All Forum Posts by: Kenneth Garrett

@Jazmine Menders

As @John Underwood has mentioned an LLC is only for asset protection and anonymity. It does nothing to save on taxes. When you are in business and have a rental property you can take advantage of the mortgage interest, property tax and depreciation. You do not need an LLC for these. Even in your own name provides the same tax advantages. Keep track of all your expenses.

@Michael A.

BRRRR and Flipping have very similar qualities. Each requires a rehab. Each investor seems to have their own philosophy on what kind of rehab a BRRRR gets versus a flip. I've done many of each. I always BRRRR's to the same degree as a flip. It provided many benefits to me. It provided an additional exit strategy if I decided to flip the property instead of renting it. It brought a higher ARV, better tenants, higher rents and much less maintenance issues.

A flip provides a lump some of cash. A BRRRR provides long term wealth for generations. You will benefit from BRRRR'g way beyond a flip. The tax benefits alone provide a much better return in the long run; mortgage interest, property tax and depreciation. When you add all those together and include profit. The BRRRR beats flipping everyday. It's just a boring method to become rich. There are no HGTV shows about BRRRR'g, it's not sexy. It just works if you stick it out.

@Kiko Mattoso

Your first STR should cover its own mortgage payment and it's other expenses. There should be profit left over. Your 2nd STR should do the same thing. Your W-2 should not be covering your investment expenses unless you meant your DTI is to high.

@Arjun Raman

You have to check the zoning regulations to make sure a group home is allowed. Group homes are a hotly debated topic. There are many variations of them rehab facilities for drug dependent individuals and of course senior housing to mention a couple. Senior housing has many variations. Nursing care or just senior housing. Assisted living facilities in general are three parts; senior living, assisted living where the individual needs some assistance and then full assistance as in dementia areas. Typically dementia is not allowed in a SFH, but you need to check the regulations. Is there an operator to run the facility? Are they licensed? Many questions that need to be answered.

@Charles Stubblebine

Raising rent should be based on the market.  I take a different approach when raising rent.  I always look at market rent, higher cost to me and what the impact to the tenant is going to be.  What I mean about impact to the tenant is if they don’t stay.  Every property does not need to be at market rent.  You need to weigh in the cost of replacing a tenant, how long it will be vacant and the cost of repairs.  Of course this is market driven as well.  If the cost to repair your unit to get it rent ready is $3000 and the total length of vacancy is 60 days, then you are down $5000 if rent is $1000 a month.  Raising rent in increments of $100 and keeping a good tenant is worth more than jumping a significant amount.  You should take all factors into consideration.

Best of Luck.

@Barrett Johnson

Yes, you can either put the criteria in your listing or advise them when they call to schedule a showing.  I find it best to hold open houses to find applicants.  That way you can garner competition among applicants.  

@David Lou

Always verify with the city/county depending on what jurisdiction you are in. One reason for STR's still operating is they could be legal non-conforming where the old ones are grandfathered in and new ones are illegal. Or they are just plain operating illegally. Redfin doesn't talk about STR's. I'm guessing it was part of the listing and not Redfin stating that.

Again check with the city or county.

@Jack B.

$2700 just to do the walls??? It would be unusual to not have to do any repairs to the walls at least nail holes. Hope it includes wall repairs. No trim. I think your going to be disappointed after the walls are done and trim and doors don’t look very good. I use Sherwin Williams crushed ice on all my walls. It’s a very light gray and then paint my trim with white trim paint. Actually $2700 seems a little heavy to me without trim and doors.

I have painted many of my units and houses. It takes a lot of time by yourself, especially if you have a day job. Probably a couple of weeks and that’s with some help.

@James Mercer

I cash flow about $1000 a month or so. I have a mortgage and HOA fees. Still does way better than my LTR that have mortgages on them. When I get my STR paid off which will be a few years, the cash flow will probably be $2500-$3000 per month, but will probably just by another when the right deal comes along. I look at cash on cash return as a way to evaluate how things are going as well. I'm at around 17%-18% annually, which means in 5-6 years I will have no money in the deal. That's where the profit is, of course the tax advantages of mortgage interest, property taxes snd deprecation make the numbers way better than only CoC. I have a 3/2 house two blocks from the beach.