All Forum Posts by: Tim Delaney

Does she handle all the tenant communication? Hiring lawn care? Maintenance scheduling (I realize it may not be frequent)?

To get those hours, maybe turn one or two into medium term rentals (you want the average stays to be over 7 days so they don't fall into STR status) which would give her more to do, particularly in the first year of furnishing them and getting everything set up.

Alternatively, she maybe she could manage the properties but also get her RE license and try to sell a house or two a year - go to lots of open houses or run them for other agents?

Just ideas, talk to your CPA to make sure you are doing it properly.

You may want to post this over on Passive Pockets.

At the most basic level a good deal makes you money with minimal cash and effort. Sometimes you have to bring a little more cash, others a little more effort. Ideally not too much of both.

The best way to learn what makes a good deal is to just keep analyzing. Find properties, and plug the numbers in the BP calculators. It may be helpful to analyze each deal as a flip and a BRRRR so you understand why sometimes it works as one but not the other.

There will be some people that say it’s not all about the numbers though, and I would agree. But the numbers is where it starts. Once you start learning how to identify a good deal financially you also need to make sure the property is not in a really crappy depreciating area or that the building is completely falling apart structurally.

Hope this helps.

 I think if you are going to keep all three parties involved as owners of the deal long term then you need to separate yourself as a renter and a contractor. If you are going to be doing the rehab work in exchange for equity then that value needs to be determined up front with a specific timeline that you have to adhere to in order to earn your equity. This is a significant risk to the other two parties that are bringing the deal and the money when they could just as easily hire a contractor and keep the equity for themselves. As for rent, the three parties agree on a fair rent for the apartment and that is what you pay the partnership every month in rent. You take your share of distributions if/when there is money to share.

And then I go back to the person with money. If they want their money back fast like a flip then let them flip it and you buy it as a primary residence with a conventional or fha mortgage. You will get way better loan terms than you would on a Cash out Refi as a partnership entity with no RE experience.

This is all very theoretical, can you share the actual numbers so we can help you more?

Are you looking to focus in a particular area or property type?

I’m an investor in Buffalo and happy to buy deals.

I like the idea of using a HELOC over a personal loan and going with option 2, but it depends on what your goals are. Just keep in mind that using that emergency fund to buy your next property and having tapped a HELOC already may leave you in a bad spot if you run into a similar problem again.

Also, I’m not 100% sure, but I have heard that personal loans don’t your credit more so than other types of debt so be sure you look into that if you go the personal loans route and then planned to finance your next purchase soon after.

You have a lot going on there and I’m not sure I fully understood your thought process. At a basic level there is no one set way to structure a partnership. There is definitely more too it than just the money that goes in. But with three partners and one looking to move into the property it will probably be complicated. So first, can you do this without the other two partners or with just one of them? Or just pay your sister a finders fee for getting the deal?

If the other two parties want to flip a house maybe they can do just that as partners and then sell you the house which you can buy with a primary home loan with low down payment. They could even hire you to do the work on the house and instead of paying you they could just give you a credit at closing. That may keep things cleaner for everyone.

Is your new house going to be a househack? Or can it be? That would be a helpful addition to your plan as you would further reduce your cost of living.

Also don’t forget from that $600 you are planning on getting in cash flow you have taxes, insurance, maintenance, capex, and vacancy to consider.

With two homes, you may want to keep that extra $20k as an emergency fund rather than spending it on a third property and then be left with no emergency funds.

The document you linked to is for NY State as a whole so that applies to Erie and Niagara counties. Locally some investors say that Niagara county is actually a little more landlord friendly than Erie, but I do not have experience in both counties so I can't comment on that.

This is one of the things that @Matthew Irish-Jones mentioned above - be careful about putting #3 on his list above #1 and #2. The numbers often look the best in some of the worst areas to manage and on properties that have the most deferred maintenance. I actually know other investors from Singapore that got burned very badly in this market. That said, it is a great place to invest and there are still plenty of good deals despite the national attention! Not as many as there used to be, but they are still here.