All Forum Posts by: Eric Black

@Pamela Sandberg, just sent you a PM.

Hi Kevin. I'll send you a PM. We use a guy out of AZ but he is awesome! He only works with RE investors and/or business owners and he really knows his stuff. 

Hi Everyone!

We will be holding our July meetup at 5:00 PM on Thursday, July 25th in Santa Maria, CA. Due to limited seating capacity I am not posting the location and request that you please send me a message to request the specific location. 

This meetup is relatively informal and we have participants from beginners to experienced investors. Two of our members will be updating us on their out-of-state BRRRR status and we'll leave time open for discussion of other topics and general Q&A. We've had 10-12 people the past couple of months and we're growing so we hope to see you!

Cheers!

Eric

Hi all,

Recently we've been getting a small group together informally, mostly of BP members but some who aren't. This isn't a formal Meetup or REIA, just more of a chance for investors to get together to share ideas and knowledge. This is not a leader/audience type group. Again, we want everyone to feel comfortable not only attending but also to participate. We have some who are still just learning, some who have recently started investing and some with years of experience. If you're in the area and would like to join us, please reply. We are meeting this Thursday, June 20th however our current venue has limited capacity.

Cheers!

Eric

I never said, and am not saying a deal's not there. This isn't my market. I haven't seen the deal. I'm just saying that in many cases, and dare I say most cases, a BP meetup isn't the first place someone goes with such a great deal. Most great deals get snatched up long before they need to be presented to a REIA or investment group. But if this truly is a great deal, more power to you and I hope you do well with it. That said, I also know there are a lot of "experts" out there pitching deals to ambitious new real estate investors.

I'm not discouraging anyone from exploring the opportunity, I'm only suggesting to proceed with caution. Proformas are often inflated to make the deal look better than it truly is. 

I hope you prove me wrong. 

Cheers!

Eric

My first question is, if it's such a great deal and the numbers are as good as they claim to be, why is it still available at a local BP event? Why haven't the "ton of people making money" snatched it up if it's so good? 

I'm not being pessimistic, negative or doubtful and I'm not trying to offend you. But if the people who have successfully been investing haven't grabbed this deal, where does the person pitching the deal go? To a local investor meetup to find a newby?

Maybe it IS a great deal. Maybe, like most "deals", the proforma is inflated to look good. Have you presented the proforma you got to anyone else in the area who has experience? Again, I'm not trying to be a downer or discourage you, I just don't want to see someone just getting started get burned.

Cheers!

Eric

Hi Robbin. If you don't want the hassle of managing the property yourself then I would recommend reaching out to a few property management companies in your area. They can come see the property and give you a good idea of what they believe it could rent for. True, you will have to pay them their monthly management fee (typically 10% of the monthly rent) but if you're not the type who likes getting phone calls in the middle of the night or having to drop everything you're doing to go fix an issue on the weekend or while attending a family gathering, then it's the route to go. The management company will advertise the property, show the property and screen potential tenants for you as part of their services.

Hope this helps!

Hi Ken. First, there is no right or wrong answer to your question and you'll most likely get varying opinions. Second, how many units are in the property you're purchasing? If it is 4 or less it will still be considered a residential mortgage, not a commercial mortgage, and most residential lenders will not lend to an LLC. Also, if you buy it in your name and then transfer it to the LLC the lender may call the loan due when they see that.

Depending on how many units are in the first purchase may determine if you create a new LLC next year. Some people have a separate LLC for each property. However, seeing that you live in the great state of California, as do I currently, you will still have to register each LLC as a foreign entity in the state of California, and pay the minimum $800 annual fee/tax on each LLC. There are ways around this but if you get caught it will most likely cost you much more than the $800.

An LLC is basically an insurance policy and will protect your other assets. If you don't have any/many other assets for someone to go after you for then there's not a lot to protect. If you're buying a 10-unit property (just as an example) and buy another 10-unit next year and put them in the same LLC, if someone sues you for something at the first property and they win a large judgement against you, more than what your insurance will pay, then they could go after both properties. If you had them in separate LLCs then they would only be able to go after the one.

I am not a lawyer or CPA however we have an LLC set up in Indiana for our rentals and have gone both routes. I would recommend talking to a real estate attorney and/or your CPA about this.

Cheers!

Sorry all, I misspoke. Yes, we have a CPA doing our taxes and yes, we are paying taxes on that income. Soon we won't have to as we'll only be CA residents for a couple more months. Sorry for creating confusion. 

Hi Loren. Thanks for sharing the article. We currently live in CA and own in TX and our experience has been that the benefit of no income tax far outweighs the higher property taxes. This obviously is property dependent. We bought two properties in TX in 2012. We have sold one but still have the other. While the property taxes are higher than we're used to even in CA, not having to pay income tax on the rental is huge. If you decide to choose another state/market that does have an income tax, you also need to factor in the costs of having to file an additional return in that state and how much that will cost depending on if you do your own taxes or pay someone to do them. It could potentially end up costing you more in income tax and filing fees than the additional property tax in TX. Also remember, the property taxes are a write-off. Income tax in another state is not. 

Just some food for thought.

Cheers!