All Forum Posts by: Tim Delaney
Tim Delaney has started 1 posts and replied 778 times.
Post: Career advice for my daughter
- Buffalo, NY
- Posts 788
- Votes 527
Quote from @Blaise Peterson:
@Theresa Harris @Jonathan Greene @Tim Delaney @Corby Goade @Adam Bartomeo I want to thank you all of your great suggestions! Here is a little more info related to my question:
My (note: "my" means my wife and me) daughter likes her job and finds it rewarding and fulfilling, and I am putting no pressure on her at all to change careers--my job has nothing to do with RE. She wants to talk about RE when she comes home for Thanksgiving so I want to come with with some ideas for her ponder. If I fail to spend all my money before I die, she will inherit the high credit, corporate backed NNN properties I developed/repurposed over the last 15 years. Residential, in my opinion, is a hassle so I am getting rid most of those properties so I can reduce my hands-on activities by 90%. This is better for her, as well.
Example: This past year, I've been working with the RE group in a big company. I've been working with job titles like construction project manager, who doesn't know a lot about construction but coordinates architects, engineers, GCs etc, the VP of RE management, who also does not know a lot about construction but oversees site selection, lease negotiations, property management, RE accounting who writes my checks and does annual CAM audits, and other jobs like that. I think these jobs would pay about what she makes now. With exception of the accountant, these individuals did not go to college with these careers in mind.
She can use my properties to suppliment her income without a lot of work and, in my opinion, have a lot of fun doing it. But, if she were to transition to a job in the RE sector, she would develop a skillset that would enable her to take this much further and in her own direction.
I have a couple reasons for posting this topic: the main one is that I think this is a good topic for discussion in the BP forums. Many BP people see contractor, RE agent and property manager as the only options to enter the RE business. I think it would be fun talk about other careers that would compliment their personal RE investing efforts.
The other reason is that I don't know the answer to my question. It would be helpful to learn how one lands the jobs that come up in this forum and how much entry level positions pay.
I think taking one of those other jobs would depend on her personal long term goals. And what is the growth potential in her current job vs. one of these other jobs if the investing part never takes off for her?
I like the discussion though, it's definitely good as I think about my younger children and how to get them involved/interested in real estate.
Post: Short Term Rental Alternatives? Need Help/Ideas
- Buffalo, NY
- Posts 788
- Votes 527
Quote from @Robbie Shiver:
Quote from @Tim Delaney:
One option is to call around and talk to some STR managers. Depending on what aspects you would like them to handle vs you then you may be able to negotiate that 20% down lower.
Alternatively, look into medium term rentals. Since your place is already furnished you can test this out pretty easily by changing the minimum stay to 30 days. Also see if you can find any corporate housing companies. Sometimes large employers will rent furnished apartments for their employees coming to town on a regular basis.
Also, if you believe strongly in the appreciation of the house, how bad would the negative cash flow be if you did long term rental? Is your income in a place that you could fund that for awhile until rents catch up and make it positive?
It is possible that I could sustain some low months with my income. It doesn't feel right to take a monthly loss on an investment property but it could be worth it for the short term.
Also, since this is your residence the economics are slightly different. As long as your out of pocket expense every month is equal to or less than what it would be if you rented somewhere else then you are still technically ahead of the game. But, I would still look into STR management or seeing if MTR can fit your desired lifestyle.
Post: Short Term Rental Alternatives? Need Help/Ideas
- Buffalo, NY
- Posts 788
- Votes 527
Quote from @Robbie Shiver:
Quote from @Tim Delaney:
One option is to call around and talk to some STR managers. Depending on what aspects you would like them to handle vs you then you may be able to negotiate that 20% down lower.
Alternatively, look into medium term rentals. Since your place is already furnished you can test this out pretty easily by changing the minimum stay to 30 days. Also see if you can find any corporate housing companies. Sometimes large employers will rent furnished apartments for their employees coming to town on a regular basis.
Also, if you believe strongly in the appreciation of the house, how bad would the negative cash flow be if you did long term rental? Is your income in a place that you could fund that for awhile until rents catch up and make it positive?
It is possible that I could sustain some low months with my income. It doesn't feel right to take a monthly loss on an investment property but it could be worth it for the short term.
I agree, and it's not something I would do. But I know some investors that do that if they believe in the long term appreciation.
Post: App/Services for Landlords
- Buffalo, NY
- Posts 788
- Votes 527
That depends on how many units are in your MF, what your longer term goals are and what kind of lifestyle you want.
If there are a lot of units or you plan to have a lot of units in the future then invest in setting up good systems now. RentRedi is free to BP Pros and is a good place to start. There are other free services out there as well.
If you only have a couple units and that is all you want and you never plan to hand off property management then you can probably just collect checks and have tenants text you.
Personally I don’t like tenants texting me issues, they are too easily missed or forgotten about. When they enter them into RentRedi they stay there until they are resolved and my partner can see them immediately as well.
Post: What to do with a property that has too much equity?
- Buffalo, NY
- Posts 788
- Votes 527
Quote from @Josh R.:
Quote from @Tim Delaney:
That seems like quite a jump in rate! I’m getting quotes in the high sixes to low sevens right now on commercial loans so the first thing you may want to do is double check that. Obviously a lot can change between now and next year as well.
