All Forum Posts by: Clint Galliano

@Brody Pitre Try attending the local REIA. @Robert Leonard can give you more information on that.

Keep on reading books. Check them out from the library if you have to.

Listen to the podcasts and dig through the forums for discussions on the investing options you are interested in.

Good Luck and #EverForward!

Clint

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 Have you had the discussion with him that you are an investor and that you are not emotionally involved in the outcome of the deal, that your offers are pure business decisions AND you are willing to negotiate via counteroffers? With him working for you as a buyer's agent, he should write what you are offering, not talk you out of it. Instruct him to tell the listing agent that you are expecting a counteroffer to your offer. 

If he doesn't want to do that, find an investor-friendly agent. 

 How does your rent compare to market rent? If market rent is higher than your rent, don't feel bad. Blame the market if you need an "excuse". Additionally, calculate how much your increase is as a percentage of the current rent. Then check to see if there are any regulations in your state or municipality capping the amount of rent increases. Then verify what your lease says, if anything, about rent increases and the rules around it. 

If the rent increases put you above market rents and you don't have justification for being above market rent, you might have trouble getting or keeping tenants. At that point you will have to consider that your expenses have consumed your cash flow. Based on how you think the overall economic situation will change going forward, you may choose to ride it out (expecting insurance will drop, rents will rise), or consider harvesting equity and redeploying it in a property with a better ROI & ROE (return on Investment / Return on Equity).

Here in Louisiana, post-Hurricane Ida, rents skyrocketed due to the massive increase in demand. We had several large multifamily properties evict all tenants due to damage on top of many displaced homeowners wanting ot rent until they could repair their home. Then, in the following year, insurance companies did one of the following: went bankrupt, stopped writing policies in Louisiana, or raised rates and requirements to ridiculous levels. 

Start building relationships with the people who could possibly be on your team one day, today. If you are able to work, get a job in a real estate-related business to learn the players and the market. 

Find a local REIA(s). Join & attend meetings. Lots of people who may one day be on your team attend these meetings. Build relationships with them.

Select a goal of what you want to do, build a plan on how to get there. Detail what steps your will need to take.

Practice deal analysis in the chosen area of investment so you will start to learn what is a deal and what isn't. 

Work on building your dreams.

Clint

@Jake S., @Chris Levarek & @Jason Marino pretty much nailed it. 

If your property is going to be owned in an LLC, it will either need to be a Louisiana LLC (domestic), or if held in an existing out of state LLC, said out of state LLC will need to be registered in Louisiana as a foreign legal entity.

**Disclaimer: I do not play an attorney on the internet nor did I sleep in a Holiday Inn Express last night. Please consult your own attorney or one appropriate for the jurisdiction you are operating in.**

Having a plan and taking action is more than the majority of the population will do. Feel free to reach out with any questions.

Clint

Louisiana is starting to see new policies written with a 3-5 percent hurricane deductible and a minimum of $400,000 of coverage on a residential personal home. The company my rentals are insured with is not writing new policies in Louisiana. Luckily, they are not dropping me. Not a whole lot of options for homeowners or investors in the state. 

I approach the idea similarly to vacancy...it's something you account for in your underwriting. Living in South Louisiana has shown that the communities come back. The economy comes back. People still need a place to stay. It was reiterated in the aftermath of Hurricane Ida. We already had a tight rental market and the storm damaged many large multifamily complexes forcing them to evict everyone due to uninhabitability. Between that and people whose homes were damaged or destroyed, the rental market went crazy (professional term...lol). Rents skyrocketed. They eventually leveled off, but there is still enough of a demand that they will not be dropping anytime soon. 

So, you can look at it from a scarcity mindset or an abundance mindset. How many people can you help after a disaster if you win the lottery and are not dealing with a total loss?

Soooooo many things going on here...First off, @Corey M., I am assuming that you chose to invest with REI Nation because A) you may or may not live in a different area than the investment property, B) You did not want to handle the rehab of a property after purchase, & C) They provide property management & experience.

All of that comes at a price. I understand that you did your analysis based on their Pro-Forma, but from what I have read, there was no distinction on if Pro-Forma numbers were for your specific area or across REI Nation's whole portfolio. When presenting stats, companies tend to present them in the best light possible, so, as others have mentioned, the tenant terms were most likely an average of their whole portfolio. Additionally, as was also stated, deployment terms are 2-3 years for active military and if you are renting to military (as in that is the specific tenant pool), then you should assume a max of 3 years tenancy. 

I can imagine that the monthly cash flow is minimal due to the premium you paid for a rehabbed property. Eventually, this property may appreciate and you will rent it to a new tenant and continue to receive cashflow. This is but a bump. If you had invested the same amount of money in the stock market, you would probably be in a much worse position. It's not a big deal. These things happen. I would suggest, as others have stated, that you ask for a copy of the deployment orders, be aware of everything in your lease, (which should have a 30 day notice clause for military breaking lease [not an attorney, don't play one on the internet]), and verify when the notice to quit was submitted. If the 30 day period falls into the next rental period, then they would owe rent for that month. If it's a couple of days, I personally would not charge them rent and would be marketing the property for rent before they leave. 

Which brings up turnover. Are there any repairs/maintenance that need to be made that you know of or are you just making the assumption that there will be things that need to be done? Spackle & touch-up paint can go a long way for a turnover if everything else is in great shape.

Lastly, I would suggest that you possibly consider a different style of investing if this bothers you this much. Even if you don't, read 

Long-Distance Real Estate Investing | BiggerPockets Books – BiggerPockets Bookstore

by David Greene. There are a lot of tips and tricks that will elevate anyone's investing game.

Best of luck to you!

Additionally, check out The Obstacle is the Way by Ryan Holiday...it's a good read for providing perspective on life.

Disclaimer: I am not an attorney. I don't play one on the internet. I did not sleep in a Holiday Inn Express last night.