All Forum Posts by: William Sing

Hi @Michael Soukup,

Great question! Here’s a quick breakdown based on my experience:

Building new construction gives you full control over the design and materials, allowing you to incorporate the latest energy-efficient systems. You also benefit from warranties that can reduce initial maintenance costs. However, the initial costs for land, labor, materials, and permits can add up. Building is a lengthy process that requires coordinating multiple aspects, which can be time-consuming.

On the other hand, buying an existing property is generally cheaper upfront and offers the advantage of immediate availability, so you can move in or rent out quickly. Established neighborhoods often come with more mature landscaping and amenities. However, existing properties may need updates or renovations, leading to potential additional costs.

Key Considerations:

• Market Conditions: Fluctuate, impacting whether buying or building is cheaper. It would be worth seeing how much the in-law apt would add in terms of value since appraisers in different areas value them differently. 
• Long-Term Maintenance: Older homes may require more repairs. Thus, it'd be good to expect a higher capex in the long term. 
• Appreciation: Can vary widely based on location and property. This might be a huge value add in some areas and not so much in others depending on price point, etc. 

Personally, I find that buying is usually quicker and cheaper upfront, while building offers customization but requires more time and coordination. It’d be a good idea to talk to a few builders to get a better idea of costs per square foot. Since I’m not sure about the size and other major factors, take this advice with a grain of salt.

Good luck with your decision! 

Cheers, 

Will

Hi @Yichu Zhou,

Welcome to the exciting journey of real estate investing! It’s great that you’re taking proactive steps to build a solid foundation for your investment strategy. Based on your questions, here are some insights that might help streamline your financial arrangements and improve your system:

1. Separate Banking Accounts for Each Property Using a separate banking account for each rental property is indeed a good practice. It simplifies bookkeeping and ensures clear separation between personal and rental property finances. While your property management companies provide monthly statements, having a dedicated account will make it easier to track transactions, verify statements, and manage cash flow. This also reduces the risk of mingling funds, which is important for both clarity and legal reasons, especially if you decide to form an LLC in the future.

Potential Issues with Personal Checking Accounts:

• Audits: Using personal accounts can complicate things during audits. Clear separation helps demonstrate that rental properties are business activities.
• Bookkeeping Accuracy: It’s easier to reconcile and categorize expenses when they’re all in one place, reducing the chance of missing deductible expenses.
• Professionalism: Separate accounts show a more professional approach to managing rental properties, which can be beneficial if you seek financing or partnerships.

2. Organizing Your Financial System You’re on the right track with your CPA handling your tax returns and receiving 1099-MISC forms from your property managers. Here are some steps to improve your system:

• Automate and Centralize Records: Use property management software like Buildium, Stessa, or Innago. These platforms can integrate with your bank accounts, track income and expenses, and generate reports, simplifying your record-keeping.
• Regular Financial Reviews: Schedule monthly or quarterly reviews of your finances to ensure everything is in order. This helps catch any discrepancies early and keeps you informed about your properties' performance.
• Budgeting and Forecasting: Create a budget for each property, including expected income, expenses, and reserves for maintenance or vacancies. This helps in planning and ensures you’re prepared for unexpected costs.
• Consult with Your CPA Regularly: Have periodic check-ins with your CPA to review your financial strategy, tax planning, and any changes in tax laws that might affect your investments. This proactive approach can optimize your tax situation and ensure compliance.

Starting with these steps can create a strong, organized system for your real estate investments. If you have more questions or need specific advice, feel free to ask. Best of luck with your investing journey!

Cheers,

Hi Sam,

Congrats on forming your LLC! I've been down this road before, and I've got a couple of tips that might help you out with your address situation.

First, head over to your local UPS store and rent a mailbox. It's important to note that this isn't a PO Box; it's a mailbox that provides a physical street address. This can be a great workaround because many states require a physical address for your LLC, and a PO Box won't cut it. The cost varies from place to place but I've seen anywhere between $50-100/month, and it's a solid investment to keep your personal home address private.

