All Forum Posts by: Account Closed

Workers comp is required for a tenant for two reason in this case; 1) because the OP said the tenant worked for him (or her) several times and 1) because the OP asked the tenant to help, or knew the tenant was going onto the roof.

I definitely don't have a halo glowing around my head because I definitely fudged many times in my life and went with the fast and cheap contractors and I was ignorant in regards to all the horrible things that could happen. I even owned my company for several years in the beginning with no auto insurance and no liability insurance. Not every person is knowledgeable about how safety issues we take for granted can destroy both our lives and the people who get injured.

One thing I say almost every day is I never look back and regret any mistake I every made because we humans (most of us) try to do the best we could when we made those decisions.

I've had a roofing license since about 1975 and about 10 years ago deactivated my roofing license because the worker's comp was 40% of the gross payroll. Then add liability insurance, vehicle insurance, advertising and all the overhead and if was difficult to make a profit.

If you come across something hot and need to partner with someone contact me because I am always looking, but I am interested in being partners as a general and not limited partner. Especially, since I am a hands-on investor with licenses and for 8 specialty trades, have several employees and can rehab properties fast, make changes to reduce annual expenses and increase the income.   

The first thing you need to do is tighten up your lips. File a claim with your insurance company, but don't tell your insurance company any details. Let your attorney do all the talking, or you might make an innocent mistake you regret. I've been involved with many lawsuits and I am always amazed when I tell my attorney something and he tells me how what I said can be used against me.

It is very difficult to find an attorney who does not overcharge and will actually work on your side. Most attorneys demand unreasonable detainers and even when you pay the highest fees it is often difficult to talk to your own attorney when you want to ask simple questions. I always found that the best attorneys I worked with had 20 to 30 years of experience and they worked in a small office alone and did not work in a firm with other attorneys. Those were the best attorneys I ever had and one was a woman. I could call with questions and both attorney came to the phone almost every time I called and not always because it is obvious they have to go to court and mediation on some days.

The first 6 charts are from my software I give away for free and the last 3 charts are from a spreadsheet created by Michael Blank. You can easily find his website on the internet. Since I must have signed some sort of Terms I am afraid to give a copy away and get sued. I paid $129 for the spreadsheet and you get about 30 videos with all sorts of explanations for the software and syndicating. I also sort of duplicated this spreadsheet on my own MS Access software a few weeks ago and I give the software away for free, but since I was not enchanted with syndicating I deleted all the files for syndicating from the current version of my software, but I have backups of my software and since someone (you) have interest in syndicating it will take me a few hours to put the syndicating back on my software.

If you go to bestlineplumbing.com, scroll down the home page (way down!) to a list of links, look on the link for MS Access software, read the instructions and in the software is a button that  PUIRCHASE SIDE-BY-SIDE  ANALYSIS. This is a section of Mr. Blank's spreadsheet that I created for syndicating and I did not delete because this side-by-side analysis is very critical to use when analyzing the purchase of multi-unit properties. The first column is used to double-check the marketing package numbers, 2nd column is used to negotiate for a better price and the 3rd column is for your offer and your realistic expectations. Then, there is a page tab for a chart that does some extended projections for apartment buildings.

The real truth is; I did not particularly like many of the calculations in Mr. Blank's spreadsheet because I don't believe it is important to have to explain to limited partners the Internal Rate of Return nor do you have to get heavy into limited partners with many other calculation, but his spreadsheet does do some projections where I don't have the brainpower to figure out how he did the math. Since I am not interested in syndicating I decided to delete many things from my software.

I am always willing to modify my software for the benefit of everyone providing people send suggestions. I have a son who has has a degree in math, is currently going to college for a Phd in math and he can do anything, but I limit my requests to only when I need help.

There are 10,000 plus more questions that need to be answered and those questions should be answered only by investors who have extensive experience with both single-family and multi-family investing and not answered by an agent or broker who sells properties for commissions. A strange thing I notice many years ago is a high percent of real estate agents and brokers were not real estate investors. My mother was a real estate agent for many years, sold many properties, never invested in a property and gave me horrible advice that almost wiped me out.

No investor, agent or broker should tell an investor that single-family investing is better or worse than investing in multi-units. I made millions of dollars investing in single-family homes when I purchased them for 30 cents on the dollar between 2008 and 2010 and I made 20 times as much investing the same amount of money in apartment buildings. Every single-family and multi-unit has its pros and cons and needs to be analyzed.

I will always make my claim that it is much easier and more-profitable to manage 4, 10, 20, or 100 units under one roof that to manage the same number of single family homes. In 2020 I sold and gave my children 26 of the 28 homes I owned in Las Vegas because even though I paid cash for every house and paid only 30 cents on the dollar for each one the constant breaking down of the air conditioners was eating up my profits, every time a tenant moved the cleaning and carpeting cost me $6,000 to $12,000 and for the past 2 or 3 years I had a property management company and the errors they made and costs was sucking up all my profits. So, I sold and gave the homes to my children, did not do a 1031 Exchange because the homes were sold over a long period and I paid the capital gains taxes, purchased a 6-unit in California and paid every mortgage I had on my apartment buildings and I save $180,000 every year from interest charges.

