We are still doing fine and have been able to go back to the gym, so that is a nice expansion on our workout routine from the lockdown.
I have completed my 90 Hour Real Estate Salesperson training course and will be taking the national and state exams this week. #WishMeLuck
Today I wanted to talk about outsourcing. As a real estate investor focused on expanding, you continuously search for properties. There are numerous ways to accomplish that on your own, whether it is “Driving for Dollars”, (drive around looking for vacant properties), searching the MLS, tax sales, or any of the other numerous ways to find properties.
There is an issue with all of these methodologies in that if you are doing them, what aren’t you doing to work on your business?
So, why not outsource your search for properties?
Put in a little effort to document your criteria in a Property Search One Sheet and share it with anyone and everyone. This allows other people to identify properties that meet your criteria and bring them to you, thereby increasing the input into your funnel.
The people you share it with can be family, friends, acquaintances, and even property wholesalers.
As I’ve stated in another article, I was given an early retirement package recently. And if you have read other articles I have posted, you also know that I have been preparing for retirement for a few years now. I am currently 52 years old and planned to be retired from the oil and gas industry by the age of 55.
But I wasn’t sure that we truly had enough saved and/or invested to cover things. So I kept on working.
Now, don’t get me wrong, I enjoyed most of the aspects of my job, but I was starting to get aggravated with the things I could not change or impact. And in one of my last positions, the amount of administrative busy work that was not HABU, Highest And Best Use, of my skillset.
With all of that said, being told that I was being retired early was a wonderful blessing!
Working from home for the last couple of months of employment and the subsequent five weeks or so has been a revelation. I see and hear people complaining about weight gain and complications from their chronic medical conditions during the pandemic lockdown. I did not experience any of that. In fact, my glucose levels are now sitting at a normal level, with fasting readings mostly below 100. They used to stay between 130 – 180. I have lost approximately 15 pounds.
I was also dealing with migraines due to some nerve issues in my neck. They were exacerbated by the constant stress of work.
Now, those are pretty much gone!
What I have realized over the last few days is that the stress from work was driving a lot of the issues I was experiencing. When I was still working, I would get to the end of each day and be too exhausted to do much of anything else. I would feel mal de ventre, (sick feeling in my stomach), due to worrying about the latest “crisis” occurring. It was so bad that for the last ten years or so, I rarely even had a casual drink because that would just add to the general malaise feeling, in addition to upsetting my glucose levels.
Now, I have none of those worries. I am content. I am spending more time with my family. I am preparing to take the real estate salesperson license exam to become a licensed realtor. I am continuing with real estate investing, looking for quality cash-flowing properties.
It begs the question, why didn’t I retire sooner?
Ultimately, the real answer is that I was not prepared to. After my job was changed and relocated in December, I started to figure out the HOW? of leaving the company. I have some answers, but not all. And that is OK. We have more than enough buffer to get the rest.
Cheers! from semi-retirement!
And, as always, let me know what you think in the comments. Ask questions, tell your story. If you like my posts, please share them with others and subscribe to this blog.
I did another live stream for my local REIA group and wanted to share it here. The guest is Keith Baker, host of the Private Lender Podcast.
In this video, Keith Baker, Host of The Private Lender Podcast, talks to us about how he got started in private lending, things to watch out for when lending, and his outlook for the future.
Things you will learn in this video:
How Keith got into private lending
How private lending works
Difference between Hard Money Lenders, Private Lenders, and Banks
How Keith screens borrowers
Keith’s “Trademarked” 3Ps Strategy
Why it is good to say no sometimes
Why you should always follow your processes
What a self-directed custodian is
Resources mentioned in this episode:
Sign-In Sheet (Go fill out this form to get on the Group newsletter list)
Today I am going to do a review of Stessa, an online rental
property accounting platform.
But first, a disclaimer:
***This review may contain affiliate links that compensate me for user
registrations of this product.***
As I have detailed in a previous article, I started using Stessa
last year to track accounting for our rental portfolio. Previously, we used
Google Sheets, tracking rental income and expenses for each property on
different tabs. This would involve me going in to the first property’s income
tab, entering the collected rent, then checking all of my receipts and accounts
to verify I hadn’t missed any expenses and adding them to the expense tab for
that property. I set up expense categories and put in a section to summarize
the expenses by category and by month. While not ideal, it insured that someone
at my CPA’s office was not classifying an expense in the wrong category or for
the wrong property. It was not hard to do, just more a matter of remembering to
do it.
