Finally... Property Management for the 21st Century

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Finally... Property Management for the 21st Century

Joe Ramirez
Rental Property Investor · Chicago, IL · Member since 2014 · 20 posts · 3 votes

www.LandlordHero.com

Hi all,

I've been in the landlording business for several years now, and I've finally mustered up the courage to quit my job in Finance and start my own property management company. We are 2 MIT grads (2007) that are looking to disrupt the real estate investing arena. Our first stop is to simplify the property management aspect of RE investing such that it is cheaper, faster, and a more pleasant experience for all parties involved. Our company, Landlord Hero, aims to offer a 0% per month management fee, unlike the 5-10% charged by traditional managers. Finding contractors in your area and collecting rent from tenants will be a breeze with our app. We want to make RE investing as simple as buying stocks and bonds on your mobile device! Our extensive experience in the financial and software development worlds allow us to bring a whole new face to the real estate investment game.

Please head over to  to sign up and follow our progress as we launch within the next several months. We are offering landlords 1 month free and a 3-month trial period with no contract for those who sign up before June 30, 2015! Come explore what we have to offer and we welcome any advice or comments below!

Thanks,
Joe

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Ariel O.
Vendor · NY, NY · Member since 2009 · 175 posts · 52 votes
11y

@Joe Ramirez

Good luck!

From a marketing point of view your messaging is not clear. Who are you replacing? The Property Manager? How? Property Management is a wide range of tasks that include getting a tenant into the unit, collecting rent, doing maintenance on the unit, handling evictions as necessary, etc. It's very much a "boots on the ground" type of job.

From my very limited overview of your Landing Page it looks like a hybrid model of AppFolio with an Angie's list add on, where your markup is on every single service rendered. Does that make the most sense?

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  • Aristotle Kumpis
    Specialist · Long Beach, CA · Member since 2011 · 877 posts · 398 votes
    11y

    Congrats on your move to property management. There's high demand for good managers. But it seems like a lot of work dealing with tenants all the time. I considered managing property, but after seeing what my manager goes through, I don't think I would want to do it.

     If you are not charging a monthly fee to the owner, how is your business making money? 

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  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    11y

    Sounds like a good technology play for your company.  What round of funding is your company in?

    312-681-7487
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  • Garen Lafser
    Real Estate Broker · Saint Louis, MO · Member since 2015 · 41 posts · 12 votes
    11y
    Very curious to know how you will make money
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  • Joe Ramirez
    OP
    Rental Property Investor · Chicago, IL · Member since 2014 · 20 posts · 3 votes
    11y

    Hey folks.  Thanks for the replies! We are in the very early stages of funding right now. Our model is based extensively on custom software that we believe can make the management of properties and tenants much more efficient. Instead of a per month subscription fee that traditional managers charge, we will collect on a per event basis (i.e., when the furnace breaks or an apartment needs painting). We believe this is a much more efficient and enticing model for landlords and helps align the incentives between the property manager and the property owner. Please sign up on the website for updates as we make progress and share with other investors you think may be interested!

    Thanks,
    Joe

    1Reply
  • Joe Fairless
    Investor · Cincinnati, OH · Member since 2013 · 2k+ posts · 1k+ votes
    11y

    @Joe Ramirezcongrats on launching the site! What is the difference between your company and Cozy? 

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  • Joe Ramirez
    OP
    Rental Property Investor · Chicago, IL · Member since 2014 · 20 posts · 3 votes
    11y

    Hi @Joe Fairless,

    Thanks! As far as I know, Cozy only offers online/app rent payments and tenant screening services. While we intend to provide those services as well, the main aspect of our company will be a new paradigm for property management. Our 2 main differences would be our pricing model and our software/app service that allows landlords to quickly find top-rated contractors in their area to schedule services instantly with less hassle.

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  • Account Closed
    Property Manager · Baton Rouge, LA · Member since 2014 · 2k+ posts · 195 votes
    11y

    Hello Mr. Ramirez

    I was under the impression that we[Hamilton Investment Properties Community Housing] were one of the few management companies offering 0% per month management fee.  However, we are an I.R.S. 501 ( C ) 3 non profit tax exempt association of landlords who house low to moderate income people and those with special needs only.  Our members do pay 10% of rental income to the non-profit as a tax deductible member fee, and the property management is but, a benefit of that membership.  A charitable donation here, when you receive  a benefit,  you need to deduct the cost of the benefit.  As a lot of management companies charge 20% or more per month the deduction is still good at 10%.

    My question to you is:  Why do you feel that finding reasonable contractors to maintain a client's property, and collecting rents a breeze?  Outside of dealing with Tenants one on one eye to eye, what is a breeze to you is the most difficult part of my Job.  Check us out by going to www.hamiltoninvestmentschddo.com, and I will check out your online offer.  However, what you offer, i'm doing through Home Warranty Companies.  Your offer sounds more like Tennat Screening and online collections of Rent, and you are including a maintenance agreement

    1Reply
  • Ariel O.
    Vendor · NY, NY · Member since 2009 · 175 posts · 52 votes
    11y

    @Joe Ramirez

    Good luck!

    From a marketing point of view your messaging is not clear. Who are you replacing? The Property Manager? How? Property Management is a wide range of tasks that include getting a tenant into the unit, collecting rent, doing maintenance on the unit, handling evictions as necessary, etc. It's very much a "boots on the ground" type of job.

    From my very limited overview of your Landing Page it looks like a hybrid model of AppFolio with an Angie's list add on, where your markup is on every single service rendered. Does that make the most sense?

    1Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    11y

    I am also confused. Are you a rent collection app or a full property management company?

    If you are a full property management company I do not see how you will be able to sustain profitability without charging a monthly management fee.

