ForumsStarting a Business

Depending on 'income' to sustain rentals? Rental property needs up keep and that is expensive, especially when you start dealing with heating-cooling and other infrastructure issues.

So what is the big plan for selling these investment properties? I see you have given yourself 18 months so what is the plan until then? Accumulating capital? Making sure you have an above average business credit score? Accumulating properties?

You are planing to have a real estate company. Are you a broker? Licensed agent? If a licensed agent what broker is holding your license and how do they feel about your new venture?

Great tax benefits? Between capital gains taxes, upkeep on properties, property taxes you must plan on having one heck of a creative financial advisor. One bad trading week and you may be lucky to be eating beans and rice. Is your trading business incorporated or are you using Montgomery Capital as your corporate trading account? Do you even have a financial/legal structure/plan other than a registered business name? Do you have an accountant and an attorney? Have you made a deal with a title company for discounted fees based on volume? Do you have a line of credit? Have you thought about property insurance?

Do you even have a business plan? A mentor?

Not to rain on your parade here, but while your idea sounds like fun, your business model could turn on you in an NYSE minute.

My losses are offsetting my gains. You know tax season is coming up, so i'll sell a few stocks that have under perform or the one's that were down more than 1/2.

Man your tough. But I got tough skin. I actually enjoyed reading your response to my blog post. It was very thourghly explained and thought out. You almost sounded like you had answer the question bout 100x. To be truthful about my business, my business doesn't necessairly have to be profitable. I make decent enough money from day trading. My initial ideal was to have anywhere from 3-5 properties max. I'm a mortgage loan adjustor for a BIG BIG BIG bank, that just recently just bought another BIG BIG BIG bank. This will be my last year working full-time. I wanted to somehow apply my knowledge as an loan adjustor, my overall knowledge of the real estate industry, and my business connections to form a minature holding company of some sort. I do have about an 18 month horizon, thats mainly due to my capital being tied up in stock investments (mainly gold). I'm a Gold Bug, and I expect to see gold back up around $1000 real soon, citi is qouted for saying Gold being around $2000. I think they are either dead on, or way off. So i'm dividing their opion by half, and I really do see gold hitting 1000 bucks. anyways enough bout that. Lets say hypotehically I have between $150k -$200k,will that be enough to hire a personal attorney, finanical advisor (I am one by the way), accountant, maintence... I can easily answer your question (no it wont). Your post gave me great insight, made me think more as to what I really want to accomplish and how I want to accomplish it. Once again I would like to thank you for your post, it was really helpful. I think after reading your post, I have a better direction of where I want to take my business.

I started a real estate firm that offers property management in 2002 in a small suburb of Charlotte, NC. I found that offering the property management service compliments the sales perfectly. I work with investors, sell them a property (make my comm.), manage the property for them, (50% of the first months rent, 10% per month thereafter), turn my tenants into buyers and sell them properties, move new tenants in and keep the cycle going.

We grew VERY quickly and are now the largest management firm in the county. If there has been a "downfall" it has been that by offering the property management, we grew more quickly than we were prepared for.

Property Management will always be a thorn in your flesh, regardless of your attempts at organization.

My tips would be:

Make money off of repairs by obtaining a good relationship with a licensed, insured contractor and disclosing the relationship. In exchange for the contractor getting all your repair leads, have them take all the repair calls....no after hours employee expense for you. Repair calls are by far the most time consuming aspect of property management. Obtaining property authorization for repairs..etc. Put this off on the contractor to deal with in exchange for the volume of business that they receive without having to pay for the leads.

Consider making money from other investors instead of purchasing with your own money. Purchase your own investment properties as additional income. Let the agents make money for you as the property management accounts give you residual income. The investors will buy more properties as they see the hassle of ownership removed.

Join a good, tenant screening network and make the tenant application pay for the fees.

Make everyone at the office hold a valid license.

Don't waste your money on advertising. Use yard signs, directionals and a good company website. It will be all you need for the rental properties and let the agents pay for their own sales advertising.

Invest in a good, money management system that is approved by the real estate comm.

Have an accountant audit your books monthly for a minimal fee. It will be worth every penny.

I've done this and flipped houses on the side at the same time. I think it's a good combination. The rentals carry you during hard economic times. AND...my tenants pay. They know they want to buy a house and they know I'll evict them if it's not in on time...no excuses.

Good Luck!

Lucy, I'm a licensed Realtor and my husband and I own a very small property management business (12 doors). We'd like to greatly expand the property management business -- I'd like to email/talk to you more about this. Would you contact me privately at mjglendenning@austin.rr.com . Perhaps you can give me some ideas on how to pick up additional owners/investors?

Marilyn

Linda I owe you an apology it seems you are not ValCards, at least not from your posts. The water alarn website link alerted me.

The Vegas market was crazy at one time, we heard from a salesman that prices were not being locked in when the contracts were signed, is that true?

Remember that if you are selling for tax purposes you cannot buy the stocks back for 30 dasy, it's called the wash rule.