All Forum Posts by: Paul Balyoz

Hi Richard, your reply is very informative. You're right, a good PM does all of this very efficiently, to be able to handle a lot more properties than I do. I love the consistent-and-long-filenaming idea, I really need to work on that.

It's the decision all investors have to make: when is the point where I should hire someone instead of doing it all myself? Usually the answer involves consideration of the cost; when you have the cashflow to afford it, it totally makes sense.

Thanks.

As an owner-landlord of 20+ single family homes across 3 states now, I am spending an inordinate amount of time handling bills, statements, receipts and other paperwork, both in physical-paper form and electronic. I probably spend 20 hours per month on this stuff. I want to optimize my time, find ways to automate, but I haven't found many good options.

If you receive bills & receipts & statements by physical-mail (USPS), or in person:

* must scan them into a PDF to file them digitally; then file-away the paper, or shred it.

* not everything arrives as paper, so if you file the paper away, you can't search your paper-files to find everything later - files are incomplete - unless you print every digital file you get, and keep TWO sets of files (physical + digital)! That's a lot of extra work, and wasteful, so much bulk paper - stored in many file cabinets, file folders, banker's boxes to rotate your files every year, paper-cuts, etc.

* while looking at any page of paper, it takes work to figure out what property-address or LLC is that it goes with! Many companies don't print the service-address on the bill/statement, they think you're a homeowner with 1 property. I had to make a lookup-table file on my desktop, so I can map "account ending in 1234" to "500 S Property Avenue, inside your XYZ LLC". It's a lot of extra work for half the paper items I receive. Same thing for insurance, bank & credit-card & lines-of-credit statements - a lookup table is the way to go, just slow & annoying.

OK, so let's go all digital! That's the modern way, right? Check the "bill me digitally" option, or "paper statements," or whatever each company calls it. This can even save a few dollars each month (some banks charge a fee to mail you paper-statements). But this causes other problems:

* half the companies send no notification when each bill or statement is ready on their website.

* the ones that do notify you, it goes to email - how often do you keep up with your email? (I have trouble with this personally).

* the notifications are often cryptic about what it is - "a new document is available in your portal," with no info about whether you care about this document. Is it a statement? a bill? random FYI? do I need to take action or not? HOA's do this all the time. I care about the bills, and about changes in HOA fees, but I don't care about voting, or many other communications from the HOA.

* fetchiing the document is non-standard and confusing: find the right URL & login & password for them, navigate the completely-inconsistent (and often confusing) web site -- every company is different from every other -- to find where the documents are; find the newest document; try to figure out if there's more than one that arrived, how many should I download? which ones do I already have?  Download the document; open the document; read the document; decide what to do about it.

* now that you downloaded the document, where do you file it away in your system? You have a hierarchical standardized storage system for all your digital files, right? Is it in Dropbox, OneDrive, or another cloud system? Where do you file this thing away, in its proper place, so you can easily find it later? Does a receipt go into the property-specific LLC's area, or the outermost-holding-company-LLC that pays all the bills? Or is it related to a specific property manager company? ...who manages many properties, so where does their folder live? If a utility company sends you a shut-off notice, does that go into the property folder, or the property-manager folder, after you handle it? Or both?

* HOA web sites are the worst - for properties you have that are in HOA areas. I don't recommend buying properties in HOA's, but I have 5 of them myself. Two of the properties have TWO HOAs each. HOA web sites are the most convoluted and confusing outdated-looking crappily-designed and organized data-management-systems out there. And every one is completely different from every other one. With one site, I could not figure out how to change my password for weeks - I probably spent more than an hour looking for how to do that. I finally had to call the HOA management company for help, and they walked me thru the 10-step process for finding the spot where you can change your password! Please note that I was a full-time software engineer with a 39-year career before I retired a year ago; my last 3 jobs were building and maintaining huge custom web sites for large companies. If I can't figure out site navigation, something is terribly wrong.

I finally realized something:

The postal-mail-system uses a common user-interface! No matter who sends you documents via postal-mail, the way you process them is always the same:

1. if it arrived in your mailbox, then it's queued for you to process it - you won't miss it. (It sits on your desk until you address it). Unlike email, text messages, and calendar appointments, if you don't react to it immediately when you're not ready to address it, then you can easily miss it and forget about it. Paper is in-your-face until you deal with it.

