All Forum Posts by: George Hoover

Hi @Brandon Wells,

Great question.  First, I would check the state laws regarding property management.  In Ohio, you cannot manage property for others for a fee without a broker's license or working under a broker as an agent.  Ohio also has stipulations about how you can name your companies.  They basically want the names to be fairly similar.  

As far as risk and liability, check with your insurance company.  Personally, it's not a bad idea to separate the entities to mitigate risk.

Sorry I can't provide more details.  Keep us posted on what you end up doing.

Cheers!

Hi @Reis Beecher,

Great job so far acquiring properties and making it work!

The first question I would ask is that, whether or not you have to be a licensed agent working for a broker in Louisiana in order to manage property legally.  If so, then work on getting licensed and if it makes sense, be an agent at a family brokerage.

The other nugget of experience I would share is that you should try to systematize as much as you can.  When you are managing property for others, it is a greater responsibility.  If you can get the system down, that will keep your head from exploding.  One of the pieces of our system includes the hiring of a part-time bookkeeper to keep the ledgers straight in our Buildium property management software.  That will free you up from having to worry about keeping good accounting and be able to focus on getting more business. 

I have lots of other thoughts but don't have time right now to finish this response in full, but try to figure out what type of property you want to manage and in what areas.  

And build a good team!

Call me if you want to talk :)

Peace! 

We are somewhat new at property management and we have elected to use Buildium.  We are growing at a steady clip and we need to get a firm handle on Buildium accounting and operations before my head explodes.  I need help properly applying expenses, income, etc to the ledger and basically accounting for everything properly.  I have every transaction accounted for thus far, so we are extremely diligent about keeping great records.  We also have ePay.  I would also appreciate advice on the best practices of using the Buildium software.

I envision that I will need you for a few hours to begin, then 1-2 hours every week with more as we grow.  I don't mind if you have a full-time job and you want to handle our business after hours.  I can be available for you at almost any time.

Please e-mail me to set up a time for a phone call.  Please include a resume or profile of your experience.  

Thank you!

@Cody F. glad you are tackling this screening issue now. I use Cozy for my 1 SFH rental and absolutely use the screening tool. The credit and background check is your first line of defense along with the application itself. If the rent is more than about 1/3 of their monthly income, I will usually pass. You may also want to talk to their employer to not only verify employment, but to see if they are in good standing.

But for your 41 units, you may want to use Buildium.  We currently use that now as a property management company and it is a lot more robust.  You'll especially need it for your accounting, which will make your accountant happy.  It of course allows you to take electronic applications, screen tenants and offers an online portal for tenants, vendors and owners.

All the best! 

@Janel Page great job and congratulations on your new acquisition!  And I completely agree with @James Ayers on how great it is that you stepped out of your comfort zone!  That's what I need to do to.  It is great to see others taking such great action steps.  Thank you for sharing.

I don't have anything else to add but all the best for 2019!

Kyle,

Just a couple of thoughts based upon your information:

• I would tend to agree with Josh on finding the NOI numbers. You really need that.
• How long have the tenants been tenants?  What are their current lease terms?  Are they current in rent?
• What are the commercial vacancy rates in your area; how difficult will it be to fill if need be?
• CAP rates are a good barometer because they include the NOI in the formula
• Is there an option for seller financing?
• After you gather all of the numbers, take a step back and ask yourself if it's all worth it for the profit you'll gain each month after you pay the note.

I hope this helps.  

All the best!

Hi Michael,

I have read blogs where real estate attorneys suggest putting the loans in your personal name (to take advantage of the lower interest rate), then moving them into a land trust which is then purchased by your LLC. This is apparently totally legitimate/legal. It also won't trigger the call on transfer clause from the bank because moving into a land trust doesn't require a filing with the county.

The only drawback is that you will have to pay an attorney of course but it may be worth it.  Try searching BP blogs under land trusts.

All the best 

Hi Mark,

Congratulations on your first commercial deal!  Here are a few comments:

• Your property management fees seem a bit high unless 12% is customary for your area.  I know in Ohio it's about 10%.
• You may be able to adjust your vacancy rate down if you have a strong rental market.
• Where is the property located?
• Glad you are billing tenants back for water.  I would consider doing it as inclusive of the rent so you don't have 2 items to collect from each tenant.  I do that on my rental property and it works fine.  I settle up with them after 6 months if it ends up being different.

All the best!

Hi @Jared Viernes - Thanks for sharing that.  The Akron/Cleveland Area BOR and other Ohio BORs are seriously thinking of using this same platform for commercial as well.  It may be a better alternative to LoopNet/CoStar & Crexi, etc.  

What do you like about it?  It looks like they're asking for a monthly fee of $85-$100.  How much work is needed for buy-in from other "old school" commercial agents?

Thanks!

Is Your Property Manager Preparing Your 1099, 1096 and W-9 IRS Tax Forms? 

'Tis the season for tax preparation.  As you prepare your goals for 2019, are you also making sure your tax forms are being prepared?  The following forms are very important so that you can provide the necessary documentation to your accountant and the IRS:

IRS Form 1099-Misc:

The purpose of this form is to let the IRS know how much you have earned AND which vendors you have paid more than $600 in the current calendar year.  The IRS should receive Copy A and you and the vendor should receive Copy B.  Most forms are due to the IRS by January 31, 2019 depending upon how you file and what boxes are filled in.  Please check with your accountant or make sure your property manager has confirmed with their accountant.

IRS Form 1096:

The purpose of this form is to provide the IRS with an Annual Summary and Transmittal of U.S. Information Returns if you file a 1099 and other forms by postal mail.  It must accompany all paper submissions.  Again, check with your property manager or accountant to make sure this is being handled properly.

IRS Form W-9:

Form W-9 should be filled in as part of the vendor on-boarding process.  Businesses use the name, address and social security number or tax identification number vendors provide on Form W-9 to complete the 1099-Misc and some other forms.  Neither the sender nor the recipient should send a copy to the IRS.

There may be additional forms your property manager needs to prepare for you as well.  Be sure to address that.

If you have any further questions about property management or commercial brokerage services, please call me at the number below or visit our website. 

Thanks!