All Forum Posts by: Account Closed

Scott,

Ignore the question I left on your voicemail about the 508 area code. I knew it was familiar but I could not remember why.

When I was living in MA the whole state was 617.

This present up and down is a reminder of the one in the 1980s/1990s. Stuff happens in the RE market and it sometimes goes down.

The company promoting the deal above has posted a similar pitch on another site. There they made it sounds like an investor found a deal and was sharing it with others who were interested. Just as clumsy. Different email address.

John Corey

1. If you are going to grow past 10 or 20 rentals you are going to have to go commercial in any event.

2. Lenders like an LLC with some history. The sooner you start building history the better. One lender I know wants 3 years of tax returns.

Filing a K1 is pretty good way to show some history compared to reporting all your LLC income on your personal return.

3. Umbrella insurance should be standard. Even if you have an LLC.

4. The LLC provides some protection. It will come at some added costs including paying higher rates on the mortgage. Note that as you grow past 10 mortgages you will have many of the same issues with extra costs. The cost of running a larger business.

5. Use good contracts and operate correctly in terms of your policies and procedures. You can minimize some of the risks by how you operate.

6. Consider moving assets and other personal items into a trust or the name of other family names. If someone wants to sue and you do not have much if they win then let them make a run at you.

You are building firewalls. There is no way to completely prevent a fire. You want to limit the damage.

John Corey

Before picking a printer decide how you want to use the item.

If you have a home network and you want the printer to sit in a specific room but be on the network then you have to check the printer can do that. Or if all you need is the printer plus a network hub with a USB port or similar.

This is mostly for people who work with a portable and want to roam the house. It is also for people who have more than one who might want to use the printer (children and parents with their own computers but needing to print from where ever they are on the network).

It is not hard. Just something to consider. Some all in one printers have a restriction as to what they can do on a network.

The above can vary if you are using a PC and Mac computers on the same network.

John Corey

Having a mobile phone is critical in this business. You are never in the office when looking at deals.

i started when there was almost no mobile phones or they had to be bolted to the vehicle.

John Corey

If one is evicting a tenant is there not a process in your state to turn that into a judgment?

Each state might vary. I am not aware of any (shows what I know) that require a separate action in small claims court to turn the eviction decision into a judgment. I am clearly not up on my legal knowledge in this area.

Any comments for folks who evict and do get judgments?

I know one guy I can ask later today when he is up and moving.

John Corey

Has anyone actually used any of the programs or services on the list? If so can you share what you do know.

I have been reviewing the websites to see what makes sense to me. One criteria I have is that the service has to be multi-user and I want it to be roll based security.

By that I mean that I expect more than one person to be entering the data, looking at the reports and otherwise using the system. I do want the ability to segregate the access so co-investors can see only those properties where they have a slice of the deal. Property managers can access pretty much the full deal. Maybe having the tenant or a prospect see the property description is a good idea when marketing a vacancy.

One of the packages on the list does offer such role based access control. A somewhat similar package (not on the list) does not but will be adding it soon. They already support the ability to have multiple people entering data to the database.

New topic.

One issue I do have with any online system is the integrity of the data if something should happen to the company. I assume they know how to do backups and recover from a disaster. What I am not sure about is what happens if they shut down. Most of the companies on the list feel like new software companies. As we all know some do close their doors. Can the property investor who has been keeping all their data on the system gain access to the data after the closure? In the software industry this is akin to escrowing of the software. Customers can access the escrow if the company closes.

No answers so far but a question I will be asking for any that I am seriously considering. If they have no policy then the RE investor can create reports but that is not the same as getting to the real data. Some of the data for some of the providers appears to be downloadable in Excel format so that might be a good compromise.

John Corey

I am interested in starting a discussion about what folks who have provided private loans have learned. To start it off here are my observations.

1. The borrowers are not always that smart. They will do dumb things rather than switch to plan B when their main plan is not working.

