I'm a Property Manager - Ask Me Anything

[Tick]

Do you use ACH for collecting rents?

I switched to that about 10-12 years ago and it has been a lifesaver for both me and my tenants. (especially now that I live out of the country) I can collect all rents in about 5 minutes with no trips to the bank for deposits. The tenants love it too.

Hey, sorry it took me a while to get back to you. ACH works OK for the higher end and mid-range stuff but occasionally you'll work with lower end properties that have a lot of tenants who can't do that. They aren't bad tenants, they just still prefer to drop off cash. It's for a million different reasons but if it's because they're skipping out on child support or it's drug money we don't deal with them.

But yes, ACH is awesome. Just remember that you have to have a way to turn it off on a moments notice. Here in AK, if I accept even a penny after we start going into eviction I have to start the whole process over. The way the courts see it, I just accepted a partial payment and we're starting all over. Talk to your attorney and double check it won't bite you if you need to evict

 

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[AroundTheWorld]

I want to build a successful company that can run for the most part on it's own.

I am curious to hear what you are doing to make this happen. Property Management can be such a labor intensive business, and the overall atmosphere can be somewhat negative... (people don't call unless they have a problem) that turn over seems to be high, and it is hard to keep employees focused on being positive and providing quality customer service if the owner of the business isn't there as a constant presence.

In our PM company, we were inspired by ideas found in E-Myth, and implemented many of those ideas with varying success. My partner is always on the look out for additional ways to achieve the goal you stated above... a property management business that can run (for the most part) on it's own.

 

[CashFlowDepot]

Important consideration for a property management company is that your earnings are ACTIVE income and taxed as such (ie HIGH).

You could easily convert the income to PASSIVE income ( much less taxes) if you do a master lease with the right to sublease. You still do the exact same work but the tax savings are huge.

Many states require a license to be a property manager. But they do not require a license to be a landlord - which you are when you do a master lease.

 

[OVOvince]

If I wanted to sell my service to an apartment, who is the best person to target?

I've been sort of struggling with this for a while---for quite a few months.

Never was able to ask and get answers by asking an employee at an apartment directly because of :

1) by email i wouldnt get any answers
2) by phone they would just keep asking me who or what i need.

for example, let's say i wanted to sell ORM services, or SEO services, who do i send my mail marketing envelope to?

the property manager at the office of the apartment?

the corporate marketing person?

thanks

 

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[FeaRxUnLeAsHeD]

I have this thread bookmarked. Why is it only on page 2?

Any recommendations for younger folks coming out of college and looking to learn more about real estate? Any books you would recommend? People to talk to?

My goal is to live mobile eventually.. to have the freedom to up and move. But i'd be curious to get into real estate investing as a start to live for free and make a profit.

 

[eliquid]

I've been looking into this.

My kids are getting older and me and my wife want to travel more. I have no experience other than buying my own house to live in, but I am thinking about purchasing a 4-plex and living in one of the units with my wife and having the other 3 rented out to pay for the building and maybe have a small cash flow from it.

My reasoning is, I heard ( yeah I know I need to research it ) that owner occupied 4-plexes are easy to get loans for. I also felt that keeping it a 4 plex would be easy to manage as well as a first timer.

I'd like to repeat this process in a few select cities as well in the upcoming years.

Questions:

1. What's the procedure you do go through in screening applicants? I don't expect a detailed answer, but what have been the best methods for you in selecting good/great tenants? I wan't to avoid terrible tenants as much as possible and didn't know if you have a certain process/method/flow to your screenings

2. I've heard ( at least where I live ) that getting rid of tenants that don't pay is a HUGE hassle, especially if it's a single mom with children. Have you ran into this? I know of at least 3 people who no longer rent apartments and sold off their business because of this 1 issue alone.

3. I am not looking to become a RE millionaire. I am mainly looking for cash-flow up-front that I can then re-invest into other things outside of RE while learning and getting my feet wet. Are there any strategies I should focus on to achieve this ( maybe look at single family homes instead of 4 plex, or look at duplexs or larger unites? ) Again, not looking to making $100k a month on it or hold for 25 years and sell based on appreciation, just immediate cash flow starting out.

Thanks for doing this.

 

[SteveO]

1. What's the procedure you do go through in screening applicants? I don't expect a detailed answer, but what have been the best methods for you in selecting good/great tenants? I wan't to avoid terrible tenants as much as possible and didn't know if you have a certain process/method/flow to your screenings

Get a good screening company that gives credit information and multi-state background checks. Set your rental criteria and stick to it.

Read up on fair housing. This is so important for anyone that wants to rent apartments. You cannot pick the best tenant, you must select the first one that qualifies based on your minimum criteria.

2. I've heard ( at least where I live ) that getting rid of tenants that don't pay is a HUGE hassle, especially if it's a single mom with children. Have you ran into this? I know of at least 3 people who no longer rent apartments and sold off their business because of this 1 issue alone.

Understand what the rules are for evicting tenants in your county/state. Once you understand them you know what you are up against. It is simply part of the business.

3. I am not looking to become a RE millionaire. I am mainly looking for cash-flow up-front that I can then re-invest into other things outside of RE while learning and getting my feet wet. Are there any strategies I should focus on to achieve this ( maybe look at single family homes instead of 4 plex, or look at duplexs or larger unites? ) Again, not looking to making $100k a month on it or hold for 25 years and sell based on appreciation, just immediate cash flow starting out.

I personally find this to be a tough business model. People do it but the business typically operates on thin margins. I have found success by purchasing properties that need work and are not making money. Then fix them up and either operate them or sell them for a profit. People tend to hold on to properties that are cashflowing well. Finding mismanagement is much easier for me.

This does not come without challenges though. You must make accurate and correct decisions along the way.

 

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