All Forum Posts by: Troy P.

1. A duplex > an apartment
2. I wouldn't decrease rent unless I had 30 days of vacancy with only a few showings and zero applicants.  If you have people spending money to apply, the interest is there.  They may not qualify, but the interest is there.
3. Same as above.  Is the tenant asking or is this your preconception to the current market?
4. Have you run current comps using the multitude of rent estimate tools freely available? 

Good luck.  My rentals just went up 30% from last year and my agent says this was "by far the best deal she could find".  I haven't started calling providers myself, but it's beyond ridiculous.

@Amy Verges sharing is caring! :)

Quote from @Simon W.:

Quote from @Troy P.:

Quote from @Jeff Nash:

 @Linda Weygant gave a thorough and complete explanation of the technical considerations.  To add to my post, It sounds like the admin is your main concern, but if you use accounting software like QuicKBooks Online you would just have 1 or 2 accounts to handle this scenario.  Just set up the rentals as classes in one account and property management company on its own.  With this many properties I assume you are using someone monthly or periodically (ie your CPA firm) to do the accounting.  If it was just a couple of properties I can see (wouldn’t recommend though) you just using Excel if reported on Schedule E where you just show an income statement and not the balance sheet as well. 

 Yes, right now with 2 properties, I have a cloud based management software that does income and expense tracking, rent collection, state-specific lease generation, etc.  It's very simple, convenient, and relatively cheap, but is not a human so I can see how there is room for improvement.  I know I will reach the threshold soon for moving on to something more professional like QuickBooks.

 If you are scaling, QB is not the way to go about it. Invest in PM platform with a good accounting module. I am literally moving my clients away from QB.

 Thank you for the info.. can you give some examples or recommendations of "PM platform with a good accounting module"?

Quote from @Jeff Nash:

 @Linda Weygant gave a thorough and complete explanation of the technical considerations.  To add to my post, It sounds like the admin is your main concern, but if you use accounting software like QuicKBooks Online you would just have 1 or 2 accounts to handle this scenario.  Just set up the rentals as classes in one account and property management company on its own.  With this many properties I assume you are using someone monthly or periodically (ie your CPA firm) to do the accounting.  If it was just a couple of properties I can see (wouldn’t recommend though) you just using Excel if reported on Schedule E where you just show an income statement and not the balance sheet as well. 

 Yes, right now with 2 properties, I have a cloud based management software that does income and expense tracking, rent collection, state-specific lease generation, etc.  It's very simple, convenient, and relatively cheap, but is not a human so I can see how there is room for improvement.  I know I will reach the threshold soon for moving on to something more professional like QuickBooks.

Thank you all for the advice.  For example's sake, let's say I currently have 2 mortgaged investment properties and my goal is 15 properties with 30% equity across the board in the next 5 years.  I know there are many ways to get there, and I have entertained the following options:

1. good landlord insurance with an additional multi-million dollar umbrella liabiliy policy
2. single holding LLC and single PM LLC (seems like holding LLC is still "exposed" given its value of assets)
3. 1 holding LLC per property and additional PM LLC
4. any combination of the above

I will likely eventually hire a PMC but wanted to get the financials and protection underway in the beginning.  With $1M+ in investment equity, the biggest exposure is my investment assets.  I read Tax-Free Wealth by Tom Wheelwright and listened to BP podcast 109 with attorney Scott Smith "You Will Get Sued.  Here's How to Survive".  I know entities are the ultimate asset protection, but at what point do you say "ok this is no longer a side job, but a business, and I am not qualified (or able) to run a business of this size"?  I know several people who feel the false security of entities while comingling funds, paying personal loans with business income, etc.  I am constantly going back to "this is not worth the headache", and doing what many other experts and veterans have suggested, owning the assets personally with lots of insurance.

Hi all,

I'm relatively new to REI and extremely new to business entities. I took the advice of so many others and sat down with a tax advisor and attorney. I'd like to put the protections in place now to shield current and future assets. My CAP suggested creating a holding LLC for each property and a Property Management LLC to collect and distribute funds. Has anyone heard of this strategy and actually deployed in their own situation? This seems like a management nightmare having to keep track of 10+ books, filings, articles of organization, etc. and I'd like something that I can manage more easily myself. Is it still worthwhile to create a single holding LLC for all properties with a separate PM LLC to perform accounting and true business duties?

Personally, I would have made sure window screens and door stops were functional before advertising the property.

That being said, if it's not a safety or health hazard, you are not obligated to make the repair.  These seem like minor issues with quick and cheap fixes, but if you want to risk losing a tenant, you are within your right to explain you have no obligation to make the repairs.

If I was in your situation, it would depend on my goals.  If your goal is to have 1 or 2 rentals as supplemental income as you age, then I agree paying off all debt sounds great.  If your goal is to build a real estate portfolio and turn this more into a legitimate business, then leverage and cash flow are your friends.  Do not put a single penny more than you have to into principal pay down and instead use that cash to acquire a property that will return 10+% of that cash annually as well as give you another appreciating asset, as well as (and this is my favorite) a plethora of tax benefits.

I spent a lot of time reading "401k vs REI" on other Internet forums, and it all comes down to how much effort do you want to give.  If you want a relatively low stress life, retire comfortably, and leave minimal assets to your friends and family which will be taxed at normal income rates, then by all means keep maxing out that retirement plan.  Most of us on here want more...

@Nathan Gesner when you say "Emotional Support Animals are covered by Fair Housing, which only applies to their permanent residence", does that mean an LTR vs an STR? You must allow an Emotional Support animal in an LTR unless you have a valid reason, is that correct?

Please show me one example where a real estate investment is a bad idea because of taxes.  Yes, you will need to have a great tax advisor and CPA that has your best interests in mind, but that is with all RE transactions, not just house hacking.