Second, consider having your lawyer act as your registered agent. This way, their address can be listed on your articles of organization instead of yours. Alternatively, you can use a third-party registered agent service. There are plenty of these services available, and a quick Google search will help you find one. They’re typically quite affordable, so pick the one that fits your budget best.

Using these strategies, you can maintain privacy and still meet the legal requirements for your LLC. Good luck with your investment journey!

Cheers, Will

Hi @Alex Granados,

Welcome to BiggerPockets! It's great to see you diving into real estate investing in the Portland/Salem area. Renting out your current SFH would be a great opportunity especially if you have a lower rate. Depending on what you are wanting long term the househack is a great option as well and depending on your situation you might be able to also keep your house in Salem and buy up here.

I agree with @Nathan Gesner on the question. The groups also go through seasons of highs and lows depending on the time of the year and the membership. I'd also recommend checking out Investor Lab – their events are worthwhile, though there is a fee.

Besides REIAs, look into:

1. Meetup.com: Many local real estate groups host events here.
2. Landlord Associations: They provide excellent resources for both Portland and state-level, which could be helpful if you decide to self-manage your home in Salem.

Best of luck on your real estate journey, and feel free to reach out if you need any advice!

Cheers,
Will

Hey @Coretha Antchouey,

Congrats on the move! I'd highly recommend looking at going to the Investor lab events or join the local REI. If you ever want to chat a bit more feel free to reach out too!

Hi @David Eyal,

I’m sorry to hear about this tricky situation with your tenants. Navigating personal issues between tenants can indeed be challenging, especially with the strong tenant protections we have here in Oregon.

I completely agree with Nathan Gesner's advice. It's crucial to remain objective and not get involved in their personal disputes. Here's how I would approach it:

- Offer the Renewal to Both: Provide them with the option to renew the lease per Nathan's suggestion. Give them a clear deadline to decide, ensuring they understand the consequences if they can’t come to an agreement.

- Separate Lease for the Remaining Tenant: If the male tenant wants to stay and can afford the rent on his own, verify his financials. If everything checks out, you can renew the lease with him individually.

- Prepare for Eviction if Necessary: If the female tenant refuses to leave and cannot pay the rent on her own, you may need to consider eviction. While eviction can be a lengthy and complex process in Portland, it might be necessary to protect your investment. You could reach out to an eviction company like Landlord Solutions, Inc to assist with this process if it comes to that.

- Consider a Cash-for-Keys Agreement: To avoid the lengthy eviction process, you might offer the female tenant an incentive to leave, known as a “cash-for-keys” agreement. This can sometimes expedite the process and save you the hassle of legal proceedings.

Lastly, remember that tenant situations like these can be delicate, so handle communications professionally and document all interactions with both parties. This will protect you legally potentially. 

Best of luck with your situation, and feel free to reach out if you need more advice or resources!

Cheers, Will

Hi @David Cano,

Welcome to the exciting journey of real estate investing! I'm glad to see you're considering a multifamily home in Portland—it's a fantastic way to get started.

Portland can indeed be a bit tricky for multifamily properties, particularly with the current market conditions and tenant-occupied units. Here are a few tips to help you navigate this:

