All Forum Posts by: Chris McHaney

We have been approved for the EIDL loan, but after taking a look at all of the requirements for use of funds, I can't see how it's advisable for landlords to take this loan, unless you are truly in need, hence the term disaster. At the time we initially applied all bets were off, and uncertainty abounded. 

The only way that I can see accepting these funds would be to set up a new checking account for the funds to arrive in, and then use that account over the proceeding months to pay utilities, insurance, taxes, "Normal" mortgage payments, and anything else deemed working capital by the SBA. If doing so, this still seems like a back handed way to use the funds if most of your tenants are still paying rent. I emphasize most here.

Any other take on this loan? The collateral requirements, use of funds, etc seem to restrictive for the need in my opinion. Sure, I'd love to utilize their funds to pay off one of our mortgages, essentially refinancing, the debt, but that's not the point of the the whole loan program in the first place. 

Hi @Jack Cross, I am a long and STR owner in Memphis. Familiar with the market to a good degree and be happy to answer any questions that you might have. Hope you were able to find a new investment that suited your needs.

Great suggestions so far. Hope you're up and going possibly. It can be daunting when first getting started. I can personally attest to using www.igms.com for automated messaging using templates, in addition to managing the calendars for all listings in one place. You can also add team members, like your cleaners so they are in the loop. In addition to cutting down on all the questions that guest invariably ask check out hostfully.com for their digital guidebooks. Can personalize all your recommendations of all the place you like to send people to eat, drink, and be merry. 

We started using AirGMS for our 5 listings about 10 months ago, and I can honestly say that I can't imagine doing things without it. It provides a ton of automation for messaging. The best thing to me though is the customization of the messaging using tags such as <<First Name>>, <<Listing Name>>, and so many others. You can save all of these templates and have them automatically go out based off of triggers, such as Instant Bookings or inquires or based off of time (e.g. 7 days prior to check in for check in instructions as an example). 

I will try my best to respond to your gracious replies. 

@Steven Hamilton II We do have separate bank accounts for operating, trust account for security deposits, and another savings account to hold saved money for taxes and insurance (escrow) and investment capital. 

@Ashish Acharya This is my best understanding before posting my question. 8825 filed with income/expenses, Schedule K to owners.

@Justin Freeman Great idea to make sure we have an agreement between the two parties. Will definitely look at the 1065 for the partnership and sounds like Schedule E for us. 

@Llewelyn A. A. Makes sense to me that the PM company needs to be a for profit entity, not just a pass through to us as the owners. Thanks for all the great questions.

@Matthew McNeil One thought I've had over the past year is to keep the current LLC as a management company, and then quit claim deed the properties into another LLC, creating managament agreement(s) between the two which would certainly be better from a legal standpoint. Not sure if it would make more sense tax wise considering the previous conversations above.

@Michael Plaks In our case the members of the LLC are just my wife and I, not a 3 way deal. I should have clarified. No need for obtaining additional financing in our case for now. Thanks for all the words on all the problems that arise. Makes total sense. Certainly should have thought through this more ahead of time of course.

Thanks for all of your input. I have send this thread link to my CPA as well. We'll get this figured out!

I've tried to search and haven't seen exactly what I am after, so I thought I would bring this to the group. 

After many, many years of owning our own rental properties and filing our federal returns, utilizing Schedule E, we decided to form an LLC for a few reasons, mainly to serve as a property management business, and place our rentals under the LLC as well. At some point we decided to not quit claim deed the properties to the LLC and keep the LLC as a means to facilitate all the collection of rent, and payment of bills of our rentals. Not quit claiming is always a subject that gets both sides, and I'm not wanting to debate that here. What I am wondering is how to categorize all the income and expenses of the LLC vs putting the info on our Schedule E? This is a multi member LLC, so I am assuming that at the end, the numbers from the PNL get inputed, a Schedule K I think it is gets issued to the owners of the LLC. However we still have all of the properties in our personal names since we didn't quit claim them over to the LLC.

Fun, fun right? Starting a company sounds all daisies and puppies until you have to post your confused self question in the Bigger Pockets Forum. Thanks in advance to the smart people here. When my CPA says, "interesting conversation Mr." I know it will cost me more this year in tax preparation. ;-)

Chris

Hi all,

We self manage our properties and save monthly for taxes and insurance for all of our properties. I can't seem to figure out a way to get journal entries correct in Quickbooks to keep track of each property. 

Tenants rent goes into an operating account, and after expenses are paid out of the operating account we initiate a transfer to another checking account that holds all funds for taxes and insurance for all of the properties. When it comes time for tax or insurance payments we write a check out of that account for said payments. I'd like to be able to keep track of the balance each property has sitting there for these tax and insurance payments.  

I've tried to set up  an "Other current assets" account to tag each payment, ex. 123 Main St. Escrow, but after making the transfer from the operating account to the other checking account the resulting balance for the 123 Main St. Escrow account shows up as $0 since there are two sides to each side of the transfer, thus cancelling it out. 

I am obviously not a Quickbooks expert, but it seems like I'm missing something simple in my process. 

Anyone have ideas? Thanks in advance!

Hi Perry. You’ve received great advice on viability for sure. I can tell you my experience from Memphis echos what others have said, that your gross income can range 2 to 2.5 what you can attain from a long term renter. There is a cost of your time though, as it is more involved than a traditional renter. I’ve found fantastic info on YouTube, especially on Richard Fertig’s channel, which is now called Short Term Rental University. Great luck with your listing. Follow Richards great advice on best practices and you will always set yourself apart from the competition. Cheers and good luck! Reach out with any questions you may have.

Please read “Set for Life,” be BP’s Scott Trench. I used to give out Dave Ramsey’s “Total Money Makeover”, still a great plan, but if I had to recreate my 20 something year old self, and had Scott’s book as a roadmap, life would be different now. Supplement with “The One Thing” by Gary Keller and you’d be a powerhouse in no time. :-) Cheers!

Another vote for www.tenanatcloud.com here. Very easy to setup and tenants are very happy. $9/month for us to collect our 18 units. Lease/Maintenance/communication and so much more for the same price.