All Forum Posts by: Tom O.

I've only made one book my bible where I follow it and it's been the key to my success. 

David Lindahl's Multi-Family Millions. 

It's fantastic. Tells you how to analyze property, how to make the calculations and what metrics you should aim for. The "forced appreciation" approach works every time. It's foolproof. If you improve units and push up the rents the value of the building will follow. I've doubled the value of some of my buildings and gentrification has helped me as well. 

Here's what nobody says when they are shilling that you should own everything in an LLC:

1. The "personal asset protection" may not be there depending on your jurisdiction and your activities. In my area, which is pro-plaintiff, I have personally seen judges go through LLCs (and even land trusts) as if they don't exist to find personal liability for the owners. I even had a judge say "this looks like a shell game" which is true of any corporate structure. Also, if you self manage you may be personally liable for your activities. 

2. A downside to putting property in an LLC is you may be barred from representing the LLC in court in say an eviction matter. Attorney ethics rules prohibit non-attorneys from representing LLCs in court in many/most (?) states. So if you use an LLC you may be required to hire an attorney.

3. I have never personally seen a personal injury attorney go after personal assets when sufficient insurance was in place. And a $1 million umbrella costs only $3-400. If you want to sleep better at night buy more insurance. My suggestion is assume your building is going to kill someone and buy a policy that provides at least $1 million and a $1 million umbrella unless you have more than 10 units. Also, you can buy one umbrella that covers multiple buildings. 

4. Keep your building bank accounts in a separate bank from your personal accounts. 

Thank you for your service. 

First, can I recommend a book that has done me well? David Lindahl's Multi-Family Millions. It shows you how to analyze deals and what numbers you want to hit. 

Second, I have a friend who owns 3 buildings totalling 12 units all purchased using VA loans. It's a powerful tool.

I don't know where you should start but I would suggest two things: 1) buy where you know the area. Maybe where you grew up or where you served. Go where you know the most about the area, the good parts, bad parts and know people. 2) Maybe an area near one of the air bases where you served because you are familiar with the area and you may have an insight in how to get Air Force folks as tenants. 

Good luck to you. If you were thinking of around Chicago, I would definitely love to have a beer or coffee with you and help you out with some ideas. 

I thought the benefit of cost segregation was increased losses due to depreciation of more things not changing whether you can use it against active income. (You can't according to my accountant.) So here I sit with $120K in "losses" mostly due to rehabs of units waiting for the day when I actually start taking profits. But I have a decent day job although retirement is in sight. 

If they took the money out of the house for other investments hopefully those are doing so well you can sell this one and move on to something else. Why even own this if you are holding/renting it at a loss? 

 Book is in the post. David Lindahl. Multi-Unit Millions. Really good blueprint for success IMHO

While there's no question that Chicago's city proper population has gone down much of the alleged migration has been either overblown or just flat out incorrect. See this story about the serious undercount -- by 250,000 -- in the 2020 census. 

https://www.nbcchicago.com/new...

From person experience and what I've read there's two large groups leaving. Older, retired folks who are moving to Florida or just over the border in Wisconsin or Indiana looking for lower taxes. There's folks who've gone from paying $30,000 a year in property taxes in the suburbs to paying $5-7,000 in Indiana or North Carolina. 

But those houses are not going away and are not sitting empty and those folks aren't renting apartments in the City. Also, City of Chicago employees have to live in the City during their jobs but as soon as they retire they move to Indiana or the burbs. Often Indiana or elsewhere for the lower property taxes. 

And there's been a well reported migration of African Americans from the south and west sides to northwest Indiana. 

And it's hard to blame them when you see what $300,000 buys you just over the border: A 3 bedroom, 2 bath house with decent schools and NO crime whatsoever. I've seen towns where a couple of kids shoplifting liquor from the local liquor store is the big crime of the weekend. 

Anyway, I know I read that you're supposed to invest in growing cities but I also know that almost every kid who graduates from a Big 10 school wants to move to Chicago and work. So we're constantly getting an influx of immigrants and people at the bottom of economy and the much higher up folks. 

Go into your local bank or the bank that you currently have an account with and ask for a credit builder loan. Instead of a normal loan where they give you money and you pay it off this works the opposite. You put in 100 a month and at the end of a year or whatever you get your money back. 

So if I was looking in St. Louis, I would look for a 4-unit or bigger. They are dirt cheap down there. I don't know if they are in horrible areas or not as I don't know the area. But look at this one: 
https://www.trulia.com/p/mo/sa...

four units for 300K. 

Look at this search: 
https://www.trulia.com/for_sal...

There's a 4-unit for as little as $225K. 

 Of course an attorney won't do that. But most realtors don't either. Most realtors want the deals to go through so they can get their commission. Mr. Gesner is playing on fear. Fear that these realtors have some sort of "secret sauce" that you are screwed unless you have it. I have four realtors and NONE of them brought any of this to the table. A "team of experts"? Don't make me laugh. Experts at what? 

And please let me be clear on something: I don't mind realtors. I use realtors. I've had a realtor on everything that I have ever bought. They don't really cost the buyer anything and they will guarantee the seller the full price on the MLS. And there are discount brokers who will put you on the MLS for 1% or less.

They definitely can add value to the transaction. But if you have a house to buy there is no real reason to use a realtor and give them a commission. If you want to use them as your closing agent I think that's a good idea but at a flat fee because I don't think that justifies a commission.