Your Rental Income Problem Has a Name

本站添加: 2026-05-19

[00:00:00]All righty, folks. We were lucky enough to have the CEO of Basecamp, Mathias, here with us and we're going to talk about the three financial blind spots killing cash flow. Folks, this is a critical topic. You buy real estate, specifically rental real estate, to produce cash flow. And as I've said a hundred times, 2026 is the year of operations. And folks, if you don't get operations right, you will have cash flow problems. So, Mathias, this topic is near and dear to my heart, my audience. What are the three financial blind spots killing cash flow?

[00:00:34]Thank you, Michael. It's great to be back with you here.

[00:00:37]You know, this is a problem that we think about quite a lot at Basecamp.

[00:00:40]We see it firsthand. You know, we have 50,000 customers and so we can see kind of, you know, how different components of the market are kind of impacting investors. And so, three things that that that we we like to speak about is, you know, one, lack of financial clarity. That's that's a killer for your cash flow.

[00:01:00]Money leaks, right? So, not being able to control your money.

[00:01:05]And the last one is kind of systems that break at scale, right? Not having the right systems. And so, I think all of those are very much in line with your thesis of year of the operator. So, I love that.

[00:01:18]We'll have to We'll have to use that more. Yeah, please do. Yeah, so let's let's kind of dig into this cuz I think all three of these are on target and will hit different people different ways.

[00:01:26]But let's start with clarity. Again, I think you know, this is one that's really subtle. I think a lot of people buy rental properties and they they talk about cash flow.

[00:01:36]They think they're clear.

[00:01:38]But let's dig into clarity cuz sometimes you might not be You may not be as clear as you think you are.

[00:01:44]Yeah, 100%. So, I think like what's happening, right? So, you know, I think one of the reasons why I see sometimes investors struggle is they have, you know, lack of financial clarity across their properties, right? And many times all of their rental properties are kind of commingled into one one one kind of Excel sheet or kind of you know into one bank account and so not having that kind of property level data can be a problem.

[00:02:08]Right? You want to be able to see kind of how you know each of your properties performing. You want to be able to see you know which are the ones that are doing well, which are the ones that are kind of the underperformers, right? So sometimes when you don't have that clarity at a at a property level um I think what ends up happening is that you kind of you know it goes unnoticed. And so that that's one element around lack of clarity. I I could you know speak from personal experience on this. We were probably in the game five or six years at this point. We probably had we probably didn't even 1031 yet. So we probably had eight units.

[00:02:41]And I remember filing my taxes.

[00:02:44]So for so step back. So we have eight units.

[00:02:48]If you were to ask me how we were doing I'd have said break even, you know maybe a little positive.

[00:02:53]But we go and file our taxes. We finally have to break stuff down. This is before systems, right? I'm I've been doing this almost 30 years. So there were no mobile apps or anything, right? We're we're literally faxing expenses back and forth with my property manager. This is how old I am.

[00:03:07]And um we go into our taxes, you know it comes back you know a couple weeks later because we have you know you know more complex tax statement than most.

[00:03:17]And lo and behold what we find out is we have one leaky boat.

[00:03:22]Mhm. Seven of the eight are arguably cash flow monsters.

[00:03:27]Mhm. But we had one one house was actually the duplex that was just leaking left right and center.

[00:03:33]And for whatever reason we missed it all year cuz again you know we're both busy busy employees raising a daughter. I'm traveling around the world. All we're caring about is hey is our our rentals paying the mortgage cuz that's all we thought it was at this point. We weren't we weren't trying to live off cash flow. Let's not get it you know confused.

[00:03:52]And so we were happy.

[00:03:54]But lo and behold, we would have been really happy if we would have understand that cuz we could have we could have done things uh to that duplex to to make it perform better or worst case we could have sold it and this used that, you know, proceeds somewhere else. So uh I will admit kind of uh I've lived this lack of clarity.

