All Forum Posts by: Jeff Filali

It's a business, treat it like one. Always follow the lease and law with no delays, otherwise you are setting yourself up to lose a lot of money over your REI life.
Right now it’s one tenant, one month.  Next it will be two months, plus legal fees, court costs, etc. & a judgment that you May never collect on.  What happens when you have 50 doors, 100, 1000, and it happens a few times a year?  
If you can’t stand up for your asset, get a property manager to manage your properties. 
Good luck!! 

In my purchase contracts, I require a new lease be signed with my property management company or the tenants to be evicted PRIOR to closing every time I purchase an occupied property or unit.  Also, its sellers responsibility to turn over property unoccupied, and to have any authorized or unauthorized occupants removed.  I learned the hard way after purchasing a portfolio of condos and one unit the tenant was behind and it wasn't disclosed. PM sent them initial welcome letter and bill, and started contacting trying to get new lease and collect rent. They never returned calls, after about 3 weeks, PM contacted me and initiated eviction process. Then once the sheriff removed them, the place had to be renovated, and then took time to fill the vacancy.  It ended up taking over 90 days to get them out, renovate, and get new tenant lease in place.  Never again!!  

As long as you're self employed and have the excess income that you do not need now, I would recommend a Solo 401K with both regular and roth accounts.  Use the regular acct to save money tax deferred, then build the roth with excess savings you have to grow long-term.  This opens so many options to grow your retirement.   This allows you to contribute up to $56K year.  You can borrow up to $50K (1/2) from your account if needed and repay with interest.  You can also use leverage in both accounts.  Definitely should meet with a good CPA and Tax Attorney prior to setting this up to make sure you do what's best for your situation.  Everyone's situation is different.

Another potential tax savings if fully self employed, with plenty of regular income available, is changing your taxation to be LLC as an S-Corp to save on self employment. Again, discuss with CPA and Tax attorney to make sure this fits your needs.

Also, don't forget about using Section 179.  Its one of the most overlooked deductions that we can use as business owners.

You might also consider offering the owner a little higher offer by offering X in cash up front with the balance due at time of sale after rehabbing it and flipping it.

100% of profit made on real estate happens on purchasing at the best price possible. You have to determine what that is based on Comps, Location, Repairs, Exit Strategy, etc.  The number or percentage is different for everyone and on every deal.  I've purchased properties at up to 125% of asking price before (bidding war) and as little as 25%, because that's what it was worth to me.  

@Matt Hudson On your offers, figure out your cash price, and use that to determine your seller finance offer. You're trying to solve objections before they exist. If your cash price would be $150K, MY 1st offer would be something like "what about 10% down in CASH, balance of $135K paid at $800 monthly and a 10 year balloon payoff for any balance still owed, and I'll be paying all the insurance, property taxes, repairs, etc so that YOU net the full $800 monthly". Then negotiate based on their response. You'll find most people who are reaching their retirement years would prefer seller financing because of the taxes and cashflow.   I've had several deals at ZERO interest by offering like this.

Also, Is the long-term tenant on a lease, or month-to-month? Many who have been there longer then 1 year are month-to-month unless the landlord is more experienced or uses PM and they require new lease at end of every lease term. If M-to-M, Do yourself a favor and in your offer/contract include clause along the lines of "PRIOR TO CLOSING existing tenant must either sign new lease with buyer at buyer's rental rate and terms, or the current owner is responsible for removing tenant prior to closing". I learned the hard way. Purchased a portfolio of properties and waited until closing to have my PM get updated leases signed. Come to find out one tenant was 90 days behind on paying (wasn't disclosed) and it took my PM about 45 days to get them out because of not knowing and trying to get a hold of them to get lease signed, so it was almost a month before we filed, then had to do repairs, and by the time all was said and it was rented to new tenant, lost 3 months of rent. Found out the seller filed on that tenant the day after we closed trying to get his money from them but never disclosed they were behind.

Good luck!!

I knew states were going to start cracking down on wholesaling due to all the “grey” areas being abused by so many and taught by Gurus. Virginia just stepped up and shut it down. Other states will probably follow.

(From the release of updates to Virginia Consumer Protection Laws)

Real Estate

“Unlawful practice: Makes the unlawful and unlicensed practice of contracting, real estate brokering, or real estate sales, in connection with a consumer transaction, unlawful under the Virginia Consumer Protection Act.”

PMI Green Country does it. They're based in Broken Arrow and manage all types of properties (residential, commercial, vacation/airBnB, etc) all over Tulsa and surrounding areas. They're who I use for my Tulsa area rentals. Direct deposits, online reports, affordable.

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