All Forum Posts by: Mike Adams

Quote from @Mike Adams:

Quote from @Mark F.:

 Since NJ is automatic renewal State; what advantage do you have from a M2M over annual? You cannot just throw them out on a M2M lease.

 If you lock in a tenant in a year lease, you must wait until the lease is up to raise rents or literally do anything. Like changing their lease or adding rules they could be violating such as pets or behavior. If you buy a place with m2m tenants (I've found most NJ tenants are on m2m leases with old landlords) or set your tenants up that way, you are able to raise rents before that time period. In my experience, this entices tenants to leave sooner.

I don't see one advantage to doing a yearly lease. What if the tenant sucks? You're stuck for the year. At least with m2m I can have conversations about raising rents within 60 days. Again, my big thing is I don't want any tenants living in a unit where they don't want to be there.

Quote from @Ben Aaron:

Quote from @V.G Jason:

You bought stuff on a 0% APR, prayed they did not have issues before the apr financing ran out, got lucky they didn't and were able to come out safely?

If so, congrats on being lucky. No credit for trying to come off as shrewd or smart. Any luck that went against you, you probably would never recover.

use credit cards only for covering all contraction costs, materials, and other project expenses you can pay with CC( utilities, Insurance etc). Those expenses I will have no matter what but with having the 0% APR CC i was able not to commit my money to one project and manage it.
So when sold/refinanced I paid the cards, I had 2 rentals and one flip on going 2023.

this is not a new concept its been talked about on BP ad nauseam over the years. Works fine for those that are diligent and diciplined in their credit and the jobs go as planned .. For those that lose control of the CC debt great way to bury yourself :)  also I have to imagine it affects your fico if your putting a ton on of money on your CC .. ??? So when you go to refi you may have to pay higher rates as your fico is not as good ?  maybe ??

I'm not I'm CT but your neighbor a bit south in NJ. The "clever" ways I've learned is to know the LL/tenant laws inside and out, screen tenants heavily, be diligent on 6 month unit inspections, and the biggest one IMO, I do M2M leases.

Knowing the confusing LL/ tenant laws and reading the guide my state puts out allows me to try not to get myself into bad situations. My realtor and I screen tenants really well as I'd rather take a vacancy for a few weeks than get desperate and let someone who will be a crap tenant into my unit. Diligent on 6 month inspections gives me an idea on how they're going to be as tenants when I do that first one, and allows me to nip any issues in the bud (or is it butt?).

The last one, month to month leases, some people disagree on. For us in tenant friendly states, I like them as they enable me to be nimble. If a tenant wants out, I don't want to stop them. Why would I want someone in a unit they don't want to be in? Conversely, if there's an issue, I may be able to use legal ways to entice them to leave, mainly rent increases.

Last thing is verbal judo. Seriously, talk to your tenants like human beings. You'd be surprised what they are willing to do when you see how you can accomplish a win win instead of this mentality a lot of LLs have which is "its my property, I own it, get the hell out". Are they right? Sure but there's a lot of old sayings about getting people to do stuff thinking it's their decision and not yours.

Don't listen to those who don't or haven't invested in tenant friendly states. They just want to take the easy road ;)

Quote from @Mike Adams:

Quote from @Jim K.:

Quote from @Shafi Noss:

Hm, I think I have seen LLCs prevent bad debt from leaking between ventures, but not an actual lawsuit. 

But that's never how they sell LLCs to the little guys like us! Oh no, these boys from Nevada and Wyoming and East Bumschmuck call us up and tell us a tenant is going to slip on the ice in front of our house one cold day and sue us! If we don't have an LLC, we're screwed! Ah, but with that LLC will come a magical corporate veil that the local district management judge won't be able to pierce, perhaps with his penetrating judicial lance...

It's all a load of hocus-pocus baloney telling us that without that LLC, we're at the judge's mercy and his big bad black judicial lance will come penetrating in tender, sensitive places that make us squeal and call out for our mommies.

