BiggerPockets Podcast 062 with Phil Dwyer Transcript
Link to show: BP Podcast 062: Managing Tenants For Maximum Profit & Minimal Stress with Phil Dwyer
Josh: This is the BiggerPockets podcast show 62.
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Josh: What’s going on everybody? This is Josh Dorkin, host of the BiggerPockets podcast here with Brandon Turner. What’s up, Brandon?
Brandon: What’s up, Josh? How are you? Sick aren’t you?
Josh: I’m sick.
Brandon: Aw. Wah-wah.
Josh: I feel terrible, man. My family’s been sick for weeks. I’m really not feeling good, man, but I’m here.
Brandon: You’re here, and we are going to do this anyway.
Josh: We are going to plow through.
Brandon: Because it’s a good interview, and I think people are going to like this a lot.
Josh: Yeah, a lot of good information for those folks thinking about hiring property managers, folks looking for more information about appraisals, and our guest today is Phil Dwyer, Phillip Dwyer, and he’s a professional property manager in the Las Vegas area, formerly in Detroit.
Josh: And he’s also a real estate agent, and an appraiser. So, the guy’s got a lot of knowledge, a lot of skills, and hopefully you will chime in, and check it out.
Brandon: Yeah, and we talk about people who just manage their own properties. Like, if you ever want to get into rental property, and you want to manage tenants me and Phil give a lot of examples, and you too, Josh, we talk a lot about the ins and outs of actually dealing with nasty tenants, and good ones too.
Josh: Well, you don’t have to deal with good tenants.
Brandon: Exactly! Yeah.
Josh: They’re the ones you never hear from.
Brandon: You deal with the rough ones.
Josh: Yeah, exactly. Anyway, so before we get into the show, this is show 62, we’ve got show notes at BiggerPockets.com/show62. You can jump on there, we point to things we talk about, you can ask questions there, and I definitely recommend that. Otherwise today’s
Josh & Brandon: Quick Tip
Josh: Is show 61, we’re trying something new and we actually did a video recording of it, that was our interview with Ben Leybovich, and we’re going to have that up on YouTube for those of you who are interested in actually seeing the process, I guess, or checking it out on Youtube. So, go check out our channel, where we have lots of really good videos, at YouTube.com/BiggerPockets. With that, let’s get this thing going. Phillip Dwyer, welcome to the show, man. Good to have you here!
Phil: Thanks for having me, guys! Pleasure to be here.
Brandon: Awesome. Us too, us too. Well, you are a property manager, and an appraiser, and you do all sorts of fun stuff with real estate so I think we’re going to dig into all of that stuff today, but why don’t we start with what we always do. Before real estate what were you doing, and how did you get into real estate in the first place?
Phil: Well, it’s interesting. Growing up my grandfather, he was a teacher, and he had a bunch of rental properties so that was my first exposure, but I didn’t realize that was something I wanted to do, it just looked like a bunch of work.
Phil: So, I went to college, did my thing, and a buddy of mine was a real estate appraiser and just kept talking about how much he liked it, and he had an opportunity with the company he was with to take over a branch in Miami, and asked if I wanted to jump in and learn the ropes with them. So, who wouldn’t want to go to Miami, right?
Josh & Brandon: Yeah.
Phil: Yeah! So, I said, “sign me up, let’s do it,” and then he called two weeks later and said the Miami plan changed, and they were going to give him the branch office in Detroit.
Phil: So, somehow I talked my wife into going out there, and anyway, that’s how we got started back in 2003 learning appraisals in Detroit.
Josh: Wow, she must really love you.
Phil: I don’t get it either.
Brandon: That’s funny. How was that? We make fun of Detroit for low property prices all of the time. I mean, did you find that the same, or what was it like to be an appraiser in Detroit?
Phil: Well, at that time that was 2003 so the whole country was going through the boom cycle, but Detroit is unique in that that market you have basically one of the poorest cities in the country right next to one of the wealthiest counties in the country. I think at that time Oakland county was third wealthiest county in the country.
Phil: So, parts of the metro were going crazy. The new construction all over the place, and then in the city you had foreclosures all over the place. So, it was an interesting dynamic. I remember one day I appraised a house for $500, and then—
Josh: It costs $500 to appraise the house, or the appraisal value of the house was $500?
Phil: The value was $500.
Phil: And the same day I was at a multi-million-dollar house a half hour away.
Josh: Can I ask, what does a $500 house look like? I mean, is it like, you know, is it made of sticks, and the wolf can blow it down, or what are we talking about here?
Phil: You’re talking a place in the city that basically they’re probably bulldozing now. It’s something that needed to be tore down, but those are the kinds of houses you see people put up online saying, “oh yeah, you can get in for $500 and you’re going to make millions,” and people really need to do their homework.
Josh: Yeah, and I’m glad we’ve got you. As everybody knows, yes, I rip on Detroit as, I’m sure you would agree, that for many reasons Detroit should be ripped upon. I do so, again, because I think it’s important that people understand that just because the property is $500, and seems like a steal doesn’t mean, you know, you’d want to own that property. In fact, I wouldn’t take that $500 property from you because it’s going to cost me more than $500, and I’m not going to make anything off it.
Phil: Yeah, I mean, you have $500, $5,000, whatever. If you don’t have anybody that wants to rent it, what are you going to do with it, you know? If nobody else is going to want to buy it from you if you fix it up, and all the stuff will be stolen before you’re done it just doesn’t make any sense.
Brandon: Do you think there’s any value in, I mean, I know today you can’t buy them for $500, maybe you can, I don’t know, but is there any value, do you think, in buying these properties for extremely low prices just hoping that in 10 years from now they’ll be work $100,000, if Detroit ever turns around which it seems to be? Is that a valuable—
Josh: Are you saying, like, to bulldoze? Like, buy—
Brandon: No, just to hold.
Josh: 20 properties for a couple thousand bucks a piece, bulldoze the property, because they’re probably dilapidated, I’m guessing a $500 or $2,000 property is not going to be in a condition you want to keep. It’s probably better off bulldozed, and then you get the land, and then all of a sudden in 10 years your taxes on that are pretty minimal, there’s some value? That would be my strategy on it.
Brandon: I was thinking, yeah, whether you bulldoze them or not just owning property for that cheap, I mean, what are your thoughts on that?
Phil: I don’t know, I mean, there’s still risk, right? I mean, even vacant land has risk. For $500 you could go put that on a roulette table, or you could put that in a piece of property, but I think there’s more risk on the piece of property in that situation unless you know that it’s going to be redeveloped, or it’s part of some master plan to, you know, a new hospital is going down the street or something like that then I could see doing that, but just as a hold just to say I’m going to buy this house just because it’s this dollar amount, and hope that later it’s something more just seems risky to me.
Brandon: Yeah, that makes sense.
Josh: Particularly, I guess, in an area that still hasn’t really turned around. Well, I guess that’s not necessarily true. There have been a lot of signs of Detroit starting to turn, and that’s great, but there’s a lot of challenges to be faced before things really start to turn. I’m guessing you would agree from your appraiser years, right?
