Managing real estate finances as I expand to multi-unit
Rental Property Investor · Chicago, IL · Member since 2023 · 8 posts · 3 votes
I am mulling options to see if this is a real problem for new or existing landlords today. I have a single property that I've started out with and for me to manage the costs I have a single account and an LLC. As I plan to increase my investment to another multi-unit property, I'll potentially invest 10-20% of my own savings, are there any free or really low cost banking or real estate management solutions that can help me do this, prefer one!
1. Accounts for each primary property
2. Ability to get payments from renters
3. See your cashflow, mortgage, taxes, interest and expenses in one dashboard - basically be able to estimate my ROI and review something on a regular basis, plus for tax purposes, as I am trying to get the groove on taking pictures for each payment or doing this through the bank
4. Earn interest on my cash in the account automatically, most big banks don't pay you a dime
Most importantly, how do I verify tenants and check if they are good/credit score or otherwise as a new landlord myself?
Thank you Bigger pockets community!
I am mulling options to see if this is a real problem for new or existing landlords today. I have a single property that I've started out with and for me to manage the costs I have a single account and an LLC. As I plan to increase my investment to another multi-unit property, I'll potentially invest 10-20% of my own savings, are there any free or really low cost banking or real estate management solutions that can help me do this, prefer one!
1. Accounts for each primary property
2. Ability to get payments from renters
3. See your cashflow, mortgage, taxes, interest and expenses in one dashboard - basically be able to estimate my ROI and review something on a regular basis, plus for tax purposes, as I am trying to get the groove on taking pictures for each payment or doing this through the bank
4. Earn interest on my cash in the account automatically, most big banks don't pay you a dime
Most importantly, how do I verify tenants and check if they are good/credit score or otherwise as a new landlord myself?
Thank you Bigger pockets community!
@Mehdi Haider Go through the list below and request a few demos. I'm not aware of any platform that does all (accounting is a missing piece for most) and gives you high interest rate at the same time. I personally have several checking accounts for operations, and an online savings to park the money and earn more interest.
@Mehdi Haider welcome to BP! Something else to consider is that as a REI professional you will be in a very different income tax bracket and you won't need as much income as you think you need. As you do your financial planning and requirements ask your CPA to walk you through this. All the best!
I am mulling options to see if this is a real problem for new or existing landlords today. I have a single property that I've started out with and for me to manage the costs I have a single account and an LLC. As I plan to increase my investment to another multi-unit property, I'll potentially invest 10-20% of my own savings, are there any free or really low cost banking or real estate management solutions that can help me do this, prefer one!
1. Accounts for each primary property
2. Ability to get payments from renters
3. See your cashflow, mortgage, taxes, interest and expenses in one dashboard - basically be able to estimate my ROI and review something on a regular basis, plus for tax purposes, as I am trying to get the groove on taking pictures for each payment or doing this through the bank
4. Earn interest on my cash in the account automatically, most big banks don't pay you a dime
Most importantly, how do I verify tenants and check if they are good/credit score or otherwise as a new landlord myself?
Thank you Bigger pockets community!
@Mehdi Haider Go through the list below and request a few demos. I'm not aware of any platform that does all (accounting is a missing piece for most) and gives you high interest rate at the same time. I personally have several checking accounts for operations, and an online savings to park the money and earn more interest.
Thank you both for responding. I was able to find an offmarket wholeseller, turnkey'ed the properties into Section 8 and some external support providers. Financed using HELOC for now. I need to cash out so I can scale. Ideas? 3 properties purchased 275K with total rents 3700 a month
I have explored the following:
1. Refi but the lenders are not giving me 75% LTV based on the appraisal and HELOC seems to be working out better. They say they are using AUS system and investment property is a risk so they can give me 56%. They want a 45K monthly income to give me 75% which is the most ridiculous answer I have heard, considering my DTI should be about 28-30%
2. Credit score has dropped mid 660's
3. Have an active income of 25K from job and contract.
Thoughts?
You have gotten a HELOC approved for properties held in an LLC? Or on your primary and you use with your LLC? I think you might already have a system in place that works.
Relay is a banking solution that enables easy account creation and transfers. I understand that PNC has something similar.
I get my payments from Apartments.com. I use Stessa for the software accounting, with dashboard to see the income, expenses, assets and liabilities.
I have used Zillow to screen tenants, but you could pay a PM to just do this part and then manage the property yourself.
What if you could draw your down payment from the HELOC and use all the cash flows (rents) to pay it off asap. Use the HELOC for emergencies. Draw again when you find your next property, and repeat. Navy Federal has a very long draw period, 20 years and 20 year repayment period.
Other options: buy from tired landlords and see if you can get owner finance. You could do marketing to owners of small apartments, the ones that are difficult to finance 5 units on up, and see if they'd be willing to carry back a note for you. You could go with DSCR mortgages (I recommend Timothy Hero) which are based upon the cash flow that properties produce.
Last idea: get business credit with your EIN number, and keep credit off of your personal side of things. Use the cash flow to pay off your personal credit. Then go to Chase Ink and American Express Business Blue. Avoid CapitalOne, which shows up on your personal credit.
You have gotten a HELOC approved for properties held in an LLC? Or on your primary and you use with your LLC? I think you might already have a system in place that works.
Relay is a banking solution that enables easy account creation and transfers. I understand that PNC has something similar.
I get my payments from Apartments.com. I use Stessa for the software accounting, with dashboard to see the income, expenses, assets and liabilities.
I have used Zillow to screen tenants, but you could pay a PM to just do this part and then manage the property yourself.
What if you could draw your down payment from the HELOC and use all the cash flows (rents) to pay it off asap. Use the HELOC for emergencies. Draw again when you find your next property, and repeat. Navy Federal has a very long draw period, 20 years and 20 year repayment period.
Other options: buy from tired landlords and see if you can get owner finance. You could do marketing to owners of small apartments, the ones that are difficult to finance 5 units on up, and see if they'd be willing to carry back a note for you. You could go with DSCR mortgages (I recommend Timothy Hero) which are based upon the cash flow that properties produce.
Last idea: get business credit with your EIN number, and keep credit off of your personal side of things. Use the cash flow to pay off your personal credit. Then go to Chase Ink and American Express Business Blue. Avoid CapitalOne, which shows up on your personal credit.