All Forum Posts by: Wade Sikkink

What is the NOI and cap rate? Have you seen the property? If you are out of state and taking someone else's description as C+, who knows what you might be getting. Odds are there is deferred maintenance that you will need to account for. We would need more info on the numbers to know if this is a good deal or not.

I would recommend against multiple LLC's. They become very difficult to manage and keep as separate entities. As soon as you co-mingle funds or otherwise make a mistake and don't keep them separate you have lost the protection they provide. A single LLC give you the protection you need and is manageable. Unless you are dealing with large commercial properties I don't feel you need to separate the properties into different entities.

No legal advice, good luck!

I tried Tenant Cloud and it's accounting side sucks.  Very hard to use and doesn't do a good job of giving you useful reports or information.  Cozy doesn't do accounting so you would need another system anyway.  Seems like there could be a better solution coming very soon.......

Automated rent collection often comes with hefty fees either directly or as a subscription and set up fee's associated with an expensive software package.  I would be looking for something that's automatic and cost like $0.99 to use.  That would be very attractive.....

Quickbooks isn't set up for a rental business and Excel get's too hard to use if you have more than 1 or 2 units.  There is a better solution right around the corner....

@Wendy Forbes how many units do you have? A separate LLC for each property seems overly complex and cumbersome to manage? What benefit are you getting by doing that? There are people on here that advocate for all these LLC's, but at the end of the day you are at greater risk of not properly managing all the entities than you are having a property related problem. The accounting alone would seem to me to be a nightmare.

Most PM software does a poor job of handling the accounting, unless you buy a really expensive one.  They tend to be more focused on the PM side of it and not the accounting side.  Unless you're an expert, Quickbooks is confusing to figure out how to make it work for a real estate business.  There are probably better options out there.....

Depends on what you want the software to do.  Accounting? Tenant screening? Maintenance requests?  Most available options are too expensive if you just have a few units.  I've tried some of the free options and they are not user friendly.  There really are no good options for the small guy that self-manages a few units.  Yet.......

We bought a 14 unit 3 years ago.  Based on that, here's some feedback on your deal.  I can't comment on the price or rents because I don't know your market.

Your laundry will probably make more than you are budgeting.  Ours makes about $2500 gross per year and you have more units than we do.  On a 20 unit I think you could safely assume $3000 per year.

Your repairs are probably too low.  Our building was built in 1973 and had been neglected.  We have been averaging around $1200-1500 per month in repairs/renovations for the last three years.  I expect that to slow down now that we've pretty well renovated all but a couple of the units.  And keep in mind that expense doesn't come nice and smooth every month.  We'll have a few months with next to no repairs, then someone will move out and we'll drop $5k renovating that unit.

We also executed a pretty significant rent increase shortly after buying the place.  Even with that increase we were at the low end of the market, so we didn't really lose any tenants because of that.  You should be able to push rents up as long as you stay at the low end of market and not lose any tenants.

Good luck!

Brandt hit the nail on the head.  Odds are they did the damage and they know it.  Send them a deposit statement showing the deductions for the damage and that they are getting no deposit returned to them.  It is an extremely low probability that they will take you to court over it.  And if they did and tried to tell the judge there was feces on the floor when they moved in, as someone above suggested they might, the judge will laugh them out of court.

Good luck.