All Forum Posts by: Vlad Stinga

Yea you're right, the CPA route might be the easier path. Thanks for all the advice Anthony and for the CPA connection.

Thanks Anthony  that would be great. My bookkeeper will finish catching up all the expenses for the year tomorrow so I'll be good with that. And yeah at this point I just need to get to the closing line.

I just thought of another scenario. What if I do a quick claim deed and move another property into this llc? that way when I sell the ones under contract, they won't be all the assets in the llc and I might not need the letter of good standing at all. what do you think?

Hi @Anthony Thompson , yea I've used Pace's company and they turned out to be horrible. I'm searching everywhere for a CPA that would be willing to write me a letter. I have all the documentation from my tax returns so it's not like they would be taking a risk , it's just inconvenient. I got the request with the Division of Taxation already, and they asked me for a pro forma return. I asked my previous CPA about getting that and she said "software and forms are not even available for that, and I have never heard of such a request" . This feels like a bad joke at this point

I need a certified CPA who can draft a letter for the division of taxation in rhode island that states that as far as they know i do not owe any taxes for 2022. I'll provide any documentation you need from my tax returns and fees for the letter. I used Pace Morby's Prime Business Pros to do my taxes last year and they are absolute garbage, and I can't even get the operator from their company on the phone to request this letter. The reason I need it is because I'm selling all the assets I have in an llc and the title company requires it or a letter of good standing (which requires a lot more documentation). 

Help. Thank you!

Mason is right I have done the exact same thing and was able to raise section 8 rents on 2 units from 850 and 950 to 1075 on both with a phone call to the local housing authority office and with minimal increase to the tenant's portion of rent

I spent 3 years researching and basically procrastinating. I always needed to read another book or listen to another podcast before buying my first property. Or I needed just a little more money, or more experience. Eventually I just pulled the trigger and bought a 4 family property. It was an absolute slam dunk and I'm kicking myself for not doing it sooner. Now, I'm trying to figure out how to get the next one , because my debt to income ratio is out of whack, even though I have a higher income with the cashflow from this property. 

Moral of the story: stop waiting !

Updates:

Audis are not meant to be trucks...my suspension broke...I should probably add that to renovation costs:)

Finishing up the floor today, most of the painting is done, new doors and new windows went in, we put together the cabinets and installed them, rewired most of the apartment, eliminated the old "knob and tube" wiring, etc.

When they say everything that could go wrong , will go wrong....they are not kidding. Here's a list of stuff that went wrong because lack of experience costs time/money when you do a DIY project:

Car broke down because I used it as a truck

Had to get a GC registration with the state of Rhode Island or face violations from the building inspector (5 hour course, pay for insurance, and taxes, around $2000) because here you can't pull permits yourself for anything and you need permits for everything other than painting or putting up shelves. 

Half of my appliances got delayed because the delivery company was absolutely incompetent.

The countertop measurement guy delayed me by a week because "the cabinets were not secured to the floor and the wall" (wtf).

My HVAC guy didn't pull a permit for the minisplits and they might need to be moved, I'll find out on Tuesday when the inspector comes in.

Somebody reported excessive trash even though it was obviously an active construction site and it was all contained in one place but only got the trash container later (you only get it for 10 days, or you have to pay more).

There were a lot more daily ones but who has time to stop and worry about all of it :)

Unless we have other unforeseen delays, we should be done in the next 10 days. fingers crossed.

Thanks everybody! Means a lot!

Here are some updates on the renovation:

I renoved most of the kitchen cabinets, a lot of the carpet in the rooms, Removed the old wall boards in bedroom #2 scraped a lot of the old ceiling in the dining room, and generally made a lot of mess :) 

Here are some pics starting with my one of a kind Audi truck seen here carrying 6 doors and 40 cases of LVP flooring :)

Hello BP! I purchased my first property in December and I would love to share the process with everybody here, maybe others will get inspired to buy their first or next property even in this crazy market.

