2018 Real Estate Investing Tips

2018 Real Estate Investing Tips

Use tax strategies Let’s face it—every dollar saved on taxes is another dollar freed up to invest with. This is one of the main pillars of building true wealth.

There are many ways to save on taxes, whether it’s depreciation, all the write-offs the real estate business can offer us (mortgage interest deductions, taxes, maintenance, etc.), or even becoming an agent to take advantage of unlimited passive losses. My personal favorite is probably investing through qualified plans like self-directed IRA accounts, HSAs, ESAs, etc.

This year in particular, it would be wise to meet for a planning session with your accountant about all the new tax law changes to avoid any surprises. That said, the biggest advantages didn’t really go away, as they stem from things like providing housing, creating jobs, or helping charities.

No one said you have to choose just one either. For example, my buddy’s non-profit owns an apartment building that leases units to disabled veterans. Perhaps you can incorporate a similar strategy into your business model.

Stay Focused and Disciplined

Sure, focus and discipline can be applied to things like sticking to a budget and having your financial house in order, but what I’m referring to is a little more philosophical. As Jim Rohn puts it, “We need to work harder on ourselves than we do at our jobs.” Many of us could use more work on our soft skills—things like time management, sales, negotiations, public speaking, or even just reading more.

Set Goals

Earl Nightingale, an author and successful insurance broker, best known for The Strangest Secret, put it best when he asked the question, “Where do you see yourself based on the actuarial statistics for 100 men at age 65?” At the time (1950s), the statistics were that one was very wealthy, four were very well-off, five were still working, 54 men were dependent on others, and 36 were deceased. What he noticed was not so much that 36 of the men were deceased, but that there was a common trait in the top 5%—they all set goals!

Plan with Purpose

We should all try to be more strategic in our investing this year. For example, you should know your exits before you invest. Maybe you could plan to purchase your first owner-occupied place with the intention of keeping it as a future rental. As my buddy Jeff Brown always says, “You should have one goal in life, to have as much passive income, as soon as you can, by retirement at the latest, and have as much of it tax-free as possible.”

Utilize Leverage

You can leverage many things, like relationships, time, etc. What one thing could you really leverage this year to take your business or your  investing to another level? Maybe it’s utilizing your equity better by incorporating more arbitrage? Maybe it’s accumulating more assets with good debt or eliminating all your bad debt? Source Other People’s Money (OPM).  Shauna Crowden and SEH Consulting can help you with your real estate project financing.  We provide low interest loans in many categories of project development and renovations.

I’ve always said that your money list is more valuable than your buyer’s list or contractor’s list. Some of the best ways to raise capital involve teaching it, whether that’s teaching about how to invest or the parameters of your investments themselves. One of the best ways for me to raise capital is to actually teach raising capital. There are probably too many ways to mention, but another favorite strategy of mine is working with charities, or having a charity component to your business.

Pay down Debt

If you’re not in accumulation mode and you’re thinking of how to accelerate the pay down of your properties, try to do it in a fashion that considers all the risks, including the use of asset protection and/or estate planning. One of my game plans as I approach retirement is pay off a rental home, move it to a family trust, then when the values and interest rates rise, sell it with owner financing to a real estate investor’s LLC, and place the loan into servicing for collections. Now, I’m cash flowing without the headaches of ownership.

So, whether you do a biweekly mortgage, send in next month’s principal with this month’s payment, or if you’re using a more advantageous strategy like utilizing sweep accounts, there are plenty of ways to shrink your debt service and increase your cash flow.

Build in asset protection and liquidity

Obviously, the use of debt can be an inexpensive form of asset protection, especially property that’s held in your own name. This is why I like using HELOCs on properties with substantial equity because not only does it act as asset protection but gives me liquidity too. Equity loans were off the table for a while but seem to be coming back and in a rising market, with good employment, it may be a good year, with still fairly low rates, to put some of those in place. Another area we can look at in 2018 is how we can take business or investment risk off the table. Maybe that means pulling excess capital out of our businesses and putting some into more diversified, safer investment vehicles such as other qualified plans, insurance contracts, etc.

Have your assets pay your liabilities

This is probably my favorite. Whether it’s income from my rentals paying for my vacation home or buying a note to have the payment pay the payment on my wife’s car that costs twice as much as what I paid for the note, I just love this strategy.  Call Shauna Crowden and SEH Consulting for information regrading your project financing.

Calculating Your Net Worth!

Calculating Your Net Worth

What’s your number? No. I do not want your phone number. I’m talking about your freedom number. Freedom number—what is that, you ask? If you don’t know, you’ve been thinking about your finances all wrong. Let me explain.

