All Forum Posts by: Nick Baldo
Nick Baldo has started 0 posts and replied 73 times.
Post: Investment Property Tracking

- Investor
- Buffalo, NY
- Posts 74
- Votes 72
Hi @Account Closed,
Two industry standards are AppFolio and Buidlium. Both are extremely useful for tracking units, tenants and their associated documentation. A Web based solution is great because it allows you to access your data from anywhere. For your 36 units, it looks like AppFolio would be the most cost effective. I would suggest starting a demo of each to see what fits your needs best.
Personally, I use Podio. Podio is a fully customizable database application that allows you to build your owner workspace and relationships between records. The main reason I use Podio is because of the fact that its completely customizable. I can set it up exactly how I want it. In addition, I can use Podio for other aspects of my business. I use it to track my rehab business and connect that information with my rental business.
For the average Property Management business, the first two suggestions are most likely your best bet. Anyone have specific personal experience from AppFolio and/or Buildium?
I would find it unlikely that the institution with whom you are refinancing would allow the 2nd position lien to stay on record. If it is a conventional bank, they would almost certainly require that the 2nd lien be discharged before financing the deal. If they were to refinance and let the 2nd lien stay in tact, the 2nd lien would go to 1st position and the new lien would be in second position. The refinanced lien would be as of the date it is actually recorded.
Post: All cash or financing?!?

- Investor
- Buffalo, NY
- Posts 74
- Votes 72
Continuing to utilize financing will allow you to grow your business at a more rapid pace. The cash that you could use to purchase a property out-right, could potentially be applied as a down payment on several properties.
Also, adding financing to your rental analysis forces you to buy better deals. When you buy with cash, you don't need the property to carry your debt service. This could lead you to "settle" for worse performing deals. If you can get your deals to cashflow with debt service, they will be that much better once your loans are paid off.
As you're relatively young, its okay to utilize leverage. As you get older, you will pay off these loans and become more liquid.
Let me know if you would like to discuss further...I'm local to Rochester!
Post: Private Financing for an Apartment Complex

- Investor
- Buffalo, NY
- Posts 74
- Votes 72
I would recommend checking out http://www.themichaelblank.com/. Michael has been on the podcast and is a regular contributor to BP (profile: https://www.biggerpockets.com/users/MichaelBlank/). His expertise is doing exactly what you are asking about. He has a lot of free resources available to help you wrap your head around how you can bring value to an apartment deal.
Post: Pros & Cons: Flipping vs Renting

- Investor
- Buffalo, NY
- Posts 74
- Votes 72
Hi @Taylor Pariseau,
Great question! I have experience with both flipping and rental properties. They each certainly have their pros and cons and are dependent on many variables. Here is my opinion below;
- What are your Pros and Cons of each?
- Flipping
- Pros
- Larger short term profit/ cashflow
- Potential for no money down deals (with private lending)
- If you have a bad deal, you can get out and move on.
- Cons
- You are always dependent on your next deal (No consistent/ reliable stream of income)
- Much more difficult to find good deals
- Certainly not "passive". Managing rehab projects is very complex.
- Higher risk
- Requires creative and high cost financing.
- Pros
- Rental Properties
- Pros
- Long term, potentially passive income
- Reliable source of income
- Easier to find good deals
- More resources available. Certainly the more popular strategy
- Easier to find conventional financing (The deals are safer for banks)
- Cons
- Can take awhile to build up the cashflow to sustain itself
- Typically requires some form of personal cash contribution
- Pros
- Does your answer change based on locale? - Yes! Our business began with a focus on flipping properties in the Buffalo, NY area. While we had success, it was difficult to establish a consistent flow of deals with high profit potential. In markets where the median selling price is relatively low, there is generally a smaller window for flipping profit. On the contrary, these markets are usually attractive for rental properties as they have lower barriers to entry. Our location caused us to shift our focus from flipping to building a portfolio of long-term rental properties.
- If you are 100% on one side of this, please provide your personal reasons! - We still do both! We use the rental business as the bedrock of the business; slowly and steadily increasing our portfolio. We treat flips as supplemental or "bonus" income. Still love both...but rentals are the focus.
- If you have successfully done both, please provide some examples of what you liked and didn't like! Love the predictability of rental incomes. Flips are great when you hit a nice profit. However, listing a flip for sale can be extremely stressful. You are paying high interest to your private lender with no guarantee that you will break even. Rentals are nice because they allow us to establish a relationship with conventional banks. This serves our goals of long term portfolio growth.
Quick responses...but let me know if you would like me to elaborate in any areas!
Post: Utilities and property management payments for rental property

