All Forum Posts by: Alecia Loveless

@Joseph O'Loughlin Hi Joseph, I am beginning to explore purchasing a small business as a way to help diversify my portfolio.

I would love to hear any advice you may have.

Thanks!

@Sami Gren I have had great luck with my pest control company. They got rid of a mouse/pest infestation in less than 6 weeks.

The one thing they consistently tell me to do is to cut back and trim down the vegetation around the building. The mice and rats love tall grass and bushes that grow adjacent to buildings.

Also if you have not already inspected the units you need to do so because tenant cleanliness can play a big factor in these types of issues.

@Hitanshu ShahMany years ago my Dad owned a 12 unit apartment complex where there was one meter for water, sewer, and electricity.

After careful consideration he decided to divide the bill in 15 parts. 1 part of each bill to each tenant and he paid the remaining 3 parts personally so the tenants knew he was still paying part and did not complain that their usage was less than the other tenants and they deserved a smaller bill.

After the first 2-3 bills the consumption rate dropped by almost 40% as now everyone had an incentive to conserve.

And my Dads bill was significantly reduced by just paying 1/5 of what he had been paying.

@David Jay I have a similar situation but my tenant has become a low level hoarder. Other tenants in the building have complained about the state of his apartment.

We have scheduled a walk through inspection of all the units in this building tomorrow.

My manager got our insurance company to write a letter stating they were planning to come inspect for life/safety. I have made a copy for each tenant.

The letter from the insurance company will help

add teeth to whatever action we choose to take next. Which I’m assuming will be a letter that the unit needs to be cleaned or if the tenant doesn’t/can’t clean it then he will need to find another place to live.

Not sure if a dirty bathroom could be considered a life/safety hazard.

I like the potential idea of having it cleaned for them.

My cleaners can spend 2-3 hours in a bathroom if it’s really soiled. At $50/hr I think $150 would be worth trying to save the relationship with long term tenants.

I would also recommend raising the rent at least $225. That gets you closer to market but still incentivizes them to stay.

@Andy Chen I did not know there was a BP Pro discount at Home Depot. I would like to learn more.

@Brandon Campbell I would be interested in joining such a club if Zoom or other online meetups were available.

@Kevin Sobilo totally agreed. This is also what we do.

I'd keep the 1.74 for as long as possible. If you're in the US it's likely going to go up to 7ish if you refi which will likely kill any cash flow you've got left after increasing your loan amount. 

I'd bank as much cash flow as you can between now and when the loan's up. Then worry about interest rates then. 

@Brent Thomas The current cost of flood insurance for a building in a flood plain may need to be considered.

I just looked at a 4 plex in a flood plain. The homeowners insurance was about $2500 but the flood policy was $10,000.

This alone was enough to deter me from any further consideration of this property as without factoring in any other information $1000+ per month in insurance ate up any cash flow that there might be otherwise.

@Michael Kare As my tax return has become more complicated over the years due to multiple properties I have come to realize it’s just worth paying the deductible expense to have an accountant prepare my taxes.

My 2023 tax return was over 70 pages long. It was beyond the scope of my ability to even think about preparing it.

I’d recommend you stop using accounting software that’s designed to prepare tax returns for people who have very little more than a W-2 income and no assets and hire an accountant going forward.