All Forum Posts by: Brian Ky

Investment Info:

Single-family residence other investment.

New construction project in Radcliff, KY.

If you are in college, you can find a cheap single family house near the school.  Once you buy it, turn around and rent out each bedroom.  If you have a 3 bedroom house, the two bedrooms you rent should cover the cost of the place.  Just save any extra money you get for repairs.

If you can find a duplex, you can rent out one side completely and rent out the extra bedrooms in the side you stay on.  Tri/Fourplexes are the same game.

Thing to remember is being near the school your tenants will likely be college students.  They wont mind sharing the place just like you wont mind.  Having their own room is better than living in the dorms, especially with a more private bathroom. 

Once you graduate from college, you wont need to sell the home as there will always be another college student who will need a place to stay.  This is what makes investing around colleges a great deal. 

There was a podcast a couple years ago of a college student who bought a place rented out everything and realized he was making money.  So he bought another place just to rent and did the old rinse and repeat.  I forget how many places he owned by the time he completed college but it was in the ball park of 40 doors.  If I could have done it all over again when I was in college, this is what I would have done.  Now that I have a family, I can't use this style of investing, but I encourage all of the single people I work with to do it.

Like Don said, there are a lot of great books out there which you can learn from.  Go to your local library and make an account there.  Ask about eBooks.  You can get, direct from Amazon, free eBooks for 3 weeks at a time just like you are checking them out.  My library lets me hold onto 10 books at a time in eBook format plus more if you get the actual book.  But again, this requires you to get an account from your library that has this as an option.

My current boss is a Real Estate investor as well.  He used his remainder of the GI Bill to get trained in home inspections and HVAC.  He already has his RE licenses, so now he can go into a home and check it out himself prior to making an offer.  Some may argue this is a better form of training as you are learning a skill related to RE investing rather than theory. 

I have read several times on this forum the best education is just getting out and investing.  If you make a mistake that cost a couple thousand dollars, you will really learn and better yourself for the next opportunity.

This is a great question.  Maybe there should be clarification on the question/answer though. To me it seems Spencer is a tenate by stating he is renting from a friend.  But many of the answers are for if he is the land lord. I think what Spencer is saying is what does a room mate do with property when the other room mate moves out and leaves property?

The good news is that no one stole the money order. That means you don't have integrity issues.  But something that really sticks out as a risk for your system is that your book keeper has access to money. That is a huge risk to any business. If the person who has access money also documents the money then issues will arise.  You are granting access to money and the ability to alter the books to conceal the crime.  A book keeper should never touch money, but instead touch receipts. The smaller the business the higher the risk of fraud. 

For ideas on protecting your business from fraud check out articles written by Joseph Wells. 

In the city I grew up in there was a law against parking in the front lawn.  The justification was the sewer line that runs from the house to the sewer line in the street goes along the front lawn.  The concern was the weight of a vehicle on the lawn could damage the sewer line. 

If your city has a similar law then you have him on the lease violation and city code violation. Since this is a commercial truck you may want to inspect the sewer line prior to returning the deposit. 

Frank said what I said, but in so fewer words. So if I confused you, do exactly like he said. 

Not sure if I like Arlan's suggestion of not putting it in your books. That is a sure way to forget to account for items and pull your hair out when the accounting math doesn't add up. 

Also, in most businesses accrual basis accounting better reflects the state of the business than does a cash basis.

To explain the difference accrual you reflect profits when you earn them and expenses when you utilise them. So when you expense your supplies as they are used then your accounting books will tell you what you have on hand. 

Cash basis expenses when you pay and recognised revenue when you receive the payment. The down side is not reflecting the expenses and revenue at correct time.  Suppose you pay $2000 in property tax in December for the following year.  In cash basis accounting you will reflect the expense in the wrong year instead of the year which the payment represents. 

For every debit their is a matching credit. Supplies are a debit in your (current) asset account, credit card debt is the (current) liability account. Since I can't see your chart of accounts I can't tell you the best one to place it in, and chart of accounts are unique to every business. 

Keep in mind, accounting math is slightly different than school math in that everything is done twice utilising the double entry system. That is probably the source of your confusion. 

Now for more advanced book keeping. As you burn up the supplies, you credit the supply asset account and debit your expense account by the same value. The expense account is in your owner equity accounts not the liability accounts. 

As you pay the off the credit card, you debit the liability account and credit the cash account for the same value. 

If you don't have any accounting training I should clarify: 

On an asset,  debit means increase and credit means decrease.  On a liability and owner equity account, credit means increase and debit decrease. That may explain some confusion of it seeming I switched their meanings. 

I will stop there before I risk confusing you more. If you have any more accounting questions let me know.  IE how to account for the interest of you incur it on the card. 

Got owned by auto correct. 

interesting spider man squeal.