All Forum Posts by: Bernie Huckestein

I have a good friend who kills it by Airbnb on a house that is apparently haunted...is has been on one of those Ghost Buster shows... (I've been there and it is haunted).  I would imagine the Brady Buch property might have similar allure 

Great job nice to here and appreciate the detail

I think you meant 3% rule in that you have $30 grand into it and it rents for $900?

On paper that would be awesome cash flow but the area remains a question...can you get a good occupant that hopefully stays and takes care of the property.  Hard to tell without a better understanding of the area --  sounds more like a D maybe C-?

Is this your first investment?  This would not be for me personally but there are a lot of investors that do quite well with this type of property --  I would say you need to decide if this is the type of asset you want to focus on because you will need to be all-in  --  it is a job and not passive.  That said, if you determine this is where you want to be if you build the management systems around that type of property my guess is there will be no shortage of opportunity where current owners "tried their best" --  definitely not for the faint of heart.

My 2 cents.

b

Questions about partnering with your own SDIRA...let's say 50% inside SDIRA and 50% outside SDIRA.  Let's also say together we purchase a multifamily @ $1,000,000   I understand the prohibited parties issue.

1) If we (myself and the SDIRA) were going to put 20% down...does that have to be in equal amounts meaning 10% from me and 10% from SDIRA and everything is split 50 / 50 or can you still have normal deal partnership flexibility...so something like the SDIRA puts in the entire 20%, owns 50% of the property but gets a "preferred return", etc.

2) Perhaps the bigger question is financing, I know there is SDIRA financing that is non recourse but that is typically for 50% LTC. Is there a way -- as in this case, where I can get a mortgage for the 80% in my own name and the non recourse part for the SDIRA is that I am personally on the hook for the funds and not the IRA hence non-recourse

Thanks, b

Brian, I don't think investors WANT to see 50 or 100 houses before they make an offer but I would make a couple of points:

1) As I tell my life partner "you have to kiss a lot of toads" before you find the right one but this is related to how you find the home...meaning if it is on the MLS - typically harder to find a deal although not impossible, if you drive for dollars you might have to look a lot of owners up but if you get to the point to see one odds start to flow in your favor

2) If what you refer to is being a newbie and trying to understand what a good deal is or is not and if you have the time, touring that many properties to get an idea of value is fine.

I have a w2 job and family so never had the time to specifically look at 100 properties with no intention to buy --  this is in no way a requirement.  

If you concentrate in one area I believe it can be done much much quicker...I would rather look at 10 in great detail than do 100 walkthroughs.  Pick different potentials in the same investment market...run the numbers before and have a list of what you need to know or look at, then run the numbers after...depending on the property and intent use one of the calculators on this site for every one...work it as and then use the tool to calculate what it would need to be  --  if they are the same then it might be the right deal.

Once you have this then you can move to other surrounding markets easier...just make sure you adjust your assumptions to align with that market.

One final note and this depends on your area, here in FL you have to account for what your property taxes "will be" not what they are.  Many times if a piece of real estate is owned for a number of years the tax value will take a big jump in the next tax year...this is often overlooked

b

Those numbers would be tight and all you need is a few weeks with no tenant and any hope for profit is gone.  

You are probably better off selling and moving into a small multi house hack...I'd put all the money from current residence down on the small multi so that the mortgage payment was as low as possible, then once you are situated and fully occupied you can go after a HELOC on the small multi property.

(the trick is going to be timing all this)

This way your living expenses will be as low as possible (maybe zero with the right hack) then when you find the next property you can activate the HELOC based on the new property investment numbers

b

I'd make a couple of comments:

I use Quicken for all my bills, personal and real estate...I have not written a paper check in years.  Business wise quickbooks or any number of others are probably better for the situation you describe quicken would work fine.  I do for sure have sperate personal and business accounts...this is a must; however, I do pay multiple property bills from a single business account...tracking it is just a matter of creating property categories eg 123mainst:Electric, 123Mainst:Taxes, 456AppleSt:Electric..).  

You didn't specifically ask the question but you may want to limit the number of properties in one single LLC for asset protection purposes...others here are more qualified to chime in on that, mine are not 1 for 1 but it is also not 1 for everything

b

As you likely know there are some questionable areas in Jax so look them over for condition and location.  It would be good to know the seller motivation, if it is an older investor that property manages as well he/she may just want to step away from the day to day and could be okay with owner finance (OF).  OF could still provide steady income while also not requiring all the capital gains tax up front.  I'd try straight owner finance first (make sure you show the broker how they will get paid if you want him to support IF to the seller)..second Id try as Master Lease Option which is just another form of OF and lastly if the deal is good enough you can get an equity partner

keep us posted  -  b

Trying to assist my daughter.  She is awaiting her official orders but likely will be stationed in Portsmouth/Norfolk for her residency as a Navy Dr.

I gave her Rich-Dad / Poor Dad about a year ago and she has been waiting for this residency year to "make her money work for her" with a duplex, triplex, quad.  She can't pull the trigger until orders come through but she has been snooping around.

Looking for some feet on the street to help locate a solid opportunity --  let me know if you could potentially help with this...also please provide a short description of your experience in the market especially as it relates to small multi to and with investors (this will be a house hack for her; however, the numbers still need to work as a pure investment as the nature of the work is she will be transferred out and have to pay for management etc.)

thanks, b

I still own the property yes, the gross rent was $1800 per month and now is 1850.  I was attempting to sell before because I moved to FL and had another opportunity to us the equity.  I have since found another way but still would sell under the right conditions but not overly motivated to do so