All Forum Posts by: Michael Smythe

@Jagger Boyer why go to Maine when there are great investment opportunities in Grand Rapids and Metro Detroit?

Did you watch any of the NFL Draft and see all the positive feedback about Detroit?

Regarding remote managing, in our 24 years of experience, dealing with hundreds of investors, what we've had to bail DIY Remote Investors out of is mostly Class C properties with some Class B.

So, in our opinion, one can remote manage a Class A property fairly easily if you are organized.

Class B requires more organization and knowledge, to avoid tenants taking advantage of you.

Class C should NOT be done DIY - hire a PMC!

BTW, how do you plan to handle:

1) Finding tenants and doing showings?
2) Screening applicants?
3) Turnover maintenance?
4) Ongoing maintenance with tenants?
5) Evictions?
6) MoveIn and MoveOut inspections to document condition for security deposit reconciliation?
There's many more...

@Joseph Wojciechowski you're reading too many "scary" articles!

First issue is an investor always has a choice for liability protection: 

Insurance vs LLC setup

If you have enough insurance, you can cover any lawsuit!

Second, when doing flips you'll typically put each property in its own LLC.

If you plan to scale rentals, you can have a Management LLC that acts as a PMC collecting rents and paying expenses via its bank accounts. Then you could have each rental in a Property LLC that hires the Management LLC for management. Annually, the Management LLC would "distribute" to the Property LLCs, but it would all flow thru to your 1040 Schedule E - unless you get partners, which would require a 1065 return with K-1 distributions to the partners.

@Immanuel Pierre there's ONLY a couple of companies that manage room-by-room because it's so difficult and time consuming.

Nothing is ever "Free".

They either charge other involved parties or market other services to you.

@Timothy Altman recommend you start by making an offer that meets your ROI target.

The seller will probably reject your offer, but it opens the door for further discussions.

You can then discuss alternative transaction types.

@David Yee you maximize your cashflow in real estate by wisely leveraging your cash.

Also, real estate investing is rarely all about the cashflow. Appreciation over time often exceeds the cumulative cashflow.

You can PM us if you'd like to have deeper discussion on this topic:)

@David Ning

Be careful asking for investor-friendly agents!

+95% of agents only have experience dealing with owner-occupied transactions - which are mostly EMOTIONAL decision based.

An investor wants an agent that sticks to logical numbers like ROI, Cash-on-Cash, etc.

You can differentiate between these different types of agents easily by asking them:

1) If they are RE investors themselves.
--Many will say yes, so ask them for proof! They should be able to send you an address of a rental they own.

2) If they plan on sharing a BP Calculator sheet for each and every property they send you.
--Many will state that's your job, but then what value are they truly offering as an "investor-friendly" agent?

The more questions and request for proof you ask, the better!

@Chris Good logically, it depends on the Class of the property/tenant.

Class A property/tenant: annually BEFORE lease renewal, to make sure they are taking care of the property and you want to renew.

Class B property/tenant: at least annually, maybe bi-annually depending on "vibe" from tenant.

Class C property/tenant: at least bi-annually, maybe quarterly. 

Class D property/tenant: good luck...

@Viral Mehta why haven't you already implemented these procedures to test them out while you are still local?

It's the logical way to test them!

Agree that S8 often pays more rent than cash for Class D and some Class C areas. Definitely NOT Class A and rarely Class B.

We struggle with newbie investors that buy a Class B rental and fix it up real nice - but they've listened to some fake guru online about S8 and want us to put them in their nicely fixed up property. We'd prefer getting them a cash tenant who will take better care of the property!

OPINION: S8 program should only give voucher holders 6 years max on the program and require them to attend college or trade school to improve their income. Should also require financial literacy programs, so they learn how to budget, save and fix their credit.

I don't like my tax dollars supporting "free loaders" for decades.