All Forum Posts by: Chase Gochnauer

Thank you for that detailed response. I agree that our book/tax basis is different. I currently am the sole onwer/investor so I have nobody else to please. I am just struggling to determine what the "norm" is for expending versus capitalizing. My global DSCR doesn't look ideal for lender purposes, but it is because a somewhat significant part of our overall payroll and expenses are more capital related items. I had planned to begin capitalizing things, both book and tax(I do not need any additional deductions) that we hadnt previously, to help with this global DSCR. I imagine other larger investors have this same issue, I'm just surprised that I can't find more conversations around the topic. I'm not sure if we just truly are a bit more unique, or if we are missing something obvious, etc.

Hey all,
I have a good sized portfolio, approx 300 units. I have W2 staff managing and maintaining the units.

We have recently run into an issue where our P&L looks a bit rougher than it should. One main reason for this, is due to the work we are doing to improve units. I have never made a strong effort to break out payroll costs to capitalize them for the time spent on capital projects versus R&M.  There are other items also that I have on my P&L that I'm thinking I should capitalize to strengthen my P&L. This is slightly different than taxes per say, as my CPA will do different things with the numbers than we do with the P&L.

Couple of items I have on P&L now that I think I should capitalize?
- Hot water heaters
- Flooring replacements <$2500
- Window replacements(done in house)
- Appliances

Are there others out there that have a similar W2 labor setup that calculate hours to capitalize part of payroll? The issue is that my P&L doesn't look as strong as it should for DSCR issues. However, we are making mostly the right decisions because we are improving the properties with the extra money that we are spending.

Anyone out there in a similar situation?

I have a local PM down there that does all that for 20-25% fee. Yeah I wouldn't do something like an out of country STR for income purposes. Only do it if it's an area you enjoy and want to use it yourself.

 I think it's difficult to give a true assessment without knowing the repair details. Was this a Saturday evening no hot water situation? Was it a repair based off a rental inspection? Was it safety related? Was it something that potentially the PM didn't know the full cost up front? Or was it something silly?

Either way, as stated above, basically your options are to terminate them or have a conversation and move on.  Unless they charged you thousands of dollars in repairs, it's probably not worth stressing over and just find another PM you like better.

Hello all! 

I have a portfolio of around 150 SFH and 150 multi units. We are going through a period of some hard looks at our financial performance and I'm attempting to find other similarly placed landlords to determine some rough industry metrics on capex, R&M, payroll, etc for this size.

Does anyone have any good resources for this? Portfolios and properties for sale never seem to share real numbers. Smaller portfolios don't necessarily have the overhead that we would have so it's difficult to compare there. 

 Hello, so far the property itself has been fine. Covid was a terrible time for income of course. To be honest it definitely doesn't cash flow. Income roughly covers all of the upkeep expenses and I'm still paying the mortgage. I do donate approx 5 weeks a year to charity auctions so I'm losing some time of potential rent. I could push harder probably to get it more fully occupied but I'm content where it's at. I don't know that I'd expect it to fully cover the costs if you are mortgaging it. Aside from that, the house itself hasn't had any really crazy expenses. Flat roof repair. Couple of ACs, etc.

@Alyssa K. I was not aware Cozy charged a processing fee? I believe there's a $3/mo/unit fee if you want the pay out a little quicker is all.

Hello, 

I am bringing 170 units from a 3rd party PM to in-house PM. We are setting up our chart of accounts in Buildium currently. Does anyone out there have a solid chart of accounts that they would be willing to show? Breakdown of different repairs, etc. We are going to brainstorm ours next week but thought it might be better to build off of someone's already developed.

Thanks!!

Chase

I don't have a specific budget in mind. I'm big into bonuses for my employees. So I'd likely do something like a base of $50k-$60k and then bonus potential that could be another $10-$30k? Just a shot in the dark. I imagine it depends on what level of talent you want to recruit.