All Forum Posts by: Dan H.

Quote from @C Rutherford:

@Matthew Irish-Jones agreed, I need to hire help.  I would love to do that.
Unfortunately the income from the rentals is just enough to pay the bills, cover any emergency expenses, and pay taxes and insurance.   I am running a tight budget.
There's nothing left over to pay the wages of a property manager.   Right now with all these vacancies, I will be lucky if I save up enough to get the property taxes and insurance paid.   I also need a new garage roof at my own home I need to save up for, there's a tarp over it now, and a large leaning tree in the backyard I need removed before it falls on the neighbors house.   Trying to save up for those, too.   And a huge renovation coming of one of the apartments, which may turn out to be costly just in supplies.

What do you recommend I can do on the side, as a second business.... provided as soon as I get caught up with these vacancies which were an unlucky hit-- to make the extra money so I can afford to hire a property manager.     Without giving up being self employed, because that was the whole reason I got into this to begin with.   Does that make sense?

 >would love to do that.  Unfortunately the income from the rentals is just enough to pay the bills, cover any emergency expenses, and pay taxes and insurance. I am running a tight budget.  There's nothing left over to pay the wages of a property manager.

my view is you cannot afford to keep this property and not pay a PM.   A good PM would place good tenants that would not require extensive tenant flips.   They would have preferred crews for the tenant flips and likely could do it much faster than you can do it by yourself.   A good PM would deduct appropriate expenses from the security deposit.  they would know how to deal with filthy tenants and tenants that short the rent each month.

A good PM may increase your net.   At the very least they will ease your stress.  

good luck

Quote from @Steve K.:

Guessing the “greatest go-giver ever” sub2 dude will be on the list soon. Although he doesn’t post here anymore because he knows he’ll get called out on his B.S. I think he’s speaking at BP con though, and BP published his book. Lots of sketchy things about him circulating the back channels. 

I heard him at BPCon.  I was prejudiced against him going in and came out a little less biased against him.   He is very much a people person.   His cronies are very loyal and virtually all claim to have been successful using his training.   He claims to be the largest RE network but I am unsure how he define a RE network.   

he advocates over paying for better terms.   This only works if 1) you hold it long enough 2) rates do not go down such that the savings from preferred terms decreases.

still if a seller is adamant on the selling price, the only place to negotiate is the terms.

i am not near the people person that Pace is, so I doubt I could ever approach his ability to get these sellers to agree to terms that would work.   I suspect he is getting properties under contract that most of us could not.

i will be a bit surprised if he gets charged with anything.  He sells training and seems to have a high satisfaction rate (understating their satisfaction).   

however, uncapitalized buyers buying on preferential terms equates to high risk for those students.

Quote from @Jay Hinrichs:

Quote from @Dan H.:

I think the warning is very appropriate.   It seems there is more lender fraud currently than ever before (maybe it is just more publicized than it used to be).  Did anyone else notice how many lenders were at BPCon2025?  It reminds me of the Ohio realtor mafia in the forums (OP excluded as he pokes as much fun at the Ohio realtor posse as anyone).

I do not place bob Stevens with the others even though I did not aggree with his posts because 1) I knew he had 2 different names online for quite a while. I was unsure if he had a name change, wanted some anonymity, or had some other reason. It did not bother me. Note I use Dan H rather than my full name for some poor anonymity. Anyone can find my full name via my profile and maybe 5 or 10 minutes search (just trace the LLC would do it). 2) I suspect Bob believes the dribble he posted (except possibly exaggerating his purchases) 3) to the best of my knowledge he was never charged with anything.

I do feel using an initial rather than a fake last name seems more ethical, but the reality is they serve the same purpose.

yes lots of lenders there.. Shoot sorry I missed you there. I could not figure out how to use that app thingee the attendees used  LOL.. so Ms. Lori and I just wondered around .. I thought it was pretty first class though with food coffee drinks etc.. not bad really would recommend it. 

If I had recognized you, I would have introduced myself.  I would have been honored to meet you.

The more experience you have, the less valuable the sessions (but I apparently still need help with deal flow), but the networking presents a valuable opportunity. I am not into the nightclub party; Orlando in bpcon2023 had exclusive assess to Universal Studios.  That is more my up of tea.

