All Forum Posts by: Tyler Fontaine

Anything over 5+ units in a building is generally considered commercial residential at that point. This means that the lender/bank is going appraise and provide a loan based on the NOI of the property and not necessary the stated "value" of the asset from comps and so forth.

A 15 unit building with 50% vacancy and below market rents will be cheaper than the exact same building that has a 15% vacancy and has the rents at market rate. 

You totally could jump right into bigger deals but you must keep this in mind. It depends on the strategy you want to deploy. However you could raise capital from investors for the downpayment on a building that has the value add opportunity. You then stabilize the asset. Do necessary repairs/updates. Fill vacancies. Increase rents to market rate. THEN approach a the lender and refinance your loan to cash out the added equity to recoup the initial investments and ideally some cash for you to repeat this process.

It's worth noting, the bigger the deal you take on at first you will be going through trial by fire. The caliber of investors, contractors, lenders, agents, and red tape you will work with will be much higher at that level. If you don't have the skillset to run the play then these people WILL run you over and take your lunch. It's very possible you just have to be self-aware to what your strengths and weaknesses are as you go through the process.

Also, as you take on bigger deals the network you use to execute the deal have less patience for you. They assume if you're swimming in that pond - that you do indeed know how to swim. They will be less tolerant of ignorance, errors made, and will not care if you don't know what you're doing.

If you can move out of CA or get a job that pays you from another state that will help. Cost of living is too high in CA and will only continue to go up in the near/mid future.

Additionally, CA is becoming more communistic by the day. Political perspectives aside. The state has some of the largest income tax in the country. Property tax only goes up. Their social programs heavily weigh on the economy for regular people. Restrictions for housing/tenant laws are becoming increasing hostile for landlords. 

It might be safer and get you a greater return if you explore other markets to invest in.

That said, @V.G Jason and @Bjorn Ahlblad make good points. Consider you other streams of income when you retire. How much do you have saved, and how far will it take you accounting for emergencies, black swan events, and inflation? How will you turn into a full time investor without a w-2 to keep adding to your portfolio?

An app for receipt management could be Shoebox. It allows you to upload pics of the receipts, categorize them, label them, and so on. This way you should be able to allocate them in one place.

Rocket Money is a good app as well. Connect all your cards and accounts. As money is spent simply tag/categorize each transaction into the right section. In this case each job its associated with.

If you can afford it and are scaling some what you can enlist a proper accounting team. The one Lyon uses is out of country. So its cheaper but they are effective. After a thorough set up with them we simply email them receipts with a note for what it was for/what project and they allocate it into the right category.

Now if you have the capacity to learn quickbooks or employ someone who is versed in it then that is your best bet. It's extremely robust. CPA's are familiar with it.  

If buying on MLS an experienced investment realtor will be your best bet to help you.

They have relationships established, know the other agents and so forth.

I will say it's possible to find deals on the MLS but if you want true deals you will have to go off market.

Realtors can be good for this too. Connect with them, let them know your buy box, and tell them you buy distressed assets that struggle to move on the market. 

They may call you before they list a property if they think it’s a better option than going to market.

Check what your lease says about utilities, who’s responsible for them being turned on/paying them, and so on.

Connect with your local real estate attorney and get guidance on a course of action.

So if you’re out of state - a local, experienced, agent will only help you get the deal done.

Do not cut costs or cheap out in attorneys, cpas, or contractors. The pennies saved will cost you dollars in these areas.

If you really want to cut out the realtor then contact the seller like you mentioned. Come up with a couple offers/options you can present to them.

Find their pain points and leverage them with solutions. Explain, “how much money will be saved without an agent…”

Also consider if you don’t have an agent who will be your boots on the ground that you trust? 

Who’s gunna do an inspection properly?

Who’s gunna ensure the comps are legitimate? 

Who can be your connector for local help? Contractors, inspectors, appraisers, property managers etc

It depends what's on the horizon in terms of scope of work. Begin to separate capital expenditures and routine maintenance items.

Think about the roof age, HVAC systems age, and larger cap-ex items that you need to plan for but might not have to do now. Then think about what needs to happen now. Could be simple things like changing some lights out, painting a unit, or fixing broken handrails in the stairway.

Once you have that you can more accurately slide that % up or down. For example, if that house was rehabbed really well recently you may have newer hot water tanks, newer units, and the only thing you NEED in the next couple years is a new roof. So then you can plan to put away for just the roof and maybe some of the smaller items.

Now lets say you buy it and the units are all new but in the next 12-24-36 months you need a new roof, new hot water tanks, a new boiler needs to be installed, and you will have to address a leak in the foundation. You should increase that percentage to 8%-10% or what ever works for you. This way you can ensure you're saving enough for these projects.

That's a reasonable concern. I know that REI Call Center provides VA's that speak english well and are versed in real estate talk.

Otherwise I would say that you should just interview as many VA's as possible until you find the right one who suits you needs. Put them on a probationary period until you know they are doing the work and doing it how you need.

Ahh that could be tough. Definitely consult with your real estate attorney as I am NOT an attorney haha.

However, if she is on the deed then that condo cannot be sold/transfer ownership without her approval as well. So long term she may have some leverage over the guy but she might be stuck until then.

Furnishings; she may be able to just take them back as she paid for them. Rehab and down payment might be more challenging. Again, I would say defer to an attny to get more clarity.

Have a company properly SEO your websites/backlinks/etc.

Get a google my business set up and begin to have everyone you know who's willing leave you reviews.

Get in as many rooms as possible with investors. Local REIA's are great. FB groups for local communities or investments. Just clearly define your offering and target market, then start telling everyone about it.

As you get clients and increase revenue/streamline things for them/handle difficult tenants ask them if you can use them as "case studies" for social media. Tell a story online with this and make the client the hero of it.