All Forum Posts by: Paul Novak

I have a small portfolio of 8 doors about an hour north of you in Sheboygan and we use a few different software systems to manage our properties. We use Zillow and Apartments.com to list our properties. We also like using that software for screening tenants. The tenants pay for their background check. The next software we use is Stessa for basic bookkeeping. Other than that we do most of our process outside of software. We have documented work instructions for all processes we follow to market properties and select tenants. If you are interested message me as I would be happy to share what we have put together. It could be a good starting point for you as we have shared these with other investors on BP starting out in the past.

Dan

First off welcome to BP, you are in the right place. I love your excitement to get started. I am an investor about 1.5 hours to the east of you in Sheboygan and I have been at this for about 4 years. We have acquired 6 properties 8 doors and love it. Our strategy is buy and hold.

Since starting up our business we have worked hard to take it seriously. While we are small we have developed systems and work instruction for every step of our business. We have work instructions and checklists for everything from buying a property, marketing for new tenants, property management, turning over properties etc…. We have found this a great way to stay consistent. We also have email templates for every step of our process.

I love helping new investors get started so if you have any questions let me know. Also if there is anything I can share to help you get started let me know.

This was super helpful information and I like the idea.  We do cover many things with our tenants and do have a documented expectations sheet we have them fill out.  Most of it is around cleaning expectations and who to contact for utilities but based on what you shared we could do a lot more.  This post gave me quite a few ideas, thanks again for sharing.

We have had our tenants fill out applications on Zillow and Apartments.com.  I think apartments is cheaper for the tenant and it's who we prefer.  Using this service the tenants pay for the application, you get a full credit report on them with their score, and a full background check not just in your state but the whole country.  They also look for past evictions.

Cameron,

First off it's cool to reach out to someone who is actually investing in the same market as I am!  My wife helped me with the research but when our property taxes came in as high as they did I wanted to investigate how to talk with someone about them.  My wife actually found on the bottom of our Sheboygan Falls Utility bill that it stated on May 22nd we could discuss our property's assessed value at the Open Book.

Similar to you I had multiple properties so I knew that there were some large discrepancies between the increases and wanted an explanation to why that was.  Seeing as how you are from here you know that Sheboygan Fall's isn't very big so I wanted to know how I could have difference in tax increases ranging from 34% to 4%?  Our assessor was super great to work with and explained the whole process to us.  What else was great is that he was more than willing to work with us to lower the assessed value on our primary residence which was the property that went up 34%.

For us after walking through the assessment process he verified all the major components of our house to make sure nothing was recorded incorrectly.  For example not that the sq/ft was off or that they had us with a finished basement when we didn't have one, etc...  Then we walked through the condition of everything and started removing price.  Again for examples we only have single vanity sinks in each bathroom, they had us marked down as 2 sinks, that decreased the value by $2K, they had us marked down as a whirlpool tub in the main bathroom which hasn't worked since we moved in, he removed that for $2.5K, then we have 2 fireplaces both gas but one is exhaust vented out the side of the house without a chimney which took another $1K off the value.  He also lowered our grade from a C+ to a C plus 5% whatever that means.  All and all he was able to knock $20K off the value of our house which will lower our property taxes by about $300 per year.

I know this isn't much but its still something and if anything I learned the process to do this in my municipality for future tax increases.  You do this process over 5 to 10 properties and this savings can really add up.

BP Community,

Our property taxes on our primary residence just went up last year 34% which we thought was extreme.  We have 3 other rentals in our small city of Sheboygan Falls of which the taxes went up 4%, 14%, and 18%.  One of those rentals only being a few blocks away from our primary residence.  For that reason we decided to go down to city hall and do an "open book" appointment to understand why our taxes increased so much.  I had never done this before but it ended up being a meeting with the actual accessor.  He was super easy to work with, explained everything to us, and ultimately helped us lower our assessment to lower our taxes.

I wanted to share this because I didn't even know this was an option until we tried this last night.  I thought maybe this could help others that have had large increases in their property taxes.  Don't get me wrong, I know home values have been increasing and their for taxes will increase with it.  I also don't have a problem with taxes going up because that means home values are going up.  My issue was understanding how the process was completed and feeling like the increases were fair.

Assessments just came through and we underwent quite a few property tax increases last year.  I am not going to say that they won't go up again next year but I felt like most of the increase have already gone through.  All of our properties are in Sheboygan County and our taxes increased last year anywhere from 14% to 21%.  Heck our primary residence went up 34%!  This property also underwent tax increases last year of 23.5%.  The view below comes directly from the county land records for the property so you can see I am being honest with the $2,400 number.  I rounded to keep the math simple.

As for accounting for maintenance and vacancy% I ran these numbers on this property much tighter than I normally do because it's the last property I need to purchase in order to have enough cashflow to retire.  I am now pivoting from acquisition mode to dept pay off mode.  I am fortunate enough to save about $120K a year from a combination of excess income from our W2 jobs and profits from our portfolio.  If a maintenance request comes in I could leverage that savings to cover expenses.  I can also so in the 4 years I have done this I have never come across an expense that the profits from my portfolio couldn't cover.  I haven't had to use W2 income to cover expenses.  We expect to pay off our entire portfolio in the next 5-6 years.

I hope this helps add additional clarity.

 Jaycee, the properties are in our name and we close on this property June 10th.  We have all of our numbers as I worked on getting them last week but we don't close until early next month.

Vijay, welcome to BP. I am an investor an hour north of you in Sheboygan. I am still relatively new as I got started in 2021 and since have acquired 6 properties, 8 doors. We have learned a lot since getting started and have really enjoyed our time as real estate investors. This is our primary vehicle to get to FIRE.

While small we have worked to build our business as if it was a large scale business. We have developed many systems and created work instructions to manage all aspects of our business. I would be happy to share as you look to get started.

My first bit of advice would be to get good at saving money. Work to build that savings rate to give you the capital you need to get into investing. While I have found real estate a great way to grow wealth it also takes a decent amount of capital to get started. In my situation the best way to generate that capital has been having a high savings rate from our W2 jobs.

If you have any questions as you look to get started don’t hesitate to reach out. I love helping new investors get started and am willing to share any of the experience we have gained up to this point.

One thing that I found interesting was on a recent BP podcast Dave was going over the top metro areas and home prices.  He discussed that out of the top 50 metros in the US Milwaukee home prices were up 12% last year.  That was the highest out of any metro area in the US.  Below is a link to the episode.  He starts talking about Milwaukee 14 minutes into the episode for those that would like to listen in.  I thought it was interesting and tied into data on Milwaukee.  It's about home prices, not rent prices but still information specific to Milwaukee.

Housing Market SHIFTS: Price Cuts, Flat Rents, Buying Window Widens