All Forum Posts by: Michael S.

Hey Mitchell! Welcome and congrats on getting an early start! Don't be afraid to keep tabs on other nearby markets too, if your investor friend is willing to invest outside of Murray. What goals do you have for your investment business?

Thanks Josh! Yea, I intend for the "engine" to run on it's own for a while, just need to have that starter motor to get things moving. 

What's everyone's favorite credit card as a landlord? Seems like there are lots of options, just want opinions on which offer great rewards and other benefits.

Hello! I'm a new investor with a shiny new LLC. We're getting ready to close on a 4-plex, and I'm curious about a couple of things.

When forming the LLC, we decided (with our attorney) to capitalize the business with $1000. Once we get our business bank accounts set up, we'll just write a personal check over to the business and our business account will have a balance of $1000.

Question 1: When closing on this property, the deed will be in the name of the LLC, but the loan will be guaranteed by us personally. Should we put the full amount of closing costs into the LLC account and pay from there? Or does that matter? I already paid for the inspection out-of-pocket from my personal account because the LLC was not quite finalized yet...

Question 2: The property we're buying is a good deal, but we may need to put a new roof on it before we've saved enough in Cap Ex from rental income. Can we just "invest" more of our personal money into the LLC account to cover it?

Thanks!

I know this topic has been thoroughly discussed on BP, but I wanted to clarify a few things with the more experienced.

Here are the facts:

We're getting ready to close on a 4-plex, currently all units are occupied. 

The previous owner has only owned the property for 6 months, and has very little documentation on the tenants. Of that small amount of info, here's what I've determined:

Unit A was originally on a year term lease but has been month-to-month for about 5 months. His rent rate (and corresponding security deposit) are ~ $100 below market.

Unit B's lease will be up in December (was a year term). This unit is currently ~ $25 below market.

Unit C apparently doesn't have a written lease OR security deposit....

Unit D is ~ $50 below market, used to be on a year term lease but has been month-to-month for 20 months.

The current landlord claims all tenants pay on time. Unit B was pretty filthy when I toured it, the other units seemed in decent shape. 

My real estate agent (also an investor) suggested that I go in after close and meet each tenant and give them the opportunity right then and there to sign a new lease to bring them all up to ~$625 (that's a $75 increase for A, zero increase for B, unknown for C (I'll have to clarify), and $25 for D). If they don't sign a new lease that day (they aren't obligated to), then rent will increase by a further $25 at the end of their month-to-month (or December, in the case of Unit B).

I don't think that's a bad idea, but here are my questions:

1. If I'm upping rent, do I also need to collect the difference of the security deposit? E.g., should unit A also pay a new $75 deposit to bring their total deposit up to the total amount of rent?

2. Given that there is no screening data, I'm thinking I'll use others advice and reword my tenant application as a "Resident Update" form and waive the application fee to get some details on my tenants. Good idea? Waste of money if they're already paying? If they sign a new lease before I get those details, it will be a waste anyway...

3. As far as the current state of the property, I doubt I'll get any info about the original move-in condition of the property. Does that mean the current state of the property when I take possession is the state against which I'll compare the move-out condition? Can I still expect them to do a full cleaning and make any repairs?

Thanks for the advice!!

Welcome @Andre Brown! What educational materials are you pursuing? A few of my current favorites:

Rich Dad, Poor Dad - Great cheerleading book to get you in the right mindset. A little thin on practical material, but great for getting your head in the right place.

The Book on Rental Property Investing by BP's @Brandon Turner - This was the PERFECT starting point for me. Spells out exactly what to keep in mind when evaluating properties and even goes beyond into the basics of tenant management.

The Richest Man in Babylon - A really cool book, kind of "parable" based. Again, more a mindset book than anything else, but still great. 

Bigger Pockets Forums - Honestly this is the best place ask questions. I had a lot when I was wondering about LLC's, realtors, etc, and the forum posts helped gain perspective on what would work best for me.

Best of luck! Just remember, education is extremely important, but sooner or later you need to hit the ground running, so set a goal, always be learning something new, and you'll have no issues succeeding. 

Thanks @James Wilcox! How's the market in Lexington? Wife and I lived there for 8 years for college and loved it. 

I am a little nervous about the landlording stuff - I picked up Leigh Robinson's "Landlording" and Brandon Turners (of Bigger Pockets fame) "The Book on Managing Rental Properties". Do you have any other books or sources of advice for tenant management? 

Unfortunately I don't think Bowling Green has a local REIA (or at least their website is defunct) - thought that might be something I could get started a little further down the road.

Hello fellow BP Investors! 

My name is Michael - my family and I have been in Bowling Green for ~4.5 years. I'm a software engineer by day and have always been intrigued by the earning potential of real estate. After motivating discussions with my wife and friends about investing, I came across Bigger Pockets and everything took off from there. I've been devouring as many books, podcasts, and articles as possible, but quickly realized I needed to do more than just learn. I started reaching out in my community and lucked out with meeting a great real estate agent that specializes in investment properties. 

I'm currently waiting on my LLC paperwork and am in the process of closing on my very first property, a 4-plex here in town that I plan to manage myself.

I don't have a hard "wealth" number I want to hit, but instead would like to build my business in such a manner that within 10 years I can generate enough income to allow my wife and I more flexibility in our day-jobs to enjoy life with our friends and family. These days, if I'm not reading about real estate, I use my free time to pick up new hobbies (SCUBA, woodworking, hobby electronics, HAM radio), tinker in the garage, work out, and of course play with my son. 

I'm excited to be engaged with such an active and successful community!

Did you ever get any traction on the WP plugin? I'm in the same boat now and would rather not write something myself if an existing plugin is available!

Hey Chris, welcome! My sister-in-law lives in Cecilia, you've got access to a great market! I'm a newbie too from Bowling Green, working towards closing on my first property. I'm not much older (just turned 30) and am excited about the adventure. Good on you for getting started! 

Best of luck!