All Forum Posts by: Philip Hy

@Kevin Manz when you invest in certain types of investments, they provide a one-page tax statement called a K-1. As I understand it, it breaks down your share of taxable income, depreciation, etc. This is relevant when I own shares of a MF investment, and need to know my tax impact.

Everyone, thanks for the great feedback, whether you agreed or not. For those curious, I have 9 SFH, 5 K1's from MF syndications. Everyone I've talked to has said that they paid $1-2k, and that's why I'm wary that I'm overpaying.

While I greatly respect accountants, I want someone to explain why they're worth the fee for 90% of buy and hold investors. This year my refund was $3,800. My total tax prep fee was approx $4,200 (not unusual if you ask around at these real estate accounting specialists). A great accountant would probably catch every mistake and squeeze every tax benefit, but what's the point if the fee exceeds any of the tax benefits. Moreover, many real estate accountants increase their fee based on number of properties. 

Alternatively, I could use TurboTax, maybe I miss some claims and I only get a $2,000 refund, but the software is only $500. I come out ahead $1,500 instead using an accountant where I'm negative $300. Even if I pay for TurboTax audit protection, I'd still be ahead.

What am I missing?

This is an older thread, but would love to hear about others' experiences with GKhouses.

Everyone, fantastic feedback. So valuable to see how other people are managing the more mundane aspects of real estate, but its so necessary to develop best practices.

@Caleb Heimsoth fair point. Easy enough with 4 properties, but what about 40? Same thing? I'm also curious about the mechanics of managing 100+ property portfolios (even if you're using property managers).

I've never heard anyone on any podcast or webinar talk about the mechanics of how they live off their cash flow. Do they have a bank account for each property? Or does it all go into a single bank account? How much, how often do they withdraw? Some of these things will of course be affected by the number of properties you have and whether your're using an LLC.

Currently my four properties have their mortgages withdrawn from a single bank account where all my rents also go each month. My plan when I retire is to keep $20k ($5k per property) in cash in my account. Then, after paying the mortgages each month, withdrawing anything above the $20k reserve. If I have an expense, I'll draw off of the $20k reserve, and use rents to "refill" the $20k reserve before withdrawing my retirement spending money.

Thoughts?

Jay Hinrichs thanks for the reminder on keeping insurance current when vacant more than 60 days! If someone has invested with Memphis Invest, would appreciate if you would PM me to share your experience.

@Jay Hinrichs @Ben Leybovich On BP, I hear many wholeheartedly recommend Memphis Invest. I don't have any reason to doubt their ability their ability to perform, but their sales rep confirmed that they do markup their repairs and services while other providers like Midsouth Homebuyers (also has a great reputation) does not mark up materials or services, and they offer a lifetime occupancy guarantee where if your property is vacant more than 90 days, they'll pay you the rent. With an offer like that, I struggle to understand why one wouldn't choose a more investor-friendly provider. This is a personal feeling, thus I'm adding it last, but the Memphis Invest sales rep was very salesy and pushed hard, felt like he was on commission. I haven't bought from Midsouth, but plan to later this year.

I do own a property with Spartan Invest in Birmingham, and I have been very impressed with their property management and communication. I am in the process of buying another. Don't know if they markup materials or services. This was my first turnkey, so at the time it didn't occur to me to ask...

If anyone has any other SPECIFIC recommendations of other providers, would love to hear.

@Will Prince great offer and great attitude. I looked into some duplexes but hard to make the numbers work when I was looking at them. Good luck on your investment journey!