Automation – Stessa Rental Property Accounting

Today I am going to do a review of Stessa, an online rental property accounting platform.

But first, a disclaimer:

***This review may contain affiliate links that compensate me for user registrations of this product.***

As I have detailed in a previous article, I started using Stessa last year to track accounting for our rental portfolio. Previously, we used Google Sheets, tracking rental income and expenses for each property on different tabs. This would involve me going in to the first property’s income tab, entering the collected rent, then checking all of my receipts and accounts to verify I hadn’t missed any expenses and adding them to the expense tab for that property. I set up expense categories and put in a section to summarize the expenses by category and by month. While not ideal, it insured that someone at my CPA’s office was not classifying an expense in the wrong category or for the wrong property. It was not hard to do, just more a matter of remembering to do it.

Around the middle of 2018, I started seeing advertisements for a product called Stessa on Facebook. As per my SOP, I ignored them, other than taking note of the name. A few weeks after first seeing the ads, I heard an advertisement for it on The Bigger Pockets Podcast. This was more effective, as they pointed out how it was free for rental property owners and individual investors and involved some automation to keep track of your accounting. They also pointed out how the product was developed by real estate investors for real estate investors and the name was “assets” spelled backwards.

I went to the web site and registered for it. I was able to set up our properties and import bank & credit card histories to the transactions section, allowing me to categorize each expenditure. It took maybe 10 minutes to set up two properties. And, once numbers had been entered, the dashboard populated with portfolio metrics. Way nicer than my spreadsheets!

Features

Individual tracking for each property:

Property Profile Header – Address, Acquisition Date, and Cost.

Property Details – (Year built, neighborhood, parish [county, for those of you outside Louisiana], number of units, bedrooms, bathrooms, square footage, and lot size, all pulled from Zillow, based on the address.)

Valuation – Provides for multiple options: Custom Valuation, Zillow Zestimate (automatically polled, user choice to update property valuation), Gross Rent Multiplier, or Capitalization Rate.

Rent Roll – Allows entry of Bed/Baths, Square Feet, Tenant names, Rent, Market Rent, Deposit, Move-in Date, Lease Expiration Date, and notes.

Property Notes section – Freeform note space for property.

Monthly Expenses – Allows for Pro-Forma expense entry and pulls in categorized expenses from the Transactions section to show actuals compared to Pro-Forma.

Neighborhood – Shows location on a Google map, with a Walk Score and a Bike Score for the property.

Assessments – Pulls in assessed value and property tax amount (I’m assuming from Zillow), and allows you to add missing assessment/tax details.

Capital Expenses – Allows for entry of Date, Description, & Amount of Capital Expenditure.

Loan-to-Value – Shows a chart with LTV percent, Property Value, Debt (principal balance), and number of loans.

Mortgage – Details the Lender, Principal Balance, Payment Amount, and Interest Rate.

Insurance – Displays the Carrier, Premium, Policy Number, and Renewal Date.

Transactions:

As I mentioned above, Stessa allows you to link bank accounts and credit cards to the Transactions ledger. It lets you initially import all transactions and gives you the option to review them to either categorize each one correctly or, in my case, the credit card I use also has personal charges, so it it allows me to delete those transactions.

Stessa does not store your credentials on their servers and use bank-level encryption to secure the transfer of information. It also does not allow changes to your bank or credit card accounts. It only pulls a copy of your transaction information.

The Transaction Ledger Menu allows you to review new transactions, view ALL PROPERTIES transactions, view individual property transactions, or add a new property.

The main Transaction Ledger display shows all transactions, filtered, based on the menu selection. It additionally allows you to search by keyword and/or filter by Date, Category, Amount, or Account.

There is also an export function, allowing you to export filtered transactions to a *.csv file.

You can manually import *csv and *.qif files from accounting software, in addition to adding individual transactions by hand, such as mileage.

Reporting – Reporting is one of the reasons I was interested in trying out Stessa in the first place. It provides you with standard reports such as Income Statements, Cash Flow, and Capital Expenditures, with options to select a date range, property/portfolio, monthly breakout, and whether or not to show Category Details. The report is downloaded as an Excel file, allowing you to customize the report title and report formatting, if needed.