Your freedom number is the amount of passive income you need to fully satisfy your living expenses. Once you achieve this amount of passive income, you no longer need a full-time job. You will be living off of your passive investments and will be able to fully enjoy the life given to you. So, what is that number for you? If you don’t know, don’t worry. Just keep reading.

Calculating your number

Calculating your freedom number is easy. It is the average amount you spend on a monthly basis. If you are organized, this will take as little as 10 minutes. If not, you may need to spend a couple of hours pulling together records of your various spending outlets. Either way, the time invested here is well worth it. Here are the steps to calculate:

1. Figure out how much you spend on a monthly basis. Look back at all of your spending mediums for the last 12 months—including bank statements, credit card statements, debt payments, charity donations, etc.—and try to remember any cash transactions as well. Note: This is why I try to never use cash. It is untraceable!

2. Put them all into a single spreadsheet. Aggregate all of the transactions you have made in the last 12 months into a single Excel spreadsheet.

3. Divide by 12. Take the sum of all of the transactions you have made in the past 12 months and divide it by 12. Assuming no drastic life changes, this is your average monthly spending, otherwise known as your freedom number. Once your passive income surpasses this amount, you are free!

Let me give you an example. Let’s assume John Smith looks back at all of his transactions over the past year and determines that he spends approximately $5,000 each month. Once his passive investments generate $5,000 per month, he is “free.”

Why did I put “free” in quotations marks? Because being free does NOT mean you should quit your job and move to a tropical island with bottomless piña coladas—well, at least not yet!

Being “free” means you can live your current lifestyle, exactly how it is, without working. Before elevating your lifestyle, you need to increase your passive income by the amount you desire. If you want to live a lavish lifestyle spending $10,000 a month without working, then you will need to increase your passive income to that amount prior to living that life.

Keeping your full-time job will likely help you attain this goal quicker by providing a steady paycheck that can be used to invest while also making it easier to obtain a loan.  SEH Consulting can help you calculate your net worth and provide you with alternative financing.

Annual Income is Irrelevant

Most Americans use “annual income” as a barometer of how successful someone is. Let me break the news to you: Annual income by itself is irrelevant.

Why? Because annual income is solely an indicator of how much your time is worth. If you are financially free, you do not need to work, and your time is therefore worth an infinite amount.

The only thing that annual income is good for is giving you additional cash on a regular basis that can be used to invest and increase your passive investments.

While passive income is the underlying metric to determine freedom, it is driven directly by one’s net worth—though net worth is a misnomer. Real net worth is the true metric that should be monitored when considering financial freedom.  SEH Consulting can help you calculate your net worth and provide you with alternative financing.

Net Worth vs. Real Net Worth

Your net worth is the amount you own (assets) minus the amount you owe (debt and other liabilities). Why is this so important?  Because you have the ability to earn passive income on your assets while still having to pay your debts.

As Scott Trench pointed out in his book Set for Life, many Americans’ net worth is tied up in their personal residence, personal vehicle, retirement accounts, etc. These are called “false assets.”

They do not provide you a return that can be deployed in a reasonable amount of time to generate passive income. Since our goal is to have cash-flowing assets and the ability to access this capital well before the age of 60, we will be excluding all “false assets” from our calculation.

And yes, we will be retaining the debt. You are still obligated to pay your debts even if you did not buy real assets for it. This will give you your “real net worth” number.

Net Worth vs. Real Net Worth

A common rule of thumb is the 4% rule. This assumes that, on average, you are able to make a 4% annual return on your investments. Now, of course, some years will be lower, and others will be higher. But the average rate of return is a conservative 4%.

Let’s revert back to the John Smith example above. If we take his monthly expenses that we calculated above and multiply it by 12, we will get his annual spending of $60,000. To get to that real net worth number, he divides his annual spend of $60,000 by 4% (or multiply by 25) to discover that with $1.5 million of real net worth, he will be financially free.

Now, if you are generating more than a 4% return or spend less than $60,000 per year, you may be financially free even before you hit this target. The 4% is just a rule of thumb that takes into consideration fluctuations in the market on a year-over-year basis.


SEH Consulting can help you calculate your net worth and provide you with alternative financing.   Contact us today to get started on financing your next project!

Financing After the Bank says No!

Get Financing after the Traditional Bank says No!

Things may be going great between you and your bank. Maybe you’ve attained several mortgages from them already, and you’ve been buying up real estate left and right, building your portfolio.

You might not see it coming, but once you own a set number of mortgages in your own name, the traditional bank will likely cut you off, refusing to lend you another cent. Although the limit can vary, I believe it’s now around 10 mortgages. Of course, this number depends on many factors.

