All Forum Posts by: Jonathan Taylor Smith

Inquire with different lenders as your current lender is apparently making their loan discussion based upon what should instead be an insurance concern. What difference does it make to the lender if it cannot be rebuilt as a quad if it is insured for at least the loan amount (which they certainly will require)? And when going to alternate lenders, do not give them a ready-made reason to say NO as well by volunteering the zoning concern of the prior lender - let them determine if that is an issue for themselves.

Cash-flow is certainly important, but it's not the only way you make money from rental properties - there are at least 4 others. Also, it should be called "first year cash-flow", as you can raise rents, get better priced insurance, dispute taxes, rehab the property to lower future repairs and capex, negotiate property management fees as you bring more properties onboard, improve processes and marketing to lower vacancy expense, refi when rates decrease, etc... And for me, the tax benefits alone may still make a property worth buying even if cash-flow is -$500/mo. So, to answer your question, I do not look at cash-flow alone... I consider all 5 ways a given property makes money to determine if it will be profitable overall, along with what cash-flow is likely to be 2 or 3 years out.

Embrace the "slow" and tedious... If REI was as quick and easy as buying stocks, EVERYBODY would be doing it and you'd never be able to find a property. All those things you named are barriers to entry (among many others) that are often GOOD things for those who are in it and can deal with them effectively.

Maybe more than what you need, but I use Realeflow.com (competitor to propstream and others), which has a feature called "Moby" that allows creation of text campaigns. So, you could create a "Cash Buyers" campaign and opt-in people to which you can then send text blasts as needed. I use the feature for a number of such functions, including blasting out rental vacancy texts to everyone on my tenant waiting list. But this is a full CRM, property lead and marketing system that may be overkill if all you want is text blasts.

I never know what to actually think about "global warming", "global cooling", "climate change", "sea level rise", etc... Is it all a hoax? Or are those who think it's a hoax all fools? And memes like this don't help me to know which side to land on...

Regardless, I love the Tampa Bay area, and it is one of a few places that I target for investment, including desiring beachfront property. And I'm willing to bet that if SLR does put it all under water at some point, there will be any number of COVID style bailout programs coming from the government. But if SLR is a hoax (or just greatly overestimated in impact), then I'll also be good when the areas continue to appreciate, and I own lots of properties there.

I fund my rehabs with either private lender funds, hard money lenders or my own cash / heloc funds.

Not aware of any books specific to Section 8, but a Section 8 rental/tenant is not essentially different than any other type, but that the source of income is from a third party, and you have an inspection requirement - both of which can be good things. So, it is really just learning the specific process(es) of your local housing authority and making sure your unit will pass the HQS inspection. There will be both potentially good and bad tenants with vouchers seeking your home, so you'll need to screen well (which you should be doing anyway). And you'll need to be VERY clear and professional with how you handle all matters, including going over your lease to set the correct tone and expectations right from the start (AGAIN, which you should be doing ANYWAY).

Well first, is your primary lender going to allow your down payment funds to also be borrowed? Most will not... And does the person expect to get any equity in the property in exchange for making the deal happen with their DP funds? Assuming not, you should still create a note with the repayment terms spelled out. And do you have anything you can pledge as collateral against the funds in the note? It has been my experience that the more you treat this as a professionally handled loan transaction, the more likely they'll be willing to do it again upon full repayment with interest.

You can learn what HUD/Section 8 will pay in rent for X bedrooms in your county at: https://www.huduser.gov/portal... - but note that this is the MAX they will pay. It does not mean your particular tenant will qualify at the max. The actually resulting approved rent depends on the tenant; whereas one tenant may get approved at or near the max, and another (based upon income and other factors) may be well below that. Some of those factors can include consideration of tenant paid utilities, but maybe not - if they have sufficient income.

Be it single or multi-family, when I'm handling accounting for ALL expenses related to a property acquisition, I count them as tax deductible expenses against the property (and its future income or sale gain) with full details and invoices attached. Then it's up to my accountant to determine the legitimacy of a given expense as being tax deductible or not. This goes for the appraisal, inspection, survey, closing costs, etc... But you aid your accountant greatly in this effort by having all these expenses reflected on the closing statement.