1031 would seem an obvious choice. There are rumblings that over the next year or two more apartment buildings may come available. I’m not a 1031 expert but I believe you need to use the same amount of debt you currently have. Plus if you bought with all cash from the proceeds of the sale you would be trading down in asset value quite a bit.
Depending on the refi rate you could consider keeping this and refinancing it to pull some cash out which you could use as a down payment on another property.
Just some thoughts, hope they help
the issue with the refi is those rates at the new loan if i do a 75% LTV will almost overcome the cash flow its producing now and basically get to a break even point. I have other apartments as well that I could wrap all into one big 1031 exchange but probably need to identify the deal before I even try and sell the whole portfolio to trade up... I know it's a nuance to try and 1031 and hope the deal is still there when my properties sell. I just know the 500k sitting there needs to work harder that what it is
Yeah, I feel like 1031’s can be like a chicken or egg problem. If you find a deal you can always make an offer contingent on selling your existing properties. You may pay more for that extended closing window, but it may be worth it. Just a thought.
Post: Reinvesting in the business (How to structure paying self)
- Buffalo, NY
- Posts 788
- Votes 527
Quote from @Jamie Parker:
Quote from @Tim Delaney:
Quote from @Jamie Parker:
In my first stint in real estate, I thought reinvesting in the business was keeping the marketing engine running. At the time I was running on direct mail. I thought reinvesting in the business was partially investing in education. I justified going to the 10X Growth Con in 2017 and a couple local investor seminars. Only thing I got out of those events were I didn't understand how to get to the next level (no fault of the events, I take responsibility of my on inability to make the connections in the content). Taking notes and asking questions only got me deeper in the weeds as if I was asking the wrong question.
After purchasing my first property last year, I have resumed cold calling after purchasing a second property this year. Closed my first wholesale deal in 5 years. But now, I am more concerned with entity structure. I wholesale in LLC #1, and the 2 properties i purchased is in my name currently.
The big question for me: When I start to build, should the properties be held in an entity? I will need to partner with a builder to get financing. Secondly, should Building LLC be separate from Wholesaling LLC(currently being used for wholesaling). Who should I or do i talk to about getting things more compartmentalized. I recently ordered a survey on the two lots I own, and realized that I may be approaching this the wrong way.
For clarity, as i understand the concept of reinvesting in the business, each "Bucket" should eventually fund itself without the need for cash injections or contributions. Where or when is the point should I consider this or can just start out at any point?
Any thoughts?
Thanks for your reply, but also my apologies for the lack of clarity. In my first stent in real estate, I would make a withdrawal from my account, or spend out of it. Not going over a predetermined amount. However, I want to do things different. I think the technical term is distribution.
Do I write the LLC a W-9 and write a check from the LLC into a personal account for tracking purposes? The rule I plan to enact is paying myself 10% of the revenue generated from wholesaling quarterly. Since starting up, I am personally funding the marketing and lists. At this point I have not done anything yet in terms of distributions. This year, Unless I hit my goal i do not plan on taking distributions, this will be how next will start for simplicity.
My ideal is to have a system or a standard in place to maintain discipline about procedures. That way I am rewarded but not using the business account as a piggy bank.
You don’t need a w-9 if you are the owner from my understanding. And having a system of distributions is a great idea. You may want to consider taking a percentage of Profits though instead of Revenue.
Post: Getting Advice with buying Real Estate
- Buffalo, NY
- Posts 788
- Votes 527
Sounds like you’re on a good track, just need to keep plugging along.
2) usually you can’t just “roll” other debt into a mortgage without doing a refinance. And a refinance will have fees attached to it which makes this even less attractive.
3) Just because you are not a professional test doesn’t mean you can’t add value. It certainly doesn’t hurt to start developing relationships for the future!
Post: What to do with a property that has too much equity?
- Buffalo, NY
- Posts 788
- Votes 527
That seems like quite a jump in rate! I’m getting quotes in the high sixes to low sevens right now on commercial loans so the first thing you may want to do is double check that. Obviously a lot can change between now and next year as well.
1031 would seem an obvious choice. There are rumblings that over the next year or two more apartment buildings may come available. I’m not a 1031 expert but I believe you need to use the same amount of debt you currently have. Plus if you bought with all cash from the proceeds of the sale you would be trading down in asset value quite a bit.
Depending on the refi rate you could consider keeping this and refinancing it to pull some cash out which you could use as a down payment on another property.
Just some thoughts, hope they help
Post: Typical Monthly Cash Flow / Best US Markets
- Buffalo, NY
- Posts 788
- Votes 527
Those are pretty broad questions. For the first one there is a ton of data available on markets through the BP website that you may want to jump into and analyze.
For the second one, $300 would be considered great to one person and a waste of time to others. You need to create your plan and goals and go after deals that will fit your strategy. Sorry that probably isn’t the answer you are looking for, but it is reality.
Post: Community For New Investors Considering Limited Partnership
- Buffalo, NY
- Posts 788
- Votes 527
Isn’t that what the new Passive Pockets is trying to do?