So, why would the bank do this, especially when you’ve shown them repeatedly that you’re good for the money? Maybe you even have a perfect credit score or enough cash in reserves to buy the property outright if you really wanted to. That’s great—it’s not what the bank is concerned about.

Just as we investors like to diversify between multiple investment types, sometimes the traditional bank likes to spread out their risk among many different borrowers, not lending over a certain amount to any one person, for example.

This, however, does not actually mean that your situation is too risky or that you have done anything wrong. It’s the bank’s policy. Or, in other words: It’s not you, it’s them.

To avoid being blindsided, a good practice is to every now and again take a banker to lunch (i.e. pick his or her brain). Ask them what they’re lending on these days or what kind of deals they’re looking for.

If you’re already to the point where you’ve hit a roadblock with your neighborhood bank, no matter how many lunches you buy, don’t lose hope.

There are other options out there, including SEH Consulting who offers capital funding for investment projects.  Consider their investment program when you are searching for alternatives.

Find an investor-friendly bank or mortgage broker

When I hit that first roadblock, I decided to join a local real estate club to network with other real estate investors. Through rubbing elbows with more experienced investors, I was able to add more tools (or strategies) to my arsenal.

I also met others who had hit the same roadblocks I was currently trying to bypass. Little did I know that there were investor-friendly private lenders out there looking for deals. I was even connected with a mortgage broker out of Pittsburgh who helped me attain several mortgages.  Although hiring a mortgage broker does require you to pay more than if you had found the financing on your own (i.e. maybe he’ll make a few points), there are still benefits. Mortgage brokers are well-versed on what lenders are looking for, and they may be able to find you financing that you wouldn’t have otherwise known about. If the numbers still work and you get the deal you wanted, it just might be worth it.  Shauna Crowden and S.E.H. Consulting can help you to find the right mortgage product for your needs.

Go Commercial

When you create an LLC for your real estate business, you are usually required to attain commercial financing for any properties purchased by the LLC. That said, the bank will treat the LLC as a separate borrower, allowing you to obtain more financing that’s not necessarily limited.

Personally, I’m not a huge fan of commercial loans that require me to personally sign or that are eligible to recast in, say, five, seven, or 10 years, since now my other assets are at risk in a default (not just the property loaned against) or I may not qualify for the loan to continue if there was a dramatic change in property value or in my personal income or credit.  S.E.H. Consulting and Shauna Crowden can help you to make the transition from residential to commercial by providing you with alternative funding options.

Don’t Use the Bank at all

There are also ways to get the deal without the bank. For example, you could do a subject-to deal, a lease-option, or have the seller provide owner financing.

Better yet, you could find a money partner who would either put up all the money for the deal or sign on the loan. Using OPM (other people’s money) is a great way to acquire deals, while sharing both the risk and the return.

Use Private or Hard Money

There’s also what is commonly referred to as “hard money,” the difference being that hard money is typically more expensive with stricter terms and is often released on a draw schedule, in accordance with the work that’s being completed on the property.

Become the Bank

At some point, possibly after you’ve grown your real estate portfolio, you may start thinking about becoming the lender, as opposed to the borrower. When you have capital to deploy, lending private money or purchasing performing notes allows you to participate in a real estate deal on the financing side. It’s also much more passive.  Personally, I worked my way through each of these five strategies, and each one of them helped me to build more wealth.

Although it may be tempting to jump ahead to commercial financing or some of these other strategies, I’m a big believer in utilizing the bank’s money while you can. When you’re just starting out, you can get financing with very low down payments, especially when buying owner-occupied or as a first-time homebuyer. Why not take advantage of it?  Let S.E.H Consulting and Shauna Crowden provide the foundation for your real estate investment wealth building strategy. Give us a call today!

Finding a Contractor after the Storm

Be prepared to forego multiple bids — or even pay to get a bid


The fact that a natural disaster affects a tremendous number of homes, it will be extremely difficult for home owners to find competent professional contractors to work on their homes.  Demand for contractors and remodelers in the hardest-hit areas will far outpace the supply. As a result, the traditional rules of thumb when it comes to hiring a contractor may not apply.  Consider hiring S.E.H. Consulting and Shuana D. Crowden to manage your renovation project.  Their professionalism will surprise you.


Contractors in these areas may not choose to submit bids to people who they know are shopping around.

Instead of soliciting multiple bids, which usually involves the contractor assessing the property in person, homeowners should find a trusted contractor and have them work up a rough estimate for the cost of the project over the phone. Then, compare bids from additional contractors, before ultimately having one inspect their home and write a more formal bid.


Homeowners who would feel more comfortable having a contractor visit their property still have options. Homeowners should offer to pay a nominal fee for the contractor’s time as compensation that could be refunded if they ultimately hired them.


Is the contractor fraudulent?


