All Forum Posts by: Jeff Studer

For those who buy, rehab and rent, do you factor in your 'non fixed monthly costs' into the equation to determine your projected COCROI?  I guess by, non fixed monthly costs, I mean:

- vacancy fund (do you factor that the tenants with turn over every year or every 2 years?)

- cap ex fund

- misc repair/maintenance fund 

Thank you

Jeff

Hey There-

For you BRRR Investors out there, do you recommend deeding the home over to an LLC after closing so that the liability is limited to the corporation?

Here are my assumptions of the advantages and disadvantages but please feel free to advise:

HOLDING TITLE IN MY PERSONAL NAME

- no fear of lender calling the note due because there is no transfer of ownership

- because there is no corporation, I'm assuming that you can count write off passive losses on tax returns

- you would need to have an umbrella insurance policy in place to cover yourself if the tenant sues?  If so, how much protection do you recommend?

- can't depreciate the asset (because it's not a business asset) which doesn't allow for the annual tax benefit but also allows you to sell the home later on without having to factor in the depreciation?  This is an assumption.  

TRANSFERING TITLE INTO AN LLC

- Slight fear of the lender calling the note due although I've done this twice and have not had any issue 

- limited exposure to personal assets if sued by a tenant 

- can write off annual passive business losses because the home is now part of a corporation

- would have to depreciate the asset which, again, helps with annual tax advantages but really stings when you go to sell after a long period of time.

Thanks in advance for your help

Jeff

Hey There-

Does anyone happen to know if you have to be a licensed agent to act as a property manager for a home that you don't own?  I currently own and manage my own properties but have a friend that may need to rent his home. I'd like to help him if I can because most of the PM firms around our area stink (in my opinion) and I know I can do a better job and may look to expand that 'service' to other homeowners on our neighborhoods that may want to rent their homes, but don't want to jump on with both feet if I can't do it legally.   Thanks in advance for you help. 

Jeff

Hello!

My name is Jeff Studer and I am a part time BRRR in Atlanta, GA. I've done 1 flip and bought, rehabbed, and currently still manage/maintain 2 of my own SFH rentals and am now in the process of bringing on partner/investors to purchase more. As I go through this process, I realize that this is what I was born to do for a variety of reasons. The problem is (and it's a good problem to have) that I have a good 130-140K sales job and my wife doesn't work so it would be tough to leave that to go full time with investing.

I guess my question is, does anyone have any insight or contacts that can offer some advice on real estate investment firms or mom & pop firms in Atlanta area that may be looking for someone like me that has 16+ years of sales/marketing experience and a passion for scouting/analyzing deals, rehabbing and managing contractors, leasing/managing properties and bringing on investors?  

If so, please let me know as I feel like Matt Damon in the movie 'Rounders' (one of my favorites by the way) when he was talking to his professor in the bar.  The professor told the story of how his family wanted him to be Rabi but he didn't have a passion for it and decided to go into law.  He told the story because he knew that Matt Damon's character didn't have a passion for being a lawyer, although he probably would have been a great one, but needed to pursue the career as a pro card player because 'that's what he is'. Cheesy story...I know but that's what I feel like.  I need to be in real estate in one form or fashion because 'that's who I am'.

Thank you

Jeff

BTW, BP is the best forum and source of information that I have ever seen!  I wish I would have found this years ago.

The partner and I would secure financing and put up 2/5 of the DP, rehab, carrying cost, working capital etc and then silent investors would put up the other 3/5 of the capital needed in return for an equity growth % stake as well as an annual 'dividend' (% of cash flow) funded by positive cash flow after the cap ex fund is where it needs to be, probably after 6 years. 

I'm looking to scale up my single family home rental business, (I currently own 2) but don't have enough for a down payment, rehab, carrying costs etc. I'm looking for a partner to go in on the financing with with me, and then maybe a silent partner or 2 to help with the initial cash expenses shown above. I feel like I have a fair ROI deal structure for the silent investors but I don't know how to assign a value to what I bring to the table and how I split ownership with my financing partner. I would be handling: Partnership agreement/Corporation set up Aquisition process Insurance Initial Rehab Leasing/Property Mgmt Accounting Basically everything! Any ideas on how I would assign a value to this so that the ownership stake is fair and equitable? Thank you. I'm a new member to BP and am looking FW to hearing from seasoned professionals.