Phil: Well, I still have a lot of close friends that are there that are doing very well investing in that market, and I think why they’ve been successful is because they’ve paid attention to where people are moving from, where they’re escaping from in the city that’s bad that isn’t going to get fixed, and where they’re relocating to within that market, and buying houses there. Just as you would maybe in another part of the country, you know, following where the population’s going to go, and getting in front of it, and taking advantage of that situation.
Josh: Gotcha, gotcha. Alright, so let’s talk about the appraising thing a little bit. So, you’re an appraiser, how many appraisals have you done? I’m guessing thousands over your career?
Phil: Yeah, I guess I don’t know. I kept track for the first few years, but once you get all the credentials you need you kind of just forget about it. I’ve probably done 3,000 or so, I don’t know.
Josh: So, what do you know today that you didn’t know after appraisal 100, for example. Like, what have you gotten better at, and what tips can you share with the listeners in terms of valuating properties, and figuring out what something’s worth? Are there any cool insights you can share?
Phil: Yeah, I think where it all came together is when I actually decided to get a real estate license, and practice helping people to buy houses. As an appraiser you have the data, you get really good at analyzing the data, but you’re missing the piece of what consumers actually want, what they’re talking about when they go inside of a house, what they’re picking out that are ups and downs that sometimes the data itself doesn’t reflect.
So, when I started helping people to buy houses stuff sort of started coming together, and I think it’s made me better at both now because I’m a better appraiser now that I have that insight, but I think I become a better agent as I continue to do appraisals too. You just look at more pieces of the puzzle I guess.
Brandon: Well, that’s interesting. I never actually met a appraiser that was also an agent, I don’t think. I mean, that’s kind of a cool combination.
Josh: It’s like Bigfoot.
Brandon: Yeah, “I’ve heard of these things, but they’re mysterious,” hey, that’s kinda cool. So, you are no longer in Detroit, though, right?
Phil: That’s right. I’m in sunny Las Vegas.
Brandon: Nice, so how did you get there? Like, what took you there?
Phil: Snow drove me from Detroit. I’ve been all over the Midwest growing up, and college, and Detroit, and we finally decided, you know, if we’re going to start our business let’s go someplace where we want to be. Away from the snow where it’s going to be nice, where people want to come and visit us, and where long term business prospects look good.
So, we looked at several places before we decided on Vegas. So, we looked at Phoenix, Southern California, and Vegas had, at the time, a booming economy. Demographically if you look at census info the whole southwest region from Denver to LA has, you know, is trending towards mass migration here, and the barrier to entry for starting up a business here seemed to be the easiest. So, a combination of all those things is how I ended up here.
Josh: Gotcha. So, Phil, now you’ve taken up property management, right? Your career path, you’ve got the appraisal, you’ve got the agency side, and then you decided to go into the property management side, yeah?
Phil: Yeah, so full disclosure I don’t own any rental properties right now, but it’s on my to-do list, and I think everybody has, you know, you have these goals that you want to attain in life, and then you have to figure out your path to get there. For me I didn’t have the capital to go invest in properties, and I didn’t have the connections that would give me the capital. So, you have to start thinking of, “what can I bring to the table to make this happen?” I had the appraisal experience, and that continues to be a great resource for me, but I didn’t have any experience managing rental properties, or knowing enough about that. I have several friends that do it, but until you’re in it you don’t pick that stuff up.
So, my thought was, “okay, why don’t I reach out to the clients I’ve been working with, these investors, and tell them what I want to do, and see if they would give me the opportunity to manage some of their property and grow with them?” So, yeah, I stuck my toe in the water, and three years later here I’m enjoying it, and I’m learning a ton, and when I finally build up where I need to be to buy my own, or when the market changes so there’s an opportunity there then I’ll be ready.
Brandon: Well, that’s one of the reasons I wanted to talk to you is because even though you’re not currently an investor you’re doing what I always recommend people to do; You know where you want to be, and you went and worked in the field to get there, and I think that’s just awesome. So, when you actually get your first purchase, or whatever you’ll already be leaps and bounds ahead of most other people. That’s really why I wanted to talk to you today cause I wanted to encourage other people to do that, and obviously you’re a professional at property management, and that is a part of the business that I think a lot of people struggle at, and a lot of people are really bad at, and it took a long time for me to get halfway decent at it.
So, why don’t we move to that? Why don’t we talk about management? So, why don’t I start out with: what is the most difficult part of single-family, or just in general, property management? Actually, let me go back then, what are you managing? Is it single-family, multi-family, or what do you do?
Phil: Almost all single-family detached houses. I have a couple of condo units thrown in there as well, but I mean mostly just single-family stuff.
Brandon: Okay, so what would you say, then, is the most difficult part of managing?
Phil: It’s not the property, it’s the people. Because I’m not an investor this is a little different, I’m managing two different sets of people. I’m managing the owners, and the tenants, and the reason that the owner side there’s management there is a lot of my clients are accidental land lords for whatever reason. They either inherited a property, you know, mom or dad passed away in this retirement community and now what do I do with this house? Or someone that’s in a situation, and they’re doing better now and they want to move up and buy a bigger house, but they don’t want to, or can’t sell the smaller one. Situations like that so they have absolutely zero experience going in, and therefore either their idea on how it should work is skewed, or they don’t know how it should work. So, it’s my job both to coach them, give them information, and when things inevitably go wrong, as they do in rental properties, one: prepping them for that, but then delivering the message.
Josh: Yeah, you know, one of the things that I had the hardest time with was finding good property managers, and as you sit here nodding your head, and Brandon, I’m sure, is nodding his, and most of our folks listening are nodding theirs, you had said something about it being a partnership. You know, when I first started hunting for property managers what I discovered was they talked to me like I owed them something, you know? They’re the boss, they’re in charge, and they’re going to tell me how it is, and I didn’t know any better, and so I said, “okay, great, cool. You tell me how it is,” and I found out that didn’t work very, very, very quickly. Realized that it was a partnership, and I needed somebody who was going to look at the properties the same way I looked at them. Who had a similar philosophy in management, had a similar philosophy on how to deal with evictions, and screening, and that kind of stuff.
So, I think people need to realize that just because, I don’t know, I think a lot of new investors have this idea that the property manager is going to interview them about their properties, but it’s just as important, if not more, that you do the exact same to them. We actually put together a property manager interview checklist where it’s got a list, and Brandon will link to it, we’ll link to it, in the show notes at BiggerPockets.com/show62.
Brandon: Sea shells by the sea shore.
Josh: Exactly, thank you. I’m having a hard time. I’m sick today guys so, you know.
Brandon: Aw. Wah-wah-wah.
Josh: Anyway, so the whole point is: how does somebody go about finding a good manager that’s going to work with them? Beyond the interview spreadsheet. I mean, do you just go and talk to everybody in town and see who’s got a good fit, or is there any kind of tip that you have?
Phil: It probably depends on a couple of factors. One: are the properties in your backyard, or are they across the country? So, if they’re in your hometown, or wherever it is you live you probably have some resources in your own personal network that you can use to help vet the prospects on your list, or at least come up with prospects. Whether that’s investors that you hang out with, or real estate agents that you know, or attorneys that you know, you start asking the people that you trust. If you have a CPA maybe ask them. Likelihood is that your CPA probably has some investment property, and they probably have somebody manage it cause they’re too busy doing the CPA stuff so that’s one way I would go about it on a local level.
