All Forum Posts by: Ali Boone

I know of a really good fund run by someone I know well. Great guy and offers good stuff. Shoot me a message if you're interested and I can connect you with him.

Can you share the name with me?

I haven't talked to him in a while, so I'd need to make sure he's still doing all the same things. My post was 4 years ago. Shoot me a DM and I'm happy to reach out to him and find out.

0 Votes

Quote from @Alex Gerondale:

Quote from @Ali Boone:

Just to put some clarification in here, Austin... the questions you're asking are really a mix of different questions. If I'm understanding right, you're first asking about the turnkey strategy as a whole, and whether you should do that or do a property yourself. For help on that question, check out this article-

https://www.biggerpockets.com/...

Then there's a clarification about different kinds of turnkey companies, because who is who matters for understanding who/what to do your due diligence on. You said "is Rent to Retirement" a smart investment? That again goes to the previous question... you're actually asking if turnkeys are a smart investment... but then if you decide to pursue turnkeys, you need to understand the difference between a direct turnkey provider and a turnkey marketing company. RtoR is a marketing company, as are many good companies, so they aren't the one who is directly selling you the property. They're merely connecting you with the company (direct provider) who does. That simply matters so you know where to direct your due diligence focus. Yes, research RtoR and learn about them and see if you want to work with them, but they aren't the one selling you the property, so don't stop your due diligence there.

Yes, absolutely run your own numbers. You should always verify everything for yourself and don't take anyone's word for anything.

As far as whether turnkeys are a good strategy or not... I've been buying turnkeys since 2011 (not through Rent to Retirement) and I wouldn't choose any other strategy! They aren't perfect, nor is any strategy, but they fit for exactly how I like to do things.

Hope that helps. The biggest thing is--separate out the questions you're asking into their specific categories so you can better and more easily figure it all out.

Hello Ali, just curious as to which TK companies you work with. I would like to compare and contrast different teams before I make the final call for who I work with.

Sure, anytime. Can you shoot me a message?

0 Votes

I totally agree with you and found exactly the same info when I initially dug into it back when I started investing.

Maybe someone else said this, but a huge thing that people don't realize... to expand on your initial question about properties that have mortgages... if you have a federally-backed mortgage on your property, an LLC doesn't create 100% asset protection because of the fact that your personal name has to be the one to guarantee that loan, meaning your personal name is exposed. People think LLCs give 100% protection, and in some cases they can, but not when you have a traditional mortgage, which is true for a large majority of rental property owners. It creates a loophole for someone to still get to you. That's where umbrella insurance becomes smarter.

3 Votes

Quote from @Grant Smith:

Quote from @Ali Boone:

I 100% think setting up an LLC before you invest is putting the cart before the horse. For so many reasons. If you want to keep the finances separate, just create a separate checking account for the rental properties. That's what I have- an account where all the mortgages go out of and all the rental income is deposited into. There's nothing other than rental property money in and out of it. And then an umbrella insurance policy will cover liability issues for the property (which is what everyone thinks they need an LLC for).

The LLC, business credit cards, and businesses accounts are huuuuge overkill when you're just getting started.

@Ali Boone - what about when it comes to tax write-offs? In what way would a new investor capture their depreciation or costs that are capable of being written off? In my mind I feel like you need an LLC or business to be able to write items off no (thinking depreciation, property management, any tools used like Stessa/Rentredi, or classes/conferences paid for as education). Would love any insight you have.

Fortunately you don't need those things. You can write them all off under your personal name. There's actually no difference in tax savings between personal and corporate; it's just a matter of when the write-off happens. For corporate, the expenses are taken off the top and then you're taxed on the remainder. For personal, all the income is tallied, but then you write-off the expenses and are taxed on what's left. So the numbers are the same. Confirm with your accountant (since I'm not one), but you definitely don't need a corporation to get all the benefits. The advantageous tax laws regarding long-term real estate holding were really written for the personal guy rather than the corporation anyway (at the biggest picture perspective).

Hope that helps!

