All Forum Posts by: Dante Pirouz

I have both...a lawyer that is local to my properties that I can call when I need him and we hired Anderson Advisors based in Las Vegas, Nevada that do all of our LLC and trust structures and advise us on tax planning because they have CPAs and bookkeepers in the firm too. I pay Anderson a regular retainer and pay my local lawyer when I need him. Anderson Advisors are very knowledgable on investor issues and tax planning for RE investors and my local lawyer isn't really that good at more complex investor issues but he is excellent with local issues and has an extensive local network. Hope that helps!

Are you analyzing an SFR or a multifamily property? In my experience it is hard to make SFRs cash flow but they are good for eventually pulling out equity or selling for cash to reinvest. I've sold all my SFRs for that reason. I have found the higher the number of units the better the cash flow so maybe you should consider looking at a duplex or larger. Also be willing to look outside of your immediate area to find an area that is developing and can give you better cash flow...and yes this market is the toughest to buy in the last 14-15 years.

Do you think it is better (faster, easier, better price, etc.) to sell a 1-4 unit property with a residential agent or a commercial broker? 

A couple comments on this one: 1) For a 4plex you don't want a commercial loan because they will always have worse terms (interest rates, balloon, down requirement, reserves, etc.) than a residential mortgage. You'll need 20-25% down for most residential loans plus some cash reserves but you could put an offer in and then see if the seller would be open to a land contract (Michigan) for seller financing...it's worth a shot. 2) It looks like this property is a conversion into a 4 unit and those will always need cap ex to get them functioning well or else you will be doing a ton of maintenance calls and complaints from tenants vs. a multiplex built as that. It looks like this building may need new windows, systems, electrical, roof but you won't know for sure until you get an offer in and inspect. Just figure that into your offer. I usually figure min $10K per unit for immdiate cap ex after close to get the rents up over time. 3) You'll want to check the current rents are now (don't go with the agent numbers alone). You can look up old rental listings for the address online to see what the current cash flow is and then estimate your pro forma that may take a year or so to get to. Base your offer on the current cash flow not the pro forma. Often landlords don't have clean books to look at so do your own digging for cash flow numbers. Once a deal is accepted you can ask for their books. 4) A 4plex is IMHO a good number of units to start with if you are a newbie and you will self manage. It allows you to get your systems and vendors in place and make a few mistakes and it will have better cash flow than an SFR. 5) I think these forecast calculation reports are a useful exercise to get comfortable with crunching the numbers but I've never had one turn out to be the real numbers for a property once I've purchased. There will be unforseen hiccups but I think the asking price for this one at $40K/unit is a good price given this market. 6) Don't be afraid to just make an offer...it won't be written in stone...you can always decide whether you want to go forward after you've seen the books/units, double checked cap ex needs, etc. if the offer is even accepted. Hope that helps!

I am thankful for:

1. my 13 unit portfolio and my tenants 

2. my dream of growing my portfolio to 100 units

3. my free time

4. autumn in Michigan

5. the abundance in my fridge that I get to share with family during the holidays

6. my dog pals and my chickens that deliver breakfast each morning (usually)

7. my kids who are thriving 

8. all the small things that make my life cozy and comfortable

9. the BP community with a wealth of wisdom

10. a little cash in the bank

I have some units in a rural area that have had the mailboxes bashed over off the 2 x 2 post two separate times. I figure it was local kids hitting them with baseball bats or with a car. I put a laminated sign up I downloaded from the USPS on the post saying to report any mail tampering and that it is a federal crime and haven’t had problems since. 

We normally do not approve applicants with any court records of evictions or judgments. I have a tenant who makes a good salary and qualifies except for history of past court judgments for non-payment. Can we charge her an additional premium monthly on top of her rent for the additional risk? If yes, what do we call it? Security fee? Rent insurance fee?

I've been to court with tenants and it is not something to be afraid of. Tenants will threaten things but that doesn't mean that they are true or that they will carry through with it. On your side, simply document with pictures and dated documents (for example a simple letter detailing the damage sent to the tenant with the date on it). I also keep an Excel doc with the cost to repair and replace (2 columns) damage itemized. It lists broken screen is this much, dent in the wall is this much. I give that to tenants with their move out instruction documents so they are informed ahead of time. All of the documentation is what you bring to court (in case it goes to that but it almost never does) to show to the judge. I have found judges in my area (Michigan) to be pretty fair on both sides but definitely willing to rule on the side of a respectful, calm, diligent landlord who is doing their best to run their business. You have to get used to this process because if you are going to grow your business, all kinds of people will try to make threats to get their way but you can't let that paralyze you. Everything in your business should be a chance to learn how to create a process to handle it so you can scale and grow. Good luck!

I have been obsessed with real estate all of my life and have been seriously investing for the last 6 years. My husband and I have been married for 23 years and after taking our net worth from pretty much $0 to over $3M mostly because of the value of my RE portfolio, he still isn't at all supportive...can you believe that? Over the 6 years, the progress has been slowly building (which we all know is normal) but because he doesn't see a Porsche in the driveway and a private jet out back he makes fun of my "little business" (it is only 13 units but it cash flows $3K per month and of course I dream much bigger). Needless to say I am a RE investing wife who does this pretty much without spouse support...some spouses are just not on board and never truly will be but you can't let them destroy what you are building. 

@MarliaStone Your most recent response is the right way to look at things...you learned something for the deals...plus it makes for a great story when you finally get your episode on the BP podcast :)...Mine will be: "I remember when I bought that deal from a wholesaler that had 2 feet of raw sewage in the crawlspace..."