I will always look for multi-units first and buy single-family only if I can find one for 40% or more less than the after repair value. The big money is made from appreciation and not from collecting rents. The difference between single-family and multi-units is multi-units appreciate in value when you increase rents and single-family homes do not increase in value when you increase rents.

So, if you own a 10-unit property that you can sometimes purchase for the price of a few single-family homes the numbers work like this:

10 units x rent increase of $100 per month = $1,000 per month more rental income = $12,000 per year x 18 Gross Multiplier = $180,000 you increased the value of the property by increasing the rents and you cannot do this with single-family homes.

Then, suppose, you have a cashflow of $400 per unit when you purchase the property. Then, in your first year, if you raise rents the day you close escrow, you earn 10 x $400 = $4,000 per month x 12 months = $48,000 + $180,000 you increased property value = $228,000 + the extra you earn the first year for cashflow by increasing the rents $100 per month = $250,000 profit your first year plus the paydown on the mortgage that is paid from collecting tenant's money for rent = about $270,000 to $280,000 in profit your first year plus you need to add to that depreciation you get from the IRS.

Suppose you put down only $300,000 to purchase the building. In that case, you earned almost a 100% return on your money in 1 year. Try doing that with a single family house and then try to tell me that investors should be steered toward single-family.

You should never ever feel like you need to be loyal to a real estate agent or broker and this subject comes up all the time on every real estate forum and I can write about the reasons forever.

The problem with dealing with and trusting one broker is you are limiting yourself to only the properties that broker offers you and you are most-likely missing out on many golden opportunities when other brokers have better deals and pocket listings where the properties are not available to the general public. If fact, most properties I ever purchased were pocket listings. 

I find that very few brokers know how to do the math for multi-unit properties and while you may think you love your broker you need to realize that virtually every broker tells you that every and any property is great for you as long as you are willing to buy any property from them so they can earn their commission.

I go to many real estate club meetings, meet many brokers and almost get into fist fights when brokers tell me that single-family properties crank out better profits than multi-unit properties and that indicates that many brokers are ignorant about doing the math for multi-units, don't care enough about their clients to learn and they have an agenda that does not align with your agenda.

I just made a fairly decent video on youtube that explains a software app you can download for free and I explained how I do the research and math for multi-unit properties. You will never find this information in any book nor will any broker every tell you.

Go to youtube and search blprei multi-unit.

It sounds like your current agent does not know the answers to what you are looking for. I call brokers on the phone in several states almost every day and I am very disenchanted with the answers I get. You can never trust a broker and you have to realize brokers are like car salesmen. No sane broker is going to tell you there is a better property to buy from another broker. No broker will offer you important information upfront that you need to know so you don't buy a property from that broker and buy from a different broker. For example, I was looking at a $4 million property in Cleveland and the marketing package showed all the current expenses that were accurate and listed the property taxes as $48,000 per year. I called the broker and had to ask whether or not the $48,0000 taxes were correct for the buyer and he sent an email with all sorts of calculations and the buyer's property taxes would be $198,000 per year. This made the purchase so bad I would have been hit with a negative cashflow that would have been impossible to recover from. You cannot trust nor rely on the sole information you get from brokers and you need to shop with every broker you can get to send you properties that are for sale.

I purchased a property not long ago from a broker who I thought was honest and my friend, but he keeps sending me seriously bad properties for sale and always presents them as being a great deal in the beginning. When I tell him about the downside to each property he immediately agrees with my assessment and that raises the hair on the back of my neck.

I had a real estate agent who worked for Century 21. Her and I lived in Sandy Valley Nevada (a town with about 3,000 people). I purchased 28 single family homes between 2008 and 2010 at a live auction and I paid her 1% to 2% of the purchase price only to help watch over the escrow companies because I own several other businesses and needed someone on my side. I also purchased a few properties through her the conventional way and she won Salesman of The Year two years in a row at her Century 21 office. The, she kept sending me listings for properties and she told me how great they were. She sent a property in Sandy Valley that consisted of a restaurant, post office and two novelty stores and told me the property was for sale for $280,000 and was a goldmine. I immediately told her I thought the property was worth $180,000 and she immediately agreed with my assessment. I can't remember, but the property sold for $160,000 or $180,000 to someone else. This was about 10 years ago and two of the stores have been vacant since that time. Then, after a while I got angry with her and ignored everything she sent my way. 

