All Forum Posts by: Becky Hiu

@Owen Dashner is pretty awesome too. He helped us on 4 deals and we just got them all perm termed! ;)

We use https://www.hamiltonjuffer.com.... They're very familiar with larger MF syndicators/PE firms. 

Chris Coy at Union State Bank. We've 60+ units with him to date. Flexible, available, knowledgeable. Does 80% LTC/LTV, construction financing, competitive rates for the 5-year fixed, 25 amort schedule.

Others would include MidwestOne - publicly-traded Iowa bank that isn't too large, yet, Savings State Bank, Farmers. Some require larger deal sizes to be worth their time. 

Haha, @Darson Grantham, thanks for connecting @Owen Dashner to us. I've been MIA on BP but need to get back at it. 

@Bill B. - Thanks for your input. We do want to charge "market rates" but since we're new to this in-house construction business, it's tough. We plan to do mini-BRRRRs for this 15 unit and plan to charge the same rate for all the other partnerships, if that makes any sense. No screwing anyone over. :) I do know good handymen charge $30-50/hour including their tools, so perhaps we just use that as a ballpark. 

Big dilemma on best practice or most efficient way to charge "rent" on tools/equipment that one partnership owns that will be used for remodeling/maintenance work on other partnerships with different owners. Let me rephrase this: we are doing mini-BRRRR on the new partnership's property but the tools are owned by this partnership of 4 - not just maintenance items. And, what are "market rates?"

Scenario: I am part of 4 different partnerships of which one is a property management company we recently started that hires labor (in-house construction workers - we have 1 full-time and 2 part-time guys) and owns equipment/tools. There are 4 members in the property management company and we just created a new partnership with a 5th (same 4 other partners, 1 new partner) to own a 15-unit we are closing on next week. 

How should we go about charging this new partnership of 5 (15-unit investment) tools/equipment rent? We brainstormed several ideas such as identifying useful life in hours each tool/equipment that costs > $100 and charging per hour "rent" when used but this gets more complicated the more tools we will be using (we likely have $15-20k in tools and equipment), OR we should just tack on a "rent" charge of say $10/hour on top of the labor wage we're paying our in-house construction workers (for e.g. $20 base/hour + $10/hour for equipment "rent") but this $10/hour is very arbitrary number (could it be $5, $15, $20?). 

Thoughts, anyone?

@Matt Fisher - I can let you know how Golden Rule does with my leaky gas pipe fix. It's going to cost us $2.8k to fix just what they can see now.

You have to define what your time is worth/hour and what opportunities you're missing out because of dealing with X, Y, X of real estate. For some, time is money, and if that's true, the Time Value of Money principle quantifies things, and personally I think it's one of the best ways to quantify your personal time, especially for a quant-nerd like myself. 

I'm a millennial, earning a decent W-2 wage at a Fortune 500 firm with great opportunities in Des Moines. I've flex time off, which is nice - as long as I get my job done, I'm free to do whatever. HOWEVER, there's still perception of how I ought to spend my time in a corporate setting, which isn't ideal. My real estate side hustle is a full-time job in itself but I'm funneling all I have besides de minimus 401k match, ESPP, etc. as those are "throwing free money off the table" if I don't at least match into real estate. 

From my experience, in order of most important/expensive:

1. Time/opportunities lost (it's a zero-sum game).

2. Ignorance of a subject due to unawareness/no knowledge of (think tax strategies/business strategies/automation strategies).

3. Select CAPEX expenditures (a roof was $5.57k recently but we managed to layer it into the PA Addendum, where we borrowed on the purchase price at a 6.5 to 1 ratio, and a furnace went out for the same property during the Polar Vortex but we were super fortunate to have home warranty on it (1st year usually applies)). Yes, you can depreciate those items based on certain schedules but money today is worth more than money tomorrow, and yes, those tack on value to your property but it's the TVM/opportunity lost today because of the cash outlay.

4. Vacancies. 

5. Difficult tenants.

6. Additional stress produced by this side real estate hustle. I could be climbing mountains. Ties back to point 1. Recall, 10 years from now, my knees/physical self wouldn't be able to enjoy as much as I do today.

My 2 cents. I am self-managing all the properties now but definitely will outsource it once my personal TVM is $100/hour. Currently, I value it at about $60/hour.  But, I do enjoy the property management aspect of things, so don't mind learning the bolts and nuts before I pass it on to someone else. ;)

Speaking from a standpoint of an immigrant here who is currently a permanent resident as of 2.5 years ago. I came here on a:

1. Student visa (F-1), then

2. Using the H-1 work visa, got a full-time job IN a field related to my majors (Quant Econs/Finance undergrad, Masters in Finance grad. This is a must - I couldn't be a barista at Starbucks and stay in the USA. Now, with the new POTUS in place, immigration is so tight, it's difficult to get certain longer-term visas approved). You have to be sponsored by a corporation/company and this is lottery based. 65k/year allocation max, first 20k go to grad degree holders, then they get dumped into the 45k pool if they don't get a draw and the entire world is applying for it. Chances today is a 20-25% win, AND they get snapped up day 1 of April's opening), 

3. And finally got my PERM just before my H-1B limit was up (3 years first tranche, 3 years max renewal after, otherwise leave the country or change visa status). This is a very expensive, tedious process that depends on which country you're from. Peeps from China/India's waiting average time is 10 years now. Mine was only 2 years.

Buying a house here is like buying a car, but lenders obviously prefer if you are at least an H-1B holder to lend to you, unless you're an all cash/private/hard money user. Think about it from the lenders' perspective - if you were to default on your mortgage, it's hard to trace a foreigner who's on say a student visa. I bought my first rental property being on H-1B. We now have LLCs (partnership) to house the properties and YES, you cannot earn a 1099-MISC/W-2 wage other than what you're being sponsored on. I am now able to earn 1099-MISC/guaranteed income (aka active income) because I'm a permanent resident but the nice thing about real estate investing is that foreigners can receive "passive" income... Also, you cannot own an S-Corp (I think) being a foreigner but can open/own an LLC but cannot work for yourself unless you're sponsoring yourself.

PM me if you want to chat more about this as I think I've quite some experience being a foreigner myself. Been doing this 7 years (RE) and been here 10+ years.

I own 4 SFRs by Drake, currently all occupied by Drake students/young professionals, a 6-plex partially rented to Drake students but mainly lower income folk (inherited those who we plan to non-renew and have Drake students live there), and just got another Drake duplex which will be rented out in Fall to Drake students. Most Drake students (that I know, including myself, a former alumni) prefer not to live east of 27th St. My 2 cents. All our SFRs are a few blocks west of Drake and the 6-plex is 28th and Cottage Grove (2 blocks south of Drake).