All Forum Posts by: Ryan Denman

Listen to Josh and Brandon and go PRO today!
(if you did not 10 years ago) :)

Hi All,

I considered starting a REIT to allow others to invest and build wealth in projects that I would start, but that was a much, much higher level than I actually have interest in pursuing. Reading through some other forum posts, it looks like there are much simpler partnerships, entities, or offerings that would meet what I am trying to do:

My Role:
-Decide on properties to purchase, mostly SFHs
-Establish LLCs or other business structures to hold the real estate and distribute returns
-Purchase properties, using loans as needed depending on the ROI/cash flow desired from investors
-Act as property manager for the properties
-Depreciate properties held in business entities to minimize taxable income to investors
-Distribute returns to investors
-Create investments that have high cash flow (CF) and low appreciation (App) , moderate CF and App, low CF and high App
-Find investors from connections, friends, and family with no public advertising
-Advise in a minimal capacity on tax and real estate strategies
-Send investment reports to investors
-Be fiduciary to all investors
-Receive compensation from PM and other management work I do related to the investments

Investors:
-Can be non-accredited 
-Invest as little as $1000
-Can use retirement accounts

What references can people recommend for me to learn about business structures, partnerships, securities, taxes, or other topics to get me started on learning what will work for my goals?

Thanks!

Hi All,

I have a family friend who wants to rent a property in Colorado and I want to help them out.  What are the tasks that must be done by a property manager/owner versus someone who is assisting a PM/owner?

I believe that list of tasks for Colorado includes:

-Setting rent

-Negotiating lease terms

-Evictions

Anything else?

Hi @Jimmy Alexander,

I've inquired about this as well and with some of Pace's own guru program graduates and it is just a myth. With the way interest rates have gone, there is no way a company could function as he said it would (if the DOS is triggered, then the 'insurance company' would create a loan with the terms of the original loan). I think his comment on this was largely to try to recruit people into his guru program. If you have ever watched his videos, he does have a disparaging view of the BP community, so I'm not sure why they let him on the podcast to begin with.

@pacej#0 any comments?

Hi @Sudhanshu Saraswat,

First consider if the tenants are of high quality.  Do they keep the unit clean and well maintained?  Do they communicate well?  Have they caused problems at this unit or with the neighbors?  How happy are the tenants with how you have managed the property?  

Then take a look at what your costs for maintaining the unit were for the past year.  Did taxes and insurance go up?  Did you put more maintenance into the property than expected?  Add up those costs and find out what additional rent per month you would need to cover them.

Finally take a look at the market rents.  Does your unit exceed the market rent with the maintenance, taxes and insurance (MTI) increase?  If so, raising the rent may cause your tenants to move out and you would incur 2-3 weeks vacancy and other turnover costs.  If the MTI increase still puts your rent at well below market value then you could consider increasing it more.  

A great approach to take with good tenants would be to have a conversation with them when lease renewal time comes and show them the additional costs you have for managing the property and ask them what rent increase seems reasonable to them.  

Hi @Adrianna Johnson,
HELOCs can be a great way to utilize equity in a primary residence to buy an investment property without having to go through the hassle of a cash out refinance and being stuck with higher payment.  Here are a couple of things to consider:

-Some HELOCs have introductory rates for the first year and then go to adjustable rates that are prime +1%, +2%, or even +3%.

-HELOCs can be interest only or interest and principle

-I would consider HELOCs as an alternative to a hard money loan

-Do you have a way to pay down the HELOC relatively quickly after you buy the investment property?

-If your investment property went south and you could not pay the HELOC, you could face foreclosure or other negative impacts on your credit score.

I have used HELOCs to advance my real estate investing (see below) by buying a primary residence, getting a HELOC, using that HELOC as a down payment on a new primary residence, waiting six months, and opening a new HELOC. It did not quite work out for me to repeat this pattern multiple times due to how the Colorado market fluctuated, but I now have two rental properties that were my primary residences when I got the original mortgages and when I got HELOCs on them, so I have access to capital that would otherwise be trapped. I did also have an ace up my sleeve to pay off the HELOC (selling another property) in the event that I could not pay off the HELOC in a reasonable amount of time.

Oct2017-bought primary residence

Jul2019-opened HELOC on primary for 100% of equity in my primary

Nov2019-used HELOC as 20% down on new primary and opened 80% conventional loan, rented previous SHF as long term rental

May2020-opened HELOC on new primary for 100% of equity

Agu2020-sold out of state rental property to pay off HELOC

Apr2021-moved back to first primary, refinanced for new lower rate, closed existing HELOC, rented previous primary

Oct2021-opened new HELOC on primary for 100% of equity

Oct2022-bought new primary, rented previous primary

Hey @Ryan Rominger,

Some of these links are a bit dated (Cozy is now apartments.com), but this is a great list to explore.  
https://www.biggerpockets.com/...

Do you have one software that manages everything, or do you have processes that exist outside the PM software?

Thanks All!
Especially:
@Ryan Thomson, I have not heard of doc hub before, I'll check it out.

@Nathan Murith, great link for the REI tools!

@Nathan Gesner, good idea to run through the whole process on both the tenant and landlord sides of a new software.  I'd like to switch to a better platform, but did not want to toss existing tenants into a new platform that I was not familiar with.  My goal with my rental business is to build the systems that can be scaled now, so as I grow I don't need to continually need to reinvent how I run my business.  I also work a full time job, so the more I can make managing my rentals automated and outsourced, the more units I can manage.

Hi All,

I currently use Apartments.com for managing my two long term rental units in Colorado, and I want to know what other small time landlords use.  What software/website offers the best:

-Tenant screening

-Listing syndication

-Electronic signatures for lease documents

-Tools for after a tenant has moved in (maintenance, call service, renter's benefits packages, etc.)

-Accounting

Can one site/software do all of these things really well?

Ryan

Hi @Robert J.,

I did end up selling in Aug 2020. It was a delicate process, but it worked out well.

Ryan