2. it comes in an envelope. You open the envelope and pull out its contents.

3. the contents are folded pages of standard-sized paper. Unfold them, and staple them together.

4. read the paper to understand what it's about.

5. Decide what to do with it:  scan and file it digitally? toss/shred it? or file it in your "reference" drawer for later use?

This is not true for digital documents / web sites. There's no consistency, no standards, no queuing system to make sure I miss nothing.

I just wish the processing steps were easier for digital files. I want an application that can log in to any web site, and navigate any crazy arrangement of pages & links, download any file, understand what that file is about, and file it away automatically in the right place in the cloud.

I actually wrote a Perl script that does the "file it away in the cloud" part properly, for about a hundred different documents. It takes work to maintain that script, though, it's not something a non-programmer could maintain; plus, I have to already have interpreted the meaning of each document, and named the files in a unique way that includes the date, so that the Perl script files it away in the right place.

If I could automate the web-site interactivity part, and connect that to a calendar-based trigger of some sort (on the last day of the month, login to THESE sites and download all the files), that would go a long way to freeing up my time.

As a real estate investor, I want the freedom to have 10X the properties I have today. I don't think I could handle 10X of all the paperwork I have to deal with today! It would be more than a full-time job at that point. If I could automate it better, so it took only (let's say) 2 hours of my time per month, then I could handle 10X of that amount of work.

How do you handle all the paperwork of your life? Digital, and physical?

Have you found any great automations that help you with this?

What can we do to figure out a better system, to handle all this?

What can we do to make all HOAs use the SAME WEB SITE PLATFORM, so that at least we could memorize how to download documents quickly every time? Or optionally set a "just email me the PDFs, I waive my right to privacy," because email is generally more secure now than it used to be, and/or I don't care about privacy for my HOA statements.

I'd love to hear what you think.

Hi Ashley, I'm glad you found my post! There is no single perfect app for GTD. There are apps claiming to implement GTD, however I found all of those to be cumbersome and not fun to use.

I just use Trello which is a free and easy to use lists-of-lists app. It works on all phones, tablets, and PCs (via web site). The basic version is free, which the version I used for many years (now I pay for some more advanced features).  I have a "board" for all of my Projects, a board for all of my Tasks organized by context, a Vision board for what I really want in the future, a Properties board for all of my rental properties and flips while working on them, and even a Shopping board for our grocery list, home repair store list, and other stores.  That way, when I realize "I need more 2.5 inch deck screws," that goes on the Home Depot list immediately and I keep working on whatever I was doing. "We need milk and eggs," makes me throw "milk" and "eggs" onto the grocery list real quick. I shared that grocery list with my wife, so we both can add/remove items from those lists. Sometimes I'm at the grocery store buying the 5 items I saw on the list, and suddenly more things start appearing - my wife is going thru the fridge and adding more items we need  :)  It seems to synchronize between people & devices very quickly and accurately, which is great.

It's important that the software be easy and fun for you to use, and not restrict you too much. And be with you wherever you need it. Everyone's different. 

The first list on my Task board is "inbox" - if I need to record a thought real quick, I just add it to that list, knowing I will see it later and move it to the right place, wherever it should really go. When you're in the middle of something you don't want to really be interrupted - but you also don't want to lose that stray thought that's really important!  Add it to your inbox, and figure out later what it is, and where it should go.  Later decide: is it a project? a vision item? a task? something to research on the Internet?  My friend just told me of a great movie I should see or a great song to stream - throw it on the inbox! Now I won't forget the name. I usually say "let me write that down," followed ironically by furious typing on my cell phone.

I love having a thought, recording it quickly and moving on, knowing that I will never lose it now. It doesn't have to recur over and over for me to act on it.  Because it might not visit again in time, and the opportunity is lost. That used to happen so often... now I never lose anything. I also sleep better at night.

