All Forum Posts by: Jerry W.

@Nicole A., as to your first question, I have property management in my apartments, but not my houses.  So for a nice house I would definitely place the tenant myself if I am qualified.  On my apartment building since it is a lower class property I would let my property manager rent it unless I had a really good prospect.

As to your second part of when to show a property, I have shown properties that were quite a ways from being ready and never rented them to the one I showed to.  When they are almost done I am fine with that.  I have had the whiney complainer prospect.  I had one who when walking up to the house looked and saw peeling paint on the outside window trim and made the comment, wow you don't spend any money on paint do you?  I had at her request taken time out of my morning work schedule because she had to see it right now!  The two combined together made me stop on the steps of the property with the keys in my hand and say you know, you are right.  This property is not ready and definitely not the right property for you.  I will let you know when it is in proper shape for you to look at it.  She said no she was willing to look at it.  I said no it would just waste your time and I turned and left.  We both knew she would not ever be renting one of my properties.  If that was her attitude before giving me money it would be much worse later.  Life is too short to waste dealing with folks like that.

Ok here is my take on liability protection. First you must have insurance. Next run your business correctly . Third LLCs do work. The law supports forming LLCs and corporations to prevent personal liability if operated correctly. Companies do not protect you from all liability, but they do from most. My Sub S corp costs my $50 a year to the state to keep my filings up. Companies do require a lot more book work. Separate bank accounts, separate book keeping, separate mileage tracking, etc. I do not find it an efficient use of time to have an LLC for each property or even every 2 or 3 properties. I think I currently have 3 corporation and LLcs set up with over 30 units at stake.

Hope this helps.

@Gina DiMasi, in Wyoming it is literally like 15 minutes online to create an LLC in Wyoming. I am sure it is similar in many other states. You do need to read how to operate an LLC to to avoid making mistakes that could unravel the protection an LLC gives. Good luck.

Well since I have had several links to write on this post by @JD Martin and @Steven Vaughn, here goes.  

First I found this site through a link to an article by Brandon Turner about how to vet tenants. I had been investing for over 10 years, but my partner had done all of the renting and managing, I did acquisitions and financing, and legal work. My partner moved over a hundred miles away and I suddenly had to all of the landlord tenant stuff. My partner had no books and no methods to how he did things. My partner was very good but entirely self taught. After having a few pretty bad tenants I decided I needed to get educated on better ways to do some things and started looking for information. After getting on the site and reading, I went into the Learn section and read nearly every spare minute for about 2 months devouring nearly every article they had written and numerous posts. I learned about having a minimum of 3 times the salary as rent costs, I learned what questions to ask, I learned the tax differences between a Sub S Corp and an LLC, I learned about including a factor for vacancy and cap ex in evaluating a possible rental house purchase. It was great. For the first time ever I wrote down some goals to achieve.

Next I started reading posts and articles from truly great minds.  @Bill Gulley, and @Brian Burke,  @Jay Hinrichs, and I began challenging some posts from smart guys like @Ben Leybovich.  My mind expanded and grew with new ways of thinking and even by arguing with Ben, I learned new things and new ways of considering things.

I also found like minds.  I literally had not one person in my town I could talk about real estate to.  Not even my wife who was actually against my investing in real estate, (and still is).  There was something about sharing my dreams and outlooks with others that was satisfying.  Imagine you were born without an arm, and always felt a bit weird about it, but later found thousands of people just like you who were willing to talk about it.

I slowly began contributing about things I did know about and like Jay H, ran across some pretty bad advice.  There was a guy I called Al Gore's brother who advocated things like taking the door off a house to make folks move out.  Giving the address of the house to bikers in a biker bar and telling them there was a party there and they were welcome to come.  Horrible advice.  So I began posting more and more.  I think the most satisfaction I have felt however is truly helping someone out who was in a bind and needed encouragement as much as advice.  I had folks send me messages about how much better they felt after conversing with me.  Things I went through and learned was helping others.  That is a pretty cool feeling.  My father among many other things had been a preacher and a missionary, and I suspect that influences me on what I feel in rewarding and important.

As to the time and energy spent on BP, I made a conscious decision after being on BP for several months and writing out goals to accomplish, to quit playing online role playing games like Everquest and Warcraft.  I spent quite a few hours at night and sometimes nearly the entire weekend playing those games and honing and advancing characters.  it was an excellent trade.  It took nearly 20 years for me and my partner to acquire a commercial property and nearly 20 rental units.  In the last 5 years I have bought full ownership of the real estate companies I was previously a part owner in, I acquired several properties in my own name, and added nearly a dozen more properties.  Keep in mind this has occurred despite a pretty severe downturn in our local economy.

While I do contribute to a few forums, I have gotten a lot out of BP as well.  I have learned,  made friends, offended a few, and tried to help others as best I could.  I never came to brag, and found it very hard to talk about what I was doing, but am getting better about that.

So thanks for the thread and thanks to BP for providing this site.

@Joe Tomko, I am confused, how can an LLC be your daughter's if it is wholly owned by a holding company? The daughter LLC owns property you say, but your daughter does not own the LLC? I am unable to understand what you are implying or how it in any way it could possibly help get a property out of an S Corp without causing a taxable event. As I understand the rule of transferring into a trust, you cannot have the mortgage called if you put property into a TESTAMENTARY trust. It has nothing to do with creating a transfer exempt from taxes. Could you please explain more?

@Isaac K., I tend to agree with @Michael Plaks. The real extreme asset protection plans some of these folks sale like Clint Coons are just overkill and really don't do much more than a simple LLC would if you owner operate. You cannot separate yourself from liability for any act you do personally, so even 10 LLCs stacked on top of each other will not protect you. If you look or ask, not a single one of the really big operators on this site use multiple LLC stacked and blind trusts. What is the point of networking and building up a good name if you are anonymous. Again if you personally manage you will never be anonymous. A simple LLC will do 98% of what investors need. Just operate them right.

@Isaac K., actually the filing fee is based upon the amount of business property you own in Wyoming, so unless you have a load of property in WY there is only a $50 filing fee.  Filling out the form online only takes about 10 minutes, but gathering a list of all of the properties and breaking it down by land and nonland takes me a few hours.

@Cris Dahlgren, the estate cannot legally be probated without notifying medicaid.  Medicaid as a creditor can do the probate and get the estate assets up to the amount of it is owed.  Keep in mind if it is a recorded mortgage some type of probate will be needed to ascertain who inherited the mortgage.  If no one inherits it and has that recorded who will file the lien release after the mortgage is paid?  The title will be permanently clouded.

@Steve Vaughan, please let me know when you will be around.  You will be my guest of course.  Look forward to meeting in person after so many years of conversing on the site.  There is a lot for your family to do here.

@Steve Vaughan, congratulations.  I really admire your common sense approach to investing.  People lock in on the next purchase and forget their overall strategy.  Your posts also show a depth of experience that many posts lack.  I like your viewpoint where your only concern is not to buy a 200 unit complex by year 5 of investing.  Yes some folks do it.  About 1 in 10 million do it.  it really is not rational for most folks on here to aspire to that in 5 years if ever.  Most folks doing real estate do it as a side business not their only business.  People taking risks make huge strides forward often, but folks with a family are usually more conservative and do want risk everything with massive leverage.  Risk is for the younger single guys, not the ones with a wife and 2 kids counting on them for their food, clothing and housing needs.  I have passed on several high potential deals I would have taken 40 years ago, because I have something to lose now.  People like you help the folks out who want the safer surer way to wealth.

One of these days I will take a real vacation and come out and see you.  Until then be safe and well.