There are a tremendous amount of scandalous activity following a major natural disaster.  To find trustworthy contractors, check with state or local homebuilder’s associations, plus the National Association of Home Builders and the National Association of the Remodeling Industry. Additionally, consumers can check with local Better Business Bureaus or sites like Angie’s List to find company ratings.

Homeowners should also request to speak with previous customers or companies that use as references. If they choose not to provide references, then that’s a bad indicator. Homeowners should also ask about how much hurricane-repair experience contractors have. Homes that were flooded will need to be dried out with dehumidifiers and other equipment, but less experienced contractors might not know that.

Subsequently, consumers should check that a contractor has general liability insurance, which covers damage to the property that could occur during the job. A contractor should be willing to have their insurance company provide their certificate directly to a homeowner as proof.  Consider hiring S.E.H. Consulting and Shuana D. Crowden to manage your renovation project.

Try to choose a local contractor


The best route to take when selecting a professional is to go local whenever you can; this will protect you as much as possible form dishonest or unscrupulous characters that you cannot locate. Also, most local governments in regions affected by major storms require that contractors have a license on file to be able to get the permits for construction work needed.  A local address shows stability.

But there are other practical reasons to hire local in situations like these. Many out-of-state contractors will travel to disaster areas seeking work. While these businesses could be legitimate and licensed, they won’t have established relationships with subcontractors or lumberyards in the area, which could make jobs move slower or cost more. Even if a contractor is based on the other side of town, that could mean additional travel time between their office and a consumer’s property, which translates to less time actually doing work on the home.

DO NOT pay upfront for your renovation!


A common scam following major storms is contractors who travel door-to-door offering discounted work. Be very wary of anyone who says, ‘Pay now and you get a discount, Norman said. Many of these people will simply take a homeowner’s money and run.

Contractor work should be paid out over time as certain projects are completed, with contingencies built in to account for possible changes in the price of materials.  For example, the homeowner will pay 10% of the agreed-upon amount after the drywall has been installed.  Homeowners should reserve a final payment until last-minute work is completed.  S.E.H. Consulting will work with you to get your project completed.

Choose a Firm that has a clear and honest dialog


Given the amount of time these projects will take, it’s important to get a sense of how good a contractor is at communicating.  Work with a contractor who’s good at communicating the good news and the bad, no communication is the most destructive aspect of all.

Additionally, in many cases repairs will be akin to renovations. Consumers will need to make choices regarding paint color, tile, cabinetry, etc. And an honest contractor will help you make those decisions while keeping you within your budget.  Consider hiring S.E.H. Consulting and Shuana D. Crowden to manage your renovation project.






Construction Managment | Disaster Recovery

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We get the job done! After dealing with the clean-up process during “Katrina”, it make take local, state and federal agency months to get funding your debris.  Our Disaster Recovery team of experts can do it cost effectively in days.
Our Construction Management team’s are insured, Licensed Construction State Contractors who specialize in disaster recovery.  We’ve completed hundreds of projects in Louisiana stemming from hurricane”Katrina” aftermath. We do all phases of construction from ground up to roofing.  No job is too big or small.
The phases we include but not limited to includes:
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Roofing                        Windows
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Heating and air         Electrical
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Flooring                      Fencing and more….

Contact S.E.H. consultants TODAY!

Recovering from Disaster

Recovering from a disaster is usually a gradual process. Safety is a primary issue, as are mental and physical well-being. If assistance is available, knowing how to access it makes the process faster and less stressful. This section offers some general advice on steps to take after disaster strikes in order to begin getting your home, your community and your life back to normal.

Catastrophe can arrive at your doorstep in any number of ways: A century-old tree could hit the roof; faulty wiring could spark a fire or a storm like Hurricane Harvey could unleash its fury and yours could be one of countless homes in its path.  You should enlist the assistant of a certified disaster recovery firm. S.E.H. Consulting and Shuana D. Crowden can help.

Tragedy’s hand might be unpredictable, but the road to recovery is forged in the language of your homeowner insurance policy, words that will determine how — and if — you will be made whole again.

The disorienting months following disaster are often marked by endless Saturdays spent wandering the aisles of Home Depot; afternoons wasted on the phone arguing with your insurance company about the value of an Ikea crib; and critical decisions made at your most vulnerable hour. And all of this often happens while you are living in temporary housing, wondering if your life will ever return to something like normal.

S.E.H. Consulting can Shauna Crowden can help you to navigate through the process of securing the funding you need to renovate your property.  We work will any and all size renovations.

Our Disaster Recovery team of experts can manage your project effectively and under budget!

Call us today and let’s get started on your project!

How to Evaluate a Rental Property.

