All Forum Posts by: Mark Gruetzmacher

Hello everyone, I am trying to decide on what accounts I should set up to keep track of the rentals. I have used a program called GNUCASH, for many year for my other business but that was very basic, just income, and a couple expenses. Now with rentals, that is a whole different story. Attached above is screen shot of what categories I have now. Right now I am in the process of rehabbing to get it rental ready so everything I have in repairs is all that. I am wondering if I should separate the repairs out further. Also wondering if they should be separated out so they coincide with the IRS. I am trying to use GNUCASH because I have it but have thought about getting quickbooks as well. I do have SFR and some mobile homes both as rentals if it matters.

Do you put the cost you purchased the rental for in the assets as well or just leave it out.  I don't have a CPA yet either as I have always done my own taxes online because it is pretty straight forward.  I might have to check into a CPA for this tax season.  I am still not sure what I can include in the basis and what has to be depreciated out as well.  I talked to a local guy and he said anything over $100 per should be depreciated out on a per type of item basis.  For example  carpet, drywall, windows, doors, etc.  

If you have any suggestions or comments please post them.  I am open to hear all the great knowledge everyone has. 

I too am using GNUCASH.  I am a little confused on how exactly it should be set up for buy and hold rentals.  What categories, where to put stuff etc.  I have mine setup and have tons of receipts entered for all the repair I am doing to get the place able to rent.  I have them all in the expenses under each rental but wonder if there is a better way I should be doing things.  @Carlos O. have you come across any youtube videos or pages that how things should be setup?

@Account Closed From my understand you take the yearly income, minus expenses or up to 40% of income for expenses and then you divide that by the cap rate for the area. I think in the 10-12% from what I have read from others on this topic. So in your case if the NOI is 400K, with a 12% Cap rate your numbers are looking like 400K/.12=$3,333,333.33.

@Jamaal Jaynes 

 Here is another thread going pertaining to selling on contract or payments.  Good info in that thread.  Check it out.

http://www.biggerpockets.com/forums/30/topics/163663-how-do-i-sell-a-mobile-home-via-rent-to-own-and-remain-compliant-with-dodd-frank

@Jamaal Jaynes In regards to the doublewide for 23K. Since it is in a park, I would talk to the to make sure it can stay there and find out how much the lot rent in for it to stay in the park.  Lot rents vary all over the board depending on your market.  Ranges usually between the $200 to $600 range.  I would ask the year of the doublewide as well.  If it is somewhat newer (90's-2000's) year then the price might sound good.  Cost to move something like that will be expensive if you had to ever move it.  Check out the floors around the outside walls and windows for soft spots which are usually common for mobile homes.  

Purchasing is another thing. Do you have all cash for the purchase? If not you might be hard pressed to find a lender that wants to lend on mobile homes. Most lenders don't or most don't like to. Usually what you will find is if it is a newer mobile home less that 15yrs old you might find a local lender that will lend but the rates are going to be a lot higher than conventional house loans. Maybe something like 10-15%. So with that said if this is for yourself, I would look at something else where you can get a conventional 30yr loan on. SFR, duplexes, tri's and quad's.

Along with purchasing, selling is also another issues.  You might have to have a cash buyer if lending is not available. Since the new laws and regulations for Dodd Frank and the Safe act you can not do seller financing like you could before the laws.  So selling might be a little tough as well.

I am newer too but I hope this info has helped and gave you some more food for thought.  Take care and Happy Holidays.

@Brian Rossiter I am in the process of stripping the interior of the basement now.  It needs to be redone.  Then I will be able to see what there is.  None of the actual interior walls will be taken out because I believe a lot of them are structure walls.  There are no Beams under the existing frame which would have been the ideal way to do it with pockets in the exterior wall for the beams.  They have metal jacks and walls holding up the 2 inner frames.  The outer plate sits on the concrete wall but outer frame (which is 3 ft from the outside wall) is only supported by interior walls running perpendicular and even at that they are not build the way I would build them to hold weight.  Once all the drywall is out of the basement and I can see what there is I plan to get in touch with @Collin Goodwin . 

The previous owners had a VA loan because the VA is who owned it when I bought it as a foreclosure. You would have thought that is would of passed some sort of VA inspection but you never really know for sure. I also checked with the city and they don't have any records on fine back in 99 when it was put on the basement.

I plan to check with the city to see if they have anything on file. But sometimes they are as much help as a box of rocks.  So we will see.  The home is a 99 and was put on the basement I assume right way when it was new.  Looking at it, I think it needs more support but plan to get some opinions.

@Travis West Awesome post, thanks.  I know everyone says that you need to find the source of water so the mold doesn't come back.  I believe there are a lot of drainage issues with the foundation, like ground sloping toward the house, missing down spouts , etc.  It was vacant at the time and we also got 3-4 inches of rain in a day.  And combined with no power the sump pump never pumped out the water.  No one knows for sure what happened exactly.

There is no doubt that the plan is to remove all of the floor coverings, walls, studs, boards, doors, etc down stairs that have any sign of mold on them which is a lot.   The good thing is that there is a vapor barrier on the underside of the upper floor which is the double wide itself.  I don't plan to just kill it, removal is planned also. 

Like everyone has said, it depends on what your market is.  Are you wanting to actually fix them then sell or just try to sell with out fixing.  I think the most profit is from fixing them and then flipping if that is what you want to do.  Sometimes you can get some screaming deal on ones that need some work.  No one mentioned years but I would stay away from anything older than 1976.  Again depending on your market ideally something in the late 90 and above are so much better than the stuff in the 80's.  But if you are fixing and depending on the extent, some older ones looks better than the newer ones.  My market prices are high so I try to stay in the late 80-90's. 

You will also have to watch the lot rents as well.  They vary a lot by market.  Seems prices vary from around the $150-600 per month for lot rents.  My market they are just over the $200 mark.  There is money to be made just like in other aspects of real estate as well.  

Another thing to consider is how your state does the titles.  Here they are just like cars.  I do believe though that depending on your state, some states cap the amount of transactions allow per year.  If you do over X amount then you will have to have a dealers license.  Something to check into.

@Dave Antonelli Is that cabin by Terry Peak in Lead/Deadwood area?  Just was curious.  I ski there some times and only 35 mins away.