2. Funding deals many times means educating the borrower as to how a loan works. I am talking about rehab projects or otherwise where the person is effectively borrowing on hard money terms. Many times the newer investors want the lender to take on a lot of the risk.

3. The paperwork is pretty straight forward as there is a lot of history out there to depend on.

4. Borrowers who do get it have a repeatable process and will come back for more. That said they still seem to bump into things every now and then. The biggest issue is when they are good at one skill but not at the full process from start to finish. Many they can manage property but they do not know how to manage a large rehab project. Or just the opposite.

5. It is easier to be remote when a lender than many other forms or RE investing. When borrowing from a private lender you are buying for a fixed price a partner who has clearly agreed the role they will play with no strings.

6. Here is a funny one. Many potential borrowers find hard money rates and points to be very expensive. In some ways they are correct. The number of times someone will then offer to split the profits so they can save money makes me laugh. Either they do not believe in their deal, the deal really is not a good deal or they do not recognize that a silent partner at 15% plus points is better than a full voting partner who gets 50% of the profit. For the most part they do not do the math. They focus on the headline numbers and assume sharing half the profit has to be cheaper.

Like all of us knowing what you are good at and contracting out the balance seems to be the key.

John Corey

1. Slow down. You are rushing forward and you are building land-mines for yourself.

2. Sell the puppy and build up some cash. If you rent it and $400 a month is a stretch for you what if something breaks or the tenant fails to pay so you need to evict.

The world looks differently if you have a bit of cash in the bank.

3. Doing work without permits is a fools game. You will get burned. See what the process is to bring the property back into compliance.

If you rent and there is a problem where the tenant is hurt or dies you are facing some really huge liability issues if the problem was caused by a code violation. You can go to jail. Forget the financial impact.

If you sell you are likely going to sign something that implies that the house meets code. To lie is a bit of a problem and will open you to other legal issues in the future even after the sale.

Now that I have scared you....

A) It is great to hear that you got up off your but and make something happen. You are learning by doing and that can work wonders for many investors.

B) It sounds like the deal was OK. If you sell for a much lower price than the current list price you will have a profit. Well done.

C) Becoming a landlord at this point is likely to sink you. There are a lot of things to learn and your style is to learn the hard way. I would do a few more rehabs, book the profits, pay the taxes and then decide to get educated as a landlord. You can afford to make a few mistakes if you have the cash buffer. You can afford to buy training materials. Right now you are an accident waiting to happen. Stick to the rehabs as you do appear to have a process that you might be able to repeat if you really can get this one sold for a profit.

Remember that carry costs matter when doing a rehab.

John Corey

I invest remotely. Both sides of the pond would be a British way of putting it.

I find that the Internet and computers have greatly improved the ability to deal with property when not local.

I am also a Macintosh user. I once worked for NeXT Computer. Where Steve hid out while being exiled from Apple during his non Apple years. Today's Mac OS is largely based on the work done at NeXT. Apply bought NeXT because their internal efforts to build a replacement Mac OS had failed. Steve came back to Apple in the bargain. I was at Swiss Bank Corp by that time (NeXT's largest commercial customer) and got cashed out of my NeXT shares. Back to RE...

What do people see as ways that RE investing has changed given the march of technology?

I added a poll as I am curious about which OS people use. Mostly so I can then ask questions about what software tools people like.

John Corey

I was discussing a deal with someone over Skype the other day. I am in London and they are in San Francisco. We both worked together in Paris in a past life.

It got me thinking about Skype and RE. Many RE investors focus locally. A few are a bit more remote.

Do many folks here use Skype? If so what are the reasons? If I am using the forum correctly a poll should be attached to this thread. The preview does not show the poll so we shall see.

I find like it for three reasons.

1. I travel and my calls follow me
2. Low cost. Big win on that score.
3. The ability to conference people in. Up to 10 people on a call.

Note I am a Mac user but that does not really matter when using Skype.

John Corey