All Forum Posts by: Richard Dale-Mesaros

BOOM!  As always, Ann chimes in with solid, usable advice!  :)

...not sure if putting it into an LLC is a 'transfer-taxable event' and if so, what number is that based upon? Good attorney/accountant question. If you're doing this for anonymity purposes, maybe a revocable trust makes sense - minimum transfer tax in NH of $40 and no-one can look up the beneficiaries of the trust to know who is behind it, which makes it more challenging for someone looking to sue you/take your assets. With any entity consideration, it's always good to consider things from 1) Insurance, 2) Taxation, 3) Legal, 4) Financing perspectives - would be fun to get your attorney, insurance agent, banker/mortgage broker and accountant together in a room and get the lowdown on S-corps, LLC's, trusts etc, to see how they consider each of these from their viewpoints!

You're in a great market down there, Jonathan, however you may have to work pretty hard to find buy+hold properties where the numbers will work for you. Make sure you set up a separate entity for your long-term stuff (or even better an LLC for each property...) and one for flips if you end up doing any - that way there's no chance of being hit for self-employment tax as a 'dealer' under IRS code, for properties that you should have only been paying long-term capital gains tax, on sales of properties that you've held for over a year. In other words, don't mingle long-term hold properties with short term flips in the same entity because an IRS audit could deem you a dealer even on the long term holds if you were to sell any. Check with your accountant on this point. It may make sense for you to move funds into a self-directed IRA and have your IRA buy the properties, so can defer tax on multi family profits, or even avoid it all together. Equity Trust or Pensco trust are both good to talk to about this.. Don't hesitate to call if I can ever help you out with anything..... this isn't a hard biz to understand but it can be scary and stressful at times! Bigger pockets is a great resource and you'll find one that is very helpful and supportive. Good luck! :)

......no doubt you can attend one of their monthly meetings, so you can get a good feel for their culture and the type of people in the mix; talk to as many as you can, both full time and part time and especially investors (of which there typically won't be many...). Make sure you ask about selling your own investment properties - some or all of those are split-free. If you're someone who needs to be fed leads by your brokerage KW won't be for you, although you could consider joining a team within KW...... hopefully you have the drive, tenacity, integrity and win-win outcome orientation to be a successful agent!

I'm an investor and went with Keller Williams because of the training, great culture, decent splits, ability to earn 100% of the commission (once you've 'capped'), profit sharing and you can have your own brand under the KW umbrella. Well worth your consideration and I'd be happy to talk more if you like. I'm glad you're doing some due diligence before deciding where to hang your license.

Hi CJ, 

Send me a list of the parameters governing what you're buying (size, age, location etc...) - nhrebiz@gmail dot com

Thanks!

Richard :)

First of all Troy, my what a big, woolly dog you have!

Well-said with your comments...... I wouldn't categorize Claremont as out in the sticks and all that risky, some other towns I would. We've done a few SFR flips in Claremont; seems the sub-$200k stuff will move pretty quickly as long as the rehab is done well. This is a feeder market for Dartmouth/Hanover, which has improved the rental environment and moved some of the inventory that had been sitting - I like the town's enthusiastic Downtown program, too. Kudos to you for doing such a thoughtful response and happy investing!

R  :)

Hi Paul,

A few things (okay, well not just a few...) that came  to mind when reading:

- Do a REALLY thorough job of figuring out what the market might bear for your place after the work. This is something that a decent Realtor should be able to work through with you, but you may feel comfortable doing much of it yourselves. This due diligence can include driving by, or even better getting a look inside the three or four best recent, comparable sales for the subject property. With the right approach, you can get people to let you look inside, I have managed to do this on numerous occasions (if you can't get in, look at photos from the most recent MLS listing of the comp your investigating). This extra effort will provide you a more accurate sense as to the range within which yours will likely sell, giving you greater confidence/conviction in your projected numbers. This might help you to weigh up the merits of doing a multiple year rental stint as a Plan B. Go see the three most similar houses that are currently on the market, so your're able to experience first hand what you're competing with. What's the town tax assessment? What similar homes have sold off-market and what do they indicate the value might be (find through town records....)?