Evaluating Rental Property – Consider These 4 Things

When you are looking to buy a rental property, Shauna D. Crowden and S.E.H. Consulting believes there are four considerations which can help you make the best choice. It doesn’t matter whether it’s a 1 bedroom, 2 bedrooms or even an F.B.I. (Four Bedroom Investment) property, these following four factors can help you evaluate an investment:

  • Location
  • Financials
  • Repairs
  • Current Market

Evaluate the Location of the Property

Location is one of the most important things to consider when evaluating a potential investment property. It can help you make an educated guess about the property’s potential to appreciate over the years.

For example, real estate guru Robert Kiyosaki talks about the benefits of buying an income property near a college community. The reasoning is, there is always an ample supply of tenants, the students’ parents will usually pay the rent and you can often charge a higher rent because of the desirability of the area and increased demand for apartments.  Shauna D Crowden and the team at S.E.H. Consulting can assist you with evaluating the environment for rental property, insuring that you chose a location that will maximize your investment.

What Is the Neighborhood Like?

  • Is it suburban or urban?
  • Is it close to retail shops, transportation hubs, hospitals, and schools?
  • What type of tenant will want to live there? (families, seniors, single people, middle class, etc.)
  • Is there an ample supply of tenants in the area?
  • Is it close to your current residence?
    -If it is far away, you will have to factor in travel costs in terms of financial costs from commuting and opportunity costs from lost productivity.
  • Is the neighborhood stable, expanding or in decline?
    -Are there a lot of vacant properties or is there a lot of new construction?
  • Do you see an opportunity for growth in the future?
    -For example, a new railroad line that connects to a major city is being built, or a new company is relocating to the area and creating new jobs. These can dramatically increase the desirability of the location.

Evaluate the Property’s Financials – Know Your Budget

  • How much can you put into this investment?
  • How much can you afford to lose?
  • If you need additional funds, where will you get them from?
  • What will your monthly mortgage payment and interest rate be?

Look at the Value of the Property

  • Ask to see the actual income and expense sheets for the property. If none are available, make sure you are able to reasonably predict the operating costs.
  • Calculate the Net Operating Income (NOI) for the property.
    -What is the standard vacancy rate for your area?
    -What is the projected rent for the property?
    -What would insurance cost?
    -How much are taxes?
    -What will property maintenance cost?
  • Have you determined your market’s Capitalization Rate (Cap Rate)? If you are unaware of your market’s Cap Rate, you should consult with a local real estate broker.
    -Once you have determined the Cap Rate, you can now divide the NOI by the Cap Rate and get the current value of the property.
  • Have you done a Comparative Market Analysis (CMA)?
    -What are comparable homes in the area selling for? Whether you are buying a rental property or looking to flip a house, you will want to make sure you are not over-paying for the property.

Evaluate What Repairs Are Necessary                                                           

  • What Repairs are you Comfortable With?
  • Do you want a property that just needs a coat of paint and new carpet, are you OK with a moderate amount of work or are you comfortable with a gut rehab (new plumbing, electric, floors, walls, etc.)?
  • Does it make sense to hire a property management company like S.E.H. Consulting?

Can You Afford to Make These Repairs?

  • The cost of repairs will vary greatly depending on if you are able to do it yourself or if you need to hire someone else to do it.
  • Your construction budget for materials and craftsmanship will also vary widely depending on whether you are renovating a million-dollar home or a fifty-thousand-dollar rental property.
  • Another general rule of thumb is, repairs will always cost more than you have planned for. If you hire a contractor, a two-week job often turns into four weeks. Even if you are doing the repairs yourself, costs can get out of hand.
    For example: You plan to put up new dry wall in a room for $800. When you open the walls, you find an infestation of termites and the need not only to exterminate but to also re-frame the walls. Unexpected expenses like these will add up quickly. You will not only be hit with a higher construction budget, but you will be paying additional financing costs, called “soft costs,” to pay the mortgage, property taxes, and insurance on the vacant property while these additional repairs are completed.

Consider allowing a management company such as Shauna D Crowden and her team at S.E.H. Consulting.  It may make sense and save you time and money over the long term.  S.E.H. Consulting can assist you with putting together a preliminary strategy for the property you are interested in and help you with managing your maintenance costs so as to maximize your profits.

Evaluate the Investment Compared to the Current Market

Trying to flip a McMansion during a recession will not be the easiest venture. In a recession, buying a foreclosed property to rent out to tenants might be a better bet for success. You need to look at what is trending in the real estate market now and adjust your plan accordingly. If you buy that McMansion and have the money to hold it for seven years until you can sell it for a profit, then, yes, it can potentially be a good investment.  S.E.H. Consulting can assist you with the evaluation of your potential investment.