 Even if it is easy then why would someone want to pay $13,000 to  Intuit every 10 years for payroll tax tables and web-based subscription services when you can get what you need for free. While I am not cheap and one of the most-generous people you will every meet, I strongly believe in being frugal and using the money I save for my family's lifestyle, to reduce stress and to invest to make even more money. If we (you) can save $13,000 every 10 years just from one software application, another $30,000 by shopping for groceries, another $30,000 by being smart with vehicles purchases, another $30,000 by being smart about investing and dealing with vendors, etc. then most people can save more money every 10 years than many people can bank in a lifetime. I learned many years ago that the more money people waste the more they are stressed. So, when I found my 3rd wife about 23 years ago and had two children with her we stopped wasting money on stupid things like extravagant birthday parties, senseless Christmas presents. People waste too much money and spending definitely does not make people happier.

I get the tax tables for free at http://www.payrollguru.net/Pay...  and why would a sane person be willing to pay Intuit  $13,000 for the same information. I love this free website better because as I stated, I don't like to integrate my accounting into one application like Quickbooks. I created a separate software application for my construction business and payroll because Quicken nor any other canned software will do what I need my software to do. In fact, if you use Quickbooks in California to process your payroll I am 100% positive that you are breaking serious laws in regards to giving your employees Weekly Wage Earning Statements because Quickbooks will not calculate all the information that is required by the laws, e.g. tracking available Paid Sick Days and the balance. Business people may think this lack of information on a Wage Earning Statement is not important until they get slapped with a civil lawsuit by an employee's attorney and find the lawsuit has a Cause of Action demanding $500,000 because this trivial information was not on the employee's Wage Earning statement and I am living proof because I was hit with 3 civil lawsuits within 3 years and each lawsuit was for a little more than $1.2 million and most of the Causes of Action were in regards to improper information on Wage Earning Statements.

While I was super stressed over 3 civil lawsuits that cost me about $200,000 out of my pocket, they were actually a blessing because I learned many things and made many changes for the better to protect my company for any future lawsuits and any employee who sues me is going to have a very difficult time proving I violated some sort of employment law and I sleep very well at night. I even learned to purchase EPLI insurance to protect myself so if I get a large ceivil lawsuit I pay about $6,000 per year for the policy and will have to pay a $25,000  fee to the insurance company if I get hit with a lawsuit, but I won't have to pay an attorney $20,000 every month like for my last civil lawsuit and I won't have to worry about selling my properties to pay for damages awarded by a court. 

 While what I say does not sound true it really is. When the first personal computers were invented I wanted to go with the IBM version format that is Microsoft, today, but a friend talked me into going with a Commodore computer that ran its own version of software. I had already purchased an Atari 800 computer for $2500, then a Commodore for about $10,000 with an external hard drive and a Compaq portable computer for about $3500 that weighed about 35 pounds and was the size of a sewing machine in entirely covered with a plastic case. I paid more than $20,000 trying to find software I liked for my business. In those days, most people like myself purchased software and had to be software developers and we had to create our own applications. Some of the software I purchased was almost $10,000 and it had so many flaws and bugs the software would not work properly and had to be scrapped. That is why I consider myself to be a fairly good software developed today and can do very well with MS Access even though I should be only a real estate developer and plumbing, heating and construction contractor.

Later, I purchased the IBM, or Microsoft version and did fairly well for several years with Intuit's Quicken. To do my payroll with Quicken I had to pay $99 every year for tax tables that were uploaded to the computer. Then, Intuit increased the price to $125 per year and then Intuit stopped selling the tables and forced everyone to switch to Quickbooks.

I had no problem with trying to switch to Quickbooks and I purchased the full version three times for about $500 each time and literally threw the software in the trash because it asked too many questions during the setup, was cumbersome and difficult to use, was so complicated it left room for making too many errors, had too many whistles and bells to deal with and there three things that make me hate Quickbooks with a passion and they are:

1) it is web based and super slow when changing screens, 

2) the software has so many screens to enter information on it is difficult to know whether or not information you enter goes to where it was supposed to go e.g. you may accidentally type in a wrong number, or you may enter data as a debint when it should be a credit and

3) Intuit is greedy and found that they could charge $109 per month for the software and the tax tables and that comes out to $1308.00 every year, or $13,080 every 10 years compared to the $99 or $990 every 10 years I was paying for Quicken that was simple to setup and use, but it still had some file storage problems that were fairly frustrating to deal with.

