All Forum Posts by: Mark Butler

Hello Everyone

My name is Mark and I am an MBA student at SMU in Dallas. Two friends of mine from the program are interested in investing in rental properties and have a particular strategy in mind, but I want feedback from the BiggerPockets community. The idea is simple: we equally invest in a rental property in year 1, keep all of the cash flow from the asset in our LLC. Then in year 2 we buy another property, again keeping all the cash flow in the LLC. We plan to buy a house every year and keep cash flow in the entity until we have purchased enough houses (rough math shows it'll take about 8 houses or so) to where the cash flow from all our properties is then able to fund the down payment on following purchases. Just like compounding stocks we thing this could help us build a sizable portfolio and ultimately produce enough cash flow to where we could purchase multiple properties a year with the cash flow. The question comes as to when or how we might go about taking distributions. We don't want to fully liquidate the LLC annually because there will be costs that need to be funded, but want to start realizing some of the cash flow benefits as the plan matures.

Can anyone provide guidance or feedback on this? Thanks.

Mark

Hello Everyone

My name is Mark and I am an MBA student at SMU in Dallas. Two friends of mine from the program are interested in investing in rental properties and have a particular strategy in mind, but I want feedback from the BiggerPockets community. The idea is simple: we equally invest in a rental property in year 1, keep all of the cash flow from the asset in our LLC. Then in year 2 we buy another property, again keeping all the cash flow in the LLC. We plan to buy a house every year and keep cash flow in the entity until we have purchased enough houses (rough math shows it'll take about 8 houses or so) to where the cash flow from all our properties is then able to fund the down payment on following purchases. Just like compounding stocks we thing this could help us build a sizable portfolio and ultimately produce enough cash flow to where we could purchase multiple properties a year with the cash flow. The question comes as to when or how we might go about taking distributions. We don't want to fully liquidate the LLC annually because there will be costs that need to be funded, but want to start realizing some of the cash flow benefits as the plan matures.

Can anyone provide guidance or feedback on this? Thanks.

Mark

@Ray thanks for your note. What are some methods by which you can go about determining if a good property manager would be good at this task when interviewing. One of our goals as a partnership between me and two others will be to get a feel for the local property manager market so we can get to work once we have our capital. Thanks. 

Hello

I am an MBA student interested in investing in rental properties within 18-24 months of graduating from school. I would like to hear from the forum whether investors tend to lean more on their property managers (if they have them, my understanding is this is most likely) or if they try to find tenants themselves. I understand their is a cost saving appeal to finding your own tenants but the ease of relying on property managers can make increased portfolio growth of properties more scale-able. Any advice would be helpful. Thank you.

Mark

Just out of curiosity, as I consider entering the real estate market with ambitions of developing a geographically diversified "buy and hold" rental portfolio over the upcoming years, I would be curious to know if people would recommend looking at local property managers or if there are property managers that have a nationwide presence.

For instance, say I start with a house in Dallas. If I know that someday I'll want to invest outside of the Dallas area and into other states, would it make sense from an organizational standpoint to have all my properties managed by a national portfolio manager? 

Also just to clarify, I don't know if companies with this type of breadth exist, but would be surprised if they didn't.

Thank you!

Hello everyone! My name is Mark and I am currently a 27 year old MBA candidate at SMU in Dallas. I wanted to reach out and say hello and see if I could seek advice from the forums. I have come back to SMU (graduated with a degree in finance in 2012 and then proceeded to work in banking for 4 years) to effectively make a transition into the commercial real estate industry by concentrating in Real Estate. However, I am interested in all aspects of real estate and wanted to ask everyone how they would best recommend using BiggerPockets. I have listened to several of the podcasts and check in on the website, although there is so much information it can almost be overwhelming (this is a positive, not complaining!). Does anyone have a method or recommendation on where I can focus over the next year on BiggerPockets.com and the podcasts to gain the knowledge I need to be most effective? My goal is to invest in my first rental property within 12 months of graduation (May 2018) and ambitiously move forward from there as I learn through experience. Thank you all!