When I have a serious problem or I fail spectacularly at something, I irritatedly ask the question: "how do I make this NEVER happen again?" Then my brain kicks in: what steps can I take every time in the future to make sure THIS doesn't happen again?  Like if you forgot to check the roof on a property you just bought, and it needs a new roof, which is going to cost you a lot of money. Oops! The way to never let that happen again is to add "check age of roof" to your property inspection checklist. Now you will be reminded to have an expert look at the roof on all future properties. After you have an answer to "age of roof", then you check that item off the list. Commit to NEVER buying any property until every item is checked off the list. And, you're always adding more things to the list as they come up, and removing or rewriting outdated items, to make it better and better over time. It's a living document. The moment you realize something is missing from the checklist, add a task (to your inbox!) like "put 'Test Garbage Disposal' to the inspection checklist". That way you'll see it when you get home. Spend time sorting all your inbox items daily if you can. That doesn't mean doing them immediately. You can, if they're quick enough; maybe schedule the longer ones for later.

There's an old saying you've probably heard: "fool me once, shame on you; fool me twice, shame on me."  I love that saying because if something bad happens that I never expected, well, I just add a check for it to my system so that I will catch it next time.  Because if I'm tricked by the same thing again, well... I hate to admit it, but that's kind of my own fault.

Good luck, -paul

To operate a successful Real Estate investing business, or any business (really), it's super important to have a good organization system to follow to make sure you don't forget anything, don't miss anything, attend appointments and meetings in a timely manner without forgetting about them, do the things you say you will do, and so on.

I have seen so many people who have not built the skills to manage the crazy amount of information we all have these days, without "dropping anything on the floor" by accident.  The truth is, we are all human beings - and, as such, are not designed to remember too many things all at once, especially if they're tied to specific day & time, or location. We are not robots with calculating mathematical brains - we actually have creative brains instead. Our most powerful mental activity is the creative part, not the memorizing-everything part.

If you struggle with forgetting important things, times, dates, places, people names, meetings, appointments, reservations - please stop beating yourself up about it. Nobody can handle those things very well on their own.  There's nothing wrong with you. The trick is to follow a system that keeps all of your life data organized.

Understand that as your business grows, as your investments grow, you will need to retain more and more data - more and more appointments! addresses! prices! contacts! locations! Repair Lists! Supply lists! If you're struggling now, how are you ever going to handle it later when you have more abundance? You need a way to handle everything you have today, and scale it up to 2X or 3X that quantity of information, easily and comfortably. You may be holding back right now, because you have that sinking feeling in the back of your mind, "I'm going to screw this up royally when I forget important stuff; I know it."  This is an understandable feeling, and probably pretty accurate. It just means you need a way to handle all the things from now on.

Luckily, many other people have gone before us, and figured out how to do exactly that.  Some people have studied the behaviors of the most successful people in our society, and written books telling in great detail how those people successfully do what they do! You just need to find and read those books, and follow the advice, customizing it to your own preferences and environment.

The best of all of those organization systems I have ever found is Getting Things Done by David Allen. It's extremely detailed, but when followed, can help you conquer all the "stuff" of your life. It's not enough to just have a digital calendar and a list of tasks to do. We need a way of handling all the inputs - email, physical mail & bills, twitter/facebook/instagram posts, phone conversations with friends & business partners, etc.  When you have adopted a system to manage all the incoming stuff, and give yourself time to manage all of your ongoing projects at various levels, you become much more powerful at knowing what to work on next, and how to spend your time and energy for maximum results.

It may sound counterintuitive to spend some time each week just on organizing your tasks and projects, instead of getting all those tasks done - but it's worth it, and doesn't waste your time when you know what to do. GTD calls that a weekly review where you edit your task lists, project lists, and review your goals and vision plan to begin new projects that help further your goals towards your vision.

Anyway. I strongly recommend reading books like Getting Things Done to help you stay organized. I have been following those principles for about 10 years now, and succeeded in building my real estate business to a very high degree, all while still working full-time as a software developer. My software development jobs never "got me out of the rat race" after 35 years of hard work. But real estate did; it took me about 14 years. And I'm extremely grateful to David Allen and the GTD system for its powerful effect in my life, enabling me to do this.  I don't think I could have done it without a system like it.

Stop beating yourself up for missing appointments and forgetting stuff - for not having qualities you were never born with. Nobody automatically has those things. Instead, implement a system to track and remind yourself of everything going on, in a way that helps you stay focused on immediate tasks, but still retains the big-picture of what you're trying to do and why. Use a system that helps you make progress on ALL of your projects, both personal ones and business ones. It's powerful, and will let you sleep more soundly at night. At least it does for me.  So many others have done this, and you can, too.  I know you can.

