All Forum Posts by: Huggy Baird

If you put in $8k and received $250 extra cash flow per month that is a 37.5% return on your investment. Amazing deal

Of course, you may not be able to pass all the cost on to your tennants. In other words the market will likely offer less gross rent for a unit with fewer utilities provided. You'll have to know your local market and estimate the effect of the decision on rent.

Good luck

Thanks for the tip on how to see forum viewership. And I'll refrain from the confusing re-post of the same content.

Using your tip, This (different subject) thread had 232 views in 1.5 days versus the blog receiving 63 in 2 days. So a rough rule of thumb would be for every view on the blog we'd expect 4.9 views on the forums... but this number would have a high variance depending on factors like topic, followers, etc. This satisfies my curiosity.

Has anyone ever seen a bank foreclose on a home with assessments/prop taxes? Typically the bank makes 100% sure these are paid as part of servicing. If you've seen this, what were the circumstances?

I have a somewhat similar arrangement with a partner of mine whom i paid for his realtors license.
50/50 split of all income, 67 (me) /33 (him) split on commission. The only thing we did to "complicate" things is:
I offered him a guaranteed salary of $42k/year even if the market turned on us and I lose money. My goal was to avoid him being unable to food on the table if things went bad. But still have all the "big" money" performance based with the 50/50 split

You were also asking about LLC vs promissory note and contractual agreement. IMO either is fine for starting out.
With the LLC, I'd imagine he'd contribute as a member for the materials. You'll likely have an operating agreement too. The downside of the LLC is there will be a little more cost for filings with the secretary of state.
As a promissory note and contract, also will work fine. The downside is it will be less "standard" of an agreement if you wanted to have it bullet proof from a law perspective (unless you hired a lawyer to draw it up).
In either case I'd recommend trying to cover the unexpected like decision authority, exit options, dissolution, etc. Just to be clear from the beginning

Others may disagree (especially the lawyers) that both are fine. so hopefully they chime in

Although i would not lose any sleep over the LLC vs Promisory note, I'd spend a lot of time thinking about the roles of the partnership and how it will be win/win fully utilizing what each of you are best at.

I hired my dad (also a contractor) and it did not end well for me. To avoid any conflict or hard feelings I didn't realize voice much concern and just paid to complete a renovation with him. I make more money now by not accepting favors from family. Hopefully you wont share my experience

On the getting better prices thought. My experience is you likely wont. Contractors are used to getting materials list at retail and invoicing customers. The most you can hope for is typically the 10 or 15% discount using the pro-desk quote system at lowes/homedepot. Or sometimes local suppliers give "wholesale" pricing and deal specifically with contractors; but, my experience is these wholesale prices are almost the same as retail.

Generally an investor who is rehabbing is scouring the clearance isle, checking out craigslist, and visiting the scratch and dent appliance store in town. Contractors aren't incentiviaed to do these things. You'll get better pricing through these avenues than the contractor discount. And, btw you can get most contractor discounts yourself at lowes/hd if you just put in a quote and tell them you're an investor. They'll give you access to the quote system.

I sound like a bit of a gloomy gus, but don't let me discourage the overall goal. There is always a way to structure things so that it is win/win. If you try the profit sharing and it doesn't work as you expect, you can try the simple promissory note. It's a great positive that you have a good family to work with and you'll find both ups and downs as you travel the road.

I'd ask your dad what his problem is... and try to structure the deal so it helps him. As an example, if he is concerned about the weeks he doesn't have work (and concerned for his workers well-being during those times) you may want to structure the arrangement so he comes in at a slightly discounted rate for those weeks only.

Yeah, I am suggesting posting a thread topic with the same content as the blog I posted here: http://www.biggerpockets.com/blogs/3600/blog_posts/25694-quick-tip-profiting-from-seasonality
I'll remove the graph and the table and simplify everything for a forum topic. It would just be a social experiment. The same person who no one has ever heard of... posting the same basic analysis in both the forum and the blog and tracking total number of page views for a two day period. The only challenge is we can't see the page views ourselves for forum topics. W'd have to ask Joshua if he'd have any interest in this social experiment and posting the page views for us here on this thread

I'd imagine the same experiment for for someone who is well knows would have drastically different viewership numbers.

And obviously the blog is a different medium with richer content delivery of graphs and tables. It's by no means intended to "beat up" on the blog area of bp. It's more just a social experiment of viewership

Thanks everyone for the replies but most are targeted towards social networking. I'm a introvert who is not even on the facebook or the twitter. My goal is not meeting people or having followers. My main goal was honestly giving back to the BP community some analysis and profit maximizing advise I had not seen quantified before. My secondary goal was to see if anyone had feedback I had not considered.

I did not mean to imply it is a ghost town. I bet every section of BP gets tremendous traffic as a credit to value your site provides to us. Your alexa and compete.com rankings speak for themselves.

Rather, my guess is for every 1 page view on the member blogs user's would expect 20 page views on the forums. The blog I posted had 63 views after two days. Which, is honestly good traffic and not to be slighted. But, out of curiosity, I was thinking about removing the graphs and table but posting a simplified summary of my research in the forum to see how much traffic it receives. But, I dont think we can see views on the forum.

Joshua, would you have any objection to this? could/would you post the view count here at day 2? This almost sounds like i'm up to something fishy, but really i'm just fascinated by how things work and numbers

Hi Slavik,

Welcome to the community.

Appartment 2 that you are living in is an opportunity cost. By moving out you'd expect an additional $1100 in revenue.

That being said, you would have $4,425 in gross rent.

The 50% rule is that $2,212.50 would go toward costs of:
insurance
vacancy
maintenance
property taxes

You should shoot for the other 50% to be net rental income after expenses and capital improvements.

The 50% rule does not typically include debt coverage/mortgages. If you used you're own cash you'd expect 50% of rent to be income, using financing you'll have the interest charge.

Another note: keep in mind the $2,100 mortgage includes a principal portion. You really are only paying interest, the principal goes towards your equity position in the asset

All said, nice buy