All Forum Posts by: Patrick Menefee

The Angry Ale's meetup is back! This is our third month back after we took a long break due to Covid!

If you've never attended, we keep a rather informal atmosphere for everyone whether you have a lot of experience or are just on your first deal. We don't do formal presentations or speakers, but rather present an opportunity to share lessons, ask questions, and truly help each other progress in our respective businesses.

Ultimately, the goal is for this meetup to be a monthly check-in of sorts for your business:

1. Come prepared with something you're looking to get out of the meeting and give to other investors
   
2. Leave energized with a more clear picture of where you are going
3. Grind it out over the next month so you have an update to share with the group in the next meeting

Please comment or reach out with any questions, RSVP so we get a feel for how many to expect, and tell your friends!

What: talk real estate and business over a few drinks

Where: Angry Ale's bar in Montford (near the Park Road Shopping Center), Monday September 27 @ 6:00pm

When: the fourth Monday of every month

Who: anyone interested in expanding their real estate network in Charlotte and moving their business forward

Please pass the word to any friends or family who may be interested, and I look forward to seeing you there!!

Additionally, please RSVP at this Eventbrite link so we know how many people to tell them to expect!

Reminder to all of the Charlotte investors about the meetup tomorrow!

The Angry Ale's meetup is back! This is our second month back after we took a long break due to Covid!

If you've never attended, we keep a rather informal atmosphere for everyone whether you have a lot of experience or are just on your first deal. We don't do formal presentations or speakers, but rather present an opportunity to share lessons, ask questions, and truly help each other progress in our respective businesses.

Ultimately, the goal is for this meetup to be a monthly check-in of sorts for your business:

1. Come prepared with something you're looking to get out of the meeting and give to other investors
   
2. Leave energized with a more clear picture of where you are going
3. Grind it out over the next month so you have an update to share with the group in the next meeting

Please comment or reach out with any questions, RSVP so we get a feel for how many to expect, and tell your friends!

What: talk real estate and business over a few drinks

Where: Angry Ale's bar in Montford (near the Park Road Shopping Center), Monday August 23 @ 6:00pm

When: the fourth Monday of every month

Who: anyone interested in expanding their real estate network in Charlotte and moving their business forward

Please pass the word to any friends or family who may be interested, and I look forward to seeing you there!!

Additionally, please RSVP at this Eventbrite link so we know how many people to tell them to expect!

Just a reminder that the meetup is tonight at 6pm! Please RSVP on the Eventbrite link above if you haven't yet. Looking forward to seeing everyone!

Patrick

@Jayden Hamilton there are a number of good recommendations on here, and a few that I didn't read. I'll give a couple of my own as a fellow Veteran based on my experience

Quick background-6 years in the Army before starting corporate life in 2018. Bought my first investment property in September 2019 and quit my (pretty damn good) job in October 2020 to do real estate full time

3 recommendations/thoughts for you: 

1. First, define your timeline and goals. How much monthly income do you need in order to not have to work a job? If you don't tap into your SFH equity, without accounting for any reserves or property management it looks like you take home about $1,400/mo across both properties. You should really be setting aside money for repairs and reserves, which even at only 10% of gross income means you're now working with income of <$1,000/mo. So to start, figure out the exact dollar amount you need to make per year, quarter, or month. Additionally, figure out what you want. Are you trying to build your own true business? Are you trying to make the most money with as little effort as possible? Not working for others is great, but what do you want to do with the time that affords you?
2. Start looking at your current situation and decisions with your end goal in mind (which is why you need to have that end goal figured out). For example, how much schooling do you have left? Is that all paid for with the GI bill, or do you have expenses that will be deducted from the $100k liquid cash available? What is the goal with going to school, and what purpose will it serve in your picture of your future life/business/income? With your current portfolio, are both of these good assets to keep going forward to keep moving towards your goals? Could you be putting the equity to better use? For example, if I consider the SFH, it currently puts $12,508 in your pocket annually. If you ever chose to add a property manager at 10%, and put 15% into reserves, you now net $9,381/yr. With $150k in equity, that's a 6.3% ROE. If you pull out $80k of that equity to invest elsewhere you're looking at negative cashflow. Is there a way you can make better use of that equity?
3. If your priority is speed, cash flow is probably not the answer unless you already have a large nest egg ($100k is a great start, but even if you invest your $100k + your $150k in equity at 12% COCROI, you're making $30k/yr. Is that enough?) I'd suggest you build an avenue to create active income outside of a job (i.e. flipping, wholesaling, getting your license, etc.) to cover your monthly expenses, and then use the extra to continue buying income producing assets. The tax advantages of your current rental portfolio plus any new acquisitions will help minimize the tax burden of active income. Based on your analysis of how much you need to make to sustain yourself, use the appropriate amount of the $100k cash you have and create a reserve/operating fund for yourself. If you need $3,000/mo to survive, put at least $18k into the reserve account (more if it'll take you longer than 6 months to create the income you need). Now you know you have $82k available to invest

