All Forum Posts by: Curt Smith

In a small effort to be a help here; my best tip is still to join a local boots on the ground REIA. There's 4 maybe more. So as to not seem biased and to be fair one REIA may appeal to you and your needs more then mine so my pick for the last many years may not be your pick. Google: Atlanta REIA, Georgia REIA, Mid Atlanta REIA (?? meets just south of down town Atl). For your city google real estate investor association . Or look for real estate investors in meetup.org. Old timers are more face to face meetings and these are the folks you want to have in your network. Go to ALL REIAs in your area for at least a year. Do all in parallel. This is how you grow your network, gain knowlage. "All in".

You can make more money in real estate with knowledge vs your own or borrowed cash!!!! Focus on learning everything from experienced folks who are doing what you are asking. In time you'll figure out to not pay or try to learn from folks who used to be doers and who are now supporting themselves on coaching fees and weekends. I'm not saying don't pay for education, I've paid many zeros for education. Like I said knowledge is vital and paying for a weekend or a REIA membership or a REIA event is apart of your RE College tuition.

Good luck, curt

Hi All,  Just some comments from my own marketing and hearing from folks like you who have asked for my sub to training (BP needs you to connect first).

- My own and from other folks; I hear of no wave or even a trickle of sub to purchases!!!   :(    Owners just do NOT have enough stress:  under water, extreme deferred maintance,  loose of income and behind on payments.  Some or ALL of these needed ingredients aren't in place.   The market appreciation is saving the stressed owners.  Good for them!  Always root for owners to be ok.  Us investors after all deliver win win solutions where everyone has to win.  Its another book on why a stressed seller benefits from an investor buying as-is taking over the often behind mortgage.

- Today (as always) the most fertile group of sellers for sub to deals are the very VERY difficult deal scenario of pre-foreclosure. IE the owner has received their 4 week Notice Of Default with the auction some day of week in 4 weeks. Believe it or not; 95% of owners who are asked if they would like to sell and put some cash in their pocket who have been given a NOD and auction date say no right up to the auction. They got into their many problems via in-action and that is their MO, 95% say no. Some of the 5% may say yes but... some catch that kills the deal. A very small percent of NOD owners say yes I'll sell and the numbers make sense. Now the problems with this deal scenario that new folks need to say away!!!! Often 2-6 mo of arears; $5k to $25k. The auction is the following Tuesday at 10am and you have only 4 business days to close the title, pay off the bank, AND MUST MOVE OUT THE OWNER!!! The owner must NEVER be allowed to stay in a sub to purchase post closing!!! NEVER. Another book on the problems a owner converted into a renter can cause the investor. The investor may even loose their cash input and the owner sues for fraud and they get the house back, now their arears paid off. The owner has to be moved out the morning of closing!! My friend who focuses on NODs has a moving crew. There's ALOT of crying spouces, kids, tremendous stress moving those sellers out!! Very emotional. Imagine yourself given notice you are loosing your house and on no notice have to move out??

Anyway;;  that some info on where there are assured sub to purchases.  But its VERY difficult.  Just finding a closing attorney who will do title and do a closing on 24hour notice is very very difficult.  This deal scenario takes a specialized team who are experts in closing (and moving out families) who do their tasks in hours not weeks.

Theres a data shortage to better find sellers. What we need is easier access to credit info en mass; Who in some area is 60 days late on their mortgage? 90 days late on their auto loan? Every sub to deal has financial stress at its root reason for the sale. Here's a source that propstream.com has the data on; HOA liens, bankruptsy, divorce. I can tell you there's very few leads in these catagories!! You'll need to cold call and door knock each lead. Forget about post cards. You have to get the person face to face.

Creative deals are negotiated.  NO owner knows of creative scenarios (sub to, seller gives a 2nd note for their equity, seller takes an option to sell...).   Creative deals are negotiated by educated investors.

You can make more money from knowledge vs having ones own cash.  So get educated.  Assocated with experts.  To me this includes being members of your local REIAs.  Find local RE groups and join them all till you sort down to one or 2 local RE groups.   I'm a member of 3 local groups here in Atlanta.   You are the average net worth net knowledge of your network.  :)

Good luck, curt

Only in the FWIW dept; we've always been able to flat rate list our sales via FSBO/forsale by owner sites in the local MLS. We do the pictures, ad text, show the house, lock box etc. Most MLS's have a fee we never see (the listing agents office pays this) of around 0.5% you pay on top of a typical $500 flat rate. Most folks don't know or know how to self list.

