All Forum Posts by: John K.

@Chris Winterhalter - thanks for the info, kinda what I was thinking.

Does anyone who works with a portfolio lender and has their rental properties in a LLC have a fixed rate mortgage? Or are ARM's the only way that banks will finance buy and hold rentals in a LLC? My Realtor just mentioned as we were looking at a duplex she had another client that was doing rental properties in fixed rates as an LLC.

Has anyone ever done creative financing with a portfolio lender like 1/2 ARM and 1/2 in like a 15 year fixed or anything?

Instead of a flat decrease in rent amounts for modeling purposes, I look at it in vacant unit months (ie: if duplex, if 1 of the 2 units is vacant) and with the rent decreasing by various percentages. So you can see if hard times hit and you have a vacancy for 2 months, and the rent ends up being 20% lower than current/target, that you are still in the black for the year.

I'd suggest Quickbooks, and then use the class feature to track break down specific properties.

does anyone have any recommendations on some of the best property management conferences? There seem to be tons out there - which are the best?

I got a good one here. I'm going to use some easy numbers.

I purchased a duplex for $200,000 in July. The prior owners had the property forever and it was assessed at a total of $150,000, $50,000 towards land, and $100,000 towards improvements.

I took the values with my accountant at the time: 33% is land, 66% is improvements. So I can depreciate $133,333 as improvements ($200,000 x 66.6%).

Jump forward 9 months (now), the county got around to updating their website with the assessment values of our purchase (they are just REALLY REALLY slow), they now say that the land is worth $50,000 and the improvements are worth $150,000. They didn't adjust the land basis and say that all of the increase is towards improvements. Naturally I want the extra $16,667 in depreciation over 27.5 years.

My accountant said option 1 would be to re-file last years taxes with correct amount. I'm not a big fan of refiling since we are a multi-member llc and it would be a big mess for everyone. I saw online you can file IRS form 3115, does anyone have experience with a situation like this in changing the depreciation amounts?

You can reach out to the local housing management office if you have problems, lots of time Section 8 gets a bad reputation - but it can be great as well. Tenants are obligated to follow all rules of the lease so if they are causing damage or problems and it violates the lease - you can evict them like any other tenant or notify them of the violation and many times they will promptly comply since they risk loosing their section 8 assistance.

I don't even pay for basic inspections, we just make sure there is nothing obvious wrong with a unit (no leaking water, electrical is not knob and tube, etc). I'd suggest just writing in any offer the right to do an inspection, which you can then do yourself and then sign off on it / wave it. After you do the inspection yourself and if you have doubts, just have a regular inspection done.

Personally, I think anytime you have to pay for education at a local club something is probably wrong. I'd suggest taking property management classes at a local community college - I took one and the teacher was really great and had tons of experience. I'd avoid a lot of the "pay to learn" clubs and groups outside of that though, it seems like they are more out to make money than teach. While you may meet some good networking resources at a local club or group, I think overall there are more of the "get rich quick" types at them. I think bigger pockets is probably a 100 times better resource and you can get more advice from real investors.

First of all I'm not a lawyer, however for investment property I'd suggest an LLC. Having all your investment real estate activity contained within a LLC or LLC's is great for a number of reasons. It contains most of the liability - so you lower your risk of personally being sued by someone. I personally think it also makes it better for accounting since even though the IRS considers it a pass through entity if it's a single member LLC - you contain everything inside "your business name LLC"