All Forum Posts by: Scott Mac

Hi Robert,

You do not need an accounting degree to be an investor. They will not teach investment accounting to you there.

To understand the accounting involved spend some time (and some fees) with a local "Real Estate CPA" and ask them to explain investor accounting to you.

Before you do this:

• Understand what a chart of accounts is for an LLC and a Sub-S Corp.
• Understand how depreciation works for rental housing.
• Understand what a 1040 is and what schedules an investor may need. 
• Skim the IRS instructions for depreciation.
• Read Rich Dad Poor Dad (if you have not already), while not a true to the book picture of accounting, it is a good way to think about it.

Basically you want to know how the cash flow and depreciation flows onto your personal 1040, and what is the best way for an investor to work with a CPA.

And knowing a CPA that can assist you in your investment business is better than paying a college to teach you how accounting works. 

Let the experts do their thing--and you do yours.

Good Luck!

Hi Faraz,

Chickens are loud but some people don't mind them, but eggs are cheap.

Emotional support chicken--with a doctors note--OK, but undisclosed up front.

Emotional support chicken is a new one on me.

Good Luck with whatever decision you come to on this.

Seems to me the logical starting point would be the county tax assessor's office. 1977 probably means searching microfiche in person.

The tax appraisal would probably be lower than the actual market value at the time, which would increase your gain on the sale.

If your county follows a % less than fair market value for the tax value, that would probably zero you in on a higher received cost.

Hi Tandi,

I'd be careful, because this person may actually show up in court and be able to make expensive stalling maneuvers. 

If it were me, I'd make certain that my attorney was in the loop on this and follow their direction (exactly) as to what to do. Just go by the book 100%.

Have you considered cash for keys?

Good Luck!

Hi Earl,

To cut the risk, I'd start by visiting a Chase office and discussing the plan (show it to them as a bulleted list of the credit you want) and see what they have to say. Then go to Capital One and get their opinion.

As they say, straight from the horses mouth.

Good Luck!

Figure out what it takes (for you) to get an 800 rating and shoot for that. 

Spend the time you need to spend to understand how the credit rating system works.

If you do it right your credit rating will go up.

Also keep an eye on your debt to income ratio because lenders look at this when granting credit.

Good Luck!

Hi Anthony,

Before using the credit card, read Rich Dad Poor Dad if you haven't already, and skim the internet about how to get a good credit rating.

Good Luck!

Hi Nikki,

Go to Real Estate meetups in the area and just ask a lot of questions and make some new friends.

San Antonio is a GREAT town. Lots of good restaurants, good people, and the river walk.

Good Luck!

Hi Tomiko,

The $49 thing doesn't represent the whole cost of getting set up. It's typically just a basic filing. Then they call you back and tell you you need this and that for so much more money. To do it right cost much more than that.

On the cheap, legal zoom, but because this involves taxes before you do anything, it's best to talk to Real Estate CPA. Pay for an hour of their time and become educated a little bit more on what the IRS wants to see to make the Sub-S work. And follow that persons advice before choosing someone to set up for you.

Also, there are legal requirements, and issues such as asset protection that can come from a Corp/LLC, and talking to a Real Estate Attorney about what the CPA recommends before doing anything with this would be a smart move too.

Good Luck!

Hi Robert,

Here is a quick thumbnail of property classes.

There is lot more on the internet about property classes, but regarding the refrigerator replacement or not for a new tenant, it kind of comes down to a high rent tenant is probably less likely to accept dents like this than a lower rent tenant because they know they are getting what they pay for.

Class-C might like a Cadillac at Hyundai price but they don't expect it, but you don't want to go to far overboard in this area and make the place look like a flea market either because they are also shopping other units. 

Class A Properties:  

• Usually built within the last 10 years.
• Will have the highest rent in the area.
• Will have all the amenities. Pool, workout room, etc.

Class B Properties:

• Not as new as the Class A’s but still high end properties.
• Rents are fairly high but not as high as the Class A’s.
• Typical renters are white collar office type workers; mixed with higher paid blue collar type workers.

Class C Properties:

• Lower rent than Class B's but not in a War Zone.
• Typical renters are hardworking blue collar type workers; and possibly Section 8 renters.
• Probably never afford their own single family home.

Class D Properties.

• Typically located in the worst parts of the city.