All Forum Posts by: Brandon Ellis

I just finished Rich Dad, Poor Dad by Robert Kiyosaki. Without going into great detail, he mentions that he invest a small percentage of his money (which, by small, I am certain he means hundreds of thousands) into tax lein certificates. He claims to earn 16 percent annually over the 5 percent earned from a CD (Keep in mind the book was written in '97). He mentions their lack of liquidity and says he treats them as a 2-7 year CD.

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Originally posted by "takleberry":

You can also elect to have the IRS treat your LLC as an S-Corp for tax purposes, so I guess maybe that makes the third LLC "type".

I am not at all familiar with S-corp. I will look that up.

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Originally posted by "MikeOH":

Brandon,

I don't like the fact that the purchase price of this property is near the high comps. I think that you can do better - a lot better. I'm also a little concerned about the way you described the rent as "average rents in the area". Is $600 the rent on this property with the current tenant.

Here is how I see the numbers on this deal:

Purchase price $39,000
Gross Rents: $600
Operating Expenses: $300
NOI: $300
Mortgage: $259
Cash flow: $41

In my opinion, the equity and the cash flow are both too low to make this a deal.

Mike

Ok. I don't think I could get him dowm much more. He has spent too much fixing it up.

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Originally posted by "r2d246":

why don't you download "Limewire" and using that do a search for "Flip This House" and "Property Ladder" and download those episodes and watch them.

My computer may explode if I put one more program on this 8 year old piece of crap, but I will try. I am already a library junkie, so I will pick up an RE cd when I am there today. Thanks

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Originally posted by "MikeOH":

Brandon,

Unfortunately, I think you'll be a little disappointed. There isn't really anything to see. Are you going to watch the investor answer the phone? I get about 40 calls each day and I can tell you for a fact that is BORING (and a little annoying). Are you going to watch the investor do a rehab? If so, come on down and I'll put you to work? Got a good back? I need to install a new water heater today. Now, if I had a yacht like the infomercials - THAT WOULD BE SOMETHING TO SEE!

Mike

I'll help you install the water heater on your yacht if I can have it on the 1st and 3rd saturday? 8)

Maybe I should jump on the deal myself. I posted it under the "Deal analysis" blog as 1st deal, i think that is what I called it. Can you have a look if you have time?

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I hear the first one is the hardest. Here it is...

3/2 ranch

Cost $39,000

Comps vary from $25k to $45k, most properties in the area are rentals, the ones at $25K are in questionable condition

this one belongs to a co-worker who needs to reorganize due to divorce, he had dropped the price $10K. There is already a section 8 tenant with about 9 months left on her contract. She has been there 3 years and pays on time. He has maintained the place well and it doesn't need any work initally (pending inspection of course)

average rents in the area $600/mo

I can put 10% down, if not a little more

Let me know if you need more info. I am sure I am leaving something important out of the equation.

Brandon

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Thanks guys, this piece of the puzzle in my business plan development was not coming together, but after talking with you, I think I will get the first deal or 3 under my belt and read the Nolo book Takelberry mentioned in the mean time.

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Originally posted by "MikeOH":

Brandon,

Yes, we do everything humanly possible to ensure we get good tenants. We thoroughly screen every tenant. Unfortunately, a small percentage of tenants will go bad while renting and there is absolutely nothing you can do to prevent it, except not run a rental property business.

Mike

I was thinking along the lines of setting up a camra at the neighbors so when they take a chainsaw to the deck or throw a brick throught the window, you have evidence.

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Originally posted by "MikeOH":

Brandon,

My suggestion is to make friends with the SUCCESSFUL investors at your REIA (not other newbies). Forget looking for a "mentor" and just make some friends. Your new friends will be happy to help you, just be sure to learn the basics so you're not asking basic questions that you should know the answer to. R2d2 has a good idea about listening to REI material while you're driving.

Good Luck,

Mike

I attended REIA last night and met a full time investor who I plan to refer to a deal I have, if I don't jump on it myself (that is a whole other blog). He has 20 rentals and has done as many flips. I plan to charge him little or no cash in the referral, in exchange for the ability to shadow him on the deal.

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Originally posted by "r2d246":

What kind of mentor are you looking for? There's plenty of millionaire right here, that know their stuff.

Also what I'd suggest is you absolutely must turn your drive time into study time. Your drive time equates to 2 classes each day studying REI. Those two classes are your part time studies toward earning your PHD in REI.

So don't even think about what I'm saying...Do this...go to ebay, buy a used copy of "Carlton Sheets No Money Down" and start listening to it in your car to and from work every day. You'll be a pro in no time. That's all I did. It gave me the confidence to go out and buy my first apartment building years ago. I'll be your mentor right now, and I say "do it" otherwise you should just forget about REI altogether.

This website has already been an incredible resource and I will be on here throughout my learning process. To answer your question. I am looking for someone who is willing to let me shadow them from beginning to end, on both a flip, and a rental deal. I am a visual learner and need to see the whole picture.

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All Forum Posts by: Brandon Ellis

Brandon Ellis has started 5 posts and replied 33 times.

Post: Buying Tax Deeds...Good or Bad??

Post: Getting a loan for an LLC and building corporate credit

Post: 1st RE deal

Post: Mentors

Post: Mentors

Post: 1st RE deal

Post: Getting a loan for an LLC and building corporate credit

Post: Don't quit your day job?

Post: Mentors

Post: Mentors