Hi,
I am an out-of-state investor with a few single family homes in Cleveland, OH. I've been trying to obtain property management services for them, but all the property managers I've spoken to have passed on the properties; either b/c it's not in an area they service or they don't manage single family homes. Since I can't seem to find property mgmt for these properties, I'm not sure what I should do:
1)Try to find a handyman that is willing to help me rent out the place?
2)Try to rent the place out myself by flying out there as needed?
3)Sell the homes (possibly at a loss)
4)Other suggestions?
Thanks.
1) is likely illegal. Most states require a property manager be a licensed real estate agent.
2) is likely to be extremely unprofitable.
3) Maybe
Have you actually been to and seen these houses? If you have, its are they in a war zone? Is there some obvious reason why the PM's won't take them?
If you haven't seen them in the flesh, I'd buy a plane ticket and have a look. Perhaps there's a valid reason nobody want's to manage them.
Have you called every PM in town? If you've only called a handful and the half that does SFRs won't do them I think you just need to do some more calling.
How did you come into these properties? Perhaps the person or company involved in selling them could assist you in finding property management.
1) Would it be illegal if he doesn't do the actual leasing? What if I just hired him to post some for rent signs and be there to show the property..whereas I will be doing the advertising and credit checks?
I have pretty much spoken to all the property management companies there(about 12 companies) ..and there were only 2 who managed single family homes and both did not service the area.
I actually have never seen the homes in person, but I've googled it..and the area looks decent to me. I don't see any obvious reasons why the mgmt companies passed them over.
I've also contacted the agent that sold me the homes and he has not responded.
Suppose I visit and the homes are in a war zone, should I sell it at a loss? How much of a loss should I be willing to accept?
Thanks.
how far away do you live(miles)?
Michael S- I live about 2500 miles from the rental properties.
Jon- I don't think the homes are unrentable; they were previously rented to section 8 tenants and when I advertised the homes, there were some interested parties...the problem is I have no one there to show the properties...and since I can't find property management for them; I'm trying to decide whether or not I should try to manage it myself somehow or sell it. Right now, I'm leaning towards selling. Well, thank you for your time and advice.
Pretty much the same points as Jon. In certain states, you are able to hire a non licensee to oversee your properties. He may only do it for you and no one else. If he wants to expand, he must be a licensee when he adds a second client.
I think you already know you have an unhappy tiger by the tail, with few choices. If your agent isn't returning your calls, you probably got snookered. Go see the properties . Then you'll know how big the tiger is. Rich
You may have tried the PM companies, but any Realtor can assist you, that will be up to them and the broker and if you can strike a deal.
Employees of a property owner are exempt from license requirements in most states, check on the state stautes regarding leasing agents.
I just made a comment to your (OP) question concerning commercial, I suggest you stick with residential first.
I know that it has been several months now, but I am curious of the outcome. I am a Property Manager and willing to take on the properties if there are nearby. I am on the west side of cleveland, oh
But it is in OH, where these properties are:
From http://www.ohiorealtors.org/absolutenm/templates/article.aspx?articleid=3179&zoneid=31
Is that typical, that many property managers don't do SFRs? Is it because there's more money in it for them if they manage apartments?
I'm not sure if the OP is still around, but this situation is a lesson for all to learn from. I do hope the poster found someone to help them or at least unloaded this thing.
1 - If you're a new investor, investing in properties that are not close to home is just a bad idea.
2 - Investing in a property sight-unseen is a bad idea unless you're a very savvy investor.
3 - Before you buy a property, always make sure you've got someone to manage it, and I'd go as far as to suggest having 2 alternatives.
4 - Investing in war-zones as a newbie is always a bad idea.
I'm sure there are more lessons here, but I thought I'd point these out for anyone who is reading . . .
BTW - If you find yourself in a situation like this, often-times selling at a loss and getting rid of your problem is the best solution.
I feel like i have this conversation at least once a day with someone who already owns a property, usually bought site unseen, out of town, from a friendly on the ball agent that disappears once closed.
Based on the thread and not knowing any more details, dump them, you will bleed slowly for a couple of reasons.
1. Sounds like bad neighborhood if PM not interested.
2. Maintenance will be annually reoccurring. The "never ending renovation"
3. Having a PM do all this work will kill the bottom line
Let this thread be a lesson to anyone reading who is new at this. Be VERY aware of buying a property that is far away from you. The fact that there is a section 8 tenant in there, or was there, does not translate to easily rent able house. Before you buy the property have PM in place and ask their advice on the property. We could have saved investors thousands if they just would have called us before closing and asked our opinion, instead the call us after they close. The real estate agents job is to sell you the property, once he has he's done. The property managers job is to run it for you. WHY WOULD YOU NOT CONSULT THEM BEFORE BUYING.
If you must buy out of state, travel there, visit the area DAY AND NIGHT. i cant tell you how many times people will tell us "we were told this area was good"
/rant
When I was transitioning into the Rental business, from being a handyman, one of the things I did to improve my cash flow was to offer a five year lease to property owners who had trouble with their rentals. I offered to do everything for free in terms of management and maintanance but the materials would be paid by the owner. As you may know, labor costs are always way more than materials. At the time, about 20 years ago, I made $100 per month per property. In other words, I leased it for $300.00 and sub-leased it for $400.00. I paid the rent even if it was vacant. I did that to get around having to have a license to manage other peoples properties. I took on the risk of a five year lease in exchange for the profit potential.
The point here is to cover your taxes, insurance and materials and let someone else get the profits so you won't bleed to death.
It's a win win for you and the contactor/handyman of your choice. Most of them are really slow on work these days.
I just closed on my first property in Cleveland and I purchased unseen. However, I worked with property management prior to purchasing a property. I then found many people to talk with about the area to get a wide range of thoughts without bias.
I'm guessing you purchased your houses on the eastern side of Cleveland, and in very bad areas. Have you talked to Carnige? I do however, think you'll have a very hard time finding anyone, but I wouldn't give up quite yet.
There are some great Cleveland based members here that could give you an idea of the area if you give some addresses etc.
I went with the Tremont area of Cleveland. I plan on visiting and meeting a realtor, inspector, local investors, and hopefully some BP members.
With that said, you indicated you're about 2500 miles away, are you in Northern or Southern California?
Also, I have a realtor that I actually trust in the area, if you'd like her contact information. She had helped me a ton, even though I didn't buy a property through her, or using her services.
Wow, this thread has gotten quite a few replies :) Anyway, I did eventually find a property manager and yes, unfortunately they are on the east side of Cleveland..the numbers just looked too good to pass up...lesson learned.
Ben,
I'm in Southern CA...and yes, I'd love the contact info for your realtor in case I want to sell.
Thanks.