All Forum Posts by: Timothy VanWingerden

How many rental properties do you have? I have 8 and I self-manage. I treat every aspect of my management as a business and I have enjoyed it. I think that when I really start to scale I will need to decide if I want to start a PM company or just outsource it. 

I believe self-managing is the way to go when starting out because of the additional cash flow. But it just depends on how active you want to be with your investments.

CBD is legal. No way law enforcement is going to seize your property because a tenant is selling CBD without the proper credentials.

Is he growing hemp for CBD extraction or is he just selling the oil? With the introduction of the 2018 Farm Bill, hemp has been removed from Schedule I controlled substances making it an ordinary agricultural commodity. While hemp and marijuana are both cannabis, the difference between the two is the level of THC present. 

I'm not exactly sure how it works in your state exactly, but in KY, you need to have a permit to grow hemp. The KY department of agriculture will require the coordinates of where the plant will be grown. When it is time to extract, they will inspect and take a tissue culture of the plant to determine the cannabinoids present. If too much THC then the plant will need to be destroyed. There are also a ton of compliance regulations that must be followed. Look at what just happened to CannTrust. 

All that to say is you need to find out in your state what the requirements are for growing hemp. I doubt your tenant has any of that documentation present. Maybe you could require an approval letter from the department of Ag so that this doesn't come back to you. 

however, like @Ryan Dormond was saying, this is a space with very little regulation and it is going to take some time to get the laws enforced. 

@Larry Fullard I would run the numbers as if you are not living in the unit.

@Ryan Rush thanks for the honesty and for this post. I purchased 8 units last year and all the repairs just kept hitting me every single month. I was able to get a $45,000 subordinate loan on my primary residence that my local bank offered. Just a 3 year note at 5% interest. My income is good and we live below our means so the additional payment I can handle.

Thanks to this thread, I’m changing my strategy and I’m going to take it slower until I can build up some reserves for these properties before purchasing more.

I’m curious what benchmark others use for reserves?

@Theo Hicks, @David Acosta, @Amy Wan, @Michael Plaks

All: thanks for the helpful information. Yes, I am well aware that I should be consulting with professionals. It is helpful to get some background understanding of how to structure a syndication so that when I begin searching for the right professional I will know what questions to ask.

To give you some more background on the deal, I am actually raising money for a private placement loan for a business that is a cash flowing like crazy right now but cannot get a conventional loan due to the industry that it is in. All the investors are friends and family but I wanted to use this deal as a primer for real estate syndications in the future. I figured this raise would be a good place to start.

@Eamonn McElroy, thank you for the advice. This is helpful when I begin consulting an attorney

@Ashish Acharya, great thanks for the information. I was thinking about just starting one LLC and then when the next deal comes up to make a holding LLC for the multiple investments, but it sounds like it would be best to structure it with scaling up in mind. Question, I already have my the properties I own in an LLC. Could this act as the "holding" LLC or should I keep these separate?

Planning to ask these same questions with a professional in my area.

I'm working on syndicating a deal and I have a number of investors who have an interest in committing some funds with me to make this deal work. My thought process is to set up an LLC where each investor has a % ownership based on the amount of funds they have committed. However, I have not done this before and just looking for some direction on the best way to go about this. I'm consulting my accountant but her office is closed today so just trying to get some feedback on this as I move forward.

Additionally, if you know of any professionals in the Lexington, KY area that are familiar with this I would appreciate the recommendation.

Outlets are really easy to convert; you can do this yourself. 

Quick story: On my first fixer upper this past year I wanted to do as much as I could on my own so I could learn how to do it and also get a better idea on how to estimate rehab costs. I learned a couple of things very quickly: 

- you do not need to paint an entire house to figure out how much work it takes to paint an entire house.

- a contractor can do it twice as good and twice as fast for twice as much

Depending on what your real estate goals are, I truly believe you can learn everything you need to learn without doing the work yourself. I didn't get into real estate to become a handyman. Of course, doing this type of work will save money at first, but if you are trying to scale, you want to focus your time and energy elsewhere. 

With all of that said, since this is your own home and you want to learn how to change out an outlet, this is definitely something you can do on your own. Just make sure the power is off and you are good to go.

I've done 2 deals so far and the search for the 3rd deal has not been any easier. Granted on this 3rd deal I'll have 1 year of experience, a way better idea of how to evaluate a property, more connections, etc. all of these things help, but I'm still facing new challenges.

The challenge for this 3rd deal is capital, which wasn't an issue for the first two.

After your first deal, the next are not going to fall into your lap, but you have to get started somewhere. So many people learn about real estate investing and never put their learning into action.