All Forum Posts by: Jerry W.

@Roxana Daneshjou, the problem with prices being jumped up by the pandemic is none of us really know if they will be long lasting.  It is an out and out guess.  Since you have walked away I would wait at least until after the election.  That may also wildly affect the market, but there is really no way to know.  Try buying again in about February.  Good luck either way.

Me and a partner bought a guy's mom's house for whatever the lien is.  It was $14k.  We paid the lien off and rented it about 5 years before selling it for about $60K.  It was my best deal because it opened the floodgates.  I bought out an attorney's parked Sub S Corporation for me and my partner to use.  We ended up acquiring about 25 units over the years.  My partner eventually moved away and I bought him out by selling some and refinancing the rest.  It now holds over 40 units and I have some commercial property too.  None of the other deals would have happened without the first deal.  That makes it the best deal ever.

Now my most recent deal has been pretty good.  I bought a place at auction for $42,500.  It took 2 and half years for various reasons.  I held it for 6 months, and just relisted it.  I sold it with owner financing for $80K.  It was $10K down to pay realtors and closing costs, and interest only payments for 5 years at 9%.  I put about $800 in it for labor and and about 40 gallons of vinegar and about 20 pounds of baking soda to get the dead animal smell out of it.

@Jason Eberhardt, I don't do large MF but have been looking at doing that in Casper myself.  Be very careful.  Casper is a boom bust town.  They built really hard and frankly are a little overbuilt at the moment.  There are a LOT of really new MF with a lot of amenities, and they are offering a lot of free rent with only a 6 month lease.  In my opinion that makes it a good time to buy, but make sure you don't buy at boom prices where they were only last year.  As little as 1 or 2 years ago places rented within hours, now it is months.  I cannot say how Covid19 has affected demand for housing however.  It is the lost joker in the deck at the moment.  I doubt I am much help but feel free to pm me if you think I can answer anymore questions.

@Account Closed, if you are going to do business in the state file. Otherwise just drop the LLC and do it in your personal name. If you don't follow the rules, then they don't protect you much. I would file one LLC and have it own a seperate LLC for every flip you do, then collapse the LLC doing the flip after you sell it. It is like $150 to create an LLC in WY. When you collapse the LLC after the flip all the residuary liability goes away with closing the LLC. Whatever you do follow the rules. Don't scrimp or you wasted the time and effort of creating an LLC.

@Joe Splitrock, congrats. Literally I furnished every piece of furniture and decorations from yard sales and online sales on facebook. Imagine paying 20 cents on the dollar for furnishings. I always buy sheets pillow cases towels, brand new. Get good quality items, not cheap, and get enough to furnish the beds etc. for 3 times what you need. We try to keep 2 working packages, so we can just strip and make beds with clean sheets and towels, etc., then put the new ones on, then take the old ones home to wash. Much faster, drying towels takes forever. You never know when calamity will strike like a stain, rip, or even burn. so be ready to replace as needed and not lose your spare. Also, there are a ton of folks who eat in bed. Good luck and have fun with it bud. As soon as you get a dozen 5 star reviews raise your prices. I set the platform with the most reservations at the price I think is best, but set the other platform a fair bit higher. If I get a lot of rentals at the higher price I raise it. I have really enjoyed the STR, met a lot of really nice folks, some I talked to for hours. Oh meet your neighbors,. Shovel the snow from their sidewalk, bring them chocolates, coffee etc. They actually can really help your business.

Best wishes bud, and on a final note outsource the cleaning as soon as you can, it can be a real pain.

@Bob Anthes I know you might find this hard to believe, but WY only has one area code.  We know if it is not a local number.

Hey @Natalie R., what do you have?  I buy a few houses in Thermopolis a year.

@Account Closed, keep in mind that unless you have endless financing there is an opportunity lost when you buy a deal.  So settling for a mediocre deal just to make it work may limit your ability to buy a good deal later due to lack of funds.

