All Forum Posts by: Coleman Nelson

My company has transitioned from owning our own properties outright to syndication of apartment buildings. We currently use Buildium as our property management software, and that has been working well for us so far. We are looking for some sort of software that will help us on the asset management and investor relations side of things. Preferably something where we can send financial statements, distribution info, and other data to our investors. Having an investor portal would be nice too. I know there is some good, robust software out there for big companies, but we need something that is cost effective for our new business. If I can't find anything, I'll figure out a way to do it with Buildium and Excel, or something else, but I'm hoping there is a good affordable option out there that other syndicators are using.

@Matthew King, @Mike Nelson, @Dave Toelkes, @Richard Shevak

I want to thank you all again for your insights on this, and wanted to update you with the results of the study.

I wound up getting some other references from our CPA advisors at ProVision, but ultimately decided on using Duffy & Duffy Cost Seg Experts. The three quotes I received were almost identical in product, they all seemed to be high-quality, and the costs were pretty similar. Duffy is more local, so with travel expenses factored in, they wound up being the cheapest.

Ultimately we wound up paying $6,450. Our total building cost, determined thru us and our CPA advisors (not the cost seg company) was $1.935 million. Of that $465k allocated to 5-year property, $18k to 7-yr, $132k to 15-yr, and $1.3 million to 27.5-yr. This accelerated our 2016 depreciation (half year) by $90k from $38k to $128k. The total accelerated over the first 5 years is $415k.

So depending upon the tax rate, that's an acceleration of approximately $25k in tax savings in year 1, or $115k over the first 5 years. You have to NPV that to get the actual return since it's all time value of money-based since actual depreciation expense doesn't change over 27.5 years. If you have any questions, just let me know.

As other responses have mentioned, I'd probably be more likely to wait and see if they pay January's rent. The question is do they know who to pay rent to? Were you able to verify that this resident was paying rent consistently before to the previous owner? I wouldn't evict unless you have a reason to, and non-payment would be the best reason. But regardless, I would post the 3 day on the 6th, whether you post a 30-day before or not, because then you will be evicting based on breaking the lease for non-payment rather than for not moving out at the end of the lease. Let me know if you need an attorney recommendation.

@Amanda Palmer, as mentioned earlier, if their lease ends at the end of the month, it automatically rolls over to month-to-month until the landlord or tenant gives a 30-day notice. For Hamilton County, OH, there's a standard form on their website that should be used (see link below):

https://www.courtclerk.org/forms/leavepremises.pdf

So you can serve the 30-day notice anytime between now and 12/31 and put the move-out date as 1/31. Under grounds put something along the lines of "Termination of lease agreement." If they don't move out, then I believe you have to post another 3-day notice before actually filing for eviction (verify all of this with your attorney). However, if they don't pay rent at the end of this month, then you can use this same form to post a 3-day notice, with the grounds being "Failure to pay rent." Make sure you are following the payment terms from the original lease. So if they get a 4 day grace period, don't post it until the 5th day.

With all that said, you could wait to decide whether to terminate the lease based on if they pay next month. But ultimately you need to decide if you want a resident that is not responsive or cooperative. Best of luck to you!

@Paul Lachaud Are you planning to owner occupy the building? Based on your financing terms, it seems like you are, but I didn't see you mention anything about that. I know a lot of lenders require 20-25% down for investment (non-owner occupied) properties, so I wanted to make sure your financing terms are correct for what you plan to do, because that could have a big impact on the amount of cash needed to purchase the property. Also, make sure you have sufficient cash reserves for initial turnovers and any maintenance you may need to get the units ready for a new tenant. New tenants may require a nicer unit than someone who has been living there for 5 years, especially with increasing rents.

 Thanks Dave. I appreciate your insight.

We are a small, growing company, and we are looking to outsource our payroll functionality. We only have one employee and one independent contractor that we pay on a regular basis, so we're looking for something inexpensive, but something we can grow with for at least 5-10 employees. I've been looking into OnPay, Gusto, Paychex, etc., but wanted to see if anyone has had any good experiences with who they are using. If you can tell me how many employees you have, and cost per month, that would be helpful. Thank you!

Welcome @George Emmons to BP. You are in a good place because it seems like investors (especially out of town investors) are on here all the time asking for recommendations for a good property management company in the Cincy area, and they don't get many responses. I think there are some decent larger companies for larger multi-family apartments, but not as many for the small to mid-size properties. If you are active on here and are a good property manager, then you should be able to find plenty of investors looking for your services. Best of luck to you, and let me know if there's anything I can do to help!

@Jacob Homan I'm a little late to the party, but wanted to throw in Valley Central Bank for you. The only drawback for them is that they only have two branches, located in Reading and Liberty Township. They are a small portfolio lender that was willing to take a chance on our company and loan us some money when many other banks wouldn't. We wound up moving most of our banking with them to gain more credibility with them. About 95% of our bank financing is thru them at this point. They have good mobile banking, where we deposit all of our checks via their app, and we use their Bill Pay to pay all of our vendors that don't take a credit card. It has worked great, and I've only had to physically go to the branch a few times so far this year.

Hey @Jason Wilde. I'm a BYU alum, and my sister lives in Eagle Mountain. Lehi is a nice little town. We have 64 units in Cincinnati...22 of those are from 1-5 unit properties and 1 42-unit apartment community. This is definitely a great place to invest, whether it's big or small. With that said, good, reliable property managers are hard to come by. There are some larger companies that have a decent reputation, but they are usually tailored to apartments vs smaller properties. These include Towne Properties, Sundance Property Management, and CRES Property Management. You can check out their websites, and they may be willing to do smaller properties. Feel free to send me a PM or email if you want to discuss specifics about the area, and the different neighborhoods.