All Forum Posts by: Peter Mckernan

Hello @Chris H.

Welcome to BP! That is great experience along with quite a bit of real estate holds. Congratulations on those properties. You'll find a great amount of knowledge on this site. There are plenty of people in all spaces of real estate on this site.

Good luck and I hope you get that commercial property conquered quickly!  

Welcome @Jacob Wohlgemuth

Congrats on the intern spot that you got with that management company. I would go in wide-eyed and looking to jump in with someone that really wants to reach out and teach. First see what interests you and then get to know the person at that company that has the best grasp on those strategies, tactics, and is as transparent as possible with everyone at the company and all the customers.

Good luck! 

@Herlando Y.

The first deal that you found sounds like it may not be a deal with all the rehab costs. There is no insight to the other numbers; however, with your reluctance about the high costs tells the reader that you either need to get one more estimate if you believe you are getting gouged, or the deal is not a deal. 

It sounds to me that you have some time to get one more contractor out there to give you that estimate. This will give you the chance to save your money, or actually make the deal happen! 

Good luck! 

Hello @Cesar Mendoza

Congrats man!!! You are doing well! What areas are your rentals and what areas are you getting the flips in? I see you are from San Bernardino, and I have some rentals in Redlands. 

Hello everyone,

I wanted to see if anyone can explain the FTB withholding requirements for out of state property owners. I was asked about it yesterday and I could not find the clearest information on the topic. I gathered the withholding is applied to the gross income of the property. Does the owner hold this after he receives the money from the property management company for the rental income, or does the property management hold this percentage for the owner?

Thank you for the help!!! 

Hello Gabby,

Welcome to the site!! This is a great resource for knowledge on any type of investing, knowledge for the current field you are in, and all around great people. It sounds like you have a lot of ambition and value to bring to real estate investing since you have the background with the management company you work with. 

You should be able to apply those skills and the information you have to properties you are interested in buying. Keep learning on this site to help you with your first purchase!! 

@Gabby Garcia 

I agree with @David Wissler his account of Dave Ramsey, and he seems to be a pretty smart guy from how he has grown his business from where he was (at the bottom financially) to becoming a multimillionaire. This same circumstance goes for Robert Allen he was worth more than Dave Ramsey and filed for bankruptcy around the same time. 

@Bradley Marion this goes to show that with risk there needs to be a high level of calculations on your part when increasing debt. The market and your read on the market is the best option you have. Do your research and make sure you get in at the right time, and do not step in when the market seems too hot, and properties are selling for much more than you as a knowledgable investor within that area knows they should be selling for. 

If the research is done, calculations are done, and all the due diligence is performed you should be able to enter a market and capitalize. 

@Phil Earley

I agree Phil 100%, that's where I see the management company just wanting to take on more properties that their staff can handle, I know there are rules of thumb out there that talk about a certain amount of units per manager; but that should be analyzed by the company and make sure that person cannot move outside of their property span of control. 

If they end up moving outside of that span of control, that is where the lack of communication happens since they are so overwhelmed by all the things that they have to perform on top of staying up on the communication between those tenants, owners, and vendors.

A property management company's biggest asset is their communication skills, as is any company. If a company prides themselves on the communication between owners, tenants, and vendors the company would sit head and shoulders above the rest of the competition. Even the larger companies should stick to this basic process and make sure that the company fixes any communication flaw as soon as they become aware of it.

There are many other aspects that the company can dwell on; however, if they stick to the basics keeping with the example of communication, they can trump a majority of their competition since their competition is more worried about growing exponentially and leaving all their true customers in the dust. 

Good question Steve! I hope this adds a little bit of value to the thread! 

Hello @Jeremy Clarke

I would first go talk with your lawyer (or a lawyer that can answers these questions more depth). LLCs are great for asset protection as are S-Corps. LLCs have been around so long that they are tried and true for investment properties. The LLC will give you the added asset protection, which will give you that added protection if any litigation were to ever come up.

For taxes you'll have to pay an extra LLC fee in your state, I'm not sure what that amount is; however, in Ca it's an $800.00 fee when filing (you should research your state).

The highest hurdle for you is placing the current properties into the LLC. You'll have to notify the lender of each property that you want this to be performed, and they may be okay with that happening, or they may call the loan due (which causes a huge headache). The best time to perform this act is when you are about to close escrow on your next property. You'll have the deed and title show your LLC instead of your name.

Good Luck!