All Forum Posts by: Scott Mac

If you do it yourself - zero.

If you have workmen do it- past the cost along to the tenant without markup.

If you have a property manager handling it for you, pass it along to the Tenant at cost of the Workman plus the markup of the property manager, whatever amount that is.

Spackle is cheap, but paint can get costly especially if two coats are required. 

I mentioned doing it yourself. If there are a lot of holes they may show through the primer and the paint after they're finished. 

You might be able to find a local handyman or painting company that has someone on their staff who is really good at blending things in.

If you're looking for a first class repair, someone like that is as good as gold.

Good Luck!

DIY Tips:

https://www.youtube.com/watch?v=qbupCzSPW9o

https://www.youtube.com/watch?v=PLGmTzEGSIY

Go for it---

Good Luck!

(1) Maybe the wax ring on the toilet is not sealing, and sewage is wetting the subfloor. You might want to think about pulling up the carpet and taking a look. 

(2) Maybe the water delivery piping under the floor, hot or cold, has developed a pinhole leak and is spraying onto the subfloor from below. 

Just my 2 cents.

Another option would be to speak with your tax person about the requirements and expense involved in lending the cash to the llc when needed.

The IRS is picky about loans to and from LLC's by the owner.

It may require another schedule to be filled out at tax time meaning an extra expense also. 

And of course the loan must be paid back by the LLC.

About imagining Capex you're looking at two things equipment end of service life replacement costs, including downtime of the unit for turns if there are problems getting the equipment quickly.

The other is end of service life items such as the roof that would have to be capitalized aka Depreciated rather than written off as an expense immediately.

You might want to consider making An Excel spreadsheet for each property with all of the items, with their ages and expected replacement time- it's only a guess.

And you can also put an inflation adjusted dollar figure on each one as well as a timeline when that money might be needed.

Hvac, Insinkerator, furnace, water heater, toilet, fiberglass tub, roof, driveway, etc...

Here's a link: https://www.hud.gov/sites/documents/EUL_FOR_CNA_E_TOOL.PDF

You might also want to consider a home inspection for each unit with a written report, and a sewer cam report.

Good Luck!

An eclectic answer.

=========

Hi, I want to Drive in a NASCAR race at 200 mph tomorrow.

I have been driving my Ford Escape on the city streets for quite some time.

What do I need to know to be able to drive 200 miles an hour tomorrow in the race?

Note: I want to win the race too.

Well Karolina-- These are big money deals, big money can be a double edged sword so be careful!

I am not going to answer your question directly because it would involve teaching and there are a lot of points to learn about this.

There are people on the Internet who teach this skill for price- I don't have a direct recommendation, but they're out there.

What I'm going to say is I see people who have experienced success in this arena, analyze many practice deals before they put their money down on the table for a real deal.

I also see people in your situation who as a newbie do okay, that's all I'm gonna say about it and you can take what you want from that because I don't have the Magic Pill to give you to make this work.

I'm just looking at it from a potential risk standpoint, and looking to give you some other experience you can learn from.

It's a skill you can learn, but learning it from forum posts seems like a longshot.

If I were doing it I would address the things I want in a letter of intent, non binding.

Then there is going over the accounting data for the property, and Making accurate projections, As well as having a good lender who can close and qualifying yourself for the lenders qualifications, which may be different said the loans on your other properties.

Good Luck!

Both you and your wife should take the time to schedule a session together with an asset protection attorney who knows Connecticut and New York law.

Good Luck!

You intend to buy 40 units and you need to use other people's money for $3,000???

You also say you're looking to buy 5 units to 40 units. Have you talked to a lender yet about this because you may be looking at different qualifications personally for a 5 unit loan versus a 40 unit loan.

I have to say if you cannot tap $3000 (or even $500) for this without feeling it, you might not be able to tap what you need to qualify for the loan- you should look into this.

You will also need earnest money for the deal, and earnest money on 40 units is a lot different than earnest money on 5 units.

And then there are also  sewer scope fees, and if your inspector recommends other inspectors to do inspections on things like the plumbing system, the roof, the electrical system etc... those have to come out of your pocket also- if you're going to pay for them.

Does your lender require a Phase 1 Enviro; How do you intend to pay for that?

 just my 2 cents.

Well Larry,

You are in over your head on this LLC thing.

It can be pretty complicated from a tax standpoint or it could be rather easy from a tax standpoint to implement.

There are so many choices out there that you need to make, and you have to look at what you really trying to do with it, which is asset protection for your personal assets most likely.

There's also the issue about having an accounting system in place for the LLC and using the accounting system when you prepare your taxes.

Some investors, (and some attorneys are comfortable advising) running without an LLC for some people and instead having an insurance policy in place to cover most likely scenarios of paying.

Your personal tax situation, as well as your personal asset situation will weigh into this decision of how to set up the LLC And what to include in the operating agreement.

You will also have the need to have annual member meetings and annual manager meetings for the Shell (slang for the LLC).

Talking to your real estate tax person and an asset protection attorney and then making your decisions is a reasonable way to go about this task.

Also know that some LLC setups can make it very hard to borrow, which is something to talk to lenders about before you make your decision on what to do.

Good Luck!

How to have a single member LLC members meeting:

https://www.youtube.com/watch?v=U6WnUFLfg9Y

 Do snowbirds want to live in Class D areas?

Well guys, I agree with all of you.

Although I do see some nuances.

There are bread and butter deals, and there is shark food.

Shark food can put you in a new Mercedes with a Burmeister sound system. Class C or not.

If you have the cash available to swing the bat and are clever enough and have the experience to make it work, a shark food deal can improve your lifestyle.

But what is shark food to one person could be biting off more than he chew to another--without a war chest of touchable/spendable cash.

Which is what I mean when I say cash is king.

just my 2 cents.