All Forum Posts by: Pierre E.

Hey there Asia!  Keep it up! And make a plan and commit!   You need knowledge, people and money to invest, but you can make a plan to get all three of those.  One thing that really helped me was making friends that invested in my area, and I started learning I had some friends that I didn't know invested in real estate for years. 

What is your goal? Do you want to just build wealth in the longterm? Do you want this to be eventually the main way you make money to live in your current life?  Do you want to become financially independent early (in line with the FIRE mindset movement)  Then ask what fits or how would you get there? Do you think you could get started in 6 months?

Specifically, do you want to flip, wholesale, or buy a rental? 

Then where are you on the path to being ready to do a deal? How long will you need to save to reach your goal of getting started? For example, if you want to buy a property with the BRRRR method and it is 150,000 and you need to 10% to put down, where will you get the 15k? Will you use a hard money lender to help do the repair? FHA 203k loan instead? Are you willing to house hack and live in part of the property? Would you rather slow flip live in it and fix it up?
Do you need to do a partnership/Joint Venture with someone to get started, or do you need to try to find a seller finance deal or subject to deal ( a little more advanced but some people start that way I havent done one of those yet)

Anyway you don't actually have to answer these questions here but try to come up with a pathway. Swimming in the tons of information out there about investing is good and necessary but you dont want to do it for too long. You want to find some way to execute and start building wealth! All the best, good luck! 

One thing I wish I did was take NOTES... being a successful landlord means you build systems that you can scale. Have some place to journal for real estate make notes ideas etc. Where can I make this smoother for the future what do i need to prepare draft source create etc... what is my move in process/system/routine    what about when a tenant says something is broken?  Who do I need in the future for repairs?   What records system should I setup?  

check out this article also ----  https://www.biggerpockets.com/...
biggerpockets.com/guides/landlord-rental-property-management

Another point... Water I think is the most common property enemy. Rain Water, Flood Water, House Water.  - Leaks sometimes - roof leak or drain leak. Leak slowly continuously .... water supply line issue. 

Oh yea. Speaking of water supply... Not sure how much you understand so this might be extra but you dont need to be a contractor however you DO need to understand a few basics of  physical property 101  helps  in knowing who to hire and also what to look for in terms of damage or issues-  a house can be divided in three parts...

the bones/structure,
the guts/mechanical (behind the wall stuff that you see during the "rough-in phase" of construction),
and the face or skin/cosmetic aspects (stuff in front of the wall - cabinets, paint, light fixtures, faucet fixtures, flooring etc). 

Mechanical parts are HVAC, Electrical, and Plumbing and one of these things is more likely to cause problems while your tenant is occupying the property and can sometimes become an urgent issue.     HVAC includes the ductwork, and then the blower, and then the cooling system (Air cooling coils and outside condenser) or heating system (Furnace) or both that heats or cools the air the the blower pushes through the ducts. There are other types of heating and cooling like boiler radiator, mini-split cooling and heat pumps baseboard etc but wont go too far into that)  Plumbing is water supply, and then the DWV system or Drain Waste Vent - To drain, pipes need to be vented. I had no idea about that when I started wanting to invest in real estate. See the picture below for what is "behind the walls"  These things tend to be behind certain walls in your house and not others, houses generally try to keep anything water related close to each other. 

Anyway hope that adds something? Good luck! 

David Greene has a book on Long Distance Investing I highly suggest that you listen or read to that book!
Then I suggest looking for Long Distance Investing posts here on the forum and long distance investing on youtube. Market choice will definitely be a covered topic in some of those areas. 

On Identifying your market data is king.  City Data  is a useful site, and combining it with tools like Zillow Rentometer and Redfin will help.  Propstream and Property Shark might not help so much with market choice as opposed to property choice but are paid services I have not used yet.

I have noticed some choose because of where they live, some because of where they have been the most besides where they live, or because they have a strong family or friend presence there and have an "in".... some people choose based on straight analysis alone... You will need to know factors such as economic trends, population shifts in or out, state laws and local laws (landlord friendly vs tenant friendly etc)... physical property hazards by season (flooding, rain, hail, fire) or in general (ie I personally can't fathom investing in New Orleans unless it was to AirBNB for the short term and then sell the property)   - If you can narrow down to one or two states, then I would look for "where are the tenants I want to deal with located" theres so many ways to answer that question but you may want to start looking in a major metro area... most states have less than 10 major cities or areas of decent population density.  So if you narrowed to two states and 20 "areas"  you at least  cut that haystack in half while searching for that needle. Some people then also include price rent metrics to help.  Also decide if you want to maximize cashflow no matter way, or you want a blend of cashflow and appreciation/equity build up.  Different places offer different things. 

I hope some of that has helped!  

@JD Martin  & @Michael Plaks Thank you both for the candid responses and the humor!  (I swear were not all crazy over here in DC! weve got Joe Asamoah and Russell Brazil to back me up ... I hope!)     and yes self employed 1099 non food makin/bakin ppl :-) 


I have looked at several articles, (always more detailed than the videos I have watched so far) ....the main ones are below - An appraiser won a challenge to his REPS status because he was involved in the buying and selling transaction. Since that is for valuation's sake....almost as if that appraiser "makes a mark on" the property, not sure if the same could be applied to the inspection of the property or not?
A lawyer won REPS status challenge because he owned a prop management company more than 5% had material participation through providing legal services, but because he did some sort of work in a business that DID qualify (within one of the 11 categories) and he had sufficient ownership of it, it met the status. 
Mortgage Lender didnt qualify, not directly involved in the buying and selling. CPA doesn't qualify. 

From this and other questions just have been trying to understand more. I have no desire to tango with the IRS and like to keep my nose clean, but am exploring data and options as I consider what routes to pursue going forward in real estate as well as what resonates best with me. 

Again I really appreciate your thoughts and will keep learning and would love to hear others perspectives as well, if anyone has done something specific, and if it has passed muster. 

also @ Michael I don't mind digging through case history of you might have some guidance as to how to start me off? 

Key REPS Data I have found so far (I havent checked Kitcies yet! but maybe theres some there too):
irs.gov/publications/p925
therealestatecpa.com/guide-to-qualifying-as-a-real-estate-professional
thetaxadviser.com/issues/2017/mar/navigating-real-estate-professional-rules.html
thetaxadviser.com/issues/2014/jul/skarbnik-july2014.html

Did you ever find who you were looking for?   I think two might be Cerebral Tax Advisors and  Your Locums Tax   guy named Ben he is a CPA and CFP.   (ended up on your post while looking for something else... but would be interested to hear how things have progressed for you I am interested in GA real estate and I do locums)

Another aspect:
A plumber works installing plumbing on houses - would that meet for construction/reconstruction or conversion?

A wholesaler assists bringing together buyers and sellers and involved in the acquisition of real estate

An appraiser appraises, or an inspector inspects, real estate during the sale transaction process thus correlates to the  acquisition category

If I own 100% of a rental property turnover company where we redo cosmetic work to homes to get them rent-ready - repair /replace flooring, repair holes in walls small or big, replace drywall and repair leak damage and I spend >750 hours managing and coordinating the operations of that company...

which of these would qualify?

. 

One question I do have is what is different about choosing an area for large residential  (multifamily) vs small residential (4 or less units)  any other special considerations?  

We could also test it out and try out what he said! It would be interesting to see what people come up with. If its all math and data... we should theoretically be able to arrive at the same points. definitely gonna come back to this. Thanks to OP