All Forum Posts by: Damon J.

To clarify, as a small time real estate investor (3 rental homes) do I have to collect W9s and issue 1099s to the handymen I use to do over $600 a year in repairs.

From what I have read it seems like I do not have to at this point?

Great Question!!

I am fairly to new to this as well so I will give a few of my experiences.

1) Don't skimp in plumbing repairs they can be quite costly in water bills and damage.

2) Spend the extra money to replace windows (if necessary), insulate, etc. to make home more energy efficient. If the energy costs are too high your tenants will soon find their way out the door.

3) Hardwood/Tile over carpet.

Look forward to hearing more thoughts from the pros...

From what I have read I should have an account for security deposits and an account for rent and expenses that are separate from my personal account. Assuming I will be targeting 10 properties here are a few questions I have:

1)Do these accounts have to be setup as "business accounts"? What are the negatives to setting up personal accounts?
2)When purchasing the home should I fund business account with my personal account for the down payment? Is it incorrect to pull these funds directly from my personal account for closing?
3)Is there any need to open an account for eac property? Seems that one account would suffice with the proper accounting per property.
4)If I am going to first purchase these properties in my name but later have them setup in an LLC that will be created at a later point, how does this effect the account? Once the LLC is setup can I add the LLC name to the account in place of my name or have both?

How do you convert your variable HELOC's to fixed with TD? Don't you have to go through the refinancing aplication all over again and then deal with potential issues/costs.

Try pentagon federal credit union.

I have found that there is quite a bit of inconsistency between actual # of units and what is listed by the city and by the county. So trying to understand the source that the bank would use.

@Greg - thanks for the info. Assume this is the county property tax rate card?

How does a bank verify how many units in this scenario? If I plan to operate this as a quadplex (use the fifth unit for storage) could I simply call the home a 4 unit home and apply for conventional financing?

My understanding is that a 5 unit property will not qualify for convetional financing (FNMA only for 1-4 units).

What options do I have then if I have good credit, can put down a good & and only have three properties?

What about costs in each scenario? It seems that an LLC is actually less expensive than an annual umbrella policy. My understanding is that the LLC is a one time cost to set up versus a recurrring annual premium for umbrella policy.

I currently only have a high dollar umbrella policy so I am curious as to the financial as well as the risk side.

Wanted to better understand what type of work is generally cheaper using a contractor rather than DIY or using handyman/laborer and buying materials from Home Depot.

In my experience I found that Vinyl Windows were cheaper. Have also heard that about insulation but have done it myself in past.

What other areas should be considered?