Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Try Pro Features for Free
Start your 7 day free trial. Pick markets, find deals, analyze and manage properties.
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Steve Smith

Steve Smith has started 5 posts and replied 19 times.

Post: Dollar-Cost Averaging Applied to Rental Property Acquisition

Steve SmithPosted
  • Investor
  • Caledonia, MI
  • Posts 19
  • Votes 7

Thanks everyone for your input, I really appreciate the different perspectives.  

Post: Dollar-Cost Averaging Applied to Rental Property Acquisition

Steve SmithPosted
  • Investor
  • Caledonia, MI
  • Posts 19
  • Votes 7

I've been listening to @Scott Trench's new book, Set for Life, recently. Scott discusses the concept of dollar-cost averaging a bit as it relates to investing in index funds. This makes a lot of sense to me and I've been doing this for years through the traditional routes of 401(K) and Roth IRA. However, now I am considering how this applies to purchasing rental properties. Here's an example: If an investor plans to purchase 30 rental units over the next several years, would it make sense to just systematically (as mush as possible) purchase 3 or 4 units per year? Similar to dollar-cost averaging with index funds, sometimes units would be purchased at higher prices and sometimes units would be purchased at lower prices (depending on where the market was at the time). In theory, the investor could then spend less time attempted to time the market, trusting in dollar-cost averaging to end up in a good position 10 years down the road. I'm still kicking this around in my head, but wanted to see what others thought of this. Thanks!!

Post: Michigan Lease Template

Steve SmithPosted
  • Investor
  • Caledonia, MI
  • Posts 19
  • Votes 7

I agree with @Aaron Treloar.  I just recently joined the RPOA and they have a ton of great resources. I wish I had joined sooner. 

Post: Help me learn from this experience...

Steve SmithPosted
  • Investor
  • Caledonia, MI
  • Posts 19
  • Votes 7

Thanks @Kristopher Smith, @Richard Ball, @Paul Leason, @Kim Meredith Hampton, @Account Closed for your comments.  I really appreciate it!  

Post: Help me learn from this experience...

Steve SmithPosted
  • Investor
  • Caledonia, MI
  • Posts 19
  • Votes 7

Thanks @Justin Workman, I appreciate your feedback.  

Post: Help me learn from this experience...

Steve SmithPosted
  • Investor
  • Caledonia, MI
  • Posts 19
  • Votes 7

Thanks @Derek Lacy for weighing in.  I may have to adjust my coverage going forward.  

Post: Help me learn from this experience...

Steve SmithPosted
  • Investor
  • Caledonia, MI
  • Posts 19
  • Votes 7

I'm reflecting back on a situation that happened over the last several days and trying to ensure that I properly identify the lessons learned.  I'll lay out the scenario below, and I'm hoping you all can provide some third-party perspective to help me figure out how I can handle this better in the future.  

Last week Thursday I received a call from one of my tenants informing me that a chunk of ice on the roof had fallen to the ground, taking with it the soffit, facia, and electrical mast.  The tenant had called the utility company, who shut down the power to the house, since the service from the street had been compromised from the falling ice.  

I had a chance to speak with the utility worker, who informed me that I should contact an electrician.  That the electrician should be able to fix the mast and appropriate components on the house and then the utility worker could come back out and restore power to the home.  This was all at about 10 pm or so.  I attempted to call an "emergency" electrician, but he never called me back.  

The next day, Friday, I called several electricians.  I was finally able to find one that had time to look at my project later that day.  At this point, my tenant was staying at a family members house.  The upcoming weekend was Christmas weekend.  The tenant wanted to get back home before Christmas, and I wanted that to happen as well.  

When the electrician arrived, he pretty quickly called me to let me know that the damage was pretty severe.  That, coupled with the fact that the house is very old, he anticipated that we'd need quite a bit of work done.  Independently of this, I had a handy man out at the house that day working on another more minor project.  While he was there, he took a look at the damage to the property and was pretty quick to advise me that I should file a claim with my insurance company.  Both the electrician and handyman thought that repair costs could easily be in the few thousands and therefore it'd be worth the effort of filing a claim with insurance.  

