All Forum Posts by: Chris Roush

I am working with an attorney to setup my first LLC. Since this is my first business, I'm trying to figure out how to handle the expenses when the 2019 tax season begins. Since I had to start the LLC with my own personal money, and the attorney fees wouldn't show up on that LLC's balance sheet, is it possible for me to write it off as a business expense after the LLC bank accounts are active?

For other expenses that I am currently paying for from my own personal account such as online subscription fees for various business-related needs such as rentometer and Bigger Pockets, do I need to move those subscription charges to a business credit card or checking account before I can write them off?

Any advice for managing my business expenses properly from the start would be greatly appreciated. Thanks!

Looking forward to it!

When evaluating a wholesale deal, is your realtor typically involved in the process of calculating the ARV? Should I just depend on my own knowledge of my target market and leave the agent out of wholesale deals? These are maybe slightly ignorant questions, but I am still not super familiar with the proper etiquette when working with a real estate agent. I don't want to waste their time doing comps if they are not directly related to the potential deal.

Hello. I am wanting to acquire properties using the BRRRR strategy, and it seems that unless I'm willing or have time to drive for dollars, my best bet would be to find deals through networking and/or wholesalers.

The issue I see with using wholesalers is that it seems like they typically want to turn around a contract quickly using a cash purchase. This normally wouldn't be a problem for a seasoned investor, but for a beginner who may need more time to evaluate the property before closing, I fear that it would turn off a wholesaler when working on deals with me.

How long does it typically take to analyze a wholesale deal? They come and go so fast, that I don't want to make the mistake of buying before I really know whether I can handle the rehab on time and on budget.

Thanks!

Because the HELOC is a revolving line of credit with variable interests rates, I would want to pay it off as soon as possible. For rentals, my understanding is that banks are going to want you to have 20% or more as a down payment anyway, so a refinance won't help you much unless you drastically improved the value of the property. I can't really recommend a specific turnkey company yet since I have not closed on a property yet.

@Annie Zhao

I have no properties under my belt yet, so take what I know with a grain of salt.

I am looking to invest in my home town of Kansas City. From my research so far, and from what I've seen on the BP forums, it is a good place to start. It's convenient that it's in my backyard. From what I know so far, the biggest downside to purchasing a turnkey property is that you get a smaller cash-on-cash return. The turnkey provider has already done the heavy lifting of finding a good deal, rehabbing, and reselling to you, the investor. You won't make instant equity on the deal, meaning you won't be able to refinance right away and reuse the money for another deal. You will have to wait a significant amount of time (4-5 years) in order to pull any sort of money out of the property with a refinance.

My rationale for including turnkey property or 2 in my plan at the start is that it removes some of the stress of getting started. As a new investor, I still need to make sure my business entity (LLC) is setup properly, ensure my bank accounts are setup, find a property manager, vet contractors, open a business line of credit etc... It's a lot to think about on top of trying to acquire a property.

For the first investment, I care more about building relationships with local businesses and lenders than the actual return coming from the property. In my mind, that's just icing on the cake. With that said, I still want the property to perform within the criteria I laid out above.

Thanks @Nathan Brooks! I've been lurking on the Bridge site for properties as well. Where is the meetup located? I couldn't find any information on it. I would love to meet more investors.

@Brian M. - yes, I do not plan to purchase from Morris Invest' since I have seen similar bad reviews. I do think the advice he provides on his youtube channel is still sound and very similar to what is suggested on BP.

@Lee Ripma - I agree that $12k/year is less than ideal, but it is my starting point. I do not include cash bonuses from my full-time job in my numbers, but I plan to invest that as well. Bonuses can be high (upwards of 10% of total annual salary). I plan to re-invest the cashflow from rentals as well.

I would like to officially come out of the weeds as a BP lurker and say hello to the investor community! I have been listening to the BP podcast for months, as well as absorbing as much audio book content around BRRRR as I can find. I no longer listen to music in my car or on walks. On the treadmill, I get sucked into the Youtube channels for BP, Clayton Morris, as well as a few local investors here in Kansas City. I have even attended a few local meetups on the topic and will be joining the local investor club here in KC (MAREI)

TL;DR - I'm hooked, I'm pumped, I'm....terrified!

It is time for me to take action. I have setup a budget which provides me with $1000+/mo in investable cash. I have cash reserves of $10,000+, I am sitting on a HELOC worth $25,000 at a zero-balance, I have my deal funnel coming through in the form of an MLS portal, I'm chatting with my local hard money lenders to get an idea of how placing quick offers works. I'm looking to get pre-qualified for conventional loans with my local banks (still in process). I feel like I'm setup to begin my journey.

Here's my current plan, and I am open to suggestions on improving it:

I want to:

1. Invest in single-family properties
2. Aim for 10%-12% cash-on-cash returns
3. Learn how to properly rehab properties and estimate costs without breaking the budget
4. Reach 10-15 properties. My goal is 1-2 properties per year at a linear rate, but I would be happy if I could figure out how to compound that acquisition rate.

I like the strategy of buying properties with a HELOC, paying the HELOC down with investable cash, as well as cash flow from the rentals, opening a second HELOC on the rental, and repeating. I want to blend this strategy with BRRRR.

Does it make sense to buy turnkey properties, or properties that require $5000 or less in repairs using a HELOC? My thought is to use this strategy as my slow play to attain higher cash flowing properties at a slower acquisition rate, while keeping an eye out for BRRRR deals that can be done with hard money and low/no money down. Even if the cash-on-cash return is lower for my first deal, I feel like it would be a nice confidence boost since I still have to tackle other tasks like properly setting up my business entity and dealing with taxes. I don't want to ignore the fact that BRRRR is probably the best way to break out of a linear growth pattern. Not to mention the flipping skills can be used for multiple strategies and fast cash when done right.

I look forward to chatting with the community, and am very excited (and scared) to start!