Many of our clients are what we call “Landlords by Default” meaning that they purchased a home at the height of the market and its value declined to the point that when they made the decision to move they couldn’t afford to sell.
These clients never really thought of themselves as real estate investors. When we met with them in the capacity of trying to earn their property management business we shared with them our knowledge as professional investors.
Everything from the importance of the right insurance, why having an LLC may be a good idea, and the tax implications of being a rental owner. One of the foremost lessons that we try to teach our clients is that real estate investing should be a business and never personal.
I recognize that its difficult to separate yourself from a home that you may have lived in for 10 years, raised children in, or otherwise have some kind of emotional attachment to. However, the moment you look to rent it, its a business and I recommend that it be treated as such.
So congratulations, you are now a small business owner. A real estate investor!
It may never overtake your income from your day job, but you should be proud of yourself for doing something that will positively contribute to your long term wealth and financial independence.
What happens from time to time is we have clients that find it all very exciting, and they have aspirations to own more rental properties because of how their experience with the first one went. Of course we love that, because we get to share our passion with our clients and help them to do what we do for ourselves.
Going from the original property that you once lived in and transitioning to owning two or more is a very simple process if you have the right team to show you the way.
Simply by expressing that you have an interest in owning additional property to us, we will meet and discuss the next steps. You will need cash to buy more. There are options to use a self directed IRA.
You should expect to buy the property either in cash, or to finance it and put a minimum of 15% down (upwards of 30% depending on your credit and other factors).
We will help you to identify potential acquisition candidates, do a rental analysis, estimate the cost of repairs to be visually appealing and rental compliant. We can assist you in the capacity as a buyers agent to negotiate all terms of the sale, connect you with our lender and title partners, and get the property rehabbed and prepared for rent after closing.
Of course we offer leasing, property management, ongoing maintenance coordination and can assist in the eventual disposition of the asset. We will be your resource for most tax and legal questions you have as you grow your portfolio.
One rental property is great. It is a solid way to diversify your investment portfolio, but on its own can only be a supplemental income stream. If you are looking to add another independent income stream to match or overtake what you make at your job I recommend that you own 4 or more rental properties.
Contact me if you are ready to step up and own more. We’d love to help you to realize your goals.