All Forum Posts by: CJ Witmer

Kari Barnett currently, I just want a way to keep track of expenses for home inspection, paint, flooring, electrical repairs etc. as well as travel time to/from the property. Little things like that for which a PM probably wouldn't record anyway. They don't care what my expense is on paint and I don't need to buy software if they've already got something they use. So I want to record all my expenses appropriately, it don't need to pay $700 a year for software overkill. After I posted the original post last night, my wife and I sat down and made a basic excel spreadsheet taking into account things like traveling to the property for meeting contractors and inspectors, travel to lawyer, LLC setup fees, travel to Lowes looking at flooring, etc. Its just basic stuff now, but we both would love to get into this as a full time thing, so down the road, we will need something more complex. My inquiry was just to see what folks use in between no houses and going "big time"? :). Got some good info from BP as usual! Thanks!

My wife and I started an LLC and I've just emailed our lawyer to draw up a sales contract for a duplex. So, we're going for it! I also just listened to podcast show 88 and they discuss software a bit. I've been looking at apps like Quickbooks, AppFolio and Buildium, but they seem way more complex (and expensive) than what we may need at this point. So my question is, for those who aren't managing the property themselves (we will use a management company to start) does something like Excel suffice? If so, do you have any templates you recommend? For example, I've gone to the property a few times to meet with inspectors, etc. so that should be written off, but I've not tracked it anywhere as of yet. Even before the LLC, we paid $330 to a home inspector to see if we even wanted to go with this house. Once it checked out, that's when we decided to form the LLC, etc. so I paid it out of pocket, so how do I record that? I do have an appointment setup with a local CPA and will run all this by him, but in the meantime, I don't want to let stuff go and forget about it. I guess at worst, I should be keeping a word document of activities. Would love input on software / basic Excel and how those with smaller portfolios do things. Thanks everyone!

My lawyer, who is also an investor said he has each of his properties (approx. 30) in its own LLC. His point was, if you have all properties in one LLC and someone comes after you with legal action they can take everything under your entire LLC. Because he's setup the way he is, if one person comes after him though, they can only get at the one property for which they are renting from him as it'd be under its own LLC. He just puts an incremental Roman numeral on the next LLC he starts.

William Dutrieuille I haven't actually pulled the trigger on that loan, so I'm working with two other banks at the moment (filling out paperwork). I was up front with them that I plan to refinance and at least the one bank didn't care and I'm pretty certain the other was OK as well. Both of them are 20% down and the one where I would've had a 5 year pay-off penalty was 25% so I'll definitely stay away from them. So to answer your question, I do not know of a way out of the payoff penalty. I'll certainly chime in if I find a solution for you though and please post here if you find a way.

So basically, I borrow money from bank A to finance the duplex. Once I've got tenants and the dust has settled, I go to bank B and get a loan to pay bank A back, but I've got the equity from the money borrowed from bank A originally and the work put into the duplex? So I use the new equity to finance the next deal?

Leverage was my next bit of research. Don't quite understand that concept either. I really am serious, if someone can break it down (and the refinance part) like you would for a 2nd grader, I'd appreciate it. :). Maybe I'll wake up tomorrow and it'll sink in, but I'm just not getting it.

But I don't see how I'm gaining any ground on the loan. Seems like I'm perpetually kicking the can down the road.

But I'm borrowing money to pay money back...that does not make sense to me. Again, I understand the overall idea, but the specifics don't make sense to me....if that makes sense. :)

Ok, I've done a lot of reading here on BP and I have some sort of mental block because the refi part is just not sinking in to me. It seems like I'm just robbing Peter to pay Paul? Can someone explain this to me like I'm a second grader? If I buy a duplex for $60k ($12k down and $48k financed) and I put $20k into it and it appraises for $115k, that's obviously a good thing. My total investment is $80k. Using 70% LTV, I could theoretically get $80,500 back. So if I refinance, it seems to me, I'm up $500. I'm refinancing $80,500 to pay off my original $80k, which sounds dumb. Obviously folks are using it and it's working, it's just not sinking through my thick skull on how it works. Can someone help and explain it so I can comprehend?

Went through the property with the inspector last Friday.  The house is unoccupied.  Current owner let the tenants trickle out when he knew they were going to sell.

As for Property Management, I have reached out to the company who managed it previously.  They charge 8% and are familiar with the property.  She is willing to work with me on aspects of the house to increase rent as long as I consider her for business going forward.

As for the heat, the inspector recommended going up to 200amp.  So, the plan was, down the road, to remove the radiator style heaters on 2nd floor and put in electric baseboard and just let the furnace heat the downstairs unit.  This would split the heating and it could then fairly be passed on to the tenants.

Lawyer pinged me this morning to confirm the LLC name as what we wanted previously had been taken. I also called the electrician to have him in to look at the electrical repair recommendations from the inspector.