All Forum Posts by: Jason Riddle

I first found my agent using the biggerpockets agent finder tool: https://get.biggerpockets.com/agent-finder-rm/

As far as finding a good agent, I was looking for someone where a) we had a similar style of communication, b) did real estate investing themselves, and c) was honest when they didn't know something.

I don't really have any more useful advice beyond that. I had to stumble between 3-4 agents before I landed on someone where I felt we "clicked".

Then after finding my agent, I leveraged their existing network. They connected me to a property manager.

Finding a good CPA and lawyer is tough, I'm still looking for them. As a guideline, after going through many bad and okay ones, I expect to pay somewhere between $2500 - $5000 for a CPA a year (probably $50-$300 per hour if only done hourly), and a lawyer will probably bill $300 - $500 per hour. I will also be able to deduct these expenses from my taxes, so I'm not too concerned with spending more money and time upfront to save on the headaches later.

Hi Kenneth,

I will address your concerns in the order you provided them:

> What resources exist for absolute beginners? I tried going to a local meetup and felt really out of place. Speakers immediately started using acronyms I had no idea what was going on.

When I started a little over year ago (June 2022), I was an absolute beginner. Nobody in my family or friend group does real estate investing. As of today, I have 2 properties, one purchased in October 2022 and the other purchased in May 2023. Here are the things I used to get me to this point:

1) BiggerPockets

You found this community so that's already the biggest step! Finding a group of like-minded folks is important to feel supported in your real estate investing journey.

2) Lots of reading

I didn't attend any meetups, instead I just read a lot. I really like this because I can go at my own pace, absorb and process the information, and then act.

I started with 2 books:

- Long Distance Real Estate Investing by David Greene
- Buy, Rehab, Rent, Refinance, Repeat by David Greene

Between both books, you'll learn probably about 80% of what you need to know to start. I got through about a third or halfway each book and then stopped, because they started to become repetitive.

3) Asking Lots of Questions

Besides BiggerPockets, I had some other people I could go to:

- My agent
- My property manager
- My lender
- My CPA
- My lawyer

In the beginning, it's going to feel intimidating. That's because you are learning the vocabulary, which takes time to understand. It took me about 2-3 months, but I was a) unemployed and b) reading everyday, so I would say 6 months is more realistic.

> Also financially I don't know if this will make sense. Even assuming best case scenario the soonest I can save 25% down is another 2 years away.

So for me, this is how I approached the finances part.

To start, I wanted to have atleast $150,000 in cash. I felt this number gives a decent amount of flexibility and helps with risk reduction.

Then I needed to identify which markets I wanted to invest in. This could be a very long post on how I determine that, but to keep it short, I decided on San Antonio, TX, which is outside of where I live in San Francisco, CA and, at the time, San Antonio had a median home purchase price of 250k.

Then there were some other factors to consider.

- Right now, interest rates are high (7-8% and climbing). This doesn't mean that it's a bad time to invest, but it does mean that deals that worked when interest rates were 2-3% won't work today. The best solution for this is to a) put more money down (I used 50% instead of 25%) or b) target a property with a lower purchase price.

- I always used very conservative numbers. For example, if my property manager said rent would be $1500, in my own analysis I used $1400. If insurance was supposed to be $1300, I would make it $1400. Doing this to every number I saw, sometimes by $50 or $100, helped me feel more confident that I was creating a good buffer for myself.

> I spoke with a property management company and she was helpful but I just don't think I can do this.

Is there something she said that spooked you? Or was it something else? Asking it here is the best way to get a second opinion or if you have more questions, you can post them here as well.

This is not a question of which is better, as since this is on Biggerpockets, the bias is obvious.

My question is for the folks that are invested in both the Stock Market and Real Estate. What is your strategy for investing in both markets?

For example, some folks will invest a certain percentage in real estate, say 15-20%, and the rest goes to the stock market. Others might be trying to reach a specific cash flow goal in real estate, thus it may be higher like 75%, and then once that reach that goal, they will change their investment percentages.

I'm just curious on folks thoughts on this.

Thanks all!

Based off of the responses here, this increase does seem aligned with other insurance providers.

I like the idea of raising the deductible, but will have to think more about lowering the replacement value.

I just got an email that my homeowners insurance will be increasing from $1,067 to $1,447 for the year. I'm deciding if I should shop around or does this seem pretty inline with other companies?

When dealing with invoices, I always end up with atleast 2 documents, the first is the original invoice with the date and amount owed, the second is a receipt showing the invoice paid and the date it was paid on. Is it best to just hold on to both documents? Could I just keep one instead of the other?

I'm trying to understand what date to use for categorizing expenses, I have the following example.

Say someone sent me an invoice for work done on December 30th, 2022. I'm not able the pay that invoice until Jan 1st, 2023. Which date should be used for that expense? When it was billed or when it was paid?

I believe that San Antonio, TX is a great place to start. I actually bought my first property there back in Oct 2022. Home prices and rent prices continue to climb. I looked at other things like population growth, job growth, and income growth and they all were trending in a good direction. The only thing right now is interest rates for investment properties make cash flow difficult, you may even be negative by hundreds of dollars. The interest rate I have right now is 8.625% for investment properties. For better cash flow, you could put a higher down payment however since you only have 45k and median home prices in San Antonio are 310k, your options will be limited. Financing the purchase with a VA loan (0% down) or an FHA loan (3.5% down), living in the property for a year (requirement for the loan), and then renting it out may be a better option.

I'm not going pretend that I understand anything about how the tax side of things work, but I was reading this article the other day by Michael Plaks (not sure how to tag people, sorry).

https://www.biggerpockets.com/...

One of the things that caught was the topic of depreciation recapture.  Since you will be paying taxes by depreciation recapture, why choose to depreciate at all? Because in a way, if you are depreciating, you are betting that you overall tax owed will be less when it's time for depreciation recapture, right? Besides owing less in taxes, prior to depreciation recapture, is there any advantage for depreciating an asset?

I have the following situation. I have two properties, each in their own LLC. If I have an expense that's only related to one property, say a utility bill, than I can expense it under that LLC. However, sometimes I have expenses that aren't related to either property. For example, paying a CPA to file taxes at the end of the year which involves both properties. Where should this transaction be reported? Can it just be expensed under one of the LLC accounts or should I have an entirely different account?