All Forum Posts by: Mark Jones

Investment Info:

Large multi-family (5+ units) buy & hold investment.

Purchase price: $150,000
Cash invested: $45,000

8 plex Buy and hold for now

What made you interested in investing in this type of deal?

The price and they are building a 50 million dollar casino at the edge of town

How did you find this deal and how did you negotiate it?

Realtor friend, negotiated with the property manager

How did you finance this deal?

Majority was cash, remainder is hard money until completed

How did you add value to the deal?

Laundry and storage

What was the outcome?

to be seen, not completed as of yet

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Other than my friend and always recommend him

Being a CPA and an MBA, I would forgo the MBA if you plan to stay in real estate. I agree with Theresa. What you would learn in the program would be of little benefit to you, in my opinion. I wish I would have gotten into real estate before getting my MBA.

I had read and talked to a few people about rental property. I started with one SFR and slowly built up to 32 houses. After I had about 10 houses I could use the equity from those houses for my down payment for the remainder. About 3 years after I started purchasing rentals, I was in the hospital for six months. I managed the properties myself until I was in the hospital and could not find a good property management co. People moved out and they did not find renters. I was losing money on the rentals. When I got out the total hospital bill, it was 5.5 million dollars. My insurance capped out at 1 million, so I owed 4.5 million. I still could not go back to work for another 6 months. I had to file bankruptcy and I had to throw my rentals in with my medical bills. Fast forward about 5 years and my mother died and left me about $20,000. I day traded stocks and accumulated enough to purchase 3 duplexes that were mismanaged and needed work. I got good management and started upgrading them. 3 yrs later I sold them for double my purchase price and put the money in a 1031 and currently purchasing with that money. I also flipped two houses and made 57K on one and 53K on another. Am currently looking for a 10-20 unit with that money. It is going slower than I would like it to. I think having a mentor would help me considerably.

Did you talk to a CPA as of yet?

Don't worry about the taxes. Look at the extra revenue you are bringing in. Say you are in the 25% tax bracket. You spend a dollar in expenses to save 25 cents in taxes. Don't spend money just for a tax write-off.  Keep the dollar and pay the 25 cents of tax.  This is an oversimplification but spend money on expenses you need not just a tax write-off.

Make sure it has gone through probate and tax return filed

I used the same formula in Oklahoma. You don't want to burden your tenant out of business.

Never compare FMV with Tax Assessed Value. They have absolutely nothing to do with each other. FMV is what the property might or is worth on the open market. Assessed value is for taxes for the county. The assessed value times the millage is your tax amount for the year. Obviously, the county wants the assessed value as high as they can make it to receive more money.

I always said, "Enough to know better" and laughed it off, then redirected the conversation.

Brings back too many memories, makes me wonder why I am getting back into the rental business, lol.