My property is a 4 unit in Rhode Island that I purchased with an FHA loan. It was listed at 409k , and I offered 480 with an escalation clause up to 500k. Crazy, I know but I figured it would still cashflow even at those numbers. I also believed it was priced low.

My offer was accepted, but the appraisal came in at 420k. Neither we not the seller believed that to be accurate given the area and comps that we found so we ordered a second appraisal. And boy were we right...the new appraisal came in a whopping 2k more. Luckily FHA has a clause that lets you back out if the value of the property is lower than the offer price. So we renegotiated and landed on 430k (8k out of pocket).

The property has two 3 bed 1 bath units (1200 sq ft), and two 1 bed 1 bath units (600 sq ft). It was fully rented and according to the seller's agent 2nd and 3rd floor were problem tenants and they were related.  The two 1 bed units on the first floor were 2 quiet old ladies with section 8. In order to get my offer accepted I had to put in the contract that I will take over the tenants and it wasn't the seller's responsibility to get them out because I found out that the seller was the widow of the guy that actually handled the property for 50 years so she knew nothing about being a landlord and she just wanted to get out and move to Florida.

Perfect, now I know what the seller wants and how to give it to her, but what about the tenants? BP podcasts always speak about figuring out what the seller wants and fixing their problem. But what do the tenants want? Why were the tenants on 2nd and 3rd floor problem tenants?

I went and talked to them and found out that the 3rd floor tenant is the son of the 2nd floor tenant. Also on the 2nd floor everything was nicely organized in their home, fresh baked goods on the table every time I went in their apt, and very nice friendly conversations. They also lived there for 17 years.

I quickly realized that it wasn't the tenants that were the real issue but the landlord. The tenants knew I was buying the property as an investment and they knew that there's a chance they were getting kicked out. So I made them a proposal... I told them I wouldn't kick them out, and I wanted the guy on the 3rd floor to move to the spare bedroom on the 2nd floor so that I can renovate 3rd floor as soon as I close on the property. Afterwards, when I'm done renovating the unit, I'll rent it back to them at market rent and that way I have access to 2nd floor right away to renovate that. They absolutely loved the idea. They were finally getting their dream home  (their unit was in bad shape because the previous landlord was a slumlord) and they didn't even have to move.

I just finished the renovations on 3rd floor (pics below) and rented it to them. Before I bought the property they were paying $750, and now they signed the lease for $2200. Market value was $2300 , I gave them $100 discount and waived the pet fee, but I made them responsible for snow removal/lawn care. They were thrilled they were getting a good deal on a brand new luxury apt, and I was thrilled I can start the next renovation without any delay. 

The rents for the first floor units were $850 and $950 with section 8. When I closed on the property , I called the housing authority, introduced myself and told them I bought the property as an investment and I wanted to work with them to keep the current tenants but I need to increase rents and I wanted to know if the government can give them more money.

They were very happy that 2 of their tenants won't be losing their homes so they offered to give me $1075 for each unit starting in March. Perfect! My next question was, what is the maximum amount that they pay for a 1 bedroom apt? the answer, $1100. So with one phone call I basically got almost maximum rent for 2 units without spending a single dollar on them. That's great ROI :)

Now let's talk numbers:

Purchase price: 430k

Cash to purchase: 30k

Renovation Budget:100k

Total rent  (including forecast for 2nd floor) : $6650

Expenses (mortgage, insurance, taxes, flood, pmi, etc) : $3140

Vacancy 5%, Repairs 5%, Capex 5%

If I hand it off to property management at 10%, my cashflow will be $1944

If I manage it myself, the cashflow becomes $2609 with a 23.93% CoC ROI.

As promised here are the photos :

I will keep updating this thread with photos and details from the 2nd renovation.

Big thanks to everybody that could make it, I hope you guys had fun and got from the event whatever you needed to get from it and everybody is one step closer to their first or next deal! 

Hopefully we'll see you all and everybody else who might be interested in a little while when we start the renovation on the 2nd apartment. 

Cheers!