All Forum Posts by: Brian Kantor

Thanks, all. I am pretty sure that this is both landlord and liability.

I definitely do plan on shopping around for the policy I hold long-term, but short term, I am closing within the week and feel like I need to have a stop-gap policy until I can find something better.

• Is there any "problem" with using this policy for a month or so until I find something better?
• Either way, what is the specific name of the document or documents that I should be requesting from my PM about this policy?

Thanks again!

Hey there. I am in the process of closing on my first rental property, a SFH in Detroit. I ultimately found the property through my Property Manager, who had another client that was looking to sell it.

When I asked about liability insurance, he said that he gets a volume discount through NREIG (which I have read mixed reviews on in BP). He sent over a generic NREIG packet PDF about the policy and said the cost would be about $60/month.

Regardless, when I asked for paperwork and forms for me to evaluate and sign, he said "No paperwork; no forms. I will get you policy on day of closing."

• Is this something that I should be concerned about? Is this typical? Do Property Managers often handle the Liability Insurance for their clients in similar fashion?

Ultimately, I plan on using my own insurance broker, but he is having issues getting the paperwork filed efficiently given the pandemic and riots. My guy asked to see the paperwork from my PM to evaluate and said that an estimate is nothing unless it's formal.

• If I am likely (or even just have the option available) to switch providers to my broker's vendor at some point soon, does it even matter?

Backstory on my PM:  I interviewed about 12 PMs in Detroit before picking this guy. His company has about 1500 doors in the area. My Agent independently recommended him as well and vouches for him. 

If he is marking up the cost from NREIG, and that's why he is handling, it doesnt really matter to me, as I dont mind him making money. This just seems strange/shady to me.

Am I being over worried?

@Matt Hurley, I am working on this right now. Getting ready to reach out to a dozen local lenders with the ask of purchasing through an LLC. Did you have any luck with this after you posted a year ago? @Joe Villeneuve and @Joshua B., I'd love to hear if you've got any thoughts on this as well. Thanks, all!

Hi, Thomas. Congrats on getting started. I too am a new investor from Northern NJ originally, but am now in Brooklyn. Both expensive markets, for sure. As such, I have never seriously considered investing near me, although, to be sure deals are to be had in any market if you know what to look for and have enough capital to get started. 

In Brooklyn, for example, house-hacking a four-plex can make sense if you run the numbers, but you'd be looking at best at $60k down + $150k+ in renovations on a $1.5MM fixer-upper that you could rent out for ~$7500/month plus live for free. The numbers work, but I dont have that kind of cash to start-out.

As such, as far as markets, I look for small cities and suburbs of bigger cities where I can find some combo diverse businesses with large offices or factories and/or contain or are near to a couple colleges or universities. In OH, MI, FL, IN, etc, you can find houses that arent terrible for $50k asking price.

Once I do that, I Google "safest neighborhoods in City X" and start popping the neighborhoods one at a time into Zillow going down the list to check out available home prices. I'm looking for:

• The Safest neighborhood possible
• With available homes in less-than-deal condition that are far cheaper than nicer homes in the same 'hood
• And decent price-to-rent ratios

From there, I start researching agents and property managers here and on Zillow and start interviewing to see who seems like they might be a good fit. Agents can help you evaluate deals on the MLS and ideally bring you deals not yet posted there.

Once you find a property, you can evaluate it here on the BP calculator under the "Tools" tab.

As far as finding people to invest in you, maybe other people will disagree, but I think you try to get your first home with your own capital outlay, and once you prove success, you'll have an easier time finding those who would invest with you. You'll also make connections to hard money lenders over time who can help out.

Some great places to start:

• David Greene's "Long Distance Real Estate Investing" book
• If BRRRR is something you're interested in as well, I also found his book on that subject great as well.
• If you've got a little bit of cash, Paula Pant's course "Your First Rental Property" is a great intro course that covers all the basics.

With your background, you should have a huge leg-up on most of us when you begin the renovation process.

