All Forum Posts by: Mark H. Porter

To echo some of this, the long-term strategy of deferred gains has been, put very simply, defer, defer, defer, die, inherit, stepped up basis, no taxes.

Of course, no one knows whether 1031’s or stepped up basis will survive this national debt crisis.

Good morning, Eric.  I have short term rentals in North Myrtle Beach and though I don’t have section 8 there I’ve had dozens in my apartments here in Burlington, Vt.

It’s just more management intensive.  Many, though not all, do not have jobs so they’re home all the time.  Wear and tear is accelerated.

The benefit is having the housing resource office as your advocate.  I only discuss things once with the tenant and if there are any further repeated issues I go straight to the section 8 advocate for that tenant.

Make sure you have clearly stated rules in to your lease - tenant changes smoke alarms batteries, no pulling down smoke detectors, dogs on leash, no unauthorized overnight stays more that three days, where to park, etc...

Finally, any rules for the section 8 tenant must be enforced for all tenants.

I have LLCs formed in GA and VT and I’ll live in SC.  Makes no difference whatsoever.

You mention having an LLC in order to write off expenses. I didn't get an LLC until I went over 23 apartments. I didn't even have separate bank accounts. The only reason to get an LLC is for reduction in risk but even in that case you could just use an umbrella policy until you get much bigger.

@Benjamin F DeCarlo good morning, Ben.  We’re fortunate that property taxes are a pass-through here in Burlington.  I simply divide the increase across each unit proportionate to number of bedrooms.  I also let the tenants know why and if they have an issue then they should call their state representative.

I found cap rates are almost exactly the same as they were 10 years ago.  You’ll pay 6’s near downtown or the college/hospital and 7’s in the old north end.  Of course, that’s staying within the same class of asset.

The trick, as in any market, is truly knowing how to increase cash flows.  If you buy a turnkey property the value is in the appreciation.  If you buy a property where rents are 10%+ under market, either due to a landlord complacency or needing lipstick, those are the gems and they’re out there.  Those are the ones where you need to spend $5k per apartment in order to raise the rent $125 per month.  That’s a little over a three year payback!

Burlington will always be a good place to be a landlord.  No matter how many apartments get built in the outside areas you’ll always own apartments where everyone can walk to work or Church Street.  I still get dozens of calls per vacancy and they’re gone in days.

You’re on the money in suggesting the pay attention to your numbers.  Cap rate is merely a cut-line that will get you interested.  From there it should be about either appreciation (class A asset) or cash flow (class B or C).

@Max T. sorry about that.  The subject changed from taking about PPP and EIDL

to stimulus payments.

@Max T. and they’ll all get arrested for fraud.  It was very clear that it was only to be used for operational expenses AND you are subject to audits that will prove you were effected by covid. nothing else.  Fraud is a fine way to end your career and fail your family.

@Ash Patel if you read my posts above you will see that I did tell everyone about the bank in Pittsburgh offering the same terms as the bank I am dealing with.

In 23 years of playing this game I’ve learned to not to share my bank, broker, and legal team with competitors.  Let’s face it, if you are also in this business you are a competitor.  It has never happened to me but I’ve had friends get the rug pulled out from under them by investors who will shake their hands and meet for drinks.  The next day they have undercut you without blinking an eye.  If you’ve been doing this for decade then you MUST have seen this.

When asked my strategy or goals I always stay at the 10,000 foot level, I won’t even share particular cities I am after?  Why?  Because the first hot shot not fully understanding the art of the deal will come in and make offers using hard money and at 4.5% cap.  There are just too many inexperienced investors muddying the waters.

Hi Ron, this is one I purchased exactly one year ago in North Myrtle Beach. It was my first STR after decades of LTR.

I never realized the first year success like this.  Covid had no effect whatsoever as people stayed out of the major hotels and shared elevators and Sought safety in solitude.  You’re 100% correct about private pools.

https://www.elliottluxuryrenta...

I use a spreadsheet to the same way.  It’s just four simple columns. Make sure it’s updated though as the IRS will ask for it to be produced quickly.

Yeah, only your first line is true