All Forum Posts by: Matthew Stanizzi

Quote from @Elin Trinh:

Quote from :

I'm in the same situation. I pay a significant income tax each year. The cost to sign up may be steep but I'm looking at it from a ROI. If I can save 10-15% It will be a 100% ROI in the first year. I'll keep folks posted about my experience.

Thus far I've had two 30 min  getting to know you conversations with the advisor.  Cost up front was made clear about 10K.  Some of their suggestions were not a surprise.  Other's I had not considered but I can see value moving forward. 

Planning on having one more conversation this time with my wife on the call as well and that point I would need to pull the trigger on paying for the service.  

Thereafter the plan would be to get teamed up with a CPA and Advisor team locally to build out the frame work in which I can maximize deductions.  

 Hi @Matthew Stanizzi

would you still recommend wealthability?

The short answer is yes…but it fit a specific need for me.  If you want to learn how to be a tax strategist and how do use these tricks to keep more of what you make and amplify you wealth I think the Course is worth it. It’s a large upfront cost but I’ve made that back in the first year and each subsequent year it’s been a return on investment.

The catch is you may need to restructure a number of things in your life in order to optimize the results.  If you’re looking for something that will allow you to maximize your tax benefit and really change nothing about what you’re currently doing then this might not be the right course for you.

Originally posted by @Ade Adesuyi:

Originally posted by @Matthew Stanizzi:

I think it depends on your risk tolerance.  There is no correct answer.  What do you use for your CapX, Maintenance and Vacancy percentage? Assume 5% each for example.   The capital reserve should reflect that.   Let’s say I had 10 units with a 1M value.  If I’m grossing 100K year  I might hold 15% each year for Cap Ex, Maintenance, and Vacancy.  I’d hold 3-5 years in liquid reserves. Maybe 50-60K. That should me enough to float the properties if you loose a roof and half your tenants for a few months.   If you want more of a safety margin you might want more.  If you have a family member who could bail you out you might feel comfortable with less.  

I’d personally hold the reserve as Cash Value in an properly constructed overfunded Whole Life Insurance Policy rather then the bank.  You’re young so you could build the cash value as you build your real estate portfolio. For the record I’m not an insurance sales person. 

However you store the liquidity, bank, life insurance, investments etc. once you have the sufficient reserves you can take the Cap Ex, Maintenance, and Vacancy as Cashflow until you need to replenish the reserves.  

Hey Matthew, I'm curious.  What's your workflow in replenishing your cash value?  Do you pay a monthly premium that equals the amount of monthly capex/repair reserves you're putting away?  Or do you pay it back like your paying back a policy loan?  ALSO, do you keep reserves for multiple properties in one WL policy?

Having a WL policy was a game-changer.  I was able to get into multiple deals with it.  I have one policy from 2013 and another from 2014, and now I'm really starting to see the growth.

My work flow would be something like this. I’m the example above I underwrite the property for 10k per month gross I’m Holding back 1500$ for vacancy, maintenance and capex.  Let’s say I want 50k in reserves.  If i have the 50K funds in the bank or as cash value in WL I’ll feel free to take the 1500$ as Cash flow.  That’s 18k in extra cash flow per year If I don’t need the reserve.  If I have a 3K  repair I’ll put back the 1500$ For the next two months until I’m back to my 50K.  

I think it depends on your risk tolerance.  There is no correct answer.  What do you use for your CapX, Maintenance and Vacancy percentage? Assume 5% each for example.   The capital reserve should reflect that.   Let’s say I had 10 units with a 1M value.  If I’m grossing 100K year  I might hold 15% each year for Cap Ex, Maintenance, and Vacancy.  I’d hold 3-5 years in liquid reserves. Maybe 50-60K. That should me enough to float the properties if you loose a roof and half your tenants for a few months.   If you want more of a safety margin you might want more.  If you have a family member who could bail you out you might feel comfortable with less.  

I’d personally hold the reserve as Cash Value in an properly constructed overfunded Whole Life Insurance Policy rather then the bank.  You’re young so you could build the cash value as you build your real estate portfolio. For the record I’m not an insurance sales person. 

However you store the liquidity, bank, life insurance, investments etc. once you have the sufficient reserves you can take the Cap Ex, Maintenance, and Vacancy as Cashflow until you need to replenish the reserves.  

In my opinion it’s a simple decision sell your negative cash flow property and use the dead equity to buy another property that does cash flow.

Welcome.  I’m from southern NH.  I think there are decent options for house hacking in the area.  

As far as an LLC is considered I would offer the following. An LLC is a legal structure and not a tax structure. The term LLC isn't in the tax code and YOU chose how the LLC is taxed. (Sole proprietorship, Partnership, S-Corp etc). What you choose is going to depend on your situation and the help of an experienced CPA can help determine the best choice.

An LLC as I said is a legal entity and can provide some legal protection depending on how it's set up and how you run it.

If you looking to do a VA loan then you're looking at residential financing and many lenders won't let you take title as an LLC with residental financings. You would have to take title in your/husbands name and use a quit clam deed to transfer ownership to the LLC after closing. In doing so a lender theoretically could take action on the"due on sale clause" although I hear this rarely if ever happens.

If this is your first property and you don't Have a ton of other assets to worry about protecting then I wouldn't worry about the LLC yet. I would find the property and put the title in my and my spouses name and make sure you have a good insurance policy on the property and a good umbrella for yourself.

You should Be able to find something in the area that works well as a house hack.  I would be happy to discuss with you and give you the names of contacts in the area that could also be of assistance. Shoot me a message if you’re interested.

As a long-term buy and hold it doesn’t work if your predicted vacancy, maintenance, capital expenditures, and management fees are correct.  It looks like you’re after rehab expenses exceed your gross income by several hundred dollars and that doesn’t include debt service if you were to refinance.

Property taxes make SF less likely to cash flow.  I found that 3 units or larger work best in the area. 

I’ve used Alpha Home Inspection.  Good work.  

I would echo what @Jessica Stevenson said in terms of what areas have some deals.

@Imran Ahmed given what your looking for a owner occupied multi in the north end of Manchester might fit your needs.  I would start there and expand my search outward to other neighbors that are attractive to you.  There are some nice neighbors in Nashua as well but Multifamily property is more limited.

With that said finding something that meets the 2% rule or has a high COC return will be a challenge in this market.