All Forum Posts by: Curt Smith

@Grant Doyle I bet you made the mistake of telling the lender that you were going to do do student housing banks are allergic to short term rentals and student rentals. And they gave you a commercial loan.. Tell them it's gonna be a straight rental and look up the market rent for a 12 month term rental and that's how you can get better terms.

This is a lender in all 50 States that knows how to do rental loans. Swbc.com

If S WBC falls through for you to qualify for a Fanny loan then go to finance of america.com and look into their DS or DSCR 30 year rental loan.

By the way you should've never sold that rentle because a distance just learn how to remote manage a distance rental. It's not as difficult as you think there is books on out of state investing. To all don't sell good rentals if you're in good locations but just too far away. Just learn how to manage at distance.

Per Joe, Ramsey is only a personal finance guy.

When rent is >> the mortage by at least $300, or $400, then that rental mortgage is "good debt".

Gary Johnston's seminars, Financial Freedom, is geared toward investors;  https://garyjohnston.com/semin...

We've been to Gary's seminars 2x. Its what helped my wife move from low debt to max (rental) debt as long as each house cash flows well. Google DSCR. We like min dscr at purcase to be 1.5 or better, after a few years 1.7 and mature rentals 2.0... Look up what these numbers mean. It means both safety and huge income and even greater wealth building via appreciation.

Wealth accumulation is maximized via max # of doors. The debt-less advocation crowd does not mention; you are minimizing wealth accumulation since you have very few doors (debt free). But BRRRR will have you the max number of doors, all with OPM debt, and all appreciating and debt paydown. We "quit" early due to BRRRR and max mortgages and max doors.

Thankyou OPM and mortgages!!!  :>

Most folks are not as interested in tax code as I am.  :)  

All of BPs books are great, buy and read;

https://www.amazon.com/s?k=big...

This book on RE taxes is a must read.  Even (especially if) you outsource tax prep you need to know the code yourself.

https://www.amazon.com/Book-Ad...

How to hire a tax prep person.  Need not be a CPA.  

- ask;  do you own your own rentals?  If no = move on to the next. 

- only hire folks to do something that they themselves do.  you only hire plumbers who know how to replace tubs and valves, Medical Drs who are specialists, please only hire tax prep folks who are experts in RE taxes and to be an expert IMHO they need to own their own rentals.  I hear of too much bad advice from folks (including CPA) that is not that good.

Accounting;   just need to track expenses, repairs, inhancements, rent collected.  The tax prep expert will help you with was the expense really a depreciated improvement, or a real expense etc.   Read about RE taxes its not that difficult.   The real decissions are in the year of "in service" determining the cost basis,,, where the years after just normal operations the accounting is much simplier, 99% of expenses are deductable as expenses against rent income.

Knowing the tax code you can ask your contractor to divide up a small fix up into $2500 per each invoice to allow for De-minimus expensing of the whole turn over rehab.  Where a $4300 invoice would need to be capitalized (depreciated a portion each year).  This is where reading for yourself the tax code you can guide contractors and expenses to be favorable.  Once you have the $4300 invoice its too late.

You need to be aware, even an expert, in RE taxes to know how to chop up a rehab and get the documentation that is favorable (and legal).

Best to you.

@Montez Blackburn Delegating is always a good idea but 1st let's backup why do you think you need an accountant? Do you have 200 doors?

I've got 35 doors and have no need for an account nor a CPA.

Study what you actually need to track for landlording specifically for your April 15th tax time schedules schedule is it's not that much info.

I take pictures of invoices and checks I write contractors and email them to myself via Gmail and then in Gmail I move them to folders or labels 1 to 3 Main Street.

Then come February I just go to each folder or label and add things up use the subject line is the address space dollar amount space what and then the picture where explanation is in the body of the email. And I use home depot pro extra and they email the receipt to me so I don't have to take pictures of receipts either.

If you truly study what you need to have accomplished in bookkeeping for rentals it's actually extremely simple you do not need an account you don't even need ACP a to do simple schedules with turbotax...