Brandon: I wonder if asking contractors also would be a good idea? Like, who’s paid you on time? Who’s been the best to work with? I mean, that would probably tell quite a bit about a property manager based on how they treat their vendors.
Phil: I think so, and then calling on the signs that you see in the neighborhood.
Josh: That’s a great idea. See how they answer the phones.
Brandon: I called a property management company this morning cause I saw a listing online, and I just wanted to know more about the house cause it’s comparable to one of mine. Anyway, they answered the phone with, “hello,” like, that was the answer. “hello,” and this is like the third largest in my town property management company. “hello.” Yeah, terrible. Moving on.
Brandon: “Hello. Josh, this is your mother.”
Brandon: That’s my New York accent.
Josh: Real nice, man, real nice.
Brandon: Anyway, yeah.
Josh: So, that’s pretty good advice. In terms of your property management company specifically, let’s kind of cover that a little bit and we’ll go from there. How many tenants are you currently managing now?
Phil: I have, well, our office is kind of unique in the way we’re set up, and maybe it’s not unique, but I found in our market we have a couple different types of property management companies. Some companies are set up just to be property management, and that’s all they do. They don’t do sales, or even manage their own properties. The brokerage where I’m at is a full-service brokerage so there’s sales people here, there’s also property managers. In Nevada we have to have a real estate license to be a property manager, and then you get a property manager permit. So, anybody who says that they’re doing property management at least needs to have those licenses.
Anyway, so the brokerage where I’m at we have, I think, ten property managers managing roughly 500 properties. Of those I have 50, and I try to concentrate on one part of town so I’m not all over the place, but the nature of the business is you get one in one part of town, and you do a good job then they’re going to refer you to other people and you tend to do stuff all over.
Brandon: Hey, do you have a number that’s pretty typical, this is a tough question, but how many property managers does it take to handle X amount of tenants? Like, is it typically 1 to 50? You know, one employee versus fifty tenants, or is that just too general of a question?
Phil: I think it depends on the set up of the company. At our office we have an internalized book keeping staff so that takes a lot off our plate, and then I have an assistant who is well over qualified, it’s my wife, so that takes a lot off my plate too to handle the stuff that I need to be doing. I like to go out on a regular basis and visit properties so it gets me out of the office a lot. To answer your question, it depends. I’d say the hardest part in property management is scaling up, and making sure that you’re staffed appropriately to handle that growth. It’s easy to take on, you know, tomorrow I could get a client that has 20 properties, and all of a sudden that’s a big influx in business, and being able to have the right people in place to handle that is important, obviously.
So, I don’t know. I guess it depends on the structure.
Josh: What does that look like team wise? So, right now it’s you and your wife. You guys are managing this one section of this overall brokerage’s management team, but do you guys as part of your own team have any other folks involved? Presumably you’ve got the vendors that you deal with, anyone else?
Phil: We pick our own vendors. They get approved on our vendor panel that our managers can use, but I’ve been hand picking those, and once you have a relationship established that we outsource all of that stuff to those vendors regardless of what the repairs are. I mean, if I’m at a property all I have to do is push a reset button on a garbage disposal, sure, I’m going to do that, but for the most part I’m not swinging hammers. I leave that to the people that know what they’re doing.
Josh: Well, speaking of the vendors, I think that’s another thing that a lot of people are curious about. I was with a property manager who required you, this was my first or second property manager, they required us to use one vendor that they had, and I didn’t know any better. They were like, “this is the guy, this is our internal,” whatever you want to call it, “our internal contractor, you guys have to use him,” and, again, big mistake on my part not asking, not saying, “well, that’s crazy. I need options,” but you live, you learn.
So, I would say you A: want to avoid anyone who’s doing that. The worry is that there’s kickbacks and you’re not necessarily going to get the best contractor. How would somebody know that the people on your list are legit? I want to take your word for it, but how do I know you’re not getting kickbacks? Is that a question? Is that something that they can ask? Is it even viable? Is it something that matters?
Phil: Well, I think you definitely ask that question, and the tone of the response might, in itself, give you the answer you need, but a couple things you can do when you’re working with a manager is ask for monthly statements, and then have those reconciled against invoices that they give you copies of. Depending on the scope of the work, I mean, if it’s a garbage disposal or a microwave those are pretty easy things to figure out if you’re getting ripped off on or not. The larger the project, or more complicated it becomes then it may be harder, and you’ll have to use your judgement, but at that point you should have also done multiple bids on the front end to help mitigate some of that.
Josh: Do you have an issue with folks saying, “listen, this is a guy that I know. This is my contractor,” he’s not on your list, is that going to be an issue for you specifically?
Phil: If an owner has a vendor that they like?
Phil: I’ll use them, but I vet them first. I require that anybody we use for repairs that require a license be licensed, and insured.
Josh: Yeah, of course. I think that’s great, that’s fantastic.
Brandon: You know, one of my biggest fears about using property management, and one of the biggest reasons I haven’t, and maybe you can just kind of calm my fears here is—
Josh: Control freak.
Brandon: Yeah, well, partially that, but I am afraid of it being the garbage disposal didn’t work, all it was was a button. Instead they go ahead and replace the garbage disposal, and while they were there they cleaned up under the sink and I get a bill for $750. Like, that’s my biggest fear, and when I know it was a button. Cause I feel I know more than most contractors in my town, like, those handy man guys cause I don’t trust them. I guess, what can I do about that? Is that just a matter of getting the right property manager?
Josh: You can test them, man.
Brandon: I guess.
Josh: Mess up your garbage disposal so it’s just a button, you set em up, you have em show up, and if they try and charge you then make sure you’ve got a video of that sucker, and once they try and do that you bust them and you report them to the local news station.
Phil: I want that on BP. That would be awesome.
Josh: Then you do it again, and again, and again until you find the one honest property manager in town.
Brandon: That’s not a bad idea, that’s not a bad idea, but that’s my fear.
Phil: You know, sometimes you just have to let go on certain things. I’m sure there’s always a risk you could get taken. Hopefully you’ve built some rapport with the company, or the person you choose, and that’s why you’ve given them that job to then have them take care of these things, but there’s always that chance that something could happen. I think, though, I mean, if you’re worried that they’re going to screw you over on a garbage disposal you probably shouldn’t have hired them to begin with.
Josh: Well, I tell you what, as somebody who’s been ripped off by multiple property managers I am hesitant to ever trust a property management company. You know, even like somebody like you who I know, who I feel comfortable with, like I would be really skeptical. Like, no offense, I think you’re a good guy, I trust you, you’re on BP, you give great feedback, but there’s that fear, and I get where Brandon is. It’s that level of there’s a lot of shady managers out there, and it sucks.
