All Forum Posts by: Kris Martinez

Put all your tenants on Leases, do not collect cash, and try not to show a loss on your taxes. The banks will want 12 month seasoning on the leases before they will count the rental income towards your DTI. However, if you show losses it could negatively impact your DTI. Hopefully after 12 months seasoning, the DTI will be acceptable just based on your ordinary income. Get that certificate and attest hours and go private, too. Good luck.

@Karla Talancon John Buxie handles my partnership's returns, etc for our apartments here in Texas. The name of his firm is Mastrodomenico & Buxie, CPAs. Let him know I sent you.

@Leigh Ann Smith I am a CPA in San Antonio. I cannot personally help you, but I can give you a name of a local gentleman who can help with organizational structuring, taxes, and payroll. With 40+ employees during peak selling season, you should really incorporate and do a better job of protecting your personal assets. Contact me if you would like his information. Take care.

@Alejandra Perez Welcome to the site. There is no shortage of content available to you; which is a great thing, especially starting out, as you can really dive into all the wonderful ways to be successful in real estate. My advice would be to be continue to learn about all those methods until you find something that you can be passionate about. Once you find an area that is interesting to you, become an expert at it. That is generally what will make you your money. Also, network. This is a relationship business. 

Nothing is sexier than accounting and real estate!!! I think @Todd Moriarty is referring to replacement reserves, which would be an expense on the P&L once the disbursement is made, since those costs are not capitalized.  The owner's reserves, which is correctly presented on the balance sheet, is not something that transfers to the new owner. Those reserves are typically held for capex improvements, which of course are capitalized as it increases the assets useful life. 

@James Wheelock  Great job in being proactive! I am interested in hearing about your approach to writing the mailer? Did you use a standard format? How did you obtain a list of apartment owners?

@Poem Turnerthe leasing fee is the fee the PM charges to fill vacancies. Usually they charge first months rent. I either take 1 months rent and straight line that over the year or 10% of the annual rent and straight line that. 

As far as I know, the home warranty will not cover anything identified in the inspection report. Also, read the fine print for the home warranty. If you need an example, I can send you a current one that I have on a duplex. 

As for the analysis, I think you are on the right track, but your assumptions need some work.  Is this a Texas property? The insurance and taxes seem very low for a Texas property. Especially for an older property, even more so if the foundation is pier and beam. I would budget $700 - $1,000 per door, per year, for insurance. Call an agent and give them the basic info, it will be worth your time. For taxes, you should be able pull up the 2015 taxes. Taxes should be more/less about 2.5% of sales price per year.

I use 10% per month for PM, 10% per year for leasing, 5/5/5% for repairs, vacancy, capex. However, I prefer to not buy assets that I have to sink in a ton of capital for capex. Based on the condition of the property, you should really scrutinize this further and prepare a proper analysis. If this is a good deal, you should be able to throw everything in your analysis and let the numbers stand on their own. Once I changed insurance and taxes to be more reasonable I am showing an 9 cap. That is before any other capex. Good luck.

Hi @Jennifer Noble, welcome to BP. I just moved to San Antonio, TX from LA (Culver City)! Good luck on your investing career. See you around!

Hi @Julio OlveraI can refer a good CPA in San Antonio, if you strike out in Houston.