The other reporting option I have mentioned before is the Tax Package. This contains everything needed to hand off to your CPA at tax time. And it sure makes it easier on me!

Click on this link to get your own free copy of the Rental Property Tax Guide by Stessa.

Dashboard

The dashboard is the main page you see when logging in on a computer. It allows you to show the total portfolio or to select individual properties.

It contains the following sections:

Portfolio Value – Options to see Market or Purchase Value.

Asset Return – Either Appreciation or Levered returns.

Occupancy – Detailed in percent.

Income

Cash Flow

Unit Count

Property Count

Debt – Total

Net Cash Flow – A chart detailed by month & Category

Location – Google map showing all properties in Portfolio View or a single property in Property View

Compare Properties – Rental Income, Market Value, and Square Feet. Available in Portfolio View only

Property Highlights – Property picture from Google Street View, Income, Expenses, LTV, and Occupancy. Available in Property View Only

Summary

I think that Stessa is a great automation tool for rental property accounting. It’s free, cuts down on time spent doing bookkeeping, and makes tax time easier. On top of that, their user support is outstanding! Early on, I identified a couple of bugs and they were fixed within a couple of days. Amazing!

If you are interested in trying out Stessa for your rental properties, please click on the link below:

Stessa Rental Property Accounting

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this blog.

26-Feb-201927-Jan-2022

REI – Free Rental Property Tax Guide!

A few months ago, I ran across an ad for a free rental property accounting web application on Facebook. I didn’t think much of it and continued on about my merry way. Then I started hearing ads for the same company on the Bigger Pockets Podcast. So, I decided to check out Stessa for myself.

I like it! Stessa is simple to use and allows you to output your financial data to hand over to your CPA at tax time. As a perk, the team at Stessa put together a free Rental Property Tax Guide. I liked it so much that I have partnered with Stessa to share that Tax Guide with my readers.

Click on this link to get your own free copy of the Rental Property Tax Guide by Stessa.

Let me know if you like this guide and if it is helpful to you.

I plan to do a more detailed review of my experiences with Stessa in the near future, so stay tuned!

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this blog.

22-Feb-201927-Jan-2022

Personal Improvement: Podcasts – What I Listen To

I recently connected with someone on LinkedIn who is a Life Coach for High-Performing Remote Workers. As part of his getting to know me messages, he asked if I listened to any good podcasts lately. That got me thinking about the regular influence on my thinking of the podcasts I listen to. The more I thought about it, the better the idea to turn it into an article listing what I am listening to and why.

Doggcatcher for Android
Downcast for iOS

A little background on my interest in podcasts:

I have listened to podcasts for almost 12 years. Up until the start of this year, I always had a long commute. Whether a 200+ mile daily round trip to Lafayette, Louisiana or a 1,000+ mile round trip driving to Houston, Tx every other week, I had a lot of highway time on my hands. Podcasts allowed me to be entertained and informed, in addition to allowing me to utilize “dead” time for learning.

Podcasts I Listen To

Podcast	Link	Category
Bigger Pockets Podcast	https://www.biggerpockets.com/podcast	Real Estate Investing
Tim Ferris Show	https://tim.blog/podcast/	High Performance
DH Unplugged	https://www.dhunplugged.com/category/podcasts/	Stock Markets
Rich Dad Radio	http://www.richdad.com/radio	Current Affairs/Rich Dad Theory
James Altucher Show	https://jamesaltucher.com/podcasts/	High Performance
Akimbo	https://www.akimbo.me/	Personal, Professional Improvement
Private Lender Podcast	http://privatelenderpodcast.com/	Education on the Subject of Private Lending for Real Estate
Bigger Pockets Money Show	https://www.biggerpockets.com/moneyshow	F.I.R.E.: Financial Independence, Retire Early
Freakonomics Radio	http://freakonomics.com/archive/	Various Topics

Bigger Pockets Podcast

The Bigger Pockets Podcast helped me to learn a great deal about real estate investing. I have the Bigger Pockets website listed as a resource on this site, but the podcast is an additional tool to learn about REI. Each week, the podcast interviews guests, most real estate investors, sometimes famous authors who provide useful tips for investing, business, and personal improvement, and every once in a while, they will do an occasional webinar-type podcast to educate listeners on a particular topic.

