All Forum Posts by: Damien C.

Thanks for your responses @Ann Bellamy and @James E.

Thank you @Bob Langworthy

Hello, friends.

I am looking to hire a new accountant to do my 2017 taxes, which involve pass-through LLC rental income.

If anybody knows a solid account who has experience with small rental portfolios and who they'd recommend, I'd be grateful to hear about him or her. And if you are that accountant, I would love to hear from you, too.

I live, work, and own in the Boston area, and my LLC is registered in Wisconsin.

Your replies and/or PM are appreciated!

Thanks.

@Roman S.

No. I spoke to him, though. His operation seems on the up and up, and much of his buying criteria appears very rational. They tend to focus on, as far as I can tell, newer homes in areas with solid employment and steady population growth.

I happened to have had enough time to research and put together my own team out-of-state. But if you have funds and don't have the time or the inclination to pull together an out-of-state investment/management team, his company might be a good fit. Since you are posting here, though, I am guessing you have (or soon will have) the knowledge to put together a team yourself.

You should give them a call and ask for a list of references and referrals. After several calls, you should get a sense of how things are being run and whether clients are getting the outcomes you are looking for, etc.

As a side note, I don't do flips. I had reached out to Simply-Do-It since they do flips in addition to buy-and-holds. I feel confident building my own rental portfolio, but I would consider working with them on a flip.

Hope you get a chance to talk to some of their clients. Let me know how that goes!

dc

@Mehran K.

@Mehran K.I had the same troubles as you had initially. In my case, I purchased a couple homes for around 45-50K each (cash) and invested 5-10K in each for small renovations/clean-up/make-ready. Realistic comps would have pointed to 60-65k appraisals, easily. Not so. They both came in at the initial purchase prices...to the penny. (FYI: I am certain I did not overpay.) I got the feeling that that is/was the M.O. of that particular appraisal team/bank in cases of cash-out refi's occurring immediately after acquisition. It was not a crisis; but it was a *bummer* and a head-scratcher. 

M.K.--sure, it would have been cooler to get that cash back a couple years ago, but I'm really happy it finally worked for you. Thanks for the update. Onward and upward, my friend!

Hey Mike. I invest in Milwaukee but more on the single-family rental side of things (at the moment). Regardless, feel free to PM. To your comment about state and municipal debt: Are you concerned about the long-term economic health of Chi-town and the surrounding areas? Or are your concerns more closely tied to property values and rents in the near term? Or increasing property taxes? I am just curious.

In case it is relevant, there are big advantages to investing in MKE, but, in my opinion, booming economic growth is not one of them.

@Doron Rice Did they offer a reason for the 3-month timeline. Were there title issues or something like that? Or just slow processing?

Sorry to hear you were disappointed.

dc

If the payments are too high to handle with relative ease, pay it off, I would think, right? Or maybe make a dent in it and refi, if that's possible. What's the interest rate, if I may ask?

I tend to aggressively pay off (a) debt with high interest (example: credit cards!), (b) products with variable rates and (c) loans for non-income producing assets/ liabilities (depending on the terms).

If you can swing the student loan payments, and the rate and terms aren't too crazy, I would imagine securing a nice income property with a low fixed-rate mortgage might be a good way to go.

Since the principal on my student debt, for example, is on the low side with a manageable interest rate, I just make the monthly payment and focus my resources on other endeavors--the primary endeavor, at the moment, being rental real estate acquisition.

The buy and hold model, in my opinion, is not built on appreciation (although, in the long-term, we hope appreciation is a happy bi-product).

While a down cycling market will have an impact, it's more likely to put stress on house flippers, for example, rather than buy and hold investors.

If you *must* sell in a down market, you will likely lose money. But a decline in a home's value does not mean you (the buy and hold investor) will be unable to rent the property to a tenant. In fact, I would say that such an inability is unlikely unless there is a noteworthy and sudden drop off in the local population, or something along those lines.

If you buy toward the middle of your market (i.e., B and C areas), and you consider all reasonable factors and expenses when calculating cash flow (rent, loan payments, interest rate adjustments if applicable, routine repairs, capital expenditures, insurance, utilities, vacancies, turnover costs, etc.), you are in a good position to weather the storm when the going gets rough.

To the question about when its time to acquire another property with leverage: I would suggest that you take action when your other property or other properties is/are stabilized--that is, your property or properties is/are occupied and up-to-date with maintenance, and you have cash reserves in place. (And I mean cash reserves in place *in addition* to the down payment for the next property.)

The above might be a little simplistic; and even very conservative hold investors can take hard hits. Regardless, I think, for the most part, budgeting and cash reserves are important considerations for hedging your bets.

@Christopher Griffin 

 "What are your most efficient strategies for exploring a market once your are set on a location?"

Once I decided on a location, I planned a trip and made sure it lined up with an established RE meet up group. Met a lot of investors, realtors, PMs and so on, in the span of of an hour or two. 

I drove neighborhoods and had pre-planned meetings also--but the RE meeting/club was a bonus for good local info and contacts.