[00:04:12]And um it almost cost us. So I like it.

[00:04:15]Yeah. No, I appreciate that story and I think one of the things I'll even go further on is, you know, you mentioned kind of break even.

[00:04:21]And I would even push, say, can we look at this in even better lens, right? Like Yeah.

[00:04:28]Is there actually true return on on investment tracking?

[00:04:32]Right? So most investors are saying, "Have this is my rent. This is my income that's coming in. These are my expenses.

[00:04:37]This is what I have left over." But it's it really what you should be looking at is like, what is the actual return on the investment you've made?

[00:04:45]Absolutely. I mean, I I could Yeah. And I think that's when you start to realize, okay, look, like, you know, that that's when you realize, is is this the best way to to kind of build wealth, build passive income, whatever you're looking to do.

[00:04:57]Um and I think that that's a super important distinction as well.

[00:05:01]No, I mean, it's it's everything. I mean, if you hear if you hear me tell the stories today, I talk about yield, right? Buy boxing yield. 100%.

[00:05:07]>> And a yield is nothing more than a return on capital, you know, whatever you want to call that. Um but yes, how much money do I put in? How much money do I get out? That's the only thing that matters.

[00:05:17]And, you know, at year five or four, wherever I was in this story, I had no idea. I knew what I I knew what I expected like cuz I still did the buy box and calculated the yield before I bought the deal. But I didn't have the introspection, honestly, nor the care to look backwards. And I should have, right? I should have cuz that would have told me and and helped me learn like, "Oh, this one's, you know, I thought this would be an 11. It's a 13. Why?

[00:05:44]Rents are better, expenses lower. Why?

[00:05:46]This one's a, you know, a negative eight. What the heck is going on? Why is this a negative eight? It's supposed to be a 17. So, um you're absolutely right.

[00:05:54]I I uh fully admit I was not as disciplined at year four or year five. So, this this is good insight. I I like the clarity.

[00:06:02]Yeah. And maybe the the last the last piece to touch on on clarity, and this is maybe for folks that are that are just getting started on on on their kind of investment journey, um you know, definitely do not blend your personal and rental income.

[00:06:15]So, you know, this is you know, That I got right. I never did that.

[00:06:19]>> [laughter] >> Yeah. So, you know, that that that's a nightmare. And so, you know, tons tons of confusion at tax time, tons of you know, terrible mistakes, stuff done there. But, you know, that is that is one that I will point out to you.

[00:06:30]>> Please separate your life. Yes. Start out start out by keeping things separate. And and maybe we you know, just to close kind of the the lack of financial clarity conversation, I'll say like how Baselane can help you. One, like you come on a Baselane uh as you open an account, uh we're going to prompt you to set up what we call property level accounts. So, you have like visibility by property, uh you can set up accounts for security deposits, for maintenance reserve, for you know, savings for the next purchase you have. Uh we automatically categorize every transaction that comes through every account to the right property and to the right tax category. And so, that is all done with the app. So, you can go and audit it. You can see what's been reviewed. So, you know, you're making sure that really you have very clear property level data, you really are tracking kind of your ROI in the right way. Um and then, you know, instead of having to go and like stitch together spreadsheets, like the performance we give you is live, right?

[00:07:22]And of course, you can go much deeper into it. You can kind of go and depreciate every single one of your assets in the right schedule. That all flows directly into kind of uh your schedule E. So, you can actually have really clear visibility and optimize those things. And so, I love that. That that kind of that that's kind of that topic, right? Lack of financial clarity.

[00:07:39]I I you know, beautiful. You you've nailed it on head with some good examples. Yeah. Well, folks, don't forget it's right there on the screen baselane.com/orat.

[00:07:48]They were nice enough to add our Orat family to their main website. So, go check it out. See what he's talking about. But, let's get to number two.

[00:07:54]That was only number one, right? We're going to hit three. Number two was money leaks. And as soon as you said that, all I could do was cringe cuz I know I've had several money leaks over the years.