Around the middle of 2018, I started seeing advertisements for a product called Stessa on Facebook. As per my SOP, I ignored them, other than taking note of the name. A few weeks after first seeing the ads, I heard an advertisement for it on The Bigger Pockets Podcast. This was more effective, as they pointed out how it was free for rental property owners and individual investors and involved some automation to keep track of your accounting. They also pointed out how the product was developed by real estate investors for real estate investors and the name was “assets” spelled backwards.
I went to the web
site and registered for it. I was able to set up our properties and import
bank & credit card histories to the transactions section, allowing me to
categorize each expenditure. It took maybe 10 minutes to set up two properties.
And, once numbers had been entered, the dashboard populated with portfolio
metrics. Way nicer than my spreadsheets!
Features
Individual tracking for each property:
Property Profile
Header – Address, Acquisition Date, and Cost.
Property Details
– (Year built, neighborhood, parish [county, for those of you outside
Louisiana], number of units, bedrooms, bathrooms, square footage, and lot size,
all pulled from Zillow, based on the address.)
Valuation – Provides
for multiple options: Custom Valuation, Zillow Zestimate (automatically polled,
user choice to update property valuation), Gross Rent Multiplier, or Capitalization
Rate.
Rent Roll – Allows
entry of Bed/Baths, Square Feet, Tenant names, Rent, Market Rent, Deposit,
Move-in Date, Lease Expiration Date, and notes.
Property Notes
section – Freeform note space for property.
Monthly Expenses –
Allows for Pro-Forma expense entry and pulls in categorized expenses from the
Transactions section to show actuals compared to Pro-Forma.
Neighborhood –
Shows location on a Google map, with a Walk Score and a Bike Score for the
property.
Assessments –
Pulls in assessed value and property tax amount (I’m assuming from Zillow), and
allows you to add missing assessment/tax details.
Capital Expenses –
Allows for entry of Date, Description, & Amount of Capital Expenditure.
Loan-to-Value –
Shows a chart with LTV percent, Property Value, Debt (principal balance), and
number of loans.
Mortgage – Details
the Lender, Principal Balance, Payment Amount, and Interest Rate.
Insurance –
Displays the Carrier, Premium, Policy Number, and Renewal Date.
Transactions:
As I mentioned above, Stessa
allows you to link bank accounts and credit cards to the Transactions ledger.
It lets you initially import all transactions and gives you the option to
review them to either categorize each one correctly or, in my case, the credit
card I use also has personal charges, so it it allows me to delete those
transactions.
Stessa does not store your credentials on their servers and
use bank-level encryption to secure the transfer of information. It also does
not allow changes to your bank or credit card accounts. It only pulls a copy of
your transaction information.
The Transaction Ledger Menu allows you to review new
transactions, view ALL PROPERTIES transactions, view individual property
transactions, or add a new property.
The main Transaction Ledger display shows all transactions, filtered,
based on the menu selection. It additionally allows you to search by keyword
and/or filter by Date, Category, Amount, or Account.
There is also an export function, allowing you to export
filtered transactions to a *.csv file.
You can manually import *csv and *.qif files from accounting
software, in addition to adding individual transactions by hand, such as
mileage.
Reporting – Reporting is one of the reasons I was interested
in trying out Stessa in the first place. It provides you with standard reports
such as Income Statements, Cash Flow, and Capital Expenditures, with options to
select a date range, property/portfolio, monthly breakout, and whether or not to
show Category Details. The report is downloaded as an Excel file, allowing you
to customize the report title and report formatting, if needed.
The other reporting option I have mentioned before is the
Tax Package. This contains everything needed to hand off to your CPA at tax
time. And it sure makes it easier on me!
The dashboard is the main page you see when logging in on a
computer. It allows you to show the total portfolio or to select individual
properties.
It contains the following sections:
Portfolio Value – Options to see Market or Purchase Value.
Asset Return – Either Appreciation or Levered returns.
Occupancy – Detailed in percent.
Income
Cash Flow
Unit Count
Property Count
Debt – Total
Net Cash Flow – A chart detailed by month & Category
Location – Google map showing all properties in Portfolio
View or a single property in Property View
Compare Properties – Rental Income, Market Value, and Square
Feet. Available in Portfolio View only
Property Highlights – Property picture from Google Street
View, Income, Expenses, LTV, and Occupancy. Available in Property View Only
Summary
I think that Stessa is a great automation tool for rental property accounting. It’s free, cuts down on time spent doing bookkeeping, and makes tax time easier. On top of that, their user support is outstanding! Early on, I identified a couple of bugs and they were fixed within a couple of days. Amazing!
If you are interested in trying out Stessa for your rental properties, please click on the link below:
