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All Forum Posts by: Cliff Benner

Cliff Benner has started 13 posts and replied 314 times.

Post: Laundromats and Similar Businesses as Real Estate Investments

Cliff Benner
Posted
  • Accountant
  • Denver, CO
  • Posts 317
  • Votes 146

From what I see and my experience, it is a bit hard to find one that is going to Cash Flow positively right away. You will have lots of expenses with the formation of a new LLC, lawyer fees, costs to start up payroll for this company, workers comp, new insurances, immediate repairs, etc. But you will be getting cash inflows that may reduce that burden.

You will have to stabilize the turmoil that comes with drastic change, and changes you implement to increase efficiencies. Where as a Turnkey rental has some of those same charges but can be rented and be a bit more passive, depending on the route you take. 

I would suggest working in your new business 6-12 months before you are able to see trends and find who can properly lead so you can step back from operations and focus on growth. 

Cash flow for businesses require more time which usually means higher returns in $ amount, % of CoC Return is more difficult, and keep in mind your time. my rental takes a hour a month and maybe cash flows $100, $100/hour is nice, but took $60k. My Bookkeeping is $65-$70/hour and but cost $1,000 to make it operational. I spend lots of time to automate and duplicate reports in order to save time to increase my efficiencies that help me increase the use of my time. I can't do anything to my rental to increase efficiencies in creating more income until it is vacant or the market decides I can.

Businesses will require workers, that require leading, and that requires more patience and more hard decisions/conversations to make. But can you find additional revenue sources for a business, yes. Sometimes it's not easy or cheap for Real Estate. 

For finding businesses, I use BizbuySell, Crexi, LoopNet, and Facebook. 


Good luck! I have interest in the Laundromat world too so let me know how this goes for you!

Post: Excited for this Section!

Cliff Benner
Posted
  • Accountant
  • Denver, CO
  • Posts 317
  • Votes 146

Very excited for this section! 

I think the world is moving towards a need for a person to have to have multiple streams of income even if one wants to buy Real Estate. 

My wife and I started a Coaching company and added Bookkeeping Services to it, in order to grow more.

Then we bought a Candle business using Seller Finance, which wouldn't have happened if it wasn't for BP, and now there is a section to help others learn more about being able to do this!

Can't wait to see how many others benefit from this.

Post: Best business bank acct for LLC owned property low Min balance

Cliff Benner
Posted
  • Accountant
  • Denver, CO
  • Posts 317
  • Votes 146

I like Relay and use it for 2 businesses, my Real Estate is under US Bank, but we will move it to Relay when I get more time.

They allow 18 Checking Accounts 2 Savings Accounts, you can pay via CHeck or ACH from their bill pay feature for free too

Post: Seller finance offers/balloon payments…How to “sweeten the pot”

Cliff Benner
Posted
  • Accountant
  • Denver, CO
  • Posts 317
  • Votes 146

@Courtney Olson I did this for my candle business but it could work for real estate

Maybe offer Step Up  Payments too, as long as the number works, and hint at it helping wiht inflation and maybe combined it with an interest rate that is above typical inflation.

A combo of something like 4% inflation to keep your same spending power as the years go, and we increase the payment by $25/month every 12 months so your spending power stays the same and you get a bit of a raise every year, then we could do a balloon payment in 10 years to settle the rest.


Something like that could be an option. 

Post: Contractors for Rehab Project in Dayton

Cliff Benner
Posted
  • Accountant
  • Denver, CO
  • Posts 317
  • Votes 146

I have a great Roofer/Exterior Contractor and a great Pest Guy. 

Exterior: Dayton Roof and Remodeling - Chuck 

Pest: Free Bee Pest Control - Eric

Please let them know I recommended them!

Post: Useless property what to do?

Cliff Benner
Posted
  • Accountant
  • Denver, CO
  • Posts 317
  • Votes 146
Quote from @Alecia Loveless:

@Henry T. I willl be consulting with a lawyer about being able to keep the non-permanent dumpster and the parking in the ROW.

My original thought was to fill in the gulley and build a warehouse structure on it to rent out as either an auto shop or larger storage type facility. It’s not quite zoned for actual storage units but I could get away with one bigger building for a single business. Of course Mr. Development has already warned me against filling in the ditch but I hadn’t thought of adding a culvert for the drainage.