I especially like the investor interviews to get tips, tricks, and strategies that may help me in our REI business.

The Tim Ferriss Show

Tim Ferriss, author of numerous books on increasing performance (4-hour Workweek, Tools of Titans, Tribe of Mentors, etc.), conducts long-form interviews with high-performers across various domains. Even when interviewing guests who have been on EVERY medium you can think of, you always learn things no one else has ever asked. Tim listens to guests’ answers and responds to the answers with deeper questions. He also does extensive research on guests and does not rely on canned press release questions.

I generally like to listen to his interviews because the people he does interview are “Doing It”. They don’t have a theory, they are not selling snake oil, they have done/do whatever they are recommending to increase performance.

DH Unplugged

DH Unplugged is an unscripted conversation about markets between investment advisor Andrew Horowitz and pundit John C. Dvorak.

I like DH Unplugged because they discuss what is going on in the markets and aren’t trying to sell you anything. In fact, they frequently point out how most “Money” shows on cable news channels are always “BUY, BUY, BUY” no matter what is going on.

Rich Dad Radio

Rich Dad Radio is an interview podcast featuring Robert Kyosaki, author of Rich Dad, Poor Dad, and his wife, Kim Kiyosaki, author of Rich Woman. The interviews are mainly related to money and economics, (in a broad way), and generally promote Rich Dad, Poor Dad Principles.

In addition to interesting information from guests, it’s fun to listen to Robert interpret the guests’ statements into Rich Dad principles.

James Altucher Show

The James Altucher Show is another long-form interview podcast, similar to the Tim Ferriss Show, that delves into what makes high performers “tick”. Where Ferriss delves into tools, self-talk, and motivation, Altucher focuses a little more on the path to peak performance, teasing out the development of “micro-skills”. Altucher’s overarching thesis on micro-skills is that high performers build up a toolbox of them that help them to succeed. Like Ferriss, Altucher goes far deeper in his interviews than you normally see in regular media.

Because of the depth of detail and wide range of topics covered in each interview, I really enjoy Altucher’s show.

Akimbo

Akimbo is a podcast put out by author and marketing guru Seth Godin. This podcast is a combination of self help and career advice for entrepreneurs. You don’t have to be an entrepreneur to benefit from the topics & advice given, either.

I enjoy the perspectives, suggestions, and tips provided by Godin in this show. I don’t necessarily subscribe to all of his philosophies, but that is OK. It is good to hear different perspectives from your own to allow a balanced understanding of the world.

The Private Lender Podcast

The Private Lender Podcast is a combination of interviews, case histories, and education with regards to the utilization of private lending in real estate investing.

I like learning about the details of the non-financial industry financing.

I actually met Keith Baker, the host, and have become friends with him. He’s a cool and funny guy. Oh, and he LOVES the band Rush!

Bigger Pockets Money Show

As the name indicates, BPMS is another podcast from the group at Bigger Pockets, focusing on F.I.R.E. (Financial Independence, Retire Early). The podcast is in an interview format, covering guests’ stories, tips, and tricks for becoming financially independent.

I like listening to the BPMS to better plan my own “retirement”. It has also led me to resources that allowed me to recognize that I could retire right now and be comfortable from a financial perspective.

I hope this provides you with some insight into resources to use for personal and financial improvement in your life!

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this blog.

18-Jan-201927-Jan-2022

REI – Observations on Finding Tenants

Hello there, trusted reader! This week I am going to discuss a few observations I have made on the subject of finding tenants for my rentals.

As discussed in a previous post, we purchased another rental in December. Before the purchase was final, we started advertising it for rent. We listed it with a couple of different syndication services, Put a “For Rent” sign in front of the property, and posted it in pretty much every local and/or rental-related group on Facebook, in addition to posting it on our Facebook business page.

Syndicated Listings

Cozy.co

The property was listed on Cozy.co because we are evaluating their service for application, rental payment, and other tools that assist property manager.

The set up was easy and they list the rental as available on their site, in addition to syndicating the listing to Doorsteps.com and Realtor.com.

Cozy also offers one of the top-rate low-cost online rental payment platforms, based on reviews & comparisons. If tenants use the ACH (Automated Clearing House) option, payments are free. They also have the option to use a credit card to pay, but add a small percentage service fee. I have not implemented it in our business yet, as our tenants are more comfortable paying with checks and money orders.

