New investor purchasing two 6 units apartment building
Realtor · Bartlett, IL · Member since 2021 · 20 posts · 16 votes
New investor purchasing two 6 units apartment building
Most Popular Reply
Lender · Washington DC · Member since 2026 · 61 posts · 15 votes
1moCongrats on taking down 12 units, Managing multi-family properties as a tech-savvy owner is all about setting up systems early so you aren't fighting fires post-closing.
Here is a quick pre- and post-closing checklist with automation tools tailored for a 12-unit portfolio:
Pre-Closing Checklist:
- Tenant Estoppel Certificates: Ensure every current tenant signs an estoppel verifying their rent amount, security deposit, and lease terms so there are no surprises after closing.
- Lease & Ledger Audit: Verify that security deposits and proration calculations match up for the closing statement credit.
- Entity & Banking Setup: Ensure your LLC operating account and tenant security deposit accounts (compliant with Illinois security deposit laws) are active and tied to your payment processor.
- Utility Transfer Scheduling: Schedule gas, electric, and water transfers for common areas to take effect on the day of closing.
Post-Closing & Automation Setup:
- Property Management Software: Skip manual spreadsheets. Look into platforms like DoorLoop, Buildium, or RentRedi. They automate ACH rent collection, late fee enforcement, tenant communication, and accounting.
- Digital Onboarding Letter: On day 1, deliver welcome letters (via email & physical notice under doors) introducing the new management, portal login link, and online rent payment instructions.
- Smart Lock Access: Install smart keypad locks (e.g., Yale or Schlage Encode) on common entry doors and units as leases turn over. This eliminates physical key handoffs for contractors, turnover, and showings.
- Maintenance Ticketing: Use your PM software’s maintenance portal so tenants submit work orders with photos/videos, allowing you to assign vendors instantly.
28 Replies
- Lender · Washington DC · Member since 2026 · 61 posts · 15 votes1mo
Congrats on taking down 12 units, Managing multi-family properties as a tech-savvy owner is all about setting up systems early so you aren't fighting fires post-closing.
Here is a quick pre- and post-closing checklist with automation tools tailored for a 12-unit portfolio:
Pre-Closing Checklist:
- Tenant Estoppel Certificates: Ensure every current tenant signs an estoppel verifying their rent amount, security deposit, and lease terms so there are no surprises after closing.
- Lease & Ledger Audit: Verify that security deposits and proration calculations match up for the closing statement credit.
- Entity & Banking Setup: Ensure your LLC operating account and tenant security deposit accounts (compliant with Illinois security deposit laws) are active and tied to your payment processor.
- Utility Transfer Scheduling: Schedule gas, electric, and water transfers for common areas to take effect on the day of closing.
Post-Closing & Automation Setup:
- Property Management Software: Skip manual spreadsheets. Look into platforms like DoorLoop, Buildium, or RentRedi. They automate ACH rent collection, late fee enforcement, tenant communication, and accounting.
- Digital Onboarding Letter: On day 1, deliver welcome letters (via email & physical notice under doors) introducing the new management, portal login link, and online rent payment instructions.
- Smart Lock Access: Install smart keypad locks (e.g., Yale or Schlage Encode) on common entry doors and units as leases turn over. This eliminates physical key handoffs for contractors, turnover, and showings.
- Maintenance Ticketing: Use your PM software’s maintenance portal so tenants submit work orders with photos/videos, allowing you to assign vendors instantly.
- Realtor · Bartlett, IL · Member since 2021 · 20 posts · 16 votes1mo
@LaTarence Dunbar This is great. Thanks you much. These list of items would definitely help and I have added it in my todo list.
- Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes1mo
Seems to be an odd question for a Realtor to be posting. Don't you already have systems and processes defined; standardized rental agreements and house rules to implement as current agreements end; and a screening process to evaluate the current status of all occupants once they complete your application process? Your project planning should be pretty well established based on your due diligence investigating the actual condition of the property and its systems...you must have priorities already determined in order to have funding for them, right?
Sorry, I can't help you with automation tools, but new acquisitions of Clients, or personal use should be pretty straightforward. I assume your Broker has provided some guidance on their requirements for your responsibilities as well.
