May 22, 2020
You must treat your Multi-Family as a Business.
It is a necessity because we buy the multi family real estate business based on the income and expenses. When you finance your Multi-Family, lenders will ask for the Income-Expense Report. Lenders provide mortgages based on that report so that's why you must consider your Multi-Family as a Business.
Investors also like the fact that lenders look at multi-family like a business, and it is funded like a business income less expenses.
Investor/Owners monitor every month to see if anything is out of whack and if anything that can be done to fix it.
For example, when you see your utility bill which is higher than normal monthly bill then you should consider investigating why is it higher? May be you have a water leak from one of the unit and tenant doesn't fill like reporting it to the property management. Such negligence, costs you hundreds or thousands down the road.
As you grow and your business grows larger and larger, you will see some of the bills have been higher and then you start working on how to minimize the cost of these bills.
You also need to stay on top of your property manager to be on top of rent rolls, repairs and maintenance, communications with tenants and landlords so both parties are well informed and help you make right decision at right time.
So if you treat your real estate as a business from the start, and you put property management in place, you will be able to scale your business. I have seen so many people not being able to scale because they choose to do it themselves.
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