One of the things we like to do at BP, as you know, is we speak about investors, and about the good that they do, right? Real estate investors get a bad rep in the press. There are a lot of bad investors that are out there, but as a percentage it’s pretty tiny to the overall picture of real estate investors, and I’m guessing the same is probably true of property managers. Ultimately at some point, though, I think your industry, the management industry, probably needs to do a better job of vetting their own. Basically working together, having the good property managers—kind of making the good guys stand out, and the bad guys basically look like lepers.
Phil: I think you’re right, and any industry real estate related has that. You know, realtors have that issue, appraisers have that issue, contractors have that issue, and that’s why there’s licensing in place, but licensing doesn’t necessarily mean they’re good. It means they figured out how to pass a test to say that they are the expert when they might just be trained into it.
Brandon: Well, in my state, you know, a lot of states, there is no test. Like, I was a contractor for a while, like a licensed, bonded, insured contractor. I was going to start a contracting company, and there was no test. There was no nothing. I paid a $200 fee, and they gave me my license, and I thought, “that seems really shady that they didn’t even ask me that I knew what a hammer was before I became a general contractor that could build houses,” like, I thought that was insane, and I don’t know if other states are like that as well, but Washington is.
So, definitely, definitely have to vet these people because of that because you have no idea what they actually know.
Phil: One of the biggest things, real quick, people need to ask for references, but then they actually need to follow through and call those references.
Phil: I don’t know how many times people have asked me for references, I give them, and then I’ll follow up with the people to see if anybody ever called them, “oh, no, we never received a call,” well you need to, whether you’re hiring a plumber, or you’re hiring a property manager, find out who they’re doing business with, and would those people do business with them again?
Brandon: Yup, and I could turn that around, as well, to land lords who don’t call previous tenant’s land lords, right? So, I own almost 50 units now, and we have a lot of people going in and out moving all the time, and in the last seven years I have had three, or four phone calls from other property management companies or land lords calling to ask about a former tenant. I mean, I have had hundreds of tenants in and out of my control and I’ve had like three or four phone calls. It’s completely insane how few.
Phil: It’s scary.
Brandon: It’s completely scary because that is the number one best way to know how good a tenant is going to be is based on how they’ve been, and if you don’t take the five minutes to call their previous landlord and just ask them what kind of tenant they were—I had my worst tenant ever, somebody just last week they called, and it was my worst tenant ever, and for some reason they put us down as a reference and it was really nice to be able to say, “they were terrible! Don’t touch them with a ten-foot pole!”
Josh: Well, and I wonder in hiring in the real world outside of tenants, if you call a reference on a job app there’s very specific questions that you can ask. As a reference I don’t know the exact laws, but you can’t say they were terrible. They’ll come after you, they’ll sue you, right?
Brandon: Yeah, we parsed it very carefully. “Would you rent to them again?” “NOOOO!”
Josh: But, you know, in terms of the calling and following up, I think one of the fears that people have is they’re just putting down a friend, and I think part of dealing with that is looking up the land lord. Vetting the land lord, the previous land lord. I mean, you’ve gotta do work. You’ve gotta do work to screen people.
Brandon: Somebody gave a tip on that earlier in one of our first shows where they said if you call the reference first call from your cell phone, and just ask, “hey, I’m just wondering if you have any rentals available?” And if the person says, “what are you talking about?” Then you know it’s probably a friend, but if they say, “no, we’re all full right now,” then you can know they’re legit.
Josh: That’s a good tip.
Brandon: I don’t remember who said that.
Josh: I don’t remember that on the show.
Brandon: Yeah, that was one of our first five shows way back in the day.
Josh: That was a long time ago, man.
Brandon: It was. Over a year.
Phil: I might add that to my list, that’s a good one.
Brandon: Yeah, I liked it a lot.
Josh: Great idea.
Brandon: Yeah, well, anyway, cool. Alright, so let’s move onto some details on actually managing properties cause most people listening to the show are probably, you know, they’ve got some rentals of their own, they’re not using a property manager, so let’s talk about specifics on how you actually deal with them. So, first of all, what are some red flags that you look for when a prospective tenant applies to rent from you?
Phil: Well, there’s a lot. My favorite is when somebody brought a 8-week puppy, or I don’t even know if it was that old, but they brought that to the showing, and didn’t tell me on the front end so I don’t know. I mean, we do several things when we screen. So, you need to be looking for: can they fill out the application? Is it filled out completely?
Phil: Name. If they can’t, or if they chose not to fill out, certain parts that’s usually a pretty good indicator that there’s something going on there.
Brandon: On our application we ask how many evictions have been filed on you, we don’t ask how many evictions do you have, or do you have any evictions? That’s easy to lie. I’ll say, “how many evictions have been filed on you?” and people leave it blank and it’s a huge red flag because they can’t just say no, it’s easy to lie, but to actually say none or zero people feel too uncomfortable doing that, I think, so they just leave it blank. Anyway. That’s my story. Go on, red flags. Sorry I just interrupted, but go ahead.
Phil: We always run credit, you guys have that tool through BiggerPockets for, I can’t remember which credit reporting agency, but—
Josh: The Smart Move tenant screening?
Phil: That’s something you need to do because it’s more than just the number, you need to read through the actual things that are in the credit report, both for what types of issues they have, and it may help you confirm some other things that you have going on there. It should tell you whether they’ve been evicted or not, but sometimes the local whoever is in charge of evictions, the courts or whatever, may not have reported yet to them so one thing I recommend that land lords do is: both on the screening side when you’re running the credit and eviction history, also look up on your local court record system. Most of them are electronic now where you can reverse lookup their name, and find out if they are in the process of being evicted at their current residence.
Josh: That’s good advice. One of the challenges with that, and the screening tool I said was Smart Move, and we’ve got a link to that, we’ll have that in the show notes, the link to our tenant screening. In fact, I’m just going to really quick on top of that say that Brandon put together a really, really amazing guide for screening tenants.
Brandon: Aw, thank you.
Josh: The Ultimate Guide for Screening Tenants, which we’ll also link to on there, but in terms of the evictions: one of the problems is that people, there may be one or two people in your county with the same name so getting the false positives is kind of tough to vet so in terms of that how do you deal with that? If you see an eviction, and it’s the wrong guy how do you know? How does the poor guy who’s sharing a name with somebody that has been evicted, and they’re a perfect tenant deal with that?
Phil: We’re lucky in that, if I remember correctly, the other parties to that case are listed on the court system so you can use that information, then, to go and cross reference that with ownership data and things like that so it helps you eliminate the false positives. Sure, there may be one occasionally, and I just ask people, “okay, so we found this on the eviction records, can you explain this?” and see what they say.
Brandon: Yeah, just stop talking and let them talk.
Brandon: That shows a lot of stuff. Hey, also, do you rent, then, to people who have evictions? Like, would you rent to somebody who had an eviction? If so, when? How long does it have to be? Kind of what’s your—
Phil: Got an easy answer for you: No.
Brandon: Okay, that’s good. I mean, a lot of people, I’ve had arguments online about, “yeah, but you’ve got to give people a second chance, and they try, and it’s so hard for those people,” and I just always kind of look at it as I’ll let somebody else take that chance and give them the second chance. There’s enough land lords, there’s plenty that aren’t doing any tenant screening whatsoever, so I’ll let them go to them, but on my properties I ain’t going to risk it.
