All Forum Posts by: Michael Pease

@Matt Holmer that's a perfect summation of the difference here in this area.

I will say that a lot of people in IA tend to avoid IL for rentals but I find this to be more personal preference than driven by any real numbers. Properties rent very well in IL!

@Jesse Clark

I would agree with the responses you've gotten from other tax advisors on this chain.

To add to what @Natalie Kolodij mentioned, you may be able to get the properties to show a loss especially in years of acquisitions. I tend to see when investors buy properties, that first year is a favorable tax outcome due to stabilization costs and depreciation in excess of the principal paydown.

Additionally, I happen to be a local CPA in Davenport and do specialize in real estate. I'm a little bummed when you do a search my firm does not appear and will certainly be working on my web presence. My specialty areas consist of investors, agents, contractors, and other small business startups.

On top of the accounting firm, I also have a full service property management company I've been running this alongside the accounting firm since 2017.

For one more plug, I'm also an investor myself and have been since 2009 in the Quad Cities. I understand the owner aspects of real estate as well as the tax and accounting side. Happy to get together with you anytime! I'll send you a private message to connect!

@Isaac Lauritzson - I would 100% agree with @Jack Medford in regards to appreciation being a nice addition in real estate analysis. Unless you are doing a development or other large value add, when it comes to just pure rentals I think that the most important factor is cash flow. Obviously that will depend on your goals but for the most part holds true! I've bought properties on both sides, both have their pros and cons. IL properties actually rent pretty well and cash flow pretty well but you have to overcome higher property taxes by ensuring you get into properties for less. Evictions in IA are much easier than IL. I'd love to chat sometime and see what your goals are with real estate and if we could have any overlap! I run a real estate focused tax and accounting firm, MSP Tax & Accounting in Davenport and also a full service property management company, A2Z Real Estate Management. I'm also an avid investor myself and love chatting with new investors!

@Bryan O.

Curious what arrangements you have with them. Fraudulent charges are obviuosly a MAJOR concern. Are you worried they are misreporting rents or something along those lines?

Photos for work if agreed upon in the contracts signed would be a nuisance but an accomodation that could be provided if desired I'd guess. In the few years I've been doing this I've never had a request of this kind and in the 9+ years I've owned real estate I've very rarely asked for this from a contractor/company hired.

Communication is a very normal concern. What do you mean by poor communication? Is it the communication between you and the manager or between the manager and the tenants. Often what I've found over the years is if a relationship exists with the owner and the tenants that they will express a lack of communication to the owner anytime something doesn't go their way. A reputable company such as mine will be able to demonstrate call logs and messages between the company and the residents.

Maintenance is something in my opinion you have to trust the management company and maintenance team on and have a comfort level with them. If you do not, you will never trust any work that is not your own. Questioning the time it takes to perform work or work performed should be an easy question to answer for the management company.

Being an investor and a property manager I understand the struggle better than most between managers and the owners. These are legitimate concerns that can be addressed with more openness between the owner/manager. Happy to walk you through how we operate daily for our clients!

@Aaron D Hanson welcome to BP! I'd love to chat sometime and talk about what your goals for 2019 are. I have a property management firm and an accounting firm that I own and operate and am very involved in real estate here in the QC. Additionally, we are expanding our services to include some direct mailing to generate deals and I also work closely with Kyle Condon, he is a licensed realtor on the IA side, (IL side soon) and we work on a lot of deals together! Let me know if you'd like to connect and see if we can work together on anything or at the least share goals!

@Bryan O. I'd love to chat with you sometime! I manage many SFH in the Quad City area and also larger apartment buildings. I'm an investor myself, not just a manager so my company runs the day to day operation for my units the same as for other investors. My personal background is actually in accounting. I've been a licensed CPA in IA for the past 5 years and started my own tax and accounting company as well in 2017. These two businesses work hand in hand to ensure that people are getting the best day to day and long term advice possible.

Just curious, what are the concerns you have with your current manager? Lack of timeliness, over charging, etc...

I'd love to connect sometime!

Thanks for the plug @Paul Stern!

Vibrant credit union does a lot of those. Not being owner occupied will be tough to get a 30 year fixed rate but I'm not saying you can't make it work! If you'd like some names I'd be happy to pass along some of my contacts!

Kevin, there are a couple really good groups that meet up to chat on a monthly or every other month basis! There are definitely plenty of resources in the Quad City area for new investors to get started! This is a great place to start and then the meetup that meets at the Stardust by Alex Bock and Shawn Farris has a good following.

I'm always here to answer any questions you may have on the investment side from a financial standpoint as well! If you have specific questions or want to grab coffee and chat about your goals let me know!

Red flags with certain areas. The common thought process here in the QC is that IA properties are easier to sell, maintain better occupancy and bring in a higher rent amount. That doesn't mean avoid IL as there are for sure pockets that work and compare to the IA side as mentioned previously.

I believe the Amtrak can provide some long term value on the IL side as well as the IA side, IF that ever is finalized. Last I heard it was still in the planning phase and it keeps getting pushed back.

1.5% is a good find for sure but not uncommon here. I wouldn't use that as a starting analysis as costs per property can greatly fluctuate so you need to look at the whole picture and focus more on the cash flow.

Can you share any generic locations you are looking in?

I've used Behncke Construction and they did an amazing job. This was a few years ago and they were regarded as one of the best in the area at the time but I know the business has been sold since so I can't vouch for the new ownership. I do think they charge for estimates now. Also have used Todd's Mudjacking, good guys and do good work as well!