    0Reply
  • Greg H.Pro Member
    Moderator
    Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
    11y

    Are you licensed in all of the states that require one to do property management ?

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  • Joe Ramirez
    OP
    Rental Property Investor · Chicago, IL · Member since 2014 · 20 posts · 3 votes
    11y

    Hi @Account Closed, Thanks very much for your insights. This is exactly the type of feedback and critique we are looking for. We actually don't think that finding good contractors or doing any part of property management is a breeze at all. In fact, we believe it is the biggest hurdle for beginner investors. This is why we want to make it as easy as possible for beginners to get started with real estate investing while providing a unique and innovative service model to existing landlords at the same time. We know that we will have to work incredibly hard ourselves to make this model work. We are focused on developing a model that makes managing properties much more efficient in a number of regards, which relies heavily on a software element as well as a pricing element.

    I hope you follow the progress of our company and give us further feedback along the way!  Thanks!  -Joe

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  • Joe Ramirez
    OP
    Rental Property Investor · Chicago, IL · Member since 2014 · 20 posts · 3 votes
    11y

    Hi @Ariel O.! Thanks for the feedback - we are still working hard to perfect our marketing strategy. We agree that some of our points may not be as clear as they could be.  We are focused on being a full service property manager with a different model for doing business. We agree that boots on the ground is very important, but we also believe that most property management firms are very fragmented and have lots of room for improvement to be more efficient and high-tech.

    Please follow us and keep the input coming!  Thanks.  -Joe

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  • Joe Ramirez
    OP
    Rental Property Investor · Chicago, IL · Member since 2014 · 20 posts · 3 votes
    11y

    @James Wise

     That's exactly why we believe there's an opportunity! The traditional model is a 5-10% subscription fee, but there's always more than one way to skin a cat! We plan to be a full service property management company, just with a different pricing and business model.

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  • Joe Ramirez
    OP
    Rental Property Investor · Chicago, IL · Member since 2014 · 20 posts · 3 votes
    11y

    @Greg H., we are still in the process of ramping up, but we certainly plan to be licensed in all states we will be operating in. Note that we are not operating yet and that our first market will likely be Chicago unless we get significant interest elsewhere first. We are already working with folks who are licensed agents in the Chicago area.

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    11y
    Originally posted by @Joe Ramirez:

    @James Wise

     That's exactly why we believe there's an opportunity! The traditional model is a 5-10% subscription fee, but there's always more than one way to skin a cat! We plan to be a full service property management company, just with a different pricing and business model.

     Please enlighten us with what your pricing model is.

    0Reply
  • Joe Ramirez
    OP
    Rental Property Investor · Chicago, IL · Member since 2014 · 20 posts · 3 votes
    11y

    Certainly @James Wise. We are actually in the process of refining the wording and it will be up on our site within the week. I'll be back to let everyone know when its up!

    0Reply
  • Joe Ramirez
    OP
    Rental Property Investor · Chicago, IL · Member since 2014 · 20 posts · 3 votes
    11y

    Good morning and happy Friday everyone! Just wanted to post an update to our website, which now includes a more detailed explanation of pricing. Check it out and let us know what you think! Note that we plan to initially launch in Chicago with only the ability to bring contractors to you on demand. We'll add the leasing and rental payment services soon after and then widen our scope to other cities.

    www.LandlordHero.com

    Thanks,
    Joe

    0Reply
  • Leonid Sapronov
    Investor · Laurel, MD · Member since 2012 · 149 posts · 33 votes
    11y

    @Joe Ramirez

    Damn MIT kids :-) When something seems impossible (like PM without boots on the ground), you can count on MIT (or Google) to come up with a solution that will silence all naysayers. If nothing else works, they'll build a robot that will knock on doors, collect rents, and knock sense into deadbeat tenants.

    Seriously - good luck. Just be prepared for a lot skepticism - what you are proposing is challenging and a quite a deviation from the status quo, but I really hope you succeed. That would be a disruption alright.

    Do you see yourself managing multifamily properties and, if so, up to what size?

    The boots on the ground comments got me thinking... maybe you could somehow partner with existing local property management companies to provide specific per event services. If you could offer them an incentive to work with you, they might be less hostile to the new competition; plus, it would be cool if you could leverage all of their local connections and knowledge of the local market.

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  • Leonid Sapronov
    Investor · Laurel, MD · Member since 2012 · 149 posts · 33 votes
    11y

    @Joe Ramirez

    One place where you might loose out to the traditional PM companies is cost of repairs. A lot of PMs, especially bigger ones, have in-house repair crews (or receive discounts from outside contractors) that allow them to cut down on the cost of supplies and labor, which translates to lower maintenance expenses for the owner.

    That and finding quality trades people to work with is a big challenge.

    1Reply
  • Joe Ramirez
    OP
    Rental Property Investor · Chicago, IL · Member since 2014 · 20 posts · 3 votes
    11y

    @Leonid Sapronov Thanks so much for the helpful feedback! We certainly recognize the huge task we are trying to take on but we believe the opportunity to make property management more efficient is an exciting challenge. Maybe one day we'll be using robots with zero actual boots on the ground but for now our plan is to significantly reduce the boots on the ground and exploit new ways of accomplishing the same goals as traditional PMs. I really like your idea of using existing PMs and we've been discussing something similar. Our target market is small landlords who manage buildings with up to 6 unis. Many of these smaller landlords manage properties themselves because they don't feel an 8% fee is worth it. This is especially true for many Chicago 3 or 4 unit properties that are relatively new or require little maintenance. In terms of cost of repairs, we hope to eventually get to a large enough size that we can obtain discounts from providers as well.

    Thanks again for your comments! We appreciate all the feedback we can get. Good or bad!

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