All Forum Posts by: Kevin McGuire

@Rex Celle Agree with the posts here. I’ve been tracking it about quarterly for years even before RI and always update year end when preparing for taxes since I’m collecting much of the data anyway.

One absolutely should be able to produce a balance sheet (assets and liabilities) for your RI because put simply you’re running a business and that’s what businesses do. I use QuickBooks Online and can produce that and many other reports at a moment’s notice (second important one is profit and loss). There’s lots of great learning material out there, I do not have a financial background.

Finally, I’ve seen blog posts here on determining net worth. I include RI property value and mortgages, stocks, principal residence and mortgage on it. I include my residence because although one must live somewhere (so it’s not liquid) I could leverage it through refinancing. I don’t include car etc because in my view those aren’t assets.

@Ivan Barratt I'm realizing through these comments that I may be more interested in financial education than he is, which is perhaps what this really comes down to: the degree one wants that education to be more self directed, or wanting others to just take of it all for you.

@Todd Dexheimer Good comment, shows integrity on your part as a syndicator.

@John Fortes Agree.

@Alan M. I like the model, thanks.

All, thanks for your comments. I was traveling then away on vacation and am just now getting back to this article.

@Ian Ippolito Thanks for the book reference.

@Taylor L. Good point on hard money lending, and thanks for the book reference and folks to follow.

@Steve K. Appreciate it.

@Alina Trigub Thanks, I'll pass it on and ask my friend if he wants more references.

@Thomas S. He does have an accredited financial advisor, whom I also consult with, but I find his advise, while sound and well-intentioned, to be limited in scope to the financial instruments he can offer. My friend is not looking for us to advise him, I am simply looking for pointers that he may broaden his financial education. Which is what I love about the PB forums!

@Joe Splitrock You may be right.

@Lauren Do He has already bought an annuity. But he recognizes that even that has risks (e.g. the company may not be around to pay out).

@Theo Hicks Thanks, the meetups might be more involved than he wants to be, but I might do that myself.

@Brian Burke Good point that you want a syndicator that has seen the dark days.

@Mike Krieg I too have been interested in mobile home parks and storage. 

(Apparently wordpress doesn't want me to add any more @mentions here!)

@Llewelyn A. Great comments! I hadn't heard of "over-consumption" until this podcast. Always fascinating what happens when you artificially control supply and demand, it leaks out somewhere because people will always find a way to optimize their situation, whether the landlord or the tenant, as you point out. Still, real estate is different in that shelter is a necessity (versus say me selling pies, if I charge too much you can always buy cakes instead), which means that invariably government will be motivated to get involved. I accept that as the reality but then look to ways to devise regulations that are fair to the landlord, who as it's said doesn't get a lot of sympathy.

@Louis W. I thought it was a well balanced podcast. I always enjoy Freakonomics.

@Darren Sager I'm sympathetic to tenants not wanting to get priced out of their home. As a landlord I respect the power that I have over someone's life. All of my rental properties are in Ottawa, Canada. In Ontario there's regulation which limits the amount I can increase the rent per year, unless I file for an exception. If I miss raising the rent one year I can't make it up, and while the increases each year are supposed to be reflective of increasing costs, they might generally but not specifically. I can however set the rent on an empty unit to whatever I want. Despite all that I continue to invest in Ottawa because that's where I have my team, the cap rate's ok, and I like the market dynamics. Which is to say, you can make a system work, as long as they don't change the rules.

@Chris Mignone @Sally Fairchild Yes, much of it reminded me of my economics 100 class ages ago when we learned about unions: they work great for those already in the union but those who aren't part of the union will find it difficult to join because the jobs are more scarce due to their higher cost to the employer.

Thought folks might find this episode interesting:

http://freakonomics.com/podcast/rent-control/

(and couldn't figure out which forum to post it under!)

@Brandon Penn I celebrate your success and exceeding your goal! Cheers man!

@Trudy Pachon from the responses here I’m sure blog posts on your experiences would be well appreciated! I’ve researched early retirement abroad and Mexico comes up high in the lists for cost of living, quality and cost of health care, and acceptance of expats. Would love to hear how it all works out for you.

@Dustin S. I am not an accountant, I don't have a finance background, I have an accountant file my taxes for me ... and yet I use QuickBooksOnline for my properties. I first did so because I was finding keeping spreadsheets up to date to be error prone, confusing, and a lot of back and forth with my accountant preparing for tax time. It addressed all that. 

But I've come to view it not as accounting software, instead as a mechanism for me to have visibility into the financial operations of my real estate holdings. You model your business with it. As a simple example, I have invoices generated every month for my rents and when a tenant pays I reconcile the payment from my bank account with those invoices and voila I know who paid when and who hasn't. The other day I was at work walking to my desk sipping my coffee, deposited the electronic check with my bank app, when to the QuickBooksOnline app on my phone, pulled in the bank info, reconciled the payment against the invoice, sat down at my desk and got to work at my day job. Done!

I can tell you my profit and loss, balance sheet of assets versus liabilities (mortgages), and compare from year to year using various reports both canned and that I constructed.

It was a bit of learning curve but as you noted, there's a ton of great free material out there. It was well worth the investment of my time. Ultimately for me it came down the realization that I'm running a business (duh), and that's what people do when they run their business.

@Ashley Sliwa You can definitely do it part time. Like you my goal is future passive income. I have a busy full time high tech job, own seven properties and am buying a fourplex. Oh and they’re all remote. You need to approach it as a job though and build a team of real estate agent and property manager. I personally believe the latter is critical; if you self manage you take on the risk of those events (stopped toilet, whatever) disrupting your life. PM me if you want to chat more.