All Forum Posts by: Mark Smith

 Thanks for the clarification, I've never lived through a full cycle exchange so wasn't sure the qualifications.  I do see this experience coming up for me sometime in the future... 2022 likely.

We use a virtual mailbox, costs about 150 a year, all our mail goes in and is scanned to our dashboard.  If it's something we need we can option to have it forwarded to our home address.  Most the time, the PDF scan is sufficient.  It's a little more then a post office box but it allows us to operate a true virtual office from anywhere, we can even fetch our mail from our phone.

And, it lets us go paperless for a large part of our business.

This!!!

MY reply didn't show up?  Can you 1031 exchange the property?    The incoming admin may change the capital gains rules too so an exchange may be an option if your property qualifies.

Sorry you took it as condescending but it illustrated the point, find a cash based business to start.  Vending is a good option so might be ATM machines.  All have the same basic sales cycle and operating model the cost of entry is an order magnitude higher but so are the monthly returns. 

Get the real costs from the seller, evaluate if they are sound and estimate the gaps. Typical gaps are property taxes they normally go up due to the sale. Insurance is often a gap your quote may be higher, differed maintenance is a biggie. Be very clear on who pays what utilities and what it is you will owe each month. You have accounting/tax prep, legal (if you hold in an LLC), vacancy rate, annual local licensing and inspections for non owner occupied housing (some areas) and just normal fix and repair that comes with maintaining a building. Snow removal/landscaping mowing is another unless you are able to get your tenants to cover. And it's wise to build a contingency should a big repair come up.

I assume a 45% expense ration as a quick calculation and firm up the numbers based on the data.  So, based on your scenario, you would be losing 5% a month.

This is a tough one cause it sounds like it triggers the "if mamma ain't happy, no one is" modifier.

If growing means baby, you may need to consider door number 3, if not door number 1 seems like the best option, door number 2 may close on you with some kind of student loan debt forgiveness program now that the progressives own all three branches.

Good Luck 

You could:

Remove the hallway lights off the tenants meter and put that meter back in the tenants name. 

Install some kind of energy meter inside the main panel and track the usage for the circuit the hallway lights are on and just pay that usage and put the meter back in the tenants name.

Figure out what is driving up costs and do an improvement program to drive those monthly bills down, caulking, insulation, more efficient heater etc.  Depending on your location there may be grants available to do these kind of upgrades.

Good luck and it would be interesting to hear how you decided to approach this...

First, I hate these kind of decisions it drives me nutty. I don't want to rule out good tenants due to bad data or irrelevant data nor do I want to overlook serious defects that could cause me future issues.  However, having inherited a number of tenants from past acquisitions, I can tell you the tenant pool isn't so easy to sum up in data like this.  I have some great tenants I inherited that I would have likely screened out.  I've let in one or two stinkers despite my best screening attempts.

"bankcard account balances are too high in proportion to credit limits" could mean she has an old card with a 500 limit and it's at 500 or it could be a 100K card maxed out so it's not a great benchmark without the detailed report. 

The delinquent account thing is concerning, again, look at the data and see what the root of the problem is.  If it's old or a one off that may be a data glitch or some other reasonable issue (to you). 

I would identify the precise entries in the credit file creating these issues and ask her to clarify what's up.

I see two risks looming:

1. Market crash and you are in a location what could see the values pull back

2. The incoming administration could drastically change the capital gains tax rules so your waiting may be for naught, it just depends on which issues they decide to go after first in the bucket list of punitive taxes and give a ways they have planned for us.

Couldn't you 1031 exchange it?