Trying to create a system

23 Replies

Hi everyone. I'm currently at 35 units and things are picking up fast. I'm looking to bring my son in and teach him more about the business. I have a challenge perhaps. I've never quite created a system yet. So, before I bring someone in I would like to at least have some criteria and guidelines on paper. Most of these things are in my head, and I just act on it as deals come along. What would be some of the best advice you guys and gals have for implementing a system for my business. Thanks for all answers beforehand !

I have no idea how you got so many units without a system.  lol  My system is basically following what the BP webinars say to do...look for deals, analyze, etc.  I go by the numbers they say on the webinars--at least $200 cash flow per door (so you should be bringing in at least $7k/month right now) and at least 12% cash on cash return on investment. 

When you analyze, don't forget to include HOA fees, taxes, insurance, property management fees (if you do that), money set aside monthly for capital expenditures as well as regular maintenance, etc. I use the Rental Property tool a lot. Just today I've probably analyzed 10 properties and didn't find anything I wanted to make an offer on.

As for PM, I hire it out because I'm too nice to evict folks.  I know that, so I don't even bother to try.  I'm also too disorganized.  Hey, know what you're good at and get help with what you're bad at.  I'm bad at being a PM.  lol

Those are my systems.

I built my own system using google drive..most of their applications (apps) work well with each other and I used them so they can update automatically when you plug in information...it's also good if your on the go where you can update from your phone...I built my system using the (free plugins) that you can install for each app...it takes some time to build it out but it's all free if your savy with computers (coding) it's not that hard....if not then you can always use something like Podio or appfollio which I've heard work pretty well.

Hope this helps!

Jeff Williams, Real Estate Agent in NY (#10401288643)

When you get to that many units, you probably should look at an application that is specifically designed for managing properties. There are several out there but we use our own. You won’t be able to scale your business with adhoc components such as quickbooks, google drive, a solution for screening, something else for syndication and another for eDoc solution etc.

Originally posted by @Jody Schnurrenberger :

I have no idea how you got so many units without a system.  lol  My system is basically following what the BP webinars say to do...look for deals, analyze, etc.  I go by the numbers they say on the webinars--at least $200 cash flow per door (so you should be bringing in at least $7k/month right now) and at least 12% cash on cash return on investment. 

When you analyze, don't forget to include HOA fees, taxes, insurance, property management fees (if you do that), money set aside monthly for capital expenditures as well as regular maintenance, etc. I use the Rental Property tool a lot. Just today I've probably analyzed 10 properties and didn't find anything I wanted to make an offer on.

As for PM, I hire it out because I'm too nice to evict folks.  I know that, so I don't even bother to try.  I'm also too disorganized.  Hey, know what you're good at and get help with what you're bad at.  I'm bad at being a PM.  lol

Those are my systems.

Lets just say a little bit of luck and a lot of determination has happened for me to accumulate 35 cash flowing units. I have a system that I already follow. I'm really interested in the best way to get the system down on paper. Basically, I'm starting to view my real estate endeavor more as an operating business. If I wanted to take a year vacation (which I doubt I will ever do), I would still want my business to operate as if I was here running it myself. That's the reason i'm bringing my son along to learn more about the back end of things. Have you ever ran across this particular challenge before ? 

Originally posted by @Jeff Williams :

I built my own system using google drive..most of their applications (apps) work well with each other and I used them so they can update automatically when you plug in information...it's also good if your on the go where you can update from your phone...I built my system using the (free plugins) that you can install for each app...it takes some time to build it out but it's all free if your savy with computers (coding) it's not that hard....if not then you can always use something like Podio or appfollio which I've heard work pretty well.

Hope this helps!

What are some of the apps you mention sir? Thanks for the response!

Originally posted by @Kuba F. :

A couple good reads include Work the System and The E Myth Revisited.

When scaling any business, you want to document and outsource as much as possible the things that keep you working in the business...

This is exactly what i'm trying to do. I no longer want to micromanage. I feel as if it I can be spending more time analyzing deals and giving the yes or no approval to my son. I just need to find a way to put everything on paper so he'll be able to understand it better. Thanks for the response!

Originally posted by @Keith Weigand :

When you get to that many units, you probably should look at an application that is specifically designed for managing properties. There are several out there but we use our own. You won’t be able to scale your business with adhoc components such as quickbooks, google drive, a solution for screening, something else for syndication and another for eDoc solution etc.

What are some of the applications you would recommend ? Thanks for the response !

Originally posted by @Daniel Hyman :

@Malcolm Darensbourg

There is a great book called, "Traction." The author writes about the importance of identifying all of the core business processes that are in our heads and documenting them in a step-by-step format. That becomes the training manual for the company. 

Thank you, I will definitely give this book a read!

Viewing your real estate endeavors as an actual business will certainly help you make more money.  Good for you.

