All Forum Posts by: David Wolber

Hi @Jon Farley and welcome to the world of information overload!  If you can't find it on this site you are asking the wrong questions for sure!  Seriously, this site is so awesome.  The people who have already responded to you are some of the best and successful people rocking it in the area.  Every one of us will always take the time to help or answer questions.  And the meetups are no joke great places to network, bounce ideas and just rub elbows (6ft away) with people that are truly doing the hustle in real time.  

So, what type of REI are you looking to get it to? SFH? Multis, Mixed use? Airports?

Also, tell me about your contracting business, what trade or specialty?

Truthfully i'm typing this without having clicked on your bio yet, so if it's all in there then i'm sorry and just ignore the questions. :)

Oh yeah, as @Jaysen Medhurst said, i do PM work in the area.  So if you have any questions on that front, I can maybe provide some answers. 

Cheers!

-Dave

@Aamir Shah I'm definitely not an accountant, but PM sorta forces you into it!  haha If you are going to do this, make sure you have a way of tracking it.  Best way i would recommend with having no idea how you track your books, is to mark that transaction as an owner draw or member draw.  This way it shows that you took money out of the business to pay for a personal item.  At the end of the day it won't matter too much because i assume all your LLCs are pass through and it sorta ends up in one pot.  If you have an account or CPA who does your taxes, ask them how they want you to track the transaction.

When we move money from business to personal the LLC account will be tagged as owner/member draw, when we move money from personal to business we take it as owner/member equity.

Hey @Frederic Mileo just as @Filipe Pereira said, rent demand is strong in a lot of areas here in CT.  We primarily invest and manage around SECT (Groton, New London, Mystic), we have a few large employers as well as the Navy here so we don't see a decrease in demand for some time.  Hartford area definitely has significantly more inventory at the moment, but there are definitely opportunities to be had. 

What type of investment are you looking for? simple 2 or 3 unit houses or more like 30 unit complexes?

Thanks @Kyle W. but i'm not sure i could support a full time office assistant at the moment.  I wouldn't' feel right asking her to relocate. If she was looking for a part time job then I'd absolutely but all about it! 

@Kyle W.

That 4-hr work week really isn't in me honestly.  I'm a bit of a workaholic.  A better yet I enjoy it. 

My first goal is to leave the J-O-B, and run the business full time. HOWEVER, I do plan on building the company to a point where I will hire a manager and PMs and such to operate the business.   I will concentrate on growing the business, the portfolio of investments and such.  I am in desperate need of an office assistant at the moment and will be hiring one very soon.

In CT, and in a lot of other states, I can't hire PMs because they would need to be Realtors and therefore I would need a Broker's license, which is at least 3 years out for me.

Damn @Ricardo R. that's a hell of a write up!

@Kyle W. for a less doom and gloom version of the story... :)

I do PM as a 2nd job...or more like a 3rd or 4th job. I love it. I am doing exactly what you are talking about. I still invest in real estate and started a PM company to manage my own properties. Then someone asked if I would manage theirs, which i couldn't do yet since i hadn't gotten my Realtors license yet. Well in CT, there are certain things you need a license for and other things you do not. So I started out as the "Maintenance Guy" and let the owners do all the leasing, rent collecting and such. Got the required license and off I went, had my foot in the door and now manage over 50 units after only 6 months in the official Biz.

I have plans on leaving my W2 by scaling the PM company. Because what I've found in my area, nobody wants to manage the 2-6 unit buildings for single owner investors. The big boys want condo or 250+ apartment complexes and most Realtors that do PM only want SFHs, so I’m aiming for the niche.

One thing i like about managing more units in addition to my own is now your team of maintenance techs and contractors get a lot of business from me and give me better deals on my own properties as well. Another thing is talk about a great pool of contacts!  Who would be calling you to manage properties, but other investors.  Although I don't advertise buying and selling real estate, since i had to have by license I now have worked with investors to buy properties that I also manage. One more step closer to W2 freedom. 

But once you start managing other properties for other owners you now have two customers. The tenants AND the owners and it's a whole bunch of fun being in the middle of all that.

I wouldn't trade it for the world.

Cheers

@Matt Bouthet , House hacking, in my opinion is all about gaining equity and living mortgage free. $380 is pretty damn close to mortgage free in my world. We own a duplex (a very LARGE duplex) in New London and when we lived there it costed us $85 a month after the crazy NL taxes, water bill, insurance and debt service (and we still pay PMI!) to live there. However, now that we've moved out and it's rented, we cash flow almost $1700 a month... that's $850 a door... yup. So a duplex can work. I know an investor that duplexes is all he buys. Especially the side by side ones that were actually built as a duplex and not converted SFHs.

Holding out is like the grass is greener idea.  Just rock it and pull the trigger.  Once it's 5 years down the road and you have a well oiled machine and everything is just pulling in cash you'll not even remember that the "numbers" weren't perfect.  You'll just know you have an asset working for you.

As I've been told many times on this site, don't get analysis paralysis and don't spend dollars to save nickles.  Concentrate on getting the next deal and acquiring your next asset. Get after it!

Cheers!

-Dave

hey @Shawn Burns

We always use 1 year leases for our Groton area properties for the most part.  For no other reason than we're able to track renewals and rent increases better.  We use the year anniversary for mandatory unit inspections, fee collections and rent increases.  Now nothing says we couldn't do that with a M2M lease in place, but this process works for us.  We have done a M2M lease for tenants that we've placed in certain complexes and those tenants may have a past that isn't favorable.  As in we want to give them a 2nd chance but just in case; M2M.   

@Tanisha Haughton I can't answer your questions unfortunately.  After 4 years of business and 5 LLCs i was just asked for my DUNS number yesterday for a lease application for a copier of all things!  I literally didn't even know what it was! 

I wanted to tell you that when you go to buy your first property in the name of the LLC it will be more expensive for one (assuming financed and not cash buy). Buying it in an LLC makes it commercial financing and most of those loan docs are individually drafted vice using a basic Fannie Mae or Freddie Mac form. Also, don't be surprised when they will ask you to personally guarantee the loan regardless of the business credit. My bank requires you to be grantor if you own 20% or more of the asset. Which means doing a personal financial statement and all that fun stuff. Trust me, it gets more and more fun with every new property. Regardless if you own them in different LLCs.

-Dave

@Sarah Anne So we collect no fee while it's vacant since our fee is based on collected rent.  So we are still doing everything required to manage your asset with less income.  That should be incentive enough for any PM that operates this way.  Also, if you want to create some consequences for an extended vacant unit then you will find the PM and your interests misaligned again.  Now the PM is under the gun to get it rented or face even more consequences other than not getting paid.  Guess what you will end up with for a tenant?  Any tenant that's willing to sign.  Nothing lowers standards like punishment and deadlines.  

We even go a step further to ensure our interests align and have a progressive leasing schedule.  We charge very little to place tenants, but increase re-leasing fee if that tenant stays year after year up to a point.  We're not fully compensated really until about year 5.  This way the property owner and I want the same thing, long term happy tenants.