategy but I really only want to work with someone who comes with solid recommendations and who has extensive experience working with landlords. Thanks in advance.

I'm in a large metro area so not a good comparsion probably, but to answer your question, the longest vacancy I've ever had is one month. It's averaged about 2-3 weeks for me and often times it's only that long because I'm taking my time getting the property ready or turning down non-ideal applicants.

Nice post. Yes, it goes against 99% of the advice and conventional wisdom you'll hear on real estate discussion forums and in local real estate investment groups, but I've followed the no-debt and/or pay down debt as fast as possible approach and I would highly recommend it. It's definitely a challenge to get that first property paid off but then the second one is easier, the third even easier, etc. I won't dispute the fact that using leverage is one of the most attractive features of real estate investing and unless you are born with a trust fund it's how almost all of us will start out in this business, but having done it both ways I can say that it is a different world once those mortgages go away. That said, the one property I do still have a mortgage on is by FAR my highest cash-on-cash returning property but that's due to a confluence of factors that I can't necessarily replicate. (Primarily due to refinancing several years ago when we lived in that property and mortgage rates had hit rock bottom.)

Something to keep in mind is that once you have a free and clear property you can take out a HELOC against it and you are now a "cash" buyer for the next property, with all of the advantages that entails.

Hello BPers,

Earlier this year (May) I obtained a HELOC against a rental property that I owned free and clear. I then combined funds from that HELOC with some of my own cash to purchase another rental outright. Has anyone here done something similar and if so, how was the HELOC handled from a tax standpoint? I use TurboTax to complete my tax return each year and for each of your rental properties TurboTax usually asks "Did you refinance this property?". My assumption is that I will just say "yes" there and plug in the interest expense. Could it really be that simple or am I missing something?

Thanks in advance for your responses.

Hello BP forum -

I'd love to hear how other landlords approach asset protection as it relates to your rental properties. Is it recommended to place ownership of all rental property into a Series LLC? Or is an umbrella liability policy sufficient?

I currently have three rental properties that will all be free and clear in the very near future. I intend to acquire another 9-10 properties over the next five years and all will be owned free and clear. Currently all properties are under my name. From doing some reading on this forum and elsewhere, the consensus seems to be that this is a risky proposition. I've had an LLC in the past for a business that we owned for a short time and I wasn't crazy about the paperwork hassle involved in an LLC. Maybe it's just a necessary evil though. We currently use all proceeds from rentals to pay off the little remaining debt on one of the properties. From there all proceeds will go toward acquiring the next property. I wonder what complexities will be involved in doing this if I form an LLC.

Any and all thoughts and advice would be greatly appreciated. Thanks in advance!

Hi Joe -

Yes! I did get my HELOC through Wells. The process was quick (under 2 weeks) and they were great to work with. I got the full amount I was wanting and I am currently under contract on my next rental property. Zero closing costs or fees. There is a $75 annual fee but it is waived the first year. However, if I close the account in less than five years there is a $500 penalty. Interest rate is okay..5.3%...but I'm not concerned as I will pay balance back quickly. They gave me 65% of the appraised value that I gave them (weird). And yes, they did an appraisal. I think they always appraise very high on these things because they want you to borrow alot of money.

Thanks Geof...What has me looking at this particular 2/1 is the selling price combined with the fact that it's move-in ready. It will rent for $200-$300 less than the 3/2s but it's also about $15-$20K less in asking price. It seems like it would be really easy to maintain and the taxes and insurance are lower. I could see it out performing the 3/2s I've been looking at but I'm taking to heart the comments here about higher turnover, etc.

Thank you everyone for the replies. This was very helpful. The higher turnover rate makes alot of sense but I hadn't thought of that. Many good points made here and things to consider. College campuses were mentioned a couple of times and unfortunately this property is nowhere near one of those. I think I'll keep this particular property towards the bottom of my list for now and see how my other prospects play out. Thanks again.

The general consensus seems to be that the ideal specs for single family rental properties is: 3 bedrooms, 2 bathrooms, 900-1600 sq ft.

What are everyone's thoughts on 2 bedroom 1 bath SFRs? Is there really that compelling of a case to be made against buying these as long term rentals?

I'm looking at several possibilities right now and one option is a just over 1000 sq ft two bedroom one bath property. The price is right and it's basically move in ready. And as small as it is the insurance and taxes should be really low in addition to being relatively easy to maintain. The neighborhood is decent and I feel like it would make a good rental. This property is really my plan "c" right now (assuming plans a and b don't work out).

What do you think? Should I hold out for a 3/2?