All Forum Posts by: Mil Sanghvi

 What transition steps have you taken in the past? Which ones have worked?

I will send out letter to tenants informing them of management change and upgrades to take place. I will also have to train them to create an account online and pay rent online instead of mailing checks like they currently do. I don't know the process. 

Any help will be much appreciated Steve.

@Philip Bashaw You are addicted to BP!!! Then again, being addicted to success is a good thing. Let's get some lunch. 

Hi BP,

I JUST BOUGHT A 10 UNIT APARTMENT BUILDING!! NOW WHAT DO I DO TO TRANSITION??

I am closing on my biggest property yet (10 units) on October 15th. I am uncertain as to the exact steps to follow when you transition. My LLC will own the property and another of my LLC will manage the property. It cash flows well with the numbers below. Expenses are verified. 6 of 10 units are on section 8 with long term tenants and is 100% occupied. I only accept direct deposit, pay online or pay through pay pal. No mailed check or pick ups.

Purchase price 300k and owner is giving 20k towards upgrades/repairs etc Plan is to install surveillance cameras, lights, paint doors and shutters, 2 water heaters and new signage and minor fixes etc. Pocket the rest ;) :P

What are the steps to follow to transition into new management.

What should I expect from the tenants?

Are my numbers realistic?

Step by step guide would be very helpful.

What do you wish you would have known when you were in my place?

Property Management software recommendations? I'll have 15 units total.

.................................................Monthly         Annual          % of Income

Gross Income                          5250               63000           100

Vacancy 5%                            262.50            3150             5

Gross Scheduled Income        4987.50          59850          95

Expenses

Property Taxes                         275                3300              5

Property Insurance                  275                3300              5

Electricity                                 150                1800              2.85

Water                                       150                1800              2.85

Waste Management                100                1200              1.9

Lawn Care                               250                3000              4.76

Repairs/Maintenance              250                3000              4.76

Property Software                   200                2400              3.8

Property Management            262.50           3150              5

Total Expenses                      1862.50        22350            35.5%

NOI                                         3125              37500            64.5%

Debt Service                         1466              17596            27.9%

Cash Flow Before Taxes      1659              19904            31.59%

Debt Service Ratio 2.13, Cash on Cash return 26.5%

At 10% cap the property is worth 375k

Thank you in advance.        

Hi BP,

I JUST BOUGHT A 10 UNIT APARTMENT BUILDING!! NOW WHAT DO I DO TO TRANSITION??

I am closing on my biggest property yet (10 units) on October 15th. I am uncertain as to the exact steps to follow when you transition. My LLC will own the property and another of my LLC will manage the property. It cash flows well with the numbers below. Expenses are verified. 6 of 10 units are on section 8 with long term tenants and is 100% occupied. I only accept direct deposit, pay online or pay through pay pal. No mailed check or pick ups.

Purchase price 300k and owner is giving 20k towards upgrades/repairs etc  Plan is to install surveillance cameras, lights, paint doors and shutters, 2 water heaters and new signage and minor fixes etc. Pocket the rest ;) :P

What are the steps to follow to transition into new management.

What should I expect from the tenants?

Are my numbers realistic?

Step by step guide would be very helpful.

What do you wish you would have known when you were in my place?

Property Management software recommendations? I'll have 15 units total. 

.................................................Monthly               Annual             % of Income

Gross Income                           5250                   63000               100

Vacancy 5%                             262.50                3150                  5

Gross Scheduled Income         4987.50              59850                95

Expenses

Property Taxes                          275                     3300                  5  

Property Insurance                   275                     3300                  5

Electricity                                  150                     1800                  2.85

Water                                        150                     1800                  2.85

Waste Management                 100                      1200                 1.9

Lawn Care                                250                      3000                 4.76

Repairs/Maintenance               250                      3000                 4.76

Property Software                    200                      2400                 3.8

Property Management             262.50                 3150                 5

Total Expenses                       1862.50              22350               35.5%

NOI                                          3125                    37500               64.5%

Debt Service                          1466                    17596               27.9%

Cash Flow Before Taxes       1659                    19904               31.59%

Debt Service Ratio    2.13,        Cash on Cash return 26.5%    

At 10% cap the property is worth 375k

Thank you in advance.

Where can I go on BP to purchase this book? Can someone post a link?

Mil 

@Jeff Gates

Step 1. Pre qualify over the phone. Tell me about yourself, your credit, your income. Why and when do you want to move? Price range? Pets? etc.

Step 2. Have them text or email a copy of there picture id. If they complain, the do not qualify.

Step 3. Have a lock box on vacant units so you can give them the code to enter the unit. This will save you a bunch of time if you are not local.

Step 4. They fill out application and PayPal or deposit $35 app fee. You do credit check, call landlords, verify income, call their references etc. 

Step 5. Always sign a lease in person. Make it clear that you will file for an eviction the first day they are late and any other lease violation.

**For non local property managers, install cameras on all your properties so you can keep an key on the property and also provide security for your tenants ;)

I have a few properties in Phenix City, AL and Columbus, GA. Based on the information I'm willing to bet the properties are in south Phenix City which is an area I would stay away from. 

Rent: $500 x 8 units = $48,000 a year

35% expenses and a 12% cap rate gives you 260K. If you're paying 180k, that doesn't leave you much room to rehab 8 units. 

Let me know how things work out.

@James Wise You're wasting your time if you are going to the AM seminar with the mindset of an undercover operation. If you actually want to learn, to go one of the Rich Dad Education's free seminar's and sign up for the 3 day training for 299. That's only 150 a person and DO NOT sign up for anything else. People spend that much over a couple of dinner and drinks. 

Read books, Network, ask questions and dive right in. You'll be ok.

Deborah, 

I am a US citizen living in US. (Atlanta, Georgia) The plan is to partner with a foreign national living in India to invest in US real estate. LLC, EIN and Bank Account is not a problem in my name since I'm a citizen. Will i have any issues getting the above working with foreign partner?

Any lawyer and accountant recommendations who specialize in real estate with foreign nationals?

-Mil 

I appreciate your input and would like to speak with the lawyer more in detail.  I have heard about a lot of Chinese, Japanese and Middle eastern foreign nationals investing in US real estate. I know it can be done.