All Forum Posts by: Mike Dymski

Agree with Hugh above on referrals.  I had my wife post it on her facebook page and we received numerous referrals, with two CPAs getting multiple referrals.  I would then recommend calling or sitting down with them with a list of prepared questions specific to your taxable income.  For example, you can find out how many clients they have a real estate portfolio similar to yours, what are some of the nuances with real estate and how they handle them.  IMO, the value add for the CPA is not in the tax return preparation but in their ability to handle a question or two that you may have during the year on the tax implication of a potential transaction.  You may want to include that question in your due diligence...how they can help there.

@Tim Porsche If your P2P involves lendingclub or prosper, they pay your IRA fees at certain investment amounts. I opened a prosper account for my wife with the minimum investment to avoid fees and use that free SDIRA account (with Equity Trust) for non-prosper investments. The amount of time it takes to get funds deposited into the SDIRA and directed out to the investment is insanely long but the tax benefits are nice. Having the prosper account is also a nice vehicle for reinvesting the SDIRA earnings from non-prosper investments. Otherwise, the funds sit idle, which reduces your return.

@Brent Coombs

Agreed.  Logan A, CPA, suggested using replacement value from the insurance policy.

I use lot sale values for IRS/depreciation implications (and have not had a property where the lot value exceeded the total value to cause issues).  Not sure if my method is proper.

@Brent Coombs, the insurance policy covers the replacement cost of the building in the event of a full loss regardless of the land value.  Not sure if that is what you are asking.

 I use the same 20% threshold as does an investor at my office.  IMO, real estate is too much work to not get that type of return.

@Brown Nathan, @Logan Allec

Nathan, I have the same questions as you...the appraisal does not split out land and replacement cost are all above the purchase price.  Logan, what's the solution then?

I use lot sale values and then will use replacement cost from insurance policies as additional evidence of lot sale values being conservative if it is ever questioned.  Not sure if that's proper.

What is the minimum return you look for to invest in real estate?  Feel free to define return how you like (cap rate, cash-on-cash, cash-on-cash less interest, whatever you use) and just make sure to include you definition for clarity.  Feel free to discuss any type of real estate or geography and just make sure to include the type/strategy and geography for clarity as well.

30 year fixed rate and 30 year amortization with residential vs 5 year fixed (maybe 7) and 20 year amortization with commercial

I just transferred all (except apartment complex) of my insurance to USAA and saved $6,415.  That figure includes my family's personal residence and cars but I saved 50% on the rental policies over what I was paying with Travelers (and State Farm for one rental policy).  USAA had two great features (1) online data entry allowed for plug and play changes to coverage terms and recalculation of the impact on the premiums (2) you can adjust the dwelling policy limit (within a range) rather than just getting stuck with some inflated cost estimator.  It's a replacement cost policy where you can insure for closer to a cash value limit (or not, your choice).  USAA comes highly rated by Clarke Howard and friends of mine who are with them.  If you have the military family history to qualify, it's worth checking into.

There are many small (100-250 total units) but professional PMs in my area that manage 10-50 unit complexes.  I'm using one and I find her primary challenge is her contractors.  I had to help her find a MF painter, MF flooring company and affordable general maintenance.

The sales broker for this complex is a new syndicator (has two investors right now) and he has two properties, 26 units and uses a manager that has 105 units and he said she's excellent.

I would think you could find professional PM without much trouble.