I fear most folks think things are more complicated than they really are.

Hi, Atlanta has a large number of investor groups.  Use meetup.org and search on;   wholesaling, real estate investor association,  multi-family etc.

There's around 4 REIAs, real estate associations.   I joined them all once upon a time.  I suggest you do to.  Each offers pluses and minuses.   I ended up just keeping GaREIA, the oldest and the one with a google group for members to ask questions, get contractor referals in near real time.   More experienced folks I found when comparing other REIAs vs Gareia.

I suggest you join them all and decide for yourself.   Look for giving, helpful experienced folks as a ratio of membership.   Many are mostly new folks.  Some just offer payfor training.  Payfor training is a good thing actually, just you want it to be taught by local "doers", vs professional teachers.  Its hard to tell at first if they are just teachers, vs mainly doers who teach.  :)

My gig is buy and hold, screening tenants etc.   See the file linked off my BP profile;   Buying a bullet proof rental portfolio.

Best of luck.

Join your local REIA, real estate investor association. Google; city REIA. Also search in; meetup.org for REIA, and real estate investing, etc.

I got over my learning hump via hooking up with local, boots on the ground experts, in my local REIAs.

I found that REIAs offer pay for boot camps that are great values, and most experts actually don't have a pay for model. They are happy to help you, because thats how they got started. Thats how this REI business works, you learn from someone, then its your turn to help someone younger.

Don't be tight fisted about paying for education, boot camps etc.  I'm suggesting you avoid Fortune Builders $25k level, but local boot camps by your REiA maybe $499, even $999.  This is what it costs.   I have gotten in a car and traveled a few hours for boot camps in near by cities.  Until Covid, my own education budget was about $5k/yr.  Honest! in 2019 and prior at my FI level, we spent $3k min to $5k typical each year adding to our network, our learning, our education.

Best of luck.   

Hi Mark,  I'm mid way through a Finance Of America 30yr commercial loans on 3 rentals.  3 separate loans, one on each rental.   

3.85%, with $4.8k buy down. A 3 yr break even on the buy down. These (and most commercial) loans have pre-payment penalty periods, this one is 5 yrs with a sliding scale down penalties. The more accurate term today is "DSCR" loan vs portfolio. But both are in the same catagory; commercial, fully amortizing loan on rentals. Fin of am is one of the lower fees and good deals. BUT they are higher expense, fees and interest rates vs FANNIE bank rental loans. I did 2 of these with another lender 6 yr ago at 6.7% and they where great loans and the houses cash flow great. When you buy right even high interest rate still makes for a good deal.

Today I'm cash out REFI'oing with these loans. I'm full time REI so its hard to qualify for FANNIE bank loans. I did start down the FANNIE path and gave up and jumped to Finance of america which is a 50 state lender.

BTW a "rental" IS commercial,,, BTW.

But you are correct if you are buying a strip mall,  a MF,  20 yr am, 5 yr or 7yr rate reset is common.  But in 1-4 door space and Fin of Am you can get 30 yr am fixed term.  Higher interest rate by a small amount 3.85 vs 3.5 or so.  But 3.85 with $5k buy down for a $180k loan.  I feel these are insanely good numbers for non Bank loans.

Fin of Am, allows lower FICO, lower reserves, just slightly higher interest rates, but a 5 yr pre-pay penalty. These DSCR loans are almost as good as FANNIE loans today. Just a few yrs ago they where 5 % and I did get 6.7% int just 6 yrs ago.

@Tyler Boykin in the cheaper south , Atlanta, a no change on outside walls full rehab is

.. $100k rehab ...

Re run yiur numbers. You may not make a nickle.

Most 1st time flippers run close to breaking even. Flipping is insane difficult to finish and sell,, and to make a net profit. Not mentioning taxation of the net even.

Have a strong mentor guiding tiu. Taje boot camp education from the local Rei groups, like a REIA. Search for local investors!

