All Forum Posts by: Nathan Grabau

We broadly have a housing shortage in the US, this is total units that can be lived in. The only way to increase this number of units is for the price or demand broadly to go up. Landlords buying homes, that they will use as rentals does this. Housing inventory needs to increase for prices to stabilize, and right now we need to take an all of the above strategy to get more SFH built.

People typically focus on using HELOC's for BRRRR deals when possible, because then you have the capacity to pay off at least part of the Heloc if you need to. I would try to find a property that can support itself and has cashflow to pay for the Heloc too.

Broadly, I think a lot of people get focused on cashflow because it is easy to track, or seems easy to track at least. That being said, people who get wealthy through real estate get wealthy through appreciation, not a couple hundred dollars a month. On the flip side, cashflow is a great long term "defensive" metric, because cashflow allows you to keep paying your bills. That being said, cash is the true first line of defense. If you have an HVAC go out, you are not going to care about the difference between $125 and $175 of cashflow. 

I would think through the 127k as cash that you have. If getting two properties has the ability to make you more money than one I would do that, but I would just think about it as the money that it is. 

How soon does the repayment period begin? If it is 10 years and you are scaling quickly, this shouldn't be the big of a deal, if it is sooner that story is different. 

As a general rule of thumb, especially for MTR's, you want to try to have a king bed in one of the rooms as an option. Could you have the master with a queen bed and a desk and have one of the other bedrooms have a master? 

When you look at the comps, do you see most of the 3 bedrooms with 1 or 2 bathrooms? The 3/1 to 2/1 difference might not be as big as a 3/2 compared to a 2/1. 

In my experience, lawsuit that are at this dollar level just end up costing everyone more money than is awarded. I am sorry that you had damage to your unit. 

Have you tried to contact the owner of the unit above yours? Just contacting them about your costs and asking them to open a claim on their insurance to cover them does not seem inappropriate to me. 

I also do not think there is any risk in consulting a new lawyer though. 

I would be property specific, but generally you want it to cover anything that you could reasonably expect people to do. I would call your insurance agent on the property and ask them what you need to have included so you are covered everywhere. Ultimately you are talking about something that is $15 a month, so I wouldn't be scared to overdo it with what you ask for. 

Good to Great is one of my favorite books. I think you need to think about it within the context of the books theme, which is what does it take to transform a company from mediocre or good to great, not non existent to great. 

I do think that one thing that drives company growth though is excess resources given to the right people. This is not really a delegation discussion though, this has to do with getting to right people on the bus, and letting them drive it. I also would not necessarily consider VA's, at initial hire, to be part of the executive team. I think that this chapter needs to be viewed next to the idea of level 5 leadership.

I would walk into local banks in your area with less than 5 branches and ask to talk to someone about lending options. You can probably find one to write interest only loans for you. I would start the conversation by asking what they are interested in lending on and then saying what you are trying to accomplish. If they start to put you in a narrow box and seem to lack flexibility, I would move on to the next bank on your list. What you are looking for is a local bank that lends their own money and it is a few people around a table deciding whether they will fund a loan or not, in this set up, there is a lot more flexibility to design a lending product that meets your goals. 

You should be able to see what other people are charging for single room rentals on facebook marketplace or websites like roomies or hotpads. They will also list whether utilities are included or not. I personally never have done a monthly split on utilities, and just included them in the rent number. When you think through that, I would assume they will pay less than half of the utilities thought, as they will not be using half of a 4 bedroom 3 bathroom home. 

I am not a lawyer or a CPA so this is not legal advice, but from my experience I think you are getting less protection than you think you are. I have had to personally co-sign on all of my properties DSCR loans that are held by their respective LLC's, this is a normal practice that I hear other people having to do too. Also, depending on where you file your LLC, you are not actually getting anonymity. My LLC's are Colorado based, with some licensed to operate in Iowa, and it is not hard to see that I own them and actually where my mail and place of business is. There are state that offer anonymity, but it is very limited and would take a lawyer about 60 seconds to find you if they were trying to sue you.

In 99% of situations the most tax advantageous way for an individual to hold real estate is in an LLC, if you a re going to have a service business, that services your real estate, s-corps become advantageous for tax reasons.

I do not sign on any of the leases that my property managers create, but for the most part the agreement I have is that I am still responsible for a tenant damaging the property or paying for an eviction. 

Where you get into real legal protection is when you start talking about being a general partner vs a limited partner in a LLP. In the likelihood of a catastrophic legal situation, a judge that sees that your Jason Ownership LLC owns the property that Jason Management LLC manages and Jason (personally) is the owner, operator, and main employee of both organizations is likely to let the "corporate veil" be pierced and let the plaintiffs come after you personally. And this makes sense. All of this is you, and the government doesn't exist to protect you from things that you should be liable for.

BP 595 talks about General/ Limited Partnerships and domestic/ foreign/ hybrid trusts for asset protection. These things are not cheap, but if you want legal protection that is extreme, it is what you should do. 

Donald for yourself, and anyone else who is looking in the mentor forum, the reason this post doesn't have any responses is because we could use a specific skill set you can offer in exchange for mentorship. If this post said "I will help with your social media if you will mentor me" I bet you would have agents and investors from all over the place reaching out, because I do not have time to maximize my social media, but it is incredible tool to get seller, buyer, and investor leads through. 

I am not sure what that skill set is for you or anyone else reading this, but I am confident you have something to offer, and if we know what it is, we can start that conversation.