All Forum Posts by: Diane Menke

I have had appraisors work with me inthe past, helping me hit my loan goals. These were folks I had history with. I was present at the meetings and we discussed what I wanted to do. They knew my lenders and mortgage bankers who were local.

I never feel confident that the appraisor I don't know is going to do anything at all to benefit me.

I never feel confident about a large faceless lender working with me.

Best
Diane Menke

I thought I would share this with the group since I had an e mail come into the office from a fellow in Boston looking for a slate tile for his project. He Googled our company and saw the image there of a simple slate tile install I did a few years ago.

I bought 12x12 inch slate tile for about $3 a sf. I cut these in half with our big wet saw, and then installed them in a running bond pattern. I sealed and then grouted these with grey grout.

The whole room cost less than $1000 in materials and I spent a Labor Day weekend installing it which was the only downer part of the project. The room looks great and people are impressed by the results.

The floor is a slab we put electric radiant heat into. Its very energy efficient.

I hope you all check out installing some inexpensive slate tiles in your high traffic areas.

Diane Menke

I have read that some managers/owners of multi unit properties will work with on line payments or cc's.

These are upscale properties with amenities like access to web and cable TV, pools, gyms, etc. They charge for each service use by the tenant. The entire property then reports "takings" to their mothership business via the internet connection to the company books.

There is no reason a SFH rental corp with only a few properties could not do the same. You would have to set your website up to provide and bill for the on line service convenience. Hey no stamps! And no chance of being late.

I would say you should mark up any cc charges as well.

Best
Diane Menke

Corey I agree its worth talking to the seller about that prop.

I don't know anything about the particulars of that prop. The guys have laid out a lot of potential issues for you.

Another issue to consider is that just because a property cash flows, you might still like to sell it. I have 3 like this now. I want to move onto bigger things by cashing out/selling them. Could be your seller is considering a sale simply to cash out.

Seems to me a great biz plan is to create cash flowing properties to sell to wanna be investors. Thoughts?

I am also struck by the ratio of chatter to actual buying/selling/renting that people do on this site. Seems like a lot of looking and talking but not so much action?

Maybe time to get into the game Corey.

Diane Menke

Hassan,

I side with Joe here as you know. You are putting a huge amount of time into these deals. So you should track your time.

This being said, I have to point out the obvious - you are making turn key rental properties available to folks who want to be landlords and make 20% on their investments.

Man put that in a bottle and you will have your buyers. I think this is what you should be selling - turn key property deals that net 15 - 20%. And by buyers I mean what you call "lenders".

I would stop calling them lenders and instead call them buyers. And then you can "sell" what you do for them on a website. It will fit on a business card.

I think get these buyers to pay into a cash pool to become "members". This will give you the cash to work. Then offer the deal to the member pool. Let them "bid" on each property? I think something like this would be ideal but you have to check the SEC rules on this.

What lazy want to be investor would not want to have someone like you running his tail off creating deals netting 10-20%?

Best of luck and I hope you develop a huge reputation for selling these types of turn key deals in your area.

Diane Menke

You guys should stick to your knitting - RE investing.

You should team up with professional remodelers and builders, GC, and also team with some small solo folks like plumbers, electricians, painters, etc.

All these folks should be in our team. Have lunch with them. Spend some time. Give your team members the work. Don't nickle and dime. Don't try to learn how to be a GC. Approach them from a place of abundance.

I did an informal check on some other GC's I know who all do around 1 mil a year. It costs them about 100K of personal investment (time, free labor, family loans...) to get the business to where they can gross 1 mil.

It takes about 10,000 hrs of time, to be an expert at anyting. (read Outliers by Malcom Gladwell)

Just 2 things to think about when you pay $200 for an estimating tool.

Good luck to you.
Diane

Gary you need some spread sheets -
personal balance sheet
cash flow statement
and a spread sheet that shows value of the houses vs whats owed on them

You look at these three and you run your scenarios - cash out, increase mortgages/rents/costs, cash out one prop to decrease second props expenses.....

I think you already have a nice suggestion from Ben. Why not spend some time this weekend with Mr Excel and on the phone with your mortgage pro?

Good luck
Diane Menke

Something about that tower.....

Oh right! Tear it out of you can fit it into your budget. Have you gotten an estimate? Then you can market 'new drywall' and it will be gorgeous.....

Good luck
Diane

Chance 1 I think your name says it all.

Seriously why don't you talk to your lawyer about this pronto?

Tell us what liabilities you are worried about. I have some property in my name and some in LLC's. Sometimes it depends on financing, and how much cash I want to tie up. A commercial loan is going to demand more cash from me than a loan held in my name. So I make a choice sometimes to go that way. Not my favorite. Typically I target a refi date to shift it out of my name - min 12 months.

Are you financing or did you pay cash? How long do you want to hold it? What kind of renters will you take on? Whats your cushion should they be jerks who trash the house?????

Lay more info on the table.

Diane Menke

Tiara I like how BIG you think!

I got a better understanding of this process by reading Robert Kiyosaki's books. Start with the Rich Dad one and then move into Cash Flow Quadrant. Then read the investing books. He explains the nuts and bolts there about how and why you go public. He is trying to take a few companies into IPO. For him it seems to be about a level of business acumen he wants to achieve or prove, as well as make a bundle.

In the "happinin" '90's everyone and their mother wanted to go public. But its not for every business to do this. I know a bunch of the other bigger investors than me here know about the SEC and its rules better than me. I hope they chime in and share their insight.

What I saw was a lot of small companies that would have been better off not going public delving into the IPO process and it messed them up. In particular some small boutique motorcycle companies like Moto Guzzi and Ducati. While Ducati has faired well enough, Moto Guzzi is pretty much dead in the water. The rigors of an IPO did not suit its business model.

In the 1990's folks were betting on companies that never made a penny. The "irrational exuberance" brought in buyers though. So you can pay yourself well if shareholders look the other way when the fundamentals are in the toilet.

The investing atmosphere is a little different now. No one should ever have invested without a clear understanding of a businesses financial state. It seems to me that people investing now are folks who can read financial statements.

You should learn too! A great book is "Understanding Financial Statements". It starts off with a small business and gets more complex as the business grows. You won't absorb it all at first, but with wisdom and experience you will absorb more!

Best and keep thinking large.

Diane Menke