- Realtor · Bartlett, IL · Member since 2021 · 20 posts · 16 votes1mo
@Richard F. I am a realtor who has buy, sell and rent experience but I have never managed a property so my question was around investment since it is first time I am doing. I am not worried about lease and other paperwork because I already have system for that. It is just a management side of business which I am not aware of.
- 1moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Quote from @Krunal Patel:
I am partnering up with two other partners and purchasing two buildings - 6 units each.
Closing is end of next month. I am not sure what all the things I need to do before closing since I will be managing both the buildings.my Lender is taking care of registering LLC and everything. I am tech savvy and would like to implement some automation in the property management.
Please share your thoughts on todo list before the closing and even after the closing.
How strong is your partnership agreement?
What happens if one of you wants out early?
- Will other partners have right of first refusal to buyout?
- At what price?What happens if someone dies?
What happens if additional capital is needed?
Logical Property Management4.9450 Reviews- Realtor · Bartlett, IL · Member since 2021 · 20 posts · 16 votes1mo
@Drew Sygit we haven't worked on operating aggrement yet but while making it, I will keep your points in mind. Thanks!
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes1mo
Quote from @Krunal Patel:
@Drew Sygit we haven't worked on operating aggrement yet but while making it, I will keep your points in mind. Thanks!
Big mistake. Every partnership I have ever seen breaks at some point. The most important thing is to have your exit clearly spelled out. Basically a prenup. Otherwise a judge will do that for you later.
There is not much to "automate" on 12 units. Automation starts when you have hundreds of units under management. Until then you then are service and managing people - not automate them.
- Specialist · Goa, India · Member since 2026 · 175 posts · 35 votes1mo
One thing worth adding since there's three of you managing together: most automation advice assumes a single owner, but the real risk with partners is one of you handling something and the other two finding out about it after the fact. Whatever system you set up, make sure every tenant and vendor interaction lands somewhere all three of you can see, not just whoever happened to answer the phone that day. Much easier to build that habit before the first tenant moves in than to retrofit it once things are already scattered across three people's personal phones.
Are you three splitting responsibilities by building, or sharing everything across both?
- Realtor · Bartlett, IL · Member since 2021 · 20 posts · 16 votes1mo
@Andrea Fernandes Thanks for sharing your thoughts. I will be managing all 12 units. We have made an agreement that I will charge 5% of rent as a management fees every month.
- 1moSean O'KeefePro MemberCPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 870 votes
Quote from @Krunal Patel:
I am partnering up with two other partners and purchasing two buildings - 6 units each.
Closing is end of next month. I am not sure what all the things I need to do before closing since I will be managing both the buildings.my Lender is taking care of registering LLC and everything. I am tech savvy and would like to implement some automation in the property management.
Please share your thoughts on todo list before the closing and even after the closing.
Krunal, congrats on getting to 12 units with partners, that's a big step.
Building on what Drew brought up about partnership agreement terms (buyout, death, capital calls), I'd add one thing that gets missed a lot in multi-partner deals like this: how you structure ownership interests inside the LLC operating agreement matters just as much for taxes as it does for control.
If the three of you aren't putting in equal cash and equal work, don't let allocations default to "even thirds" just because that's simpler to draft. The IRS looks at whether special allocations of income, loss, and depreciation have "substantial economic effect" under partnership tax rules. If your paper splits don't match who's actually funding the deal or carrying the risk, those allocations can get reallocated back by the IRS down the road, and that's a mess nobody wants to deal with after the fact.
Since you're managing both properties yourself, think through whether your compensation for that work comes as a guaranteed payment versus just a bigger slice of distributions. Guaranteed payments get hit with self employment tax, but skipping that structure entirely can create its own headaches if your partners aren't actively working the deal and you are.
Another thing you'll want to check out: because you're closing on two separate buildings, decide now whether they're both going into one LLC or into two. Down the road, if one partner wants to cash out of just one building, or you all want to sell one and do a 1031 exchange on it, having both properties tangled in a single partnership makes that a lot harder to unwind cleanly. Untangling a multi-member LLC to do a partial exchange (some call it a drop and swap) needs lead time, sometimes a year or more of separate holding, so it's worth settling the entity structure before you're at the closing table, not after.
