All Forum Posts by: Michael R.

Congrats to the whole BP team, this is an outstanding accomplishment.  I'd like to thank each of you for all of your contributions, I know I've certainly learned a ton and created an incredible network that I leverage on a weekly basis.  

Being that I'm a pretty analytical guy, I'd love to hear some stats about the percentage of members who are active investors.  I know the percentage of people who own more than one rental is incredibly low, but wonder if there is any correlation between membership growth and the growth in that percentage.  

Here's to a million more!!

@Andrew B. those are the steps I've taken thus far, but when it came time to actually transfer the funds over I became hesitant of how that may come back to haunt me.  If I was asked to show proof of the agreement at least I have the signed addendum.  Thanks for your input!

Fellow Illinois landlords and property managers,

A year ago I rented a home to two individuals who met most but not all of my minimum requirements.  In order to mitigate risk, I asked that they provide 3 months of security deposit funds under the pretence that if they pay on time for 12 months I would refund all but 1 month or just apply the other 2 to their rent due.  Here we are 12 months later and they have been a great tenant so I intend to follow through with our agreement and create an addendum to their lease.  

That being said...Is it enough to simply transfer the funds from the security deposit account to our operating account as paid rent for the next 2 months or is it necessary that I refund the money to them with a receipt, have them sign the addendum, and pay their rent themselves as usual?  I've searched the security deposit laws for Illinois and haven't found a clear answer.  

2 bed 1 bath lakefront property with 1232 sqft of living space, and two large decks for outdoor entertainment.  Great fix-and-flip, or vacation rental potential. House is located on a dam-controlled lake and flood insurance is not required. Home is being sold as-is. Roof is 3 years old, and home passed sewer and septic inspection performed on 11/29/17.  

See Zillow ad for photos:

https://www.zillow.com/homes/for_sale/5018626_zpid...

We've spent a substantial amount of money this year on direct mail to advertise our business to homeowners.  While I  understand that the stamps, paper, etc. are a deductible expense, does the same go for the service?  How about the live answering service we utilize to take the calls?

@Haris Bajric I see the conversation you had with your boss as less of a threat and more of an "I'm ok with it, just make sure it doesn't interfere with your work priorities".  He can be as jealous as he wants, but if you're still performing in the workplace he has little reason to single you out.  Best to exercise caution either way I suppose.  I hope someone chimes in with a story of how it backfired, limited their career mobility or mobilized them out of the building.  I'd imagine many of us are in the same boat, and could definitely learn from it.

I don't go around advertising or bragging about it, but just about everyone in my office knows that I'm a landlord/wholesaler/flipper and that I'm constantly looking for more properties to purchase.  This has led to tremendous opportunities as a result.  I was in conversation with someone in my department about my side business, and she mentioned that her friend in IT was interested in selling his mom's house.  He and I grabbed lunch, walked the house, and proceeded with negotiations over the next month or so.  I purchased the house at an awesome discount, via seller-financing, since he just didn't feel like doing the work and going through the hassle of selling.  I did a "lipstick" rehab, rented it to great tenants, and it's been one of the best deals I've purchased to date.  

After a year, I refinanced that home with a big bank, and my coworker liked working with me so much he mentioned that he'd be interested in "being the bank" on another deal in the future.  4 months later he's now financing the entire purchase price on a flip we closed on last week.  Amazing how one conversation can cascade into so many other opportunities!

Soon after all of this, my department reorganized our org chart and added another management position opportunity.  Since I've been able to perform at a high level, while also managing a business, it put me high on the candidate list and I ended up landing the job.

The key is that you must maintain a high level of performance at your 9-5 if you're going to spread the word there.  Running a successful side business can go from an impressive quality to a major liability pretty quickly if you aren't meeting your objectives/deadlines at work.  As you communicate this, you might be surprised to hear how many people in the office also have something they do on the side to make extra money.  

Thanks for your input @Aaron K. !  I would classify these properties as vacation homes, for all intents and purposes, due to the fact that they wouldn't make for practical full-time living quarters (lacking storage, no garage, large deck and yard in lieu of indoor entertainment areas). 

I like the idea of running the numbers as a regular full-time home in the area, but most of them only compare by beds, baths, and sqft...almost nothing else.  Big picture, from a risk perspective, I suppose I had better know the area really well, by some other means, so I know a deal when I see one and can price it appropriately.  Otherwise, I feel like I'm really taking a gamble.

My market is the northwest suburbs of Chicago, where my company does a combination of flipping, wholesaling and buy-and-hold depending on the deal.  I've had a couple of instances pop up where people call and want to sell their lakefront property at a discount.  Everything has been less than 2000 sqft, with at least 100 ft of lakefront, and anywhere from 2-4 bedrooms.  The challenge is, for one reason or another, it's hard to find recent sales for lakefront stuff since most people in my area hold onto them for a long long time.  My gut tells me to stick to more cookie-cutter stuff since it's lower risk, but I have a hunch that there's flip or wholetail profit to be made on these rarely-available lakefront homes.  

After some due-diligence, I don't see any major underlying reason for the sale other than "our family doesn't use it as much as we used to, and it's just an extra expense at this point".  

I'd love to hear some perspectives on this.  Do you guys pick up unconventional properties of any type?  How do you price it? Do you just avoid it altogether?

@Mike Percy  You're welcome, just take my advice with a grain of salt.  I'm new relatively new to this business, still testing and tuning on a daily basis, but happy to help in any way that I can.  Until this whole thing functions, from beginning to end, without me, I'll consider myself a student, not a sage advice-giver.

We let them use their own scripts since, again, we plan to get back on the phone as soon as we can to fill in any gaps.  Looking at the notes, 25-30% of the people who call in provide some info, but say they would "like to speak to Michael directly".  I have yet to close a deal with any of those people.  

As far as the call recordings, I considered asking about that, but then realized that anyone who's going to be recorded has to agree to that beforehand.  I'm worried that small thing might remove some of the personal "hey this is Michael from down the street" aspect.  They work in concert with Jerry, so we all share the same CRM.  Jerry's people manage mailing through there on the front end, and Call Porter changes the lead status/adds comments to the follow-up section.  I also have it set up to send me an email when someone manipulates the CRM in any way so that I can get on there quickly and call the lead if need be.

I pay by mail volume, but they gave me a range.  If I send out another 500 mailers they're not nickel and diming me over it, and, in the grand scheme of things I feel that the call service fee is relatively insignificant if I'm getting in front of sellers and closing the deals.  It's all about perspective.  When I see the CRM being populated with info, and I didn't have to take the call (or historically miss the call 20% of the time since I was in the middle of something), I spend zero time being preoccupied about whether that expense is worth it.

Maybe someday I'll train a person or two to handle this, but for now, I'm focusing on getting in front of people.