All Forum Posts by: Michael Pease

@Earl W. welcome to the group! You'll find a lot of good information and great contacts on this site. I'm an investor myself and have been for 7 years in the quad cities and have truly enjoyed the process and the area. I am a licensed CPA and have also recently started my own accounting and tax preparation firm in Davenport, MSP Tax & Accounting. I'd love to meet with you and just chat about your properties and what your goals for the future are and see if there is anything we could help each other with. I also manage rentals if you grow and decide you want to spend your time doing other things!

Where is your property located in Rock Island? I know many commercial bankers in the area who may consider the property for a refinance or even for an equity line if it is owned by you free and clear. Credit score obviously helps but for a commercial loan they can work around it. 

Hey guys,

I agree with what @Alex Bock has said here. I wanted to just put in a brief snipit from my perspective as well.

1) IA taxes are lower but I wouldn't avoid IL just for that. SFH prices are much lower and yes it can be harder to sell but if you are looking for buy and hold it may not be a bad place to start. I own property on both sides that compare in cash flow.

2) Definitely some neighborhoods to avoid. Any good agent will help with that and if you aren't using an agent just send me or anyone on this from the area an address and we'd be happy to educate you on the quality.

3) Once again, both are pretty good here, apartments have been moving quite quickly in the last year or so here and deals can be harder to find. I personally think we are in a seller's market with limited supply but that doesn't mean good deals aren't to be had still.

4) If you guys want to chat further I have just launched an accounting firm and property management firm in the area for essentially investors like yourself. We specialize in real estate agents, investors, contractors and also do more generic tax preparation and consulting. On top of that, since I've been investing in property for over 7 years, I incorporated a property management component into our company. The thought here is that we can offer a much higher management service and overall service on buying all the way through the final sale and everything in between.

I also have a good list of agents and other people who have wholesale deals if that's what you're looking for. Message me with some additional info on what exactly you guys look for in returns and any other info and I'd be happy to help!

@Chuck Noyd Welcome!! I just wanted to mention that I work a lot with investors and invest myself on a part time basis. I have also just launched a new management company and accounting firm in the Quad Cities area to focus on providing services to anyone associated with real estate investment. Contractors, realtors, investors, etc... My background is in real estate taxation and have been investing in rentals for over 7 years. Connect with the business or myself on facebook. The business name is A2Z Real Estate Management and MSP Tax & Accounting. I'd love to connect and talk about your needs and goals and if we could help each other out! Thanks!!

Michael

Hello Andrew. I am a property manager and CPA in the Quad City area. I see you already have a a lender recommended so I won't bother with that but if you'd like to discuss property management I'd be happy to give you some details on my company. We are really trying to have clients that we do all levels of service for all the way to filing tax returns as that's my specialty. Please let me know what exactly you are looking for. Thanks!

Hey Alex, I'm a seasoned investor in the Quad Cities area and am also a licensed CPA starting my own firm dedicated to individuals involved in the real estate realm. The firm also will be offering property management service, upfront deal consulting and basically the full spectrum of accounting services and tax preparation. If you are looking for someone to aid in that area of your business please let me know, I also just enjoy chatting with like minded individuals!

Welcome to BP @Rob Hill, I currently live in Bettendorf and have been investing in the Quad Cities, Rock Island, Davenport, and Bettendorf for 7 years now. Always willing to connect and talk to like minded individuals.

I'm also a CPA and building a new practice centered around Real Estate investors that will help with year end tax preparation, property management, and basically a full one stop shop for people who want to invest in real estate but not be landlords. If that's something that may interest you I'd love to chat further about it.

Thanks, and welcome to the BP network.

It will be difficult to find a property that both cash flows and allows you to live there. I always tried to have my total expenses covered and basically run a break even because then I was building equity, paying less than an apartment, and learning valuable skills. If you can find a property that allows you to live in and earn extra money that's hard to beat. Tough market around here right now and good properties don't last long though, there are a lot of buyers.

I'd run the projection both ways. Sort of an "as is" with you living in it, not paying management fees, and then an "investment" projection with more of a traditional approach.

I've done a few deals like this in my time investing. My first property was very similar. I bought a duplex near Augustana and lived in one side while renting out 3 other rooms in that unit and 4 bedrooms on the other side. It's hard to compare numbers with a deal like this to most other investments because the return has to be much higher to compensate for you living there.

My recommendations would be to get accurate utility numbers, factor in the cost of you living in the unit and losing out on one month's rent and focus on a cash on cash return. Chances are since you are living in the property you'll get better financing terms so you can really generate a great cash on cash return.

Also think about when you don't live there and make sure that the property still looks good under normal circumstances as in a sale to a pure passive investor. This will help you know that the resale value will stay strong.

To address your questions in more detail:

1. Just depends on what you can handle, college can be great, can also be terrible... I've found it really depends on your communication level with tenants and honestly just varies year to year based on the kids.
2. Splitting utilities could change the NOI pretty easily especially if you live there it would be easy to allocate utilities to tenants. Personally, I usually just increase rents for it. The duplex I mentioned above when I lived in it I allocated utilities per kid and now I just do a flat $75 per student (started at $300 a student and now I charge $375 and pay all utilities, not bad for 8 students)
3. I have one property that I own that is a chop. I've not seen a lot done very well and usually the big concerns for me are poorly done electrical additions or plumbing. This can be mitigated by getting a property inspection and I STRONGLY recommend this. I have good contacts if you need an inspector.
4. A lot of structural issues would be caught by a good inspector. As far as water leakages in ceilings or other things, you can certainly "cover" those things up but overall just make sure you have an inspection, do a solid walk through or 3 and check for things like outside grading around the foundation, cracks in exterior foundation, roof issues and gutter issues and you cover a lot of the major issues you can encounter.

Hope that helps you! If you ever need assistance in analyzing the deal further I've got a pretty handy spreadsheet I've developed to help analyze a property like this and determine a price to offer and also see what your cash flow may be under various scenarios!

@Manolo D. I've talked to a few people with something like that but am just not sure that I can trust the quality of work. Some of the jobs I have are a little more involved and I'd want them to probably sub out the work. I'm more or less looking for someone like you've mentioned but who is also willing to admit when they are over their heads and hire someone else and really just let them in the property and coordinate repairs, etc... I know I should just hire a property manager but they are just so expensive. This is the only area I need help in. Leasing, accounting, cash management, etc... I've got under control, I just spend too much time diagnosing issues and responding to tenant requests for repairs, etc...