All Forum Posts by: Alexander Merritt

I think your maintenance expenses are a little low. You are calculating only about 7% when it should probably be closer to 18-20%. Personally I use 10% for vacancy, maintenance, CAPEX (capital expenditure - new roof, hot water heater, a/c, furnace, etc...), and then 12% for property management.

Go to www.rentometer.com and you can see how your current rent fairs with the rest of your market.

@Edward Seid I agree with everyone else that you are not responsible for the car break in. However, if I were you, I would certainly start looking into what is going on. Speak with the local police department and see if there is any type of neighborhood watch and talk with them. The police should be able to tell you if they have seen an increase in reports for your area. You can ask them if they can send some patrols around the area for the next week or so. That my scare off the burglar. Check online and see if you have a "crime map" for your area.

A very cheap way to address the problem... One thing that I found is that if you put up Home Security Alarm stickers (like ADT) then that alone can deter criminals even if you don't have an actual system. They see the sticker and think... hmm this house has an alarm but the one next door doesn't.

You might also consider actually installing a home security system and some exterior motion detector lights. Not only will it make your tenants feel more secure, but you can probably pass along the cost of the monitoring as well as charge a little more rent for that "feature." 

Hello @Albrena Ceroni and welcome to BP!

Here's some good places to start:

Beginners Guide
http://www.biggerpockets.com/real-estate-investing

Tenant Screening
http://www.biggerpockets.com/renewsblog/2013/01/27...

I agree with going to local banks and Credit Unions. I recently spoke to a business rep at Navy Federal Credit Union who said I could get a commercial loan for a brand new business no problem. The terms aren't even close to a traditional mortage but for flipping it would be OK. 70% LTV amortized over 20 years with full balloon payment after 5 years. They also said I could refi the loan without any seasoning period.

So, reach out to a bunch of banks and see what they have to offer. The other thing is, do you have a property you are looking at? I think it will help the bank of you can put together a Lender Package with all of your assets and numbers specific to an actual property instead of just asking them to "lend you money for flip". If you can prove that the numbers are solid and they will work out, then they are more likely to be open to giving you a loan. You can easily use the BP flip calculator to develop a nice looking report that you can put into that Lender Package. It  presents well and looks professional.

Good Luck!

Depends what your strategy is. If you're going to hold the property forever so you can build up a nice income stream, then appreciation shouldn't be a factor. If you get it, excellent! If not, you weren't planning for it anyways and just care about the cashflow. So you need to figure out if you plan to hold it long term, medium term, or short term and that will help you guide your answer.

I don't understand why people are saying that a "Limited LIABILITY Corporation" does not protected you from liability? Isn't that why they were originally created and not just for tax purposes?! Yes, you are have to run your LLC to the letter of the law and have all your paperwork in order and all that stuff in order to be protected. As others have stated, it doesn't protect you against fraud or negligent acts.

I think the main point to remember is that LLCs don't protect your business. They protect your PERSONAL assets. I think people are forgetting that part. Yes if you get sued your business can be in jeopardy and may go bankrupt. But, if your run your LLC properly, your personal assets should be safe.

If LLCs do not protect you from liability then why does every attorney, doctor, cpa, etc... all have their business setup as one? For tax advantages? Sure, but I don't think that's the main reason....

 I do think that generally if you are a good landlord and keep your properties nice and up to code and you work with your tenants and you show that you care about them and your properties, that you probably won't have very many lawsuits or maybe even none at all. But, suits still do happen and if that suit happens to come at the beginning of a business venture, then you may be in trouble.

The more seasoned investors who have weighed in have an experienced team established and have significant financial resources to deal with a suit. I don't have 170K laying around for attorney's fees. In the case where the vet's are saying they setup the LLC for partnerships for tax reasons, I'm not sure that's the only reason. If the partner did something stupid and a suit resulted from it, then the LLC would limit that exposure to their other investments? Isn't that kind of the point?

I love this thread because it's a real debate with different opinions and personal experiences. 

Just found the biggest list of payment collectors... wow!

http://smallbusinessbonfire.com/send-online-invoic...

BP also wrote an article about a pay service for tenant's with cash. It sounds pretty good, but there is a $4 fee paid by the tenant to use the service.

http://www.biggerpockets.com/renewsblog/2013/11/30/paynearme/

I just found this form thread today which is what you are looking for...

http://www.biggerpockets.com/forums/52/topics/1029...

@Erin Estes Can you break out taxes and insurance separately for me?

@Erin Estes 

Honestly I think a more thourough analysis of your rental should be your first step to determine if it's even a good rental.

How much is your total mortgage payment?
How much is your taxes?
How much is your insurance?

Go to rentometer.com and plug in your address and 4 bedroom and tell us the lower of either the median or average rent.