Depends. Depends really where your LLC is also domiciled. Our parent LLC is domiciled in Delaware. Also, having good insurance always helps too.

Yeah here in Pennsylvania, LLC or no LLC, the little guy who owns two single-family and a duplex is gonna to feel the district magisterial judge probing deep, DEEP where the sun don't shine. The LLC isn't a veil, isn't a shield, it isn' t even a prophylactic.

I'd like to apologize in advance as this is going to be long winded.  But I felt it was necessary to effectively communicate where I was coming from. 

Ever since I put in an offer on a piece of investment property (my first), I've really caught the real estate investing bug and have gone down this deep rabbit hole. 

I've decided I want to make a go of this, but there's still something I don't get and I'm pretty sure it's due to both a lack of knowledge and not having the right mindset. I definitely have the entrepreneur's mindset as I currently run 2 companies that I own. But there's still something missing that it just isn't clicking for me.  So I am humbly reaching out to the brain trust on this platform in hopes of getting educated. 

I've been binge watching/listening to the BP podcasts and I hear words like "keeping the deal funnel flowing" or concepts like making sure one keeps on making offers to keep the deals flowing. 

I'm finding it hard to understand how this is possible when in my own deal, I wouldn't be cash flowing positively if I didn't purchase the coop in cash. I plugged in my numbers in a mortgage calculator to see what my monthly payments would be if i did the 20% DP with a prime interest rate and if I take that number along with the HOA dues, I would be at negative monthly cash flow. Even a 50% DP would still yield a negative cash flow. So I can't even understand how someone with an FHA mortgage would be able to do it even with house hacking. (P.S. house hacking is not an option for me)

So when I realized there are a lot of you on here who do this constantly, day in and day out, I ask myself how? How are you guys doing this? How are you making the math work? I realize the environment is tougher now with where interest rates are now but I have this sense that, this doesn't stop you guys (and gals).  I'm missing a piece of the puzzle.

- Is it the asset class i'm looking at? (coop vs multifamily)

- is it market i'm looking in? (NY or Northeast vs. other parts of the country)

- or is there a real estate concept or principle that I am totally unaware of?

Any insights and inputs would be greatly appreciated. I am looking to learn. Thank you very much.

Quote from @Alex Ng:

Hi, I've recently bought one property and under contract for my second one. It's been a wild journey, learning as much as I can. As you scale more and have more properties, you also incur more debt. For people who own multiple units, how do you handle being in so much debt? I know it is good debt but debt is still debt. Are you ever worried if tenants would move out and you cannot cover the payment or if things break down, or god forbid a recession? I read how the more units you have, the "less risky" it can be because you have more units to fall back on if one tenant decided to vacate one unit. At what number of units did you feel comfortable that they would take care of each other if something happened? Are you ever worried if you were to go into foreclosure and lose all of your portfolio? What are some ways to hedge against risk? Will putting all my units into a LLC truly protect me if they were to all foreclose someday? I'd love to learn how to manage all the risk and debt as I continue to scale my portfolio.

 You should have enough reserves to be able to pay the mortgage on your properties without any tenants for like 6-12 months.

Quote from @Shafi Noss:

Hm, I think I have seen LLCs prevent bad debt from leaking between ventures, but not an actual lawsuit. 

But that's never how they sell LLCs to the little guys like us! Oh no, these boys from Nevada and Wyoming and East Bumschmuck call us up and tell us a tenant is going to slip on the ice in front of our house one cold day and sue us! If we don't have an LLC, we're screwed! Ah, but with that LLC will come a magical corporate veil that the local district management judge won't be able to pierce, perhaps with his penetrating judicial lance...

It's all a load of hocus-pocus baloney telling us that without that LLC, we're at the judge's mercy and his big bad black judicial lance will come penetrating in tender, sensitive places that make us squeal and call out for our mommies.