All Forum Posts by: Coleman Nelson

@Michael J. Most of this is market dependent. I can tell you what is working for us in the Midwest but it may not necessarily work where you are. So take this for what it is worth. Our minimum requirements are:

-Gross monthly income 3x the rent
-Credit score of 550
-No violent felonies ever or non-violent felonies in the past 7 years
-No evictions in past 7 years

Our security deposit is equal to one month’s rent. Sometimes we will reduce the deposit for a special when units are harder to lease.

I recommend trying to get feedback if possible to know why they are choosing not to apply. If you have strong minimum requirements, the likelihood of them damaging the property and you needing such a large deposit is lower. In our market you don’t see deposits over 1 months rent, but if that is common in your market then that may not be the issue. We collect the security deposit at lease signing, and the first month's rent at the time of move in. One of our biggest issues is that people don't have a lot of savings, so moving in is expensive and them being able to pay the deposit now and the rent in two weeks when they move in and get another paycheck helps out with that. Is there a reason your rent is $100 below the median? That's fine if that is the market rate for your property. I just want to make sure you're not renting it $100 below what you should be able to get for the property.

I would hold firm on your income requirement, and I’d say the credit requirement is market/property specific too. Good luck!

@Eric Grant thought I would update this thread to answer your question. We did a ton of research and didn’t wind up adopting any software until this summer. We went with Juniper Square as we thought it had the best features for what we need now and what we will need as we grow. It is quite expensive and almost cost inhibitive at the current size of our company, but thought it was a worthwhile investment that will help launch our company forward. We’ve been using it for about 3 months and have already used it to send out reports, calculate waterfall distributions, and for raising money and doing the subscription process for a new acquisition we are closing on. So far so good.

@Mark Trebor in our portfolio, we have a mix of SFRs, small multi-families, and apartment communities, and our strategy is a little different because our objectives vary by asset class. In general, for the SFRs and small multi-families, we don't push rents as strongly as they are generally held for cash flow and we would like to have longer-term residents to reduce turnovers. For our larger properties, we are looking to reposition the property through renovations and rent increases, with a short-term goal of refinance and long-term goal of a sale. For these, we are willing to try to push rents more early on with the risk of longer turnovers, with the reward of increased NOI and property value as a result of the higher gross income once the property is stabilized and ready for the refinance. So we have to balance maintaining cash flow while increasing the overall property value.

Thanks @Mike Dymski. Yeah, I'm thinking I'll have to either do some extra accounting in the system, or manually track them and add it to our monthly reports in Excel.

@Mark Trebor, for now, this is strictly for our internal reporting process to help us visually see each month how far off we are from our potential, and why we are off. So the Gross Potential Income would be the current market rate for each type of unit, then the effective income is what we are actually bringing in. We want to be able to track whether we need to push rents up to market faster because we have low vacancy and high loss to lease, or because we are pushing rents to market, it's creating more vacancy. Just trying to have as much information as possible to make better business decisions.

I wanted to see if anyone's property management software provides the option to run a Profit & Loss/Income Statement that shows the breakout from Potential Gross Income to Effective Gross Income, including vacancy, loss to lease, etc...the type of report you typically see on offering memorandums. We are currently using Buildium, and it doesn't appear to have the functionality. I can only run the report based on the cash method or accrual method for what was charged. So no "top line" potential gross income, just effective gross income. We are considering converting to AppFolio or other more robust software that are more tailored to larger portfolios, but haven't been able to find if/which software companies provide this. I'd love to hear from users of other software to see if they provide this, or other advantages they've seen with their software over Buildium. Thanks for the help!

@Priya Thomas, my business partner has his license under Ownerland Realty. He uses his similarly to how you plan to use it...mostly for our own properties and limited third party transactions. I recommend checking them out. 

Hey @Mark Caudill, this really is a great site and a source of good information and people to network with in our area. Best of luck to you in your endeavors to get back into REI.

I don't have any experience with development, but over here in Fort Thomas a year or two ago a company took a 1 building apartment community and have built or are still building I think another 4-5 buildings around it. It is The Overlook at Fort Thomas, off of Memorial Pkwy, with a great view of downtown. So it is being done, but I don't know the numbers behind it.

@Hiro Kitagawa, it's always good to see new investors from the area joining the site. There are a couple monthly meetups in the area that are good opportunities to meet other investors and really get to know what types of investing others are doing. Best of luck to you!

@Oliver Comstock, welcome to the forums! It's good to see another Fort Thomas investor on here. Let me know if there's anything I can do for you.