All Forum Posts by: Llewelyn A.

21 years ago I decided that I didn't want Property Management to a full-time job even though I was going to self-manage each property.

Now I have 28 apts with 60 or so tenants in 8 multi-family buildings in Brooklyn, NYC.

I use a LOT of technology including electronic rent collection, electronic locks, internet controlled Thermostats, WiFi Cameras, Cloud Based CRM, Electronic Signatures (DocuSign), automated expense payments, etc. All controlled on my Phone Apps.

Additionally, it's been 18 years since I had to do an eviction, which I did myself.

I normally get tenants who have at least a 700+ FICO. In fact, my last tenant which I signed a lease with in March had a FICO score of 822.

I look at the time you will be spending on management as a function on the kinds of properties you buy AND your skill as a PM and if you are willing to research and buy technology.

I probably spend less than 15 hours a week on average involved in Property Management issues.

When I taught Real Estate, I often told my students to be careful of buying yourself a full time job when looking for an Investment. Remember, the difference between an Investment and a Business is the less time you spend on the operations of the business, the more it is an Investment. I don't want to buy a Business, I want to buy an INVESTMENT. Therefore, I look for properties that will require less of my attention if I am self-managing it.

Properties that require a lot LESS management comes with a high initial cost. HOWEVER, over the 21 years as a buy and hold, self-managed Investment Property portfolio owner, it's an incredibly acceptable job for me! :) One that gives me raises every year as the consistent increases in cash flow and appreciation continues every year except in the financial crisis for a few years.

I will probably continue to buy properties and self-manage them until I see it will take more than 20 hours a week.

BUT, with all the automation, smart sensors and leak and smoke detectors, wifi cameras and locks, etc., I am wondering if the only time consuming event will be bad tenants that need eviction. Since my screening process is so difficult in a place where the vacancy rate is below 5%, I'm ensuring that doesn't happen much if at all.

I may even find that my time spent on PM will actually go down due to technology advances despite increasing my portfolio. We'll see!

@Eamonn McElroy

@Basit Siddiqi

Just thought I would ask for your opinions.

Thanks.

I would like some opinions on something that probably happens every day in the life of a business person.

Let's say hypothetically, you own 100 Main Street, LLC.

You were denied a Credit Card so all you have is a Debit Card, but you don't yet have enough money to pay for some of your capital expenditures.

You do have $10k Credit on a Personal Credit Card that you have yet to use.

If you go ahead and pay for some of those Capital Expenditures, for instance, a new boiler for $1k, a replacement fridge, $1k, etc. is this something that would pass an Audit of 100 Main Street, LLC if you claimed the Capital Expenditures on it's books?

What about smaller items, such as printer paper, etc.

Each one of these items would come with it's receipt and saved for an Audit.

Will the fact that you made the claims for these expenses AND have the receipt have enough evidence that these were NOT personal expenses but rather business expenses on the LLC?

To expand this hypothetical scenario further, let's say you have a Personal Credit Card that gives you a LOT of perks, for instance, airline miles, hotel credits, cash back, etc.

You want to use this card for ALL your business purchases and get the benefits.

Will this fail an IRS Audit even though you have all the receipts and the Credit Card Statements?

Will the fact that you may be making personal purchases, such as buying a movie ticket, etc. matter as long as you only claim the business expenses?

What happens if you put 10 of your Investment Properties into separate LLCs. Are you expected to have 10 separate Credit Cards, one for each property? Or can you use just one Credit Card but allocate the Purchase Transactions appropriately?

What is the right way to do it so that:

1) The IRS would be fine with it

2) Not open the door to piercing the Corporate Veil

How have you done it in the past?

Thanks!

@Theresa Amouzou

I only invest in NYC and specifically Brooklyn.

I have been purchasing properties since 1997 and currently have 9 properties in my portfolio, most of them 3 and 4 family buildings.

I know things are expensive. But imagine what the prices were back in 1997 and what they are now.

As a real example, I bought a 2 family in Windsor Terrace, Brooklyn, for $140k and only $21k down and closing costs of $6k back then.

That same property can sell for $1.1 Million

I know it's incredibly difficult to buy NYC properties for the average person.

However, with the right partners, anything is possible.

I tend to write a lot about my Strategies here in BP. So if you are interested, just read my past posts.

Lastly... another quick way.. Marry Jeff Bezo's ex-wife! I hear she's worth $34 Billion now that she got her divorce filings!

Step 1: Find a Millionaire

Step 2: Get Adopted by the Millionaire!

There is a step 3, but I'll leave that open for your imagination! (but poison rings a bell)

BTW, for those that don't have a sense of humor.... this IS a joke.

I have a NYC Property bought all Cash and in an LLC.

I decided to call AIM Loans.

Their quote on a 50% LTV, $750k Super Jumbo 30 year fixed loan on a 3 Family building in NYC would be 4.75%

Unfortunately, they won't lend to an LLC because they don't do commercial loans as they don't consider this to be a residential property once it's in an entity.

@Chris Seveney

@Jay Hinrichs

@Andy Mirza

It sounds like my self financed self service note idea is not worth the paper it would be printed on! haha!

I really appreciate all the advice and comments on how things work.

I think I may run with Andy's comment: "When it's a simple loan where the parties know and trust each other, this is fine, most of the time."

My friends and family already know they had missed the boat on my investments. 

I do have a few ideas in which I might approach some of my friends and relatives who were too risk adverse to become Venture Partners.

Generally, they don't even make more than 3 or 4% on their money.

After watching me create millions of dollars of profit for my Partners and I, they are willing to trust me if I give them a better return on what they currently earn.

In other words, they consider me a Triple A Bond while the Note Investor who has no personal knowledge of me thinks I'm a Junk Bond!

My FICO is over 800 and I have about 25 years of Credit History.

I have also NEVER lost money in ANY investments in my 25 years of Stocks and Real Estate Investing.

This won't be a hard sell to my risk adverse friends and family who would accept my personal guarantee.

@Chris Seveney

That makes a lot of sense!

I would write a $50,000 check out to say, 100 Main Street, LLC. Deposit into the Account of 100 Main Street, LLC. At the same time, file a Mortgage Document at the County Registrar on 100 Main Street.

For terms, I would have a Promissory Note, but will need to have 100 Main Street, LLC make payments to me.

If this is all sounds good, then lets say I make a Promissory Note for $50k, 80% LTV, 2nd Lien position, 30 year fixed, at 4%, monthly payment is $268.41 per month.

Let's say the property is a single family home in a B neighborhood in an East Coast City, say, Philly.

Will this kind of Note be sellable? Any idea how much it can get sold for and where to sell it?

@Jay Hinrichs

@Andy Mirza

@Ken Hobbick

I added you all to see if this is doable.

Much appreciate your input!

Since we have a few really good Note Specialists here on this Thread, just thought I could pop a quick question to see if this is already being done OR if it's just not done at all.

Suppose I have an Investment Property in an LLC. I want to get a Equity Loan.

Instead of going to the Bank, I decide to create a Note on it.

Can I then sell that note? I am assuming I can unless there is some kind of licensing required even if I am the owner and creator of the note.

Now, even if I can create the Note and sell it myself, is it worth doing so rather than going to the bank?

I'm just putting this out here with practically little knowledge of the secondary market although I did lend money to a Partner and put a lien on his property myself. It was quite a simple process.

Hopefully this isn't an especially dumb question! haha!