All Forum Posts by: Account Closed

What cities are you looking at?  Where do you live?  You can find a lot of cheap houses in the midwest, but are they in rust belt towns, or in Urban centers?  Hard to talk about the pros and cons without knowing where the city is located.  For the record, I grew up in the west Chicago suburbs, went to college and lived in Iowa for a total of 8 years, and lived in Kansas City, MO/KS for a total of 4-5 years.

I find it funny that the property manager is charging the tenant an admin fee.  Property management should be a cost for the landlord, not the tenant.  Although, if you can successfully pass the fee on to the tenant, more power to you.  I don't think its wrong either to charge a processing fee for an electronic payment, but shouldn't be any more than a $1-$2 per transaction or 3-4% for using a credit card per transaction.

@Paiea Palomanu, I was in the same boat as you a little more than a year ago.  I was renovating my singly family house in to a rental unit with the plan on self managing once everything was complete and I had a tenant.  I researched several software and landed with Buildium.  To me, the most important thing was the process of getting a tenant in to my rental; this included listing the property (buildium will list on multiple sites for free), tenant filling out application, tenant screening, etc.  All of this can be completed electronically.  The second thing that I wanted was to do as much electronically as possible, collecting rents, applications, document signing, etc.  To me, as a new self managing landlord, getting a tenant in to your property and getting paid are probably the most frightening thing starting out, so I wanted as much help as possible.  I am also a process orientated person, so having the structure of a defined and seamless process was also very appetizing to me.

Regarding the accounting side, I have found Buildium's account module to be very easy to use.  However, I have a degree in Finance, it probably comes more naturally to me than others.  Some have said the accounting module is tedious, but I think that is the case with accounting no matter what you use. I tried using Quickbooks (rental version), but found it very hard to use, so I stuck with Buildium.

There are many more things you can do with Buildium that I am not even using.  For example, your tenants can submit maintenance requests through it, you can have community boards, create your own website, assign permissions and restrictions to users, and other things.

With all that being said, it is expensive if you have a small amount of properties.  In my eyes, it is something that would be very valuable once you scale your business to have several properties so that the cost per a unit is relatively low.  They charge based on the number of units you own and have within the system.  It looks like for 1-20 units its $47/mo currently.

In summary, I would see if you can do free trials of a couple of software packages you like to test them out and play with them.

I know I made a long winded post earlier, but to kind of clarify, I want to be financial free because money rules the world.  Unfortunately, you need money to live (house, food, medical supplies, etc.), and to get money, you need to earn it.  Most people earn it through a job.  As I said previously, that job has a lot of control over a person because of the paycheck and security it provides.  This leads to a company then being able to control you, and the decisions you make due to the fear of losing that paycheck, and ultimately money for a house, food, medical supplies, etc.  I don't want others to be able to control me, I want to control my own time and decisions, and still be able to have the money to live.

@Sergio De Hoyos, regarding your question, I am not an inspector or engineer myself, so I cannot help you with that.  But if I were in your situation, everything else you said is what I would do.

I think being an inspector would be a great way to get started.  It would also expose you to a lot of issues that can plague homes.  

While you have an engineering educational background, you do not yet have direct experience.  Once you  get some experience of some kind, you could then potentially translate that experience in to investor remodels (new additions, removing walls, foundation, etc.).  Then you could start charging consulting fees by the hour.

I would recommend continuing contributing to your 401k to get the match.  That is free money that you are passing up, assuming you are not looking to leave your company and therefore have not met the vesting period.

With that being said, one thing to consider in Scott Trench's book is what are your goals?  Is your goal to be filthy rich when you get to retirement? Is it to retire early? Is it just financial independence?  Depending on what you want to achieve, contributing to your 401k t o get the match may be part of the solution.

