All Forum Posts by: Jon S.

My Bank account is connected to QB and indeed QB came in handy for this, but we run into a serious glitch when it comes to Home Depot purchases. They are paid on a Home Depot credit line usually with very attractive 0% terms, so QB doesn't pick up those purchases since they were not paid out of the bank account.  Home Depot has this weird policy of not providing a link to QB for their personal credit lines; they only provide the link to QB on their business credit lines. However, the business credit lines only provide 60 days terms, not the generous 0% long term offers you can get on personal lines. Without that QB link you have to export to an excel file, and as I've discovered it is possible to do a good job sorting that export if you choose the "details" export file - otherwise you only get a receipt amt with no details. But with the detailed export I was able to export for the time period and for the job site, and then sort by department, class, and sub-class, which allowed me to categorize all my purchases in to Electrical, Roofing, etc. We combined that info with the info from QB into one spreadsheet, with totals for the categories in both materials and labor, and the report is working out good. I then made a new tab in the spreadsheet for a summary report, which just summarizes by category, in both materials and labor, so the bank can see just the summaries by category. Hopefully that will do the trick. I explained all this in case someone else has to go through this, these tips might help. It's still a lot of work, and a pain in the arse, but it is possible to do it this way.   

@Andrew Postell

Yes, it’s a small bank with its own underwriting criteria. They are generally receptive to lending to me, but they do have their own requirements. I’ll jump through some more hoops and hopefully that will complete all the loan info requests. The property is seasoned for over a year so it should just go by the appraisal value, so I’m not exactly sure why they want to know what was spent. But hey, we’re almost across the finish line so that’s all that counts now.

@Wayne Brooks

True, I’m just trying to be as accurate as possible, but you’re right. It really does come down to going crazy versus estimating the amounts. I’ll probably have do a little of both :)

@Martin Neal

That form would have been very helpful but now I’ve essentially made my own form in spreadsheet format. I realized that my Home Depot Pro account can export all receipts into one excel spreadsheet. I just have to make sure every purchase used the property name as job name, so I can filter by job name, then sort by category, and sub categories, and then export. That should get all Home Depot expenses which are 90% of the material expenses into a form that will be simple to summarize. After that the rest should be fairly easy. Thanks

@Andrew Postell

And that doesn’t include breaking down contractors labor charges ... which can be extremely vague and the bid is generally totally inclusive... aren’t usually broken down into neat categories.

@Andrew Postell

I figured out a spreadsheet but this is my entire weekend poof! I have 72 receipts for materials, 90% are from Home Depot, which require about 10 min each to break down into categories that Home Depot classifies ea purchase under. First one must log in to their Home Depot Pro Account, then search by $ ant to find the transaction, then click on order detail, then use a calculator to add up ea category on the receipt such as Electrical Plumbing Millwork Flooring etc. some of it requires interpretation such as Millwork was Windows, Kit-Bath was AC Window Units! So it’s a lot of work breaking out ea receipt. Some underwriter has no idea how much work he added to my loan app process. I feel like printing all the receipts out, and dropping the stack of them on their desk, and ask them to figure it out! But at least I now have a spreadsheet that will accommodate all these categories. I am fuming though about this crazy amount of documentation. Thanks for listening to the rant :)

@Dean Attali

What are you paying a PM for? If you're going to be hands on then why not keep the fees and % your paying the PM? Last I checked a SFR rental doesn't cash flow enough to give a PM a free handout. From what I see you're getting taken advantage of by both the tenant and the PM. One is getting a free ride (pm fees) and the other is getting free upgrades as well as free service calls due to tenant negligence (bath overflow). Does your lease have a clause regarding repairs due to tenant negligence? Does your lease hold the tenant responsible for the first x dollars of normal repairs? If not, then who wrote the lease? I suspect the PM uses their own lease. Take a look at it. You might need a new PM more than you need a new tenant! The tenant should be bothering the PM. If you stop answering the Tenant's every text and calls, and just respond with the PM's contact info, they will most likely stop calling you. If your PM can't handle the tenant issues then your just completely burning your profit margin.

@Steve Vaughan

These are a couple of clever screening strategies I haven’t heard before. If you can share your full placement strategy that would be awesome, either by private PM or by open posting to this thread.

@Andrew Neal

The reasons I prefer MF are I want the additional security of multiple tenants, the lower costs of property taxes and insurance and maintenance, and the higher cash flow. I can't bank on SFR appreciation but I can bank on positive cash flow. The positive cash flow improves my loan application debt to income ratios which fuels my eligibility to refinance the next property. Without MF cash flows I suspect it would be difficult to keep acquiring properties.

@Andrew Neal

Although my first deal was an SFR it had 2 doors.

First deal was an SFR with a detached in-law suite. Two doors made this SFR cash flow at 2%.

Next deal was a triplex. This was my best deal.

Next deal was a duplex. This is a good deal.

I did a couple wholesale deals to generate capital.

I recently contracted on another SFR with an in-law suite. Two doors seems to work best for SFR.

Triplexes, quads, and a MF apartment complex are my future goals.