In addition to the online rental payment system, Cozy provides an online maintenance request system, tenant screening, and document sharing with tenants. The maintenance request platform is only available if you are already using their online payments. The tenant screening offers options for background checks and credit reports, at no cost to the property manager, due to the tenant paying these fees. The document sharing is the equivalent of a shared drive to upload leases and any other documents for tenants.

Cozy Syndication

From our experience, neither the Cozy listing, nor the syndication partners are popular in our area for attracting potential tenants. People looking for places to rent don’t seem to frequent these sites.

Zillow Rental Manager

Zillow offers a similar set of services, excluding the maintenance requests and document sharing. They provide tenant screening and online rental payments, similar to Cozy. Where they really shine is the listing syndication. Zillow lists rentals on Zillow.com, but since it also owns Trulia.com and Hotpads.com, it syndicates listings on those sites simultaneously.

For this recent property we had issues getting the rental listing to be accepted by Zillow due to it still being listed for sale on Zillow when we first put it up for rent, but it syndicated to Trulia and Hotpads just fine. We received quite a few inquiries from these sources.

Facebook Groups/Facebook Business Page

Facebook seems to be the hands-down winner for attracting prospective tenants. We ultimately received more inquiries from Facebook than any other advertising channel that we used. It involved a little work…there are a lot of groups! I will post a detailed methodology on that some day. It is kind of interesting.

I created a video of pictures from the home and a digital flyer that was shared on and from our Facebook business page. The flyer listed the location, rental rate, the lease length, and basic restrictions (No smoking, some pets allowed). This helped to attract interested inquiries and potentially screen out anyone not interested in what we had to offer.

Traditional Advertising Channels

If you haven’t noticed yet, the only cost of the methods we utilized was a “For Rent” sign. Ads in the local newspapers cost too much, plus we have much better circulation on the channels we do use. That is why we don’t even bother to list anything in the with the papers.

If you have rentals, what do you use to attract prospective tenants? Leave me a message in the comments or email me at clint.galliano+ObservationsFindingTenants@gmail.com.

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this blog.

11-Dec-201827-Jan-2022

REI – Acquisition of Rental #3

This post is just a short update on REI. We had a deal drop in our lap.

122.Sagewood.FrontElev

The Deal

We were not specifically looking to buy another property immediately. As detailed in a previous post, we were working on a deal earlier in the year, but it did not work out.

A member of the local REIA, who is also a realtor, has been looking out for properties I might be interested in. I had given her the specifics: three-bedroom, two-bath home on a slab foundation, preferably brick façade, in Thibodaux, in a decent neighborhood.

She had showed a couple of homes that were close, but not quite right for us, in addition to a mobile home park that was just too much for us to take on. (This was just prior to my surgery)

She contacted us with a property that fit our description exactly and told us the listing price, $144,500, and to make an offer. She indicated that the sellers were motivated. I looked it over and saw that we would be looking at a similar ROI to the property we bought last year with an offer of approximately $111,300. I did not think that the owners would accept that and they didn’t. They countered with $125,000 and we countered back with $112,451 cash sale with an end of month closing as a best offer. This would give us a ROI of just under 7%, based on a conservative analysis.

We fully expected things to end there. The sellers asked for the weekend to think about the offer, so we agreed.

On Monday, they accepted the offer (to our surprise) and we began the inspection period.

We set the closing date for the first Friday in December, as this was the soonest that the real estate attorney could complete the paperwork.

During the due diligence period, we determined that the only things needed were to change the locks, change an over-sized circuit breaker, and some minor cosmetic work.

Updated: ~~We now have it listed for rent and are taking applications.~~ The property was rented for January.

122.Sagewood.RentalFlyer2

And, as always, let me know what you think in the comments. Ask questions, tell your story.

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04-Nov-201827-Jan-2022

REI – Rehabbing A Property: Flipping VS. Renting

Welcome back to me! I was out for the last few weeks due to a combination of work and getting post-surgery treatment for my thyroid.

Today, I am going to go over some differences and similarities between rehabbing a property to flip it and rehabbing a property to retain as a rental.

Compare & Contrast

What is your “Plan A” for a property in a given situation? That is probably an easy question to answer if you only flip properties or if you only buy and hold them as rentals. Some investors do both.