Another thing Scott Trench talks about is, is it worth it?  For example, on a typical persons budget, the biggest cost expenditures are housing, transportation, and food.  Cutting down on those categories will have bigger impacts to a typical person budget than cutting down on entertainment.  For the other categories in a typical budget, I think he says to not really pay much attention to them because the amount you save isn't going to drastically impact your ability to save.  I think your 401k falls in that later category.

For me, I want to achieve financial freedom so that other people cannot control my decisions or dictate the decisions I make for my career.  Most people are afraid that if they step out of line or stand up for themselves they will be fired because the company they work for has tons of applicants just ready to take their spot.  And for the most part, that is true.  The fear and risk of losing their paycheck is too much.  And companies know this, so they start forcing more work on to people with little or no reward.

Personally, my search for financial freedom has come from three points in my career.  I have worked for three companies and and currently on the fourth in nine years.

Company one, the first one, I wasn't really getting much out of it and was not doing the work I wanted to be doing.  I wanted to be a financial analyst, as I have a college degree in finance, but was working in transportation.  I graduated 2010 in to a tough labor market, especially with a degree in finance.  In short, I didn't really see my self growing with the company.  I was with them for three and a half years before I moved on.  Really this step, there wasn't any one thing that really ignited the fire, but just the general I know I could do better for myself.

Company number two.  I worked  for this company for three and a half years in a compliance related role due to a company rotational program.  In this time, I had four managers (one during rotation, and three once placed in to a role).  Manager number 3 promoted me, then a year later, manager number four put me on a performance improvement plan  (PIP).  During the five week plan, I found another job and resigned. Somehow, I went from being promoted to being ready to be shown the door in one years time, under two different managers.  This got the fire started within me to begin thinking about financial freedom and began looking at rentals as a path to achieve that.

Company number three.  I worked for this company for a year and a half, and everything was great.  Until my wife found a dream job in another state.  This was a small company that had a couple remote employees.  So I asked if I could work remotely.  Now some detail, I submitted my request, and they were working on it.  I asked for an update from the HR director (small company of 70-80 people).  HR director said that they wouldn't be able to accommodate my request and they would be terminating my employment for someone who could work locally.  So now the drama begins.  In this same meeting I said I don't think this would be a good idea because of 1) the Chief Compliance Officer was resigning at the end of the month and continuity in the department would be beneficial for me to stay on.   The team was made up of myself and the Compliance Officer at the time. 2) The company was not in a good place with our regulator, and as such, continuity would be beneficial if I were to stay on.  To conclude this meeting, I said I wanted to stay on and I did not want to resign.  Despite this, the HR director continued with her plan telling my manager (Chief Compliance Officer) that I had resigned.  When my manager asked me about this, I said, I did not resign and what she is saying is false.  To add to this, apparently, I was told the CEO didn't like my responses I made to the HR director, and deeming my responses as "threats." (not sure what was threatening about what I said).  I continued to work there a month or two, with more drama related to me asking for a relocation with the end result of me submitting my immediate resignation when my manager walked in to work that morning.  We agreed for me to work until noon, which I did and left.

This saga again reinforces the fear that companies use to push employees around to get what they want with little benefit for the employee except for a paycheck.  During this time, I had one rental property with the plan to purchase more, so I was moving in the direction I wanted. But now, I have the absolute fire to grow it as fast as I am financial able to.  So when an employer offers me a raw deal, I can tell them respectfully no, knowing I have the financial independence to make a decision.

I am now at company number four in the state of my wife's dream job as a financial analyst (finally) and thrilled performing in a role that I went to college for and the passion to do; at least until I am financially independent to follow my own life's desires.

I do not know the legal ramifications from doing that, but I would recommend separating your business banking activities from your personal banking activities.

If I can recall correctly, my bank wanted to see my articles of incorporation, operating agreement, and certificate of good standing in the state of Missouri to open the account. They may have also wanted an EIN as well. In any case, to get some of those things, you would need to create an LLC.

With that being said, I would highly recommend opening a business account to separate your personal accounts from your business activities.  It should be easier to track your expenses for accounting purposes.