All Forum Posts by: Jerry W.

@Seemant Nakra, in the beginning I had a partner to manage the first property.  As things grew my partner did the managing and I just helped out.  My partner moved and I took over, it was tough for awhile.  Why do I do it now?  The first is truly cost.  Rental properties here are a pretty tight margin, so paying 10% off the top would make it dam tough to show decent cash flow.  Next they can find people to rent, but don't do so well on keeping properties fixed up, finally I find that keeping myself in the renting game is a very important factor in measuring demand and setting rent prices and knowing what I can pay for a property and still cash flow.  I know where getting renters get tough in terms of dollars.  I know what I can pay for a property before renting gets tough and I lose money.  I still have some apartments managed.  I see that most repairs are done, but the amount of time it takes to manage them due to higher turnover justifies paying the 10%.  I don't know that if I bought them right now if I could afford a property manager.

One of the questions you should ask is do you want to turn control of your real estate over to another person?  Another question is do you want to pay a professional every time a document or check needs signed?  When you are NOT the Trustee some one must sign documents.  Lets say you want to sign an insurance policy or challenge your tax assessment, maybe even refinance to get a better interest rate.  Who will sign those?  Heaven forbid you try to buy a few properties.  You going to pay a lawyer to do all of those.  In my opinion most of these anonymous entities are completely unusable for folks who run their own real estate business.  For folks who passively invest they should work mostly ok.  But then if you are passively investing you really don't need this kind of an entity to protect yourself.  there are some folks who make a lot of money selling multiple LLcs and trusts to folks for anonymity, but none of the real professionals or big dogs on this site use it.  you can kiss networking and building a brand or negotiating deals goodbye if you do this.

@Erin Spradlin, I am very interested in hearing if things have changed for you.  I know Colorado has been pretty slow in opening up, but there has been a lot of push to do so.  My state has all ready opened up a bit and I am pleased to say that I am nearly at  70% of last year, but I am only getting reservations a week or 2 in advance.  July has very few bookings, but June is nearly 66%.  that is much better than say 2 days rented in May.  I don't know how this will shake out, but I am back in the black for now.  In a funny way the pick up caught me with my pants down if you will.  I had no bookings and so decided to replace my roof that was damaged by a hailstorm last year.  By the time I had wrap on it I had multiple bookings.  it is a duplex and while one side is much slower than the other I have not had a single day of both sides being empty to get up on it and pound nails.  I assuredly don't want to be hammering nails in with guests here, so it is a happy problem.  Eventually I will need to finish the roof, but for now I am grateful to have guests again.

@Craig Simak, I have only had a life coach and since no one else has addressed that I will add my 2 cents.  I tried a life coach after doing a pretty big life change in changing from a government attorney in a fairly high stress job to a private attorney.  Keep in mind I was doing a lot of real estate on top of all of that.  I wanted a life coach because I wanted to improve the quality of my life.  I didn't want the make a lot of money drive hard and fast lifestyle.  I still wanted to make money, but on my own terms.  I have only been partly successful, but I believe that it really helped me put my life and lifestyle in perspective.  I had to figure out what was really important.  Was it making six figures or having a good life?  Was it being in successful in business or spending a lot of time with my grand kids?  Once you figure out what is really important for you it makes it easier to decide what you are going to do with your life.  I have not been entirely successful, but my quality of life has improved a lot, and to be honest I believe that my family has benefitted a lot as well.  I wanted it all, good paying job, low stress, time with family, etc.  I had to figure out a lot of parts to try to get it all.  Oddly enough, my law practice work has slowed down a lot, my real estate investing has increased, and I think my relationship with my family has improved.  If I make a few thousand less than last year big deal.  I hope this perspective helps.

Being an effective hands on owner is pretty much impossible if you wish to remain truly anonymous. You can easily run turn key rentals with being anonymous, but if you are buying and rehabbing and fixing up and renting units yourself, or even networking for deals. Anonymous doesn't really work. The added cost and time of doing the extra books can be a drain also. If you are truly a high net worth individual who will not be doing any hands on then anonymous may be the thing for you. if you really want that just buy into REIT. If you truly want to invest in real estate and participate yourself you can pretty much forget anonymity. Corporations and LLS and other entities do provide a lot of protection if you handle them correctly. You also have insurance for most issues.

Keep in mind that NONE of the big dealers and movers on here do the anonymous thing.  Their business would never have taken off if they had went the anonymous route.  Building a brand or a reputation is pretty much impossible if you remain anonymous.  it all depends on what you want and can afford and what makes you sleep at night.

I lost all of my March, April and May bookings and half or more of every other ones.  I should be close to $4K a month now and made $155 instead.  I hope the country heals and this passes, but it won't be gone tomorrow or even this fall.  I will ride it out for a year and see.  I feel sorry for those with small businesses like salons, restaurants, even bars.  Time will tell. 