[00:08:04]So, talk about money leaks. Yeah, so money leaks for me is just kind of lack of control. And it's not really like one massive mistake.

[00:08:13]Right? It's It's this It's like all these small little things that, you know, you may not track, you may put on the wrong card, you may forget to deduct. And so, it's kind of building out you know, a set of controls that allows you to make sure you're not kind of, you know, this this happening. So, like the first thing is like expense creep, right? Like I think this happens to everyone. You have these small, you know, recurring costs or small kind of one-off costs, whether it's some new tool or some maintenance or some new fee or some new software and it kind of just goes unnoticed.

[00:08:44]And, you know, without the right tracking, you know, this slowly increases and and it doesn't it like there's no accountability for it, right? And so, how can you how can you kind of make sure that there isn't this expense creep? And you can actually see things in in you know, in in a in a really clear way. You know, I've had many times where I put, you know, a new expense on the wrong card, you know, all of a sudden, you know, I have a sick card that's saved on my my my computer and I put the wrong one and all of a sudden that got that gets lost. Yeah. Or you know, I I lose a receipt or by accident I you know, put the wrong account and I pay for something. So, all of a sudden, these things matter and they seem small, but you know, accumulate this across 12 months and you know, you're you're you know, it can add up. Yeah, I'll go even one level deeper. Again, in our portfolio today, which is, you know, not small, you know, we obviously have a property management firm with all their systems in place, but occasionally we get mailed a bill from the city.

[00:09:37]And if we're not careful, right? We'll We'll just pay it automatically and not get it attached to the property, not get it added to the system. These money leaks, you know, a $99 bill for some license registration, you know, is not going to kill us, but I mean that's just That's just an example of a money leak that it all adds up. That's 99 bucks that we should deduct from income that that is saves on taxes. It It's just part of the business. And we're We still have money leaks. I caught a couple of those last year. I'm like, "What Why Why Why are we paying this?" And And, you know, not not the property manager. But So, what happens at all all scales. Uh the other one is you know, I had a duplex at one time. It was actually a single-family home with two or Yeah, it was residential, two homes one lot, but shared utilities. Mhm. Water and water and electricity. And again, this is a money leak, right?

[00:10:31]I caught it like a year after I should have. But the the electricity bill just kept going up up up up up up like this.

[00:10:38]And pretty soon we went from having three or 400 bucks cash flow to nothing.

[00:10:41]Mhm. Why?

[00:10:43]Cuz the freaking people were competing with each other and like leaving the windows open during the summer and running the AC full blast. I mean, this crazy behavior. Um But yeah, the money leaks happen all the time. And to have a system that could identify something automatically like, "Hey, did you know your energy bill was up 15%? You know, take a look at it." Yeah. Huge savings.

[00:11:05]>> It would have been. 100%. Yeah. I think one of the things you mentioned, which is kind of a second topic here, is kind of, you know, the mixed the mixed tax optimization, right? Like if you're not adding something, then it's not being deducted, right? And so, this comes from two things. Like one, it could be miscategorized, right? And so, accuracy is such an important thing. You know, our AI goes and categorizes everything.

[00:11:26]Now, you can go and correct it if there's some some mistakes. It's probably 95% accuracy. And And we're improving it. Um and as you make changes, it it automatically corrects for future ones. Um but just in general, just missing a deduction, right? Like Mhm. you know, you're you're organizing after the fact.

[00:11:42]Yeah.

[00:11:42]>> You know, when tax time is here, when something happened a year ago, and you kind of have less less context of it, right? Versus doing it immediately.

[00:11:50]And, you know, so that that's an important thing. Um and then the last thing around kind of, you know, money leaks is slightly a different kind of view, but like idle cash flow sitting on optimize.