That was a lot of detail, so hopefully that makes sense. But ultimately you need to start with step #1 and figure out how much you truly need to make, put money into reserves to cover those expenses for the appropriate period of time, and start putting the rest of your money to use to grow your income.

I like bullet lists if you can't tell, so let me give a quick step by step if I were you:

• Deep dive your expenses and fill your reserve account to see how much you have in investable cash
• Figure out what you want to do with your time to make money (and again, I suggest the active route). Look into flipping, wholesaling, brokerage, and anything else that interests you
• Pursue one avenue wholeheartedly with the remaining investable funds. As a flipper, I can use $50-80k to fund 2-5 flips (in conjunction with hard money). As a wholesaler, people set up a well oiled machine with data, systems, and a VA for <$2k/mo. Start putting that money to work
• Once you have a business, consider putting your equity to better use. For now it's good cash and tax advantage while you have nothing better to do with your money, but overall you're wasting a ton of equity IMO. Once you have a place to put it, make better use of it
• As you grow your income, continue building your portfolio of rentals

Hope that helps, I know that was a lot of info thrown your way so let me know if you have questions!

ETA - I added an Eventbrite link for RSVPs but it didn't create a hyperlink, so here you go! Please RSVP here so we can get a headcount

@Nicholaos Koufoudakis I can’t remember who it was that talked about accepting, transferring, or mitigating risk, but it was absolutely spot on. The additional piece Id add to that is to consider additional elements of risk.

Consider 2 options

Option 1-you have one single LLC, or maybe after every 5-10 properties you start a new one. In the off chance that **** hits the fan big time, you potentially have other properties at risk. But in the meantime you have one bank account, one credit card, one LLC renewal fee each year, etc.

Option 2-you have 20 LLCs for 20 properties. Not sure what state you're in, but here in North Carolina that means $4,000 per year in LLC renewal fees alone. Some bank accounts also have a $200+ minimum, so add another $4,000 in unusable cash. Any time you have a major expense you either need to make a capital contribution to your LLC (quick, call your bank and transfer money but don't screw up and send to one of the other 19 LLCs) or you need money coming out of your eyeballs and all 20 LLCs are incredibly well capitalized (still, make sure you don't mistakenly grab the debit card for LLC 3 instead of LLC 13). Hopefully you have stellar credit because 20 new credit cards will put a dent in that quickly. And then, the worst happens and **** hits the fan. Luckily you have your 20 LLCs, but unfortunately you used the wrong debit card or mistakenly screwed up the documentation on some expenses one too many times and your intricate defenses fail

That might be a little dramatic, but probably not that much. The complexity introduces an entirely new level of risk to you and your portfolio, not to mention the massive hassle that is likely to stifle your business and make you lose your mind.

Figure out your risk tolerance. If it’s damn near zero, there might be better alternatives to real estate for you. If it’s higher than that, weigh the pros and cons and make your business something you’re not going to hate every waking second of

@Julie Milovanovic what does your timeline look like? And are you looking for a room or a full house? One of my properties currently has 2 rooms rented out, but one tenant is leaving Aug 31. Feel free to PM if that’s at all helpful!

@Igor Stankevich as @Robert Feiler mentioned dig into the ordinance. The Site he provided should give you the zoning, and the Unified Development Ordinance will have the details. It will be technical though, so if you don’t understand it I’d go directly to someone in the city planning department and discuss with them

Hey all,

I have someone in Canada who wants to put some money to work. I’ve used private money a couple of times, what are the differences on his end and mine when putting everything together? I understand from my CPA that on my end my deductions and everything will be the same, but is anyone familiar with the documentation requirements? I imagine it’s not as simple as issuing him a 1099 at the end of the year…

TIA!