All Forum Posts by: Brad Jacobson

Hi Fellow BP Fans,

In your opinion, at what net worth does it make sense to start estate planning?  

This is separate from housing rental properties in the appropriate LLCs and that side of the investing process. 

Thanks in advance,

Hi Fellow BP Fans,

For those of you familiar with home warranties, what are your opinions on having a HW on each rental property annually?  Here in Utah they cost between $400-600/yr and, when not trying to wiggle their way out of service requests, do cover a lot of items that tend to fail much more quickly in rentals than in personal residences.

Thanks,

Hey Bryan,

I know these price hikes and rising rates are discouraging but as landlords, we have the opportunity to be the winning side of things.  It's always tempting to want to look at other markets and see where the grass is greener but I've found that rents are rising almost as quickly as prices and deals continue to exist in all markets.

I'm in the greater Salt Lake area of Utah and though not as crazy price-wise as San Diego, we've still seen crazy price spikes.  Nevertheless, rents have shot up as well and I've still been able to accumulate units in my local market where I know the market the best.  I just have to make sure I have my rents and ARVs dialed in. 

Me belief is that it's always better to start local so you can have a real hands-on experience even though that view isn't shared by all investors.  I'm sure if you're spending the appropriate time and building the right network, you'll still be able to thrive in San Diego!

Good luck!

Hi @Stephen Massinello,

If you're both going to be on the loan (AKA, both of your incomes are counting towards the pre-approval and you'll both be on title) the lender should be fine with any sort of downpayment split.  The downpayment simply has to be sourced from the buyers on title (can't be gifted from a third party in most cases) and the amount can be split however.

If you are partnering, it would make sense to purchase the house in your personal name, then have the property deeded into an LLC. Within that LLC, you should have your ownership amounts established in accordance with your downpayment or whatever you and your partner decide.

Hopefully this helps.  Good luck!

Hey @Luyen Nguyen, 

What an exciting opportunity!  You definitely should take advantage of it.  

What you're speaking to will be a "seller finance" situation.  Here in Utah, you do so through a trust deed (ownership) and a note (loan) but this process can vary from state to state.

In order to make sure you're doing this appropriately, you'll need to find a local real estate attorney who will likely already have the appropriate, pre-made state forms that will determine the conditions of the note (with 0% down and the negotiated payments) and that same attorney will walk you and your uncle through the legal items that may exist just as existing tenant leases, other debts that might exist on the property, the balloon payment at the end of the seller finance period, etc.  

Good luck!

Hi @Jay Mersfelder,

I know the rate spike is very discouraging at the moment but I'd suggest you not let it stop you from expanding your portfolio!  You can never go back in time and buy a property at an older, lower price, but you will likely be able to refinance in the future.

The triplex I'm trying to buy at the moment is looking like it'll be a 5.25%.

Good luck!

Hey Patrick, welcome to the RE club and way to get started so early!

1. If your work is W2, you'll likely only need two to four paystubs to verify income.  If your work is 1099 or you want to use commission-based earning to increase your loan amount, you'll likely need at least one full year of consistent earnings and a tax return to back it up.  

2. Never wait to buy real estate.  Buy real estate and wait.  No joke, I thought I was buying the top of the market when I bought my first rental in 2017.

3. Find an excellent lender. FHA can be as low as 0% down but 3.5% is typical. However, based on your income, you'll want to explore other loan options like a conventional 3% or 5% down as well. A great lender will walk you through all these options, show you the fees included, and help estimate your mortgage which will help you better gauge your cash on cash return with a good house hack or traditional rental.

Good luck!

Hey @Kameron Harlan, that's an exciting problem to have!

I'd start by deciding what you want the future of your contracting business to be:

1. If you'd like to keep it small, hire a bookkeeper to help you manage invoicing, expenses, projects, etc.  A good bookkeeper and/ or tax planner will be tremendously helpful.  

2. If you'd like to grow your business, I'd consider bringing in a partner.  There are so many people out there with zero hands-on skills (like me) but really enjoy running businesses through marketing, budgeting, networking, etc.  I bet a partner with this set of skills could really help your business expand and thrive.

Good luck!

Hey @Chris Renzi,

One quick and easy option that might be out there is to find a local lender that might have a less expensive loan program.  

Most typical loans do require the 25% down but here in Utah I found a local lender that will do a 15% down with no PMI on any 2-4 unit and did a loan with them in November. Just last month I found another local lender that will do a 10% down investment loan for any property in-between 1-4 units.

Network and see if you can find something less cash intensive!

Good luck,

When vetting a property management, I like to ask questions like the following:

1. What percentage of your management portfolio is currently vacant?

2. What's your average evection rate?

3. Do you have an employed handyman?

4. What is the dollar figure for a repair in which you do and don't notify the landlord?

5. What's your tenant turnover fee?

6. Are there any additional fees aside from the monthly and the turnover?

7. Do you have public reviews I can see anywhere?

I'm sure there are more good questions but I'm sure if you are at least talking to a few PMs and comparing their answers with these set of questions that you'll end up with one that's at least a cut above the rest.

Good luck!