All Forum Posts by: Chris Clothier

Paul Talley -

Welcome to the site (a little belatedly) and best of luck. You mention that you are buying in three very different parts of our city. It sounds like you are also learning some very valuable pieces of info. about the intricacies of investing so far from home. I just wanted to tell you best of luck and encourage you to reach out if you need a second opinion on a property or if we could help in any other way.

All the best - Chris

Joel -

If you want to talk to a local CPA (not that a non-local one wouldn't know) I could give you my CPA's contact info on PM. He is an avid real estate investor and purchases both SFH and commercial property as well as land here in Tennessee and in Georgia. I'm sure, just for the sake of being thorough, he would be happy to spend a few minutes or even respond by email - whatever you needed.

Let me know -

Chris

Don Konipol that was a classic ending! Very funny line (to me anyway). I had a lot of trouble sleeping when I was over extended and over-leveraged on a group of properties that were all deep under water.

I think Greg B.'s point is that if you think you are set to never have massive vacancy at one time, you could be lulling yourself into a comfortable stage, only to be woken up when your SFR's hit you on the head like a 2x4. Be prepared - always for worst case scenario.

Cheryl C. - I'm sure someone is going to get on here with experience in insurance, but I believe at a minimum you need personal liability coverage to cover actions you take (hiring labor) and to cover actions on your property (labors actions).

I think Jon Holdman just gave another fantastic example of the really great knowledge that can be found on this site. The example of gifting to your parents never even crossed my mind. great stuff!

Good point Bill Gulley. I don't trust myself to stick to the schedule and pay off the 30 in under 15! LOL

Russ B - First, I think it is a great idea and I know of a lot of people who are using similar plans to help out their parents and in some cases their children. I'm not sure if there is any inherent tax help from using an llc or not outside of the costs to operate and report on the LLC, but I will let someone else answer that in detail. I do know that unless you are using smaller, local or regional banks that are going to shelf the loans, you will have a n extremely difficult time getting funding in an LLC. My only other piece of advice would be to ask do they want to manage property again? I know that you are buying it for them and allowing them to collect the cash flow, but do they want to actively manage? Just a thought, I'm sure you've already considered it.

Looking forward to hearing what you eventually do. Best of luck

Rich Weese - I know these are different times from the past, but I learned my lesson with variable rates and only use fixed rates for shorter periods of time today. I know everyone loves the 30yr. note for boosting cash flow, but I think Steve Babiak and Bill Gulley both make great points about looking at terms and costs as well as rate. I prefer 10 year terms and will consider a 15 year term for a cut in rate and points, but still plan to reduce principal for payoff in under 10.

Stephen Masek, 12% would be the highest charge I have heard of in any city, not just Memphis. I'm sure there are others somewhere higher. There has to a tremendous amount of value added for that high of a property management charge and I can't imagine what that value would be.

I think that the management charge can go both ways. Too low and it is hard for a company to be profitable, too high and it is hard for the owner to be as profitable. It is still a low number ($8-$10 on average for each percentage point), but every dollar counts for an investor so you have to balance what you get for the price a company is charging.

As for the original question, there is a big difference in letting an agent, who is licensed, manage your property and hiring a licensed property management company. They are not the same. You want a company that has the licensing and insurance in place to manage your property - in my experience.

The messaging function on BP is a fantastic way to generate conversations on the BP forums, especially when you are asking questions of other users or answering questions other users have posted. Most users have their settings set up so they receive a notification each time their name is mentioned in the forums. So if you want someone to respond, let them know you asked a question.

You can also bring other users into a conversation by mentioning them in your post. If they are on your colleagues list, you can @mention them if you think their opinion or expertise would help the post.

To use the @mentions you simply type "@" followed by their user name. As you type their name, a new box opens below your post listing all of the possible people you are mentioning. Simply select the user and their name is populated and highlighted in your post. When you hit enter, a message is sent to that user.

I try and use this on every post I make now as a way to keep conversation going and a way to show respect to those I am talking to. I want to acknowledge that I am talking to a specific user or that I want to get their opinion or input.

Just thought I would share that tip. It is a very cool alert when you see that your name is being mentioned all over the forums and it definitely creates more conversation.

All the best -