All Forum Posts by: Tom Mickley

@Matt Kauffman

I'm not opposed to calling her and having a conversation.  What do you consider pricey?  Can you send me her contact information when you get a chance?  

Thanks!

Tom

Hi Bill,

I've never thought about that, but I'm open and willing to looking into it.  I'll check out your website.  I assume you or someone within your company is familiar with Ohio real estate tax codes?

Thanks,

Tom

Hello All,

First discussion post and new pro member here. Got that out of the way.  I am looking for a great accountant near me.  One that specializes in real estate (obviously since I'm here). I've reached out to few firms and didn't get the best vibe of their real estate knowledge from a quick phone interview. I won't name names since I don't want to tarnish their reputations. I'm looking in the Stark County Ohio area. Preferably near the Canton area.  

I've always done my own taxes in the past including 2019 and it's getting too cumbersome. Plus I'm sure I'm leaving money on the table as far as deductions and credits are concerned. It's time to expand. I want to set up an LLC for my current rentals and possibly land trusts? Still doing my DD to know exactly what I want. My attorney told me to go see a CPA before she helps me set up the LLC so I know how to be taxed correctly from the beginning.

S Corp? C Corp? disregarded entity? Not sure. I'm savvy with finance from being self taught.  However, I only know enough about accounting to be dangerous - which I'm trying to void...

Lastly, I have no clue how they charge for their services. Is it by the hour? Per Property? Per LLC? Do they typically bill you weekly, monthly or yearly? I'm sure the answers to those are all over the map depending on complexities of your portfolio.

Thank you in advance!

Tom 

Ohio :)

Investment Info:

Single-family residence fix & flip investment in Canton.

Purchase price: $170,000
Cash invested: $9,000
Sale price: $235,000

Bank owned. I purchased and went in 50/50 with my realtor whom I've been close friends with since grade school. We both lived there and fixed up with property to be sold after having to live in it for one full year.

What made you interested in investing in this type of deal?

My realtor found it on the MLS. It was foreclosed with mainly only cosmetic changes needed. It helped that it was in a great up and coming neighborhood. I knew the house would be an easy sell with four bedrooms, 2.5 bath and attached 3 car garage.

How did you find this deal and how did you negotiate it?

My realtor that I partnered with found and negotiated the deal. He needed me for the construction knowledge and bank roll. I needed him for finding and brokering the deal. It was a win-win for everyone involved.

How did you finance this deal?

5% down on a 203k loan. We each split the 5% down and used the 203k to fund the more time consuming/tedious renovations.

How did you add value to the deal?

The house was structurally sound. It just looked like the previous owners stopped caring. We repainted the cabinets, added all new stainless steel appliances (most were given to us through various deals we struck with people), granite counters, all new flooring and carpeting, painted all walls and ceilings, put tile in all bathrooms, replaced all the ugly lighting fixtures and door knobs/accessories. We cleaned up the outside and added some simple landscaping that was there - just overgrown.

What was the outcome?

We both lived in it for a year and a half and found a mutual friend to move in with us for added rent since there were two spare bedrooms not being utilized. The outcome was perfect. I knew that renting out the side of the duplex I was living in at the time would make my portion of the mortgage even out so I could live there for free again. We had a few pretty minor arguments. Any argument stemmed from me being cheap by looking at the numbers and him looking at it from a resale perspective.

Lessons learned? Challenges?

Be very conscience of your comps. Buy your renovation material based on the type of neighborhood and the income levels it attracts. Around here... People expect granite counters in homes selling in the mid 200s, but you wouldn't need that added expense for a rental or homes in the 100s. I also learned not to raise capital from nonconventional ways for foreclosed flips. There's no need to hold the house for at least a year if you aren't constrained by the type of loan. also, always get 3 quotes

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Louisville.

Purchase price: $143,000
Cash invested: $8,000

Side by side duplex with 2 car attached garage per unit. One unit fully renovated and rented out for the last 5 years (same tenant). Other unit needs updated but the current tenant has been there for 8 years.

What made you interested in investing in this type of deal?

I have family members that have several 2-4 unit properties. Watching them live for free (tenants paying their bills) made me want to get into residential multifamily units.

How did you find this deal and how did you negotiate it?

My Uncle is a realtor. He did the majority of the negotiations. I was young with dumb at the time.

How did you finance this deal?

FHA loan with 2% down. The seller paid half of my down payment.

How did you add value to the deal?

New roof (insurance claim), new carpet in one unit, and few here and there upgrades along with new long term tenants since the property was vacant during purchase.

What was the outcome?

I lived in one side and rented out the other side starting the day after the note was transferred. I lived there for two years until one of my real estate agents found a foreclosed single family home to house flip. Living for free at this duplex gave me the cash for the down payment on the new flip without needing to extract cash from this investment. I still own this duplex as it does produce positive cash flow.

Lessons learned? Challenges?

Learn everything you possibly can before taking the leap into real estate investing and rental properties. I was 23 at the time and didn't do enough DD before I made the biggest investment of my life at the time. Don't just learn the basics. Learn every aspect of real estate - it will benefit you with many, many dividends in the future.

Also... Don't give up during the difficult times.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $88,600
Cash invested: $30,000

Duplex. Purchased to live and renovate one side and rent out the other side. The unit on the other side has been fully rented for 3+ years. The unit is ready to be rented or Airbnb for the side I currently live in.

What made you interested in investing in this type of deal?

Passive income

How did you find this deal and how did you negotiate it?

My father tried to purchase the vacant property several years prior. The owner at the time turned his offer down. The seller is in his upper 70s and finally willing to let go of the property. I purchased it for the same price my father offered two years prior.

No realtors involved. Relatively easy process had the previous owner not been immobile.

How did you finance this deal?

20% down and conventional loan

How did you add value to the deal?

Both Units - New roof, electric panels, windows, lava rock landscaping and small patio in fenced in back yard.

Side I'm living in: New vinyl plank floor thru out, new LED cans in living room, every room painted, added wainscoting in living room (overkill), Ecobee T-stat w/ built in Alexa (free 4 being in the industry), fully rebuilt kitchen w/ added garbage disposal, dishwasher, new refrigerator, new wall mount microwave, new stove, all new cabinets and counters etc. Bathroom remodel as well

What was the outcome?

Great rental in a great location with good, long term tenant. One unit covered the mortgage and all utilities. I'm able to live here for free now.

I am now able to take a heloc on the property from the reappraised value from added the above mentioned upgrades. The side I'm living in is ready to rent so I can move on to the next investment.

Lessons learned? Challenges?

Don't try to do everything yourself. That took me 3x time longer than needed. I've learned that it is easy to house hack if you live by yourself. However, it is very difficult to house hack with small living space and a live-in girlfriend with a large, semi destructive dog (I wouldn't change the dog part though :)…)

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Realtors - Dean Mickley and Jonathan Burris. Both great.

Lenders - Diana Hepner (loan broker), Sofi (hard money loan) and US Bank (heloc)