All Forum Posts by: Kevin S.

Thanks Dennis. I had a feeling your answer might be just what you said. Guess I wanted to hear it from the horse's mouth, is all. Is there a danger one could end up taking more from the LOC account if say rent doesn't equal to withdrawal due to vacancy or tenant not paying rent etc? If I adjust withdrawal form LOC because of those variables then it defeats the purpose of consistency. That last one was a question rather than a statement btw :)

Yes that is a risk and am not sure if that can be completely removed. It definitely can be mitigated if the other half of your investments in the diversified dividend ETF is doing decently well. Again the stocks/etf can go up and down as they are cyclic however, generally the dividend aristocrats/kings have a history of paying and increasing their dividends for the last 25/50 years respectively. Again dividends are not guaranteed either. Worse case, you can safely use the 4% rule to tap into some cash from this investment if you need to over-draw from the line.
Also from the rental income perspective, its common to see variances from monthly cashflow and the projected cashflow (spreadsheet cashflow), but if one is conservative in the projections then most likely the projected cashflow over 6 - 12 months matches the expected withdrawal.

Hasn't many of the dividend aristocrat lost up to half their value? MMM, T, WBA etc...

0 Votes

If I am a business owner in Texas and looking to start investing in RE, do I look for accountant who will take care of my business accounting as well as RE investing side of it?

Do accountants geared towards RE investors stay out of 'business' accounting?

Do business accountants do a better job of the business side than a RE accountant?

0 Votes

Quote from @Kory Reynolds:

Your answer to those questions will be "it depends" - it depends on the state and local jurisdictions that you and your real estate investments (or other business ventures) are subject to. The CPA themselves don't need to be local, what is important is that they (or their team) can address any specialty concerns of your locality. And even then...many state / local jurisdictions require effectively no specialty knowledge.

There is definitely no one size fits all for how to look for a CPA / firm - it is going to be highly individualistic.

Thanks. Just like choosing an attorney that should be licensed in the state of his/her client (state law applies and differs) I wasn't sure if the same hold true for accountants and whether local tax laws differ from state to state. Especially an investor who is not a W2 earner but has small business.

0 Votes

Thanks Jana. You answered question 'to the point' by far. Should accountant handling RE need to be local to the state? Are there state laws in addition to IRS rules in RE investments that makes it better to choose local?

0 Votes

Quote from @Dennis S.:

@Kevin Si

Here is another option out of many already mentioned so far:

Do both - real estate + diversified stock market via low fee dividend ETFs. Split your funds to invest accordingly. Use some leverage to buy the property for tax advantages... At the same time retain access to most of your capital via a line of credit to the properties equity. Structure the entire thing as if you get a pay check every month (from LoC) so its consistent and predictable and let the cashflow from the property pays off the line every month. Let the ETF grow via dividends and use as you need them via the 4% rule...

Why take from LOC and let cash flow pay off line? Didn't quite get that part. Isn't cashflow from properties doing just that, monthly check?

0 Votes

Sorry Jessie, forgot to mention BRRR out of picture. Just buy and hold, cash out/refi, buy more, 1031, scale, repeat. No fix/flip. Construction and reno is not for me. Thanks.

0 Votes

Quote from @Jessie Dillon:

when you say 'approaching retirement,' how long are we talking? one option would be using it to BRRRR enough properties to generate the desired amount of monthly profit in the end. as far as cash vs down payment, if you want to build more wealth over time, i would definitely use debt so that you can buy 'more' ($) real estate. leaving it in index funds isn't a BAD idea, but if you have the resources (time/knowledge) to invest in RE & do it wisely, you will likely come out so much farther ahead. another question here is, how much monthly income are you looking for this nest egg to generate in retirement?

How much monthly income can 1M generate in about 9-10 yrs in RE (leveraged)? Try to leave 'it depends' out. LOL. Guesstimate based on normal, average, median, 50% percentile. Thanks.

0 Votes

Thanks for your different input. So I gather couple of things from your response. Try to get a local accountant and that accountant doesn't have to own RE to offer solution.

Do accountants geared towards RE investors even want to handle non RE accounting needs? Zach said to keep only one accountant. I wonder what other investors here who have small businesses and invest in RE keep one or two accountants. Awaiting more responses.

0 Votes

Quote from @Louisa Davis:

@Kevin S. This amount of net worth would generally make someone an Accredited Investor, meaning different types of investment options are available to them.

They could put some or all of that money into private real estate deals - like syndications - and make 14-20% Average Annual Returns.

This is what I'm focusing on right now!

How do you vet these deals so as not to loose money or end up holding properties you never intended to own? How risky is it? Thanks.

0 Votes

All Forum Posts by: Kevin S.

Kevin S. has started 23 posts and replied 390 times.

Post: What to do with $1,000,000.00?

Post: Do I need a CPA? ANSWER INSIDE

Post: Do I need a CPA? ANSWER INSIDE

Post: What to do with $1,000,000.00?

Post: Do I need a CPA? ANSWER INSIDE

Post: What to do with $1,000,000.00?

Post: What to do with $1,000,000.00?

Post: What to do with $1,000,000.00?

Post: Do I need a CPA? ANSWER INSIDE

Post: What to do with $1,000,000.00?