Ultimately, you should already know what you want to do with your property. Then work on a “Plan B” and “Plan C”, just in case your Plan A doesn’t work out.

Compare

Whether rehabbing a property as a flip or as a rental, there are a lot of things that you would do the same in either case. Getting the main home systems in working order, such as plumbing, electrical, roof, HVAC, etc. You need these systems in working order and, with the exception of fixtures, don’t need a lot of variation between the two.

Structures should be stable, rooms may need to be added, and/or rearranged.

Contrast

Rentals

When rehabbing rentals, you want to keep things functional and not too expensive. Depending on the comparable quality of the neighborhood, you may go utilize a higher-end product in a higher-end neighborhood than you would in a lower-end neighborhood.

Especially if you have multiple rentals, you want to go for consistency to normalize your costs. Have a paint scheme, flooring style/type, appliance set, and plumbing & lighting fixtures as a standard so that time will not have to be wasted on trying to decide on colors & styles during rehab and turnovers. Your contractors or turnover specialists should already know what to use.

Flips

When flipping, you are attempting to renovate the property to a standard that will make someone want to buy the home to live in. With that in mind, you want to add finishing touches to a flip that you would not consider for a rental. This could include things like upgraded appliances, fancier light fixtures, premium paint schemes, and so on.

All of this assumes that you have the budget to achieve this and still make money on it.

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Plans B and C

I mentioned “Plan B” and “Plan C” above, so I just wanted to touch on that before wrapping things up. You should always have an exit plan. Or two. If you are planning to flip, be ready to rent or owner-finance. If you and planning to rent, be prepared to sell.

This is kind of second nature to me coming from the oil and gas industry. It has a direct physical basis, but can be applied metaphorically to pretty much anything.

Having an exit plan means not being stuck in harm’s way. When working on a drilling rig, this has life or death implications. Never put yourself in a corner where you cannot get out of the way of something.

I learned this the hard way when loading eleven and three-quarter-inch casing onto a boat when I first started out in the industry working as a roustabout.

For those of you who don’t know what casing is, it is the large-diameter pipe used to keep the wellbore pressure in and the formation pressures out when drilling and producing a well. Each forty-foot joint weighs approximately two thousand four hundred pounds.

The crane was set up to pick up four joints of casing at a time. Additionally, we were short-handed, so I would hook up the casing on the dock, then jump to the boat to help position it on the deck of the boat so it would stack properly for the ride out to the rig.

On one of the lifts, by the time I got onto the deck of the boat, the pipe was coming towards me and I did not want to be under ten thousand pounds of steel. I attempted to get outside the range of the swing of the crane, but realized that I had no more deck because we were loading onto the stern now.

I dropped down onto the deck, sitting, so that at least if the load dropped, the railing would help stop it from crushing me. I believe that maneuver startled the crane operator and he stopped the crane rotation, thus setting the load swinging like a pendulum. He immediately noticed this and started to drop the load as it got over the deck, but the casing had started to swing back towards the stern, where I was sitting.

The casing made contact with my left shoulder and chest. Luckily, it was only enough to bring out purple, yellow, and green bruises on me the next day, but no permanent damage.

The moral of the story? Have an exit plan that you can execute on.

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this blog.

02-Oct-201827-Jan-2022

Business – Optimizing A Process – Order of Operations Related to Surgery:

This week I am touching on the topic of process optimization. This is another topic that came a conversation between Kevin@deliberateconsulting.com and myself when comparing thyroidectomy procedure results and side effects. He was diagnosed with thyroid cancer and had surgery a couple of months prior to my diagnosis.

Process-Optimization

We compared notes on what was similar and what was different between the two.

(Caveat: There may be some factors that we are not aware of, specific to each of us as individuals, that could have influenced decisions made.)

We both had thyroidectomies. Surgery, an overnight stay. A vacuum bulb to drain the incision area. Released the next morning. Then wait to determine if further treatment is necessary to ensure the eradication of cancer. In Kevin’s case, he needed further treatment, in my case, it is too soon to tell.

