All Forum Posts by: Chico Ford

We own several properties that our company self manages.  These properties are located in other states in smaller towns and span multiple legal entities and bank accounts.  Many of our vendors request payment same day as the work is completed.  What systems and processes are you using to pay these vendors?  I don't want to hand our onsite property manager checkboooks to pay these invoices.  Any advice would be greatly appreciated.

Thanks for the insight.  Greatly appreciated.  How are you managing paying invoices?  Are you using QBO or a bill pay service.  Thanks

Thanks for the insight!

We have 8 mobile home parks we are managing that are all in separate LLCs. What accounting system are you using to manage the parks? I'm interested in a complete management system that provides a balance sheet, profit and loss statement and cash flow statement? Further, can you tell me if you are paying a separate subscription fee for each LLC for the accounting system you are using. Thanks in advance for your assistance.

Does anyone have a recommendation for a Tax Accountant in the Twin Cities that is well-versed in Real Estate Syndications?

Thanks in advance for sending any recommendations you have my way.  

@Cara Rohde I would add that you have to keep in mind why the lender seeks an appraisal.  The appraisal is an objective means for the lender to protect their risk of losing money on the loan.  Further, the appraisal allows the secondary market to feel comfortable purchasing the loan from the lender at a later date after the closing.  Your suggestion of asking the lender to use a different methodology for your purposes will not hold much weight as they are working in an environment to protect their interest and sell the mortgage.  If 99.9% of the residential mortgages they take in are done based on the sales comp approach why would they do your loan based on a cost approach?  

@Sergio Remedio I have a question for you.  Is a new person ever great at a new skill when they first try it?  Most people would say No.  I would mentally accept that your first deal isn't going to be perfect - No deal is ever perfect.  There will be challenges you will have to overcome but they will not be insurmountable. A couple of things I did on my first deal that helped me: 1) I said this first deal will be for me to learn and leverage the learnings for future investments. 2) I only invested money I was willing to lose entirely.  I had done enough research and knew in my heart I wouldn't lose it all.  3) Have enough cash reserves to fix any surprises that may arise.  My first deal has worked out great.... I overspent on initial rehab and had a $6,000 surprise in year 1.  Further, I've seen 26% appreciation (in 2 years) which puts me ahead of the money I've invested.  I hope this helps.  All the Best!

I might be mistaken but I thought BP was for newbies to ask their "green" questions without being put down for being new.  Everyone has to be new at some point.  We are here to both learn and share what we have learned.  BP was created for questions like these and for veterans of the trade to give back with knowledgable answers.  Just remember you were new at one point.

@Dustin Somers I remember when I was asking myself this same question as I was starting out as an investor.  I would like to come at my response from a different angle than others.  I was listening to Brandon Turner a lot on the BP Podcast and he would often say analyze 1 deal a day to understand your market and how all of the math works.  When you get to 30, 40 or 50 deals analyzed you will know what makes a great deal and which metrics matter in decision making.  To me they all matter, as someone else said it's more about the relationship of the metrics to one another that really paints the picture on the purchase decision.  Set a goal to analyze 1 or event 2 deals per day for the next 30 to 45 days.  If you stick to that goal and use the BP calculators, you will know which deals are good and which deals are bad from a math perspective.  Then balance your decision between the math and the other factors (location, management, tenant quality, capital reserves, etc....) when making your purchase decision. All the Best!

Just because the HVAC is old doesn't mean you should replace it.  I would wait until it fails before I replaced it.  If there is a current safety issue I would replace it immediately. From a tax perspective, you would be well advised to wait until it's a rental unit to make a replacement decision.  However, you need to consult a tax accountant to get their professional opinion.