All Forum Posts by: Buddy Holmes

@Ryan Miller,  I'd say that when you have 40 properties you need a CPA and you need to follow their advice.

I use Excel with tabs for each of 7 rentals. My excel ledgers balance the bank accounts from online viewing.  I am learning that Mint consolidates all the bank accounts and mortgage and expenses.  It has some AI features so that you train it to categorize each transaction into the correct category, rental, etc.  You can set up a Budget with say one line for Rental Income to view payment progress each month.  another line to monitor rental mortgage payments each month, Rental expenses and so one.

A quick signin to Mint then gives you a quick accounting on how your rentals are doing to budget as well as how your personal finances are going to budget.

You can set up "pay me first" goals and rental "cash flow" goals to give you quick checks on your progress.

You need personal and rental money separate bank accounts for sure.

You need the tenant deposits in a separate back account.

If you have all rentals in one LLC, (I do not) then you need all expenses in the LLC bank account.

rather than by rental property.

Cheers, Buddy

Hello @Carson Wilcox, I'm in the same position and have received some good advice under "Protecting yourself in a Partnership"

Cheers,

Buddy

@Ryan Miller,  I was once told and I still believe that the IRS would like(if you are ever audited) a separate back account for each property rather than separate by your functional use like you are thinking.  I am currently being audited for the first time ever (60+years of returns)  I am able to show one bank account that has all payments, repairs and rents for each of my rental properties.

They seem to like that.   It actually help you as well keep track of how each rental property is performing.

Cheers, Buddy

Thanks @Jeff V. !   Very helpful.

@Kyle Doney, @Thomas S., Thanks for the comments. I appreciate the thoughts.

I have been offered a good deal in a group of 5 duplexes. My neighbor has recently become interested in REI. As a good will introduction, I am considering a partnership with him on this deal.

I hold all my current SFR in my own name or jointly with my wife and protect myself with an umbrella policy. This is/would be my first partnership. Some of the issues I am thinking of are:

1)  Title of properties jointly with my partner seems straight forward, but how to be sure both must agree to sell?

2) How to structure mortgage so both are 50/50 responsible rather than either 100%?

3) Should we form and LLC for the partnership?

4) I am thinking of a 20% (5 rent/5 repair/10 CapEx) reserve bank account for monthly deposit. The account to be accessible with both signatures only.

5) A legal partnership agreement (perhaps the same as the LLC agreement).

Any comments on these thoughts and what am I missing?  Comment much appreciated!

Cheers, Buddy

@Michael Conway,   I would say the path of progress might have various answers based on what your end game is.  For rentals, you might look to where the young professionals might want to live.  That is perhaps close to downtown work and where the latest coffee shop, restaurant, and bars are opening.  I am told that Logan Heights in SD is one of those neighborhoods.

If your goal is resale of a 3BR/2BA home you might look where the young married couples are locating.  Let us know what your goals are.

Cheers, Buddy

@Tom Smart,  Great idea to express your plan for comment!   You have a lot to digest and comment on.   The first thing that jumped to my mind is the "working contract out of country and I don't have a 401k anymore"...

If you can say you are self employed (and it seems you can) then consider a Solo 401k.

Look it up on BP there are several pros and providers on BP. You contract job sounds like you have an opportunity to save a bunch of money. The Solo 401k allows you to put a lot of your income into the 401k. Then you can carefully invest that 401k into REI. Just be careful with all the rules. I may comment on other sections as I have time.

Cheers,

Buddy

@Alexander Monnin,  Glad you liked Rich Dad Poor Dad.  I great book to follow up with is @Scott Trench's "Set For Life". As a retired Engineer, I only wish that I had had these two books to read at your stage of life.  Read and take the lessons seriously.  Good Luck and Welcome to BP.