All Forum Posts by: Anthony Emtman

@Bob Smith - If you are to bring on help for this, you are correct in that you need more than just a "bookkeeper". Most bookkeeping services you'll find online or through a VA will trend toward data entry as the primary value provided and most run between $20/hr to $50/hr. Bookkeeping itself not a highly technical nor specialized function, it is more akin to data entry. As such, you should not pay equivalent rates like you would to a CPA, attorney, or another professional with deep technical experience, but there is still significant stratification across bookkeepers as to their plug and chug skills vs actual financial competency. Bench is an online service I would recommend checking out as a point of reference. They'll be more advanced than a non-specialized bookkeeper but will not specialize in real estate or provide any advisory along those lines. 

That said, a great bookkeeper/controller/tax accountant who manages your ledger and advises on strategy is worth every penny. A good controller/accountant will pay for themselves multiple times over each year through tax savings opportunities and helping plan for the future. 

There's too much at risk to cheap out on this front. "It's not what you earn, it's what you keep that matters."

Nathan G. - we also use QuickBooks Online. I’d be interested to hear how y’all have everything setup as QBO doesn’t naturally allow for complete fiscal tracking of everything (like balance sheet transactions). Would love to ask you some questions — would you be up for a short phone call?

Hi Nicholas, Most specialized property management software is expensive (marginally, that is; per unit basis) for smaller investors or managers. Additionally, some software like Buildium has relatively poor accounting functionality, creating double work when it comes time to generate P&Ls and Balance Sheets. Through all of my research, I’ve consistently landed on QuickBooks Online as we have a lot of the same requirements as you mentioned (cloud-based; automated, cheap or free electronic payments). I also run books for a multitude of entities though so I have the Accountant version of QBO. Through this version Intuit gives you access to wholesale prices which are about 50% off. My new favorite feature here is creating automated receipts within qbo with a pre-executed ACH authorization with the tenant so every first of the month, the entire rent collection process, deposit, and documentation all occurs automatically and without extensive thought on my end. Naturally, with QBO you have access to every financial report you could need. The primary downfall is the need to add a bit of customization, but if you’re comfortable with your accounting skills this is no issue (e.g. QBO allows you to track income and expenses by property easily but you need to create and run balance sheet transactions through sub- accounts). Hopefully this helps! Let me know if you have any other questions.

@Anthony Bright - I concur with @James Masotti. The right answer depends on your goals and, from a strictly financial perspective, the route that results in the highest NPV for you. Due to the tax consequences James mentioned (and so long as you're only doing so infrequently), it typically makes the most sense to hold for at least a year to at least hit the capital gains tax qualification. Assuming this is one of your first potential flips, the IRS wouldn't consider the flip to be part of a trade or business yet (recharacterizing the asset from an investment and changing the tax consequences). 

As with any financial decision, there are many factors to consider to confidently arrive at a decision. If you're willing to provide some rough numbers in the post, there are plenty of professionals here on BP that would be happy to chime in and provide more color. 

@Aaron Smith - what was the profile of the properties they appraised (SFRs, residential multifamily, commercial multifamily)? And what was the primary valuation method? Did they take into account each property’s specific cash flow profile and use comparable cap rates to value (on the residential properties specifically)? 

Hi Shirley, 

Happy to introduce you to my business partner @Daniel James 

We operate a property management company in the area. Would be good to have a conversation to get more info on the portfolio to determine potential fit or point you in the right direction if not.

Have a good evening! 

~A.Emtman

@Rob Snyder - Perfect, you already know what it's like then! Absolutely, I'll shoot you a colleague request so we can chat via email and/or setup a time to catch up on the phone. 

Welcome @Rob Snyder! 

You're definitely on the right track looking for a small multifamily that you could live in while you rent out the other units. This is certainly one of the quickest way to get the residual income snowball rolling. Neighborhoods in largely depend on the tradeoff between the investment returns you'd like to see and the quality of life you're willing to accept due to living in the property. 

Myself, or my business partner (@Daniel James), would be happy to chat about getting started, what to expect (especially as a live-in landlord), and how to put yourself on a path to reach the passive income goal you mentioned. Always happy to help new investors get started; feel free to reach out however is easiest for you. 

Hey @John Cimino, 

@James Masotti is correct in that property managers for smaller properties should generally give the landlord options / suggestions to choose from (main caveat being the need for possible discrimination to be avoided). 

Clients have used us for placement or for management only, so we've setup our fee structure to incentivize using us for both tenant placement and property management (tenant placement fee is cut in half if client uses us for both). 

As @Tim Shin mentioned,  I would certainly ask what protections you may be afforded if the company isn't willing to let you have a say in which tenant's to accept / reject. 

Hey @Robert Stranix,

Assuming you're wanting to continue to self-manage (while under the formal protection/control of a management company as your lender is requiring), your biggest hurdle with this will be getting licensed as a PA Real Estate salesperson. Beyond that you can just create your own real estate entity (LLC), sign on with a broker that's willing to 'sponsor' you, and then create the necessary docs.

Naturally that's just the gist; let me know if you have any further questions. 

~A.Emtman