We did flips and bought buy-and-hold's for years with only a Toyota Sienna minivan, the kid-mobile when we weren't schlepping kids some place or other. A good minivan or SUV can hold a 4' X 8' plywood or sheetrock, and tons of toolboxes and supplies, with only driver+passenger in the front seat. Plus, it's enclosed, so nobody can easily steal your stuff when parked in a parking lot to get food in the middle of the day, or when staying overnight someplace. I much prefer SUV to truck for this kind of thing. The minivan was actually better than our current SUV, in that the floor was lower, so it held more stuff. As long as you don't mind the underpowered-feeling of driving a minivan, and the disrespect minivans are shown sometimes on freeways.  I just always thought to myself, "go ahead and cut me off now, I'm pulling myself out of the rat-race with this thing, and you aren't," - always made me feel better :)

We've had great success getting useful HELOCs from Midfirst Bank, which is only available in certain states including where I am (Arizona). They had an intro rate of 2.99% when we got it, I forget for how long (6 months?) Then it goes up to Prime + some margin, ends up being around 4-5% interest annually for now. You can get the type where you pay principal+interest each month, or (for a smaller limit) interest-only payments. There doesn't seem to be a fee for balance-transfers, I just transfer from HELOC to the checking acct I have with them, then wire the funds or get a cashier's check. I can pay back extra amounts at any time with no penalty. It's an amazing instrument IMHO.

I should mention - an experienced investor friend told me he only gets mortgages/refinancing on properties, never HELOCs, because any line of credit limit can be shrunk down suddenly by the lender, any time they want to.  I've never seen it happen, but I can imagine that in some situations that could happen. That's not a risk if you got an actual loan instead, like a mortgage, because all the money came out all at once; you're just paying it back over time, so you have more control over the debt that way.

Investors who have rental homes in a 55+ communities - what is your opinion of the best month for lease renewals, when you can get the highest rent? Is there a particular month, or does it not really matter?  Our 55+ rental is in the Phoenix AZ area. 

Experienced Phoenix investors know that with regular rentals (non-age-restricted) the best months for lease renewals are June and July -- because that's when most families prefer to move, when the kids are out of school. That's not really a consideration for 55+ communities, since children are not allowed to live there. (For some reason the hot Summer temps in Phoenix is not a factor that affects when most people move).

I'm curious about your experience - is there a best month when older citizens prefer to move? Or which month to avoid?

Is that different in Phoenix, do you think, compared to other parts of the country?

Sometimes to bootstrap a new LLC, you have to put some of your own money into it to get things going, like buying an asset, or repairing a property, paying for insurance, etc. When you do that, record it as a LOAN, from you personally, to the LLC. Keep track of all loans, and make a point of repaying loans first, before taking any profits from the LLC when it starts to make money. This also helps you reduce tax burden, because a loan repayment is not profit, its part of the operation of the business. Once all loans are repaid, leftover money you pay out to yourself is generally taxable profit. Of course, always talk to a tax professional for tax advice. The money you pull out of the LLC for yourself after all loans are paid out is often called the owner draw. For my management company LLC I even have it buy office supplies - if it's low on cash, I might loan it money to buy those supplies! Keep track of everything, and repay the loans first.

If you have made a bunch of little loans throughout the year and still can't repay it by the end of the year, I sometimes write up a promissory note for the total amount borrowed, from the LLC to me (the lender). That way it's grouped into a single legal document, expressing the total amount owed. Then, next year hopefully profits can repay that loan, at least partially if not fully. I write and sign a loan-release, from me to the LLC, once the debt is fully repaid. I do not charge my LLC interest on the loan; that just complicates things, although I suppose it would be technically possible to charge a reasonably low interest rate on the loan.

We are looking for props outside of AZ.  

We currently have props in AZ and Gary In.  Want to diversify more.  Need next city to build another crop of rentals. 

We are seasoned investors with multiple properties priced out of the AZ market.  Does anyone have any suggestions for where to go next. Its a big Candy store out there.
We're looking for larger cities obviously with ingrowth. We're looking for Cash flowing Condos under 100k.