All Forum Posts by: Fred Cannon

@Ben Feder. LLC may offer some tax benefits but I think all the lawyer fees and licenses would be extreme when you start layering LLC's to shelter LLC'c. If some one has a creditable law suit against you and has a good lawyer don't think the LLC will give you a Lot of protection. I think one LLC and a good lawyer is enough. But then again I am a small investor with only 7 rentals. Don't really want to be more that 10. Life is to short to have more that 10 tenants.

@Joe Villeneuve. Actually you are wrong about Dave Ramsey. He did make millions in real estate but he lost it all because of bad investment strategy. Leverage is good but when the market goes south so does leverage. Dave is a smart guy you would be wise to consider what he teaches. It may not be your style for real estate investing but it is a smart life style. He is trying to help people who are so burden by debt that their life seems hopeless. He has been there to walk the walk. He can also talk the talk I don’t practice debt free but I am able to cover my debt if needed. Big difference.

@Isaac Johnson I like RE better also but I have a portfolio that includes both and you should consider that as well. You can invest in stocks tax deferred which is a great benefit. If you have a major financial crisis like Dave Ramsey had and don’t have a back up plan then you are screwed like Dave was. I hear people say all the time that RE makes millionaires. It does but you can go broke with RE as well. Diversification is the best pathway to wealth. I live in Florida so with my RE I could be a hurricane season away from devastation No matter where you are living disaster can happen. Should that stop you from being an investor. No it should make you plan for it. I plan by having insurance and by having enough money in stocks to go liquid if I need to while I wait for insurance to pay up. My last claim took 8 months It was just one unit and I was liquid enough to get the rehab done while waiting for the claim to get processed. If not for that then I would have had a Year of no income from that house. I had it back on the market in two months fully remodeled and better that before Beware of what any “ teacher ‘ is selling. They won’t be there when a setback happens. RE is for turtle investors not for rabbit investors the people who get rich with Real Estate have been at it a long time and have worked really hard.

@Isaac Johnson. Dave Ramsey loves real estate, however, he hates debt. He has never said don’t invest in Real Estate.

@Joshua Mellor I would advise to never renew a lease without an increase in rent. I have a clause in my lease that says rent will be increased 5 % if renew is month to month or 3 % in renewal is 12 months. It’s fair to the tenant to know in advance and it’s fair to the landlord to get the increase I can’t think of any reason to renew a tenant without raising the rent by at least 3%,

@Mitchlyn D. I would not want to live next door to 5 of any kind of dog I love dogs but that is excessive. I would keep looking and invest where I can have some peace of mind. I think you would need to disclose to the tenant that the neighbor has 5 pit bulls that roam freely around the yard and occasionally escape. Can’t imagine a tenant saying OK no problem with that

@Fred Cannon. Also I have one property I consider high end. Part of the rent includes weekly lawn service and pool service. I use to allow the tenant to do this in order to keep the rent lower but guess what, the tenants don’t really care much about keeping up your property or don’t care as much as I do. So I just include that in the monthly but don’t call it a fee. I get better tenants and they enjoy living there more than if the lawn and pool were their responsibility. It’s a win win and a deduction as well.

@Jenni G. The fees should not be part of the deposit. They should be separate.

A security check a pest control treatment and a through cleaning is around $350. That’s about what I charge total but it’s not deposit it’s expenses that incur every time a tenant moved out an a new tenant moves in. In a business you pass expenses on to customers, especially Real Estate because the customer is the one creating the expenses.

@Dennis M. Maybe he only put down 40k. Like you say there are a lot of variables in RE investing I would think 11K return on 40K investment is nice going, plus all the other tax advantages of being a landlord. He could buy every two years and build up his assets easy and by the time he is 40 be a wealthy man. But I wouldn’t do that in California

I have 7 properties and have been keeping income and expenses on individual spreadsheets which has worked out well. However I would like to move everything over to a more professional system. Does anyone use quick books or have a suggestion for other software that would make my time more efficient.