All Forum Posts by: John K.

Kristine Eickman - checkout small local banks, where they are lending their money and not using Freddie/Fanny money. You will need to have better than average credit scores, but if you do they are more than willing to lend money in most cases. Usually anything that's an "investment" or "income" property they will charge an additional percentage point over what you could buy a owner occupied home for.

Page Huyette - even if you used Freshbooks you still pay all Paypal fees above and beyond, that would just be a Freshbooks fee.

If you really want to take credit cards - using Freshbooks is a GREAT idea, since it works really well and if you had a few old school tenants and wanted to mail invoices to them they handle the mail as well.

The best way to take credit cards with freshbooks is to use authorize.net and get a real merchant account. That way you could get rates as low as 2.5ish percent, or better if you have a high volume of transactions.

Also, with a real merchant account through a big institution (like Chase), they deposit funds next day so if you received $1000 credit card payment from tenant on the 1st, they deposit $1000 in your account on the 2nd. Then on the 1st of the next month they would debit your checking account for all fees (ex: $25 on $1000 at 2.5%). They have minimum fees, etc so if you are only running one card/month not worth it - but with volume tenants will pay faster so the trade off is for $25 you could potentially get paid quicker by a lot of tenants and spend less time trying to hassle them for rent money.

I just ran the numbers through my model, looks like 36% returns "Cash on Cash" returns with only expenses as $40/month for insurance and $20/month for Misc repairs (just worse case scenario everything always!).

Also, with vacancy for one month every two years, your worst case is 32% return on bad years.

Numbers look great!

I think NOW is the best time to buy rentals with how great the prices are. People with cash can easily build a good portfolio that cash flows with great numbers. I picked up a duplex doing a 48% return with tax advantages factored in. Over the long term picking up single family homes / duplexes / 4 units at blowout prices turns into HUGE cash flow since many are renting for premium due to hot rental market.

I have a duplex I just purchased (as a foreclosure), one of the tenants has two dogs and we agreed to let that tenant keep the pets since they are a long term tenant and have kept the place in reasonable (but not great condition)

The tenant very nicely asked us if we could replace two approx 10x10 areas of carpet in the main entrance area that are worn really bad - and we agreed that it was a reasonable request since they signed a 16 month lease to get into a regular lease cycle ending in April of 2014.

Since we are not replacing the carpet in the entire unit, and just two 10 x 10 areas (which are not enclosed rooms but kinda rooms) - Does this get depreciated over 5 years or can we just take the tax deduction in full?

If depreciated over 5 years, in addition, if they do move out in a year and we have to replace it again (since they have pets and smoke) - do we just depreciate the remaining four years all at once since it's destroyed?

I should also mention we are putting the cheapest carpet we can find it since we are planning on ripping it out in a few years and replacing it with the next tenants.

Thanks!

One other thing to consider is you don't need the newest version unless your doing lots of payroll stuff with Quickbooks. My Accountant told me first thing when I asked about upgrading that it wasn't worth it and many of his clients even go buy used copies off eBay to save a bunch of money. All the different year releases do basically the same thing when it boils down to it!

Just checked out smartmove, looks like a great tool! Thanks!

What are the best websites to run tenants through after they send in an application? I see a TON of ones out there - but wondering if anyone has experience with any of them, and which ones are better than others?