All Forum Posts by: Michael Seeker

@Brian H. - When I first started out, I had a filing cabinet with folders for each of my properties.  All docs related to each property went in their respective folder.  After a couple flips and rental properties, I had a stack of paperwork that was pretty much impossible to find anything needed.  A couple years ago I went completely paperless and scan anything needed.  One thing that has made this tremendously easy is an app called ScanBot.  I use this app to scan anything and everything and it automatically loads scanned items to a Google Drive folder which I then sort once every couple weeks.

Having Google Drive set up with folders for each property has been tremendously helpful and more efficient.  Whenever I need something I can pull it up from anywhere within a few seconds.

Hope this helps!

@Craig D., if I'm choosing who to close with I always opt for Borders and Borders.  They know what they're doing and do a great job.  If I need a backup for some reason or need to close in IN, I opt for Mattingly Ford.  I've closed with several others and haven't had widely varying experiences so you should be just fine if you go with somebody besides these two.  Hope this helps!

@Marc Phelps - can you give some more detail around how you're coming up with the average revenues and expenses?  Given you plan to span multiple markets do you plan to hire somebody to do management?

By the way, I've paid anywhere from $600 to $1500 for tax prep.  The $1500 got me detailed amortization schedules that took a lot of time to put together and reduced my tax liability by more than $1500.  However the tax savings that year will be offset sometime down the road with a higher tax bill upon sale so it's not like they found me free money...just an interest free loan!

@Amaury Rodriguez - without knowing exactly what you told the tax professional and/or what they are including in the quote, it's hard to say whether or not the pricing is reasonable.

If they're doing bookkeeping or detailed amortization schedules, then it is time consuming work and is not only costly, but could save you money.

If they are just taking the numbers you give them and plugging them into the correct form and mailing to the IRS, then that seems very steep.

There are many knowledgeable CPA's on this site that work with clients remotely, I'd suggest reaching out to a couple of them as well as a couple more non-BP CPA's with RE experience and see what clicks.  Shopping for a CPA is sort of like shopping for any contractor...some are great, some are terrible and if you don't take the time to understand what you want them to do and get several quotes, then it's not difficult to get taken advantage of.

If the CPA you contacted is part of a large firm with high overhead costs, or they don't really want new business, then they may have quoted you a high number just to see if it would stick and not really caring whether they get your business or not.

@Zachary Peacock - I think you'll be in for a real rude awakening if you expect property in the Portland area to triple in value in 5-7 years.

I've driven through that area exactly twice and both times I found myself asking "this is it?"  There are some very well versed investors involved in redevelopment there, but that neighborhood is not, nor will it ever be NuLu which is what a lot of people are trying to sell.  The market dynamics are vastly different and there's no real driving force in place to change them.

NuLu is a huge success because of continual reinvestment in the neighborhood and a proximity to money to fuel that reinvestment.  You've got all of the high-salaried white collar workers driving through or past it 2x a day to and from work downtown to their nice houses out east and you're a stone's throw from Highlands, Germantown, St. Matthews etc.

Portland has none of these things going for it.  It isn't convenient for the business crowd to trek out west after work only to have to cruise by the office again on their way home after drinks.  The people that live near or around Portland cannot afford to pay $6 for a coffee or beer, so where does the money come from to fuel that growth?

People are somewhat interested in the area today because it is cheap.  But I don't see any real drivers in place to move the shotgun homes around there from cheap to highly desirable.  I'll eat my words if I'm wrong, but $300K for 1000 s/f homes in Portland will take 40+ years assuming we run 3% inflation.

@Manuel Angeles - here's a great article on RE cycles: http://www.extension.harvard.edu/inside-extension/how-use-real-estate-trends-predict-next-housing-bubble

I haven't experienced the full range of a cycle, but it looks to me like we're in the declining vacancy, new construction phase (i.e. still on an upswing).  We're probably a few years away from a peak.

As far as the state of the market, the only thing it is affecting for me is the deal flow.  5 years ago there were deals everywhere that fit my criteria, today they are few and far between.  I'm being more selective and less likely to bring in outside capital at this time.  I'll continue to buy good deals through the entire cycle.

@Don Jackson - the fees you listed seem like a joke.  It seems to me the problem is with the PM company and not you, the tenant or tenant's lawyer.  The first thing I would do in your shoes is call the PM company and get somebody to explain to you how they justify $200 to replace an air filter.

I've never seen anything this egregious, but this is precisely why I do not use a PM company.  Unless they are absolutely amazing in every other regard (seems unlikely) you may want to call around to as many of their competitors in the area as you can and find somebody that doesn't price gouge.

I'd have to agree with the tenant on this one - neither you nor the tenant should get screwed here, but I would say you should give the tenant a reasonable portion of their deposit back and then it's on you to get the PM company to fix their prices.

@James Wachob told me a bit about the phone system he uses a few months back and it sounded perfect for direct marketing campaigns.  I can't recall what the name of it was, but he might be able to chime in here...

I'm definitely not a tax expert and given the amount of money in question here your best bet is to consult a tax expert.  For a few hundred dollars they could save you serious money.  That being said, the two options that I'm aware of are to do owner financing which would allow you to pay taxes based on an installment sale (you do not get all of your money out right away, but only pay taxes on what you get out and still pay all the taxes) or to live in the property for 2+ years before sale.

Here is a thread with a lot more information about the installment sale option: https://www.biggerpockets.com/forums/51/topics/142582-tax-implications-of-seller-financing-via-note