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The Landlord's Almanac

Erik

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Erik last won the day on August 6

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10 Apprentice Landlord

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  1. We're excited to announce our first Mat-Su Valley class. We're taking one of our most popular topics and bringing it to the Valley Board of Realtors, 741 E. Susitna Ave. You can RSVP from right here in the forum. Please help us get the word out so we can make this event a success. As always, the class is 100% free thanks to our sponsors. This event is sponsored by First Rate Financial. Whether you're trying to buy your first rental, stepping up to your next, or refinancing your current property these guys can get you the right loan for your situation. These folks have helped hundreds of Alaska landlords, including several of us at Real Property Management get in the rental game. Many of the employees at First Rate own their own rentals as well so you'll be getting advice and guidance from people who really know.
  2. Erik

    Should I get an LLC?

    This topic came up the other day in front of Brian the attorney. It's a balancing act. If you're prepared to carry the costs associated and always treat it as a company, then yes. If you're just going to go on legal zoom, buy an LLC and then forget about it, then no. If you fail to treat it as a company, a future plaintiff can do what's called "piercing the corporate veil". Essentially that means proving to the courts that it really isn't a real company and that your LLC means nothing. Then you're right back to where you came from. Maggie B is right. Just make sure you treat it like a real company. Minutes need to be done. Money needs to stay separated. Receipts kept. Insurance is always the cheapest and easiest insurance and should always be your first defense.
  3. OK, landlords.... part of this is learning stuff sometimes the hard and expensive way. What did you learn along the way that is advice you would pass along to a newbie getting their start? I'll get the conversation started. When I started working as a property manager I already owned eleven units. I thought I knew what I was doing. Fast forward six years and boy did I get schooled. The cool thing about being a property manager is that you get to see a wide variety of properties, people, and tactics. You get to see what people tried that didn't work, and what did. Here's a list I came up with the other day after I was asked the above question. Please chime in and tell everyone what you learned the hard way. Don't buy a place you wouldn't want your kids living in when they're that age You can fix a lot of stuff, but you can't fix the location. Neighborhood matters. Never take the sellers word for it when it comes to rent price. Rents go up AND down. The numbers should work if either happens. "Move in ready" almost always means zero or negative equity for YEARS Over-budget for repairs and you won't be disappointed Walking on a deal, even if it means losing your earnest money is way cheaper than buying a money pit Stick with middle income working class neighborhoods. Low income "C" properties almost always look better on a spreadsheet than they do in real life As a property manager, I would tell you to NOT hire a property manager until you have managed the property for at least one year yourself. You will value what they do if you've already done it yourself. Budget for one when you run the numbers but wait on hiring. (Plan on around 15% averaged out over time, not 10%) It's not always a great time to buy but it doesn't mean you can't. You just have to take your time and be careful. It took Kassandraand I eight months to find our first 4 plex Pick an agent that's willing to tell you things you won't want to hear. I've seen Matthew Miller try to talk his clients OUT of buying a 4 plex and showed them horrible eviction pictures just to see how committed they were. If the person who stands to make a commission check if you buy, tells you to walk on a property.....walk.
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