All Forum Posts by: Kim Hopkins

Hi Peter, you know that's one of my favorite books! You're very right. Great point. Will do. 

Hi!

We are overwhelmed trying to manage our current real estate portfolio and in the process of another acquisition. I have two questions:

1) Does anyone recommend using a particular virtual assistant company like Upwork or something like that for recurring work? Is it better to just hire a specific individual as a contractor when needed?

2) WHAT tasks do you outsource? I can think of bookkeeping (entering P&Ls into QuickBooks or spreadsheets), making our Expensify reports... what else in the real estate asset management lifecycle could we outsource? Following up with tenants for rents? We use property managers for our multi-tenant buildings but have single tenant ones out of state we manage ourselves. What else? Entering health insurance receipts for our personal insurance claims? 

Any help brainstorming what we can outsource and to whom would be much appreciated!  We also have two young kids so I'm open to outsourcing personal home stuff as well if anyone has ideas. Wish a virtual assistant could fold laundry!

Thanks,
Kim

Hello!

We are long-term holders of industrial property. I.e. we have no intention of selling. We are contemplating building out an existing single-tenant 20,000 SF building into multiple units. Say Scenario A is no buildout and Scenario B is buildout.

• Both scenarios will take us roughly the same amount of time to lease up from today. 
• Scenario A is going to yield us less rent but cost less money (no buildout). Scenario B will yield a higher rental rate but cost us a lot of money. 
• Scenario A will result in overall higher vacancy over the life of the property since it takes much longer to find a tenant of that size than smaller tenants. 
• We don't plan to sell the property. 

I'm trying to understand the best way to analyze these two scenarios financially.

The IRR calculation with a 10 year hold and conservative cap rate shows 13% for Scenario A and 18% for Scenario B. However, it seems that the primary reason the IRR for Scenario B is higher is because of the much higher sales price, since it's driven by the higher NOI. Since we don't plan to sell the building, this calculation seems inaccurate to me. Here's a picture of the projected cash on cash over the next 7 years. You can see that the cash on cash is initially much lower for Scenario B but ends up higher in the end. However, that does not tell me which Scenario is a better return overall. The bottom COC number is the average over the 7 years, but again, the choice of 7 years was arbitrary and I'm not sure the average is even the right figure to use.

How would you compare these two scenarios financially?

Thank you very much in advance!

Kim

@Peter Tverdov Hi Peter, that's so helpful. Thank you! I think I'll stick with them.

@Dylan Vargas @Peter Tverdov My only concern with the health share plans is it seems they all have some sort of "disclaimer" clause that basically says at the end of the day, they don't have to cover an event if they don't want to. Like how a commission agreement with an employer says "we can change this plan at any time". With regards to the health sharing, does that concern you at all?

@Account Closed Hi Roger, apologies for the delay. Thank you so much for the info! That was very helpful. I didn't realize that the medical expenses are not deductible on California taxes with an HSA. That's good to know. 

Hello! This question is for full-time real estate investors who do not have anyone in their family receiving a W2 (i.e. no employees).

I quit my "W2 job" in December 2018 and our family now manages our real estate full time. We are currently on Liberty Share which is a healthcare sharing ministry that avoids the Obamacare ACA requirements and therefore has a very low premium (about $500/month for entire family). If you haven't heard of this, I recommend you check it out. If you have experience with it, would love to hear your thoughts, but that's not my main question.

I was looking into an Health Savings Account (HSA) which looks like a great option as well for minimizing medical costs (since most non-premium payments can be deducted via an HSA) but You must have a high deductible health insurance plan to qualify for an HSA. We don't qualify for an HSA because the healtcare sharing ministry does not qualify as health insurance. 

This got me thinking ... would we better off getting rid of the healthcare sharing ministry and going with a cheap, high-deductible traditional insurance plan combined with an HSA? I thought that Trump came out with new options of affordable high-deductible health insurance plans but I can't seem to find anything. Again, we do not have W2s so can't qualify for an HRA or anything that requires you to be an employee. We are also in California which may play a factor.

What do other investors do for health insurance? Do you know what the cheapest highest deductible plan is out there? Can it beat the ministry's $500/month plan for a family of 4? 

Thank you!
Kim

@J Scott I know this is a ridiculous thing to ask when you posted this EIGHT years ago, but I'm trying to make sure my IRR calcs are right. When I try to do your example, I get an IRR of 30%. Any chance you can post a google link or some link to your spreadsheet example? :) Sorry, I know.

Hi @Adam M., would you mind sharing your model again? I'm trying to model a value add decision on one of my current properties and want to make sure I'm doing this correctly. Thank you!