All Forum Posts by: Dani Beit-Or

You have a couple of options:

1. You can hire an appraiser to handle this for you.

OR

2. You can "split" the properties and determine the value based on a formula of your choosing. For example, if you paid $500k for both houses, and yours is 2000 sq ft while the rented one is 1000 sq ft, you could use a simple formula like $/sq ft. In this case, your price per square foot would be $167, and you could estimate the value of each property using this formula.

You can then make adjustments up and down, such as if you have a pool in the primary, or if one house has no garage, or sit on a relatively bigger lot . . . 

One you determine the base value and the adjustments - write it down on a document that surprises how you got to this value - this way you can explain in X years if anyone asks.

Another option is to use the income approach, where you determine the value of the rented property based on its income. This is an acceptable appraisal approach.

Sometimes using simple and common sense is ok way to go.

Good luck and don't forget to invite all those who provide an answer to a BBQ ;-)

About a year ago, we bought a property in the Kansas City, Missouri area.

The MLS listing stated the property was 1,700 square feet.

However, someone alerted us to a potential error, suggesting the square footage might be smaller. We had someone measure it, and they found it to be 1,350 square feet.

Even if the measurement was a bit off and the actual square footage is 1,400 square feet, that still means the house is 300 square feet less than what was listed.

So, who bears responsibility for this mistake?

Is it the seller?

The seller's agent?

My agent?

Or perhaps the county?

This discrepancy is frustrating, especially considering the significant difference between the MLS listing and the actual property size.

No appraisal was conducted on the house that could have caught this discrepancy.

While consulting with a CPA is the suitable choice, I recommend compiling a comprehensive list of all your questions and finding a CPA with proven experience in small business and real estate.

Based on my extensive experience, having been in similar situations multiple times, I've learned that the effectiveness of a CPA depends on the quality of the question I asked. As I've progressed in my career over the past 20 years, I've realized the importance of asking insightful questions to get the best answers tailored to my needs.

There isn't a single clear path to achieving your objectives; instead, you'll have various options to consider. When advising clients in similar situations, I've emphasized the importance of not striving for perfection but rather advancing through each stage of the journey. It's essential to understand that many aspects of your financial journey are flexible and subject to change. For example, if you decide to form an LLC for your properties now but later realize a different corporate structure or combination with a trust is more suitable, you have the flexibility to make those adjustments, albeit with some inconvenience and added expense.

Curtis on the accomplishments and good luck with your Investments.

Hi There, 

Many of my clients are foreigners (not Canadians but Europeans) who buy long-term rental in the states, I've been doing it for more than 20 years and specialized lenders for this scenario change every few years.

Would you be comfortable sharing the terms you've been getting from those two companies?

By the way, what kind of investment properties are days for? Long-term? Short-term? flips? Residential? Smaller multi bigger multi . . . 

Thanks

Hey Jesse,

When you mention "multi," are you referring to a duplex, a fourplex, or something even bigger?

Ultimately, it all boils down to you—your experience, your availability, and your ability to handle multiple tenants, units, and issues (trust me, they'll all come knocking).

Typically, for beginners, anything beyond a duplex can be overwhelming. Even if it seems financially attractive, factors like the property's location and condition will impact on the level of challenges and the frequency you will experience. 

Here are some challenges you'll likely face when buying a multi-unit property:

1. Gathering all the information will be more time-consuming, especially if the seller is an individual rather than a big corporation.

2. With larger multi-units, there's a common issue I call the "chronic disease of a fourplex":

- One tenant might leave within a couple of months, with or without a valid lease.

- Another tenant may start causing problems, believing they're owed something.

- The remaining tenants might be fine.

* you may even have all 4 tenants vacating short after purchase

3. It could take you a year or more to stabilize the property and start seeing consistent returns.

4. Owners often view their multi-unit property as one entity, which can lead to frustration when issues arise. It's important to remember that each unit is its own property, even if they share the same address.

In my experience, starting with more than a duplex right off the bat sets you up for a lack of success (not failure). These properties can often breed frustration, which can hinder your sense of achievement.

I think I know exactly what you mean.

And sometimes certain groups (meetups) are just hard to find ones that meet your level of experience, or some it comes dressed in a super expensive program. 

Whats I found to be working are three things

- Start by writing your questions, dilemmas, etc.  -Writing tends to trigger your mind to process the problems + when you  do get to speak to another person you have your items listed and ready and handy. 

- Find that friend who are in similar stage and offer to meet/speak once a month or so (not easy to find). Many times just explaining the difficulty to another creates some clarity. 

- Get and advisor for an hour or a few. It will be worthwhile, productive and beneficial. It will also help assure you of things are doing correctly but may be having some doubts. + it may be helpful when you speak to wife and tell her about your decision and that you have run your ideas by another person for a feedback. I found this one to be the easiest one to get unstuck.  

IMO this is not a simple yes/no question.

Here are some questions you should be asking yourself to help you determine whether you should use a PM or not:

- Are you and the property close (are investing locally or remotely)?

- How good/skilled/comfortable are you w/ handling tenants, issues, communication, responsiveness, etc. 

- How available are you? Super busy and not very available to handle things when they come up or the opposite.

-Is the the type of property and the type of tenants you are dealing with demanding? ie older property w/ potentially more issues and "needy" type of tenants? 

These Qs should lead you towards making a better decision.

I'll add that:

- If you think using a PM is hands-free than you are mistaken, but can you find a PM that will handle 90% of the “noise” and you will still need to be ~10% involved - that's doable 

- You can always start one way and change. 

How many mortgages do you have? Are you close to 10?

Are you married and does your spouse work and can get mortgages too?

From my ~20 years of experience—here are few things you can consider:

- There are options to mortgage more than 10 properties, it will mean getting a bit creative. 

- Consider buying 4-plexes, it's almost like buying 4 houses in one transaction and in one mortgage. 

- If you have close to 10 already (or when you have ) you could be able to bundle all or some under an blanket mortgage and releasing the # of mortgages you have.  

It sounds like your fears and concerns are indirectly related to real estate and more related to being an entrepreneur at the starting phase. 

I'd seek up a mentor w/o a program, is some you can hire for X hours you can use/leverage to help you overcome your challenges and help you benefit from the mentor's confidence.  

Once you get the ball rolling, you may no longer need a mentor. 

Just want to add that online and youtube I found tons of info on repairing/fixing dog nails scratches but nothing about prevention