All Forum Posts by: Joel Florek

Would I personally buy at a 4-5 cap? Not a chance. But I can buy at a 7 to 12 in my markets in the Midwest so that is a big part of it. I focus on value add deals so the more value add I can do the more aggressive I am about being willing to pay a bit of a premium. But its all about balance and risk tolerance. 

One thing I will never do though is rely on a rule of thumb for deciding on what to do moving forward. Run the actual numbers and figure out if the property is running at 60% NOI to Gross Rents or only 40%. Maybe it's even worse. But if things consistently trade at 4 and 5 caps in your market then you may be left with pay the price or don't play.

 Yeah, just south of highway 20. There isn't much product in the area which is one reason why I like owning down there. Not ideal for trying to buy into it though. 

The retail scene is very strong and you see a lot of small business investment. Menards is moving out of their small location to build a much larger store which will add additional jobs to the area. Overall there are safe neighborhoods with convenient highway and shopping nearby. 

Not selling my 8 unit near the fairgrounds. The goal is to hold that thing for a very long time. Overall very confident in that particular submarket long term. Would love to pick up some additional multifamily properties if the price, location and style makes sense. 

When things are going well good people demand good money... Econ 101! 

Rather than find a jack of all trades you might have better luck piecing out parts of the job. For instance, I know many of my contractor buddies want nothing to do with the demo. They want to come into a clean job site and put the thing back together like a new construction project. Other guys like myself hate hanging and finishing drywall, if that got completed by a company or guy that specializes in drywall then you may be able to put the work together. If people aren't under pressure to provide for their wants and needs the last thing they want to do is the part of the project they hate the most. 

Clearly, this makes your job much harder but if it was easy everyone would be out flipping properties! I would try to open up the conversation more with potential contractors to see if there are certain things that would make your job more appealing to them. 

 In my case, I don't track all that stuff on the month to month. I mainly care about cash in vs. cash out in the day to day. I know that depreciation and interest vs. principle will all make the numbers better at the end of the year. Once I hit year end I make some adjustments with my CPA to wrap up tax time. The idea is take care of 95% of the work in real time myself to keep an eye on the ball and work with the expert at the end of the year to dial things in. 

With that said, some want to have the books 100% squared away each month. Quickbooks or another full suite accounting solutions would be a better choice for that type of workflow. And depending on your day to day work schedule you may want that function hired out. For me, at 31 units and no "day job" I am fine spending 10 to 15min each week. 

@Michael Schultz The job of any individual is to seek out others advice, listen, try to understand the motivations, facts and theories behind their advice, then decide how to, or not to apply that advice to their own life. 

With that said, I love GC. He is a great motivator and certainly entertaining. You also cant ignore the success that he has achieved. But he has no incentive to tell people to go build a small portfolio that can help support or suplement a lifestyle. He sells books, courses, events, all in the effort to get people to buy into his Gulfstream ideas. I have read his books and Ill probably attend an event of his at some point in my life for the fun of it. And sure, I do want to go own big multi family some day. But I have leveraged small multi family to get me to 31 units and live financially free. In his eyes I am still broke but I get to be with my daughter every day do things I love. 

Honestly, for 95% of people I suggest going smaller to start. Personally, I stay away from single family but a 4 unit, 3 unit, or an 8 unit can provide an amazing boost to the average persons income, security and net worth. It allows you to get started in a way were a failure wont bankrupt you as a day job can still cover the expenses of such properties(at least it should). 

Some might say my mindset is too small and maybe that is the case. But there is a lot of learning that goes on in the first few properties that ends up saving $10,000's or $100,000's on bigger deals. 

@Sterling Fields I am at 31 units and still do the bookkeeping myself. I use General Ledger (www.getledgers.com) to manage my bookkeeping. A few notes. 

By doing the books myself I get to look at all my transactions and ask myself "why the heck am I spending so much on that." Helps to keep me in check. When someone else does the work you will likely just get the statement and think to yourself that the numbers sound about right and not to worry. 

General Ledger is probably the simplest tool possible that allows automated transaction download. I spend about 5min each week categorizing transactions into the different properties that I own. Keep up on it and then I send over the fully categorized transaction statement to my CPA at the end of the year for review and tax prep. Can do it periodically throughout the year as well if you choose to. 

@Ayne C. @Monte Blunk I use Airtable for keeping track of my tenant information(property management) and General Ledger www.getledgers.com for managing my bookkeeping. Airtable is free and General Ledger is about $5  month for me since I connect a few credit and checking accounts for automated transaction downloading. My problem with a lot of the other software suits is I am forced to use or see a bunch of functionality that I dont want. Gets noisy and difficult to focus on the few tasks I care about. Anyway, best of luck in growing your portfolios stronger in 2019! 

@Laura Epstein I and a few other investors friends of mine use General Ledger. www.getledgers.com

Allows you to have automatic transaction downloads via connections to your banks and credit cards. Also you can easily setup multiple properties and break down transactions via the IRS categories and sub categories you might like to track. 

@Julian Pilate-Hutcherson one thing to watch out for is changes in housing around students. One big issue for landlords is that universities have the ability to tell all students they cant live off campus and need to live in the new campus housing. It is a business for them and the housing piece is a huge money maker. Not sure how much the new development around ND has affected student housing as I focus on B class on the South Side of town. But I know other friends of mine have run into issues in other cities when universities change their rules. Can be a big problem.