The doctors started Kevin on hormone replacement therapy almost immediately after surgery, then had to wait for levels to drop to begin the secondary treatment. I am still not on any replacement hormones until they determine if I need the radioactive iodine ablation, thus shortening the cycle time to start. Since the hormones appear to last about 6 weeks, I am good for a while with no replacements and won’t have to wait for levels to deplete if I do need the RAI.

The way my surgeon planned things seems to be the more efficient way to do things. This got me thinking about how an optimized process for business is cheaper and more efficient than just randomly doing things in a haphazard manner.

I do this in my real estate investing. When rehabbing a property, I evaluate what needs to be done & plan the order of operations so that there won’t have to be re-work because something had to be undone to do something else.

You can look at your business processes and optimize them for efficiency by ensuring the order of operations for each step does not additionally delay some other step.

You can think of it like the sandwich-making analogy I used here…if your current process calls for you to put the peanut butter on the plate, then add the bread, then the jelly or jam, you can optimize it by changing the order of operations to bread, peanut butter, jelly, then another slice of bread.

What inefficient processes have you identified in your business or workplace? How did you change them?

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this blog.

04-Sep-201827-Jan-2022

Personal Finance – What Can I invest In?

This week we are talking about different types of investments that you can utilize to better your personal finances. I’ll briefly touch on traditional investments (stocks, bonds, etc.), investing directly into a business, and various forms of real estate investing.

Additionally, I would like to give a shout-out to @DeliberateKevin for the guest post last week. Go check out Deliberate Consulting.

FinChart1

“Traditional” Investments

Traditional investments are what most people usually think of when they think of “Investing”. This can be stocks, bonds, Exchange Traded Funds (ETF), etc.

There are three main approaches you can use:

Investment Advisor
Robo Advisor
DIY

TraditionalInvestingRiskChart

Investment advisors usually handle clients’ money for a fee. In most cases, that fee is a percentage of the total portfolio balance. Additionally, unless the advisor has a fiduciary duty to you, the investor, they may push you towards investments where they get better or additional commissions, as opposed to investments with less fees and/or commissions involved. Also, you need a sizable balance to start your account, say, in excess of $500,000.

Robo Advisors are basically algorithms that select the best investments based for you based on many criteria. They usually invest in ETFs and can automatically do things like rebalance portfolios, automate tax loss harvesting, etc. They tend to operate on a fractional percentage commission, meaning that they are usually cheaper than a full-blown human investment advisor. Robo Advisors will also allow you to start an account with a much lower balance than a traditional financial advisor, with some allowing you to open an account with no money, though you will need to put money in to invest.

DIY or Do It Yourself is another approach you can take. It costs you no fees other than trade fees and you don’t need a large balance to start. But, you will have to spend a lot of time researching your investments and deciding where to put your money. You can start with as little as the price of a single share of stock and the trade fee.

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Direct Business Investment

You can invest into a business outside of stock. This can be in the form of buying a franchise, buying a share of an existing business, or even taking your non-retirement account money and opening a business. A word of caution: Be sure to perform thorough due diligence into any business you invest in like this and if investing with partner(s), ensure you have a sound operating agreement in place and that everyone abides by it.

See more on starting a business with partners: BUSINESS STARTUP: 9 TIPS FOR STARTING A SMALL BUSINESS WITH PARTNERS

If you only have retirement account funds available, either from a 401k from an previous job or an IRA (Individual Retirement Account), you have the option to buy or start a business using those funds through a Rollover Business Startup (ROBS) transaction, also known as Business Owner Retirement Savings Account (BORSA). This allows you to utilize the money you have saved to start a business without incurring taxes or penalty. There are specific restrictions that go along with it and it has to be administered by a qualified group. Companies like DRDA and MySolo401k can help you deal with this type of thing.

FinChart2

Real Estate

The last type of investing option I am going to talk about is real estate. As I have talked about before, I like investing in real estate, in addition to other types of investing. Real Estate has options that range from very hands-on and intensive involvement to very passive hands-off approaches.

Direct Investment – Real Estate

If you have money sitting around, or you decide you want to follow the Tim Ferriss approach and dreamline a muse to support real estate investing, you have lots of options.

You can wholesale, which is finding people with a need or desire to sell a property that doesn’t qualify for traditional financing or need the funds in a short time period (need a quick closing).