2 Votes

Quote from @Chris Clothier:

Quote from @George M.:

I see a lot about Rent to Retirement on this forum. Who would be their competitors? Any other ones that are also recommended? Appreciate the feedback.

For ease of understanding, they are a turnkey promoter although I am sure with their growth they may develop other opportunites outside of connecting investors with turnkey companies/opportunities. Other companies with similar business models would be Norada, Real Wealth Network, Maverick and @Ali Boone although Ali may work with Maverick, I am not 100% sure if that is still the case.

Either way, these are companies who connect investors to turnkey opportunities and companies who do not have large marketing budgets or teams to market for them. I would guess they have a pretty good share of the market space meaning they are pretty influential in where investors ultimately invest.

My apologies to any of these companies if I didn't describe them in better detail. So, they may offer other services or opportunities, but regardless I think they all fall into that competitor qualification.

Best of luck to you George as you get moving forward.

Thanks for the shout out, Chris! Really appreciate it. I do not work with Maverick any longer. George, happy to help with anything you might need. I run a turnkeys Facebook group I can connect you with, answer questions, anything you need.

0 Votes

Quote from @David Greathouse:

Quote from @Ali Boone:

The midwestern properties, even if the cash flow is low, can still be profitable over time. Rental properties are a long-term investment, and the income starts compounding over time from the different profit centers (cash flow (don't forget about rent raises), appreciation, tax benefits, equity build via mortgage pay down, and hedging against inflation). With that said though, you can increase cash flow by renting out properties by the room. There's a turnkey-ish company out there who does only that. The added benefit to the higher cash flow is the properties are usually a lot nicer and in better areas than your typical turnkey property, so the appreciation factor and value over time can be a lot higher. So yes, all doable! I'm in SoCal and mostly invest out-of-state as well.

WELL SAID.....I speak with a lot of investors here in Ohio and the initial Cash flow isn't huge right out of the gate, but the rents continue to go up and will be better down the road.

Thanks so much!

0 Votes

Well I'll add in an additional risk by responding to your pro #1... the projected income will be higher. Keyword being projected, because when risk factors come into play, they can kill off that projection. The risk with rough areas is the tenant quality. If you get low-quality tenants, you risk: late payments, missed payments, high expenses for damages/repairs, high turnover costs with those potential damages, eviction expenses, and extended vacancy periods... whether due to tenant non-payment, squatters, eviction processes, or finding new tenants. During those non-payment months, you're paying out of pocket on that mortgage. Aside from the potential for the property quality to be low, meaning more maintenance expenses, bad tenants are... in my opinion... the #1 most costly thing to a rental property owner. And in rough neighborhoods, you're maximizing your chance of having bad tenants. Won't always be the case, but the risk is expontentially higher. So that's the major con you left out, and the thing that can cause your #1 pro to not actually happen.

0 Votes

New Haven, Connecticut

Quote from @Edwin De leon:

Thank you, makes sense, I know I can pick up a 4 family much cheaper in a rough area then I can in better areas, very tempting, if I can a good PM that has experience dealing with MF in bad areas, then this is KEY otherwise not worth the headaches to me personally unless I have great PM with experience dealing with MF in these rough neighborhoods.

Just remember with PMs, many PMs start out great and eventually turn terrible. If you find one who specializes in those types of properties, make sure you have a contingency plan in mind should something happen to that PM. Those types of properties will be much harder to sell if you ever needed to too, so just...again...know all of the risk factors. Don't rely on the PM, even if you get a good one, to know them for you.

