All Forum Posts by: Steven Kleppin

@Ilan Friedman I have one property from Memphis Invest that I got almost 2 years ago. I went with them because of their stellar reputation. I must say they have lived up to that reputation throughout the selection, financing, and owning. You can PM me for more details but some quick points i liked: over the past 2 years there's only been about $100 of repairs. The tenant signed a 2 year lease with a built-in increase rent after 1 year. I get a call every month from my "handler" to see if I have any concerns with the property. We'll see what happens when a new lease needs to be signed this fall but I'm optimistic.

I did use the financing company they referred me to, which required 25% down even though it's a single family.

@Chris Clothier

@Shane Woodman I'm up near D.C., but have had my eye on Richmond Multifamilies (small apts). Richmond looks like an easier entry point than around D.C. and more stable than some of the northern small towns. If you're looking at small/medium multis, maybe we can partner on something.

This looks sound for a portfolio of SFHs. Does the advice/math change for an apartment?

The govt will pay some low-income housing. Section 8 is usually the means, and they usually pay only a portion of the overall rent. HOWEVER, they will still usually base that off of the local rent rate. So even with govt subsidies, the amount you get per door should be whatever the market rate is. So do your research to see if the contractor's quote checks out. Contact property managers, call up other apartments in the area to see what they are charging, etc.

Also, since this is your first time working with the contractor... whom the seller put you in contact with... I would suggest getting a second opinion. And get referrals from folks who aren't the seller.

IF that all checks out, sounds like you've got a fun project on your hands that will make you some money on the value add ( i don't have enough info to determine cashflow, so work that as well).

Let us know how it turns out.

I'm not opposed to profit sharing, but this seems pretty darn generous (obviously depends on where that X lies in your profit margin).

If you're worried about them squeezing the place dry... you probably need a new company, not pay them more.

What's the average property manager structure look like in your area? My first PM was only taking 8% where the standard where I was living was 10%. I learned that he had to incentivize prospective clients with the lower rate, and could afford to do so, because he worked alone and didn't have a team in place. He was clearly overwhelmed and my property and bank account suffered. He has since been replaced and I'm gladly paying the market 10% for PM with a professional team in place.

Lots of advice here. I haven't read them all. I'm in the same situation as the original poster. One thing I've been thinking about implementing is providing my tenants with a cash-back bonus at the end of the year if they have 12 consecutive months payment on time.

I would speak to a securities lawyer. But as someone who as zero legal experience, you may be able to propose to your employers that a "Member Managed" LLC is an appropriate structure that does not run afoul of their internal policies. My understanding is that that is not a security since all participants are active in the deal. If this is 3-4 close family members and friends, this may be an acceptable partnership for you. If it's larger than that, you may want to look at other options.

One of the things Joe Fairless mentioned in one of his podcasts was that everyone who meets with him asks how they can add value and promises to help. But he specifically remembered someone who SHOWED action hours after their meeting. It was only that the guy bought Joe Fairless's book... but it was enough to set him apart from the countess people who only ASK what they can do. (No idea if this was just self promotion from Joe or not. But fair advice either way ;-) )

Thanks KimLisa Taylor and Robert Fogel . I certainly wasn't planning on taking these docs and running with it. I'm still early on in looking at this approach and just wanted some frame of reference of what others have done. Lisa, I'm sure you've done many of these and I think your website (and podcasts you've been on) were very informative. Do you have any examples of the docs you listed that you'd be able to provide? Thanks also to Jillian Sidoti I'll check those sites out too.

update: I did find one in the marketing section of the Files. I was looking in other areas like Forms. I'm going over every inch of it and loving it. Really excited about plugging in other properties in a similar format to evaluate them.