All Forum Posts by: Michael Sellers

It is up to $10k per unit. I believe the limit is 4 units.

I am looking for a way to optimize the way I handle property maintenance expenses and am hoping someone has been more creative than me and already solved my current issue. Any advice/ideas are appreciated.

Current Set Up: I have a very lean team with ~50+ units under management across 15 buildings, each owned by a different LLC. I am the property manager and I have one handyman/maintenance guy who is able to handle 90%+ of our maintenance requests. As such, he and I both have a credit card associated with the property owner's account. At the end of each month, I reconcile all of the charges made on our two cards to show the owner which property incurred which expenses. At that point, the property owner pays off the credit card using the master property management account before reimbursing the property management account from each individual LLC account that incurred the charges that month. We have never had an issue with the current set up, it just does not seem very efficient especially as we continue to scale.

Solution (?): The best solution I've found to reduce redundancy would be to stop using the credit card and use separate debit cards for each LLC/property. This way, there is no reconciliation necessary, and the accounts incurring the charges are directly debited accordingly. However, this has its own inefficiencies. Namely, I would have to carry around 15 separate debit cards (as would my handyman), a number which would only increase as we scale. There is also the risk of using the wrong card on accident which is not possible under the current set up. I could personally use Apple Pay if I didn't want to carry around the physical cards, but our maintenance guy is not the most tech-savvy, and not all places are guaranteed to take Apply Pay, so that's not a perfect workaround, either.

Looking for a company to come in and strip/salvage materials, appliances, etc from a single family home that is set to be demolished soon. The structure is old (hence the demo) but still has salvageable/sellable items inside such as cabinetry, granite counters, all kinds of fixtures, and appliances like dishwasher, dryer, fridges, oven, etc. I've tried with reasonable success to sell much of it on Craigslist, but there are still items that seem to be of value, namely the appliances, that have not sold despite several price reductions. List prices are extremely reasonable, but with demo in the next 1-2 weeks, I'm wondering if there are any companies that specialize in this sort of work - coming in and stripping a building of anything of value for pennies on the dollar prior to a demolition so nothing is wasted. I have not been able to find one, but it seems like one would exist.

Any recommendations would be appreciated!

I know FHA/203k loans have limits based on your geographic county as well as the number of units involved, but do those loan limits for a multi-family property depend on the number of units being bought or the number of units being built? For example, if I were to purchase a small single-family with plans to use renovation money to construct three units (assuming I had zoning approval), would the lender loan on one unit or three? The difference in my county is worth an additional $420k. If you can add a 4th unit, the difference goes up to over $700k in additional funds.

Logically, the answer seems to be that the lender would only lend on what is being purchased, but the counter to that is that since it is a government loan, there is already a painful amount of approval/red tape involved, so the lender would have seen my architectural plans and would be conducting inspections for each loan draw that would confirm that I am spending the money how I say I am.

Does anyone have recommendations for flood insurance on a mixed-use building? It's a 5-unit building in Boston, MA (1 commercial, 4 residential). 

@Tim Herman Thank you for your input. To be perfectly clear, I am definitely not trying to commit any kind of fraud here. I tried not to make the post too lengthy, but what I was really trying to get at with that question is what the purpose of that "intent to occupy" clause is. If it is just to prevent investors who don't need a 3.5% down payment from using it to leverage into fully occupied investment rentals, I would be accomplishing the same thing by letting the last unit sit vacant for a while.

I have no immediate plans to do any of this (haven't even spoken to a lender about it), but it's a thought that keeps popping in my head every time I hear a reference to this intent clause, so I figured I would ask the community. Having a background in the tax industry has taught me to look for completely legal loopholes to use to my advantage - NOT to look for ways to commit fraud. Fraud will always catch up to you, but using loopholes is not fraud - it's just playing the game by the rules.

The way I've heard this intent clause talked about, it seems pretty toothless if you can just decide you no longer want to live in the property for the predetermined period of time with no consequences whatsoever, so I was just looking to see if this was another one of the legal loopholes that people can use. Why even include a clause like that if, like you said, it's inconceivable that they could effectively monitor that sort of thing?

Hi everyone,

I live in a more expensive market, so I’ve been considering using an owner-occupied loan as to only have to provide 3.5% (or something similarly low) for the down payment. I’m priced out of my local market without a low down payment loan or some other creative solution.

I have a very advantageous living situation right now, so it doesn’t make sense to me to sacrifice that for a house hack. That said, my question revolves around the “intent” portion of an owner-occupied loan. I’ve heard it mentioned several times on the podcast (most recently David talks about it on episode #469) that if you don’t like your living situation in a house hack, you can just move out whenever so long as you had the intent of living there when you bought it.

Since intent is entirely subjectively and seemingly impossible to prove, could I buy a 3-unit (for example) and rent out 2 units and keep the 3rd vacant for a few months before moving out? I could even renovate the vacant unit while it isn’t rented out. I might be cash flow negative for the short term, but that would be a small sacrifice for getting into a multi-family property for low money down in my area that will no doubt appreciate over the long term.

I’m certainly not trying to get in legal trouble, but I also have no problem playing the game within the rules.

Thanks!

@David Johnson Yes, I have both a personal and a company page, but we've never utilized either for marketing. Reason being that the primary demographic we target tends to be older people due mostly to the fact that we filter for houses that haven't been sold any time in the recent past. This is probably also the reason our first email campaign didn't post any major numbers.

I know admittedly very little about Facebook marketing. Have you had good success with it?

I recently started using email as a marketing tool, and I have several questions about the process, so even if you only have experience with one please feel free to leave your response.

1. What kind of calls to action do you use in your message?

2. What is the expected response rate? (we got 0 responses from an admittedly small batch of 350)

3. Do you even expect a response, or is that just icing on the cake of getting your name out there?

4. Other than response rate, what KPIs do you use to track?

5. Do you find emails useful compared to direct mail or cold calls? (I personally think emails are the easiest to ignore)

6. How do you tweak your messages so you don't send the same content over and over?

Any and all advice/experiences are welcome!

Hi everyone,

I've been marketing for about 4 months now using various methods. I've been working one list in the same location (for now, I plan to expand). In January I sent out direct mailers, then in February I followed up calling everyone who didn't respond to the mailer. In March I sent out an email campaign. I've had reasonable success with these methods working the same list (currently have 2 deals underway and many more mild-medium leads in the funnel).

I'm wondering what everyone does in terms of a long-term marketing mix, namely frequency and method of contact. I don't want to inundate the same list and turn them off to doing business with me, but at the same time, the more they see my name, the more likely they are to think of me when they do go to sell eventually. Ultimately, I would like most of this to be automated, but I need to understand the system before I can automate it.

Any advice/experiences are welcome. Thanks in advance!