Andrea's point about visibility across all three of you is a good one too, and it applies just as much to your books. Whoever ends up doing bookkeeping should keep records clean enough that each partner can get a separate K-1 without a scramble every March.
Happy to Connect!
This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.
- Realtor · Bartlett, IL · Member since 2021 · 20 posts · 16 votes1mo
@Sean O'Keefe Thank you so much for the great advice. I will definitely discuss with my partners about separating two buildings in two separate LLCs.
we are three equal partners and I will be charging 5% of rent for the management fees.
- 1moG. Brian DavisPro MemberInvestor · Hatboro, PA · Member since 2016 · 2k+ posts · 842 votes
Congrats on the purchase. Before closing, I'd make sure you understand exactly what you're buying. Review the leases, confirm the rent roll matches what's actually being collected, and make sure you have a good handle on any deferred maintenance or larger repairs that may be coming. I'd also keep healthy cash reserves for those first few months because unexpected expenses are common with a new property. As for automation, I'd get the basics of managing the property running smoothly first, then add technology where it actually saves you time.
- Realtor · Bartlett, IL · Member since 2021 · 20 posts · 16 votes1mo
@G. Brian Davis Thanks for sharing your thoughts, It is very helpful insight.
- 1moAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
I think there's a lot you need to do.
1. Conduct attorney review and request as many documents as you can. You need to verify the t-12 for all the numbers. Rents, utilities, repairs, etc. you need to actually make sure the property's numbers are what they say.
2. Re run numbers for year 1 and forward based off revised projections. I'm talking actually accounting for things like insurance (and big increases too), Property taxes (usually reassessed every three years), and then revise your capex plan as you're hopefully getting quotes from contractors as needed.
theres a lot more here that others have suggested and I liked the comment about knowing how much cash to bring to the table INCLUDING reserves. Good luck and make sure to bring plenty of reserves
Brick House CPAs53 Reviews - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1mo
Quote from @Krunal Patel:
I am partnering up with two other partners and purchasing two buildings - 6 units each.
Closing is end of next month. I am not sure what all the things I need to do before closing since I will be managing both the buildings.my Lender is taking care of registering LLC and everything. I am tech savvy and would like to implement some automation in the property management.
Please share your thoughts on todo list before the closing and even after the closing.
I will be pretty blunt but if you do not know what you are doing or systems to use, then you should not be managing the property. Find a real property manager to manage and you will end up making more money in the long run as poor management leads to longer downtimes on units and occupancy/vacancy etc.
First rule of thumb outside of location,location location in real estate is hire professionals
7e investments53 Reviews - CO · Member since 2026 · 21 posts · 10 votes1mo
Good for you! I'm excited to hear how this goes. I too am thinking of forming a partnership with a friend to start investing and property management is my niche. So I too will learn from your question, thank you for being vulnerable to the group!
- Realtor · Bartlett, IL · Member since 2021 · 20 posts · 16 votes1mo
@Kacey Betts sure no problem. I will keep you updated here.
- Rental Property Investor · Member since 2018 · 826 posts · 809 votes1mo
Are you buying with a loan or cash? If you don't have experience securing commercial loans then you're like in over your head. Do you and your partners have a PFS? Is your OA fully defined?
have you secured commercial insurance before? These are also more complicated than residential insurance.while it'll be important to figure out how to manage these properties, I have the feeling that you'll be challenged to close - so my advice is to put all efforts into getting to close, then figure out how to manage. Realistically you shouldn't be taking down 2 commercial properties, but good luck if you do.
- Property Manager · Birmingham, MI · Member since 2024 · 15 posts · 3 votes1mo
Congratulations on your first acquisition! Since you'll be managing both properties, the work you do before closing will have a big impact on how smoothly things run afterward.
Before closing, I'd focus on:
- Reviewing every lease, tenant ledger, security deposit, and vendor contract.
- Confirming utility accounts, insurance, licenses, and any outstanding code violations or deferred maintenance.
- Building a list of trusted local vendors (plumber, electrician, HVAC, locksmith, handyman, etc.) before you need them.
- Creating a reserve budget for unexpected repairs and capital improvements.
- Selecting a property management platform that supports online rent collection, maintenance requests, document storage, and owner reporting.
