All Forum Posts by: Krystyna Fennelly

I loved my old tax advisor whom retired and I haven't find the right replacement.  Would love recommendations for a tax advisor/CPA in Texas (local to Houston-Galveston area is a plus but not required).  Looking for someone who doesn't just file the paperwork I provide, but provides knowledge of the Real Estate industry tax laws and effective ways to save tax dollars.  I am a Realtor, husband an appraisal and we own several rentals, as well as do a few flips annually.

Additionally, looking for a recommendation for an advisor to start a self directed ROTH IRA with. Should have done this more than a decade ago but I guess better late than never. I'm researching this more as well but love a good personal recommendation.

We have a small apartment complex near Galveston Bay in SE Texas. Our current insurer has issued a notice of non-renewal. Any recommendations for S. Texas coastal commercial ins companies?

@Jacob Claeson

Mysmartmove.com

Tenantbackgroundsearch.com

TenantVerification.com

Any of these you can run credit, criminal, eviction screening, some even assets/income screening. I believe you have to set up an account with any of these. You input tenant prospects name and email address, indicate if landlord or tenant is paying app fee and send. They get an email, fill out the app and submit cc through the site for app fee.

@Trevor M.

I’m adding to my to-do list to make sure the tenants know where the shut off value is.

A client of mine had one of his tenants leave the house Monday without tell him, when they got home water was pouring out of the ceiling, they didn’t know how to shut it, cell service was crap so took some time for the call to go through to landlord and all he heard when he answered was water!

He’ll be filing through insurance, and says lesson learned. But some things we think ‘everyone should know that’; some just don’t.

I own 8 single family and have a contract on a 12 unit apartment; we made it through with two exterior pipes cracked, a pool and sprinkler so we were able to isolated water shut off on both and it'll be a cheap fix once our plumber is done with everyone's interior fixes.

I don't think this will be a huge opportunity for distressed sales.  When you look at something like Hurricane Harvey, that flooded homes that had never flooded and weren't in high flood risk zones, there was a huge number of houses did not have flood insurance.  This winter storm with broken and leaking pipes will be covered by most insurance companies at a 1% deductible in most cases.  I'm sure there will be some opportunities out there but not a huge amount.

@Nick Atwood This one is in a very small suburban city, population 2019 shows 14k.. but I will still look into this. Sounds valuable, good to know my options and may work for the next! Thanks for the info!  As far as inspectors, one of my favorite residential inspectors switched to handling their commercial account many years back so I've hired him and feel like I'll be in great hands there.  Thanks!

@Jeff Ronningen Thanks again. Do you know anyone nationwide you would recommend? (This is in South Texas) I will ask around locally as well.  Also would you do the SBL again?  I definitely prefer lower rate of longer duration, and wouldn't mind some extra upfront fees and requirements to get it.. for future properties. This one is under a million but I plan to do more.

@Account Closed Yes financing still has to go to the board for final approval but my banker has reviewed the property detail and believes there will be no issue.  I use a local bank, I have a few accounts with them, a line of credit and one other small commercial loan. They do pull my credit, I have to provide a financial statement annually and I'm a personal guarantor but much of the weight is put on the property itself.

@Erik W. @Jeff Ronningen  Thank you both for the detailed list of information, I've added a few things to my due diligence list. Jeff: My bank is of offering 4.45% on 3 year or 4.95% on 5 year, 25 yr amortization. I'll being going with the 5 year; do you feel like the rate is competitive with what you've seen?

The sellers p&l matches pretty well to what I would expect and is pretty well detailed. Though I do have extra questions outlined for her. I'm shopping insurance, as well as having her provide a copy of her current ins. She has multiple tenants that have been there years, as many as 10 years and her rents are low.  I don't want to piss everyone off but rents are way past due for a raise. I plan to spruce up the exterior and each unit as they come available (only one vacant currently that the listing agent asked her to leave vacant for showings). 

Also any recommendations for exterior amenities for a small complex like this? 

I'm super excited to be purchasing my first multi-family property, a 12 unit apartment (8 one bedrooms, 4 two bedrooms) in a great suburban area.  I've been a residential Real Estate Broker 17 years and have been investing in single family homes for hold and flip for 12 years; but commercial is a bit of a different ballgame and I'd love some advice, pretty please.  

Contract executed yesterday, 21 day feasibility period starts today, planning inspections for Tuesday...

-Mistakes to avoid?

-Items to not overlook inspecting?

-Anything specific I should check with the city? 

-Any and all advice is welcome!  I just want to make sure I don't miss/overlook something as I transition into the commercial world.

Thank you!

@Elijah Brown

Congrats!! Great balance of hard work, creative financing and calculated risk. Thanks for sharing, great story to share with my boys since they only want to listen to mom 'preach' so much. 

I've been a Realtor for 17 years and Investor for about 12-13. I'm constantly teaching my boys about Real Estate investing; helped my oldest (now 15) start an LLC at 13, flip a house using a line of credit then purchase a house using BRRR to hold as rental (one form of college savings). We met with the attorney together, banker, he went to the closings, etc. My 12 year old is ready for his turn now. They both have their own career goals that I don't want to take away from them but hope they'll understand investing and finance from the real estate lessons I teach. But the dedication and hard work you portray in your story is something I find hard to teach...sharing your successes really paints a picture of how important that piece of the puzzle is!

Push forward.  No you likely won't be able to refi your total investment based on numbers provided but interest rates are low, you should still be able to break even or cash flow monthly, after getting most of your investment back.  If it's an up and coming area, value Will rise.  Dallas market is strong, let it grow to your area as seems to be your original plan (long term) and you'll be glad you didn't let it go for a loss.

But I agree with you on appraisal, they'll get you for not being complete.  So I advise you finish it before you refi.  Make sure to provide the appraiser with a list of all updates/improvements to the property and comps to help support the highest value you can.  But make sure they make sense and are really comparable. 

Your contractor situation bothers me a bit though.. I don't know the whole store or your relationship but if he cut corners or screwed up, hold him accountable.  If it's solely that the property needed more than expected, or unknown code related issues (though contractor should know codes), reassess your contractors bid if you even want to consider still working with him.  But if he's not showing up or reliable, then drop him and shop around! $20k seems very high for unforeseen repairs.  Perhaps ask the inspector if he has  someone he can recommend that he's seen satisfactory work from for whatever needs to be finished.

Best of luck!

@Allan Smith Appreciate your input on all, especially the 14 units. I guess that's true, it's not really multi if it's 14 condos.. we had thoughts of flipping each condo one by one as the current leases expire or trying to buy the other 6 units in the complex and doing away with the HOA. I didn't like the HOA aspect either; but who knows if we could get the other 6 to sell. And I haven't requested the HOA books yet, that could certainly be a deal breaker; too many are mismanaged. But it's in a decent area and I feel like the numbers are workable...