You can Fix and Flip. This involves buying a distressed property at 30% or more below market value (where market value is considered the after-repair value or ARV) and rehabilitating the property, then selling it at or near market value.

You can also buy and hold, the term for investors that buy property with the intention of renting it out over the long term. Generally, these investors like to acquire their properties in a similar state to the Fix and Flip investors, but do not sell the properties.

A less well-known approach is to invest in Notes. These are mortgages that the banks sell off at a discount to get their capital back & re-deploy it in another loan. There are note funds in addition to you being able to buy notes directly.

Most note funds require that you be a sophisticated investor. No, that does not mean that you have to drink your tea with your pinky out and wear a three-piece suit every day. It is a category defined by the government as having an income of $200,000/year if single, $300,000 if married, OR $1,000,000 in net worth, not including your primary residence.

Self-Directed IRA – Real Estate

Like the ROBS/BORSA methodologies mentioned above for direct business investments, there is a self-directed IRA (SDIRA) that can be used to invest in real estate. They can be used to buy investment properties or, in some cases, to actually BE a “bank” of sorts.

Some caveats with using an SDIRA to buy investment property: You cannot take advantage of depreciation on the property, so you lose out on some tax benefits; You cannot receive any immediate benefit from the investment. All returns from the investment belong to the SDIRA.

Another option is to become a private lender. Basically, you are becoming the bank, lending money on a short-term basis, to a real estate investor. They benefit from quicker and usually cheaper closings and you as the lender benefit from the interest earned by lending the money, which usually is more than you will make in the bank or other investments.

Hopefully giving you this overview of different types of investing will help further your knowledge and be a starting point for your own investigation into how best to invest your money.

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this blog.

19-Aug-201827-Jan-2022

REI – An Unstructured List of Why Real Estate Investors Attend REIA Meetings:

This week, I am covering REIAs. I will go over what a REIA is, how REIAs can benefit you if you are interested in investing in real estate, and how to find a REIA in your area. I will also provide details on how to find out about the REIA for the Houma/Thibodaux/Morgan City area.

REIA stands for Real Estate Investor Association. This is a group of like-minded individuals who get together to learn about, discuss, and network over Real Estate Investing.

What is a REIA?

REIA stands for Real Estate Investor Association. This is a group of like-minded individuals who get together to learn about, discuss, and network over Real Estate Investing. From my experience, REIAs are for anyone with an interest in Real Estate Investing (REI), from rank “noobs” to experienced real estate investors.

Meetings usually cover a topic for education on some aspect of Real Estate Investing, such as Tax implications (by an accountant), things to include in your lease (by a real estate attorney), and ensuring a property has a clear title (by a title expert).

Real estate investors also get the opportunity to network with one another. This provides opportunity to learn from each other and can also facilitate deal making. Investors have the opportunity to buy, sell, or trade deals with each other.

Some REIAs do charge a meeting attendance fee to cover a room rental and/or snacks and refreshments while others are in freely available spaces. Some are also held in meeting rooms at restaurants where in exchange for bringing in the group to eat, the room is available for use.

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What can a REIA do for ME?

REIAs are a place to learn. They provide education on many different real estate topics. As stated above, many REIAs bring in subject matter experts to present to the group. These experts are also available for Q & A.

Some REIAs have sponsors who provide REI-specific services, so that allows members to save time in finding said services. These range from title companies to construction contractors & beyond.

There are also likely to be wholesalers at meetings with properties that are for sale at a discount, in addition to investors shuffling their properties.

How can I find a REIA?

A lot of REIAs use Meetup.com to list and promote REIA meetings. Go there and search for REIA and your town name. You can set a radius distance from your target location so it will show meetups within that range, in the event there is a meeting in the next town over. When you find one you want to join, join the group and RSVP for the next meeting. It’s as easy as that.

Are you in the Houma/Thibodaux/Morgan City area?

If you are in the Houma/Thibodaux/Morgan City area, you are cordially invited to join the Bayou Real Estate Investor Networking group. Meetings are usually held on the first Wednesday of the month. Go to the BREIN Meetup page for more information.

And, as always, let me know what you think in the comments. Ask questions, tell your story.

