All Forum Posts by: Kelly Byrd

Things are moving along fine, we should close in a few weeks. Regarding forgetting stuff, I've got notes in Evernote for "here are all the things to make sure you don't forget" it seems like I add to it every week.

Think about would you do with the results of a credit check. If it comes out below 700, what would you do?  What about 600? 500? If your answer is the same regardless, doing the credit check may be a waste of time of and money. 

Here is where I ended up. I decided to just build what I want for now from spreadsheets, getting a feel for what I actually want the data to tell me. We're only dealing with a single property right now, and have a  property manager for it, so I really only need the financials not a PM software. I'm sure I'll outgrow this, but by then I'll at least know what it is that I want.

Congratulations to you!

Before our offer, we did little on the property itself. We took a look at the neighborhood, crime data, average rents, Google street view, and the pro forma from the seller, which I then turned into a "worst case" set of numbers I believed in. Based on that, we made the offer.

Since then, we have asked for things like this:

- Current rent roll

- Last twelve months of income and expenses (sometimes called a trailing 12 or T12)

- Bills to match against the T12

- Last two years of IRS Schedule E for this property.

- Evidence of property taxes being paid (the county website will tell you this)

- Leases, tenant application info

- Home/Building inspection

- Appraisal

- Bank statements

I'm very new at this, but from what I have read, the idea is that few owners will have every document, and you don't actually need everything because some documents have duplicate info. What I am trying to do is look at all the expenses, income, and security deposits and then trace it back to an actual bank deposit or bill. We ended up asking for explanations for several categories on the T12 in an effort to figure out what was an improvement vs what is likely to be recurring expenses, then I re-ran my spreadsheet with those numbers to make sure we still wanted to purchase. For the leases and tenant info, I wanted to know who I was inheriting and verify actual rents being paid in the T12 vs the lease.

I'm sure I missed something we asked for, or missed something altogether. Hopefully others will chime in with better info.

Thanks @Amy Atkinson, we've analyzed several places in the last few months, and I even managed to go to a REIA meeting and met @Pete Krentz in person. We're under contract on a multifamily now, hopefully everything gets sorted out and we can close on it, then move on to the next!

@Dan Schwartz: Thanks for the feedback. So one reason I'm steering away from the desktop version is that I'm on a Mac. From what I understand (and given my experience with Quicken for Mac) the Quickbooks for Mac is less functional than the Windows version. I could run the Windows version in a VM, or start converting my life away from OSX, but I don't see Quickbooks being the driving factor for that.

So you're saying I could treat: "Personal" as a company and "RE business" as a company. in Quickbooks desktop. Will QBO not let me do that? What about some of the other online offerings? What about Quickbooks for Mac?

I'm looking at this for just tax prep, I've always been a "collect all the data you can, it'll be useful later" kind of person. Using just the PMs owner portal (AppFolio), I wouldn't have a complete picture of the overall business. It wouldn't even be a complete picture for the property, things like property taxes, closing costs, financing costs, etc.

Not sure if this is the right forum for this, please move the thread if it belongs somewhere else.

I'm very computer literate and I'm comfortable putting in the time and learning new programs. I've been a Quicken user for personal finances since around 1999. I love spreadsheets. With all that said, I'm not familiar with the lingo and features of accounting software like Quickbooks, Xero, FreshBooks, etc.

I'm going to be investing in single and multi-family real estate out of state. We'll be using a property management company. They use AppFolio, and I'll be able to log into their portal anytime. But I still have real estate business expenses I want to track, and I want to track each property myself. My thinking is that if I have all the data myself, I can analyze it however I want later.

I don't need software to actually manage the properties, but I do want something to track expenses and income for each property individually as well as overhead expenses for the whole business.

Is QuickBooks or similar the right tool for this? I'm leaning towards an online tool but without know knowing the lingo of accounting software it is difficult to determine which "level" of QBO or Xero or similar I would need.

Finally, would it be possible to run my personal finances with the same tool? For the personal side, I need transaction download for personal banking, credit cards, equity investments, and similar. It would be very valuable to me if I could reconcile my personal accounts and run my fledgling RE business in the same workflow.

@Andrew Johnson: Great minds think alike! Part of my motivation for asking this questions was that I was weighing raising the limits to 2MM/4MM rather than adding a commercial umbrella and I wanted to understand what each would cover. For my situation, this LLC would have only this property, no employees, no other assets.

Agree about the nationals vs the regional. I'm talking to a few regional folks now.

I'm under contract on a 12-unit multifamily building and looking at insurance options. One thing that isn't clear to me is what types of policies cover various situations. I think I understand the basics of personal home, auto, landlord, umbrella. But when I contacted the folks that sold me those policies they would not write a landlord or umbrella policy for anything more than six units. 

So, I'm now talking to some insurance brokers and agents and I'm looking to BiggerPockets to help educate me on the options, learn the correct terms,  and so I can make an intelligent decision. Here is my current understanding, please correct me if I'm wrong

- Commercial Landlord Insurance.  I think of this as similar to a personal homeowners policy in that it covers the building(s) on this specific property as well as some liability for things related to the operation of the property, like someone suing for an incident on the property. From what I gather, I should be looking at all-risk, replacement cost, and business-interruption coverage. How is this different from Landlord insurance for 1-4 unit properties?

- Umbrella insurance. I've been told that my personal insurance carrier would not add this 12-unit to an personal umbrella insurance, so apparently I need to look at commercial umbrella insurance?  Is this actually different than personal umbrella or is it just that some insurance companies choose not to write umbrella policies for folks with more than 6 units?

So, would someone explain how all these layers fit together? Let's say the 12-unit is held in an LLC and that there is commercial landlord insurance on the property, with $1M per-incident of liability coverage. Do I then add a commercial umbrella policy with the LLC named as the insured? Or do I that umbrella policy with my wife and I as the insured? Would that umbrella provide additional liability coverage for events related to the property as well as general liability not related to the property or LLC?