All Forum Posts by: Matt Kowske

Thought I would try reposting this in a more visible forum... 

Is it possible to take advantage of the government guaranteed 30 year low interest loan while still utilizing a partnership in some degree? Would it be legal to purchase a rental property under my own name to ensure a government loan at fixed rate and then write up a contract with a partner in which they agree to pay me a fixed amount each month (1/2 the mortgage payment) and I agree to distribute half the equity profit on sale to them? Obviously there would be more conditions... has anyone done something like this? Is it possible and/or legal? Thanks!

Is it possible to take advantage of the government guaranteed 30 year low interest loan while still utilizing a partnership in some degree? Would it be legal to purchase a rental property under my own name to ensure a government loan at fixed rate and then write up a contract with a partner in which they agree to pay me a fixed amount each month (1/2 the mortgage payment) and I agree to distribute half the equity profit on sale to them? Obviously there would be more conditions... has anyone done something like this? Is it possible and/or legal? Thanks!

I'd like to know more about that too. 

Also, is it okay to show the apartment for awhile and collect applications and then process them all at once? Say you show the apartment for a week and take applications and then process them all instead of doing it as they come in. If there are 3 applications that all qualify after that do I have to accept the first person I showed it to? Do I send an acceptance letter to all 3 and whoever puts down the security deposit first? 

We're in the process of having to find our first tenant for a vacant apartment. I have read the Ultimate Screening Guide and written a basic set of screening requirements but still have some questions that hoping someone could help answer (maybe before I have to hire an attorney). 

1) On the tenant resource center page (http://www.tenantresourcecenter.org/discrimination) I found what seems to say that "unemployment" is a protected class in the city of Madison: 

Madison includes all extra classes in Dane County plus:

• Citizenship Status (City of Madison only)
• Genetic Identity (City of Madison only)
• the fact that a person declines to disclose their social security number
• Atheism
• Homelessness
• Unemployment

That seems a little odd to me. I can screen based on income requirements but not whether someone is employed? Does the income requirements set then supersede any unemployment protected class? Meaning, I cannot deny an applicant if they DO meet the income requirements simply because they are unemployed (maybe the receive disability or other income).

2) For Dane county specifically they list these additional protected classes:

Dane County includes all federal and state protections, plus the following:

• Physical Condition, Mental Illness, and Handicap
• Type of Military Discharge
• Physical Appearance
• Gender Identity (includes transgender)
• Domestic Partnership Status
• Political Beliefs
• Student Status
• Receipt of Rental Assistance (such as Section 8)

So, you cannot deny an applicant if they look messy ... I get that, but what about personality? If someone is aggressive and argumentative is it okay to put "agreeable temperament" or "friendly attitude" on your screening requirements?

3) Are there any laws concerning the scenario where you have two applications that both meet your requirements? How do I choose which to go with? Is it up to me or are there laws concerning this (first come, first serve) ?

Thanks!

Are there any realtors on BP in the Spokane area? We're interested in investing there (small multi-famiily) and would like to talk to someone local. Thanks!

@Jose Ramos for #1)... I understand how to read financial statements and it is more than just the P&L, however doesn't Buildium exclude these capital expenditures when calculating owner distributions? If you do enough capital improvements won't you end up distributing cash to owners that doesn't exist (has been spent on improvements) ? I'm talking about the "Available" calculation on the property summary screen. In fact, I can't figure out how this number is calculated.

I need to have accurate books on my side or it would drive me nuts... I guess the most logical thing is to classify them all as expenses until I get my taxes back and then move them to the appropriate Asset accounts and accumulated amortization at year end.

 I see, so you are saying that you categorize them as expenses, keep track of them in a separate spreadsheet and just let your accountant deal with it at tax time? Or are you saying you recategorize at year end?

Looking for what others are doing here. I'm having a really tough time doing my accounting a way that isn't totally confusing and sucks up half a day at the end of the month. I use Buildium and LOVE it for the property management features, but am having trouble with the accounting.

1) When doing renovations/upgrades, like a kitchen remodel, I understand this is a  Capital Improvement and should be balanced against an an Asset account. Things like repairing a broken light fixture is a Repair, under the Expenses tree. Now the problem with this is when you run a P&L statement (or when Buildium calculates the amount of cash a property has to distribute to owners), it does not consider these Capital Improvements because they are assets, not expenses. This is a problem because the money WAS spent. It went out of the checking account so this calculation then on what is left is incorrect. How do folks work around this? Are you to run a P&L, then general ledger all the Capital Improvements for the same time period and manually add those to the expenses? 

2) Buildium is clearly designed to be used by a PM company, assuming the mortgages and financial assets of the owner is completely separate. If I were to do this, and a kitchen remodel was done like I mentioned and categorized as a Capital/Building Improvement I don't see how that transaction would be entered because the financials for the property are totally separate from the PM. Does that mean the owner would take care of the expenses for the capital improvements so it can go on their books instead? If a PM company did a kitchen remodel for an owner I don't see how the accounting could work.

I'm starting to ramble, sorry. Bottom line is I like to do my own accounting and I like to use Buildium, but I'm finding it hard to use it for both and even more difficult to have separate systems for both. How do you all do it?

I don't think it is illegal in WI, as the law reads like this:

(3)Utility charges. If charges for water, heat or electricity are not included in the rent, the landlord shall disclose this fact to the tenant before entering into a rental agreement or accepting any earnest money or security deposit from the prospective tenant. If individual dwelling units and common areas are not separately metered, and if the charges are not included in the rent, the landlord shall disclose the basis on which charges for utility services will be allocated among individual dwelling units.

Even so, I would still like to divide it up more fairly somehow. Charging per head is a thought I had, but I have a feeling that the tenants are already not 100% honest about occupancy and this would make that problem worse. It might be the best option even so.

I'm going to some more analysis on what on the value increase vs cost for installation of sub-metering, but my back of the napkin calculations a couple months ago didn't make sense to do it. Thanks for all the feedback it is very helpful.