1 Vote

New Haven, Connecticut

Quote from @Edwin De leon:

Thank you, I was initially thinking of investing in rough neighborhoods, where I can pick up 3-4 MF cheaply, many members here discourage me against this, the questions how are slum landlords making money in undesirable areas not only in NYC but OHIO, Philadelphia etccc so it it worthwhile investing in rough area where I can pick up multifamily' very cheap, and do section 8 in them or something like this. I wish to hire a property mgr whether it is in a good area or bad area, but leaning more in the C + areas of CT to buy and invest in, higher rents there, I am tempted to buy in rough neighborhoods because of the lower entry point in prices for 3-4 family properties, I am not just sure, so you mention the higher the risk ( hopefully ) the higher cash flow projection, if I wanted to pursue the rougher areas of CT, upstate NY or PA how should I approach it if I wanted to pursue it, and what do I need to do figure out if it is worth ... i am sure there are a lot of variables that I must weigh out and working out the numbers as well, is there a way to invest in rough areas more cautiously, I am sure if others are making money from well so can I ;>) but not sure If I want the headaches or give the headaches to someone else who manages HEADACHE PROPERTIES :(

Rough area investing can work, for sure. I know people who have done it. But you're right about the headaches. But more importantly than that though, the key to making those properties work is in being crystal clear exactly what risk factors about a rental property cause loss of income. You have to be crystal clear on them because rough neighborhood properties are going to have the highest chance of those things being an issue. Once you know those risk factors, you have to know strong risk mitigations for them. In theory a property manager who specializes in riskier properties will know these and be able to do it. The potential glitch in that perfect world scenario is in finding a really legit PM who is actually good at it. That can be tough to do sometimes. I would find that PM before I buy a property. You don't need to worry about giving a PM those headaches, but more importantly finding a PM who actually knows how to handle them is key.

2 Votes

New Haven, Connecticut

Quote from @Edwin De leon:

Thank Ali.... I am not sure if I will buy in NYC, I am still in analysis & research phase trying to decide if I should buy in CT, PA or Bronx

Both CT & PA have high taxes ... not sure if I should make a high taxes an issue for me, as a 100% disabled PA may allow BIG exemption on property taxes where CT just a small discount on property taxes as a disabled veteran, I may go with Pennsylvania because of possible lower taxes on property I am retired so that savings would be nice to use for travel purposes what do you think should I run away from higher taxes in CT or take it on ?

What do you mean by " negative cash flow or super high cash flow on the riskiest MFs " are you referring to poor undesirable areas when you are telling me ............... " that it can range from negative cash flow to super high cash flow on the riskiest MF's " Yes or No also when you say super high cash flow on riskiest of MF's ... give examples of what you are referring too for riskiest of MF's not clear on this at all LOST

What is your area of specialization as an investor is it buy and hold, out of state rental properties, fix and flip or hold ?

I would focus less on the taxes to start and more on the numbers. The taxes will play into the numbers. If a property looks like it will cash flow well or the profit potential is strong, then you can double-check any possible risks on the taxes (like if they're scheduled to jump a tremendous amount, which would kill your projections). But don't start with those, as they won't give you the bigger picture.

A high-quality property in a really nice neighborhood is likely going to offer you a lower cash flow projection than a sketchy property in a rough neighborhood. The difference between those two property types is risk. The lower the risk, typically, the lower the cash flow. The higher the risk, the higher (hopefully) the cash flow projection. Keyword there- projection. You want to be careful buying riskier properties because those risks can kill off any profit potential you were expecting.

Don't feel bad about being lost... everyone is when they get started!

My area of specialization is with buy and hold. I'm big into turnkeys and out-of-state properties. I do REI coaching with people doing all sorts of strategies, but buy and hold (not including rehabbing) is my definite area of specialization.

2 Votes

New Haven, Connecticut

All Forum Posts by: Ali Boone

Ali Boone has started 26 posts and replied 6254 times.

Post: Looking to invest in mortgage fund

Post: Rent To Retirement How Does It Really Work?

Post: Why do people use LLC for "buy & hold" rentals that have mortgages?

Post: Should I Start and LLC Before Buying and Investment Property

Post: Competitors to Rent To Retirement

Post: Recommended Property Type for First Time Investor?

Post: Monthly Rental Income Profit I Should Expect From a 2-3 MF

Post: Monthly Rental Income Profit I Should Expect From a 2-3 MF

Post: Monthly Rental Income Profit I Should Expect From a 2-3 MF

Post: Monthly Rental Income Profit I Should Expect From a 2-3 MF