All Forum Posts by: Mitch Messer

What characteristics do you look for? Are there any immediate red flags that you avoid? What are good characteristics that makes them look attractive?

And while we are at it, what are your Realtor nightmares you have been through? Or a bullet you dodged?

A realtor can make or break deals, tell me about yours!

Great question, thank you for asking!

Here's my #1 dissatisfier in dealing with agents: Most have NO idea how to evaluate investment properties.

I HATE when agents bring me a so-called "deal" without having first determined whether it actually makes sense financially.

Then, when I do run the numbers and calculate a cash flow of $50/mo and a cash-on-cash return of 3%, I feel violated, like my time has been totally wasted.

And, that's the last "deal" I'll ever consider from that agent!

Just because "the seller has dropped the price $20K" doesn't mean that it's automatically a sound deal for an investor.

1 Vote

Quote from @Rodney Brandt:

Hello. I am looking for a recommendation for best book to introduce me to syndication as a real estate investment strategy. Thank you.

I strongly recommend The Hands-Off Investor: An Insider’s Guide to Investing in Passive Real Estate Syndications, by Brian Burke.

He also is active here on BiggerPockets: https://www.biggerpockets.com/users/cirrusav8or.

1 Vote

Quote from @Linda Roberts:

Is there any standard paperwork I need to sign with a troublesome tenant who, after long negotiations, moved out on time? Specifically, anything indicating that the lease is completed and both sides have no claims or issues with each other.

There's no "standard" agreement that I'm aware of, but we've done a bilateral "Termination of Rental Agreement" when we wanted to document that a tenant has officially moved out, that there are no outstanding funds owed, and that there are no claims or issues.

These agreements are particularly useful when doing "cash for keys" with a tenant.

I would keep it simple: State in the document exactly what you want to establish as facts, and then run it by an attorney for good measure.

I'd also recommend requiring the tenant's signature be notarized.

1 Vote

Quote from @Mary Ainsworth:

Quote from @Mitch Messer:

Quote from @Mary Ainsworth:

Hello!

I'm looking for a CPA and/or tax strategist that can help me start tax planning now that I own a property. I want to know what things I should plan to write off, what tax loopholes I can take advantage of, if I should do bonus depreciation - things like that

If anyone has any recommendations for NEW investors that would be great! I'm looking for people who work with rookies because I'm still new - I don't need the really expensive CPA who does intricate tax strategies yet.

Thank you! I'm in California and invest in Oklahoma

Hey Mary, I've got a great CPA recommendation for you. I'll reach out with contact info.

Where in Oklahoma do you currently invest?

I'm active in Tulsa and have contacts working Oklahoma City.

Oh perfect thank you! I'm in OKC

Great, I reached out to you on LinkedIn. I don't DM here on BP.

0 Votes

San Diego, California

Quote from @Diego L.:

Quote from @Mitch Messer:

Hey @Diego L., we're currently living in Lima, Peru, with some real estate investments in the USA!

Let's definitely connect!

hola, cool. how long have you been living in Peru?

We've been here a month, and will probably stay for at least one more before seeking warmer weather. (We're both digital nomads, so we get to live and work from anywhere!)

We were here for just over three months last year and loved it! We're staying just where Miraflores becomes Barranco.

Where in the U.S. are you investing?

0 Votes

Quote from @Scoop Schneider:

this seems more like hard money than private am I correct

You're not wrong!

Let's chat: I'm at 678-532-8870. (Got your msg but can't DM here on BP.)

0 Votes

@Mike Haworth

In situations like this, I also skip-trace the residents on either side of the target property.

Those close neighbors can be a goldmine of info on resident history, any recent comings and goings, and last known contact info.

Plus, they want someone to fix up the vacant eyesore next door as badly as you want to buy it!

2 Votes

Fort Lauderdale, Florida

Hey @Diego L., we're currently living in Lima, Peru, with some real estate investments in the USA!

Let's definitely connect!

