All Forum Posts by: Lynn Z

last week I got a call from my realtor and took the time to ride by. Just hit MLS. Unfortunately, it's a rehash and I think it's irritating as heck to have agents hawking shop worn properties and "new listings" . If they knew the inventory better it would be different but think of all the people who have to ride by just to recognize the house as one that didn't sell the last two times they tried.

The most respected agent in my city does a 1% drop until property sells but he will not overprice a house just to please a seller. Just passes it up. Very successful.

It would help to get tenants in the duplex so that it would appeal to a new investor. Have you considered your carrying costs in your calculations of expense?

We renovated a condemned house in Nashville years ago and it was snapped up because it was the only house on the block with central heat and air. I've always remembered that it's good to make the property attractive and safe fundamentally so someone will buy it or rent it.

Just sold a triplex that I had for 7 years. Same tenants were there for the entire period. Added central heat and air/vinyl siding (2650 sq. ft. building)
etc. but basically didn't have the apartments vacant to do much remodeling. What I had was Location and that made the difference. The new investor had ideas about increasing the rents on these three tenants but 8 monhs down the road he turned the building over to a low fee property manager and just wants to keep rents the same and limp along with changing filters etc. In other words, no great changes. Because of square footage the appreciation rate in this building will make him a decent profit due to stable tenants and a no frills approach. They'll be there for years to come and he can sell it again with those same tenants in there.. or rehab a unit for himself and live there free.

I knew a lady that managed her triplex for years long distance. She lived about 21/2 hours away and was present for turnovers/leasing/etc. visiting at least once a month. She had someone in town to doing small things but she ran the show no doubt about that.

You must have contacts/accounts for emergencies even if you answer every call from your tenants. For example, this week during a termite bond inspection the inspection person sniffed a gas leak underneath the house and told me as I was checking on the other matter. Had to have gas person to immediately check that valve and replace it -- all the while the tenant is present wondering if he's going to blow up or not. Hard to take care of these type matters long distance.

Alot depends on the split. If I'm financing with a relative or partner I expect to collaborate but have them do alot of the day to day that is necessary to keeping these multiunit properties above water. If it's an equal split...one of us will take care of it and all share in the duties equally. No sense in one being worked to death and all taking the expense write offs at tax season.

I'm from SC as well. Welcome to forum and good luck on your land investment.

Nice discussion. I meant to say earlier (apologies to all) that the IRS does not look favorably when comingling funds.

I might mention that if you have properties and rent to students please remember alot of them (not all) have victorian, ton weight, antique furniture that has been handed down and all try to move each piece with a relative who may or may not be familiar with how to lift much less carry furniture up and down stairs. If hurt moving in or out they will be advised by their associate/doctors that landlords cover these types of injuries on their premises willy nilly and advise them to claim expenses against them. No big deal. These are not people who WANT to take responsibility for their stupidity so be careful and have something in your leases that address this risk.

Also, if the tenant doesn't show up personally to measure landings etc. make sure they know they need measurements in order to squeeze those couches up your stairwell. They'll take out walls, stairwells etc. stuffing their oversized (hand me down) couches up your walls. Even professional movers can't make them fit sometimes....but oh how they try. Be careful and cautious. Don't assume these risks don't affect you.

I sat at the table with two high priced lawyers discussing this issue. The tax attorney likes LLC's the other one didn't think they were necessary. Maybe the idea is that if you're sued they name everything you own and everything with your name on it even an officer of an LLC. My understanding was you segregate your LLC's by risk factors, eg. age, equity etc.

I have an umbrella liability policy to cover everything. Keep an account for every house. An attorney told our real estate club comingling funds is viewed favorably in an IRS audit. My sister even divides her American Express into personal/business subcategories to make it easier.
She has a general business account and a maintenance account and moves monies as needed into houses vs. rentals by online transfers. Hopes this helps. She's got alot of property and held onto it for 30 years.

Starting using Quicken's Rent Manager this year. Really easy to use and helpful. Let's you know every day if you're really making money or losing it.

I am involved in a 1031 exchange and made improvements to equalize the FMV of the two properties. It's tricky because all of this must be completed within the 180 day exchange period. Exchange expenses are deducted from the sales and purchase and that's pretty complicated too as to what IRS allows and disallows. For instance, security deposits should be paid outside of closing as that is not considered an exchange expense by the IRS apparently.

There is conflicting information on whether or not the debt has to be equal and I've decided the FMV being equal on the replacement properties is the most important factor to remember. I did equalize the debt because my CPA believes it should be equal. When your letter was written stating the address of the property you planned to buy in the 1031 exchange (to the IRS within 45 days of sale of the relinquished property) my understanding is you state the price and add language that states "plus repairs".

I'm not an accountant but I've done 3 of these. The legal papers must be in order from the beginning. Good Luck

did anyone notice on one of the Trademark Properties "Flip that House" Ginger states something like "We've got investors ...We have to watch our budget" etc. I certainly thought Mr. Davis had his own money...married to a doctor and all. He never mentioned investors in any of the shows I've watched. Of course, I thoroughly enjoyed it...being from the region and all.