It was less crowded than I thought it would be.  that is good.   The location was not spread out everywhere(like Orlando for BPCon2023).

I, and it seemed many in the crowd, was not excited it is back to Orlando for BPCon2026.   Orlando was my least favorite BPCon of the 4 I have been to due to feeling like cattle.   Also it was just at Orlando in 2023.   There are a lot of great places they can hold BPCon.  I suspect far less than 10% of the attendees expressed pleasure/excitement with the Orlando announcement.  

Hopefully we get another chance to meet each other soon.

Take care

I think the warning is very appropriate.   It seems there is more lender fraud currently than ever before (maybe it is just more publicized than it used to be).  Did anyone else notice how many lenders were at BPCon2025?  It reminds me of the Ohio realtor mafia in the forums (OP excluded as he pokes as much fun at the Ohio realtor posse as anyone).

I do not place bob Stevens with the others even though I did not aggree with his posts because 1) I knew he had 2 different names online for quite a while. I was unsure if he had a name change, wanted some anonymity, or had some other reason. It did not bother me. Note I use Dan H rather than my full name for some poor anonymity. Anyone can find my full name via my profile and maybe 5 or 10 minutes search (just trace the LLC would do it). 2) I suspect Bob believes the dribble he posted (except possibly exaggerating his purchases) 3) to the best of my knowledge he was never charged with anything.

I do feel using an initial rather than a fake last name seems more ethical, but the reality is they serve the same purpose.

In my market most of the experienced brrrr investors are either pausing or switched to flipping. 

Why? Because after the high LTV refinance the properties are large negative cash flow with accurate sustaining expense estimates. You make all this sweat equity to see it diminish with every month of holding.

My belief is the high interest rate greatly impacts buy and hold and high LTV loans at market rate on retail rehabbed price are negative cash flow.

This year some flippers are combining with bonus depreciation so that they do not suffer a large tax hit.  

Make sure you do thorough and conservative underwriting including the hold after the high LTV refinance.

Good luck

Not only do sales fall in the winter months, but so does price.  The actual price decline varies from year to year but I question if there has ever been I higher national average sales price in December than the following April.   At a minimum, it would be rare.

I recommend you avoid placing a flip on the market in late November or December.  I recognize you have holding costs, but I suspect the price differential will more than cover the additional carrying costs.

Good luck

>any STR property put into service in 2025 (after Jan 20) is eligible for 100% bonus depreciation

OBBB requires the property to have been placed under contract after Jan 19, 2025.

>Some CPA insist on having at least 3 stays prior to considering it "in-service", some insist on at least 1 stay. The IRS definition of in service is simply available as an STR before the end of the tax year.

irs also requires an average stay of less than 7 days.   With no stay there is no average (divisor would be zero).   This implies at least on guest stay.   I have heard both 2 or 3 stays minimum for some weird definition of average, but one 6 day stay is average stay less than 7 days.

Note any tax savings is really a tax deferral.   When the property is sold with out a qualified deferral, the depreciated taxes are owed.

best wishes

I am often the contrarian, but I would use the 95% conventional OO loan to buy a property that needs a little work so that value can be added. Why not fha? 1.5% difference is minimal, fha has more restrictions on condition, and fha has forever PMI (life of loan).

Try to do as much of the value add work as you can yourself.   Earn the sweat equity

Bonus if you can afford to purchase a home that allows you to house hack.  Whether that is an extra bedroom to rent to a friend, family, student, etc or a separate unit to rent to the best tenant you can get.

Good luck

I show on just the rate at 7.25% if done today would have P&i of $2115 on 40 year term.   Note your P&i is higher because the initial loan was higher than $310k balance.   6.125% is $1884.

you should use your current P&i instead of the $2115.

$2115 - $1884 =$231.00 (the actual number will be higher)

I am assuming you plan on selling in 30 months (not keeping it as a rental).  231 * 30 months is $6930.   Is the non recurring closing costs less than this.   If so, you should consider refinancing.  

