All Forum Posts by: James Triano

@Diante Lawrence

You should start by reading The Book on Rental Property Investing by Brandon Turner and The Book on Flipping Houses by J. Scott.  Both of which are extremely helpful, and not just because they're BP books.

Some more books:

The Millionaire Real Estate Investor

What Every Real Estate Investor Needs to Know About Cash Flow

Rich Dad, Poor Dad (not quite a real estate book, but very good)

@David Zheng

Congratulations on all of your successes. I was simply creating an example of the stereotypical millennial.  I know, because like you, I am one.  I also know plenty of my peers who spend weeks at music festivals on their student loan refund money but complain of a lack of opportunity and resources.  That is my point.  Obviously what you've done sets you far apart from your peers what you do in your free time is no one's business but yours. 

I do agree with you that not all millennials are lazy as evidenced by many of us here on BP or other entrepreneurs, business people, or investors in our generation.  It's a stereotype that needs to be broken by each individual making a change.  Just like everyone who lived in the 1960s weren't hippies, not every millennial is a crybaby-entitled-spoiled-brat. 

@Natalie Kolodij Forgive me, I wasn't meaning to criticize you or your personal situation, because I have no idea what that is.  My idea of a 4-year-pamper-fest is how Colorado State has an on-site massage therapy clinic where students who are stressed can get massages, and how students at Yale needed therapy dogs and cancelled classes to cope with election disappointment.  

It sounds like you did exactly what I did and am advocating for.  There was obviously thought in your decision to be an Accountant, to be economical in your school choice, and work while in school.  I was in the exact same boat and scholarships helped pay the rest of the way for me.  Alternatively, there are ROTC and other programs that allow students to come out debt-free.  I'm simply advocating that there is a way. Which is very different from what I hear from me peers every day. 

My point is, I think it's great that we have so many opportunities to obtain financing for low/now money down, however it's still up to the individual to be diligent and decisive on what's important and where their priorities lie - something our generation seems to struggle with.  

@Daniel Lee

Using your experience, I think flipping would be a great way to generate some income/cash to then pursue rental properties.  I would advise, if your goal is to generate passive income, to churn that income from your flips into cash flow producing properties, then rinse and repeat. 

A word of caution.  When borrowing from your personal residence, please keep in mind that if something goes south and you can't repay your loan, you will get foreclosed on and be forced out of your house.  Just make sure you've really done your homework and are comfortable with that risk.  It's easier for us to say "yes, go max your personal equity to flip houses" when it's not our money at risk.  Just ensure you've got sufficient cash reserves and capital before pulling the trigger.

I definitely think that Millennials do want to buy their own home at some point even if they don't know it yet.  This is part of the perception problem - when people talk of millennials, they're interviewing some 23 year old recent Art History grad from an Ivy League school about to go to Coachella. Of course he/she doesn't want to own a home, they want to Snapchat their way around a concert for a week.  This will change as he/she grows a bit older, matures, and most likely finds a life partner.   

The programs that @Benjamin Riehle references are great, no doubt. But these programs treat a symptom (no savings) and not the problem. I've used an FHA mortgage and it does help accelerate the process but I still had significant savings set aside. I think that these programs just continue to enable a financially illiterate culture (obviously this includes non-BP'ers).

@Natalie Kolodij rightly mentions student loan debt being a huge issues.  I certainly agree.  But again, this is product of a bigger issue.  College tuition is as much driven by supply and demand as any other industry.  Although these are "state" institutions in some cases - they are a business.  We've continually pumped out college graduates with no value-added skills for a generation and now that is coming back to haunt us.  I understand the burden of school debt but if you've been on a college campus lately - it's basically a four year pamper-fest, these places are incredible. Also, there is hardly any economic analysis being done by matriculates on whether their 4 years of time and money will pay off.  Why not go to a community college for a few years then transfer to a big school?  Because it's not "cool".  There are absolutely ways to work through school without debt/assistance.  It's called working hard, being economical in your school choice, and commuting to campus or becoming a Resident Assistant.  Again, not "cool".

I really can't get on board with the fact that Millennials are "boned" though.  We all make individual decisions on how we want to live our lives and what's important.  I personally have friends who complain about not having money or don't get paid "enough".  Meanwhile, they're eating out 3 nights a week, drive a brand new leased car, and live in the nicest apartments in the trendy part of town with a spare bedroom.  Most of my millennial peers put more time into how their next Instagram post looks than how they'll be able to retire in 40 years or how much they save each month.  It's purely an educational issue.  

@Chris Kirshbaum

I would use some sort of Dropbox or Google sheets account to house some centralized spreadsheets that you can edit and share.  Excel is going to be your best bet if you're starting somewhat small.  

The best way is to have a central bank account and then pay directly out of that account so you can monitor expenses via online banking and reconcile that way as well.  Obviously, you'll be running a paperless operation so anything you can do to get information in a central spot will be key. Just be sure to keep great track of any monetary contributions you're making to the accounts as well so you know where the funding is coming from. 

@Erik Garland

The pro-rated method you're showing (using 88% of the county's value) is the right approach.  Just make sure you document your method accordingly.  That's they way I've depreciated my properties and it's worked quite well.  

You definitely can't use $37k as your cost basis because (from a nerdy accounting standpoint) you don't actually have the assets valued at $37k on the books to back it up.  

@Jack B.

My goals are very similar to yours (becoming financially independent) and I'm in the same situation as you.  I'm in an MBA program, working full-time, and running my rental/flip business.  It can be really tough, especially when balancing family commitments too. 

I think what I'm most concerned about is not stopping when "enough is enough."  My goal is to be completely financially independent but I worry that when I passively cash flowing, for example, $10,000 per month, I'll say "well I should probably get to $15,000" or something.  I just feel like I'll know what the grind is like and I won't stop pursuing bigger and better. 

Question for you - if you're financially independent, then why not stop working?

@Nick Rose

I think @Russ Draper makes a good point here with comparing apples to apples.  

You really must consider the level of management involved in the purchase of the business.  If there is already a significant management structure in place (assuming there may not be considering the size) and you're simply becoming an owner, then that's great.  Otherwise, you may be purchasing a "job" as Russ mentioned.  

Also, you need to consider what your long term goals and strategies are.  Are you looking to become an owner of small businesses through acquisitions or are you looking to become a real estate investor?

I have experience doing due diligence on small-ish businesses (less than $10 million in annual revenue) and one of the things we find is how incredibly over-stated the financial assumptions of the seller can be.  Just be very wary when doing your own due diligence. 

@Mark Bouman

It's probably more of an administrative pain than it's worth to depreciate them as a fixed asset.  It's certainly something you can do and is probably the correct accounting treatment but this is really a judgement call on your part.  Unless you bought an air compressor that's commercial grade and over $2,000 or so, it's probably not worth your time.  I would just expense them in the current year.  

As far as favorable/unfavorable to your current year taxes, it's just a matter or timing those expenses.  If you need some of the write-offs this year, then expense them.  If not, then you can certainly add them to a fixed asset ledge and depreciate them.  Taxes are all a matter of timing.