All Forum Posts by: Dave Klein

My day business is an ecommerce apparel business. I have an over seas team of data entry people who add products to our site and then 3 people here in the US who handle the customer service and shipping of the products. I do come in Monday-Friday to make sure everyone is on task and has what they need to do their job but I spend half my day drooling over real estate I can't yet afford and listening to podcasts. This morning I left for 2 hours to replace a toilet. Tomorrow I'm going to spend 8-11am cleaning brush at one of my units.

I'm aware that being an RE professional isn't measured in units but rather time. I'm wondering if the IRS has ever pressed someone and said "Come on, there's no way you spend 750 hours a year managing XXXXX number of units".

If you're a designated Real Estate Professional as far as taxes go how many units are you self managing?

I'm self employed and my day business makes a pretty good income. Employees take care of most of the work so I don't have to be here the normal 9-5.
I also have 13 units that I self manage and another 8 that I have a property manager take care of. I'm looking to add more units in 2021. In order to offset my passive real estate losses against my active income from my day job I need to claim that I'm a Real Estate Professional for taxes (750 hours spent on real estate management minimum).

My accountant tells me that this is an area that the IRS audits quite often because they know it's a really sweet deal.
So my question is to those that already designate themselves as a Real Estate Professional, how many units are you self managing?

I'm thinking about maybe adding a 4 plex and and buying a vacation home that I'll AirBnB. The AirBnB should eat up more time than a long term rental.
Thoughts?

@Jason Snell I'm from Manitowoc and there's to many variables for me to answer that question (is this a C class rental duplex or A class single family).

I can tell you though that getting contractors to answer their phone or return a call is becoming impossible here. I have a few that I worked with on past jobs even dodge calls. All the "little " guys are looking for the super easy bath/ kitchen remodel jobs that they can have done in a few days. The new home builders don't want to mess with the old home remodels.

If you need concrete or hvac I do have solid referrals for those.

Is this a sign Glenn family?

Maybe I should specify. I'm not looking to post ads on Craigslist for apartments for rent. I'm looking to post ads for "I buy rentals... ect "

Do you use a Craigslist posting software to automate ads?

I used to use Empire poster but that was on an old computer. It worked well but it looks like the software hasn't been updated in years.

I downloaded CLAD Genius but can't get it figured out

What's your favorite Craigslist posting software?

Up until now I've always bought relatively small(ish) deals and always put 20% down on my multifamily properties. I'm starting to look larger in the range of $500-1.5M and if I want to continually buy these saving the 20% down each time is going to limit me.
I've talked to my bank and they are fine giving me the 80% on a good deal up to 1.5M but won't finance the entire amount. If I can get an owner to carry back a 20% or 10% second mortgage how do the logistics of that work? I kind of assumed that the title company could set up the 2nd mortgage with the monthly payments and calculate the principal/interest for a fee of course but when I called my regular title company they made it seem like I was talking a foreign language.

Who handles the administration of your owner financed deals??

I buy rentals in Eastern Wisconsin and am looking to build a website for SEO and PPC marketing.

Which do you all like better

wi-real-estate.com which I already own or

davebuysrentals.com which I don't yet.

Do you have an idea for a catchy different one?

Thanks.

I don't know much about the syndication game but I'm pretty sure that this is the way Grant Cardone does it. He buys the deal, improves it and then syndicates it after he already owns it.

Show them the numbers! If you show them the numbers on a 4 plex and how it would allow you to live for free that's a tough thing to talk bad about.

Part of the reason that they talk bad about real estate is simply because they are jealous and to afraid to take the risk themselves.

My gut feeling is that this is going to be tough to acquire at a deal much less a seller financed deal.
I came up with one scenario but it's a waaaaay long shot. You mentioned that she moved across the street with her new fella. Is there equity in that house... like a LOT of equity? They could potentially refinance that house to pull equity out and pay off the vacant house then owner finance it to you. Since rates are so low right now that could be a motivating factor to refi if they are at a higher rate. It's a long shot though.

Senario #2 could be you do 10% down, she carries a second for 10% and then you do conventional financing for the remaining 80. That's what I'm hoping to structure on my next commercial deal.

Since this seems like not a fire sale what attracts you to this particular house?

Or how about this...... If your intention is to fix and flip it you be upfront with her. Tell her you'd like to be her partner. You pay for the repairs and then when the house sells you split the profit.