After some flippers education I have to agree that the right listing agent you can sell faster and get a higher price. IE the one in 10 million is a value and you'll get back your commission paid from their system, office with a deep data base of potential buyers. The trick is figuring out how to filter for the 1 in 10 million (figure of speech) listing agents. The #1 (or so) question when screening agents: Tell me about your lead generation system? This is an open ended trick question. What you want to hear is; I have a team of VA's working 7 days a week putting up ads, mailing fliers looking for buyers. We put all of those folks into our offices data base. When you list with us, we put your house in front of 1000's of ready to buy now buyers. What you don't want is to list and wait.... for the trickle that comes in organically off your MLS ad.

This settlement and changes does not address the need for sellers and buyers to know how to vet an agent...  ;(    This long period of selling in the first weekend above asking has spoiled listing agents and new sellers don't know how to screen for a top producing listing agent (any more).    Investors / flippers do but not most home owners turning seller.

Listing yourself means you don't get that instant exposure to 1000's of buyers a top top listing agent has in their data base. Its possible to pay only 0.5% and $500 or so to sell your house. I probably will go this route myself as an experiment along with putting in the agent comments no FHA offers accepted and use my lender to get first consideration... blabla all stuff that suits me and not the actual selling price or days on market.

 The "settlement" an imperfect solution didn't address the quest by the market and buyers to pay and finance LESS!!!   Seems the Seller is the main winner here.   ;(

No I'm not ignoring one of the laws of economics the elastic market place where price is a function of supply and demand.  I'm just "grumbling"...   LOL  aaahhmmm.   Best to all.

My view as a buy and hold investor of this;

- negotiable everything sounds great.  Lets see a year from now how this really turns out.

- Buyers must now be in contract with a buyers agent for the listing agent to talk???   What the???   This was about competition.  This is anti-competitive.   I've not used nor needed a buyers agent for my last 30 transactions!! 

I approach the listing agent;  "I always close never have canceled a contract, my offers are without any contingencies - none,  I give high earnest money offers..."

This part makes my blood boil (if its true) that I have to be in contract with a buyers agent.  Even $500 flat fee is like ripping $500 from my mouth for nothing (in my view).

best too all,  curt

Just sharing some thoughts re my own rent collection system search. I have my reasons for not describing what system I'm currently on and how I got here with 40 doors of self managed SFR.

My wife and I have been around the block re rent collection.  All of the following are my opinions from my experiences.  I've learned that managing rentals has a high degree of variability and operator's needs.  Some folks say they are very happy collecting rent via cash app!!  I wouldn't.  Some collect rent face to face in cash.  Which I used to own a few doors of that management style and I sold those on notes to investors who specialized in that style of rentals.  FWIW they charge ABOVE market rent, to high risk tenants and collect rent in cash or you are put out by my full time maint crew.   Not my style but alot of money in that business FWIW.

The current rent collection h*** we are in today, certainly unhappiness vs how happy we where just a year ago.

- No good rent payment ACH status across the portfolio Today vs what we had.   IMHO a good system has a screen that shows all the payments in some ACH state:  queued,  bounced NSF,  paid.  On the 5th of the mo you want to see a mix of queued and paid.  The NSFs are your rent collection todo of texting, calling.  A Ma and Pa operation is personal and hands on.

Today I can see payments by clicking each property, then Charges, then The Charge for the current mo and see a payment.  :(  Too many clicks and no screen showing this info across the portfolio.    Tool navigation maters!!!

- No good reports.  If the system you are looking at says export to CSV, run!!!   That is not a serious rent collection system.   You need reports for taxes:   sum ALL rent collected for the prior year for your prop management s-corp 1099.  Sum all rent collected for each door (Sched E).   A report in my view include roll-ups (sums) at the bottom of columns. 

For daily use checking up on partial payers:   Sum up the payements received AND give detailed payements for the last 3 mo,  set the date range.  You will use this alot.

=== Lots of NOT needed features new folks THINK they need.