So, I called the insurance company next and filed a claim.  Due to the upcoming holiday weekend, they weren't able to get an adjuster out to the property until the following Tuesday (yesterday).  I wanted to wait for the adjuster before doing any work, but ultimately wanted to get power restored to the house before the weekend.  The insurance company said that I could start doing work before, but to take a bunch of pictures.  Also, the electrician informed me that this type of work is generally covered by insurance.  

With that information in hand, I went ahead an allowed the electrician to begin working.  I won't get into all of the details of that here, but all-in-all, the electrician restored power to the house and the tenant was able to get back in for the holiday weekend.  Because of the extent of the damage, the invoice for the electrician ended up being about $6,200.  My insurance policy has a $1,000 deductible, so I figured I'd be out the $1,000 and then have coverage beyond that.  

Fast forward to Tuesday (yesterday) and the adjuster was able to go out to the property to take a look.  He called me and informed me that he had had a chance to view the damage.  He also informed me that my landlord insurance policy was a "major peril" policy and only covered for 8 major items (fire, smoke, hail, etc., etc.).  But, ice dams were not one of the covered items and therefore I had no coverage for this particular claim.  I went back and forth with him and my insurance agent a bit, but it's ultimately not looking good in terms of getting any sort of coverage.  

The end game is that we are now out the $6,200 with no relief coming from insurance.  Add to that, the soffit and facia is still completely off from the house.  So, I will still need to get someone out to the property to make that repair.  At this point I'm not sure what that will cost, but it will be completely out of pocket.  

I've been replaying this scenario in my head trying to make sure I get the lessons learned down.  I certainly don't want to repeat any mistakes made here in the future.  

I'm hoping the community can weigh in and let me know what you think.  Where did I go wrong here?  Should I have had the electrician hold off until the adjuster was able to come to the house?  Should I have had better insurance?  Should I have waited until I could get more quotes for the electrical work?  Is $6,200 a reasonable amount to pay for that work (new mast, restored service, new electrical panel, arc faults, etc. -- I don't know much about electrical--)?  I'd love to hear what everyone thinks.  I'm located in Grand Rapids, Michigan for all those that have their keyword alerts set up.  Thanks - Steve

Thanks @Tim VandenToorn for replying to my post and trying to help me get the conversation started!!  I'm still in the market for good handy persons.  But, have had some referrals come in that I am currently following up with.  Now that I've got a little more experience, I totally understand why investors hold their contractors close to the vest - good ones are really hard to find.  :)

So, I'll just wrap this up with a good luck to everyone out there looking for good people.  Maybe I'll add this question.  Do you have good luck getting handy persons to complete a W9 and accordingly receive a 1099 at year end?  It seems to me that this can be a sticking point sometimes too.  Happy investing!  

Steve

Post: New Investor: What more can I do to prepare?

Steve SmithPosted
  • Investor
  • Caledonia, MI
  • Posts 19
  • Votes 7

Hi @David Wier, I wanted to take this chance to welcome you to BP. I graduated from CMU (almost 10 years ago now, wow) so, Fire Up Chips!! Based on your post, it sounds like you are doing all of the right things, including checking out the BP podcast. One thing I did as part of my REI education was to go back and listen to all 200 episodes of the podcast. That's a lot of hours of podcast, but certainly worth the time. Each guest on the show has a different perspective and something to teach the rest of us. Good luck as you finish up your degree and good luck as you start your REI journey. Steve

Post: So confused about forming an LLC for real estate

Steve SmithPosted
  • Investor
  • Caledonia, MI
  • Posts 19
  • Votes 7

@Ayse Yesilyurt great questions! I just recently set up an LLC in Michigan. I too was confused about not listing all of the members on the Articles of Organization. Ultimately, we listed out the members and their ownership percentage within the Operating Agreement. When I opened up a business checking account for our LLC, they requested a copy of the Operating Agreement, and specifically needed the listing of the members to determine who could access the bank account, get debit cards, etc. Happy investing!