Good luck

@Douglas Curtiss join your local REIA, Google for

City REIA

And find groups in meetup.org. you'll find incredible local yay sayers and with experience too. My local REIA was essential in my success! :)

I was hanging back re this thread.  :)   I see a PM, Hannah, offered some nice helps!  Which nudged me to offer my own from the property owner side who self manages 34 doors, 1 door with a PM, which oddly is this home365 new francise.  I signed up with a small PM focusing on the South side of Atlanta.  I have one door in Griffin GA that I put on this PM, which was bougth or merged or turned into home365.   I'm not going to comment on this PM specificially.  I don't believe I have enough doors with a PM to comment specifically re home365.

My general comments re PMs are;

- Its not surprising to hear me offer that not all PMs are equal.   I'm in a network of high experience investors and about 5 in my network manage 700 to a few 1000 doors each.   So I hear from their side.  I have one door with a PM so know a small foot print owner side.

- Reports reports reports, portal portal portal!!!!!    Small fry PMs don't have good monthly reports showing $$ deposited to your account, maintainence, and other expenses..   A portal allows you to see in real time whats going on, tenant payment history etc.

This does not mean that the real small PMs are out, you may get mpore personalized service from a small PM, vs someone managing 2k doors.

- How often do they do a home inspection?  Quarterly?  Do they really inspect or just say they do?   FWIW I do not personally inspect my 34 self managed doors and take a calculated risk.  But If I'm paying 10% I want the properties inspected!!!

- Based on me typing this I checked into the home365 portal and poked around.  Its potentially all there but its missing the rent roll data, or maybe its being built out little by little.  The rent roll tab had no data.  I did see a maintenance request from the tenant, a big tree branch fell and knocked off some gutter.   LOL LOL Then.... the PM apparently sent someone out to fix the gutter and carry off the tree limb.  Nice pictures and a video presunmably sent in by the tenants.  They charged me $1350 for that work.  Thats typical mark-up and profit by the PM.   BTW my friends in that experts group tell of a million tactics to make money off tenants that the owner does not get.  Fees fees fees and maintenance mark up.  ...   BTW this is normal and I sort of agree with it since I know its hard to make enough off just 10% of rent and turn overs to make PMing (and all the hassel and trouble dealing with tenants) all worth it.  I see both sides, having talked to and been side by side with expert PMs.  And me with just 1 door on a PM.  :>

Theres surprising low profit in PMing and a hard job.  IE if wasn't hard why would owners turn their rentals over to someone else???

The good news;   the PM fixed this tree/gutter problem fast.  The bad news;  they did not involve me in spending $1350 of MY money.   On the flip side;  if you manage 1k doors it would double the work if everthing had to be run through the owners....  ;(    I emailed the Broker (in PM land the licenced Broker is the boss or near the boss) asking to be consulted re all >$300 maint items and important tenant interactions (whats the terminatioon fee?  Is this house for sale? blabla).

=== Bed bugs

Sooo, I never had a problem with bed bugs in my own business of self managed doors.  But,,,,  I did the turn over rehab of the Griffin house I turned over to this PM.  I did not know it had a dormant investation of bed bugs from the privious tenants (slobs is kind).   An experienced PM has a contractor for every problem.   I would have had a very very bad few months if I didn't have this particular PM managing the tenants, the pest control levels.  They ended up solving a bad investatioon with a spraying tactic by an expert pest co, one I didn't know of, but the PM did.  Whew!!!

Bottom line;   an experienced PM with a good portal, monthly reports, good contractors can be a huge value.   And you pay for this.   Its no help, but statistics are that Atlanta is the most expensive PM MSA in the country.   I am surprised at 13% but what is turn over costs?   1 month or 1/2 month?

I hear of as low as 8% and BTW these fees can be negotiated.  They aren't if you are just putting one door on the PM, but many doors, high rents, you can ask abouit negotiating the fees.   There's too much to cover really on this topic.   Hannah helped, I rambled with a bunch more, best of luck.