Josh: Yeah, I think that’s good. I mean, I’ve evicted a lot of people from my properties, and I wish I had The Guide to Screening Tenants back in the day because unfortunately, again, and I think that’s where investors really, really need to press upon with their property managers. Figure out what their exact criteria are for selecting the tenants because if they’re loose in the lease you’re going to end up with bad tenants so creating your own, and basically in your interview with the property managers you don’t want to tell them what yours is, but you want to figure out what theirs is, and if theirs is kind of half-cocked I don’t think going in and saying, “hey, okay, well you’ve screened for A, B, and C, but what about D, E, F and G that you’re missing?” I kind of feel like if they’re not already doing that they’re probably not prepared to be managing their properties.
Phil: Yeah, I think so too. I mean, there are some basics, I mean, we’re supposed to be professionals doing this, right? So, we should have more screening rules than someone how is managing their own by virtue of that’s what we do every day so that makes sense to me.
Josh: Yeah. Right on. Well, let’s talk about real estate problems. So, we put together a couple of scenarios and thought it’d be fun to throw them at you and let you tell us what you would do in the situation.
Josh: Alright, so a tenant calls and says they were sick, and they’re going to be a week late with their rent.
Phil: Depends. If they’re someone I have a relationship with, and they’ve been renting with me for five years and they’ve paid on time for the last five years and never had an issue, they don’t call and complain, they pay rent on time, the house is in great shape I’m likely to believe them at that point that that’s an issue and we’ll work with them in that scenario, but for everybody else I’d say it’s not tricky, but you have to approach it delicately. I always say, “hey, I understand you’re in a tough spot, but I have to protect the owner so here’s what’s going to happen: when the first comes we’ll be filing the five day pay or quit, and you’ll have five days to pay us the rent and if you get it to us before then then everything’s fine, but otherwise know that we have to proceed with eviction”.
Phil: So, you know, you show empathy, but you have to enforce the lease.
Brandon: Let me just tell a quick story on this. I admit, I picked that question cause the exact thing happened to me this month. So, real quick with the story, we have a family that has been with us for four years now, and they’ve been good, they’ve paid on time pretty much every month. I think they had one a few days late a few years ago, but really good, solid family been paying on time. Well, they didn’t pay this month and I was like, “oh, they always pay on time,” so I kind of let it go a couple of days late. We have due on the first, late on the fifth. Let it go a couple days, and finally I was over at the place picking up some tools, or something like that and I’m like, well, I’ll just go and knock on her door cause her cell phone doesn’t work anymore. So, I go and knock on her door and she answers and she goes, “oh! I was sick I’m going to be a couple days late, I get paid again on Friday, that’s when my paycheck cause my last one was too small,” so on Friday we wait for the rent, never got anything. Didn’t call, she didn’t call, she didn’t call, apparently her phone’s still broken so we finally gave her a three-day notice, we have a three-day in Washington, gave her a three-day pay or quit on Tuesday and that was last Tuesday. Today is Tuesday again that we’re recording this, and we have still not heard from her or anything so now today we’re filing for an eviction on her.
The moral of my story is every time I bend my rules, every time I bend my rules is when I get screwed. Every time. Even though she’s been with us for four or five years I still, I gave them the benefit of the doubt, I let emotion get in cause I like them, they’re nice people, rather than giving them the three-day on the fifth and I’m going to lose three weeks behind on my eviction because of it.
Josh: And today’s the 18th so why did you wait after three days X amount of days before you filed the eviction? I mean, you filed the three days, and then three days passed, and then you still waited a bunch more days just to kind of see if she would bring it in, right?
Brandon: Yeah, correct, I just kind of kept giving her a little more thinking we’ll deal with it tomorrow, I think she’s going to be fine. Granted, when they moved in, and I can’t remember why, but I think he was in a transitional job so we got a double security deposit for them which I always get if I’m even halfway hesitant so he was like, he was a landscaper and it was winter and he had low work I think it was, anyway. So, we have a double security deposit for them, but still I’m going to lose money on this in the end.
Josh: So, don’t be Brandon listeners. Seriously.
Brandon: Yeah. Follow your rules, follow your rules, follow your rules.
Josh: Because you’re training your tenants.
Josh: I mean, that’s the whole key is you want to train these tenants, and if this tenant tells the other people that they know that are renting from you that you let them pass the inmates are in charge of the prison.
Phil: I agree. I think training people up front, before you even get done with the lease signing, in how you’re going to handle late payments is key. If you lay the foundation of: this is how you can expect to do business with us, and you can make that positive too, I mean, it doesn’t have to be this heavy fist that you’re waving over them. It’s that, you know, here’s our expectations of how you need to perform, and here’s what we’re going to do if something breaks, so they can feel good about the relationship, but that they know you’re in this to be a business person and not for a hobby.
Josh: Yeah, that’s great.
Brandon: Definitely. Alright, well, let’s move on to the second question. Okay, I’m just going to admit it, every one of these questions came from things that happened to me in the last week or two. Alright, so, a tenant calls about their toilet being backed up, I just know what you would do in comparison to what I did, so a tenant calls and their toilet is backed up. It’s plugged. What do you do?
Phil: Is it overflowing?
Josh: No. They just can’t use it cause it’s plugged. Do you fix it, or you make them fix it cause it’s their fault?
Phil: I tell them, well, I mean, the first thing is: hey, get a plunger. There’s some simple steps you can do here on your own to get rid of this situation, and then in our, I don’t know how you guys do it in Washington, but I’m curious. We have in our lease here that tenants are responsible for repairs up to a certain dollar amount, and ours, I think, are typically anywhere from $75-$100 depending on the price range of the property. That seems to cover most service calls, and so I usually tell them, “okay, you can fix this yourself, or I can call somebody and bill you back for the service call, you decide which way you want to do it,” unless it’s something that, you know, if there’s running water we’re going to get out there right away and see what’s going on.
Brandon: I don’t know if that’s legal in Washington or not, I’ll look into that. Right now I say if you cause a problem you fix your own problem. It’s in the lease if they cause their toilet to plug, they have to fix it, and that’s what I told them and they went and got a plunger and it worked.
Josh: I think outlining in the lease the things that you’re going to deal with, and the things you’re not going to deal with is probably the most important thing, right? So, you stop up your toilet, literally in the lease, we’re not going to come in if you stuck your toilet. You gotta figure that out. You did the business now handle it, right? I think if you have those rules set in the beginning, and I’m curious about how you guys do it, Phillip, do you go through the lease with prospective tenants and go through point by point and have them signature, initial?
Josh: You do? Okay.
Phil: Yeah, I think that’s really important. Obviously I tell them I’m not an attorney, and if they have questions they need to have their attorney help them with that, but I want everybody to be on the same page. If everything’s out in the open now and they have a concern now that might be a red flag to me too that: okay, they have an issue with this part of the lease, maybe I don’t want to rent to them? You know, even after you’ve gone through the whole approval process you get down to the table, and you’re writing the lease that may be an indicator that this isn’t a good fit, but if it’s something that’s workable with an explanation, or with an addendum to make everybody comfortable then let’s take care of it now versus six months from now when an issue comes up and everybody’s emotional about it.
