All Forum Posts by: Terra Padgett

I think if the investor has had bad experiences prior, then Yes, a call from any sponsor comes with a cloud of anxiety on what the call is about. I remember with my SFRs in the beginning, it seemed liked anytime I spoke to my PM there was an issue that required more money out of pocket. I got sick of seeing their emails or phone numbers pop up. Several years later and though it has gotten much much better, there's still a level of "what now" that crosses my mind when I get an email from them. Lol. I personally just want the monthly/quarterly updates and the inbound wires received. Same in the syndication world. I just want the monthly/quarterly updates and the inbound wires received. 

Now with that said, if they're hosting a live event or an invite to something, of course I'd want communication. However someone's past experiences will definitely dictate their reactions/perceptions in the present. (note: there was a whole chapter in the book "The Psychology of Money" regarding this)

Yes, I would take non-responsiveness as a red flag. YOU are the investor/LP/capital provider so whatever YOU deem appropriate is what matters. It's YOUR money after all. Reviews from others are very helpful in navigating the space, however think of it like any other business you've heard good things about. If you patronize or become a customer and and have an awful experience, your review of that business will be completely different. And when it's your money, your opinion of them matters. 

I would setup a Series LLC to begin with if you plan to have multiple properties or businesses. You'll have the Parent or Master LLC and then each property can be held or titled to the different Series LLCs you form. Each series llc can have its own members, assets, liabilities, contractual agreements, etc. It will have its own Operating Agreement as well. It can also have its own EIN, separate from the Parent LLC. You would file the name with the state for each series created so it's clear its a series, but you wouldn't have to do a whole entity formation or do the annual filing fees. The Parent LLC would be the only one to do that. It's truly like having multiple LLCs formed but without the administration tasks and fees that come with having multiple individual LLCs.

I'm all for fractional ownership. Haven't done it on SFR, but I've done several commercial investments where I own a fractional share. It certainly breaks down the barriers to entry so that you can spread coins across a wide array of assets and markets. You're able to share knowledge, experiences, resources, and risk. Spreading smaller amounts across a lot of different investments also de-risks your overall portfolio. I'm very bullish on Passive Investing and creating multiple streams of income (mailbox money as some would say) and see this route as an effective way to achieve that.

Have Empathy for your Landlord. We all get it...receiving news of a rent increase can be frustrating for a tenant who's balancing their own financial responsibilities. However, Landlords face even greater cost pressures that lead to the increase decisions. Managing all the home's expenses are many times invisible to tenants. They may see it as "greedy landlord trying to get rich off of me." (chuckle chuckle). I wish I could live rich off the marginal dollars left over after all bills are paid. The reality is, rising property taxes, maintenance costs, increase insurance premiums (I'm a broker so don't get me started here), an HOA assessment or annual increase, etc, etc, etc. The increases are not strictly about creating more profit for a Landlord, but rather more often than not, they are necessary to keep a property in good condition (including good financial condition), meet safety standards, and ensure a comfortable living environment.

So before you get ready to attempt to rip your Landlord a new one, first go take it up with the local taxing authority, then go have it out with the insurance industry, then gripe to the neighborhood HOA (if applicable), then maybe settle your disputes with Home Depot/Lowes and any and all trade contractors. More than likely, your Landlord goes down those roads on a regular. While rent increases are never easy, neither are the increases experienced by your Landlord. So we could all have a little more empathy on both sides of the coin. 

In higher priced areas, your tenant pool will be smaller. Not as many “qualified” tenants to choose from. So it will likely take longer to rent. Don’t settle in your requirements. Cheaper in the end to find that qualified tenant than to have to evict an unqualified one. If your KC market is anything like mine here in Houston, someone who can afford that monthly rent range is likely a homeowner, not a renter. I would definitely recommend working with a PM or leasing agent that caters to a higher-end clientele. Doesn’t have to be million dollar listing style, but just a step above the run of the mill. 

“Don’t wait to buy real estate. Buy real estate and wait”

“It’s not about timing the market; It’s about time in the market”

If property is on public record in your personal name already, then you don't have anonymity currently. Moving to an LLC will help going forward to show the property is owned by an LLC rather than you individually. Or you could move it into a Real Estate Privacy Trust where the trust will show on public record as owner, not you or your LLC.

We had a flip where we were doing a complete gut renovation. We re-piped the plumbing with Pex, installed new toilets, new showers, new hoses & fixtures. However once all was complete, the tub and toilet water still had a yellowish tent to them. The sinks and faucets didn't, but the tubs and toilets did. 🤔 After having the plumber come back a couple of times to try to remediate, we brought in a different plumber that provided 2 other possible remediation things we could try. It ended up being the main water line to the house that was old/rusted/damaged. We ended up having to dig up parts of the front yard to replace the main water line that connected to the city water supply to the home. Never thought to inspect or check the water lines outside of the home prior. 

Are you wanting to stay an active investor or get into some more passive investments?

If the latter, I would consider putting your money to work in hands-off passive investments. Investing relatively small amounts into many different funds, notes, syndications, etc and having a chunk of your capital grow that way. In many cases, you’ll still receive the benefits of direct ownership such as appreciation, cash flow, tax advantages, etc, however with a lot less time and headaches. That’s what I would and have done in your similar situation.