Another thing to look at when buying a property is its resale value. Highly desirable assets are those that can be easily bought and sold regardless of the market. They are always in demand. Think of them as necessities, like bread and water.

People don’t need a house with an in-ground pool and TV screening room. People do need a house with a clean bathroom and a strong roof. You want your property to appeal to the greatest amount of people so you have the greatest number of prospective tenants and buyers.  Give Shauna D Crowden and S.E.H. Consulting a call so that we can get you started on the right path to real estate profits!
The ABC’s of Property Investing

Protecting Your Wealth

Increase your liability insurance.

Your first line of defense in litigation should be insurance. Call your insurance broker and increase your liability limits. Make sure your personal umbrella liability coverage is for an amount at least equal to your new net-worth. For example, if you are going to receive $3 million from your Aunt Jane’s estate, tell your insurance broker that you want a $3 million umbrella liability policy. Rates are inexpensive – often $200 or $300 per $1 million of coverage.  Shauna D Crowden and S.E.H. Consulting recommends a minimum of a $5,000,000 umbrella policy, and most of them opt for $10,000,000.

Tip: It’s best to make this five minute phone call before you receive the inheritance or windfall.

Consider keeping asset separate.

Depending on the state in which you live and the source of your windfall, if you deposit the money into a joint account with your spouse, this money could instantly become half theirs. For some, this isn’t an issue, but for others, this could pose a problem. For example, if you have children from a previous marriage and commingle an inheritance you receive with your new spouse, your children may get less than you expect when you pass away. This problem becomes even more damaging if you are contemplating a divorce.

Tip: If you don’t want your spouse to have ownership of your windfall, talk to an attorney and keep the assets in a separate account.

Protect yourself from renters.

If you have rental property or expect to invest in rental property after receiving your sudden wealth, create a business entity such as an LLC or corporation to shield your other assets from a disgruntled tenant. By doing this, if your renter sues you for $5 million, they can attack the assets in the entity that holds the real estate but the rest of your personal assets are protected. Whether you have a 1bedroom, 2 bedroom or an FBI (Four Bedroom Investment) Property, Shauna D Crowden recommends that you protect yourself by creating a separate entity for each investment.  Let us help you to map out a plan of action for your assets.

Tip:  Create a separate business entity for each rental property or consider a Nevada or Delaware Series LLC, which is designed to protect each property within a single LLC.

Review all jointly held accounts

Any money you deposit into a joint account with your children, elderly parents, roommate, or business partner is at risk. If the joint owner files for divorce, incurs a tax lien, or lawsuit judgment, the entire account could be wiped out.

Tip:  If there is a need for a joint account, keep the balances as low as possible.

Formalize informal partnerships.

Business partnerships are ticking time bombs. Why? Just like joint accounts, you are responsible for the actions of your partner. But unlike a joint account, a lawsuit against your partner can put all of your assets at risk. For example, suppose you and a friend have an informal agreement to partner and provide consulting services. If your partner is involved in an accident on the way to a client, your personal assets can be in jeopardy.  If you have investment properties 2br, 3br or FBI (Four bedroom Investment) properties that are shared jointly by you and other family members, you definitely want to formalize the relationship by creating entities that protect you and any your investment.  S.E.H. Consulting and Shauna D Crowden can assist you.

Tip:  Avoid partnerships.  Form an entity such as an LLC or corporation to provide you with legal protection.

Create business entities to shield assets.

If you have a small business or do part-time work on the side without having a formal business structure such as an LLC or a corporation, you are operating as a sole proprietorship. The “sole” means it’s just you, so unlike a partnership, you don’t have to worry about a partner’s actions . . . but all of your personal assets are at risk if you are sued.  Protect yourself by allowing S.E.H. Consulting to evaluate your investment property risk.  Shauna D Crowden can help you to maximize your profitability and limit your risk exposure.

Tip:  Create a business entity that shields your personal assets from lawsuits against your company.

Sudden wealth can be a life-changing experience that can improve your life and the lives of those around you, but only if you keep it.  Those with more assets are bigger targets for lawsuits.  Don’t let your sudden wealth suddenly get stripped from you.  Protect your assets before you get the windfall and you will sleep a little easier knowing your assets are better shielded.

This article is re blogged from Robert Paglirini,  Consider purchasing and reading his book: The Sudden Wealth Solution: 12 Principles to Transform Sudden Wealth into Lasting Wealth.

How to evict bad tenants!

Whether it is because of late rent payments or because of damage to your property, sometimes it is sometimes necessary to evict tenants.  S.E.H. Consulting and Shuana D Crowden can assist you with the process.  If you have a 1 bedroom, 2 bedroom or an FBI (Four bedroom Investment) property the process is still the same.