Josh: So, here’s something that’s not on this little list of ours. How do you deal with tenant conflicts? Because that seems to be one of the most challenging things for property managers, and owners to deal with. In multi-families you’ve got two people who, you know, one’s got their music blasting at night, or one’s fighting, or whatever it is. How do you deal with that stuff? Is it just stick to the lease, you can’t have music past 8 o’clock, I mean, are your leases that programmatic down to the detail the nitty gritty, or is it just dealing with chaos and trying to work the personalities out, or potentially even getting somebody evicted?
Phil: Well, one: I’m lucky and I don’t have any multi-family properties to have to juggle those personalities where you have side-by-side units. I guess the most similar thing I have are some condo units, and in those situations they’re agreeing on the front end to abide by the HOA rules and regs so it’s not likely I’m going to get a call from a neighbor. However, and this is something I actually recommend this to owners who manage their own properties as well, I’m going to go off on a side tangent here.
Brandon: Do it.
Phil: If you have a business card, whether you’re a property manager, or you just have your own land lording business go around and knock on the doors of the neighbors and give them your card. I had a situation last week where we just had a tenant move in over the weekend, and before that I had knocked around the doors of the neighbors giving my card out, and said, “hey, if you see anything screwy happening, or anything here’s my card, give me a call, or if you know somebody that wants to live in the neighborhood give me a call,” so this tenant moves in. Monday morning I get a call from the neighbor, and he says, “hey, I haven’t had a chance to meet the tenant yet, and there’s water rushing out the front of the garage. You might want to get over here,” so I called the tenant on my way to the property and let myself in and turned the water off, and all that stuff, and luckily saved all her stuff that she had just moved into the garage, but as an owner this is one easy thing that can help save you a lot of money. I mean, if that water would have ran all day and nobody had a way to get ahold of anybody who knows how much damage that could have cost?
Brandon: That’s an awesome, awesome tip. Hey, by the way, this is great, I just got a text message right now from my wife saying, “hey, the tenant who didn’t pay rent just paid,” so what do you know? I don’t have to do an eviction!
Josh: But guess what?
Brandon: Next month I’m going to have to?
Josh: Yup, what are the odds you’re going to get paid on the 1st?
Brandon: Yeah, so next month on the fifth when she doesn’t pay, cause they gotta pay on the fifth, well, maybe on the morning of the sixth she’ll get a three-day notice from me. Immediately. Because now she’s lost her, yeah, and on the ninth she gets an eviction.
Josh: She gets an eviction.
Brandon: Yup. So, next month we’ll deal with it.
Josh: Do it.
Brandon: Anyway, well, cool. Oh, by the way I hate that part of the job too is the day care part of like, they parked in my spot. I deal with that all the time at my, I actually took away parking spots at my apartment complex, like, defined ones. They were defined ahead of time. Finally, I just got so tired of those phone calls of, “this person’s parked here,” and yeah, now I just say, “park where you want, and if you have a problem go yell at your neighbor”.
Josh: You actually did remove that question so the whole comment for the listeners about baby sitting parking spots?
Brandon: No, cause you mentioned a minute ago tenant conflicts so I was referencing your tenant conflicts.
Josh: Okay, fair enough.
Phil: I definitely think with most of these things, you know, it’s tricky. In emails they can often be misinterpreted for whatever reason, but I prefer, you know, multi-communication situation where you’re calling a tenant to explain the situation so that you’re on the same page, but then following that up, or pre-empting it, either-or, email so you have something in writing. You don’t need to write a novel. I actually think you need to do very simple, just one or two sentences, here’s the situation, here’s what we agreed to, that’s it. If you write more, you tend to get yourself into trouble.
Brandon: Yup, good, good. Next question: somebody applies to rent a property from you, it’s a $600 a month house, and they only make $1,300 a month, but it’s on a fixed income. They’re like, an old guy or something, do you rent to them?
Brandon: You don’t?
Josh: What are your income requirements?
Brandon: Yeah, you don’t bend it?
Phil: Three times monthly rent, and I’ve tried making that work by, I think somebody made 2.7 times monthly rent, and every time I’ve bent that rule it’s come back to bite me so you get burned a couple times and you figure out that don’t do that anymore. So, ours is strictly three times. In our town we have a lot of undocumented income here because of the types of industry that’s here, you know, a lot of tip earners, people paid in cash, and so—
Brandon: Hundred-dollar bills?
Phil: Yes, hundred-dollar bills.
Brandon: Sorry, I couldn’t.
Phil: That’s funny. You know, we require that if you can’t show me a pay stub I need tax returns, or something. We need to have proof that you make what you say you make, and if they can’t produce that, or balk at that then it’s not a good fit.
Josh: So, here’s what I’ve heard from this show. For me the take away is: create a set of rules and regs, and define them, and if you can’t figure it out on your own turn to BiggerPockets, go to the forums, ask questions, ask other land lords what their rules are, and don’t ever, ever bend them because the second you bend them it bites you in the backside. I’ve experienced it, Brandon’s experienced it, and you’ve experienced it, and I’m sure most other land lords have also experienced it.
Brandon: Yeah, it’s hard, right? Cause you want to help these people. You want to be nice, you want to be reasonable, and so you do, but whenever you do it hurts you.
Josh: But are you being reasonable by doing that? Rules are defined so that they create order, and if you’re kind of being “lenient” due to circumstance, I mean, are you helping them, or hurting them? Now, look, somebody’s wife passes away it’s a really tough circumstance, right? You know, somebody’s dead, or somebody’s in the hospital legitimately, they lose a job. It’s really hard to enforce, but you have to because in the end, especially for Phillip, his job is to protect the owners of the property, and if they’re not collecting the income they’re supposed to be collecting then they’re going to lose their property, and then they’re going to go into foreclosure, and if it’s you, Brandon, the land lord bends your rules and you end up getting screwed on your own properties, and it’s hard. I think it’s one of the biggest challenges of our industry is: where is the line between charity and running a business? I think a lot of people have this mentality that you have to help everybody, you’ve got to be there, and be a good person, and I think most land lords by nature really do care, but I think when you get burned once, twice, five times, and you start losing money in the end it’s kill or be killed in many ways. If I’m not getting paid my family’s going to suffer.
Josh: So, is there any kind of balance somewhere in between that?
Phil: I don’t know, I think it just comes back to being proactive, again, and setting expectations. You know, if you rush through the lease, and you rush through everything on the front end, and you just throw the keys at them and say, “have at it, enjoy the house,” and then there’s a problem later, and they say, “well, I don’t remember that,” well, it’s your fault as the owner at that point. Sure, they signed a piece of paper, and they said they were going to pay rent, but I don’t think you did a good job explaining how you’re going to handle business, and if you do that on the front end it’s going to prevent so many of these problems. When it doesn’t, and something happens you can feel good that you explained to them on the front end the way it was going to work, and that’s where you feel good about it. Don’t feel good by giving them too many chances, and basically having months of collections. That’s not how you want to feel good about it. You want to feel good by you did it right at the beginning, you told them how you were going to do it, and you followed through.
