Frequently Asked Questions
Typical Maintenance / Calls
- Leaks (faucets), clogs (drains)
- Pest (roach, mice, bed bugs rare)
- Parking (conflicts, over parking by guests, towing calls)
- Snow shovel, lawn maintenance
Typical Capital Improvements
- Appliances, HVAC
- Roof,
- Apartment renovations: flooring, kitchen / Bath cabinets, paint
- Parking lot / stairs, porch, balconies
- Apartment conversion from office / storage
Hardware / Building Materials / Appliances
- Boiler, water heater, radiator heat, stove, refrigerator, ACs central and window dishwasher, furnace, Laundry
- Fire alarm, sprinkler, back flow valve, elevator
- Contractor / Maintenance equipment: truck, tools, sewage, saw cutting machines
Software Technology
- MS Office: Excel / Google Spreadsheets for revenue, expenses, T12, lender investor support
- Mobile (text), whatsapp, Monday/Keep (issue list / Planning)
- Property management platform (Still looking, likely appfolio)
- Lease doc sign drafting software (Adobe, Doc Sign)
- Background check sites (landlord station, erenter)
- Investor reporting platform (still looking)
- Listing services: Zillow, Facebook
Investor Interaction
- Reporting
- Audit
Acquisition
- Property visit
- ROI analysis
- Proposal / counter / closing credits right upto closing
- Inspection / Remediation/Reinspection/ credits/ city clearance
- Lender Interaction
- Closing
Lender Interaction
- Annual documentation support
- Refinance / Cashout analysis / followthrough
- Purchase time – personal financial statement / acquisition analysis
Inspections (city, fire)
- Repairs (proactive)
- Inspections (city, fire) with effort for zero / minimal violations to get multi year license
- Repairs (reactive)
- Reinspection and closure
Vacancy Management
- Renovation / Repair
- Apartment listing
- Showing
- Application collect and review
- Background check – credit agency and manual (references, ID, pay stubs)
- Lease
- Onboarding – key delivery, utility transfer
Tax Filing (K1s)
- Expenses:
- Collect and collate across credit cards, check payments, zelle, cashapp, venmo, online payments
- Interest paid
- Real estate taxes
- Income:
- Collected rents, laundry, parking and other misc
- Deductions:
- Depreciation
- K1 generation and delivery to investors
Expense Management
- Recurring bill payments (mail, auto payments) for utilities and insurance
- Supplies: Hardware store calls for credit card purchases
- Supplies: Online Amazon and other website purchases
- Labor: Salary payments, contractor payments
- Large payment transactions for real estate taxes, mortgage
Rent Reconciliation (book keeping for revenue)
- Tally rent (bank) deposits with renter accounts
- Followup on rent payments with late fee requests
Stakeholders
- Property Manager
- Broker (seller and buyer)
- Lender
- Attorney (buyer / seller)
- Full-time handyman, admin, ground staff
- Contractors / Freelancers
- Tenants
- City, law enforcement
- Monitoring / Maintenance: fire alarms, elevators, boilers
Risk Management
- Expense: Maintain a cash pool to fund monthly bank installments and expenses
- Revenue: In most cases all rents need to be collected within the month
- Collections: Late payers put on watch and assisted for catch up or routed for eviction
- Regulatory: Continuous cooperation with city, law officers and lenders
- Property loss: Regular property patrol to watch for risks (leaks, fire, pest, structure, lawsuits)
- Nature management: tree growth, rain, snow, heat, cold, soil
- Active (paranoid) reading on everything real estate (interest rates, rent control, economy)
Wealth Management
- Offload properties not key to growth (1031) to purchase other
- Refinance with cash out to buy larger portfolio
Key Statistics
- 30-50% rent increase during the COVID era
- Annual Increase target 3-7%; 20% collection bump in first 1-2 years
- Tenant Support: typically immediate text response; with expectation management on next steps
- High retention rate (lease renewals)> 90%
- 95%+ occupany with urgent action to recycle and rent vacant units
- About 60% rents received by 5th and 95+% by month end
Tax Benefit Calculations
- Tax code allows around 3% depreciation from the purchase price every year
- Refinance money is not tax deductible
- Property can be sold and setup for 1031 for tax deferment indefinitely until estate transfer taxes kickin
- Else capital gains tax will apply from year 2
Tenant Due Diligence
- No criminal (light offenses reviewed case by case basis)
- No eviction (higher deposit say 2x rent for promising / reformed cases)
- Stable income around 2.5+ x rent
- Background check for social security profiles
- Immigrants requested higher deposit and higher rents (in lieu of unofficial papers)
Tenant Characteristics
- (By choice) Lifelong renters (99%)
- Subprime category credit scores
- Low-level collections in the background
Tenant Profile
- Blue collar (factory workers primarily), truck drivers
- Immigrants
- Retired professionals