All Forum Posts by: Travis Clark

We similarly use multiple platforms to build out our systems, rather than using one larger property management software. For instance, we use Cozy for rent collection and maintenance tracking. Our marketing is handled independently with a local ad agency we've partnered with. The actual maintenance tasks are tracked in Asana with team collaboration. We use Dropbox for secure storage as a simple "owner portal", and we integrate HelloSign with it to automate lease signing at a distance. Accounting could be your choice of Wave, Quickbooks, etc, whatever feels right for the kind of tracking and reporting you're looking for.

We like the flexibility of breaking out tasks into different platforms...some may disagree (it can be a complicated tech stack) but for us it allows us to pivot products when we need a better fit or specific feature.

Agree with @Peter Tverdov We charge a flat 10% of rent collected, and 50% of the first month rent. If there are changes to the lease at lease renewal, we also include a $150 charge for our time updating and working with the tenant to sign the agreement. We don't assess other fees, no admin or markups on repairs. Unless they come very highly rated, I'd keep looking. Always interview at least 3 companies to see who is a good fit. Pricing and features vary wildly between companies.

Hey Michael! I own a number of rentals (SFR) in Albany, Oregon and have lived here most of my life. Rent continues to increase in the Albany area and house prices are continuing to increase as well. In the Willamette Valley, this makes for a great outlook on cashflow for rentals purchased at the right price point. What area of Oregon would you plan to invest in and what type of investment (single family, multi family, commercial, self storage, mobile home park, etc)?

When I consider how to take money out of my home for an investment purchase I consider a couple of items:
1. In my budget, how much debt service can I handle and still make a profit (think of this on a per property level and an overall operations level). This may determine whether you look to traditional financing or more creative methods.
2. How low is my current loan rate? Would a refinance be similar to that, or would it cost me significantly more (think if you bought the house at 3.5% years ago and now it's at 5.1%) This may determine whether you could cash out refi, set up a HELOC or look for more creative strategies.
3. What is my exit strategy to keep that money moving? If you plan on repeating over and over you need fresh revenue sources, or a method like BRRRR to reinvest those dollars.

BRRRR can still be an option at or above 70% ARV but this removes alot of the room for error. You can find banks that will refinance up to 80 (sometimes 85%) but the terms of those loans are often different, and the premium can make the numbers even slimmer. If repairs exceed budget, or if the market slackens a bit, this could require you to leave money in the property. Not always a bad thing if the property cashflows, or if appreciation over time is expected, but you have to be prepared. Note back to #3, always have exit strategies to handle a variety of situations as they arise.

I always like to keep the mindset that the money is made when you buy the property so always track your numbers closely to ensure it pens out when you buy, not a few years down the road based on a gamble. In the market in Oregon, this can mean offering on many different properties before finding that great deal. But, don't be discouraged! It's all worth it. Good luck!

A really simple way to handle sharing leases is through HelloSign and Dropbox integration. Essentially all your documents for them are stored in a shared Dropbox folder. After signup with HelloSign (better pricing, same service as Docusign) you can connect to Dropbox and automatically sign and send leases. This keeps a copy in their shared folder seamlessly. Even without signing, I find Dropbox sharing and storage to be a clean simple storage method. Just digitally scan those lease and place them in a shared folder.

As mentioned by @John Underwood we almost always meet tenants in person. The walk-through inspection and tenant onboarding process is absolutely critical, so signing leases in person is definitely preferred.

The critical part of a co-signer is taking them through the application and lease process just like anyone else, as they will be liable for the rent each month if not paid. As others have suggested, best to find a potential tenant who fits your guidelines from day one, less of a headache. But if the situation demands it (low volume, little interest in the property) just be clear and communicate the situation and responsibilities of each party. 480 is incredibly low, I'd definitely get a better idea of what the issues were that caused it and more importantly, check that rental history - talk to previous landlords. At the end of the day, their past history will indicate future history.

@Kenny Dahill Spot on advice there! 

Where should I get a legal contract for my tenants to sign? Should I contact a lawyer? if so, how much additional cost is that?

You can find a lot of prebuilt legal contracts with your local landlord association. Look online to see what is in your area and you may find a lot of great resources geared towards your state. Also, companies like Avail (property management software - Free!) offer custom leases by state.

How do I find tenants? Should I post myself on Craigslist/zillow/etc or pay a company to do that for me? If I pay, how much additional cost is that?

Definitely Craiglist, Zillow, HotPads, Facebook etc. Use as many social and advertising channels you can at the least cost possible. FYI, Zillow has started charging (at least in Oregon) for this service. We often find people on FB and Craigslist.

How do I screen tenants? How much is it to perform background checks?

You can use services like Cozy (Cozy.co) or Avail(Avail.co) for free to perform basic tenant services like this. You can also use SmartMove (Mysmartmove.com). Tenants sign up and pay through SmartMove and the results of credit and criminal checks come to you directly.

Is there a website I can go through for my tenants to pay me online every month? Are there any additional fees associated with that?

As mentioned before, Cozy and Avail offer free payment services. Cards have a transaction fee paid by the tenant. ACH bank transfers are free but a bit slow (at 5-6 days). You can pay for express service if need be.

Good luck in your venture, it's a fun and often times profitable experience!

@Bob Drew Screening using SmartMove is a good choice for getting credit and criminal background checks. Of course these are important but as others have said, credit score doesn't always tell the story. We use it as a baseline, but are willing to explore why someone has a credit score below that. This means, if we find a better qualified tenant with a higher score we'll probably choose them, but if all credit scores are low, then determining the reason behind their story is key.

This is where past rental history and proof of income is important. We contact as many past landlords as we can find. Our number one goal is to ensure for owner's that they are paid rent each month. From there, we want to ensure a prospective tenant doesn't have a history of damaging an owner's property. A stable rental history with provable income sources is what drives our decisions, much more than past mistakes. This has led to 0 vacancies and no late rent on our properties in 7 years.

You can ask for paystubs and W-2s for most employed individuals. If they are self employed, seeing bank statements can be useful although some states have rules on confidentiality there.

The best software depends on what you plan to use it to manage. Are you managing a small portfolio or a large one? Is it single family homes, multi family, or even commercial? For entry and smaller portfolios, I always recommend Cozy or Avail. It's mostly free, handles payments very well and simplifies the listing process. If you need any type of accounting features, those will be missing from Cozy and crew. Consider that you don't actually need an all-in-one solution. Use Quickbooks for accounting, for instance, and you can choose just about any payment service you'd like. Some banks even have Treasury Express type services that can handle online payments and direct deposits.

If your needs are more in line with property management or mid-range portfolios where you might need to watch income and expenses closer, you can start with something like Rentec Direct. I mention Rentec because they have decent accounting features and the pricing is economical for the benefits. They even have a free version that you can try that doesn't include more advanced accounting options.

In my area (Oregon), Appfolio is the dominant software for larger portfolios and property management companies. I also see some using Buildium, which is similar in pricing. These are full suite PM programs and can handle just about anything you want. 

We regularly use SmartMove as well. Many property management software programs will also include those needed tenant screening tools: Cozy, Avail, Rentec Direct, TenantCloud, Appfolio, Buildium and many more.