All Forum Posts by: Nathan McBride

I own a property management company in Baton Rouge, LA. We are in the process of transitioning over to AppFolio, and in the process we have decided to no longer accept partial rent payments and are instead requiring a single payment. This means roommates will now have to figure out on their own how to combine funds and make a single payment.

The reason we made the decision is we are running into issues where one tenant prepays and throws off accounting and makes it difficult to automatically track who has/has not paid in a particular house.  Plus, for Buildium at least, there does not appear to be a way to allow individual roommate partial payments but not partial payments by late tenants, which muddy the water when it comes to late fees, eviction, etc.

This isn’t a big problem if you only have a few units and can mentally keep track, but it is not sustainable for a growing mgmt business.

I wanted to see what other managers are doing in the instance of roommates only wanting to pay their individual share as opposed to aggregating into a single payment for the unit. 

If you do allow this, how do you keep accounting straight and automate your system for ensuring the other roommates pay on time in the event someone prepays?

Permit has been pulled, demo has started and the quotes from subs are rolling in.

I broke down and started a blog on the project:  https://www.thecamelliaproject...

I'm hoping to use it as part of a marketing strategy for my wife's new career as a real estate agent.

@Patrick Michaels is it the baby blue two-story Victorian? Love that house

I have definitely considered doing STR on the units that have entrances off the alley, but both have long term tenants (10+ years) in place that I'd rather not displace.

@Jeremy Blackburn it is in the Garden District area of Baton Rouge (not quite on the level of NOLA's Garden District in terms of history and architecture!)

@James Babin that's awesome.  Where in town is your duplex?  

One day I want to do a historic restoration project in NOLA.  Just have to find the right opportunity when I have time to dedicate to it.  Old buildings are definitely a labor of love.

Just my $.02, I think 12% CoC ROI is agressive in this market, at least in the areas that allow for decent potential future appreciation and that typically have a lower-maintenance tenant base.

Personally, I am happy with an 8% CoC ROI because this is roughly equivalent to what I might expect from the stock market, leaving amortization and appreciation as "gravy."

I should caveat that the 8% deals I am referencing were purchased with 20-year notes, so my equity build is much higher than a 30-yr note, leading to a higher overall ROI.

I haven't done it, yet, but paid storage is something I have always thought was a brilliant idea. The ROI will likely be much higher than what you would get if you invested the $$$ necessary to convert into another apartment.

I purchased a 6-unit multifamily with my partnership LLC almost three years ago. The property was built by a wealthy developer in the 1930's as a ~5200 sqft duplex (the mother-in-law lived upstairs apparently), but over the years has been split into five apartments with a sixth apartment added in the garage.

A little over two years ago, my wife and I purchased a house to live-in-flip, expecting to make a ~$75k in tax-free profit.  Now that the market has gone absolutely insane, we stand to potentially double our profit on the flip.

We have been looking for the next live-in-flip project over the past few months with no luck.  We've been outbid by $20--40k on homes that require a full, gut renovation (did I mention this market is crazy?)!

Anyway, we decided to "lease-purchase" the 6-unit from the LLC, reinvest the proceeds from our live-in-flip and complete the purchase with a 30-yr conventional mortgage once we convert the property to a triplex with a garage apartment.

In this scenario, we will have a ~3300 sqft historic home with three apartments generating a total of $2625 in rent.  Plus, we get to take advantage of the ridiculously hot market with our sale without having to turn around and buy at an inflated price.

The rehab is going to be a challenge, but I am wholeheartedly looking forward to it.  Maybe we should start a blog... haha

Anyway, here is a photo of the house, "Casablanca." 

*The Volkswagen size window unit has been removed since this photo was taken.

@Ryan Williamson

Conventional mortgage lenders do not typically lend on properties that will be owned by an LLC. They want you personally to own the debt.

You could consider making the purchase in your name and then transferring the title to your LLC. This runs the risk, however, of the bank calling the loan (historically not likely to happen, but who knows what will happen if interest rates increase or we go through an inflationary event).

If it’s just you investing and not a partnership and you’re looking at a property that qualifies for conventional financing, why not just do the purchase in your name and get an umbrella policy for liability protection?

Local banks will likely not have a problem lending to your LLC if the deal pencils out, but they'll typically come with a slightly higher interest rate and a 20-year (possibly 25-yr if you're lucky) amortization, which will impact cash flow.

I’ve made several purchases using the local commercial lender route. The transactions are sooooo much easier than conventional mortgages, but the deal has to pencil out at the higher rate and shorter amortization.

Works great on weird, niche multifamily properties that don’t qualify for 30-yr conventional or non-recourse financing if the purchase price is right.

For the property managers out there, what are you using to calculate rent comps?

I used Rentometer off and on for my personal properties in the past, but I want to systematize this PM business I am currently setting up as much as possible.

Any recommendations for apps/programs/tech that can quickly generate rent comps for use when advising clients?

Or do I just need to get a virtual assistant up to speed with using Rentometer?