All Forum Posts by: Ralph Chiaia

I am trying to close on a Hubzu auction right now and I'm learning a great deal about patience. I had a lawyer take a look at the paper work and she advised me to save money and use premium title but now as things are slowly starting to get drawn out I'm thinking I should have run title with my own team. 

I was originally told we would close by today and now haven't gotten any updates so clearly today is out of the question. What do you suggest is a good course of action at this point? Should I just wait it out or should I start nagging them? Do you suggest I run title myself through my lawyer and team? 

Thanks for any advice. 

@Bjorn Ahlblad I like this answer. I’m a property manager in Brooklyn and would definitely do this for any of my owners/landlords. I know it’s not the absolute best use of my time but it is more about relationships anyway.

If you’re not using a property manager I’d have a handy woman or at very least a handy tenant in the building do this. The last thing you want is a disgruntled tenant jumping off a too small step stool and blaming you when s/he gets hurt!

@Ryan Evans can you explain how you lose money faster out of state? I get what you mean but would love some concrete details.

Awesome job and awesome post. Thanks for sharing!

Why do you think a Roth is better than a traditional for holding rentals? 

Thanks for all the help. Those are some great points to consider. I appreciate it. 

Hi Peoples, 

I'm a newbie investor in Real Estate. I am an agent and a property manager for a few years and finally bought my first place as an investment in 2019. So far I've used the same company to insure both of my homes. I'm planning to buy 3 more in 2020 and was wondering if it's best to use the same company to insure all of them or if it's cheaper/better to use local places to insure the new ones. I started investing in PA and now I'm shifting to FL. I work as an agent in Brooklyn and have recently come across some exceptional deals locally. I thought the market was too expensive but I am starting to see that there are deals in every market, even expensive ones. 

Thanks for welcoming me into the BP fold. I love all the posts I've been reading! This group of people really inspires me! 

Best,
Ralph

Kyle, I re-read your post and want to try to answer you with a bit more focus than yesterday. I think you need to assess how much money you are bringing in in residual income from your real estate rents and then break it down. I'd go with something like this (definitely adjust it to your business model):

15% Tax

15% Vacancy and Maintenance

50% Pay Yourself

20% Set Aside for Future Deals

So if you collect 1000 in rent you'd save $150 for Tax, $150 for 'Maintency' (Vacancy + Maintenance), $500 for you to enjoy that month in your personal account, and set aside $200 to let build until you have enough for the next deal. 

I tend to break down my business as an agent a bit differently than my business as an investor. One thing that goes up as an agent is the amount of tax I pay. Also, my operating expenses as an agent are significantly higher. 

Hope this info helps. I have a lot of the same questions you have! 

Hi Charles. I have also implemented the Profit First method to both my business of importing and selling kitchen gadgets and to buying and holding real estate. I had to rework it a bit. I recently asked a question on another BP topic about this. I'm curious what accounts can be personal and what can be business. Check out my post earlier today if you'd like to see the full details of what I set up and if you have any ideas or concerns about it (I'm too lazy to type it all up again here). 

I am a big fan of Profit First by Mike Michalowicz and have opened many accounts as he suggests to separate profit, tax, opex, own pay, etc. It's much faster and easier to open personal accounts than business accounts, so what I've done is opened biz accounts for my LLCs to collect rents and pay for things through Opex accounts which I'm calling "Maintency" (Vacancy + Maintenance), but then I pass profit, my own pay, and money I hold to pay taxes into my own personal accounts. Does that make sense or does that in any way weaken my LLCs' protection? I've heard that mishandling this can lead to piercing the shield of an LLC. I'd love to hear thoughts on this. Thanks!