[00:12:01]>> Mhm. Like that is that is for me also a version of money leak because you're not >> Interesting. you're not making a little bit of you're not making some yield on that. So, you know, funds sit in a low yield account. It's not working for you, right? Like every you know, most investors have some idle cash that they're that they have there for, you know, a future investment or or or or something like >> feel like you're attacking me, Matheus.

[00:12:21]Again, I just a real-life example, right? We we, you know, I don't know about most people, but our checking account produces, you know, I think it's.01. Yeah. Big bank We have nothing.

[00:12:31]Yeah.

[00:12:31]>> Yeah, and then we have money market accounts at the same institutions which are 3 and 1/2 to 4%. Yeah. The fact that we may or may not have 20, 30, 40 grand sitting in checking is is an opportunity missed. You're absolutely right. 100%.

[00:12:43]So, yeah, I mean, on the money leak side, as I mentioned, expense creep, the mixed missed tax optimization, and I guess that idle cash, right? Like that those for me are the big opportunities.

[00:12:51]And, you know, one of the things I'll I'll share about BaseLane is that, you know, as you kind of organize all of your accounts, as I mentioned, right?

[00:12:58]It's then a very easy to make sure that, you know, you can see and manage cash more intentionally. Um we automatically help you with all of your uh expenses and receipts, right? You can snap a picture on your phone, you can upload a pic uh any kind of uh you know, invoice or any kind of receipt you have directly to the to the app. We will go and find the transaction and categorize it. You can go and upload 40 at once.

[00:13:22]Snap 40 pictures. Like we'll take care of that for you, right? So, you're always, you know, have a lot of, you know, uh you know, around that.

[00:13:29]And then just again, you know, like clean categorized books makes tax time so much easier.

[00:13:35]You know, and and it's easier to do it kind of the month it happens than, you know, 12 months later or even, you know, that's that's tough. We all know that.

[00:13:42]>> Yeah. Um and that's a little bit on the money leak side. No, I love shoot, this is great. Clarity, financial clarity, money leaks. The last one again is something that I think a lot of real estate investors will eventually feel if they have it and that is systems that kind of self-correct or break down as they scale their portfolio. It's one thing to start with a spreadsheet with one house. It's something very different when you have a house, a fourplex and a condo, right?

[00:14:06]These systems start to break down. So, tell me what you mean by that one. Yeah, so I mean, I think most folks, you know, don't realize that their system is broken until, you know, their portfolio gets big enough, right? And and and and and mistakes become too expensive, right?

[00:14:19]And so, I you know, what I always try to push people is, you know, don't wait to for that system to break just because you're growing. Actually, start planning ahead of time and and have the right systems even when you may only have, you know, one or two doors so you really avoid the chaos later. And so, you know, the starting point like manual systems don't work, right? The spreadsheet, like, you know, think about who's reminding you if they like track yourself, you know, manual tracking plus like the inaccuracies of all of that manual work, right? When you're doing things manually, like, you're just prone to make mistakes. Like, as smart as we are, you know, you're always going to make a small mistake. And so, >> Mhm. uh these processes just break as volume increases, right? And it becomes more and more complex, right? Like, you know, I have, you know, I've been in the in the in the financial world for a long time and I sometimes have these Excel documents that go, you know, I have so many monthly tabs that I don't even know what's going on anymore.

[00:15:11]The other the other >> Yeah.

[00:15:14]The other thing around kind of Yeah, go ahead. Sorry. I was going to say just just I want to echo this one because again, as somebody who was an accountant out of school, has an MBA, you know, econ guy, numbers are very comfortable for me.

[00:15:27]Um I could tell you it was really natural for me to just build my spreadsheet, right?

[00:15:31]>> Yeah. And you know, at some point it be you know, again, you got to remember a busy tech guy around the world, raising a family. I remember it was like house number six or seven. I was like I was up at like 1:00 in the morning kind of doing my monthly thing and I'm like this is this is I you know, I didn't sign up for this. This is supposed to be this is supposed to help me retire and here I'm at 1:30 when I should be asleep doing freaking Excel spreadsheets.

