All Forum Posts by: David Barnett

This is going to sound really petty, and I would strongly discourage people from using the big tax prep firms (HR Block, Jackson Hewitt come to mind immediately).  I view them as the same as the big banks for mortgages for real estate investors.

I don't think I can help with the contracts and finding a buyer portion of the question.  Is this house in Winona County?  If so, you can find the owner here:  

https://beacon.schneidercorp.com/Application.aspx?AppID=597&LayerID=9787&PageTypeID=2&PageID=4325

If there's any trouble using the site, and I can help find the owner for you, please let me know.  I don't expect you to put the address in a public forum, and happy to help if you message me the address.  I have quite a bit of experience using this tax assessors site and skip tracing owners.

 

Although I agree that online education isn't new, COVID is increasing the need to do virtual learning, at least in the near term.  I think we're looking at a different time where there might be more of a shift to more permanent e-learning.  For areas that are reliant on student housing, it could create a big vacuum.  I generally don't watch the news, generally don't put any stock in what they say, and was drawn to a story about rent prices dropping in Boston with a lot of the universities going to e-learning for the fall.  Can landlords in the Boston area afford 4.5 months of potential vacancy if they can't fill their unit in the Fall?  Will students move and/or work on finding an apartment in the cold/snow?  It could be very interesting to see how it all plays out.

@Benson Webb You're welcome.  Happy to share what I know about Saint Paul.  There are investors from the Twin Cities that are far more knowledgeable than I am!

@Benson Webb Welcome to Bigger Pockets.  What part of Saint Paul is the duplex in?  What does the unit look like, how big, how many beds/bath, etc.?  You might be low on the rent per unit, there is very low vacancy in the metro and rents have been steadily climbing.

To answer your question directly, I agree with @Joe Splitrock and have my tenants pay for the utilities directly.  I have three duplexes in the Twin Cities metro, two of which I have the tenants pay for the utilities directly (made a mistake on the first property - lesson learned).

@Ross Bowman You're welcome.  I did it once and it was an interesting and eye opening experience.  Please let me know if you'd like to chat about my experience either via DM, Zoom, Google Meet or some other virtual method.  Happy to share what I learned and what I would improve upon if I were to loan money again.  A little teaser, given the current state of the economy and the market cycle, I'd make sure to be EXTRA conservative in loaning on a deal in case there is a drop in real estate values.

@Ross Bowman My opinion only, I think you're out of luck unless you want to take on a good amount of risk. The best I think you could do with close to 0 risk is have a high interest savings account. If you put the savings into the market with a shorter term horizon, you're much more likely to need the capital when the market is down. The other possible option (would put this in the middle risk wise between high interest savings account and the stock market) is to loan the money out to a flipper/BRRRR investor on a shorter term time horizon (6-12 months) at a pretty heavy interest rate.

 I think it answers the question perfectly, as half the battle is segregating costs that are applicable to the rental (and where most non-accountants have an issue).  If you have dedicated accounts for the property, the chances of missing something are close to 0.  If you use 1 account for everything, it makes everything a lot more complicated and harder to track.

To answer Troy's question directly, I have three properties and use Excel.  Much like one of the other forum members that responded, I have a tab for each property, a tab that's a master data sheet (all backup for all properties), a linked tab that flows into a P&L/Income Statement and I match up the categories to the tax forms.  I try to make it as easy as possible for my accountant to put things on the tax forms.  

 With the current environment in the Twin Cities, I would say it is very hard to cash flow well in Minneapolis unless you go to North Minny (rougher part of the city).  The values in the Twin Cities metro keep on climbing and would say that it is more of an appreciation market now than a cash flow market.  Don't get me wrong, was great city to invest in (I'm a huge fan of the economic diversity in the Metro), however, both Minneapolis and Saint Paul are starting to put in regulations on tenant screening that are concerning to me.

I'm currently 35 (will be 36 in September) and I have six total units (three duplexes).  

How I got started was that I purchased a condo in an "A" class area of Minneapolis to test the waters. The condo was really cheap in comparison to the median purchase price in the Boston area. I came to the table with the down payment from savings. After this property, I refinanced out my primary residence and took out a HELOC and went on a buying spree (using the proceeds mostly from the cash out refi to purchase the first two duplexes), buying the six units within 18 months (February 2017 was the first duplex purchase and my last purchase was June of 2018). I stopped buying recently due to three factors. First factor is that I had a really big ticket item come up out of the blue and wanted to pump the brakes after that happened (had to get creative to absorb the cost). The second item is that prices in the Twin Cities have been on a steady climb. There are a lot of younger buyers in the Twin Cities that are scooping up small multis to house hack (driving up pricing). Last and not least, the break has allowed me to stabilize the properties, understand pricing/the numbers and can be sharper on any future investments.