Good luck!

-Brian

Hi there. 

Long-story short, when researching neighborhoods in an out-of-state market, I rekindled with an old college buddy who lives in the market I'm looking to invest. After chatting with me, he asked if I'd be interested in partnering with him on this deal and others in the future. I trust this guy, he has amazing access to contractors and vendors (from his previous career) and ideally would like to make this happen, but we would want to structure in a way that is constructive and prevents potential future issues from arising.

Does anyone have any suggestions on how best to structure?

Specific questions:

1. Would we need to create an LLC to do this? Or is there a better/other way? In Pennsylvania (our market), all loans given to LLC must be structured as a commercial loan vs investor loan (as I understand it). Does that make this problematic?
2. We're both on same page strategically (ie, buy-and-hold, interested in cap-rate and focused on rental revenue vs trying to flip), but any suggestions on how to structure what happens when "a great deal" is presented to us to buy one of our properties?
3. How best to decide on major CapEx expenses (ie, vinyl windows that may last 20 years but are cheap vs aluminum that may last 50 but are expensive)
4. How best to handle what happens if/when one of us wants out of this in the future for some unforeseen reason?
5. How best to handle if/when one of us dies?

Assuming I can check off the above boxes, I guess we could have a lawyer (or LegalZoom) draft the framework into an agreement that we'd both sign.

Anything else I'm missing?

Thanks in advance!

Cheers,
Brian

Hi there. Long-story short, when researching neighborhoods in an out-of-state market, I rekindled with an old college buddy who lives in the market I'm looking to invest. After chatting with me, he asked if I'd be interested in partnering with him on this deal and others in the future. I trust this guy, he has amazing access to contractors and vendors (from his previous career) and ideally would like to make this happen, but we would want to structure in a way that is constructive and prevents potential future issues from arising. 

Does anyone have any suggestions on how best to structure?

Specific questions:

1. Would we need to create an LLC to do this? Or is there a better/other way? In Pennsylvania (our market), all loans given to LLC must be structured as a commercial loan vs investor loan (as I understand it). Does that make this problematic?
2. We're both on same page strategically (ie, buy-and-hold, interested in cap-rate and focused on rental revenue vs trying to flip), but any suggestions on how to structure what happens when "a great deal" is presented to us to buy one of our properties?
3. How best to decide on major CapEx expenses (ie, vinyl windows that may last 20 years but are cheap vs aluminum that may last 50 but are expensive)
4. How best to handle what happens if/when one of us wants out of this in the future for some unforeseen reason?
5. How best to handle if/when one of us dies?

Assuming I can check off the above boxes, I guess we could have a lawyer (or LegalZoom) draft the framework into an agreement that we'd both sign.

Anything else I'm missing?

Thanks in advance!

Cheers,
Brian

Thanks, everyone. To clarify, all options on my list had at least 5 years of experience in my market (5 of them had over 15 years) and working with buy-and-hold investors. Most of what was said here jives with what my gut told me anyway--I'll go with my top pick and see how it goes for a few months after which I can opt to move on if it isnt working out. Thanks again!

Hi there. First-time investor here, who's been interviewing a bunch of potential agents in my target market. After speaking with about 7 or 8 in my market, I've found that I've loosely grouped them into 3 buckets--"Definitely Not", "Fine", and "Seems Great". 

I've got 2-3 in the "Seems Great" bucket, and I've noticed that each seem to have their own traits or insights that I find appealing, but all with slightly different approaches or areas of expertise.

I'm wondering if it's best to pick one, start the process of examining properties with him or her, and then decide if it is or is not working out. Or is it acceptable to take the Top 3 and sort of play them all at once, see where I find the most success, and prune down to 1 or 2 if need be?

I understand that I can once I view a specific property with a specific agent, I'm bound to use them should I make an offer on that property, but are there any drawbacks in viewing multiple properties from multiple agents?

Thanks in advance for your thoughts!

-Brian