After closing, prioritize introducing yourself to the residents, documenting the property's condition with photos, changing locks or access codes where appropriate, and establishing clear communication channels for maintenance requests and emergencies.
Since you're tech-savvy, automation can save a lot of time. Online rent payments, automated late-fee notices, maintenance request tracking, digital lease storage, and recurring owner and financial reports can make managing multiple properties much more efficient.
One final piece of advice: don't focus solely on collecting rent. Establishing strong operational processes from day one—communication, preventive maintenance, vendor management, and accurate financial reporting—will pay dividends as your portfolio grows. A well-organized operation is often what separates a good investment from a great one.
- Member since 2026 · 72 posts · 30 votes1mo
Quote from @Krunal Patel:
I am partnering up with two other partners and purchasing two buildings - 6 units each.
Closing is end of next month. I am not sure what all the things I need to do before closing since I will be managing both the buildings.my Lender is taking care of registering LLC and everything. I am tech savvy and would like to implement some automation in the property management.
Please share your thoughts on todo list before the closing and even after the closing.
How much experience do you have managing multifamily properties? Are you familiar with or any local tenant protections? Is this property in Chicago? If so, are you familiar with the city's landlord-tenant laws and regulations? They can be... let's just say they're not exactly light bedtime reading.
How healthy are your cash reserves for each property? Real estate has a funny way of introducing you to unexpected expenses at the worst possible time.
What kind of condition are the major systems in? How old are the HVAC units, water heaters, roof, windows, and electrical and plumbing? Have you had the foundation inspected? Is the property located in a flood zone? These aren't the glamorous questions, but they're usually the ones that determine whether a deal is a winner or a wallet workout.
I'd also take a close look at the partnership itself. Who has the final say when decisions need to be made? Is there one managing partner, or does every decision require a group discussion? Nothing slows down a project faster than four people trying to steer the same car.
Finally, what experience do your partners have with real estate? Having great partners can make investing enjoyable. Having inexperienced partners can turn a simple renovation into a season-long reality show.
- 1moAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
@Krunal Patel, Before closing, get the operating agreement finalized among the three partners, not just the LLC itself, that's what actually defines how income, losses, depreciation, and eventual sale proceeds get split, an LLC registration alone doesn't address any of that. Also keep in mind, since your lender is the one setting up the LLC, lenders typically aren't structuring these with tax treatment in mind, they're focused on getting the loan closed, not on how the entity gets taxed or how multiple owners are handled inside it. Get a CPA or attorney to review the entity setup before closing rather than assuming it's been structured correctly just because it's registered.
Since you're the one managing both buildings while presumably all three are owners, also get management compensation decided now, whether you're paid a management fee for running things or your share of ownership already accounts for that work, since guaranteed payments to a partner for services get taxed differently than a straight profit allocation, and that needs to be spelled out before the first distribution, not figured out after.
After closing, get a cost segregation study done on both 6-unit buildings, that's usually a strong opportunity on multifamily properties this size, and with three partners involved, keep depreciation and expense allocation tracked per building separately even though they're closing together, that keeps basis and future gain calculations clean if the partners ever want to sell one building but not the other.
Happy to connect!
INVESTOR FRIENDLY CPA®5241 Reviews - Property Manager · Chicago, IL · Member since 2022 · 8 posts · 10 votes1mo
Reading through all of these responses, they each hold value. Congratulations as well, @Krunal Patel in getting to this point! Often times, individuals are too scared of the risk involved to take that next step. As you are already doing so, please never hesitate to leverage this network or reach out to your own for advice, assistance, etc. as you may not even know what you do not know yet.
While transparently, me and my company specialize in single and multifamily professional property management, I would always be open to advising wherever needed. Please let me know if I might be able to assist moving forward. Best of luck!
- 1moVijay FriedmanBusiness MemberMiami, FL · Member since 2026 · 766 posts · 122 votes
Quote from @Krunal Patel:
I am partnering up with two other partners and purchasing two buildings - 6 units each.
Closing is end of next month. I am not sure what all the things I need to do before closing since I will be managing both the buildings.my Lender is taking care of registering LLC and everything. I am tech savvy and would like to implement some automation in the property management.