There are several different types of notices that landlords can serve tenants, depending upon the reason for eviction.  An eviction notice must first be served properly and the tenant must have failed to comply, pay or vacate within the specified timeframe.  This must happen before the landlord can begin the eviction court process by serving you an “unlawful detainer” eviction lawsuit, called a Summons & Complaint.  This is not a complete list but most common notices to vacate are:

  1. 3-day notice to pay or vacate
  2. 10-day notice to comply with the terms of the rental agreement or vacate
  3. 3-day notice for waste or nuisance
  4. 20-day notice to terminate tenancy (a “no cause” notice)

These notices are indicators that the landlord is going to initiate an unlawful detainer action against a tenant if you do not respond within the time limit.  The landlord must attempt personal service of the eviction notice (give it to the tenant personally) or the landlord may leave it with another person of suitable age and discretion who resides there, or if no one is suitable age and discretion is there, post it on the door, provided it is also sent in the mail.  If the notice is posted on the door and sent in the mail, don’t count the day it was served in the timeframe.  Weekends are included in the notice days.  The landlord may personally deliver the notice to a tenant.  It does not have to be delivered by the sheriff or notarized in order to be valid. S.E.H Consulting can help you to move through that process so that it is not headache for you.  Let us assist you with managing your properties as well as tenant vacation rates so that the stress is transferred to a professional who is trained to handle managing your property.

There may be a brief period at the very beginning of the eviction in which tenants can negotiate directly with their landlord to stop the eviction.  It is very important that any agreement you come to with your tenant be in writing, signed and dated by both parties if possible.

In order to win in court against an eviction for non-payment of rent, the tenant must be able to establish that they do not owe the rent the landlord is trying to collect.  It is very important that the property owner and landlord keep accurate records of rental receipts that are preferably signed by the tenant and the landlord for each payment made.  A 3-day pay or vacate notice does not mean that the tenant has to vacate the premises within three days.  Eviction is a court process and the landlord cannot have you removed from the premises until a court order has been issued.  There are very few ways to stop an eviction for non-payment of rent, if you actually owe the money, besides paying your rent in full within the three-day timeframe.  Always avoid taking cash, but if you do, the law requires that a receipt for all cash payments be provided.  A landlord must accept the rent payment if it is made in full and paid within the 3-day timeframe, and will no longer be able to proceed with the eviction.  If the tenant makes a partial payment or pays after the timeframe the landlord may still be able to proceed with the eviction.  Some landlords won’t accept any money until after the court process is complete.  S.E.H Consulting and Shauna D Crowden Hunter can help you by collecting the rent for you, visiting the tenant and making sure they are complying with the terms of the rental agreement.

There are no exceptions in the law for people with young children, or people who have lost their jobs or have been met with other unexpected loss of income or personal tragedies.  The law does not allow tenants to withhold rent because of unmade repairs (except in limited cases), complaints against the landlord, or money the landlord owes the tenant.

The landlord may serve a 10-day notice to comply or vacate to a tenant who is violating or accused of violating a section of the rental agreement. The notice should list which section of the rental agreement is being violated, and give the tenant 10 days to come into compliance with that section. If the tenant is not complying after the 10-day timeframe, the landlord may proceed with the eviction process. The notice expires after 60 days.

It is important for tenants to respond to the 10-day notice in writing stating that they are or will be in compliance with the rental agreement. It is a good idea to include all written documentation possible to support the claim. For example, if your landlord sends you a 10-day notice to remove unauthorized pets from the unit, you can send the landlord a letter explaining the situation and documentation to show how you are in compliance.

Or, you may also decide to vacate the unit within the 10-day time frame instead of complying with the term of the lease. If you vacate, your landlord cannot bring an unlawful detainer action against you, and you will not have an eviction on your record, but you will be held responsible for the consequences associated with breaking your lease or vacating without giving proper notice.

If you disagree that your landlord’s claim that you were out of compliance, you can write a letter back to the landlord requesting they rescind the notice. It’s a good idea to back the letter up with evidence or documentation. For example, if you got a notice for a noise complaint, but had been out of town that week, you can provide proof that you were staying elsewhere during that time.

Call S.E.H. Consulting and setup a brief discussion regarding the types of properties you may have need to manage.  We can provide you with an assessment of your property that will give you an idea or some suggestions that would make owning rental property an easier or more efficient process.  Keep in mind that the more bedrooms you have, 1 bedroom, 2 bedroom or an FBI (Four-bedroom investment) property the process is the exact same. S.E.H. Consulting can work with you and any number of properties you may be vested in to make things easy.


Budget for Property Maintenance and Repairs

How much should you budget for home maintenance & repairs?

