All Forum Posts by: Michael Germinario

Hi @Thomas D.  ,

I think @Roy N. gave you perfect advice.  Before you pay for a course read and network as much as you can on BP.  There are tons of articles, forum posts, and podcasts that have the answers you are looking for.  After you ground yourself in the fundamentals, if you find that you still have questions you can simply ask one on the forums.  Smart people with experience will be happy to answer!

If after that you still want more, then consider purchasing a course.  Good luck!

Happy investing,

Mike

Hi BP,

Can anyone help me with this accounting question?

Scenario:  Company ABC is renting a warehouse with 3% rent increases.  For accounting purposes we straight-line the rent expense (P&L) and record the difference as a liability (Bal Sheet).  Company ABC decides to cease business in the warehouse; however, still continues rent payments through the end of the lease term.  Do we still need to apply FAS 13 and straight line the rent, or since the Company is renting a now vacant warehouse with no business purpose it's no longer applicable?

Not a typical BP question, but if any CPA's out there are familiar with this I'd love to know!

Thanks,

Mike

Hi @Josh James ,

Like others have stated, you should find a RE Agent that has a lot of experience in this type of property.  Clearly, the one you are trying to work with now doesn't understand the process.  You have the right to request the actual rent roll and expenses, that way you can figure out the numbers for yourself.  Verify as much as you can upfront, so that your initial offer is in the ballpark.  Later during your due diligence period you can adjust your offer based on additional findings.

Your offer should be based on the actual current performance of the asset.  Again, an experienced RE Agent in commercial multi-family can advise you during this process.  Surround yourself with experts that want to help you!

Happy investing,

Mike

Hi @John Mitchell ,

Good for you my friend!  If you want to build a big brick wall it seems like a daunting task, some would say way too challenging.  But if you start with one brick today, two bricks tomorrow, three bricks the next day and so on .... you'll have your big brick wall while everyone else is still watching bad reality TV.

I too, am taking action everyday to reach my personal REI goals and this is an awesome community. Thanks for the encouragement and motivation!

Happy investing,

Mike

Hi @Zack Presnell ,

It depends on the specific market, but a general guideline is greater than 7%.

Happy investing,

Mike

Hi @Account Closed ,

Check out The Real Book of Real Estate by Robert Kiyosaki.  This is a really great overview of all the major touch points in RE investing.  Experts in accounting, law, property management, creative financing, negotiating, analyzing, design, etc. all discuss their points of view clearly and organized.  When I read this I re-read it and ended up taking about 40 pages of notes!  So much good info.

Another recent favorite is The ABC's of Real Estate Investing by Ken McElroy.  This book opened my eyes to the world of large multi-family apartment investing.  It is just incredible, and Ken does a great job of clearly explaining all major points.

Happy reading,

Mike

Hi @Doug Minton , @Mike D. , @Joseph Romero ,

I think it's important to fully analyze your market that you are interested in. In NJ, there are markets that support REI despite the ridiculously high RE Taxes. This is something I am looking into myself, because at first glance I would see really high taxes and my brain would automatically say "won't work, don't waste your time." What we as investors need to do is know the real market rents, look at all the expenses line by line, and figure out the realistic cash flow. The numbers don't lie, and it will lead to either further research into that market/specific properties or we can move on to a different market.

Also, when investing for cash flow the seller's asking price is usually a fantasy.  We should present our offer price based on the current performance of the asset.

Happy investing all!

Mike

Hi @Andri Artayudianto ,

You're in the right place for education, and you're taking great steps by asking for feedback on the forums. Keep learning, read some RE Investing books, then decide what to focus on. I also recommend writing down your goals, what are you trying to accomplish through REI? Write a business plan on how to get there, put a team together (RE Attorney, Broker, Accountant, etc), and execute the plan!

Easier said than done, I know, but if it were truly easy than everyone would do it!

Good luck and happy investing,

Mike

Hi @Jason Young ,

Since I don't have access to the MLS, I rely on my RE Agent to bring me prospects. I would search the free sites like realtor.com and zillow when I was actively looking; but I suggest networking as your best practice. Again, leverage the talents of others who already know how to find great deals.

This may not be the answer you are looking for, but I hope that helps!

Happy investing,

Mike

Hi @Andri Artayudianto ,

No, you cannot finance a property as owner occupied and then immediately rent it out.  I believe the rule is one year - so you need to live there for at least one full year before you can rent it out.  It is important to act with integrity in this business, so understand the rules and play by them.

You may be able to find a 4 unit that cash flows enough so that you live there for free - rent 3 units and live in 1.  Then after a year you can move out and rent out all 4 units.

Happy investing,

Mike