All Forum Posts by: Kenneth Garrett

@Jordan Gerkin

In Illinois, typically 75% of your property taxes go the public school district, the rest is split between townships, libraries, fire departments and the city/village, etc.  The city/village is generally a few hundred dollars only.  If your taxes were way under valued then this could cause that.  I have a property I bought 7 years ago and they are 60% more than when I bought it. It’s either your accessed value which never seems to go down or the multiplier.  Back during the Great Recession assessment values went down so they raised the multiplier on all us.  The government still got there’s.  You can always appeal.  There are plenty legal and tax companies who will do it for you at a cost 1/3 the tax savings.  I’ve used them before.  You can also file yourself.  Just be aware there is a small window in which to appeal which last about six weeks or so.

@Diandre Pierce

You can open business credit accounts with companies such as; Quill, Uline and Grainger.  Always pay them on time to build credit.  Probably need to spend at least $500 for them to show up on your business credit.  This takes time just like your personal credit.  One thing to note; if you’re using your home as your mailing address or business address you might get denied.  They want true businesses with a real address, not a PO Box either.

Good Luck.

@Mary El

I’ve bought a number of properties directly from banks.  You have to call small local banks and credit unions.  They have properties on the books they have foreclosed on, but are just sitting there until they are told to move the properties.  I call them shadow inventory.  There are a number of names for them. They may require you to go through their broker.  I find the contact is the VP of commercial mortgages, but it does depend on the bank.  It’s best if you have cash.  They in general are pretty rough, but you can definitely find deals through this route.  

@Joe S.

That’s pretty funny. Paying someone to dress you. I went to catholic school and had a upper management job most of my career, requiring me to dress up everyday. The great thing about being an entrepreneur (investor) is you can wear whatever you want. These days are t-shirts, shorts and gym shoes. I’m in Florida. It’s not that I be can’t dress up, I just choose to be comfortable.

If you read the book “the millionaire next door” about finding private money. The guy wearing flannel shirts and jeans everyday and driving a rust bucket pick up truck has nothing to do with one’s wealth or intelligence. I say be comfortable in your own skin. Just be you.

@Kristin Riker

Your are at the bottom of the price range where competition is fierce.  Pick a neighborhood or two in Tampa, that you can become an expert in. This means when a property comes up you already know whether there is enough spread in the deal to make it work.  When I first started I was all over the place and couldn’t move quick enough.  Someone advised me to narrow my search down.  I limited it to 3 neighborhoods and I was able to secure my first property.  I still got beat out some, but it definitely help me to focus by reducing my pool area.

@Jose Centeno

That is to register your property as a business with the state and hence pay your state tax similar to a hotel.  That is different than a local license or from a city or county.  I pay state and county tax.  Your situation, you might pay State and City tax depending on what jurisdiction you are in.

@Jose Centeno

Just to be clear you want to Short Term Rental your house.  Airbnb is a platform to advertise your listing.  There is no State requirement other then to pay taxes.  You need to call the city and find out there requirements.

@Amby Bhagtani

There are a few conditions the room has to meet in order to qualify as a bedroom.  A minimum square footage with at least one dimension to be at least 7 feet.  The residential code says 70 square feet.  Many jurisdictions have changed that to 100 square feet.  The height must be at least 7 feet.  You must have an emergency escape window that when fully open is 5.7 square feet.  Access must be from a hallway.  Bedroom cannot access through another bedroom.  Need a smoke detector, hard wired if possible.  If you are on a septic field, it must be designed for 4 bedrooms.  If you are on public sewer it doesn’t matter.  Of course you will need a closet.  If you can meet these conditions, then you should apply for a building permit.  

 Hey Jonathan, my strategy was to buy 2 bedroom houses with enough square footage to create a third bedroom.  The cost is minimal maybe $5000.  With some sweat equity probably under $2000.  

Converting an attached garage to a bedroom is a lot more work than you might think.  First there is usually a step down into the garage and most would build the floor up with sleepers to match the height so it doesn’t look like a garage that was converted.   You don’t want it to be odd so if you go to sell it, it’s not to unusual.  By building the floor up you can resolve the vapor barrier that’s required.  The overhead door will need to be replaced/siding etc.  Insulate all the walls and ceiling, add electric, drywall to be installed and a building permit.

A detached garage will have many of the same issues. In addition, you will need to address the location of the garage. Typically the setbacks for a detached garage are not as restrictive as habitable space/ADU. Some areas don't allow ADU. Just some things to consider. Contact your local building department to see if it's even possible.

@Mike Schorah

I have two thoughts on your post.

Since the real estate market is always evolving you need to use very current data. If there is a comp that matches your property in bed/bath, square footage, home style, etc same street or very close by hopefully same subdivision that is a good comp. Less then 3 months old. Be conservative on your ARV. Find at least 3 properties. Compare the finishes to what you are doing. I think you should always look at what's currently on the market. If those properties are just as good as yours is going to be you might need to adjust your math.

Forget the 70% rule or any of those other percentage rules. That’s just a back of the napkin calculation. What if a property doesn’t meet that criteria but gets you $30K - 40K profit. Who cares the goal is to make money.