All Forum Posts by: Joel Florek

Another simple option like Tiller is General Ledger. www.getledgers.com

I currently use General Ledger to track my income and expenses for my 4 properties. Low cost and includes automated transaction download. Designed to be simple and slimmed down. www.getledgers.com

@John Jones check out some of the content from https://www.incomedigs.com/

When I was setting up my Podio I used his tutorials to help me out. 

I have since moved to Airtable. What I learned is that there is very little information I actually want to track. I have 31 units and I found I wasted a lot of time clicking in and out of records in Podio. Now I use Airtable and it is a much faster process for me to edit and keep track of things I care about. Not perfect but no software is. 

@Don Nelson You show Gross Op Income at $63300 for a 12 unit and you are showing an expense for vacancy which makes me believe that $63300 is Gross Potential Rents which would mean Avg rents with all utilities included is $439 per month. It is common to see these kind of rents in studio or 1 bedroom units in C and D class areas in the mid west but I wanted to check that I am following this correctly. 

What does the rent potential look like for the property based on the surrounding area?

The other thing I see is a repairs and maintenance budget of $3165. This represents only $263 per unit per year. I budget a minimum of $500 per unit per year along with a capX budget that puts me at about $800 to $1k per unit per year. I build out CapX based on the specific property. If you have all new furnaces, new roof and appliances are in great shape you are looking good. But on an older property with a lot of units you may find old stuff is breaking all the time. 

@Richard Lovering In my portfolio I use a line of credit against a property. For a while, I had some extra cash laying around not working for me. Ultimately I completely paid off a deal and put a line of credit against the property. Now I have a big credit card laying around that I can use when I need it and will only pay 6%(not much more than commercial loans). Then I can take new cash savings and pay it down as quickly as possible. Fees are only $150 a year to maintain the line with my bank. 

 Haven't heard of this strategy. I like it and will definitely take advantage of this next month when I drop off a few increases. 

@Steve Buchanan You will always be the greedy A-hole even if you dont do the rent increases... Unfortunately we are not in the industry to have everyone love us. Treat people fairly but remember that this is business and that you have to do what is best for your family. Your tenants are buying your product and if they dont like the price or quality they have every right to move and find some place that fits their needs better then what you are providing. 

House hacking is how I always recommend people get started so I love seeing ads like this. Moving into a 4 unit out of college allowed me to get my investing started and now at 31 units I am financially free. Doesn't take long but it takes getting started and doing it where you live is the easiest way to go. Hope the meetup goes well! 

Have a plan and stick to it. I have watched a lot of people make progress in their investing and then walk away from it because they got discouraged by something small. The big payoff is the longterm wealth creation and freedom you can create for yourself. It will take years to get there, not months. Start with your first property and focus on learning and doing better from there. 

@Steve Buchanan Sounds like a great value add opportunity. Would be happy to hop on a call and talk more if you would like but Ill put my thoughts here as best I can. 

I have done 10% to 30% rental increases on most of my 31 units to date. The lesson I have learned is that I have been too slow to take the plung. I have left a lot of money on the table over the last 3 years and that is no ones fault but my own. 

Be prepared for some tough conversations. You will be called a horrible person, told you are putting people on the streets, and you are preventing people from putting food on the table. Do your best to be kind, but its inevitable. Lots of people dont think rationally that you are an investor and the current rents are under market rate. You are the enemy. That said stay strong and hold your ground when you make a decision. 

If you can knock out some exterior upgrades prior to the rental increases that will go a long way to goodwill. If tenants can see you are taking care of the place, those with some wiggle room are typically understanding that you raise rents. If the long term goal is to renovate interiors of all units these tenants will help to increase cash flow today but typically hang out for 6months to 18months until they are ready for something new. 

How well capitalized are you and how quick do units rent in your area. If 4 move out at once, can you weather the storm until you get them renovated and rented? It sounds like you have a lot of upside on the renovation numbers so if you have the financial backing I wouldnt be afraid of a bunch of people moving out. 

Multi family valuation is based on cap rates. $83/month rent increase is $1k a year increase to the NOI. At a 7cap that is $14k in added value to the property. It sounds like you are missing out on $5k a month in rents, aka $60k a year, and at a 7cap that is $857k in property value... I dont know about you, but it sounds like you have a great opportunity to execute a killer project!