- Investor
- Buffalo, NY
- Posts 74
- Votes 72
You should have a stand-alone bank account for all business related transactions. As for the utilities, typically online/ automatic payments are free. This is your best solution to get rid of the fees. Not exactly sure about where to open the account. I think you could open where you live for convenience...but not positive.
For your property manager, this depends on their payment methods/ terms. The simplest way is to send a check every time you get an invoice. If the manager is more advanced, they will have an option for you to pay online. There are several cheap/ free ways to arrange online payments...I would push them to offer this.
Feel free to reply with more specific questions.
Post: using the rental calculator

- Investor
- Buffalo, NY
- Posts 74
- Votes 72
These are allow assumptions. Each investor will differ as to what they would want to see with these figures. You don't know what these numbers will actually be, so you need to take a conservative guess to ensure your end-buyer that the deal is sound. If I were your cash buyer, here is what I would want to see:
Cap Rate - 10% or higher. This is very market-specific. Some markets demand higher cap rates than others. If I were looking at a deal in the suburbs of Buffalo, NY, I wouldn't look at anything lower than this. You need to do some research here. Each market (and sub-market for that matter) has its own market acceptable cap rate. The Cap Rate is defined as the Annual Rate of Return at which investors are willing to deploy capital. It is calculated by dividing the Annual Net Operating Income (NOI) by the purchase price. I would get in touch with some solid commercial real estate agents in your area to find out what cap rates investors are striving for. Investors who are purchasing with financing (which is most), would probably desire a higher cap rate than those buying with cash (Debt Service eats into cash flow)
Vacancy Rate - 5% of total rent. This is an industry standard assumption.
Repair and Maintenance - 5% of total rent. Again, in my experience, this is an industry standard assumption
Cap EX - 3%-5% of total rent. This depends on the condition of the property. A brand new property with new mechanicals and a new roof will require less capital improvements than a 100 year-old building. Use your judgement based on the condition of the property
Income Increase - As an end buyer, I would want to see this at 0. I am assuming I will gradually be able to increase my revenue. However, as you will see with the next point, expenses will gradually increase as well. If I'm looking at an investment, I stay conservative and assume rents will remain the same forever. If the deal is still good, eventual income increases will only serve me better in the future
Expense Increase - Same as above. Both these numbers will change...but at the time of purchase I assume they stay the same. Investors may differ on this one. If you think there are specific reasons why income/ expenses will change...put something in here.
Hope this helps. Let me know if you have any other questions !
Alfredo,
Insurance for flips can be a bit difficult to find. This is mostly due to the fact that the home will be vacant and undergoing construction. These homes are seen as a greater risk. That being said, there are certainly several carriers that offer the insurance. You just need to shop around.
I recommend contacting an independent insurance broker in your area. Explain the situation and be prepared with key facts about the house: Sqft, status of electric, heating system, roof, age, etc. Be completely transparent. There is no point to getting an insurance policy if you knowingly lied to get the coverage.
You will pay an annual insurance premium. You can pay the whole year up front, or choose a payment option to break it into 4-10 payments (small fees apply). Just keep in mind that if you are getting private financing for the deal, your lender may require you to pay insurance for the year in full. Once you sell the house, notify your insurance agent. He/ She will help you to cancel the policy. You will be reimbursed with the % of annual premium that you did not use.
Hope that helps! Let me know if you have any specific questions!
Post: Buying property without RE agent

- Investor
- Buffalo, NY
- Posts 74
- Votes 72
Chris,
Completely legitimate question! To your first question: Probably Yes - Properties that show up on Zillow/ Loopnet are almost all listed on the MLS. Zillow aggregates data from the MLS to show a comprehensive view. However, there is an option for a home owner to list his/ her home as a "For Sale by Owner" (FSBO). I do not think there is a way to do this on loopnet.
To your second question: No! - You do not need to be represented by a real estate agent to purchase property. In fact, the seller's agent would almost prefer that you not have your own agent so that they could take the entire commission (~6%) and not split with another agent. That being said, it also wouldn't hurt to seek the service of an agent to represent you when buying. Especially on your first deal, it would help to have guidance as to how to structure the deal, how to perform the inspection, etc. Once you have a deal or two under your belt, you can enter a deal with more confidence without an agent.
Hope that helps. Please let me know if you would like more detail!
Post: Focused on Freedom

- Investor
- Buffalo, NY
- Posts 74
- Votes 72
Welcome to BP Reuben! It's never too late to get started