All Forum Posts by: Mark Brown

@Jeromy Jordan. Finding the good re deal is always the hardest part. I try not to be biased, but you should really find the PM company first before a realtor. They can be a huge asset in getting feedback on potential properties from a rent-ability, cash flow, and deferred maintenance perspective.

If you do nothing else, at least let the pm company find and place your tenant. Too often realtors will try to do both and their incentives are just not in the right place, generally.

And on PM companies, look for people whose pm company is their main job. Too often I’ve seen realtors dabble in property management mainly because they want the commission on releasing your property but they provide terrible service to the tenant in terms of poor or no maintenance because that’s really not whet they do. So after a year the tenant leaves frustrated instead of renewing and the realtor leases out your property again for a nice commission but all this comes out of your pocket with turnover costs.

As for mynd ... come on, just search for them more on bigger pockets for experiences. Property management isn’t a commodity. It’s personal. If you want a plumber sent over to fix a slow draining bath tub for $245 then hire mynd. If you want a company with a maintenance guy that can unclog it for $40 - $50 then hire a local property management company.

Best of luck. ... I’ll get off my soapbox now.

Well, you can't control the supply, but it's primarily wood that's gone through the roof the most. I heard one builder switched to using metal studs for the interior walls because it was cheaper. Other than that, you can try seeing if there are any design changes that would minimize the amount of wood you need.

That's crazy that they care.  I use Prosperity Bank and they've never given me any trouble. Every bank I've ever delt with has been happy to open an account and take my money.  I think you need to find a new bank.  Yeah, next time just try telling them "real estate holding company" or "home renovation company" or "property management company" or any of the many types of work we real estate investors find ourselves doing.

@Kevin Wood. Cool.  I'll try to come by and meet everyone.

@Tamara Elliott-Deering. The thing with foreclosures right now is that most loans cannot be foreclosed because there is a federal foreclosure moratorium. Now finding all those people behind in payment but in forebearance until the foreclosures start up again - now that would be an interesting opportunity.

Whoever you use for a contractor, try to include a default provision in their contract, where if they stop work for more than a week barring acts of nature, then you can cancel the contract and keep the unpaid amounts as liquidated damages.  Too often, I've seen investors get screwed by contractors who promise the world, but then take forever to complete the work because they have 10 different projects going at once and then the investor is stuck paying all the holding costs because the contractor can't get their act together.

Honest, show up on time, and leave a great work product are definitely good starts. But don't forget: can help with cost-effective renovation options, build to pass code inspections, stick to a deadline, are insured, and can make awesome design recommendations are also great qualities.

Mmmm.  If I had a lot like that, without the means to develop it myself, but didn't just want to sell it.  Your best bet is probably to try to find someone to partner up with.  For example, find someone that could build the multifamily unit, and then form a partnership. You contribute the value of the lot into the partnership, and then take back a small percentage share of the profits once your partner builds and develops the property.

@Stephon Rhea You need an accountant. If you're the only owner of the LLC, the IRS calls it a disregarded entity, and you file all the income on your own personal tax return. If you really want, you can file a form with the IRS asking the LLC to be treated as a corporation and then file another form asking that the corporation be treated as an S-Corp. There are strict timelines on how long you have to ask for these things. And even whether you should or not. Like I said, there is an overhead cost. You might be better off growing your business and then doing these things as you get more income coming in to justify the expense.

@Stephon Rhea. Congratulations on your first flip. If you held the property for less than a year, it’s considered short term capital gains which is just added to all your other regular income like from a job and taxed at the normal rates. Flipping isn’t eligible for capital gains tax treatment anyway.

In the future, the easiest way to reduce your taxes is to create an S-Corp and run your business thought it. You can typically avoid paying self employment taxes on half your profits if you do that. But there’s overhead costs to do that and keep all the books straight. There are ways to get the taxes down more but it’s too complicated to explain here. Best of luck.