​Great Uncle Wants Me to Manage His Rentals – NEED HELP

[JT Stewart]

Hello all,

My great uncle approached me a few days ago about managing his rental properties and I’m not really sure if I want to get involved. He’s approaching his 83rd birthday and can’t take care of them at this point.

He owns 7 single-family residential homes. I’m not sure what kind of financing he used to purchase the homes, but it’s entirely possible that they are paid off as he’s had them for close to 40 years.

The primary obstacle at this point is that he’s a horrible record keeper. He has no idea where he put any of the important documents (Deeds, insurance policies, etc.) and he also doesn’t have any systems set up at this point. All of his revenue and expenses are hitting his personal checking account. None of his tenants have signed leases so far as I’m aware.

Some background:

I live in Northwestern Pennsylvania

I’m a CPA working in public accounting

I’m 26 and I’ve flipped two houses at this point. I have a varied skillset and am quite handy.

I feel like I’m ahead of most that are new to this arena, but I’m still nervous of the idea of walking into something that’s so unorganized.

Questions:

• What should my first step be?
  • My first inclination would be to get copies of the deeds, insurance policies and determine the financing status of all the homes.
  • He also needs to set up a separate bank account and I'll probably end up forming an LLC for him.
• What programs/tools should I be using to keep track of everything?
  • If you were starting out fresh, what would be your ideal setup?

Summary:

My uncle has 7 rentals and has done a shoddy job of record keeping. I’m completely new to this and really have no idea where to start. Please provide advice, systems or general guidance. 

[Bart H.]

Originally posted by @JT Stewart:

Hello all,

My great uncle approached me a few days ago about managing his rental properties and I’m not really sure if I want to get involved. He’s approaching his 83rd birthday and can’t take care of them at this point.

He owns 7 single-family residential homes. I’m not sure what kind of financing he used to purchase the homes, but it’s entirely possible that they are paid off as he’s had them for close to 40 years.

The primary obstacle at this point is that he’s a horrible record keeper. He has no idea where he put any of the important documents (Deeds, insurance policies, etc.) and he also doesn’t have any systems set up at this point. All of his revenue and expenses are hitting his personal checking account. None of his tenants have signed leases so far as I’m aware.

Some background:

I live in Northwestern Pennsylvania

I’m a CPA working in public accounting

I’m 26 and I’ve flipped two houses at this point. I have a varied skillset and am quite handy.

I feel like I’m ahead of most that are new to this arena, but I’m still nervous of the idea of walking into something that’s so unorganized.

Questions:

• What should my first step be?
  • My first inclination would be to get copies of the deeds, insurance policies and determine the financing status of all the homes.
  • He also needs to set up a separate bank account and I'll probably end up forming an LLC for him.
• What programs/tools should I be using to keep track of everything?
  • If you were starting out fresh, what would be your ideal setup?

Summary:

My uncle has 7 rentals and has done a shoddy job of record keeping. I’m completely new to this and really have no idea where to start. Please provide advice, systems or general guidance. 

 Is it a portfolio you would like to own eventually?  Is there any chance you uncle would do seller financing? 

That way you both could win.  Over the next 30 years you pay him a nice dividend for his property (which should obviously take care of him while he is living), he wouldnt have to worry about managing or taking care of the properties and lastly, and maybe most importantly, you could manage all the decisions about the property, ie if you needed to do rehab, or buy rental management systems, or raise rents etc.