All Forum Posts by: Richard Benjamin Wilhite

I’m about to list several vacant lots of land for sale. I hope to net around $800k after fees and closing costs. I want to do a 1031 exchange with the proceeds into one or more MF properties.

Assuming that I could get a property/properties at around $100k per unit, should I try to buy a single property of around 30-35 units? (With 25% down). Or should I buy several smaller properties? Or even 8 quads?

My current portfolio consists of 8 units, a fourplex, a duplex and two SFHs, in 3 different states. Some are self-managed, some are not. I hope to turn the self-managed properties over to a PM at some point in the first quarter of 2025.

I’d prefer to buy as large of a MF property as possible because of economies of scale and having to complete less transactions, but I haven’t closed or underwritten a deal that large before. So this is a concern I have.

Also, I’m unsure of the timing of the sale of my vacant lots and the gap of time in between closing. There will probably be 9 lots in total. So given the time constraints of a 1031 exchange, I thought I might have to buy several properties with the proceeds since there could possibly large gaps between the multiple closings.

I’m interested in hearing your thoughts and opinions. What else should I be working on in the meantime prior to listing the lots for sale to get ready for this sort of transaction?

I'm looking for advice on areas of Jacksonville or nearby to buy a 2-4 unit property for a personal residence with a small family. I'm familiar with Avalon and Riverside and would like to know if there are any other good areas to consider that are safe and have good schools nearby. My daughter will be school age a year or so after we move in.

I'd love if the property would cash-flow after we move out, but the neighborhood and appreciation potential is the biggest concern for me. This would be our second duplex house hack, and while it's been a great investment, the neighbor our current duplex is located in is not the worst, but not the greatest either, especially when it comes to school district.

Our tenant's lease is up August 31st. How many weeks in advance should I advertise the listing?

I did list it last night on Zillow, Avail, and FB marketplace and have already received about 8 inquires, which makes me think the price maybe a bit low and that six weeks in advance is too soon.

Thoughts?

I'm closing soon on a fourplex in Daphne AL close to the interstate and near the bay. Does anyone have recommendations for a local property manager? 

How should I set up my business structure so that income from my rentals doesn’t increase my personal income reported to the IRS?

I currently have three properties that I purchased in my name as personal residences. I lived in them each for one year and then rented them out. I collect the rent in a business bank account that I opened with a sole proprietorship.

I'm now buying a fourth property under a newly formed LLC.

Should I place the first three properties that I bought in this new LLC?

Should I change my business bank account to the new LLC?

Or should I open a new LLC that acts as a sort of "property management" that collects the rent from all of my other properties and pays out the expenses?

Do I have any other options?

Quote from @Kevin Sobilo:

@Richard Benjamin Wilhite, its unclear whether your expectations are reasonable.

For example, many pet owners allow their pet to run in a fenced yard or on a chain unattended. Then they periodically (perhaps weekly or bi-weekly) walk around the yard to clean up the poop. Unlike when walking a dog, they aren't present to see it happen or where so that is a common and practical approach to handling the issue for most people.

If the yard was to be shared as it sounds like maybe you needed a CLEAR rule to indicate that the dog cannot be left unattended and that any poop needs to be cleaned up as soon as it happens.

This may be more useful if you allow a pet with a future tenant as this tenant is already settled into what they are doing making it harder to change now. 

Yes, I've already drafted an amendment to include in the lease for my next tenant if indeed I allow pets again.

Quote from @Dave Meyer:

I had this issue once, at a property that was nearby where I was living. Weeks of poop in shared yard regularly not picked up. Other tenants were rightfully upset. Several friendly reminders were ignored. 

I didn't have a specific clause in the lease about dog poop, but the lease did state that I would charge $100/hr for any maintenance that was due to tenant negligence. I told the tenant I consider his dog poop situation necessary maintenance to keep the property in working order for the other tenants, and he was clearly being negligent. As such, if he wouldn't pick up after his dog I would, at $100/hr. With my 10 minute walk each way, plus 10 minutes there, I was going to charge him $50 3x a week to pick up after his dog. 

Of course I never had to do that, and he started picking up after the dog shortly thereafter. 

Thanks for the reply, Dave! I posted a "Quit or cure" notice on the tenants door with similar language and miraculously the poop has been picked up. Hopefully, it continues for the next four months she is on the lease.

Also, just want to say I'm a big fan of your "On the Market" podcast, and have been listening since it came out.

I have a similar goal of living in Europe, at least for part of the year, however I'm afraid I'd have to be a lot more hands off with my real estate investments. I'd like to reach my passive income goals here in the states first before making the leap. Cheers!

I'm "house-hacking" a duplex. I allowed the upstairs tenant to have a dog. It's in the lease. She pays modest pet fee per month. Over the last several months, the tenant has been letting the dog poop all over the yard and routinely doesn't clean it up. I text her, and she usually gets right on it, but most of the time she doesn't. And it keeps happening.

There's been several times that I've stepped in it, or my daughter (17 months), who plays in the yard, has almost picked it up before we stopped her.

There's nothing in the least about cleaning up the poop. I'm already not going to renew her lease due to other issues. She has four months left on the lease. 

Can anyone recommend a good local PM on the Eastern Shore, especially one that would do a quarterly walk-through of a property?

I'm also looking for reliable Handymen and Contractors.

My team is based in Pensacola and not everyone is willing to drive out to Baldwin Co or Mobile. Looking to expand my acquisitions in AL.

Any plans for future meetups in Chesapeake of Norfolk?