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22-Jul-201827-Jan-2022

Personal Improvement – Books That Have Influenced Me Recently

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Welcome back to another installment of Things I Think About! This week I am going to go over a few books that I have read recently that have had an impact. While some of them cover a mix of topics, to me, they mostly fall into one topic. Because of this, I will break them out by topic and detail the crossover topics, and why I feel that way, for each book I also have them listed separately on my Recommended Books page, HERE.

Business

The E Myth Revisited by Michael Gerber

This book speaks to my soul! I “read” the Audible version, (as I do most books due to my 3-hour plus daily commute), recorded by Michael Gerber himself. This book details why a lot of “Entrepreneurs” find themselves overworked, underpaid, and without the ability to grow. It is an interleaved mix of example stories with lessons explaining about each story. The main focus of the book is to explain why developing processes and systems for operating your business will allow you to employ other people to work IN the business so you can work ON the business.

The 4-Hour Workweek by Tim Ferriss

A young Tim Ferriss relates how he figured out how to not be locked into common misconception of the American Dream…go to school, get a good job, work like a slave for 20-30-40 years, then retire at an age where there is a good chance that you will have trouble enjoying life. In the 4-Hour Workweek, he details the concepts of mini-retirements, becoming effective and efficient in whatever you do for work, and ideas for small businesses that require little to no maintenance to support you on an ongoing basis.

Granted, as even pointed out in the book, the goal is not to be able to lay on the beach drinking mai tais, it is to free you up to do the things you want to do, including world travel, learning languages, and/or working with non-profit organizations.

This book also qualifies as a personal Improvement book, because a lot of the recommendations for efficiency and effectiveness while working have helped me to reduce a lot of stress at my main job.

Rich Dad’s Cash Flow Quadrant by Robert Kyosaki

This book breaks out the different classifications of people earning money. ESBI stands for Employees, someone who works for someone else to make money, Self-Employed, a person working for themselves to make money, Business Owners, owning a business & employing other people, and Investors, those who employ their capital to buy assets. It promotes the idea to be either a business owner or, ultimately, an investor, as this usually provides the best returns on time & money.

Personal Improvement

The Obstacle is the Way by Ryan Holiday

Ryan Holiday is a devoted Stoic. He has multiple books and a website dedicated to Stoicism. This book is kind of a manual for achievement. I really enjoy it because it basically lays out my philosophy on life. The short version is “Do what you can to change the things you don’t like in your life…Ignore the things you can’t change.” The Obstacle is the Way takes it a step further in that it guides you to figure out how to change either the situation or your thinking about the “things you can’t change”.

Rich Dad, Poor Dad by Robert Kyosaki

Robert Kyosaki tells the story of how he grew up a poor kid, but due to the tutelage of a friend’s father, learned to become a businessman. The book is a simple read but puts forth important concepts…assets are only assets if they will make you money, don’t spend foolishly, and educate yourself to grow. There is also a good bit of advice on real estate investment as a vehicle to become wealthy.

Principles by Ray Dalio

Ray Dalio is one of the richest men in the world and got that way by building one of the top hedge fund management companies, Bridgewater Associates. In Principles, he relates his lis life and how he got to where he is, developing his principles for business and personal life as an operating system along the way. This is another Audible entry where the author reads the book to you. It works.

Real Estate Investing

Long Distance Real Estate Investing by David Greene

While I don’t invest in real estate outside of my back yard, (for now), this book is incredibly useful as a guide of how to do things. The methodologies and techniques laid out here will work even in a local market. It’s a mix of strategies, tools, and tips to be successful.

The Book on Rental Property Investing by Brandon Turner

This book is a thorough primer for anyone wanting to get into rental properties as an investment. It covers everything from finding properties to rehab tips and beyond.

The Book on Managing Rental Properties by Brandon Turner and Heather Turner

Hmmm…the title sounds a bit familiar…YES! This is the follow-up book to The Book on Rental Property Investing. It picks up where the previous book left off and takes a deeper dive into what you need to do to manage properties successfully.

Loopholes of Real Estate Investing by Garrett Sutton, Rich Dad Advisor

Another Audible author read, Loopholes covers the benefits of and hazards to watch out for when investing in real estate. I have probably listened to this book at least 6 times…right up there with the 4-Hour Workweek and The E Myth revisited. Lots of great advice.

And, as always, let me know what you think in the comments. Ask questions, tell your story.

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