158: Ask Bill! Mentors, Vacation Rentals and Newbie Multifamily Investors

SHOW NOTES FOR EPISODE 158: ASK BILL! MENTORS, VACATION RENTALS, AND NEWBIE MULTIFAMILY INVESTORS

How do you find a mentor?  Are vacation rentals a good investment?  How do I start out investing in multifamily properties?  In this episode of “Ask Bill,” Bill addresses each of these questions and shares how, when you utilize the right strategies, you can yield significant benefits and revenue for your real estate investing ventures.

This is our monthly segment where Top Dawg Bill Manassero answers some of the real estate investing questions received during the month from emails, in-person conversations, phone calls or through online portals such as BiggerPockets.com and Quora.

Question #1 – Finding a Mentor

Hi Bill,

My name is Marthe, I am a 28 years old, a resident of South Florida, and I have been listening to your podcast (which has been mind-altering, thank you!)

In following with your advice on the podcast of starting as a REI, I wanted to know if you could recommend to me REI mentors located in my area? I want to start this right. I know what market I want to gain more understanding on (multifamily), and I need a great mentor to teach me the ropes…successfully.

Thank you,

Marthe

My Answer to Question #1

Dear Marthe,

Thank you for listening to my podcast and for your kind words.

Finding a good mentor is key to a successful real estate investing business.  However, you can still succeed, and others have succeeded, without a mentor, but, keep in mind, the process can take longer, be more difficult and you can avoid most of the big mistakes when you have a mentor directing you.

Finding a good mentor, however, isn’t always easy.  That’s why I have a dedicated a few podcasts to the subject.  Please ‘em check out.  They also have valuable links and notes:

• 069: “The Importance of Finding a Mentor” with Paul Moore – He especially has some interesting, creative ways to connect with investors
• 080: Should You Pay for a Mentor” with Bill Manassero

I don’t know any mentors in South Florida off the top of my head that I could recommend.  I know that Rod Khlief and Kevin Bupp are in Florida but I think they charge for their programs.

I recommend you network, network, network — look on meetup.com, reiclub.com, creonline.com, and biggerpockets.com for real estate investor meetings in your area.  There should be a lot in South Florida.  You could also check out the local chamber of commerce, apartment owners association and civic groups like Kiwanis and Rotary.  These are excellent places to meet other real estate investors, sponsors or people for your team.

Do some research to find out who some of the big investors are in your area.  You can always approach them as part of a “research project” or, actually start our own real estate investor newbie’s blog and say you are doing an article on “real estate movers and shakers” in South Florida.

I would also recommend going on BiggerPockets.com, even post that you are willing to volunteer in exchange for mentoring.  Look through South Florida BP members and invite them for coffee or lunch.  Let them know you are getting started and that you want to meet to get their experienced opinion on getting started.  When you meet them you can ask them if they know any mentors that might be interested in having someone volunteer in exchange for training.

The podcasts should also help in giving you suggestions on how to approach potential mentors.

Question #2 – Vacation Rentals as an Investment

My husband I are a year out from retirement.  We would like to invest in a 2 or 3 bedroom condo in an oceanfront condo complex in St. Augustine FL where my daughter and her husband live.  This property would act as both a vacation home as well as provide rental income to help offset expenses.   What are your thoughts on oceanfront condos for enjoyment as well as investment?

My Answer to Question #2

Joan,

Having a vacation rental can be a great way to not only have a place to vacation to whenever you want, but it can also generate significant monthly cash flow income.  The trick is making sure it’s location and the local market is conducive to vacation rentals.

My first question would be, does the condo complex have a home owner’s association (HOA) and, if so, what are the rules pertaining to AirBNB or similar type vacation rentals?  If they are OK with it, then an oceanfront condo seems like a prime prospect for a vacation rental.  But you still have to factor in their fees and other rules – which can be a pain!

AirBNB has made it not only convenient for people such as yourself to host guests in an AirBNB property but they also have a great network to promote your property worldwide.  In addition, they have insurance and other great tools to benefit and protect hosts/owners.

I had a guest on one of my podcasts, Al Williamson, discuss AirBNB rentals in some detail.  He also has some great free resources available that can teach you about how to be successful as an AirBNB host.  Check out the podcast here: http://olddawgsreinetwork.com/109-creative-strategies-to-increase-your-rental-property-net-income/.  I hope this is helpful.

There is a lot of great info about getting set up on  AirBNB and vacation rentals on YouTube and just online, too.

Question #3 – LLCs and Rental Property Analyzer

Hi Bill,

Thank you so much for launching the real estate investing site and podcast, my name is Claire, my husband and I are interested in investing in multi-family homes, and we would like to seek your advice on the following questions:

1. Asset protection: we would like to use anonymous LLC to purchase our investment property, can we simply set up LLC on our own or in your opinion, we should seek a law firm to help us? Because we want to purchase a duplex house, not sure if a single small purchase needs to hire a law firm for LLC set up
2. Getting loans: I hear you mentioned various benefits using LLC to purchase multi-family homes, we are 100% sold on this idea, but how can we use LLC to get the loan from the bank?
3. Rental Investment Property analyzer form: Can you please share the form with me? 

Thank you very much, Bill, I look forward to hearing from you soon!

Thanks,
Claire

My Answers to Question #3

Hi Claire,

Thanks for listening to our podcast and visiting our olddawgsreinetwork.com website!

That’s very exciting that you and your husband are interested in investing in multifamily real estate.

To answer your questions,

1. You are smart to want to set up an LLC.  Protecting your assets is an important priority for any serious real estate investor.  It does not have to be complicated.  I set up my first LLC on LegalZoom for $125.  Now I think LegalZoom offers LLCs for $149 plus state filing fees. They give you everything you need and also provide other services and inexpensive legal support throughout the year.  Check out episode #053 – “Why Real Estate Investors Use LLCs” and Ask Bill episodes #134 and #150.
2. Regarding getting a loan with the LLC.  Most lenders are fine with you having the loan and the property deed in the name of the LLC, especially with multifamily loans.  And even if they don’t, you can often change it later to an LLC, however, I would check with an attorney on changing it, especially if the loan docs have a due on sale clause.
3. You can get my 3 minute rental property analyzer free on my website at olddawgsreinetwork.com.  It should just pop-up when you first visit the website.  If not, I can send it to you.  Just in case, I attached one for you.

Again, thank you for your interest in the Old Dawg’s REI Network!

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