I had a major IRS audit about 10 years ago and it was the first major audit I dealt with for several real estate properties in California, Idaho, Las Vegas and Colorado. I did the accounting and bookkeeping for California and Las Vegas and my older son did the bookkeeping for Colorado and Idaho. I moved all the books from my son's records and my CPA's records to software I created with MS Access 2003. My software does not require any setup and every person can be trained to use it in less than 5 minutes. My son always argued with me and said Quickbooks was better, but when I compiled my records from my son and CPA I found that My CPA had made several mistakes with Quickbooks and was about $60,000 off and my son made less mistakes but if I remember correctly I think he was $30,000 off (can't remember). The records with my software were accurate-to-the-penny and I never ever found a mistake (not a lie) and I can prove and back up what I say. The reason my software is so accurate is because I created it with a system that matches with the exact total on all my bank statements and it is impossible to make a mistake when you only need to match the totals with the front page of every bank statement before sending paper records and Excel files to a CPA. 

I hate software that tries to integrate too many features into it. I don't like software that integrates multiple properties and multiple checking accounts at the same time. The nice thing about my software is it is free and takes less than one minute to create a copy. Then, I use a separate software application for each property I own and when I send my CPA my records for each property I don't have to worry about my CPA's ability to do what he needs to do to separate my tax records. My ex-wife was a 10% partner for some of my properties and when I bought her out in 2020 there were some serious tax issues that had to be resolved and it was difficult to come up with the price I paid her plus monthly payments for the rest of her life, but having separate software applications for each of the properties she was a partner for made sending her attorney records simple, accurate, organized and fast.

You can see how my software works and get free copies by going to youtube and searceh blprei checking account and for other software search blprei real estate, or blprei multi-unit. For people interested in trading stocks and options I made a training software about 20 years ago that teaches about 49 or 52 stock and option trading strategies, but if you dig into the software and read all the explanations for trading you should realize that everyone who touts trading stock and/or options should be shot and you should stay totally away from both the stock and option markets with the exception that I keep about a million dollars in a trading account and if you look at the history of the stock market we have what I call a Crisis Day an average of every 2 years. In March 2020, when COVID hit I purchased $10 stocks with a good value of $10 for $2.00 and made about 400% on my money in less than 1 year and that is the only way I would trade stocks and that is what Warren Buffet does. Otherwise, my money sits on the sideline in my trading account and if I find a property to purchase I have the money available, plus I have a large line of credit that costs me only $85 per year if I don't use any of the available funds, just like a credit card.

 You become a syndicator, use other people's money, but there are many laws you need to learn and abide by. While Ms. Barker's story sound inspiring I have two old saying that say, "never believe what you hear and believe only up to 2% of what you actually see" and "never count someone else's money because the totals are not usually what you've been told'.

I've been involved with syndicated real estate since about 1980, look at the numbers frequently, flew to Ohio in September to look at multi-unit properties, did the numbers for many apartment buildings for syndicating real estate and never came up with numbers that made sense to me. Maybe, Ms. Barker has more brain power and some things I don't have.

The problem I come up with in investing in Ohio is the prices per rental units are as low as $50,000 per unit, but the rental income is low and the property taxes are 4 time that of California. If the property taxes eat up all your gross income and you can't increase rents a decent amount every year then you won't make enough profits to pay your limited partners in your syndication.

The way I've seen the syndicated real estate deals work is you cannot advertise to take on limited partners. The people you take money from have to be Credited Investors meaning they need to have something like $1,000,000 in personal assets, or something like that. Then, you need to have an attorney who specialized in syndicated deals and the attorney is not hard to find. You sign an agreement with your limited partners for something like 5 to 10 years and you promise to pay them 5% to 8% on the money they invested every quarter. Then, when your agreement expires in 5 to 10 years you get to own (control) the entire property by paying your partners about 30% of the price the property appreciated.

Syndicating properties can make turn you into a filthy rich real estate investor where you end up owning thousands of units, but as the old saying goes, "poop happens" and you also commit yourself to paying a very high rate for the money your limited partners invest. If you pay your limited partners 8% plus 30% of the appreciated value you may end up paying 14%, or more and I would personally prefer to pay only 3.2% and purchase properties with my own down payment since I have cash, but for investors with less cash the syndicating could be good for you ONLY IF YOU CAN DELIVER ON YOUR PROMISES TO YOUR LIMITED PARTNERS and that is where I have not seen good numbers in Ohio nor in any other state, at this time. A few years ago, when multi-unit prices were doubling almost every year the market was ripe for syndicating, but with today's prices, I have two fairly sophisticated spreadsheet-type calculation apps and I cannot find any properties that are a sure thing, but maybe other investor know better. So, don't listen to what I say.

I look at Ms. Barker's post as soliciting to attract venture capital since it is not legal to straight-out advertise for venture capital for syndicated real estate and there is nothing wrong with what she is doing as long as anyone who invests with her understands the risks in regards to whether or not she has the abilities to analyze investment properties and to deliver on her promises. 

I requested that Ms. Barker post some numbers a few time and did not receive a response for those requests. So, either her numbers are some sort of trade secret, or there is some other reason she remains tight-lipped about them. It bothers me when people make claims about their success and them refuse to post any details about the numbers. So, I take everything with a grain of salt (whatever that means).