All Forum Posts by: Cliff Benner

Hi Jonathan!

I have all my clients on QBO to track with different Classes for each property and use the Statements to confirm balances, which is usually copying prior month transactions and adjusting them if needed, then having the bank accounts sync in other transactions too. 

Move this to the mountains in CO and I'd buy it. Live on it year round and flip each of them over time, that is my dream.

@Patricia Walthorn Welcome to BP and congrats on starting the search! From what I have seen, some recommend using Schlage locks for each room and then there is a software that connects to it to create a new code just for the guest each time and allows you to make a master code for a cleaner/maintenance tech. Then you would need to find a software that you can use to help with the cycle. Someone books, it sends a confirmation and schedules it>day of stay it checks them in and only gives them the code at a designated time(after cleaning has been confirmed done) and alerts your cleaner of check out date to scheudle them to come in that day>it sends them a notice the night before check out telling them when to leave>the same day it alerts your cleaner to come and clean this room>your clean confirms a checklist, adds photos, adds any maintenance alerts>then repeats.

This will require upfront costs with the software, software set up, key set up, and other items but is do able. 

Also, if you need help reviewing prior year financials to get an idea of where they have been and details for purchase; I offer this service and even work with @Jaycee Greene on getting him the data he needs for his proformas!

Good luck! 

Quote from @Christiana Scheevel:

I am a rookie just getting into real estate investing. I have not done any deals yet and would love some answers/advice. I am looking to invest out of state because where I live is too expensive for me to start. Looking to invest in turnkey rental properties or simple cosmetic rehabs for rentals. What things to I need to do or look for before closing to ensure I am not buying an awful property or getting myself in trouble. I assume pictures/videos of the property and an inspection, but is there anything else? Also, what about homes being sold as-is with no inspection? Can I ask for an inspection anyways or should I just avoid those altogether? 

Thank you all so much!

 Hi Christiana! 

Congrats on starting your journey and deciding on a path to take, those are both huge first steps.

I can tell you from experience, with OOS investing, your team is everything. You don't want "yes men" you want someone who will push you a bit on things you say and be ok with you questioning them.

You will need to be confrontational and be willing to tell them you don't understand where they are coming up with their results and they need to prove it to you. You also need to do the homework on learning how to comp prices and rent to be able to verify their opinions. Be ready to fire them, I fired my 1st Realtor and PM and had to get new ones who are much better.

USE BP for references on Realtor or PMs, or find one directly on here who is active. That shows that they are more aware of how to work with investors and a bad review on BP doesn't look good at all, because clients and customers don't like people messing with their money and income where as someone buying a personal house might skip the reviews and just use a different person next time with no thought.

Don't fall in love with the idea of finally getting a place, be able to walk away when your gut tells you to.

ALWAYS GET AN INSPECTION! Even if your offer doesn't have that contingency, this will help you to see what you need to do before you rent it rather than after. 

Depending on if your market goes fast or not, take that trip there to see it in person AND to see how your realtor walks a property. I would have avoided my 1st property if I did and that $800 trip would have saved me $40k. But make it worth it and ask your realtor to take you to every property you can so you can see them and the area and if you want to put in offer in. Also you may be able to see why one street is worth $100k more than one 6 blocks away. 

Check out episode 610 of the BP Podcast to hear the exact advice i got after messing up.

But feel free to reach out and we can talk more details too!

This is my plan to grow starting next year, i think this relates to the Stacked Method too. 

Careful refinancing, some loans have prepayment penalties, but you could look for a second mortgage, or HELOC.

Another thought, it might be hard when rates change and you plan on them being 5% next year but turn out to be 8%.

Quote from @Alex Kreeger:

@Cliff Benner I actually have taken this method so far. We have 3 sfh looking to add another next few months. I believe we will get to a point where a "50k or so" will work and use the rest just as you mentioned. 

 I think it's an easy method that can make sense to a lot of people so they can focus on the other items to increase income so there is less of a need for reserves or the effect of repairs are felt less. 

I think it is a risk factor, but also includes logic. 

If you have a portfolio of houses, the odds that all water heaters go out at once or all are vacant at once is low.

Also, once you hit a certain balance, it almost makes more sense to buy another so that the monthly income can add up faster too.

I would like to have $10k in reserves for Repairs/Capex/Vacancy per house, but once I get to 10, having $100k in a savings account wouldn't make sense to me. Id be comfortable with $50k and using the other $50k as a down payment for another rental.

I think once you first start, aim to get that reserve account filled ASAP and then just leave everything in it and keep letting it grow monthly to be defensive, don't use it for your life style, so you can buy more and repeat the process. 

Quote from @David Livingston:

Quote from @Blake Anthony Carter:

Can confirm I have been to the property and it is a really cool opportunity!

 Thanks, Blake!

 Have you been able to find an operator?

You could list it on Crexi or Loopnet, I usually see something similar on those websites.

I see a lot of FB groups that are the similar too but that might lead to a lot of messages.

Quote from @Dylan Villano:

Hey Cliff. I would love to buy a car wash or laundry mat. I dont know how to evaluate a business like this or secure funding. I have looked at finding an operator that would be open to carrying the note.

A lot of businesses that sell for less than $3mil are based on SDE, Sellers Discretionary Earnings, which is similar to business profit, but you also remove any transactionst that would be related to the owner or one offs. Like a truck purchase, family phone plan, a lump sum contractor for a one time project are a few examples. Then you usually will multiple that between 3-4 depending on market and industry. 

Seller Financing is very common, as well as SBA loan purchases. The latter requiring at least 10% down while Seller Financing is the Wild West. I have gotten a business for 2% down, while I have had some owners asking for 50% down in order to do the other 50% in seller financing. 

Thanks for the response, it is helpful to see other's pain points.

Quote from @Luke Mertz:

If you had to do it all over again with all the knowledge you have now, what would your journey look like. I'm a 16 year old kid really interested and I want to know what others would do if they're starting over. Would you buy and hold? Live and flip for a few years? BRRRR with MFH while also house hacking them?
What would you do?

At 16, knowing what I know now, my high school offered a home building class, instead of the useless academic classes. They brought in a frame, you built a tiny home from there all the way to the details and it was donated to a family in need. It was permitted and inspected every step. I would take that class as much as possible, work with my dad to flip cosmetic fixes gradually getting more complicated work, go to college to meet my wife and study Accounting again. 

As this grew I would look to take on rentals in the best areas of town and keep flipping in the not so decent areas. Then I would push to more of that ownership role, where I find Out of State markets to buy commercial residential real estate and move to a bigger city to continue flipping and have more things to do. Then manage the flips less hands on, while continuing to buy bigger units. I would sell off portfolios of properties to invest in 1 bigger one to reduce my management time and hire others to manage that for me.