 Not sure Zoning, but I have noticed Flex Warehouse Space becoming very popular. Maybe you could build something like that?

Post: Self Tracking / Bookkeeping System

Cliff Benner
Posted
  • Accountant
  • Denver, CO
  • Posts 317
  • Votes 146

@Derek Tuohy I would suggest start working on getting a Bookkeeper on your team and use a software, if you plan to grow it will be easier and cheaper to get into a software now rather than later and have to learn with 20 units rather than learn with the 3 you have.

I agree with @Jake Baker on his bare minimum suggestions. I use QBO for all my clients as well and use the Plus subscription for Real Estate clients, because they need the Class Tracking feature in order to properly prepare for their Tax Return. Plus a Tax Accountant can be invited to it and they would be able to look at all the details.

I set my clients up with a Box account, it is free for the first 10 GB, and allows them to scan receipts into the folder, sign pdfs from it, and other various document tasks to make it easy for them. 

Sounds like you are having some growing pains and you are in the right place to get the best advice for those!

Post: Will adding solar increase the resale value of your primary home?

Cliff Benner
Posted
  • Accountant
  • Denver, CO
  • Posts 317
  • Votes 146

@Jenny Milu I just noticed that you are located in Billings, MT. I grew up there before moving to CO.

My opinion, I don't think adding solar would be a good use of your resources there, with the new Rec Center being vetoed and all the sports teams not wanting to be a part of the old facilities that are there, I wouldn't do Solar. This veto demonstrates, again, that the city and its people are not that interested in bringing in things to attract citizens to move there. Billings needs more housing, that is for sure, and turning your resources to flipping or developing would be more advantageous. But since the city keeps choosing to not add activities, there will be a lack of younger people moving into the city from places where they value Solar. All the people I grew up and was around while there did not care about Solar.

Unless it will help replace your utilities bill, like I stated above, I don't believe you are in a market that values having solar enough to increase your house's value. You are in a market that grows very slowly because of their own decisions. 

Post: Will adding solar increase the resale value of your primary home?

Cliff Benner
Posted
  • Accountant
  • Denver, CO
  • Posts 317
  • Votes 146

I got solar on our Primary, we are in Denver, and basically i traded an electric bill for a solar bill, at the time. 3 years later it is actually cheaper than the electric bill and we do get a check every year.

I did hear that getting a battery bank helps make it more worth while. 

That might be something to consider, and we got a tax break as well. Dollar for Dollar credit.

Property Value wise, it probably added the same value as the cost, so we aren't ahead on Value wise. It more just makes our bills cheaper. In summer the only bill we are charged are account fees for the electric company allowing us to be hooked into their lines, how gracious of them.

Post: Baselane Vs Stessa

Cliff Benner
Posted
  • Accountant
  • Denver, CO
  • Posts 317
  • Votes 146
Quote from @Tyler Koller:
Quote from @Cliff Benner:

I have not tried Baselane but I did try Stessa for a few minutes.

As an Accountant, I need to be able to make Journal Entries and that is something Stessa does not have so I deleted it right away.

For all my clients we sign them up with QuickBooks Online. Yes the Class feature Cost a bit extra which is a bummer bet the support for it is amazing, and it is easy to allow access for Tax Accountants to pull the reports they need rather than my clients playing middleman.


 I originally looked into QuickBooks but it seemed very expensive for everything I would need it for. If you have just one business it's not too bad(My wife uses it for hers) but it starts to get really expensive if you have a lot of doors and or multiple businesses.


 Yes it does, needing to keep the books and properties seperate for proper Tax Reporting and any 1099s you may need to file can be costly. Something I discovered recently is; if you have a QBO Accountant start your company and allow the Accountant to get billed, you will get a 30% discount even after one year, but if you create your QBO without a QBO Accountant you disqualify yourself from their Accountant discount. 

Even at 30% discount, the QBO Plus subscription most Real Estate investors have to have is still $63+Tax.

You may look at Xero, I heard they have the Class feature but it is cheaper, it's just not as commonly used as QuickBooks.