0 Votes

Quote from @Haley Elisabeth:

Quote from @Mitch Messer:

Quote from @Caleb Brown:

Quote from @Haley Elisabeth:

Quote from @Caleb Brown:

Is the business able to be sellable? If it is not set up with systems and people in place to run it you will be mainly selling your book of business. I would not sell. If he hates managing he needs to hire that out and then use the extra time to start flipping. To throw all your eggs into the flipping basket without doing a deal to me is not wise. Do a few then decide about going all in.

Thank you for your reply! It is sellable and we have had an assessment with a broker. We are just debating to follow through or not!

We did try hiring out the manager in the past for 2 years - but my husband didn't manage that person well, so they didn't manage the employees well, and we ended up losing money. Employee management is not a strength of my husband (and he happily admits it!).

Well that's good. I would still push through and do a few deals before selling. You might hate flipping over running a GC business but I would not kill your income source.

I'm 💯 with Caleb on this: Test out your flipping plan before you sell your business!

Has your business broker explained that the majority of businesses put on the market do not sell?

And, even if you do find a seller, you're looking at a minimum of 6-12 months of due diligence and financial review.

Plus, the new owner is likely going to want you both to stay on for a least a little while after the sale!

The time to find out if flipping is a viable pivot is now, while you still have income!

Thank you so much! It's helpful to hear the perspective outside the broker. For a company our size, we were told more like 1-2 months of due diligence and 1 month of staying on, but we have nothing to truly compare that to in the "real world". I appreciate your input - very helpful!

Yes, to be fair, if it's a straight-forward all-cash purchase, then the due-diligence likely could be done in 60 days or so. I was being too pessimistic in that regard.

I'm glad the overall message was received as intended!

0 Votes

Nashville, Tennessee

Quote from @Bryan Galaz:

Quote from @Mitch Messer:

Quote from @Bryan Galaz:

I have over $500k in equity with my primary residence and feel like I should be using it to get into real estate investing, but have no idea how to get started. How can I use that equity to buy a rental property?

Thank you!

Hey Bryan, I applaud you for wanting to put your funds to work.

And, I 💯 agree that real estate is likely the best path forward.

My question is this: How certain are you that the best way for you to "get into real estate investing" is as an active investor?

Finding a property, negotiating a deal, securing a tenant, and managing a rental is seriously hard work!

And, I'm willing to bet that most landlords don't do much better than a 10% annual return on their funds. (Most probably do FAR worse...)

By contrast, private lenders are currently earning about 12% annualized interest on their money.

And, getting exactly ZERO calls at 2am from unhappy tenants!

Note: I'm not judging. I've been a rental property investor for 25 years.

I'm just wondering if you're aware of RE investment alternatives that might better suit your situation.

I never thought about investing in that way. How would that work with money coming from a HELOC?

Bryan, it would be quite similar to what you were planning. You'd access the HELOC funds and then lend them to an investor at an agreed-upon rate for an agreed-upon period of time. (There's obviously paperwork and structure and closings, but that's the gist.)

Also, it doesn't have to be either/or. You could invest some of your funds into a direct investment, and some you could put to work indirectly as a private lender.

To be clear, I'm not advocating that you should do any of this. I was just wondering if you'd even considered this option!

I often see folks jump straight to being an active investor, and I know just how much work that can be, often for disappointing financial rewards.

It's generally better to be the bank!

1 Vote

Orange County, California

All Forum Posts by: Mitch Messer

Mitch Messer has started 73 posts and replied 2082 times.

Post: What do you look for in an Agent you work with?

Post: Best introduction book to syndication real estate investing

Post: What is the standard paperwork at the end of a tenancy?

Post: CPAs Recommendations for New Investor?

Post: Germany Expats with real estate Invesments in USA

Post: Are you looking for a Private Money Lender?

Post: Skip Trace Recommendations...

Post: Germany Expats with real estate Invesments in USA

Post: Sell our current business to start full-time flipping?

Post: How can I use the equity in my primary residence to get started?