All Forum Posts by: Samuel Eddinger

I use Appfolio for my property management company but I think they have a minimum door count of 200.  Great software for accounting.  Buildium is also one you could use and I think they have a lower minimum door count.  RentVine is another company starting out in the industry.  Most of the industry leaders are moving over there so that is another place you could go.  I'd try one of those three.

If you inherited the property, what is your stepped up basis on the asset.  If the full amount, you can sell and reinvest without having to do a 1031 exchange.

Depending on the area you are in, it very well make more sense to sell and redeploy the asset elsewhere!

@Venkateswaran Venkatasubramanian - CT has best cashflow numbers based on your underwriting. What did you use for vacancy and bad debt? Many times this is not included and so when things are good your cash flow is accurate but when tenants do damage or don't pay or leave and you cannot get it rented than your cash flow numbers are incorrect. To level out over long times, most savvy investors put in Capital Expenditure (CAPEX), vacancy and bad debt numbers so that you get your expected CAP rate and/or cash flow averages over long periods. In reality, you should be removing cash from operations and putting it in a stand alone account so that you can cover vacancy, bad debt, and CAPEX for when it comes. Roofs cost over $20k right now. If you need a roof, do you have the money set aside to cover it from reserves?

@Venkateswaran Venkatasubramanian - happy to connect.  I run a property management company in central CT.  I would highly recommend you not chase the return.  The return is high for a reason!  In Hartford proper, most underwriting does not have high enough vacancy and bad debt.  I specifically do not manage those areas because it is a full time job.

@Drew Sygit - thanks.  I DM'd you and would love to connect if you have time.

@Dolly Caswell - I appreciate the kind words.  I own 20 properties and 50 units myself so I get it.

A friend asked me to give a real estate talk recently about tips and tricks to self-manage real estate property for owner operators. That’s always an interesting concept; a property management company owner trying to give advice and skills to make their audience less likely to use them. I recognize from my experience how hard self-management is so I’m always trying to teach and train people things I’ve learned trying to do the best job I can. The government and state will keep changing the rules making my job more valuable in the future, not less.

I started the talk explaining that most people should not even buy real estate. There is this pervasive view right now that owning real estate is glamorous with countless meetups and people wanting to make money in real estate and gurus taking their money. It is always interesting that if the money was actually in the real estate, why are these gurus’ selling courses and no longer investing for themselves. I told everyone in the course the dirty little secret; there is nothing glamorous about operating real estate. I even went so far as to explain to them that slumlords do not buy real estate thinking, I’m going to be a slumlord! Slumlords occur because owners do not respond quickly when tenants reach out for an issue because they do not want to be bothered except for emergencies and they attract tenants that are okay with the owner not doing anything.

I asked each of the audience member to think of themselves and what they would do if a tenant called them at 5:00 PM at night with a power issue or a leaking roof or anything else; are you going to respond right away or are you naturally going to try to avoid it until you cannot avoid it anymore. If you are the type to want to naturally avoid, you should hire a property manager or you should not buy real estate.

I also asked the audience how many people allow rents to go month to month and never set reminders to look into raising the rent. While historically, rents do not go up much in my area, right now they are up at least 15%. If you are not actively looking at market conditions and increasing rents appropriately, you should not be self-managing property.

I also talked about the psychology of waiving late fees and how it teaches tenants that rent is not the most important bill to pay.

One person asked why I quit my job as an engineer to start a property management company and I looked right at her and told her to serve. As a property manager, we serve our owner clients, our vendors and our tenants. This job is really hard and if you do not have a heart to serve your tenants and help them to have a great place to live that they will be proud of, you are ultimately going to fail in real estate.

The talk was successful; we told horror stories about chickens in basements and ducks with an inflatable 200-gallon pool in a third-floor apartment (how can anything go wrong with that?). All said, I really enjoyed sharing and continue to enjoy sharing with anyone that has questions! Do not hesitate to reach out.

A friend asked me to give a real estate talk recently about tips and tricks to self-manage real estate property for owner operators. That’s always an interesting concept; a property management company owner trying to give advice and skills to make their audience less likely to use them. I recognize from my experience how hard self-management is so I’m always trying to teach and train people things I’ve learned trying to do the best job I can. The government and state will keep changing the rules making my job more valuable in the future not less.

I started the talk explaining that most people should not even buy real estate. There is this pervasive view right now that owning real estate is glamorous with countless meetups and people wanting to make money in real estate and gurus taking their money. It is always interesting that if the money was actually in the real estate, why are these gurus’ selling courses and no longer investing for themselves. I told everyone in the course the dirty little secret; there is nothing glamorous about operating real estate. I even went so far as to explain to them that slum lords do not buy real estate thinking, I’m going to be a slum lord! Slum lords occur because owners do not respond quickly when tenants reach out for an issue because they do not want to be bothered except for emergencies and they attract tenants that are okay with the owner not doing anything.

I asked each of the audience member to think of themselves and what they would do if a tenant called them at 5:00 PM at night with a power issue or a leaking roof or anything else; are you going to respond right away or are you naturally going to try to avoid it until you cannot avoid it anymore. If you are the type to want to naturally avoid, you should hire a property manager or you should not buy real estate.

I also asked the audience how many people allow rents to go month to month and never set reminders to look into raising the rent. While historically, rents do not go up much in my area, right now they are up at least 15%. If you are not actively looking at market conditions and increasing rents appropriately, you should not be self-managing property.

I also talked about the psychology of waiving late fees and how it teaches tenants that rent is not the most important bill to pay.

One person asked why I quit my job as an engineer to start a property management company and I looked right at her and told her to serve. As a property manager, we serve our owner clients, our vendors and our tenants. This job is really hard and if you do not have a heart to serve your tenants and help them to have a great place to live that they will be proud of, you are ultimately going to fail in real estate.

The talk was successful; we told horror stories about chickens in basements and ducks with an inflatable 200-gallon pool in a third-floor apartment (how can anything go wrong with that?). All said, I really enjoyed sharing and continue to enjoy sharing with anyone that has questions! Do not hesitate to reach out.

Hey @Aldo Zypce.  I'd love to connect.  I'm very familiar with central CT and have been playing this real estate game for 10 years (own 20 properties currently).  DM me and we can chat.

In general, municipalities have a few requirements (outside of closets) that dictate whether or not a property can have a certain number of bedrooms.  They are septic systems (you design a septic for the number of people that will be using it), parking (I think most CT municipalities due it by units, but there could be bedroom requirements), and egress restrictions for fire compliance (if only two exits, no exit can be through a bedroom because of potential obstructions).  There may be more but those are the ones I've personally experienced.  

The correct answer in all of this is to call the town and tell them that there are more bedrooms in the property and you'd like to understand how to get the tax card updated appropriately.  You may have to pull a permit and have the building department inspect.