Good luck

Quote from @Eric Fernwood:

Hello @Rose Cole,

Where you should invest depends upon your goal. If your goal is to own a property in California, anywhere in California will work. If your goal is financial independence, that's a different issue. The saying, “live where you like but invest where you can make money,” is one every investor should take to heart. Long-term financial independence requires a rental income stream that meets the following requirements:

• Rents increase faster than inflation. Every time you shop, you pay more. Inflation is continually increasing prices. Only if your rent increases faster than inflation will you have the additional dollars needed to continue paying inflated prices. If you buy anywhere where rents do not outpace inflation, you can not achieve financial independence no matter how many properties you buy.
• Your rental income must last throughout your lifetime. For that to happen, your tenants need to remain employed at similar wages for decades. However, most U.S. companies only stay in business for about 10 to 18 years. So, if you plan to hold a property for 30 or 40 years, your tenants will likely have to find new employers multiple times. Replacement jobs will only be available if new companies come to the city and create jobs that pay comparable wages for similar skills. When companies are selecting a location to set up operations, the basic requirements include (but are not limited to):
  • Low operating costs, since every business has competitors. California is known for high operating costs.
  • A business-friendly government, which makes it easier to run and grow a company, California is less pro-business than many other states.
• Your income reliability depends on the tenants who live in your property. To have a steady, dependable income, you need what I call a reliable tenant. A reliable tenant stays for many years and always pays rent on time. These tenants are the exception, not the norm. You can improve your chances of always having reliable tenants by buying properties that appeal to tenant segments made up of stable, dependable people. The other key factor is your property manager. You’ll want someone with the skill to consistently identify and select reliable tenants—a talent that’s rare among property managers.

I will add another requirement for successful investing. No rent control of any kind. California has state-level rental controls (AB 1482). Individual cities may have additional restrictions. Rent control may prevent you from selecting the best tenant, limit your ability to evict non-performing tenants, and not allow you to increase rents fast enough to keep pace with inflation.

I live in Las Vegas, and I will compare the environment for investors here versus California.

• Rent control: None
• Time to evict: 20 to 40 days
• No state income taxes.
• Pro business and pro landlord environment.
• Low operating costs (low property taxes and insurance)

We have completed over 90 1031 exchanges, most of which were from California. There is a reason so many investors have decided to exit California.

Another consideration, whether you buy in your own neighborhood or another state, it's essential to work with a local investment team. Books, podcasts, websites, and seminars provide general concepts, but real investing happens in specific cities, with specific properties, with unique rules, regulations, and market dynamics. You'll also need reliable local service providers you can trust. The only source for all of this is an experienced local investment team. Also, working with an investment team costs no more than working with any other realtor, but you get the benefit of years of experience and all the resources you're going to need.

In summary, do not limit yourself to California. Invest where you can make money.

Counter point: 

 GDP California $4.1T, recently passed Japan as 4th largest economy in the world.  GDP Nevada. $200.9B.   California gdp nearly 20x Nevada gdp.   Seems like a lot of businesses like CA.

Ab 1482 limits rent increases to 5% + cpi capped at 10% so it exceeds inflation unless inflation exceeds 10% which has not happened this century. Ab 1482 only applies to MF, rent control is illegal on SFR (costa Hawkins). In my market the current rent cap is 8.8%. Per rent cafe the current average apartment rent in $2955 (SFR would be more but rent control does not spp,y to SFR) so max increase per AB 1482 is $260/month. Limiting average rent increase to $260/month does not seem to be very limiting.

Historically rents have increased more after the implementation of rent control Han prior to the implementation of rent control.

Zillow states the average rent in CA is $2800, it was $602 in the year 2000, a 465% increase.

Zillow states the average rent in nevada is $1995, it was $602 in the year 2000 (same as CA per internet), a 331% increase.

Ca average rent has increased 134% more than Nevada’s average rent.

You can look at average appreciation for this century but we all know what it would show.

Ca has historically been a great market for residential RE investors.   I suspect t that will continue.

real estate agents are incentivized to market their area.   The reality is most new investors are best served investing in their local market whether that is CA, Nevada, or Ohio.  OOS has additional risks to local investors.  Non local investor usually have higher costs than local investors.   Non local investors are placing a lot of trust on their remote team.

Best wishes