All Forum Posts by: Billy Smith

My advice on situations like this if you are a small fish stay in your own back yard plenty of good deals .That way you can keep track of all the stuff that needs your attention fill in the blank ___.

BIG fish well the whole USA can be played they have the team in place to do a long distance rent ,rehab etc...

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I would not pay points I pay off early is the grand plan then power save buy another one ASAP .

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This comes down to do have the talent for being a PM or desire to learn to be a P.M if so move forward. When your portfolio gets BIG then you are pretty much forced to hand it over to a PM .

Owning out of state I would hire one no matter what with a few exceptions

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Location is number 1 in my strategy ,.

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Cleveland, Ohio

I had a rental where the kids hanged on the fridge door I went out cobbled it back together .

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Quote from @Scott E.:

It's good to have a sense of urgency but you shouldn't be rushing to deploy $50,000 into real estate, especially in this market. Lock that money up into a bad deal and it'll be months or years before you get it back (or even worse, you never get it back).

I recommend you pay down the HELOC to $0 so you're not dealing with a monthly payment. Then draw on it when you find a deal to buy.

My bank requires the money to cook for at least 6 months in a bank to use as a down payment .

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Tampa, Florida

I would sell if in C to D class areas ,if in A to B areas look at renting after doing your home work .

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New Haven, Connecticut

My market in western K.C in A-B areas are still robust renting with in 1 month during the winter sooner in the spring /summer .This is all about several things price /location .You need to pick this person brain about price is the location hot ?Zillow with good pictures gets it done quick ,market place is used too I don't need to use it .

If P.Ms are like the rest of the economy they need lots of help you may have a fresh green horn ? Since we are on the topic what do PM charge in your area ?

The ones saying do it your self is option you should think about it ,Rule 1- you live and die be your lease get a strong one written by a Lawyer in the sector don't try to save money here .Rule 2- get a good 3 party back ground company that covers all the bases .Rule 3- keep the communication channel open with the tenants that means no surprise because you were on top of the ball .Rule 4 -the rent is do on a date ,for the small fishes you may be able to pick up the rent that keeps them on their toes .

If the rent is going to be late we talk about when is up to be paid I need exact times not general ideas .

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Charlotte, North Carolina

Yep agree a Red flag living on the edge any major issue it could cause major problems paying rent .

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Newark, New Jersey

Quote from @Randall Alan:

Quote from @Ryan McKay:

Thanks for the answer @Randy great detail!

I am currently set up as an LLC (Ezer Enterprises, LLC) specifically for many of the reasons you mentioned, but you definitely caught a few that I had yet to really think of!

We are currently running our business through a business banking account that then flows into REIHub where we do the day to day, but that only goes so far of course. Intuit of course offers some basic level of coverage of REI with TurboTax, but that is - I am sure- more of a band-aid than anything else. They problem (or perhaps "challenge" would be a better word) is that I know we could benefit from a CPA that is well versed with REI, but can they provide enough benefit with our ONE property to cover the costs during a time where we still aren't cashflowing. Maybe the answer is "yes", but I just don't have enough insight on what a CPA would even cost to answer that question (and I don't want to engage one until I have a little more understanding of what using a CPA "the right way" would even look like.

Chicken or the egg? ;-)

I'll be the first to tell you that I HATE paying my CPA. The $350/hour thing just 'blows'. But, with that said, I know it's done right, I don't get audited, and I don't have to figure out how to do it or spend my time doing it. Once you engage in a business, there are things you can do yourself, and there are things you can't do. I haven't tried turbotax myself...but as another post said, it could probably handle it in the short term. I think the problem is that there are things you probably don't know about (or myself) to take advantage of, that the CPA will. As a minor example - mine asked me for my list of security deposits today, because those are liabilities to my business, and don't count as income when they come in (I do long term rentals). Would I have thought about that normally? Probably not. But for me that is $40,000 a year that gets segregated away from income. So there is such a thing as being too conservative with your business operations in my opinion. Taxes are not something you want to screw up. Sure, the first year you file them they will go through... and then 2 years and 11 months later (The IRS gets a 3 year look-back period) you'll get a random IRS letter in the mail saying that they think you owe money for something, and now you have done it wrong 3 years in a row. For me, where I'm at, it's peace of mind knowing that it is done right. I think the saying "Proceed at your own risk" is pretty applicable. We have another phrase in our business though... it usually refers to repair expenses... but it is applicable a lot of places... and that is: "There's a budget for that." For repairs, we set aside money each month from each rental property for repairs. Likewise, there are just expenses that you should anticipate incurring. The bigger you get, accounting should be one of those. Not necessarily monthly - but definitely the year ends (in my opinion).

Randy

@Ryan McKay

Yes this is good info I was doing work I thought was deductible it was not it was a BIG rehab on rental .Stay with the pros C.P.A cost but in the long run it's cheaper .

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All Forum Posts by: Billy Smith

Billy Smith has started 12 posts and replied 692 times.

Post: MultFamily Rental investment gone wrong. Any advice?

Post: Blown Away - 7.5 % with 2.25 points

Post: Hire a property manager or not?

Post: Agree Or disagree and why.

Post: Broken stove door who is responsible for fixing??

Post: Need guidance and advice.

Post: Should I sell property or keep as a rental?

Post: Advice needed regarding property manager

Post: prospective tenant doesn't have full security available

Post: At what point is it affordable? (bringing in the pro's when you have one property)