All Forum Posts by: Account Closed

@Jeffrey Collins I am new to investing, but have an LLC set up for a MF that I am currently purchasing. I also have a corporation that owns a few other rental properties, as well as my primary real estate business. The corp was set up back in 1995 when I was doing contract work, so I kind of defaulted to using it once I got into real estate. It's probably not the best way to own real estate investments (maybe there are some better opinions about this). Going forward, any additional purchases I make will be done under separate LLCs. I am hoping the LLC will require a little less ongoing paperwork.

I would recommend talking with a real estate attorney and your tax accountant to see what setup will work best for your own personal goals.

Hi @Naveen Desai

I am new to investing, but I probably wouldn't hire a GC for this small of a remodel (I'm sure someone will chime in if I'm wrong). Most of what you are doing is cosmetic. Personally, I think you can get better prices by getting multiple bids yourself. Just make sure you get referrals and check references on the contractors you use. I also wouldn't pay until the job is complete.

@Bryce Tritt Welcome to BP. I am new here too.

I agree with @Jon Holdman in that you need to have a goal in mind when purchasing a property. Here in Texas, we don't see a lot of appreciation in the short term and it can take many years for a home to appreciate enough to cover the up front closing costs, not to mention the additional selling costs (which are usually more than the buyer's costs). I see a lot of sellers who put their home on the market within a few years of purchasing and barely break even at closing. Some even have to write a check at closing to sell their home. That's not a position you want to be in, so just make sure you know up front your goals for purchasing any particular property.

Take all of the information you learn here on BP and then decide what works best for your own investment goals.

Hi @Joshua Y. Welcome to BP! I am a new investor too in the DFW area and also a huge Dave Ramsey follower. There is a lot do debate on BP about cash vs financing but at the end of the day you have to do what's right for you. There's nothing wrong with slow and steady!

Hi @Kenneth Woods Welcome! I am in the DFW area too, but new to investing like you. I don't have a lot to offer yet, but I am learning a ton from the BP forums. Be sure to download the podcasts. They are full of information too!

Check the laws in your state. In Texas, it is illegal to profit from utilities so only actual usage can be billed to a tenant or you can calculate a bill based on allocation formulas defined by the governing authority. In Texas, it's the Texas Commission on Environmental Quality (TCEQ). The formulas are based on number of tenants or square footage or a combination. This is also known as RUBS (ratio utility bill system) and is used in the absence of actual metered or sub metered usage.

My guess is that there are probably some similar laws in Massachusetts, so be sure to check it out.

I have no idea about how the income would be treated for tax purposes. That's a question for your accountant.

There's really no need to add any verbiage to a standard contract for an inspection contingency as long as you are using your option period (at least for Texas contracts). You can use the option period to do all of your inspections (general, foundation, pool, HVAC, termite, etc) and still cancel the contract and receive the earnest money back. The option period is designed for these types of contingencies.

There are other contingencies that wouldn't really play out during the option period (I.e. Financing, credit approval, appraisal, surveys, title, etc). As long as you are using an experienced agent and a standard contract even these can be covered without risk and extra verbiage added to the contract.

I would also agree that the inspection is the cost of doing business and should be paid for by the buyer.

And as a footnote, why show the seller your cards yet? Just make your offer as simple as possible and leave the discussions about possible repairs (or price reductions for repairs) for after the seller has become emotionally invested in your contract. Sellers will usually negotiate once they have had their home "off the market" during an option period because their only other option is to wait for the next buyer and possibly a lower price if the buyer terminates the contract. Once you provide a seller with an inspection report showing items needing repair, they are obligated to disclose those items to all future potential buyers. So most sellers will negotiate to repair at this point.

Although you can't necessarily find vacant properties using the local appraisal district data, you can find out of state or non owner-occupied properties. Local appraisal districts usually show the property address and the owner address (or mailing address). There is usually a download option and you can load the records into a spreadsheet and search for the records where the addresses are different for property and owner.

I agree with @Rolanda Eldridge

Let the current tenants know you are raising the rent. If they don't want to renew, you might be better off finding a tenant who pays on time all the time and at the higher rent.

I had a tenant once who was "easy going and but late a lot" and I was ok with it too, until late started meaning the 20th of the month. Better to be firm about being on time or find a new tenant.

Good luck!

Welcome @Niki Cunningham I live near Denton and love the area. I"m a new investor on BP too.