All Forum Posts by: Sean Gallagher

I just did one for like 28k, was a little short on a closing cash purchase.  The loan is 12 months, pulls twice a month, the interest is minimal because I'm paying it off so fast.  Prob not the smartest thing to do but will be gone in no time.

Sent you a message.  These homes are in my personal name right now.  Forming a business to protect my assets is an area I need to gain more knowledge in.

Bit of a crossroads here, I'm hoping someone with a similar situation could chime in. I'm really busy with my w2 job working all the time to fund my investments. I've been buying SFH's out of state all cash as long term hold rentals. A smaller paid off portfolio seemed a lot easier to manage so that is the path I was on.. but I've come to the realization if I ever want to accumulate serious wealth I will have to use leverage and scale big. How are you able to scale big when out of state and super busy? My estimation was with leverage I could do about 7 homes a year and each year after it would increase. Soon I would be doing a home a month+. Trying to wrap my head around this being feasible while working so much at my w2. My involvement would go down drastically to where the only thing I'm doing would be funding the deals.

-Do you have a property manager that you turn the home over to after purchase and they take care of everything?  

-How much involvement do you have? 

I imagine this isn't cheap but I don't see another way.

I looked into this as well since I'm getting terribly bent over on my w-2 taxes.  I think the real estate professional strategy works if it is your primary source of income.   

Something else I failed to mention was how the PM's are also tacking on fees on top of rent to extract even more money from our tenants.  I just acquired one from a PM where they were charging a tenant a resident benefit package and a building protection plan.  These are fees separate from rent.. imagine them doing that across 100-200 properties it's wild.  That is money you could be getting as rent.. instead they probably keep the rent a little below market so they can pull more money for themselves/ the PM company.  

I guess I was looking a little too deep into it.  I took care of it with a lease addendum.  Wild how many fees PM's tack on to extract value from tenants ontop of rent.

This is my fear, I have not crossed over to a property manager but just what you discuss has me worried because one day I know I'll have to.  I'm only at 3 rentals and just 1 tenant can make or break you trying to be a PM while also working a w-2, I've already come close.  I have one tenant who is a god send compared to most, he accomplishes nearly ever repair I need, even did an HVAC unit.  If a PM handled similar situations, they would be using their HVAC go to technician, they would take a certain % of the total and add ontop of it for themself, parts would probably get marked up, it would be like 3x.  It's stopping me from scaling to a much larger portfolio leveraged versus a smaller paid off portfolio.  PM's will keep all late fees, they hold the security deposits so they collect all the interest on security deposits.  I understand they can make our life a lot easier but is it worth it if it eats up a lot of our cash flow?  Thought about if I did scale to say 100-200 doors that I would hire another company to audit the current PM on how they're handling my properties.  I don't know how the really big players stomach it.

Hi Dean, how much did you really leave up to your property managers after purchasing a home when looking to scale?  Because as we know not every property will be turn key.  Did they handle everything after purchase?  Meaning walking the home, seeing what needs to be done to get rent ready and completely managing it from start to finish?

True!  Just show me where to sign... lol

I'm just going to write up an addendum to terminate these addendums.  Other than that I can't write a new lease until next yr.. thanks everyone.