We have finally received our first paycheck from our apartment building. $4906.22.
I made color copies of it and plan on keeping it in a special place, sort of like what you see restaurants do with $1 bills put in frames behind the register. Officially it is not the first money that we received from the apartments (we were credited for a prorated portion of the rents at closing), but it is the first official check that we have received from rent.It will not always been for this same amount. The property manager has been doing a lot of work for us, at an hourly rate, in order to get the property in the running condition that we want it to be. They roofing and the siding are still being replaced, but the security gates are fully installed and awaiting fire department inspection. Once these things are fully completed, the property manager will not have as much to do outside of collecting the rent, and any minor repairs that may arise.
As I mentioned in my last post, not all of the tenets are caught up on their rent. But this payment covers two months worth of rents, minus two $800 management fees from the get go. Other fees that were deducted were for permits for repairs, and lawn services that the property manager paid for, new lease fees, and the service fees for each time they had to meet with the various vendors. Basically the property manager pays for the cheaper items out of pocket first and them gets reimbursed from the rent payments. They way she does not have to contact us for every little item that is needed and then wait for us to send the money. It makes less work for both of us.
So, what do we plan to do with this money? Not much at this point. It is going into the bank to re-build up our cash reserves for the next investment opportunity. We are just adding it back into our cash reserves. We are not big spenders nor are we prone to splurging. We are already looking for other properties, and the more cash we can set aside, the more properties we will buy. When the money starts to pile up faster than I can invest it is when I will finally feel comfortable.
1 comment:
Congratulations! I am new to Dallas (been here about a month now)but investing in RE for 3.5yrs now. We are also buying our first multifamily property. We have choosen not to purchase below 150 units. So, we have 3 under contract: 151 unit in Houston ($5.5M), a 191 unit in Dallas ($5.7M) and a 39 unit in Iriving ($1.3M) that we plan to wholesale. The 2 larger ones we are going to keep and the smaller one dropped into our lap as a 'Subject To' so we couldn't pass it up.
Though we plan to use private lenders for the $3.2M we need to close, the process for closing should be the same. I'd love to hear more details about your closing and the final 30 days prior to closing (i.e. money going hard, proof of funds, etc.)and the first 30 days after closing (i.e. switching over the staff, systems, etc.) Did the owners give you any training on the systems?
We plan to close on both properties by Dec 31st (the whole sale, we don't plan to close on so we should wholesale it by Dec 31st).
Like I said I am new to commercial properties and never had a commercial close. On all 3 properties we are taking over the existing financing. I am probably the one on my team with the cold feet. I found your postings as comforting, would love to hear more detial.
thanks,
KC
SenecaCommercial .com
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