Josh: Yeah, right on. Alright, last question in this section. Tenant has three cats, do you rent to them? By the way, my answer is no.
Phil: Brandon are you moving to Vegas?
Brandon: Okay, yes.
Josh: He’s got like thirty cats.
Brandon: I put this question in cause I have three cats. Would you rent to me?
Phil: You know, I leave the pet thing up to the owners, and we talk about that at the front end before I even take over management. I have pets, but I know how my pets are.
Josh: Do you have real pets, or do you have cats? I mean, you have like a dog?
Phil: I have a real dog.
Josh: Yeah, so I mean, you don’t have these dirty things that poop in the house.
Phil: In the box.
Josh: Yeah, I mean, it’s disgusting.
Phil: That’s kind of gross.
Josh: It’s horrible.
Brandon: I have a dog right now that poops all over the floor so I would take my litterbox—
Josh: Well, we just lost all of our cat people.
Brandon: Yup, they just left. No, they’re on my side. They’re team Brandon today.
Josh: So you would leave it up to the owners then?
Phil: Well, you know, I give them my recommendations. I have some owners that are cat people, and if they want to have cat people in their house then that’s—we go for it, and I explain the downsides and if they want to do it anyway—I mean, it’s like the whole do you allow smokers, or not allow smokers? I guess if you’re an owner and you lived in this house for five years and you smoked ten packs a day in there you don’t care if a smoker moves into the house, but for the most part the owners that I have usually don’t want any pets, and we end up compromising and say we’ll consider a small pet on a case by case basis.
Brandon: For those curious of what I do, just cause I like to share my opinion, so my theory is this: if I have a hard time renting a property even remotely if I think it’s going to sit too long, a single family, I will never rent in a multi-family with pets, but in a single family I will do it if I think the market’s soft and I need some kind of advantage and I’ll charge $200-$300 pet fee for that. Just kind of offsets my risk, and I’ve never really had a problem with it yet. I’ve had a few people wreck houses with pets, but I’ve never allowed the pet in the first place. They snuck the pet in, and then they wrecked the house, but the ones I’ve allowed in and I’ve done it correctly and I’ve screened them really thoroughly I never have a problem with them.
Josh: I’d say the two categories for me have always been cats and big dogs. Big dogs, not necessarily for the insurance reasons, but because the nails will just scratch the hell out of the hardwood, and that’s not inexpensive to fix up, and the cats cause they’re disgusting.
Brandon: Alright, it’s time to move on.
It’s time for the Fire Round
Brandon: There you go. Alright, the Fire Round. These questions all come from the BiggerPockets forums, not from my past week experience like the last questions did.
Phil: Alright, bring it.
Brandon: Alright. Number one: what do you think is the best property for a new investor to get into? A single-family, or multi-family?
Phil: I think it depends on your market. In our market I don’t like the two to fourplexes for anybody. So, if your city has quality properties in either one of those classes I’d say single family to me seems the easiest. You have one set of tenants, you have one set of plumbing, well, I guess however many bathrooms you have, but the costs should be less. I know the counter argument to that is you can hedge your vacancy over four units versus one, but in my mind it’s also hard—I think the turnover is more on a multi than a single unit, wouldn’t you agree?
Brandon: Definitely. My multi-families leave twice as fast as my single families, but the single families take twice, or three times, or four times as much to fix up afterwards to turn over as my multi’s do so in my opinion they kind of cancel each other out.
Josh: Hey, really quick question as an aside. Do you guys, I’m curious for both of you, do you guys have in your single families do you have the tenants take care of things like lawn service or is that something that you typically take care of? Cause I know some owners who have nice lawns, and the last thing you want to see is your lawn get destroyed, and relying on the tenant to pay a lawn service, or do the lawn work is a risky factor. So, I’m just curious what both of you guys do.
Phil: Well, keep in mind I live in the desert.
Josh: That’s true. So, irrelevant question to Phillip.
Brandon: I live in the rainforest so we have green grass 24/7/365.
Josh: Well, what the hell, man?
Phil: You know, conversely, we have a lot of pools here, right? So, we usually, I guess depending on the price level of the home, I do a lot of stuff in the suburbs and I guess our average rent is $1,700, right around there, of the properties that I manage, but on stuff with pools we require that the tenants pay for pool service. I take that back, it’s built into the rent, but the owners have a contractor, and we don’t let the tenants do it on their own. That’s a huge investment, I don’t want that to go south.
Josh: So, you build it into the lease?
Josh: That’s great.
Brandon: Yeah, that’s great, and I do make my tenants do their own lawn mowing, but I don’t worry about them wrecking it cause you can’t wreck the grass out here.
Josh: Well, what if they don’t mow it and it’s 16” tall?
Brandon: Then we’d hire it out. We haven’t actually had that, but we would hire it out and bill them.
Josh: There you go. Okay, cool. Alright, how important do you think it is to provide laundry hookups in an SFR, and what about providing of the actual machines themselves?
Phil: This, again, I think depends on your market, right? So knowing what your competition is doing is very important. If everybody in your little market is providing washers and dryers and you’re not and expecting to get the same amount of rent, or get it rented as fast as they did, I think you’ll have an uphill battle. The flipside of that is if everybody’s not maybe there’s an opportunity for you to do something that other people aren’t that will help attract better tenants. So, I think you have to weigh both of those things, and in our market it’s, I’d say, 50/50 on the washer/dryer situation, but most of the properties I manage we provide those appliances.
Brandon: Okay, alright. Next one: what are your thoughts on investors buying from out of state in the Las Vegas market? Is that a good idea, or bad idea?
Phil: Well, depending on when you buy. If you would’ve bought at the bottom of the market a few years back it was like shooting fish in a barrel, and it was easy returns, and a lot of fun, but I think the question you’re asking more is just a geographical one and whether or not someone should buy out of state, and Vegas is one of those flashing cities, right? People buy here for all kinds of reasons that don’t necessarily equate to sound investment strategies. It’s: I want to tell all my friends that I own a house in Vegas, or whatever. That doesn’t necessarily mean that investing here is bad. I think it’s like any other market; You need to figure out what are your goals? What are your risk tolerances? Do you have people on the ground locally that can help you achieve those goals, and help you feel good about the risk you’re taking? Depending on your answers to those that would be what my suggestion would be.
So, here in Vegas at least 30% of my clients are out of state investors. A lot of California people.
Josh: I was going to say mostly Southern California folks.
Josh: That’s easy, it’s close, and they’re within that driving distance, that proximity where you can go and check on your properties. Three and a half hours away from LA is easy.
Brandon: That’s all it is? I didn’t realize that.
Josh: It’s what? It’s like 250 miles, right? Something like that?
Phil: Yeah, depending on which day it is you’re deciding to drive out here. if you’re trying to make it on a Friday night probably not a good idea.
Josh: Yeah, good luck.
Josh: Yeah, I used to live in LA so I made that commute quite a few times. It’s a nice trip. Alright, should people be worried about another bubble in Vegas anytime in the near future?