1. Tenant Considerations: When dealing with tenant-occupied properties, it’s crucial to understand the existing lease agreements. Make sure to request and review these thoroughly. An estoppel certificate can also help verify the terms directly with the tenants.
2. Market Research: Look into neighborhoods where multifamily properties are more common. Areas with good school districts, public transportation, and amenities tend to attract reliable tenants. 
3. Loan Options: Utilizing an FHA loan is helpful since it requires little down. Do note that there is a 5% down option that is conventional as well if you don't want the PMI. If you are doing a FHA loan on a 3-4 unit you will need to pass the sustainability test which can be a bit hard these days in Portland.
4. Property Condition: Pay attention to the condition of the property. Multifamily homes often require more maintenance, so factor in potential repair costs when evaluating a property. A thorough inspection is crucial and understand the difference between maintenance and bigger capital expenditures (capex) that you will need to save for. 
5. Local Regulations: Be aware of Portland's rental regulations and tenant laws. Oregon has strong tenant protections, and staying compliant is essential to avoid legal issues down the road.There a two major places to get forms and education. 
6. ROI vs. Cash Flow: Decide whether you're aiming for long-term appreciation (ROI) or immediate cash flow. Salem, for example, often offers better cash flow opportunities compared to Portland. If you're looking for more of an appreciation/forced equity play, Portland can be beneficial, especially if you consider house hacking.

Lastly, connecting with a local real estate agent who specializes in multifamily properties can provide invaluable insights and help you find the right deals. If you need more tailored advice or contacts for contractors and lenders, feel free to reach out.

Best of luck with your first multifamily investment! You're making a smart move.

Cheers,
Will

 You can ask for rent rolls/leases if you'd like. Sometimes the sellers may or may not have that readily available or may only provide it for those under contract since usually there is paperwork around that that requires certain investment docs to be provided. 

Hi @Zachary Engen!

Great to see you diving into real estate investing in Oregon! Starting your journey with a BRRRR strategy is ambitious and offers a solid path to building your investment portfolio.

From my experience, if you're considering both the PDX metro and Salem areas, each has its unique advantages depending on your investment goals. Salem generally offers better ROI and higher chance of cash flow, making it a compelling choice for your first BRRRR project. The numbers tend to work out more favorably there, which can simplify hitting your investment targets.

On the other hand, if you're leaning more towards appreciation and forced equity, Portland could be beneficial, especially with strategies like house hacking. House hacking in Portland as your first investment could significantly mitigate your risks while familiarizing you with managing a property and tenants. However, keep in mind that Portland’s market can be more challenging to navigate due to higher property prices and stricter regulations.

As you’re building your team, especially in regards to contractors and hard money lenders, it's crucial to vet the contacts you get from wholesalers or other sources thoroughly. Be wary of hard money loans; they can be pricey, often around 12% interest for newer, which can quickly eat into your profits and also require a high down payment. Make sure to ask for references and review past projects of the contractors. Also, be cautious with wholesalers — they often hype their numbers, so it’s essential to verify their claims independently. 

If you're still weighing your options between Salem and Portland, I'd recommend Salem for its easier entry points and cash flow potential, particularly for a BRRRR newbie. However, don't shy away from Portland if you find a great deal that aligns with a house hacking approach.

Feel free to reach out if you need more specific insights or connections in either market. I’m here to help you navigate through your first investment and make it as successful as possible!

Best of luck, Zachary!

Hey @Paco Rabi,

Great question! Buying a property with existing tenants can definitely have its perks, especially if you're looking to hit the ground running with rental income. However, there are a few critical factors you'll want to consider before making your decision.

1. Tenant History: Try to get a sense of the tenant's payment history and overall reliability. This can give you insight into what to expect and whether any issues might arise.
2. Lease Terms: Review the current lease terms carefully. Understand any obligations, rules, or peculiarities that might affect your management style or investment strategy.
3. Condition of the Property: Ensure you know the current state of the property. Sometimes properties with long-term tenants might require significant maintenance or updates when the lease turns over.
4. Local Market: Consider the rental market in the area. If the current tenant moves out after their lease, how easily can you find a new tenant, and at what rate?
5. Legal Compliance: Make sure you’re up to speed on landlord-tenant laws in your area, especially concerning lease transitions and tenant rights.

If everything checks out and aligns with your investment goals, this could be a great opportunity to have a steady income stream with minimal vacancy delays. Just ensure you're prepared for the management responsibilities that come with inheriting tenants.

Cheers, 

Will