- Accounting.  This is the biggest waste of time feature.  Quick books will kill you and give you zero value, negative actually.   A ma and pa operator just needs the above reports for Sched E.   Soo many rent management systems say "accounting based".  Which includes the current system I'm stuck on.   IMHO from a before (no accounting based system, just collect rent with good reports) to an accounting based system (monthly rent is a charge in a debit / payment oriented system) I just hate the accounting based way of running a few rentals.  I can't say this strong enough;  I just HATE that a month to month lease is chopped up into individual charges (debits for you accounting folks) and then tenants pay accross a set of charges.    What I liked about not-accounting based:  a tenant can pay a head with just one payment.  If they want to pay ahead or pay a late fee; they have to make 2 or more payments on their side.  My side only views each payment.   Least this system;  won't show me ALL payments from this tenant.  I'm stuck cliking on each charge.  I just hate it.  Too many clicks, can't see the big picture.

Accounting is garbage is garbage out.  If you forget to type in that invoice, utility bill your accounting is worthless.  I have a super simple system for Schedule E expenses.  Take pictures of invoices / forward the email to your gmail business email;  subject = 123 main $99 for plumbing.  Then move these emails into labels (folders) per each address.  Then once in Janurary scan each folder adding up the numbers in the subject.  HUGE savings of time.  Annual cost per door is around 20 min if that (total per year per door).    Sending the mails / taking pictures is what you'd do anyway if you used an accounting tool. 

- Maintenance tickets.  If you want to p*** off a tenant do things that make you look like a corp landlord!!!  Like maint tickets vs just texting you;   Hey Curt theres water under the sink.   Maint tickets will cause a delay in fixing things and make you look corp.  Don't use maint tickets for <50 doors.  500 doors yes a bigger problem!.   10 doors = no maint needs.  Just text works best.

- Free.  What a bad idea to look for only free systems.  You will pay for property management or rent collection some other way that probably is less desirable.  Be willing to pay $50/mo maybe more.

- Support.  This is tough to get the facts on.  I'm ok with email support if they can login as you and see your data.  If they can't they are useless. Same with Chat.  If they can't see your system/data they are useless.   Phone support;  same;  they need to be able to login as you!!!    Ask.   I just had a good experience with phone support, we walked my screens together and it was helpful.  Email and chat was a waste of time.   My previous system;  email support and no phone support was good and worked.

=== Searching for systems

Good has a hack;   put some service name:   ABC co vs.   That vs at the end tells google to give you a list of similar companies.  I found out first hand that this list may contain what looks like comparison sites for the software I'm looking for.  These are paid sites not un biased review sites.  This is ok, just be aware.  Take it all with a grain of salt and doo your comparing.     One such comparison site after calling me for the list of issues I care about gave these 4 prop management system recomendations.  I have not looked at them myself.   What is sadly true;  theres tooooo many rental management systems out there.  I have no idea how they all stay in business.  Too many and its confusing:

• • SimplifyEm 
  • DoorLoop
  • Rentec Direct 
  • Innago

There are dozens and dozens of systems targeting <50 doors.  I'm NOT recommending these 4 just forwarding.   I did talk to SimplifyEM and They have an important feature for me;  schedule ahead.   IE a tenant on the 20th knows they have the cash and will be busy so schedules their payment for the 1st.  But another tenant doesn't have the cash and schedules for the 15th with late fee.  My tenants used to use this feature in the last system.  The current system doesn't have it.    I haven't talked to the other 3 yet.

====  How to trial a system

- Try their demo logins.  Get the sales free personal demo zooms.   Try their reports etc.

- Move just one tenant over.  Your partial paying problem tenant.  Run just one (or 2) tenants for 3 mo, maybe 6 mo.  Go slow!!!!    I will bet $5, in 3-6 mo you may move again.

PS the best landlording book I read is:  Landlording on autopilot.  Especially the chapter on screening tenants.  Your MOST important job in landlording.  Esp today with so much tenant fraud, fake pay stubs etc.   I use rentspree for applications and full tenant credit check.   If you are big enough the BEST screening tool is finddigs but they won't talk  to you unless you are 500 doors OR are in an org that you can pool your doors and get in.   Fraud, fake tenants,  squatters are a huge problem.   Worrying about property management is small issue in comparison to letting a tenant in who faked their income and past rental history!!!  :( :( :(   IMHO work on whats most important first.    I use rentspree credit check AND I get screen shots of bank balances AND 3 mo of bank account PDFS I comb through in detail.  If questions I do conf call with the tenant walking their bank statements.  -- I'm not kidding re this level of detail digging today --   Your hair should be standing straight up re having a turn over!!

