All Forum Posts by: Brian H.

@Linda Weygant

Thank you so much for that information.  For all those smaller expenses... do you set up separate expense accounts in the chart of accounts or just like a Misc. Expenses or something like that?

Bump to try and get a more clear answer to the last post above mine.

When people are setting aside say (THESE ARE HYPOTHETICAL):

10% for CapEx

5% for Repairs and Maintenance

5% for Vacancy

Do you create a savings account for each of these? 

Or just put it all in one savings account and then just split it up in QuickBooks so you know what is what? 

Or can it all just stay in the business checking and then just be organized in QuickBooks per reserve accounts created in the Chart of Accounts? 

I am just getting started with QuickBooks for my new rentals and this piece is confusing me quite a bit.  

Even more confused as to how we can not have that count as income... it went through my QuickBooks system as payments that were then received and deposited and now have been recorded in my "Rents Received" income account... 

Should I be doing something to splice off pieces for Cap Ex, Maintenance, Vacancy before doing all that?

I am setting up QuickBooks for rentals. I was curious if you all set up vendors for every little expense?  I want to enter them all but wasn't sure of the best method.  

For instance, for my one a year charge from Google for the Google Admin Suite, do I set up a vendor account for that expense or is there a simpler way?  Same with when I occasionally get gas in my vehicle using my company debit card... or occasionally run by staples or buy something off Amazon for my home office.  I know I will set up subcontractors as vendors... and Lowes, HD, places like that. Wasn't sure otherwise. Seems tedious for small, rare expenses but if that is the way to do it then I will do it that way!

Thank you all!

@David Cunningham live-in flips are one of the methods used by many on here to make some money. I do know you need to occupy it for a whole two years to enjoy the tax benefits though. Otherwise you lose a lot of the sale profit to taxes.

@Diego Alcala the BP blog and forum have so much to offer. Just use the search. Also, there is the ultimate beginners guide: https://assets2.biggerpockets.com/uploads/user_file/file_object/1694/UBG_2018.pdf

@Aurus J. Sanchez, I am with @Dennis M. on this.  You seem to have more of an idea of what you want, as opposed to a plan.

It's sort of like that meme you see:

1. Find Property

2. Buy Property

3. ???????

4. Profit.

You need to have a plan.  This is a LOT of money you will be working with, and most of it will not be your money.   Do you have solid, concrete information on prices/taxes/rental market in NJ?  It sounds like maybe NJ is just as pricey.  

Are you planning on house hacking?  

How much do you have saved up for a down payment?  You realize, aside from the down payment, you want a good $10,000+ in the bank too, right?  What happens if you end up needing to replace the roof all of a sudden because of a leak and you used all your capital on the down payment?  Also, I don't know of a lender that will lend to you unless you have money in the bank after the down payment.

Have you spoken to any lenders to get an idea of what you are looking at there? Do you know if you will even qualify for a loan based on income, credit score, DTI, etc?

Have you spoken to agents yet? Are they sending you properties?

Have you read any books about all of this? There are so many... 

I am so new to this, just in for about 2 years now, but I can tell you to be very careful. Not saying don't do this. I would love to see you jump in and succeed but would be so sad to hear you lost your shirt.  

Slow down. Pump the brakes.

I have been in this for about 2 years. I spent an entire year and a half before that just educating myself. Reading any books I could find. Reading and participating here on the forum.  Listening to the BP podcasts (I honestly did this less than anything else, they are great but many times very unrealistic with their guests that aren't relatable to us "little people").  Read on the blog. Take the time to educate yourself. Believe me, you don't want to jump in too quick and lose tens of thousands of dollars, at best.  It is VERY exciting, but take it slow.  

As far as the $3000 per month... that is something people end up with after a few years of investing usually.  It seems like a lot of people on here consider about $200/door to be decent cash flow with rentals.  So that means, with one quadplex, you are looking at $800/month.  So, with those hypothetical numbers you are looking at probably four quadplexes to maybe hit that $3,000/month.  Now, better deals do come along, of course, but don't think you will just end up at $3,000/month quickly or easily.  Again, pump the brakes... take it slow.  

Originally posted by @Dennis M.:

Originally posted by @David Lecko:

@Dennis M. are you saying that a 3 year lease is a rookie mistake?

Yes  

 Think maybe you could expand on that? Everything I have ever heard or read says long term leases are where it's at... so now I am confused.

@Arif Bhuiyan I am not too far from you. Greensboro has apretty nice rental market. It is not one of those "on fire" markets, but you can definitely make money with the right deals. Especially all those neighborhoods around UNCG. That would be a fantastic driving for dollars area. Also has a nice range of neighborhoods from D up to AAA. I sadly do not have any contacts there currently. There is a more specific subforum here for that area of the state I believe.

@Brian Kispert I feel like house hacking a triplex or quadplex would be the route to go here. Limited capital... So low down payment. You can get that first time home buyer loan. Like 3% down or something like that? You love I'm one unit and rent the other unit or units out. Could do this with a duplex as well.

@David Lecko Congrats man!!! I just closed on my second deal, first buy and hold properties And it has been great as well. Also has solidified my path into REI in my head. I'm happy this worked out so well for you.