All Forum Posts by: Jace Holt

I have never been personally involved with real estate in Blackfoot, however, in speaking with others who have, I've found Blackfoot is great because the purchase price to rent ratio can be so much better than surrounding areas. While it isn't growing like IF or Rexburg, population statistics don't paint the full picture of Blackfoot because so many people live nearby in the county outside of city boundaries. Keep an eye on Bingham county as a whole and factor in/out  Shelly's impact on those numbers. Rexburg and the greater Idaho Falls area have had significant rent increases over the past few years and have no signs of slowing down.

Congratulations on your success so far! If the cash flow works out, then a HELOC or 2nd mortgage would be an ideal option. Otherwise you may want to consider a 1031 exchange into the bigger property. Traditional bank lenders typically require an LTV lower than 80% for a HELOC but if you have found a lender that will do 80% then that's great. Keep in mind that when getting a mortgage, 1-4 units is a home loan while 5+ is a commercial loan. They will often have different guidelines/rules, and costs. Sit down with a few lenders and they will walk through their specific guidelines with you.

Hi everyone, I am looking for the best repair and replacement solution for outdoor metal stairs which have rusted and the connected concrete upper landings which have cracked and are falling apart. They are for the top 2 units on 4-plexes. On a different property, the units with concrete steps disintegrated and will soon need replaced as well so I'm not really wanting concrete steps unless they are more durable in some way. Any ideas? Material types? Costs? Suppliers? I need to replace at least 10 of them.

Start the process so the red tape is removed if it becomes necessary to remove the tenant. When they start trying to bully or get manipulative, they lose any flexibility with me. “never had a landlord do that to her before” sounds like an attempt (conscious or subconscious) to bully and make you feel like you are the only landlord who would charge them because you are so heartless. You can avoid the issue here the most by setting better procedural rules for tenant screening/on-boarding (that's a post for another day) and procedural rules for tenant removal.

My rules, which vary significantly depending on what state the property is in, give the 5 day grace period before late fees on rent. A set number of days after that they are attempted to be contacted by phone, email/software, and text etc. A set number of days given the notice to quit/cure. A set number of days later they get next step and so on and so on. Learn your states law, then build your own written procedure and schedule. Make the schedule and steps so simple, direct, straightforward, and automated that a 12 year old could easily run your management system. 

Except for the 5 day grace period and late fee, I don't publish this schedule in the lease agreement so they don't game the system. It is, however, in the manual I wrote for the managers. My only exception to the rules and procedures for my tenants is that I allow 2 months of no fees and allow them to break the lease if the primary income earner on the lease dies and they let me know they can't pay rent. I've never had that happen so far. Every other tenant situation is still bound by contract to pay rent. 

I would suggest setting up a system like this. Decide where the line needs to be drawn ahead of time. Once you have rules, you can take your emotions out of the equation. You don't have to spend emotional capital and subject yourself to bullying every time someone wants to be an exception to the commitment they made. 

So many managers are terrible managers because they never took the simple step of deciding what the rule was ahead of time when nobody was pressuring them. They get burnt out repeatedly making judgement calls where they continually try to emotionally connect with the tenant's situation to decide where to draw the line when instead, they could have made the decision once without any pressure on them.

@Daniel Bareno Are you wanting value add such as repairs or kitchen/flooring updates?

Hi Daniel, what kind of investment strategy do you have?

@Michael Trueba I am currently working on obtaining the credit. The project I was putting together fell through after some companies, which were crucial to being able to qualify for the credit, found another place to lease immediately. I am currently structuring another project. It was with the Montana Idaho CDC however they have since changed their name to MoFi.  

Hi Nick, I hope everything works out with the bankruptcy. 

Real Estate is not known for high CAP rate investments. The typical way to get high ROI through low CAP rates is debt. Your situation sounds like it is a few years away from being eligible for traditional debt.

The first thing I would do in your situation (from what little I know of it) is put the brakes on investing and get a good, solid grip on your personal finances. Even if you are personally cash flow positive, you need to be living on a written budget. That is the best ROI I have ever seen. Make sure to build a sufficient safety net of cash to fall on at any given time. If your plan to improve your credit score involves finding new ways to get into debt, I would avoid that altogether.

Securities are safest when they are 1:diverse and 2: held long term. It does not sound like these are the direction you want to go if your plan is to exit in two years.

If you are looking for quick cash, real estate is not the place. If you are okay with that and still wish to do real estate, consider partnering. You sound like you are on an excellent track to drive money into investments in the near future. With your income, you have to ability to start partnering as a silent partner and enjoy the tax benefits as an LP, or if you wish to be more hands on, there are people willing to find good deals if you have the money put up. 

If you're looking for deals or partners in locally in Rexburg when things settle down, I may be able to point you in the right direction or to the right people. 

Feel free to ask any questions. I hope things work out well for you!

Hi Matt,

I am an expert on Rexburg's apartment market. I you ever have any questions, feel free to ask.

I am working on an apartment complex and commercial space project that will cost between $10M and $15M. Fortunately, it looks like we will be able to qualify for the new markets tax credit (NMTC). I do well with projections and financials in general, however, the NMTC is fairly complex.

Currently, I am working on getting the preliminary projections ready for investors. I have completed a very thorough market analysis with a local research firm and managed to find additional analyses for the local market. I have been working with contractors, the city, the intermediary entity for the NMTC, a small handful of banks, and a few RE agents to get all of the information compiled for the business plan and financial outlines. 

 I have some questions on how to correctly account for the NMTC when generating projections. Has anyone used the credit? If so, can you help me through understanding exactly what the financial statements will look like in a leveraged QLICI structure? Also, can you explain exactly how the 7 year forgiveness works?

I'm happy to answer any questions I can help with! Thanks!