Good luck, curt

I've been using an SMS platform for 4 yrs now (+/- a few mo), got a sub to deal early on nothing since.  I've done post cards etc.  I'll give some unfortunate facts!!

- "Its the list stupid" ..   SMS is just a cheaper way to waste money on bad lists that dont target true motiviation of "have to sell" vs "like to sell".   The past years as the ave selling price grinds higher and higher has been one of sellers are spoiled silly and aren't open to negotiation.  They don;;t have to they learned.

- So few pre foreclosures / BK's.   The tried and true source of "have to sell".   AND its some what difficult to buy a list of preforeclosures and get any  campaign to them since they are on a 4 week cycle till the auction.  >95% want to keep the house and will say no they won't sell.  You'd have to work pre foreclosures for a year or more to truely understand the craziness of those owners (who are about to loose at auction).  Sad and frustrating trying to buy from them.  Plus many logisticaly closing problems with buying and closing a day before the auction re getting a decent title search, the pay off to the bank to stop the auction.  Watchout folks if you don't have an experienced partner in pre foreclosure.  FWIW:  door knocking and talking at the front door is best for pre foreclosure.   Each state has vendors of these lists.  In GA its equitydepot.net .  

- SMS to low equity?   No assurance they want to sell.\

- I've marketed to FSBO and MLS expired listings. You'd think they'd be motivated. At least in GA/Atlanta great area y9ou'd be wrong!! Maybe in small town USA with few buyers FSBO would be open to negotiation. In major good jobs cities, sellers are willing to wait and re-list. ;(

The short of any marketing tactic:  "its the list stupid".   Know what you are spending $$ on the list.  BUying lists is notorious for having dirty-data.  IE bad data that is not what you paid for.

SMS only solves the total cost issue.  SMS does NOT solve the motivation of the seller challenge.   IMHO you need to learn how to buy good data and what data in your area is working.  Join local REIAs where old timers hang and locals are the experts.   

Good luck, curt

 ll of my peers are using buildium.com.  They have a demo account with data to play in.  Sales can give a personal demo.  Yoou are the right  size for buildium.   After many years self managing I can say with confidence that you should NOT choose based on cheap, free or price.  Paying a bit or a bit more often is worth it.  NOW what is any fee worth vs features?  You will have to try many sites demos and see for yourself.   

Rentredi you should play in their demo (I don't know if they do) acct and make SURE their UI and navigation fits your thinking.

Having developeed software for 30 yrs  and been an unhappy SW system user for that many.  I can say forsure that every system has a grove, a paradyme.  You have to like any softwares paradyme, especially navigation.  Is the navigation intuitive for YOU.   I've found I seethingly-hate many systems just due to the window, nav, menu design choices.  I may be pickier and quicker to fly off the handle over some manu/navigation nuance then you/others.... Can only suggest you do NOT over look living with a tool, dating, before you decide to get married to it by moving a bunch of tenants over.   

Try moving just one or 2 and keep ity just 1 or 2 for 3+ mo cycles before you move more.  

My bet is;  you jump to 2-4 different systems using this date before marriage tactic.  These rental managements systems are very different AND ACH xfer of rent is not implemented all the same.  The cost is the smallest part of this decision.

I'm not willing to mention what systems I use/used...  Because you need to make your own decission by trying one out for a few mo.   What I like may not be what you like.

Good luck, curt

@David M.  Tnx!   If this to be foreclosed note sells at auction, I can see where I claim legal costs on 8949/sched D.   I'll set the credit bid (the min auction amount) to be my balance plus legal costs.   This would be break even since I would be selling at auction for the current balance and I received principal payments.   form 8949  and sched D would show the selling price to be equal to the cost.

I'm presuming that all notes reported in this way are break even on sched D and your only gain is the interest collected.

AND in years with just P&I received on a note, just report the interest on 1040 interest received..  Tnx

I have tried to search for what IRS form(s) cover my scenario...

As an example selling real estate on an installment sale is form 6252 which docs the selling price, principal recieved / yr and interest received.

When buying a note for $NN,  and getting return of principal / yr and interest recieved/yr how is this cost basis captured?  IRS Form?

Is this as simple as a Sched C per note?

In time the note pays off, its sold, or is foreclosed where I get $YYY from the sale at auction or worse I get the security back (a house) and I'll have to have it appraised to set the selling price of the note.

I know I'm making this more complicated then it is... Once the simple answer is heard or figured out.  Tnx to all.