All Forum Posts by: Justin R.

 Hello Max. Ive been using QBO for about 6 years for my properties (I have professional PM so I don't need the management software.) The Rentastic (and other RE focused systems) do seem way more simple, and user friendly than QBO. Im trained enough myself at this point in QBO, but my bookeeper still does the more complex entries (Loans, capital balances, reconciliation, etc) I just do the data entries for expenses. 

The cost is really expensive for QBO. I spend $90 a month for one LLC, and $50 for another. That's $1680 per year for QBO, plus my Bookeeper at another $500 a month to log monthly statements, break down loan payments, and reconcile. Thats $7700 a year NOT including my accountant/Tax prep.

I do feel QBO kinda traps you into the system (Like Apple products, haha) becuase it is the "Go-To" for Bookeepers and Accountants.  I feel that if I did switch to another software platform like Rentastic, I would have to get a new team, or expect them to learn a new system.

What's your thoughts? Thanks for any help.

 What software did you end up going with? Are you happy with it?

Congrats on getting the home and starting the process. I too live in Marin, and feel it is a solid long term market for apprecaition, and utilizing the power of principle reduction.

When it comes to refinancing, figure out what the loan costs will be, then divide that buy the monthly savings with the new loan in order to determine how long you have to maintain that loan to break even. 

If you use the Heloc option and decide to rent it out, don't forget that property (or you) will have to cover both your primary and secondary position notes.

I don't personally see Marin being a great mid term market. Perhaps if you were right next to the college, or a hospital. Otherwise with the dwindling tech sector in SF, and the remote work (2-3 days a week) that is most likely here to stay, it just doesn't seem like a strong mid term market to me. With that being said, look up other mid term postings in our area and do some research on it. 

Your mentioned Heloc a few times. If the property breaks even, or operates in the red currently, it will only operate deeper in the negative (unless you find a strong ROI like creating more bedrooms, convert a non living space to living space, etc) with another loan.

Figure out what your goals are before you make your decision. If you like your job, and your goal is to create long term wealth through equity then keep the property, fix it up over time, and in the future you will be able to rent it out for profit. If your goal is cash flow, then your best bet may be to live in it for 2 years, and then take that tax free gain (250k single person, 500k married) and buy elsewhere. 

Best to you and this journey. Be proud that you were able to break into this market. If you ever want to meet up in Marin and grab a coffee to discuss, let me know. 

 Out of curisosity, are you considering utility reimbursement portion as "Owner making money?"

That would be hard, but not impossible. First of all both positions would most likely want to be first position lien (which means if you got foreclosed upon who gets paid first.) 

Second issue is that it would be really difficult to cash flow, while paying both notes, especially with one lender in second position (which would most likely have a higher rate, plus points to offset their risk.)

Now if you got the property under contract for 75% of the market value, which means you would have built in equity, and willing to personally guarantee (full recourse) then yea it may work out.

If it's a good enough deal then you could even bring in an equity partner. 50 percent of a great deal is better than 100% of no deal.

Cheers! 

@Brian Burke Your more of an honest man, than a salesman.

It’s great that (IMO) the most trusted Syndicator/Operator on here is saying to diversify across other assets.

Brian you are in it for the long game and that is why people trust you.

I did a blanket loan in the past knowing I would have my hands cuffed as far as future collateral on those assets. You may think you wont touch those assets but what if you want/need to sell off one property out of the group? What if you just need to tap some equity, and now you are affecting the entire portfolios interest rate. Just some food for thought.

Typically from my experience, a lender that is willing to do a "blanket" style loan, lends from their own portfolio. This means they can keep it in house, and not sell off to the secondary market, giving themselves flexibility. They still like to see some sort of "grouping," whether it is in home style, neighborhood, SFD only, etc. 

I would connect with a few lenders on here, find one local mortgage broker, and then call around to several regional banks and credit unions. Remember that having a good relationship with a lender is more important than a small difference in interest rate (In my opinion.)

Cheers!

Lots of unknowns here but I will try and help out with what I'm taking from your question. 

The P/L is just that, it shows all profit, and loss (expenses.) A brief summary of revenue, costs, and expenses incurred within a specific period. This document can help assess the financial performance of an asset. 

If you obtained this from due diligence, then you must understand this form is generated from data. How long of a period is this P/L covering (typically a month, quarter, or year.) Does this data incorporate ALL annual expenses? 

IE; If you are looking at a P/L for last August, but annual property taxes are due November, you are not getting a good "monthly" snapshot.

If this is due diligence, you will also want to verify the data being placed into revenue and expense. Some examples are;

-County website for actual prop tax bills

-Tenant estoppels

-Actual utility bills

-Bank statements and tax records

-Verify insurance premiums with your carrier

Some say "Trust, but verify," I say "Trust that someone selling you something will only show you what you want to see.......So verify."

Cheers!

Welcome to the community! Im right next door in Marin county. Best of luck to you, feel free to reach out any time. 

Cheers!