@Erin Spradlin, thanks for the thread. I tried an experiment on doing a STR about 3 years ago. The first year with one unit I really didn't make enough to pay utilities, but in my opinion you cannot expect a brand new business to cash flow on day one. The second year business improved and I picked a few repeat travelers and had one or 2 fishermen books severl weeks at a time which was great for income and not washing sheets and towels everyday. I made about $200 less a month than I would have if I had done a LTR. The third year I finished renovations on the other side of the duplex and I made it have a WOW factor with western decor. I killed it. Was bringing in about 4 times what a LTR did. I had a REALLY bad month in February this year in my LTRs, had 2 empty for repairs and had 6 folks move out. Massive hit as it took about 3 months to rent them out again. My STRs do bad in winter but had really good months, it really helped. Then Covid19. I lost EVERY booking for the next 2 months in 4 days. From about $4K average to zero. Had one rental for 2 days for $155 from someone moving into town but had to unpack.

I don't know how long this will last, and neither does anyone else. You are free to gamble your money as you see fit on your vision of the future. My bet is on STRs. I am slowly getting back a few bookings for the first time a few days ago. Yet have had some August bookings cancel. I think it will be lean but work. I survived for 2 years on less. My biggest pain is having paid about $20K more for a property than I would have normally because it had very little value add, and is set up well for a STR. I quickly shifted it to a LTR and got it rented, but I will only clear my mortgage by about $260 per month. the good news is that I barely put $1K into getting it ready to rent. It will ride for 1 year to see how things shake out. I can always resell it to a home buyer and come out OK if needed. I will wait, work hard, look for deals, and keep paying down my mortgages. I could have really used not losing 20 roofs to a hailstorm last year, but I just got over the 50% mark in replacing them.

Good luck on your units.  I know it is particularly hard when you have folks relying on you keep their finances going and that is part of your business now.  I have enjoyed your articles and remember; you didn't cause this issue, you are a good person and did nothing wrong, and you are smart and hard working and will weather this thing out.  Vaya con dios.

Okay, time for some simple advice.  I think of investing like owning cattle or horses.  When it comes to advice it is like the old rancher saying, "Trust your neighbor, but brand your own cows"  In other words you might trust what folks are saying as advice, but use your own common sense to make sure it fits with your own investments.  The worst time to start a cow herd is when prices are really high, they have nowhere to go but down.  If you buy when cows are cheap your start up cost is low and prices rise.  You have to have a lot of food lined up for cattle or it gets real expensive.  (Like cash on hand)  If you have a years worth of food you can wait and not sale when the market is bad and wait for it to improve.  Pay attention to your cattle if you don't lose them during calving or or other issues if you don't keep up on vaccinations and insect control.  Be very careful about financing, banks want to lend when cattle prices are high, but will get scared and demand you sale and pay down your loan when prices go low, bad thing to do.  And once again, trust your neighbor, but brand your own cows.

Wow thank you everyone for the mentions. I do not consider myself a heavy hitter. Many folks here spend more buying one house than I do buying 5. My thoughts on what makes a heavy hitter is number one proven experience. There are a lot of armchair quarterbacks, they don't know what they don't know. They guys who have done it, are very competent about it, and share it to others are the heavy hitters. A good post to vote ratio is a very good indication. Next the folks who can teach me something. I have had my head swell from compliments and had the air let out of me by guys who knew so much more than me. Like the Frank Dobbs act. I heard of it fro the first time on BP and a guy named Jay just nailed it, and every case of solo member LLC piercing in the last 2 years. Wow he educated me with a stick and I loved him for it. Great teacher. Heavy hitters also speak their mind, popularity is not their aim, accuracy is. Throwing the Bull**it flag can be tough. I feel i have gained more than I have contributed. The thing I like most about some folks who post is when they make me think and expand my thoughts into areas not delved into before. I am not going to post the dozens of folks who I look up to, but @Ben Leybovichhas probably challenged me as much as anyone to explore new ways of thinking.

@Todd Rector, welcome to BP and Wyoming investing.  A good deal is a good deal, but keep in mind Casper is getting beat up at the moment.  They overbuilt in multifamily and while you used to be able to rent in 2 hours of posting, now they are offering huge incentives.  It is going to get worse.  Be very conservative or plan to hold for at least 5 to 7 years.  The Coronavirus is not what I would be worrying about, it is the price of oil.  Casper lives and dies around oil.

@Jessica Maser, welcome to BP.  I also try to buy distressed properties and fix them up, but I usually make them into rentals rather than flip them.  I am slowly losing touch with my roots in your area, but but it has always had a lot of potential.