Best way to learn real estate management?

Question

I'm going to be taking over a couple buildings in NYC that belong to relatives of mine. I need to learn more about management but I have no idea where to start. Any suggestions would be greatly appreciated, thanks.

Jon Holdman · Answer

6% is a pretty good rate for property management.  Are you going to do it for free?  Even if you're doing the work yourself, it will take your time and effort, taking away time you could be doing something else.  There may be other reasons to dump a property manager (bad tenants, excessive vacancies, excessive maintenance), but if they're doing a good job, the 6% is probably well worth it.  Especially considering you're about to engage in on-the-job training yourself.

Maybe you should consider selling, if this deal is that painful.

Jon

Richard F. · Answer

You should be able to obtain your jurisdictions "minimum" building code requirements. Study them. Walk the property with a contractor.

Honestly, a large majority of violations are pretty common sense. Take a hard look at the properties for slip, trip, and fall hazards; loose and missing electrical or plumbing fixtures; obvious leak sources- roof, supply piping, or sewage; exposed wiring;  adequate lighting in all common areas; fire hazards; sources of combustion gases; pest infestations; peeling and cracking painted surfaces; loose or flaking insulation or other coatings; inadequate electrical, water, or other utility services.

Deal with the obvious first. If you KNOW you have code issues, or a notice, talk with the code enforcement people...CORDIALLY!

Tom Jenkins · Answer

Thanks for the replies beachbum and rei. It's great advice and I'll consider it. I was also wondering if there's any courses I could take to learn more about any violations the buildings might have and things like that and general real estate management in nyc? Right now the buildings are with a management company who charge 6% and its really hurting us. And yeah I always read this forum, it's great!

Account Closed · Answer

Check the laws in NY. Depending on exactly who owns the property you might have to get a RE license in the state of NY.

You said you are taking over for family. That is not the same as managing your own property depending on how the ownership has been handled.

Be very careful. If you operate illegally (by choice or by accident) you could end up with no ability to evict, you can be fined and other things.

Richard F. · Answer

OK, so you need a crash course. here it is:

1) Read and Heed your State and local landlord/tenant laws, and Fair Housing laws.

2) If it's not in writing (and/or pictures), you have no defense. Document, Document, Document.

2a) All leases and other agreements must be in writing.

3) Rent is due on the due date. No Exceptions. If your lease has a grace period, initiate a lawful eviction immediately after the last day of grace, in accordance with (1) above.

4) No Exceptions. For anything. What is the point of a contract if you modify it constantly? Besides, if you make an exception for one tenant, you have to allow ALL the tenants the same exception, per (1) above.

5) Fairly and continuously enforce ALL terms of your lease. THIS IS A TWO WAY STREET. Do your part as a property owner- provide a safe, clean environment that at LEAST meets minimum local building standards. Infrastructure is expected to be functional as designed.

6) When it comes to tenants, believe NOTHING you hear, and half of what you see.

7) Establish and maintain an appropriate reserve fund, after assessing the physical plant and developing a long term PLAN.

8) You can be friendly with tenants, but don't MAKE friends. Keep it BUSINESS.

9) Properly screen all new applicants, DO NOT rely on your "gut", friends or relatives recommendations, or your need for cash today.

10) Always, Always, make expenditures based on VALUE, not cost!

Most Important: Read this forum EVERY DAY! There is a LOT of good, free advice here.

Good Luck...