All Forum Posts by: Mark W.

@Meg K. If you don't have a current lease in place the tenancy is month-to-month and all you have to do is give 30 days notice.  No reason need be stated.

Couldn't hurt to get an attorney involved.  Sounds like the tenant might hold over, and then you're headed for eviction court.  PM me if you need a recommendation.

@Kyle H.It's cash-on-cash if the purchase is all cash, i.e. come to closing with $117k cash, which is what I was trying to illustrate.  

I just realized I left out 5% for repairs.  So that would make your yearly cashflow $8901.

$8901/$117000 = 7.61% COC

Hi @Tom Vic, that looks pretty good for a suburb deal.  I originally thought that was the way to go when I got started but I found suburb multi-families to be priced too high to get the kind of returns I was looking for.  That said, you're getting $325/door which is not too shabby.

One thing I like to do, even though I don't purchase all-cash, is run cash-on-cash #s.  I see a lot of folks on here doing that so I like to compare how others are doing with my own deals.  It's a quick and dirty way to see if I want to pursue something.  I try and shoot for a minimum 10% cash-on-cash.  Using your #s:

Rent/yr  ($23940)

-10% vacancy ($2394)

-10% capital expense ($2394)

-10% prop mgmt ($2394)

- taxes (~$5000, rough guess)

- insurance (~$1000?)

- utilities ($55 x 12 = $660)

= yearly cashflow, $10098

Cashflow per yr/purchase price = $10098/$117000 = 8.63% cash-on-cash

So not bad at all, especially for the burbs.  I am looking at about 9% with my most recent deal (city), but I was super stoked with the condition and location so I don't mind coming a little under.  Last year I hit 12.5% (also city), but that one required some elbow grease to get it up to snuff.

Even though I used COC as a benchmark, my true returns are greater due to financing and doing my own prop mgmt.

Due to the harsh winter, I've got some bubbled plaster than I need to repair (as well as a roof...) in a rental I own that was built around 1920.  Is it worth it to get the EPA RRP certification so I can learn to perform the work safely or should I just pitch it to a contractor to handle?

I'm over the 6 square foot threshold.  

Looks like the course is about $250.  Is there any additional cost after that?

@Account Closed I didn't give the Quickbooks Online much thought.  While I love using the cloud for lots of things, my financials isn't one of them.

Now that said, I just realized I do all my banking online, so maybe it isn't a big deal.  For now I'm working with the desktop version and liking it quite a bit.

A big part of my decision to use the desktop version too was the fact that there was some good documentation available for setting up a rental business.

 Hi Ron, they are similar in that regard.  In general the structuring of accounts is the same, I just preferred Nancy's approach in her book.

I actually bought both books, Nancy's and the Landlord Accounting book.  I bought the Landlord Accounting book first and I wasn't quite grasping the use of the software.  Jonathan explains the structure well enough, but you work through an example file he gives you and I just wasn't seeing how some things were connecting or linked.  It appears it was last updated for Quickbooks 2012, but I don't think that was a huge deal (I'm using QB 2014).

Quickbooks looks pretty daunting and intimidating at first, especially if you are used to managing finances with Excel or Quicken.  The Landlord Accounting book didn't help to lift that veil for me.

Nancy's book was what I needed though.  She walks you through the set up of the software first.  (And the book was using QB 2014 screenshots, so everything matched up.)  I imported her Chart of Accounts and invoices and starting setting up my properties.  I got to the point where I was comfortable enough to start over with a blank file.  I think that is key.  Sure you can use someone else's setup but until your create all of your own accounts seeing the connections is difficult.

I'm not sure Jonathan is maintaining the book any longer.  Like I said it appears to be last updated with the 2012 version and the comments/help section of his website had been spammed into oblivion the last I checked.

If you have to choose one, I would go with Nancy's book. 

The other reason I wouldn't touch that with a 10 foot pole is because I bet the city will no longer let you zone it as a duplex.  The zoning board is militant about multifamily zoning.  Once there is a documented case of vacancy, the city will pull the rights and won't let you re-establish them.

Here's my simple philosophy: a 1-year lease protects the tenant, a month-to-month rental agreement protects the landlord.

If the tenant really wants to leave, the lease won't stop them.  However, if you have problems and want to remove them, you're not getting anywhere with a 1-year lease.  With a month-to-month, you can terminate the agreement with 30 days notice.

This can be handy if the tenant stops paying and proves adept at navigating eviction court.  The one time I went with a year lease I got hosed by a professional tenant.  So back to month-to-month agreements, which work well for me.  I've had one tenant on a month-to-month for 15 years now.

Invariably I will have new tenants ask for minor updates (so far just color of paint) and I couch that with saying that I generally don't entertain those requests until they've been there for a year.  That sets the expectation.