- On the rehab (good ideas BTW...), ideally the goal is to bring it to pristine shape, so there are no issues that will put any kind of a question in buyer's minds; this goes for the exterior/yard as well as inside. The better the house looks in photos (because everybody looks online....) and in person, the more buyers it will appeal to, the more it will sell for and the quicker it should sell. You might want to compare what it will sell for with a few basic upgrades (for much less money), vs what it might sell for having put in the $50k in - you may end up making the same net amount either way!? Definitely worth the cost of a professional photographer, who may have to come back at different times of the day to get the light the best on as much of the house as possible. Also consider doing a 1-minute video (doesn't necessarily have to be a professional production...) walking everyone through the house highlighting the key features that will appeal to the type of person most likely to buy it; a precursor to this is brainstorming about who these folks might be as well.

- Think hard about all of the ways to get the word out beyond the MLS (and all the other feeder sites...) and good signage, such as Craigslist, local professional vendors (mortgage brokers, attorneys etc), flyers all over town, social media (F/B, LinkedIn, Instagram, Snapchat, YouTube etc), letting very well-connected people know it's out there, local classifieds, your own personal network, mega open houses (paid for by sponsors - I even make money sometimes); I'm sure you can come up with a few more!

I guess what I'm trying to convey is that it's worth grinding through the up-front work, so you know your're being realistic and have a solid foundation upon which to base your assumptions. Good luck and don't hesitate to reach out if I can help out in any way.

Now get after it!

Richard :)

Hi Barry,

Good points from Ann - NH definitely has some reasonably hot markets -seacoast towns (Portsmouth, Exeter, Stratham etc..), the North end of Manchester, south end of Concord, where you can get in multi-offer situations, then there are sort of average markets where the right SFR's sell 'quickly' in 60 days, like the better of the towns where I live up in the Plymouth area, and of course you have your more rural or depressed towns that are pretty dead and probably worth avoiding. We do have a strong second-home market in this state, so worth bearing in mind if you want to sell to folks looking to be in the mountains or near water. Once you've figured out which areas you want to focus on, you might want to go for a first-time-home-buyer type home that you know will sell fast and ideally get one that doesn't need a ton of rehab so you get it back on the market quickly and don't have an extensive rehab to try and manage, which is less risk, HOWEVER, these are the deals that most investors are looking for, so a fair amount of competition. If you decide to work with a Realtor in your chosen area, would be good to use one that works with investors, or has done some investing themselves. I would say it's reasonably challenging to find good deals in the better towns in NH at the moment! Hope this helps.....

Hi Julie,

Absolutely, it's worth accurately looking at the return you're getting via this investment, vs. other investments! Hopefully you're including ALL of your expenses when running your numbers; I didn't see repairs, plowing, yard maintenance, % to the rental websites, cleaning, trash, sewer, advertising, management? Maybe plowing, yard work and trash are in the HOA fee? It's also worth doing the comparison with long-term, regular rentals whereby you have more of the days rented than with STR, but a lower daily rate along with perhaps lower expenses. This also comes with the risk of a possible eviction at some point, which is lower with the STR's. We do have a real shortage of homes for rent generally in NH and very much so in the white Mountain Region, so a good time to be offering rentals. Definitely keep in mind how easy whatever property you're buying next is going to be to sell on the back-end, too......

I just got a log home under contract for a seller client in Bath..... they made $20,000 gross in STR via Homeaway.com in 2015, so another site for you to consider. I may be able to send properties your way for consideration on your next one, depending upon where you're looking.......

Hope this helps,

Richard :)

PS: Would be good for you to go to the NHREIA meetings in Manchester once a month  :)