@Jon Schwartz, if you come out to Thermopolis again, I have a vacation rental you are welcome to stay at.  As to your friend from Meteetse the odds are quite high that I know him or at least know of him or his family.  Wyoming is that kind of place.  First I really appreciate your breaking the numbers down and citing the source.  I simply do not have the time or to be honest the inclination to go that far into detail, so I appreciate the enrichment that I receive by reading articles or comments written that way.  When people refer to Millennials the things written by @Shiloh Lundahl, are things commonly associated with them, but there are also other things that are to be admired like your writing skill and quoting your sources as you just did.  I have had some work for me and I have been both amazed and impressed by certain traits and incredibly annoyed by others.  You like me are in part a product of your times.  The folks who lived through he great depression of the 1930s were very obvious to me in business.  They could be cunning and amazing in business, but there was a caution few can imagine.  In doing the estates of many from that era I always found lots of cash tucked into places.  Things like books, in cookie jars, under the mattress, etc.  Nothing usable was thrown away.  You might need it later.  You have no idea of the number of margarine containers with lids I have seen stockpiled in my lifetime.  My own mother in law left a legacy of nearly a hundred boxes of tin foil because of the rationing in World War 2, when it was on sale she bought it.  Being influenced by your times is not really bad, nor are traits acquired from living in your own era.  Our era is passing, yours is beginning, treat the world well.  Thank God you have not lived with the constant threat of global nuclear war.  The 1950s saw a large percentage of the population building nuclear fall out shelters, and led to the Joe McCarthy witch hunts.  Most millennials are more socially conscious, and amazing with new technology, etc.

You are absolutely correct that you are as experienced and emotionally stable as most your age, but don't forget that you don't know what you don't know.  Even old men can be fools, but investing for 40 years gives you insights that investing for 10 or 15 does not give you.  However you may be able to see trends us baby boomers will not.  I digress.

When I buy a refrigerator from Sears, I do just as much to stimulate the economy as the guy buying the flat screen from Best Buy.  I have no real figures, but there are probably 100 renters for every landlord, but it is interesting that investors make up 18% of gross sales.  That means despite being one person I spend as much as 4 consumers normally do.  If a new tax were to limit the amount I can make or invest it will have a disproportionate effect on the economy.  I am small potatoes compared to the guys owning 2 or 3 hundred unit apartment buildings.  We have to be careful that an unintended tax consequence won't derail investing that is helping the economy.  Trickle down economics is real.  You can argue how much it matters, but it is real.  One of the great mysteries of life for me is inflation.  How can we have pumped so many trillions of dollars from increased national debt and not have triggered massive inflation?  One drawback to investing for a long time is being able to recall double digit inflation and having interest rates on loans being 14 to 18%.  Yes I had them and yes they were the norm, not the exception.  I live in mortal fear of that happening again.  The Achilles heel of my investment portfolio is high interest rates.  I watch for it like a hawk, I take steps to try to mitigate the damage it might do.  I may just be paranoid, but spend a lot of time in planning with that lurking in my mind.  I am a product of my times.  Please look me up if you come to WY.

@Anthony Wick, I can assure you that if you run a business that insurance proceeds are taxable.  The good thing is that yes if you spend the money putting new roofs on it is deductible, but there is an argument that you must depreciate it out over time and thus still take a big tax hit, but I am going on the assumption that it is a repair, we will see.  My problem is that it cannot all be spent in one year and so it was going to be taxed.  They did away with income averaging when they made so many other changes recently.  Perhaps we could get @Steven Hamilton II, (a really good accountant) @Linda Weygant, or any other really top notch accountants on this site to explain it better for us.  (Actually to explain it better for me as I really want to know if I can just expense my roofs, not depreciate them)  Now it is my understanding that if your private car or house gets hit by damage and you get a huge insurance check it is not taxable as the item itself is not a business or income generating asset.  I was able to defer the full $70K I paid for the truck, so the taxable amount I paid on was decreased, but it still had some serious tax consequences that will set be back quite a bit on my goals for growth and financial independence.  On the other hand I have been blessed to be able to deal with the issue and not change my standard of living that may have happened to a newer more leveraged investor.