All Forum Posts by: Stuart Udis

@Anna Cerda Why seek advice from gurus? Particularly when it comes to something as critical to your financial wellbeing as your mortgage payments.

@Wyatt Nauman "It seems like all these influencer-investors nowadays are talking about boutique hotels or trying to sell you into another one of their mentorship programs, which I’d rather not have to pay for …"

Why on earth would you pursue an investment strategy influencers are peddling regardless of whether you have to pay for their misguided education?

@Ilana Shalev Philadelphia is far more nuanced than that (with some zip codes more so than others). You will undoubtedly make bad investment decisions relying on statistics broken down by zip code. You really have to spend time in these neighborhoods or work with sales agent who already has and understands the market on a more granular level. Philadelphia is a market where investors can perform quite well with proper market understanding but can also be a market where investors suffer big losses relying on bad data.

@Kristi Perrotta I am concerned you are looking to save money in the wrong areas of your business. Not all sales agents are created equally, but data suggests the top tier sales agents will achieve a result that exceeds the few percentage points of commission savings you are looking to pocket. You are better served spending the time and resources you are currently allocating to your own FSBO preparation researching and interviewing the top sales agents in your market and ultimately hiring one of them. It will be a much better ROI.

It's great that you are willing to grind, this business requires that type of commitment. However I recommend grinding in other areas of your business such as networking, market research, pursuing acquisition leads etc. Not selling your own home.

@Ari Dandridge As others noted there’s very little that separates the services and offerings banks provide for depository relationships. Since your post raised  concern around moving large sums this suggests you’re looking at maintaining substantial depository relationships. If thats the case, you’re looking at banking entirely wrong. Focus on the banks you want to bank with from a real estate (or any other business venture you’re interested in pursuing). Depository relationships have become increasingly important. Many banks now require this in order to fund real estate loans beyond the basic operating account. Use this as leverage to get something more substantial in return. 

If the property is in your son's name creating an LLC or any other entity does nothing but add additional operational costs. Without getting into the weeds on litigation procedures, there's nothing that stops your son from being named as a defendant in a claim regardless of the entity structure. In this particular case, adding entities as a owner occupant where the property is titled in your son's name only makes litigation more complexed and expensive.

  @Marcus Auerbach provided great practical advice and his 5 layers really boil down to one thing.... be a good operator. As a property owner, the focus should be on proactively preventing liability from arising rather than solely preparing for when that liability event occurs. Being proactive is simply doing things the right way. Normally those who are proactive are not only more likely to avoid the liability events but by operating their business the correct way if that liability event does occur (and it inevitably will) the proactive property owner are always better prepared to repel exposure. 

Operating costs and cap ex both disproportionately impact the lowest cost real estate. Most who rely on the "1 percent rule" are novices buying the cheapest of cheapest real estate with little awareness of the  the true operational costs of owning property. This explains the misguided  lure and appeal  of the "1% percent rule".

@Joseph M. I wouldn't be so sure even the earliest investor distributions were actually tied to real estate performance. There were a lot of questionable transactions that occurred in the Philadelphia market where RAD has significant holdings during their earliest days and wouldn't be surprised if even back then distributions made to investors were just fresh capital they were pulling in.

Owning real estate is capital intensive and capital requirements extend well beyond purchasing the property.  The goal is to successfully own and operate real estate, not merely complete the acquisition.  Many who fail in real estate fail because they aren't properly capitalized, not necessarily because its a bad deal. No matter how good of a deal you have, it becomes a bad deal when there's no money to properly operate the property. Contingent and cap ex items surface,  subcontractors will disappear on you, you will experience a wonky occurrence where the  cost benefit analysis of using your deductible and generating a loss run against your insurance policy makes it more advantageous to pay out of pocket, expenses increase and the list goes on. No matter your experience level and how well you run your business, you will encounter all of these occurrences and promise the new investor won't escape this.

Carriers price their coverage based on  risk. A tenant occupied properties will be deemed higher risk than owner occupied properties. This is why your premium quotes are coming in higher. You can shop around for other carriers who may be more aggressive with pricing in your market.  Review your current policies coverage and see whether there is an exception for rented property. There's also additional coverage you are missing out on without the appropriate policy in place. As far as downside, how about denied coverage?