It's good that you're training your son to help you so that things will run smoothly when you aren't around.  For me, I use property managers.  Partly because I've moved out of state, but mostly because I'm too disorganized to do the record keeping and entirely too nice to evict, if needed.  Even when I was with my properties, I used a PM.  They're the only way for ME to invest.  lol  But while I have to pay them, if I want to take a vacation, no one in my properties even knows because it still runs the same.  ;-)  If your son doesn't work out or it becomes too much for him to do alone, you might want to consider a PM if you do take a year-long vacation.  lol

@Malcomedarensourg I use google sheets and forms...There are also plugins that you can use to automate certain functions within the apps to run automatically 

Jeff Williams, Real Estate Agent in NY (#10401288643)
Originally posted by @Malcolm Darensbourg :
Originally posted by @Jeff Williams:

I built my own system using google drive..most of their applications (apps) work well with each other and I used them so they can update automatically when you plug in information...it's also good if your on the go where you can update from your phone...I built my system using the (free plugins) that you can install for each app...it takes some time to build it out but it's all free if your savy with computers (coding) it's not that hard....if not then you can always use something like Podio or appfollio which I've heard work pretty well.

Hope this helps!

What are some of the apps you mention sir? Thanks for the response!

Jeff Williams, Real Estate Agent in NY (#10401288643)

I use google sheets and forms...There are also plugins that you can use to automate certain functions within the apps to run automatically.  You can find tutorials on youtube on how to set them up.

Jeff Williams, Real Estate Agent in NY (#10401288643)

@Malcolm Darensbourg

There are a couple of different types of software out there that can help you.  For example:

1.  Accounting software-Quick Books online- This one will provide semi automation of accounting expenses.  It will learn your patterns and assign appropriate categories of expenses.  You can create rules to make the process easier.

2. Property Management software-I have been looking hard at Buildium.  It has tenant screening, maintenance requests online, online rent collection, syndication of rental ads, etc.  It is just a treasure trove of features to assist you.  Appfolio is another one.  There are many out there.  Property Zar was mentioned on this thread.

3. Lead Management software-Podio is used by a lot of RE investors.  I am looking into REISOFT right now.  These will help you manage your leads on RE you are looking at buying.

4. Miles driven software-MileIQ is one that is an app on your phone and helps classify the miles you drive as personal or business.  This may be easier than a mileage log. 

As far as systems.  It wouldn't hurt to write an operating manual.  It would be a concise manual that would describe exactly what to do as far as property management to lead generation.  It should include your approved vendors for each type of repair, such as AC contractor, electrician, etc. It could also include all of your forms such as leases and inspection forms.

I was in a similar position with my company.  I realized I needed better systems.  I felt there were two choices: 1.  Take the time to develop them or 2.  Buy them.  I chose to buy a real estate system based upon the E-Myth.  The provider is Fortune Builders.  They have a great educational platform your son could use.  I know it's not for everyone, but it transformed our company.

@Than Merrill

Scott Krone, Developer
(847) 272-7775

I’d highly recommend LandlordSource.com. They have all types of lease agreements, checklists, notices, disclosures, office manuals and pretty much any documents needed to manage properties. Everything is downloaded as a word document that you can customize. It sounds like you could use some of the checklists to walk your son through each process. The site is geared more toward management companies, but I think you’ll find it useful for your purposes.

@Malcolm Darensbourg What I might consider doing is creating a word document or a google document and using the automated table of contents feature to create a business or process manual. @Daniel Hyman mentioned that above as well.

As you are teaching you can have your son create the documentation for you and have you approve it. That will certainly give you new ideas and also has the benefit of having him learn it twice. Once when you tell him/show him, and then you get to check that he understood it when he has to write it down and get you to approve his understanding of that system. 

Once you have it written down then it also gives you the opportunity to think strategically about your processes and maybe compare them to other's processes via bigger pockets or books. For instance how you collect rent. If your system is to drive around, or have tenants mail them in than that might not be as scale-able as you would like. That is where tools come into play. 

There are lots of softwares and services available for landlords now.  You can purchase a software or service that does one thing, or software that does more than one thing and has the benefit across multiple processes. So you could buy an online payment solution, or a property management solution like Buildium. 

I bought Buildium pretty early on as I knew that I wanted to make a business out of this in the long run. I only have 11 units but I am starting to build out systems that are scaleable long term. I wanted to create some efficiency and save time by collecting rent online, having access to tenant contact info centralized, run background screens myself, etc. 

@Kuba F. makes a great point about outsourcing, and documentation/systems making that easier. You don't want to be spending time doing $10/hour work. If you yourself have to do it then you have a job and not a business. 

Thanks for starting this thread. Its great to read about what others are doing as well.  

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Great post ! I am trying learning buildium myself , is a lot more complicated then I original though .

I use excel and chase quick pay myself

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