All Forum Posts by: Mil Sanghvi

@James Holland The tenants who currently pay via paypal do it by selecting "friends and family" so it does not charge me transaction fees. Otherwise i believe it's 2.75% and I refuse to pay those bs fees. I will have to give my account number for bank wire.

@Matt Devincenzo 

Western Union idea sounds good. Another option is PayLease. Tenant pays the bills at Walmart. I'll research both of them.

Thanks,

Mil

Is there a way for the tenants to pay rent at a store?

A couple of my tenants don't have computers and can't pay online. I will not go to the property and physically collect rent and really don't prefer mailed checks or money orders. 

These are the ways I currently accept rent payments.

1. Government pays for military tenants

2. PayPal (friends and family so it's free)

3. Online on the website (Buildium)

I can tell them to deposit at the bank but don't want to give them the account number.

I've heard of "Pay Near Me" Tenants can make cash payments at 7 Eleven and Family Dollar. I don't have 7 Eleven in Phenix City AL or Columbus GA. Family Dollar may not accept rent payments specifically.

Are there any other options?

@Mike R. Follow the steps below for peace of mind.

1. Install security cameras! Now you have proof.

2. Issue a lease violation for pets. If the problem is solved, then keep the tenant otherwise evict them and keep the deposit. Based on the current lease you can send the remaining balance, court costs etc to collections. Better way would be to pay a $200 and ask her to leave.

Anytime you take over a property the two things you have to do is install security cameras and get the inherited tenants to sign your lease. Cameras have nothing to do with the class of tenants or property and everything to do with evidence and collecting proof just in case.

Obviously you tell them it's for their security and safety. lol

It seems like you're being soft on them. I look for 4 qualities in a tenant. All 4 have to be present for them to stay.

1. Pay me on time no matter what

2. Take care of the property

3. Be a good neighbor 

4. Be easy to work with. 

@warren 

@Warren Spahn The property is located in Phenix City, AL

@Doug N. The property consists of 1 4plex and 3 duplexes plus a lot. The plan is to use the 20k that a seller is giving for future capex plus building a reserve. The software is more than just excel. Potential tenants can apply, sign leases, get automated emails, submit maintenance requests etc. It reduces a lot of administrative work. 

@Tom Lafferty I decided to go with Buildium at $40/month up to 40 units which was way better than AppFolio's $200/month plus $400 one time set up fee. However I did include $200/month in the expenses. 

@Denise Evans

I have the following documents.

Application

Information Release From (for landlord verification)

Lease Agreement

Rules and Regulations

Mold Addendum

Military Clause

Lien Waiver

Lease Termination

Below are the documents I need to create.

Statement of charges

Estoppel Letter

Change of Management Letter

Rent Increase Letter

Inspection Forms

Repair Request Forms

Vendor Sign Off Forms

I wish there was some way I can download these in word so I can modify them to my needs. Any other documents I would need from the property management point of view?

@Denise Evans  The insurance and tax information is exact from the owner. I am in the process of getting quotes which I expect to be similar. I'm managing the property myself and I still wanted to put a number. Typical rate in the area is 9 cap.

$25 incentive to resign the lease is a great idea. I'm not doing a 1031 on this one. I thought the estoppel letter was from HOA. Why should I get it from the tenants?

@Brandon Hall Building systems is my number one focus!

Property Management: I am debating going with either Buildium or Appfolio software. The tenants will be able to apply, sign leases, pay rent, submit repair request etc online. My as needed handyman will also have access to it repair requests, submit pictures and track completed ones. Appfolio is feature heavy and has everything I want in the software however at $400 set up and $200/month for only 12 units seems expensive. Buildium is only $40/month but doesn't have a lot of the features and limits on pictures etc. 

Accounting: My CPA would also have access to the software with Appfolio for reporting etc..

Document Tracking: I will have to create transitional documents that are rarely used or get them from somewhere and upload it into Appfolio. 

Evictions: State of Alabama requires you to hire an attorney for all evictions if the property is held under an LLC. Very expensive plus it's a 45 day process vs a 10 day process in GA.

Side Note: Doing all of this from 2 hours away from the property and having a full time job is very challenging but I know I have to get better. Only way is to learn and build systems.

@Wade Sikkink

Section 8 checks will be direct deposited into the accounts. Other tenants currently mail them to the owner. Everyone has bank accounts

@Mario Alexandrou  Congrats on your 8 plex. The bank valued them at 350k which is a lot lower than expected but they are using a combination of price/sq ft, replacement cost, and income approach. That's why it comes out lower.

How are you managing your units? I'm worried about the transition because I also have a full time job.

@Neal Collins It has come down to either Buildium or Appfolio. I personally prefer appfolio for its features and ease of use. The only con is its price at $200/month and $400 set up fee. At 12 units, that a lot per unit.

Buildium is $40/ month for upto 40 units but it's not feature rich. Which one do you have?

@Rick Pozos 9 out of the 10 tenants pay their own utilities. Owner only pays utilities for one tenant in exchange for a much higher fixed rent. Taxes and insurance in the area run about 1% each of the purchase price. I numbers are exact. I would say they are in a B-/C+ area.

Any steps on transition and getting my lease signed with the take over? Getting them trained to pay online instead of mailing checks?

@Michael Le Thank you.

I believe it is a C+ property with rent raise potential by 50/unit per month. The property is older but the current owner has taken really good care of it. The 20k the seller is contributing towards repairs/upgrades will be used for immediate repairs (replacing 2-3 water heaters, 3 hvac outside units etc) and sprucing up the property (CCTV, Lights etc). 

50% of year 1 cash flow may also be put towards capex. 

What's more realistic? 

What transition steps have you taken when acquiring a property? Which ones worked?

Exit Strategy

1. Buy and hold forever

2. Increase NOI and sell it at 10 cap

3. Sell 2 duplexes (4 units) at 90k a piece and almost pay off the debt and hold 6 units.