All Forum Posts by: Dillon Loomis

@David Chwaszczewski that's what I was leaning towards. I plan to have 5-10 units over the next 3-5 years (a lot of other factors to consider that may change), and wanted to make sure I wouldn't run into any problems transferring current information from Excel (if I went that route) to another program/software once I "outgrew" using Excel. 

Appreciate the feedback!

Hey gang, 

I know there are plenty of threads on this topic throughout the site, but I'd like some advice/guidance specific to my situation here. 

I will be buying my first rental (duplex/triplex) spring '17. I plan to manage the properties on my own for my first few units and will eventually hire a PM. I have a CPA that I will use to file my taxes, but I want to determine the best way for me to track everything throughout the year to simplify tax preparation. I am leaning towards establishing an LLC as well at this point.

Excel? Quickbooks? Other software? Hire a bookkeeper?

I'm slight OCD and don't mind investing the time to at least start everything out on my own, and I'd rather not pay someone to do something for me that I know I'm capable of doing on my own (at least for now). 

Any feedback/input would be much appreciated. Just looking to get started off on the right foot and avoid headaches down the road. 

@Justin Grubbs I'd love to get together and chat sometime about RE! Shoot me a DM and we can arrange it!

@Joe Frey it can be rather expensive to submeter. You can look into RUBS (ratio utility billing systems) to charge each unit for their individual usage based on various factors. 

The easiest thing, without knowing the details, would be to include the utilities in the rent. You can speak to the previous landlord, the utility company, other check with other PM (property management) companies in the area to get estimates on the average monthly or annual utility bills in the area/neighborhood and go from there. 

@Mike Lalor you get to decide, however a lot of it will depend on the setup of the property. For SFH (single family homes) - the tenant is typically responsible for everything. In MFH's (multi-familiies), it may depend on the metering and how that is established. If there is one meter for all of the units, some landlords will pay the cost of utilities and increase the rental amounts each month to compensate. Some others will foot the bill to sub meter and charge each unit per their consumption.

There are various options, but at the end of the day you own the property and determine who pays what. 

@Justin Grubbs Hey! Just figured I'd jump in here and say hello. I am from Erie, PA - right up the street. I have actually been considering driving out to Girard sometime to see what the market is like. I will probably be focusing on Erie, Millcreek, McKean etc. but am open to everything. Do you know what your strategy will be yet?

@Account Closed good question. Bear in mind, setting up multiple LLC's can increase your annual expenses quickly come tax time. This could set you back in terms of cash flow if your margins aren't great to begin with.

Also, if you have a proper, well thought out, professional lease, along with appropriate insurance, you should not need to worry about an added layer of protection from multiple LLC's. An LLC will really only benefit you if you are sued, so spending hundreds if not thousands of dollars on something that could only benefit you in a scenario you should already be trying to avoid doesn't make too much sense.

Be a good landlord, know the laws and codes, do good by your tenants, and have a solid lease and insurance. One LLC should be more than sufficient for most. If your property values, as well as your net worth start rising beyond say $5M...$10M...$15M then the additional cost of multiple LLC's may not be as big of an issue if your legal counsel advises it to be a good idea.

@Gabriel Hershberger what's up man?

Do you know what your "niche" will be yet (multi-family, single family, buy and hold, flip, wholesale)? 

@Michael Mckeavin seems as though you have received all the advice you need already, but for the future I figured I'd add another option to consider in a different situation. 

If you are stuck with the water bill due to metering issues, you could add an addendum to the lease stating that if the water bill goes above (x) that the tenant will be responsible for the additional cost. Tenants will be more responsible and will let you know about any small problems (leaky handles, leaks, drips) far sooner than if they have no responsibility over the water bill whatsoever. 

Not recommending this for this situation, but just something to keep in mind! Best of luck :)

@Adam Paxton sure thing man. If you think of it, keep me posted on how that plays out for you. I'd love to hear what you decide and how the tenants respond. Always enjoy hearing others experiences.