How much money should you budget for home maintenance and repairs? Here are the two rules of thumb that help guide this calculation, as well as a list of home-related factors you should consider as you decide how much you need to save. This is especially important dependent upon the type of property you own i.e. 2 bedrooms, 3 bedrooms or an F.B.I. (Four Bedroom Investment) property.

The 1 Percent Rule

One popular rule of thumb says that one percent of the purchase price of your home should be set aside each year for ongoing maintenance. For example, if your home cost $300,000, you should budget $3,000 per year for maintenance.

That doesn’t mean you’ll literally spend $3,000 every year. It just means that, on average, over a span of a long-time period (10 years or more), you’ll spend around $3,000 annually, according to this rule of thumb. Some years you’ll spend far more; a roof replacement, for instance, will cost $4,000 – $8,000. Other years, you’ll spend far less. Of course, this popular rule of thumb isn’t totally valid. Your market timing doesn’t impact your maintenance budget. If you happened to buy your home at the peak of the housing bubble, your maintenance costs won’t skyrocket. Similarly, if you bought your home at a steep discount at the bottom of the housing market, your maintenance budget shouldn’t be affected. The underlying price of your home and its repair costs, in other words, are “independent variables.” They correlate only insofar as they’re both impacted by the cost of labor and materials in your particular geographic area as well as if you own a home with fewer than 5 or 4 bedrooms (F.B.I.). Let S.E.H. Consulting and Shauna D. Crowden help you to determine average repair costs for your properties and help you to develop an overall strategy to reduce your annual costs. The Square Foot Rule Another rule of thumb says that you should budget $1 per square foot per year for maintenance and repair costs. If you own a 2,000-square foot home, for example, budget $2,000 a year for maintenance and repairs (again, over a long-term annualized average). This rule of thumb makes slightly more sense than the “1 percent of purchase price” rule. The more-square feet you’re managing, the more you’ll need to spend. One drawback to this rule, though, is that it doesn’t account for labor and material costs in your area. In certain parts of the nation, contractors are significantly more expensive.

What Factors Should You Consider?

S.E.H. Consulting and Shauna Crowden Hunter believe that there are specific factors that make the biggest impact in the cost of your maintenance and repairs. Those are:

Age – The age of the property will play a huge role. New construction (a home built within the last 5 – 10 years) will need very little maintenance. Homes 10-20 years old will need slightly more. Once a home turns 20-30, though, there’s a good chance that major components, such as the roof, hot water heater, and some piping, may need to be replaced.

Weather – Homes in areas affected by freezing temperatures, ice and snow are subject to more strain than homes in areas unaffected by cold weather. Similarly, homes in areas where termites, high winds, heavy rains and other extreme weather conditions or pest infestations will experience more wear-and-tear.

Condition – Some homes are more than 100+ years old, but are in pristine condition, thanks to previous generations exercising careful maintenance. Other homes, however, have been neglected and shoddily repaired over the years. The older the home, the more impact a previous owner’s care (or lack thereof) will impact the home’s maintenance needs.

Location – Homes located at the bottom of a hill (where water drains and collects), in a flood plain, or in other areas that create environmental stresses will also impact the amount of care and maintenance it needs.

Single-Family vs. Attached – A single-family home needs a larger maintenance budget, since you need to replace your own roof, siding and gutters and maintain a yard. A condo or townhome won’t need as hefty of a maintenance budget, since the exterior is cared for by your HOA. Shauna D. Crowden and S.E.H. Consulting can help you to inspect the properties you are looking to invest in so that you make the most educated choice regarding a significant investment.

How Much Should You Budget for Home Maintenance? Given all these variables, I hope you can understand why there’s no good “rule of thumb” that governs how much you should set aside for home maintenance and repairs. The weather, age, condition, location and type of property that you own will all play a huge factor in determining the amount of money you need to save. That said, if you have no clue how much you should set aside, here’s a good way to guess:

First, take the average of the one percent rule and the square foot rule. If one percent of your purchase price equals $3,000, and the square foot rule equals $2,000, then your average is $2,500. Then add an additional 10 percent for each factor (weather, condition, age, location, type) that adversely affects your home. If you have an older home, in a flood plain, in an area that experiences freezing temperatures, add 30 percent to $2,500. That’s an extra $750 a year.

That means that you should save about $3,250 each year, or $270.83 per month, for home maintenance. Again, this is just a generalized rule. It’s hard to predict how much your home will cost to maintain. The best you can do is make an educated guess based on your home’s unique factors.

Let S.E.H. Consulting and Shauna D. Crowden Hunter help you to make prudent wise choices regarding your selection of a rental or investment property. If you already own a rental investment property, consider S.E.H. as a partner in reducing your annual costs related to property management.