All Forum Posts by: Monty McLamb

I like to support efforts that help people in dire situation, such as the devastation in Maui. I don’t like giving money to large corporations, such as red Cross or female simply, because only a small portion get to the people that need it most.. are there any reputable nonprofits near the sites that most need help that I can trust with my donated funds?

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $144,000

My first BRRRR deal. Used HELOC to buy and a business credit line to rehab. Once the rehab was complete and the unit was rented, I refinanced 80% of the value and paid off both lines of credit. $0 of my own money invested.

What made you interested in investing in this type of deal?

I went to school in Greenville and it was a more affordable area than where I live.

How did you find this deal and how did you negotiate it?

Found on MLS. It was listed only 4 days before I closed.

How did you finance this deal?

HELOC to purchase home and a business credit line to pay for rehab costs

How did you add value to the deal?

Basic rehab and updated some deferred maintenance.

What was the outcome?

It rented immediately after the rehab was completed.

Lessons learned? Challenges?

I tried to do too much of the rehab work myself (to save money.) It took 3-4 months longer than it should have. I really didn't save a lot of money, I lost 4 month's of rent, I did this in addition to a full-time job and worked myself to death. If I can't buy the property and afford a contractor, I don't buy the property.

Is the lot zoned for and able to accommodate a duplex or triplex?  I built a duplex in a B-/C+ neighborhood 10 years ago and it has turned out to be my best investment.

I assume by aspiring you mean just getting started, maybe even looking for your first investment.  I'm sure some may not agree but for a first investment, long distance investing is not ideal.  You may not know the markets, you may not have contractor or management contacts, or finding and interviewing either.  The market you probably know the most about is the one where you live.  Drive around and shop!  Don't fall for the advice that where you live is too expensive or about to collapse. Deals are there, you may have to turn over a few extra rocks.  Don't rely only on agents to bring you deals, dig for yourself.  When you are looking for gold, a gold miner won't tell you where to find it.

1st. pay off any high interest revolving debt, credit cards. (instant nontaxable returns)

2nd. if no debt, then put some into educating for your future self. Prepare for where you want to be in 5 years and hold the rest.

3rd.  if no debt and you are already on track for the future, then invest in time.  Hold it in a short term cash account and wait to see what this market holds over the next 6-12 months.

Sometimes my 12-year=old self thinks money will burn through my pocket.  As I have gotten older I have learned patience and the number one rule, "When investing, don't lose money."

Only 5 months may be a little quick to pull the trigger on a sale. Are the tenants reliable and can you reasonably expect payment each month? Are the repairs you are making long-term repairs or just bandaid repairs that will keep popping up every month?  Are the same repairs needed each month ? As someone stated above, if the management company calls for service every time a tenant hears a funny sound, a faucet drips, a light burns out, a door wont close good... you get the picture, you will be hard pressed to make any money.  You pay those costs so the management company has no incentive to save you anything. (My MC called for an HVAC repair and told me I needed to replace the system at $6,600.  I called my guy and he added freon and a capacitor and I was back in business for $425.  I no longer use that MC.  Anyway, you have owned it less than a year so the taxes on the sale will be higher. After commissions, taxes, market changes, you may walk away with very little above your initial investment. The best advice I can give is talk with your CPA and do what's right for you and your situation.  A lot of people, me included, can tell you what we've done but it may not be right for you. 

I was once in your shoes and questioned every decision i made. My personal opinion is that the repair expenses should work to lower the taxable income and the tax benefits may end up making your property a very positive investment, even if it is not putting a few hundred in your account every month.  Ask a trusted CPA.

That would be great.  Send me her info.

 Thanks Jori.  I just found Income Digs the other day.  It has helped on quite a few things.

 Thank you Katherine.  The only income I keep track of is my real estate transactions and property income and expenses.  I'm really just track everything and then send it to my CPA for everything else. I do like to keep an eye on several reports quickbooks offers.  I also like some of the financial info some of the online companies offer (DoorLoop, Stessa, Landlord Studio.) All are great in their own respect but are just not as robust and intuitive as Quickbooks.   I will have to give Buildium a try.

I searched previous forums but could not find the answer I was looking. Does anyone know of a book or website that shows how to set up quickbooks for a RE investor? Amazon only had a few and the descriptions and reviews didn't impress me. I'm looking for something that shows a chart of accounts, how to properly enter transactions, how to set up each property, tenant and unit. Any and all recommendations are appreciated.