Closed on a small apartment deal! 16 units

37 Replies

Hello,

I just closed on 16 units (creative financing) taking my total to 19 units and I am having a freaking blast it's a rush hunting the deal working another 8 unit now. How ever I do have a problem units are in a small college town and property manager is great but doesn't document the units as well I would like. I have looked at many of the website like buildium and appfolio I don't know if I really need that much detail maybe just a nice excel document. Any suggestions or incite on how you track your rentals would be appreciated!

Thanks for the help

Justin

Congrats!   You're on the right path!  Definitely use an online cloud solutions like the ones mentioned.  They are good but maybe overkill.  Then again excel and google sheets are essentially free too.

@Justin Garrett congrats thats awesome! I currently use Buildium and only have 29 units. I do however plan to grow to 100ish units. I am guessing with your trajectory that you are looking to do the same. My thought is to setup everything in one program and not have to switch gears as I grow.

@Collin Schwartz that is the path I am on I want to have 100 by the time I get out of the Navy. Do you pick buildium for the price or any other reason? Do have a property manager or self manage?

@Justin Garrett - Your deal sounds awesome Justin! Would you mind sharing a little regarding your creative financing? 

Your goal of 100 units by the time you separate is great, I would also like move in that direction before I leave active duty. 

@Justin Garrett For what it's worth, my PM uses Appfolio.  It's great for me because I can get a unit-by-unit understanding of collected rent.  Some of the receipts as well as the distributions are on a property-by-property basis but that makes sense.  I don't know if I want someone doing landscaping to charge me on a unit basis for my 27-unit property.  It just, well, doesn't make sense and would lead to some weird numbers.  Anyway, I like (as an owner) getting access to the monthly packet, digitized receipts, etc.  That said, I also pay an annual "seat" license to my PM in addition to the 10% of gross rents.  She does the same for all of the owners that use her PM service.  

I'm guessing if Buildium and Appfolio are like every other cloud service out there the issue isn't so much the cost (some can be passed through to the owners) but the training cycle on it.  Not to mention if the PM wants to input all of the legacy information (yikes!).  And all of these systems are only as useful as the PM will make it.  If the PM doesn't digitize the receipts, then it's no better than an Excel sheet.  If they are extremely diligent about doing things like that, it makes everyone's life easier.  

Odds are if the PM is going to use a cloud system they will want to use it for all of their clients.  They won't want some in Excel, some in Buildium, and some in Appfolio.  So my net recommendation would be to as your PM if they are open to using a system like that, you might not be their first client to pose the question.

@Andrew Johnson I am paying a flat 10% to my PM. The town I am in is rather small 35,000 but has a good sized college. Most of the property owners are older and have owned in the town forever. I would be the first to ask for this "advanced" type of tracking but I feel with out it you aren't treating these units as a business and are guessing. I am thinking about going with buildium because of the cost just need to some more research and get my PM on board. Thanks for the feed back.

@Jonathan Pflueger I got seller financing 20 years 5% fixed rate 4% down and I collect rents for 6 months before making first payment. The seller was trying to pay a large amount of taxes and had had not really stayed on top of his manager so I asked for the free six weeks to bring it up to full swing. Only 16 days in have all but two units filled facebook market place is so powerful in a small town!

Man, I hope to get that that level @Justin Garrett . Congratulations! Did you build up to taking down that big fish, or did you start with SFR? I'm hunting down pre-foreclosures to flip (my backyard is in the $250k-$450k+ range), and then putting that cash in a neighborhood in southern CO with lower property values that cash flow.

@Justin Garrett my business partner and I actually share one account. The total units is about 95. We liked the overall functionality and the price is about $2 a unit. We currently self manage.

@Erica Shaunta Thompson what I really did was just listen to what they are always saying on the pod cast. Brandon Turner always says let people know what you are doing. I always ensure to bring it up to every one I talk to about my retirement plan or my investment criteria even if it's just a small part of the conversation they will remember you if a deal comes up.

Well that's how I landed this deal. It was brought up to PM in my home town and they weren't in the position to purchase it so he called me and asked if I was willing to take this deal on! After three months of negotiations finally sealed the deal!

In my home town there are only a few family's that own most of the real estate and most of these individuals are getting up there in the years and are looking to unload some stress. I hope to over the next 8 years to make it to 100 units (wife willing).

Congrats. I love the creative financing.  Was it hard to get the seller to forgo 6 months of payments ? 

Congrats! You could start out cheap with Cozy.co and excel. If you plan to grow to over 100 units then use a buildium, rent manager, appfolio 

That's awesome! I've been away from BP for a bit... but now I'm back. Do you live in VA beach? how did you finance? I currently have two SF rentals... but would love to find some multi-fam props. The hunt can be addicting for sure!

@Leann W. Yes I do currently live in Virginia Beach right now. I grew up in the town I buy my property in. I got seller financing with these 16 units. I am on the hunt for more units right now so I hope we both are able to find a deal so we can’t continue down that road to financial freedom!!

@Justin Garrett I use Landlord Studio and it’s an easy cloud based app. I have a tenant who’s also a property manager of sorts for me. I pay her 5% of gross rent less her free apartment. She collects the rents, handles any tenant issues, deposits rents, does lease agreements, and handles our social media presence. When she deposits the rent she send me a pic of the deposit slip with the tenants names on it. I then update the app and it keeps us on the same page. The app grows with your holdings as well. I currently have 33 residential units and 11 commercial units.

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@Justin Garrett how much $$ did you save up or was no DP required? it was solely creative no formal financing right? and also what are your suggestions for approaching creative financing if it was not ultimately stated in listing (in other words bringing it up as an option to the seller?)

You may not think you need anything more than a spreadsheet. But once you realize what a good property management software can do for you, you'll wonder how you did without it. Of course this depends on the # of units, but good software can save you a lot of time with most aspects of the management. 

@Justin Garrett congrats! I have a super easy spreadsheet I use for small MFs, might can alter for your 16. Available for download on my site. BTW, how did you find this deal?

@Jay Helms I have made an excel spreadsheet that I am using now. I found the property just by letting others know what my goals were and what I was looking for. The owner only asked three people if they wanted to purchase it and luckily one of them was my manager and he new I was in the market for an apartment. Like they say in the podcast a lot let every day one know what you are doing and what you are looking for. When they come across it you’ll be the first one they think of!

When you say your manager, are you referring to your w2 manager?

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