All Forum Posts by: Bob Langworthy

I just went through this on a 4-unit that I decided not to buy. For starters, you should ask for: 1) copies of the current leases 2) length of time they have been tenants 3) expenses/unit In viewing the property, I also met two of the tenants. I'm a friendly guy and without prying, one of the tenants opened up about problems with the property and a neighboring building. I'm sure the experienced multi-family owners will chime in, but that's where I would start.

I'm with Merv on this one. Taking the 30 year gives you the option to accelerate debt reduction if desired while also giving you breathing room for the unexpected.

That's a great question. I would second the advice to go with experience and expertise over credentials. A little more information about Enrolled Agents: we get our credentials directly from the IRS and are federally licensed meaning we can practice in every state. And while it's true that we do not have the bachelors degree requirement, we specialize in taxes. Many CPAs don't handle taxes, but instead focus on audits or internal accounting functions. When you talk with an Enrolled Agent, you know you're talking to someone who handles taxation. My advice would be to talk with experienced investors in your area to find an accountant who regularly works with real state investors. And be careful when shopping by price alone. A good accountant can save you far more than they cost you!

Thanks @Brian Schmelzlen! My process was slow and included making an offer on an off-market property. The keys for me were probably:

1) Make sure my accounting practice was in good financial shape with consistent growth. I count on it to pay a healthy lease payment every month.

2) Location. While this isn't crucial for my accounting practice, I knew that I could find tenants more easily (or they could find me more easily) if the location was good. Note that I wasn't looking for a "great" location. A "good" location is what I could afford.

3) I walked the entire area that I was interested in. This gave me a much better feel for the area than merely driving around.

4) Save up 20% for a down payment.

5) Be patient.

You could also consider working with a realtor to find a good property. I didn't do that with this one, but am working with one now to find a multi-family.

My long term plan is to grow my accounting practice so that it takes over the upstairs office as well. That's a win-win because the upstairs office is harder to lease out and an accounting practice that large will provide a fantastic income with which to purchase more real estate!

Time to make it happen!

When I was 35 I set my first real estate goal: to own a multi-unit commercial building by the time I was 40. I'm an accountant, so I knew that I would have at least one tenant. I also had some particular areas of town (Brunswick, ME) where I wanted to be located. 

Having a goal motivated me, but I didn't quite go about it the right way (read: I didn't find BP until recently). I knew about real estate from both a practical standpoint (I worked for my dad who is a builder when I was younger) and from a theoretical standpoint having worked with many investor clients.

But I didn't work with a realtor, find a mentor, and work on my goal regularly and as I result, I failed to meet my goal. But it wasn't a total fail. I was 40 years and 7 months in August of 2016 when we closed on this building:

The price was right, the location is great, and it had a lot going for it including:

1) The prior owner had put very high end furnaces in fairly recently.

2) The siding, windows, and doors were all 5 years old.

3) Handicap accessibility to the two largest offices.

4) Parking for 20 in a town that has very little parking.

There were some issues to resolve, however:

1) The roof in the picture is the new roof that we had put on.

2) The building was vacant. Zero tenants.

3) Two offices needed a complete remodel (thanks, dad!)

4) A bathroom needed to be reconfigured so that two offices could share the one bathroom.

Within 2 months of purchase, I had moved in and had the second largest office leased out on a 5-year lease. Shortly after that I leased out 6 parking spaces to a neighboring business and found a tenant for the small office in the front right. 

I am now at full occupancy and am loving real estate ownership. With the help of BP and this great community, I have a new goal:

$2,000,000 of real estate with a cap rate of 10% by the time I turn 50. Hold me to it!

Don't buy bitcoin because someone else says you should. Like anything, do your own research first. Then, if you are comfortable, only buy with money that you can lose without being devastated. 

Joy,

Congratulations. Here are the steps to take:

1) Educate yourself. (You found BP, so you're probably doing that right now!)

2) Develop relationships with a few advisors (realtor, accountant, experienced investor).

3) Educate yourself some more.

4) Buy your first property.

I see clients jump too quickly without knowing what they are getting themselves in to. Work these steps and you should do well.

Best,

Bob