All Forum Posts by: Lesley Resnick

Its just shady.  Either this person does not understand what they are doing or trying to pull a fast one on you you or the IRS.  I would stay clear.

"I did not using a broker", will be the title of a future post on BP.  The story will unfold as I renovated the house myself and figured I could sell it myself.  I spent a great deal of my time showing the house ,going on weekends nights, took off time from my day job..  After being on the market for over 120 days a buyer showed up without a broker.  The house went under contract and I did not fill out the expiration date correctly.  The indivual wanted the house and was having trouble getting financed. I battled with the buyer for 90 days more, until they finally let me out to of the contract, when I finally hired a lawyer.  Then, I started the process all over after 210 days on the market....

Not using a broker may work out sometimes, in an overheated sellers market and you are lucky person.  As we can all attest there are some unscrupulous people in RE.  The real value of a broker is if something goes sideways in the deal.  Redfin is not going to help you or care, then you must figure it out yourself or find someone to help.   

Sfh and multi units are quite similar.  Scale is more importnt than asset class. 

I recommend calling the utilities directly to determine the average usage of the property.  If it is one meter I would use the trailing 12months and divide by units.

The actual Maintenance cost is anyone's guess.

Any deferred maintenance? Age of roof, AC / Heat

What is the age Age of building 

Is the neighborhood an A, B, C. will drive costs and occupancy.

Always validate the numbers a seller gives you.  The value of the property is dependent on those numbers.  I have seen sellers leave out maintenance and trash costs since they were a shared expense between properties and the cost was shifted to a property that is not for sale. 

I don't know how it works in IA, but Tax credits in Florida are tough to get.  The site must approve it and  only up tp state funding.  There is a long term commitment to stay low income for 20 years.

I have spent a lot time looking into this.  The feds are serious about being a, "real-estate professional"  It must legitimately be your first income.  No active source of income can exceed real estate, there are number of hour requirements, etc.

As an active investor you can take a 25k loss, subject to income limits.  This is for a w2 employee.

The other strategy and you generally need to have scale to make it work.  Cost segrigation allows you to break out the comment parts of the house and depreciate them on different schedules.  The building is 27.5 years.  The IRS allows different depreciation scheduled 5, 7, 15 years.  In doing so, you pull the depreciation forward.  To do comprehensive cost segregation you will need to hire specialized firm.  

https://www.irs.gov/publications/p527/ch02.html

The do-it yourself version is, based on when you purchased an item, you can run it on its own schedule, floors landscaping, appliances lighting, etc.  One thing to look out for is the replacement vs upgrade.  If something is no longer usable and replace it is completely deductible in the year its purchased.  If there was a fire and the carpet was destroyed, it could not be repaired.  Renovation is taken on a depreciation schedule. 

The difference between a 5 year depreciation and 27.5 is significant.  

$1000 for 27.5 years = $36

$1000 for 5 years = $200

To sum it up, there are a lot of great strategies to limit tax liability.  In most cases you can get close, if not achieve a zero tax liability.    

Appreciation is the surprise at the end of the cereal box.  Buy the cereal because you like it.  My point is simple, you can go broke waiting for appreciation. Losing money each month is not my idea of investing or speculating.  You can go broke waiting for the pay out.  Cashflow is king, I can measure it and live off it.  If I can be strategic and sell the house when I can wait for the optimal time to sell.  Unless you have enough cash to live on for the rest of your days, you should be concerned with the downside risk of anything you invest in,  The great recession is a clear memory and I am alway planning my exit strategy for the down side.

My focus is on the MLS, I do not have much to do with off market properties. I have seen a steady flow of deals that make sense for investors and have been doing deals with my investors every month. I do agree that the makers is stronger, which is a good thing. There are spots ;like the beach that make no sense, however there are a number of areas that are sweet spots.

PM me and we can set up a call and I will tell you about where I have been finding deals. 

The market here is great.  There are almost more deals than I can get to.  There is a steady flow of deals coming through.  The deals are somewhat more competitive as the market normalizes and the economy improves.   With that said, you still need to do your due diligence and have a plan.  I have a team of people I trust and do not worry about being taken advantage of.  They are interested in the deal flow I provide and do n want to jeopardize the steady flow of work.  I do not think it is critical that it be you to stop by, but it helps to have feet on the street representing your interests.  Visiting properties is time consuming and not scalable as you holdings grow,  

PM me we can chat further about the details of your situation. 

I have the Doctor, I have a lawyer, I have an account, I have a contractor, a cleaning compnay. A lawn service.  You get the idea.  All specialist in their field.  A lot of what I pay for I could do myself, however, I see value in paying them for their expertise and not having to do it myself.  My time is my most valuable asset.

Finding a team is the only way to scale your business.  All things being equal, If someone singular focuses on an activity they will be better at it than someone who does not.  My job is to help investors scale their business,  I have found both experienced and newbies benefit.  Newbies do not have the time or experience to do it themselves, most have day jobs.  Experienced investors want to spend their team on high value activities.  This site is filled with people who desire to leave the rat race, but if they do all the work themselves, they are exchanging one job for another.  The goal is to be a passive investor.  It is easy to be penny wise and pound foolish in this business.  Chasing the last dollar is the most expensive dollar you will earn (80 / 20 rule).

I find deals for my investors and represent them through the process of purchasing properties.  Yes, most people could largely do it themselves.  Assuming, everything goes smoothly and they have the time to understand the process.  On the other hand, if something goes wrong what will you do?  What is your strategy to safeguard your interests during the transaction?  I have been in a lot of deals, they may have not been all my purchases, but I have seen or run the process.  

There are very few high value actives an investor does:

Build and evaluate a team

Raise money / financing

pulling the trigger and taking possession of the asset

Low value activities (that should be outsourced)

Finding deals

Evaluating deals - You must have criteria and a numbers based approach.  If you do this correctly deals go / no go decisions are easy.  The go with my gut, gets you in trouble as often as it works.

Repair

Renting / Landlording

Selling.

So, who should you work with?  Someone who gets it.  There is no magic question  They should know the business and the market.  If they aren't helping scale your investing or freeing you up from low value activities to focus on high value, why are you working with that person?

I work with a number of investor from the bay area. The internet has removed distance and location no longer matter.  If you are going to do at the work yourself then,by all means buy locally.  There is no way to scale a Realestate business with out getting others involved, contractors, friends, family, etc.  At that point you need a team and must be able to rely on them.  Even if you have local holdings, how often would you really visit them?  It sounds like you have a demanding day job.  The other point I would make is diversity your holdings.  The economy and weather are largely disconnected between Ca and Florida.  I live and invest in Florida and have a bias towards florida.  I have heard good things about Las Vegas, but it is s a market I do not know.