All Forum Posts by: Bill Gulley

Hi, COGS could be anything from site management expenses, rental discounts for new tenants to attorney fees for lease agreements and having to change out locks. Cost accounting allows for diversity in the assignment of expensing costs to income producing activities. It is as much an art as a science. I'm afraid your analysis is like comparing apples and oragnes, comparing operations of a REIT to those of another type of RE investment. There are differences in costing for Trusts, like a non-profit than might be used for another corporate entity. Performance ratios published should provide sufficient investment information. Attempting to disect corporate or trust accounting and compare management of two different types of operations is futual. Neither entity provides enough audit data for one to be successful, and for good reason. Generally Accepted Accounting Principles govern and the SEC oversees public investments and reporting, so we have to rely on that. But, then there was Enron!

Claims as to expense ratios are influenced again from the assignment of direct and variable costs to operations. If you want to increase income performance with respect to operational expenses simply transfer allowable or discreationary items to a capital expense line item for example where it may be treated as a lump sum and depreciated rather than written off. You will have no idea of what sub-accounts may be used.

Your subjective analysis of management might better be made from financial performance over a longer period of time in light of management's published objectivies. Also, read carefully the audit opinion of the accountanting firm/CPA signing off on the financial reports. I think you should certainly get an A+ for effort!

Good Luck, Bill

Hi, In short, it is not a wash as the increased income to the business has an opportunity to be reduced by other expenses which are not available under your personal deduction. The opportunity cost of financing should be assessed not only on an after tax basis but primarily on the use of funds and economic alternatives available to you. What is your cost of money on the rental, is that the best use of funds? What about acquiring other properties and increasing cash flow, providing additional income? With current rates providing new financing could you then reduce higher rate obligations from newly generated income even faster? If leveraging yourself into other ventures is not a viable option or in your business plan, reducing existing debt is always a good idea. Tax consequences alone will probably not justify re-financing, the question should be, whats the best use of funds made available? Good Luck, Bill

Hello from Springfield, Mo. (That's just north of Branson!) I posted my experience in my profile and hope to provide assistance to those getting into the business of investing. This looks like a great site and look forward to meeting those shaping the industry for the future. Bill

Absolutely do it! Great price for new pannel, breakers, rewire, GFI and hard wired smoke detectors to current code. I suggest Square D, reliable and the Home Package is very afforable @ 200 Amp service. Who is your electrician and does he travel? Bill

Hi, Cleared to Land on runway to success! Welcome, I'm new on this site as well and still trying to navigate, I'm not lost, just disoriented. I began in 76 and I'm here for the fun of it! Again, welcome and good luck! Bill

Hi, Brokers are good people to know as stated. Compensating a broker is OK, but you need to go about it in the open and don't expect them to give you personal details about their clients, just as you might talk to a loan officer at any bank.

When I was a broker and people were in default, I simply suggested to them that they contact an investor I knew and offered to introduce them. I'd simply tell them that this guy might be able to help you. I also had loan officers at banks do the same thing for me. My first approach was to refi them, but if that didn't work I then moved on to other alternatives to cure the situation.
Brokers who sell in the secodary market may never know if a loan they originated goes into default, it depends on the servicing agent and the nature of how the mortgage was originated, with or without recourse.
Soon I suspect, there will be underwriting requirements for seller financed deals and a broker is in a good position to provide additional services. You might point this out to them and provide them with a source of underwriting business. Just a though along the compensation lines.
If you need more information about a relationship with a mortgage broker, fell free to contact me. Good Luck, Bill