Phil: You know; I think it could happen in a lot of our southwestern markets right now. Seems to have really just went crazy in the last year and a half to two years, and I can’t speak to the other cities because I don’t do business there, but our market has a lot of really cool things happening on a positive side, but we also have a lot of inputs that are controlled, not by the market, but my government agencies and what not in terms of foreclosure laws and things like that that have changed over the last couple of years that many people think have drove down inventory. I bought into that some, but nationally inventory, from what I understand, or at least in the southwest, has gone down which is partially why prices have been going up so crazy as they have been. I can tell you prices have gone up a ton, but rents sure haven’t so that is a little scary.
Brandon: Interesting, interesting. Alright, final question of the Fire Round: what property management software do you guys use to manage your properties?
Phil: We use AppFolio.
Brandon: Okay, alright, yeah. I’ve been talking to them recently a little bit. We might start using them as well, but I’m not sure. Actually that’s why I wanted to know that question.
Josh: Another self-interested question from Brandon Turner.
Brandon: That’s what the show is, right? Now people know why I do this show: it’s just so I can make my life better.
Brandon: Alright, finally moving on to the last segment of the show. This is the Quick—
Josh: It’s not the Quick Tip! Oh, man. You know I’m sick when…
Phil: I do miss you guys singing that, by the way.
Brandon: We can do that right now just for the fun of it
Josh & Brandon: Famous Four
Brandon: Alright. The Famous Four. These are questions we ask everyone so you know what’s coming because I know you listen to our show. So, number one: what is your favorite real estate book?
Phil: The last one I’ve read, and right now it’s my favorite, is Land Lording on Auto-Pilot.
Brandon: Yeah! By Mike Butler.
Phil: Yeah! Obviously it’s written for owners of properties, but I’ve gleaned a lot that I can use in my property management business, and I just really liked the way he presented the data and his thoughts on things.
Brandon: Phenomenal book. So, next one.
Josh: What about your favorite business book?
Phil: I had to think about this one, but I’ve got a new one for you: The Snowball.
Josh: Never heard of it, although I do have a microphone called the snowball.
Phil: It’s The Snowball – Warren Buffet and the Business of Life.
Josh: Interesting. So, is it by Buffet, or about Buffet?
Phil: It’s a biography I guess.
Josh: Okay, cool.
Josh: Should be good, should be good. Alright, what about hobbies? What do you do for fun? Besides, like, gamble, what do you do?
Phil: I don’t gamble. Well, I shouldn’t say that. One of my hobbies before I had kids was poker, but now with two little kids running around—
Josh: Nice. Get you and J Scott together.
Phil: Yeah! I still believe that if we ever have a Bigger meet-up of some kind…
Brandon: I agree; we need to have a nice big—
Phil: Or we really should just have a: let’s meet in Denver for a big poker game. Either one. Sounds fun.
Josh: You know what? We might have to do that.
Brandon: That might be fun.
Phil: But besides that we’ve got a lot of cool nature stuff around here. Vegas is known for the casinos, but we have Red Rock, Valley of Fire, Lake Meade so part of what I like to do is go hiking with friends and the kids.
Brandon: Nice. Very cool, very cool. I need to spend some time in Vegas. I was only there for a couple of days one time, just downtown and that’s all I saw.
Josh: There’s no reason to go, man.
Brandon: Well, according to Phillip there is. Alright, final question: what do you believe sets apart successful investors from those who give up, or those who fail? You can kind of frame this within what you do, and what you notice.
Phil: I think this could be applied to life in general, but action items with specific purpose. So, we all know that goals are important, but a lot of people don’t break it down into things that they need to actually be doing every day with purpose to get there, and some people just say, “well I want to own 100 houses by whenever,” but they never actually think, “well, how am I going to get there? What’s my path?” and breaking it down into these small pieces that you can check off the list. That’s what I’ve found.
Then, the other one, and this applies a lot to my profession on the real estate side of things is just no excuses. I hear a lot of people that, you know, you’ve got those that will walk around the office and say, “well, man, when the new President gets in here my business is really going to take off,” or, “wow, when it quits snowing. We had such a horrible winter I haven’t been able to do anything. The economy’s been bad,” there’s always something and they’re waiting for this next perfect time to happen that never gets there because the next excuse comes in.
Josh: Yup. That’s great advice.
Phil: I think it’s that.
Brandon: Very cool, very cool. Well, I guess the final question from us for today is: where can people find out more about you?
Phil: Well, I’m trolling the forums constantly. I think that’s how you guys found me. Otherwise you can find me at VegasDigs.com.
Brandon: Sounds like an archaeology site.
Phil: It is.
Josh: Alright, Phillip, well, thanks so much for your time.
Phil: It’s been fun.
Josh: And anyone who has questions for Phillip can jump on the show notes at BiggerPockets.com/show62, and otherwise be sure to jump on the forums. He’s active there, and always offering some good insight. Hopefully you’ve enjoyed the show.
Brandon: Hey, and I just want to jump in here, real quick, and, because you mentioned forums, Josh, that’s actually how we pick most of our guests for the BiggerPockets podcast. We pick people who are active in the forums, and Phil is very active in the forums, and that’s why we wanted him to be on the show. So, if you want to be on the show jump into the forums! Get involved, start answering questions, and show what you know! Anyway, so Josh you want to take us out?
Josh: Alright, Phil, thanks again, man, take it easy, we’ll talk to you soon.
Phil: Thanks guys!
Brandon: Alright, thank you Phillip.
Josh: Alright, everybody! That was Show #62 with Phil Dwyer. Hopefully you enjoyed the show. Lots of great feedback, lots of tidbits to take away so thank you very much for listening, and, of course, thanks to Phil for taking the time and being here with us. Ask any questions you’ve got on the show notes, and beyond that ask any questions you’ve got in real estate in general on BiggerPockets.com. Just go to the forums at BiggerPockets.com/forums and ask away! If you’re not participating, if you’re not engaging, you’re definitely missing out I cannot tell you.
I talk to business people all the time. They contact us and say, “hey, you know BiggerPockets, you guys are doing great, what’s in it for me?” and I can’t tell you how important it is to engage. In terms of engaging that doesn’t mean posting stuff every day, all day, being addicted or anything like that, and that’s okay too, but if you jump on once a week and take ten minutes a week to participate and set up some keyword alerts at BiggerPockets.com/alerts to let you know about key words that are of interest to you you’re going to start to be active, you’re going to start to see more and more visitors to your profile, and if you’ve got a business in particular you’re going to start to see more and more people come and visit and express interest in you. If not, if you’re just an investor then the opportunities for you, like the opportunity to meet people, to finance your next deals, the opportunity to meet partners, are all going to increase. It’s all about engaging. The more visible you are, the better the site’s going to be for you. So, hopefully if you’re listening, and by show 61 you haven’t taken the time to create a profile and get involved hopefully that’ll help encourage that.
Otherwise check us out on Facebook, on LinkedIn, on Twitter, on G +, on Pinterest, we’re all over the place. Connect with us, and that’s it. We appreciate your listenership. Hopefully you guys will tell your friends about us, and we’ll see you next week on show 63. I’m Josh Dorkin, signing off.
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