All Forum Posts by: Bob Lowry

@Kyle - have tried to accommodate tenant for inspection request and showings but her blanket response, "I will not show the home while I reside here." Shared the terms of the lease and she responds the same.

For 11 months all was good, but in last 2 weeks, all has gone haywire!

Property in CA and used Realtor forms for annual lease that expires 6/7/14. Tenant has given notice to vacate 23 days after lease expires, 6/30/14. I have told them that if they activate such an extension it would only be permitted on a per diem rate that is 30% higher than the per diem rate under the lease. Tenant agreed to the extension but now will not allow a landlord inspection of the premises. They also refuse to allow showings of the property to prospective tenants. They also are stating they will not pay last months rent and instructed me to use their security deposit, which is boldy denied in the lease they signed. What are my options?

Not sure on IRA management, but caution you to check with a CPA and Tax Attorney as this might be considered a "withdrawal" by the IRS which means penalties, if not handled correctly.

I am not an attorney or CPA, but when I was seeking to use my funds for a business investment (franchise purchase), I was instructed to use a self-directed 401k structure (I am the 401k manager) and then direct the funds to invest in a C-Corp that I own. This funded C-corp then is able to make investments and act as a broker as well. I can also make annual salary deferrals to the 401k as well as contributions. I know using a C-Corp for real estate investing is frowned upon by many since you can not take the personal deductions, but if your funds are in a retirement account, this was the only way I could find to utilize them with IRS approval.

I am told IRS is sensitive to distributions being held in LLC's since profits flow through to members on their tax returns - IRS might consider this an early withdrawal and consider fines.

Suggest professional advice so you do not have a hassle in the future and maybe lose your investment funds.

To all who replied, THANKS!

I have used SalesForce products in a prior business and found them VERY customer unfriendly and their software rather difficult to use. They also did not support 3rd party integration - it was their way or the highway. IMHO, the mindset for entreprenaurs.

I will check out infusionsoft as well.

Any comments on MarketLeader? Seems they have a customer lifecycle perspective and supporting embedded tools: website, email tracking, MLS integration, etc.

Thanks to all. Make it to San Francisco and I'll treat you on the wine!

I am an investor that is just starting a real estate brokerage and want to use the most dynamic software to capture leads and manage them through a relationship lifecycle to closure. I would like to get feedback from other professionals on their opinion of the best CRM software packages for the real estate market. I am interested in your opinions both from the broker/agent perspective and the customer/third party perspective - in other words, ease of use and value.

Also, if you are willing to discuss privately, please also let me know, provide a phone number and I will call to collect more data.

Thanks to all for the help.

I am a cash investor managing my own properties in CA. Due to high acquisition costs, I am limited in making the number of investment units I would desire, but do want to remain in touch with the market and generate a recurring revenue stream. Am considering opening a Property Management firm (already have a RE license in CA) to provide services to others, but would like opinions from this forum.

If I do it, I will invest in the management software, portals, and already have an experienced bookkeeper, but could use some words of advice.

Comments?

@Derek Carroll

According to my financial advisors, it is not possible to use 401k funds for active investments like a franchise, or real estate using an LLC. Instead the funds must be in a vehicle where the profits do not flow directly into the manager as in an LLC. Instead it must flow to a stock owner and the funded C-Corp must follow IRS reporting qualifications including annual valuations, etc. Then from within the C-Corp it may be advisable to hold investments in separate sub-entities for additional protection, and based on cash flow to support such entities. If others can provide a better explanation, please add to this. Thanks,

PS, I also am a Managing Partner in a health care consulting firm which could be used to make additional investments if needed.

Steven Hamilton II
Yes, created the self directed 401k and Profit Sharing Plan, created the C-Corp and had the 401k make the investment in the C-Corp per IRS guidelines. Now I just need to generate cash flow in the C-corp so that I can make contributions to the 401k and profit sharing. I am finding that maybe trying to get leverage within the C-corp for funding will be difficult unless I find another business to buy that generates cash outside of the real estate. I am considering coin laundries.

Appears this is a vehicle you are familiar with. Any other suggestions?

Steven Hamilton II, thanks for the advice, but what is ROBS?

Jon,

Thanks for the reply. Good stuff. Few modifications on my personal investment;
1 paid cash so mortgage
2 remodel cost ~$500 in paint
3 property management being done by me, no recurring expense
4 tenant covers all utilities
Result, income = $1650/mth less costs of insurance, taxes and maintenance of about $400/mth generating a net of $1250/mth. So cash positive. The risk will be the tenant longevity, currently 1 year lease, and their care of the home.

Additionally the market locally has risen 18% since my purchase, or on paper about a $36000 appreciation. Who knows if that will increase out even hold, but now it provides good positive fodder.

But my goal is to generate more cash flow, so I am looking at markets with lower acquisition fees. For example 4 homes at $50000 each/home, renting for $750/mth would generate even more gross and net than this California home. I realize they will have PM fees and maybe less appreciation, but hopefully a strong cash flow. Based on this goal, I was trying to understand the 2% rule.

Thanks for the excellent tips. They are greatly appreciated.