All Forum Posts by: Mike Lynch

I do not have a house flipping business. My wife and I bought a home and are rehabbing it using our own saved money. We had all intentions of living in it, but due to rehab costs and other new decisions, we are now going to flip it and buy more properties so that we have assets and not one big liability.

Here is a quote that I found on the Quickbooks website:  

"If you hire someone to paint your business ( store ), for example, you might have to send her a 1099-MISC if the work is over $600.00. If you hire someone to paint your personal house, don't sweat it. The 1099 form is for businesses" "Independent contractors are temporary workers that provide goods or services to another company under specified terms outlined in a contract, such as an Independent Contractor Agreement.

My big question is:  Since these contractors were coming to my personal home to do work for my wife and I, and we are not a house flipping business, do I send them 1099's?...... In the past, in our permanent residence where we live today, we have purchased a new HVAC for $4000.00, new roof for $12,000, kitchen remodel, etc, and have never sent anyone a 1099.

When, and at what point, do you need to send out 1099's?

Thanks!

Wow!

That's a lot of great information. I really appreciate it!

Thanks!

Thanks!

I really appreciate it!

Hi Guys,

Perhaps you see what seems to be a Multi-Family property that you are interested in on a website or MLS, etc. Some of the important property evaluation numbers are there, but many are not. At what point do you ask the Realtor or Owner a ton of questions? Do you call them on the phone and start firing away? Here's what I mean. Instead of driving right away and looking at the property and maybe taking time off of work, if I can get important numbers, I might find that the deal is a total "No Go" flop before leaving my home. Will the Realtor or Owner answer all of these questions below up front?.....How do you all do it?

Here are some answers that I would need to know:

1. Does this building have an HOA, if so how much are the yearly fees?
2. How much is the yearly property taxes on the land / building?
3. Is this an A: B: C: or D: property?
4. What are similar units in the area producing for rent each month?
5. What are the vacancy rates in the area?
6. What is the vacancy rate on this building?
7. Is the area growing or in decline?
8. Who (landlord or tenants) pays for water / sewer per month? (How Much ?)
9. Who (landlord or tenants) pays for electrical per month? (How Much ?)
10. How much is the yearly insurance?
11. What is the yearly operating expenses?
12. What is the gross Income per year?
13. What is the net income per year?
14. Who is the current property manager or management company?
15. Are all units currently occupied?...If not, how many are not occupied?
16. What is the yearly cash flow, after taxes?

Thanks!

Mike

Thanks Guys!

As you can probably see from all of my previous posts this year, I have been as confused as a three dollar bill. Last year, before reading any real estate investing books, I bought a torn up foreclosure. I have allowed enough money to finish the job, which will be finished soon, by Feb 2017. I feel good about it. The home will then go on the market. My money is tied up until the sale. I have been reading real estate investing books all year that this site has suggested and have watched a lot of videos and podcasts.

After the sale of my flipper home, I will be ready to dive in to real estate as hard as I can, and after reading many of these books, it looks like Multi-Family will be my main target.

Mr. Gronski, I would love to talk to you when we get the home sold. I am not sure how long it will be, but until I have some cash to invest and reserve cash, so I don't want to try anything or get excited about anything right now.....I will contact you hopefully sooner than later! :)

Thanks!

Hi,

I took advice from this site and bought a book called Multi-Family Millions by Dave Lindahl. He says over and over that if you buy a Multi-Family property, it is a huge "No No" to manage it yourself, and you should find a great property management company to do it.

He also says that since they will manage it for you, it doesn't really matter what town or state you purchase the property, providing that it is a good investment, in a good location, and the numbers work.

Now, Phil Pustejovsky said that after he moved to Florida, his Nashville properties really started going down the drain, due to his property management, so he got rid of them, or most of them.

There are not a lot of great Multi-Family properties in my area. Most are very small 2, 3, 4 units. How far out of town would you guys purchase them? ... Would it be a disaster to purchase them up to 8 hours away by car? I live at the Beach in NC, but my wife and I would like to move near the mountains later on, maybe in 5 or 10 years and thought about buying something here and maybe up there near Asheville or Hendersonville, but I don't want to screw up and buy something too far away and have the property managed wrong.

Thanks!

Thank you so much!

You all have some really great ideas. I will definitely keep around $100,000 as "do not touch" money, as I like to play things safe. For years, I didn't even have any credit cards. If I didn't have cash, I didn't buy it............My parents taught me to live below my means. That was all well and good until I was around 30 and tried to buy a new work van. The car dealer asked if I had good credit, I said yes of course....He ran a credit check and said, "You have 0 credit, like you do not even exist".....My wife had to sign to get the van. At that point I started getting a few credit cards and paying off the full balance each and every month. Now, we both have excellent credit............As a plumber, I see many people who live on the edge of their seat every month, way above their means. If they lose their job for a month, they are up the creek without a paddle. I wouldn't be able to sleep at night living that way. Keeping up with the Joneses is of no interest to me at all. Having money for retirement is my most critical interest.

Thanks,

I do leak detection pretty much every day, but it requires a lot of probing, digging, tearing out walls, and I know way too much about how to operate a jackhammer. More than I ever wanted to know........It's rough!

The main problem today with plumbing as opposed to 10 years ago is the need to have it right now, problem. People used to be willing to wait for a few days or week to have their new hot tub, dishwasher, disposal, washing machine, new sink, etc. installed.............Now, since you can send an email in one second, people do not want to wait more than 4 hours to get a plumber to their home, and I'm not even joking...........When people call now, they expect you to ask "What time do you want me there TODAY".

A dentist can't repair every person's teeth in town on the same day. They have them backed up for days or weeks. Same with roofer, car mechanic, carpet installer, painter, etc. This is what has really burned me out completely. Everyone has the "I must have it today" mentality. It causes a ton of stress on me and loss of customers. "If you can't install my hot tub today, forget it"........ Like I said, 10 years ago this did not happen. People waited for you to get to them. High speed internet, ebay, Amazon, and easy overnight shipping has changed the way that people think about home services now. They expect you to act like an ambulance driver and race to install a dishwasher, so they will call 27 plumbers in a row until one can come before noon that same day. On most days I want to run over and crunch my cell phone with my work van and head towards Alaska without looking back. :) I have been at this game since 1987. I should left plumbing years ago when it started getting really irritating, but it was a safe career field and I knew that people will always call.......When you have a job that nobody wants to do for a living, you will get plenty of calls. I have not yet met a person that wants to play in someone's septic tank all day then play in someone else's toilets and drains for hours the following day and don't think that I ever will. For this reason, it is very hard to hire and keep people showing up to work every day. I've had people to quit working for me 2 hours after they started due to getting sick and not being able to handle the work conditions of plumbing and sewer work.......It is not for a person with a weak stomach or weak muscles. Sometimes hiring new people is not worth the hassle because they just don't want to do nasty service work, only new construction, but that's part of the game.

I am really looking forward to trying my hand at home flipping and rentals. I am sure that I will be much more satisfied with it.

Thanks!

I really appreciate all of your great info.

Yep, I am looking for fast cash flow or as fast as possible, in order to get out of the job that I have now. I do not mind fix and flips. As I get tired during the day, I can take breaks, and stop working when I am worn out....Right now, when the phone rings people have emergency calls that need to be done "right now" around the clock and it is very hard to say no to people. Once you tell them no, you've lost that customer for good.

Thanks Guys!

I have hired plumbers and plumbers helpers over the years, but most didn't work out or tried to steal customers and equipment. They are always trying to get away with something.