All Forum Posts by: Mark B.

I'm not very experienced with this yet but I will say that I'm starting to use Quickbooks for my property.  Haven't gotten too far into it but it seems to be a solid program for the needs you have. If you did want to keep it simple, you could just create or download some expense/income tracker excel sheets.  Take the full report the PM company gives you but then use your own excel sheets to double check their numbers. 

Also, I would keep your personal stuff separate if possible.  To me it seems cleaner that way. Unless of course all of the money is together anyway.  

edit - I use GnuCash for my personal accounting.  Its an open source accounting software that doesnt seem to have a ton of bells and whistles (at least none that I've played with).  Its rather simple once you set it up to track income/expenses with it.  You could always set up both your personal and RE in there and it would be very easy to keep them separated.

@Benjamin Riehle congrats!!!  I'm looking to do this type of deal for my second property (once I get enough reserves saved up for the first).  Glad to know this strategy is still fully functional in 2017!

I believe theres a tax difference between maintenance and capital expenditures but I havent gotten to that point yet so I'm not positive. But from what I understand, Capex is big stuff that you capitalize. Roof, driveway, foundation. Maintenance items are smaller things such as repairing a sink, fixing a hole in the wall.

From a budgeting point,  the bigger stuff wont happen every month.  If you dont account for it though, when it does come up, it could wipe you out.  

i found this on the IRS site :https://www.irs.gov/publications/p527/ch01.html#en...

Although Im not sure how to interpret it... I would need someone more experienced that I am. (Just bought the property in late december) 

I currently own a 4 unit using a similar strategy.  Depending on the year the property was built as well as the state of the property , i would plan to spend a few thousand on repairs when you buy it (might not be needed).

I would make sure to plan/budget/set aside money for management and capital expenditures.  you might not hire management yet but it would be nice to include it in the budget in case you ever do.

I'm not sure about NJ, but in Allentown, Pa you also need to register as a landlord as well as register each unit with the city.  

Using my numbers... Id assume 150 maintenance (6% ish), 100 management (50/unit), 216 vacancy, 150 capital (just a guess), 15 registration, 75 water/trash/sewer (your numbers) so about 705$/mo in expenses.  Granted you would be keeping the 100 by managing yourself. so 605 in expenses every month on average.  That still leaves you with 400$/mo cash flow or 200/mo/door which i think is pretty good from what ive seen!

I only own this one property and Ive only had it for less than a year so I would defer to more experienced advice, but there are the numbers the way i started analyzing mine. hope it helps!

@Jen L., i might have missed if someone said it, but i think that cost might actually be normal.  I've heard from a few different people that they account for 1 month a year for vacancy in their expenses.  Whether that is 1 month lost rent or 2 weeks + 1/2 month rent in expenses or 1 day turnover with 30 days rent in expsenses im not sure now that i think about it... 

But if youve had a tenant for 7 years and they cost you 7k. Thats only about 1k a year, which is most likely about 1 months rent per year.

I think youre actually right on track for vacancy expenses if not ahead of the curve is you didnt spend that much during those 7 years on maintenance

@Mark Gallagher thanks for the response! I found a window guy actually, ABE Glass.  Came out same day and did a clean job for a very reasonable price.

I'm looking for contractors for everything pretty much.  I only have one property at the moment but I wanted to get the names of contractors to start building a network of people to call for different jobs

Good morning all!

I have 2 separate requests this morning.  First - i broke a window in one of my units trying to open it after it had been painted shut (tried cutting the paint first). Hoping someone has a contractor in the area that can replace a single pane of glass.

Second - Looking if anyone has any general contractors and/or handymen that they use in the allentown area that I would be able to contact to start building my network .

Thanks all!

I've been reading this thread for awhile and now that i have a property i can finally contribute!

applicant over the phone - is this a second floor unit?

me - yes, it is

applicant - how many stairs are there?

my first thought was... well... umm... enough to get to the second floor?

 i realize that this is not the dumbest of questions because a second floor could be built into a hill or could be a situation where its only half a flight of stairs but i was definitely caught off guard. 

Im not sure about the validity of the article I ready, but nne article i was reading was talking about the FHA system needing another bailout. If the PMI is reduced, the reserves get low and the system can't handle as many foreclosures and will crash. In the short term, a rate cut would be great for buyers, but if it does cause issues, then rates may go up anyway.

As for the tax issues someone mentioned, that doesn't sound great.  No 1031? I was looking forward to using that in the future 

One suggestion I've heard thats similar to what @Jason Timmerman said was to take pictures of the property (time stamped) and include them in the lease.  I'd imagine that would protect you for the most part.  If the lease started jan 1st and you had a timestamped photo from jan 1st in the lease with the tenants signature right on it, I'd hope that would be more than enough proof