Please share your thoughts on todo list before the closing and even after the closing.
@Krunal Patel
Before closing, I’d make sure you have the current leases, rent roll, security deposits, utility responsibilities, vendor contracts, tenant contact info, and any open maintenance items organized for both buildings. Since you’re managing 12 units yourself, having rent collection and maintenance requests automated from day one will save you a lot of headaches. - 4wAdam BartomeoBusiness MemberReal Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
From a PM viewpoint, right off of the top of my head, I am thinking about all of the properties that we have taken over and what is needed - rent roles, estoppels, tenant contact info, welcome packets for the tenants, switching over utilities for common areas and vacant units. You do not want the tenants being caught off guard about where to pay rent and how to enter maintenance concerns. If you have M2M tenants you will likely lose several of those, they do not like change and will leave. How are you going to handle the turnover... lots to do!
Bartomeo Property Management4.7150 Reviews - Real Estate Agent · Memphis · Member since 2026 · 538 posts · 311 votes4w
WIth 12 units coming over at once, I'd have the management side ready before the keys change hands. A few things I'd prioritize:
Before closing
- Get every lease, addendum, tenant ledger, and security deposit record
- Get maintenance history, open work orders, warranties, keys/codes, and current vendor contacts
- Verify who is current, delinquent, prepaid, or approaching renewal
- Set up the bank accounts, accounting/PM software, rent collection, and maintenance request process
- Decide exactly how tenants will contact you and where those communications will be documented
After closing
- Send tenants the new management, payment, and contact instructions
- Confirm all deposits and balances transferred correctly
- Walk every unit and common area and create a photo baseline
- Review outstanding maintenance and prioritize anything involving safety or property damage
- Put lease expirations, inspections, preventive maintenance, and recurring property tasks on a calendar
Since you're tech savvy, I'd automate the repetitive stuff first: rent reminders, lease-expiration alerts, recurring inspections, maintenance tracking and monthly reporting. I'd keep actual maintenance decisions and tenant issues human until you understand these two buildings well enough to know where automation helps versus where it creates another problem.
- Realtor · Bartlett, IL · Member since 2021 · 20 posts · 16 votes3dWe have closed the property and now we are officially an Investor of 12 unit apartment buildings. Thank you everyone for your guidance. It means a lot to me. I appreciate you taking a time and sending your suggestion/thoughts!
- 3dMike FisherBusiness MemberNew Lenox, IL · Member since 2024 · 94 posts · 52 votes
Congrats on the 12 units. One thing worth adding to your pre-closing list that has nothing to do with software: pressure test the numbers you underwrote, because managing it yourself quietly changes them.
Two traps I see first time self-managers fall into.
1. The management line does not disappear, it moves onto your calendar. If you underwrote these buildings at a zero management fee because you are running them, you did not delete that cost, you converted it into your own unpaid hours. Twelve units of leasing, maintenance calls, turnovers and bookkeeping is a real job. Underwrite it as if you were paying someone. Then the day you get busy or want to hand it off, the deal still works.
2. Reserves on older multifamily are not a rounding error. Across 12 units you will hit roofs, boilers, sewer lines, the parking lot and turnovers on a schedule, steadily rather than all at once. Build a per unit monthly capex and maintenance reserve off the actual age of the systems (get roof, mechanicals and service ages during due diligence), not a flat percentage off a pro forma. A strong looking cap rate with thin reserves is how year two eats year one.
Pre-closing items that protect the cash flow specifically:
Estoppels tied to the ACTUAL rent roll and deposits, so you inherit real numbers instead of the seller's pro forma rents.
Confirm which jurisdiction each building sits in. Security deposit handling and notice rules differ between the City of Chicago ordinance and the suburbs, and getting deposit accounting wrong is an expensive first year mistake. Verify the local rule before you take over the deposits.
Walk every unit and read every lease before closing, so you know what rents are legally in place and when each one turns.
I invest in and manage rentals in the south and southwest Chicago suburbs (personally since 1991, through M Property Group LLC), and the deals that run smoothest are the ones where the owner underwrote the boring lines honestly up front. Happy to get into specifics on the Chicagoland side if it helps.
M Property Group LLC | MF Cashflow Property Management4.9102 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.