All Forum Posts by: Marcus Auerbach

@Kenny Bergeron depends on you - what would you like to do? The definition of "best" will be different depending on who you ask. It's like asking what is the best vacation?

If you are not sure what you want to do a great idea is to offer your help to other investors. If you like to get into flipping houses find a local flipper and tell him you will run errands and help with demolition. Or find a wholesaler and offer to stuff letters or follow up on returned mail.

Having a clear goal in mind will make it much easier for you determine what you need. Learning as much as you can is really the best investment you can make. There is no magic sauce and no guru secret. Join a local REIA, go to the meetings and network with other investors. Once you know what a good deal looks like (for you) you will be able to find one and usually if the deal is good you will be able to fund it (and that does not need to be your own money).

@Steven J. I would say no big deal. He is communicating with you. If I understand correctley he's asking for a change of the agreement. And it sounds like there is even a pretty good reason to do so. Integrity is very important for me, but flexibility would rank right after that. My 2 cents.

The best strategy is the one that fits best to you. How much money or time do you have, how much are you willing to dedicate or spend? 

Are you willing to give it what it takes, write 2000 letters or hang 600 bandit signs or drive 800 houses and knock on doors to close one deal? Or rather pay a Realtor to write 200 offers (because he will not do that just hoping for a commission).

Most sellers are not willing to lower their asking price. Move on. Prepare for a lot of No's before you get a Yes.

@Joe Hughes depends on the timeframe. How long will you need to turn them arround? I try to complete a house within 5-8 weeks depending on the size of the project. I found a good rule of thumb is that I usually cannot spend more than 5k a week. Sounds funny, but a 25k rehab takes about 5 weeks. So for a couple months it probably does not make much sense to get a HELOC or the commercial equivalent CELOC.

@Robert M.  don't let your ego drive your business. Look at the numbers. What do you achieve exactley when you raise the rent by $15? Just to prove a point? I would save that for a day when it matters - choose your battles, you don't have to fight this one.

What again is your turnover cost? A month of vacancy, cleaning up and maybe some minor repairs, your time to deal with fining a new tenant or hoping that your PM makes a good choice?

I would go so far to say that rent increases are a game for appartment complexes. Turnover is already a given, so there is no harm as long as you can re-fill units quickly. And if you get 24 units x $15 that's $4320 a year or $43.200 in property value. Really interesting if you manage 120 units...

My recommendation, do the math and let the numbers guide you.

@Paul Post the LLC does two things for you in my opinion: it offers some legal protection and it shows that you are a professional and you are serious. The latter is the bigger one in my opinion. As for the legal protection what the LLC does set up and operated (!) correctley it limits the impact of a potential law suit to the asset the LLC owns. In other words they dont get to take your home and your car and your 401k. (as always please consult with your lawyer, I am no expert).

Your first line of defense is your landlord insurance policy you carry on your rental property. If that get's breached than your umbrella becomes your second line of defense, usually up to 1 million USD. After that your LLC will be your last line of defense. So I would recommend both, the umbrella and the LLC.

The best protection against lawsuits is to do everything correctley. Make sure you follow all legal requirements, practice good business, communicate well and make sure your homes are safe. If you do that you may never get sued.

@Dok Kim  first of all congratulations to your investments so far, looks like you have a good eye for opportunities. It is an interesting scenario and there are a couple things you can try, but first of all let me say this: maybe it's a good thing that your bank is limiting you to 200k. After all you have to be able to afford the monthly payments. There is a difference between equity and cash and in your case you just borrow against equity. 

This is essentially what got us into trouble as a nation in 2008 - the equity was there, appreciation was good, we know the rest of the story. If you've done the math and its no problem for you the first thing I would try is to talk to differnt banks, especially small local banks and credit unions. it may take two or three, it may take twenty before you find what you want. But it's like shopping for any other product: if you have not bought it before you may not know which store has exactley what you want, so you keep on shopping.

The other thing would be to refinance your home and take a cash out - esentially you get a new mortgage to pay off the old one and for the difference you get a check. The whole thing is amortised (payed back) typically over 30 years. Again the loan to debt ratio will come up, but that's not a bad thing. The way I look at it you have 200k more to start out with than most people. In many good rental areas in the US that's the down payment for 8 single family homes.

Final thought: they say not having (much) money makes you a better investor. I think it's true. You work harder to find better deals and after all you make your money when you buy. After that its just mechnanics.

Yes, we are limited to interior work right now, but I am behind on landscaping projects from last fall and am looking to hit the road running with a new guy in spring.. 

... and that would be in Milwaukee. oops.

I need a guy who can do mulchbeds, trim bushes, plant, do small grading jobs and seed grass. Most jobs are in to northern suburbs. Any recomendations anyone?