[00:15:59]Uh and again, some of that's because we didn't have apps back in, you know, 2000, but just that mindset of I'll build it on my own, then you scale and it's like, whoops, now it's my whole life.

[00:16:09]Not okay.

[00:16:11]Yeah.

[00:16:12]Then then the other thing I would say around kind of, you know, manual systems and not having a proper system is that they're not forward-looking. Right. So, you know, you can have a clear picture of how that month closed, um but you really also want to think about like what's coming? Like what are the future obligations that I have?

[00:16:29]And I think it's hard to make decisions around kind of how to optimize property or how to think about kind of the next deal you want to make when you don't have that visibility of what's going forward. And so >> Amen. you know, I would think everyone that has a a kind of manual system is always just thinking in the now. And I think it's great to have systems that think for us a little bit and actually can can tell us a little bit about what's happening.

[00:16:52]Oh.

[00:16:57]Yeah, 100%.

[00:17:00]Yeah. And the last thing I'll say is just kind of um you know, confusing what cash flow is versus what profit is. Ooh. And so I think there are systems that can do a much better job of of of of that. And actually can project things for you, right? Like a lot of times it just takes even more calculation to do, but it creates this kind of false sense of performance, right? And so, you know, systems that can that can show you that are great. And so, you know exactly, you know, at what month this is what real profit is and this is what I need to hold for for paying taxes and other things that need to happen.

[00:17:34]And so, I think that's an that's an important thing that that a system can really can really help you with.

[00:17:38]No, you're absolutely right. Again, I'll just give real-life examples of this.

[00:17:41]There are things that you that will take cold hard cash such as a roof replacement for example.

[00:17:47]>> Yep. You know, let's just say it cost 12 grand. Guys, for most of you that's going to be a capital investment.

[00:17:54]You're going to have to depreciate that.

[00:17:55]Right? You're not going to be able to write off that whole 12 grand. All right, these there are just things in the real estate game that you you know, it's one thing to call it, you know, a hit to cash flow. Right?

[00:18:05]Hopefully that comes out of your emergency reserve. You're not probably not running that out of operations.

[00:18:10]But some of you might think that that 12 grand just comes off your taxes immediately. For most of you it won't.

[00:18:15]Right? It'll be 1/28 and 1/2 or whatever the the depreciation schedule is. So, you got to be very careful with this stuff.

[00:18:22]Yep, 100% and you can come into Baselyne as you invest in that roof, you can actually have a different depreciation schedule built in directly for each of your assets, flows directly into your tax reports. You can look at it by month as well. So, it really gives you a lot of clarity. And right, you're not spending all this time having to, you know, imagine tracking, you know, 30 depreciation schedules on Excel. Like that's that's that's not fun for anyone.

[00:18:45]That gives me heartburn just thinking about that. But but but but but but just to close off, you know, the topic of systems, you know, I think you know, at Baselyne we've built a very automated bookkeeping, rent collection and banking system.

[00:18:56]Removes all the kind of manual work, but most importantly also increases the accuracy, right? So, you have real-time visibility into your balances and your performance.

[00:19:04]You're going to be able to make better decisions.

[00:19:07]And as again, it scales it scales as you go, right? And so, you know, one property, two properties works great for you. As you have eight or more, you know, it's going to continue to kind of support you. So, yeah, those are those are the, you know, the three, you know, topics I wanted to talk about kind of blind spots killing cash flow. So, I love it. This is a great topic, Mattias. I love what you guys are doing at Baselane. Folks, Baselane's been on the channel now for three or four months. They've got a whole playlist going. Do yourself a favor, check it out. baselane.com/orat.

[00:19:38]And again, love this topic of three financial blind blind spots killing cash flow. Mattias, take care. We'll talk in a few weeks.

[00:19:45]Thank you very much, Michael. Appreciate it. Mhm.