Jay M. Menachem, Principal
Jay M. Menachem CPA
The Lay of the Land
There used to be a tagline that was used for the certified public accountant (CPA): “Never underestimate the value.” I think that’s true, and I have a lot of experience to prove it.
Management companies have expertise with properties, but so do CPAs. So don’t leave us out of the loop, especially when it comes to financial matters. A lot of times, budgetary figures can be tweaked at the end of the year. Take fuel costs, for instance. They are a big number that, as you go through the year and discover what the costs actually are, you may not have to assess as much as you had expected.
A CPA has a lot of expertise that you can draw on. I had a building that was preparing to replace its boiler, and I told the board about a property that had recently done just that and had also installed a separate hot-water heater system. It is saving them a tremendous amount of money. In addition, the life of the boiler is being extended because the boiler is not being used in the summer anymore – they’re using their hot-water heater. Less fuel is used, and there is less wear and tear on the boiler.
One of my properties was going to refinance its mortgage. It needed an additional $500,000 to have the parapets repaired. They were about to take out a five-year loan. But before they did that, they called me. Instead of doing the loan, which would have necessitated an assessment over five years for all the shareholders, they spent some of their reserves on the parapet, which was going to be a two-year project, and the assessment would be spread out over five years, for a lesser amount, without loan interest or closing costs. The lesson? It would have been a mistake had they just gone right into the refinancing without speaking to their CPA first.