Not happy with my PM Company. Need Advice please

Rental Property Investor · Los Angeles · Member since 2018 · 49 posts · 13 votes

Hoping for some advice. I recently purchased a property in Cleveland from a Turnkey company. I have another property in escrow also in Cleveland with he same TK company however recent events have made me apprehensive as to whether I'd like to move forward or pull out of escrow. Here's why. This is month 4 and apparently my tenants check came back NSF. However I was never notified of this when it happened. Instead when I recieved my Owner Statement on Nov 15th it clearly stated NSF and no funds have been deposited. I had to reach out the PM(by email of course because reaching a live person is IMPOSSIBLE) I was told that apparently the tenant had an issue with their bank and would come in that evening with a money order(which they never did). Ok here's my gripe. #1) When was my PM company going to notify me that a payment wasn't made? #2 Why haven't they started the eviction process? #3 I signed a 6 month rent guarantee with this TK/PM company and when I made mention of this they said yes you're right if no rent is paid by end of month we will definitely pay you full rent(Why wouldn't they make me whole on the 15th and try and collect from the tenant to reimburse themselves?) I am keeping their name out of this as a courtesy to not tarnish their seemingly good reputation. Is this the behavior I should expect from a solid PM company? If so, I cant say that I'm satisfied and I'm about 80% sure I'll pull the plug on my second Cleveland property that is expected to close in a week as I just don't feel comfortable. I live in CA and need eyes and ears I can trust managing my property(s). Any advise is GREATLY appreciated.

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James Wise

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

@Michael Lewis

This is a major over reaction on your part. By your account it's the 15th of the month & you've already been notified of the payment issue, yet you are also upset that you haven't been notified of the payment issue. How much sooner & in what way are you expecting to be notified?

The only possible gripe you can have that would have some legs would be that they are sending you an owner statement as opposed to providing you with an online portal to possibly view things sooner but to expect them to call you about every minute detail the moment it happens is not a realistic expectation. They cannot call you the day it's late & then everyday thereafter to personally update you on this tenant's rental payment. The rent collection process is not as smooth as some believe. There is some serious leg work that goes into collecting rent from tenants. On top of that tenants say a lot of things that do not come to fruition & or get followed up on. Contacting you about every minor update that likely won't come to fruition would be a waste of your time, their time & result in them managing your property for net loss when you factor in the time & labor involved in all of these unnecessary updates.

Let's take a look at the two ways that this could go down.

--------------------------

The rent is due on the 1st & the tenant doesn't pay it.

--------------------------

Option 1.

Property Manager personally contacts you every step of the way.

--------------------------

Day 2.

Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.

Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?

Day 3.

Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?

Day 4.

Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?

Day 5.

Property Manager calls tenant about the rent not being paid. Tenant answers & says that that they will pay the rent on day 11.

Property Manager calls to tell you that the tenant is going to be paying the rent on day 11. Property Manager fields multiple questions from you about this new agreed upon arraignment with the tenant that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will be able to pay rent on day 11?
Does this happen often?
What happens if the tenant doesn't pay rent on day 11?

Day 11.

The Tenant does not pay rent as agreed to on day 5.

Property Manager calls to tell you the rent hasn't been paid as agreed to on day 5. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

The tenant said they would pay the rent, why didn't they pay the rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?

Day 12.

Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?

Day 13.

Property Manager calls tenant about the rent not being paid. Tenant now agrees to pay rent on the 15th.

Property Manager calls to tell you the will be paid on the 15th. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?

Day 14.

Tenant calls Property Manager to say they will now be paying on the 16th & not the 15th.

Property Manager calls to tell you the rent will be paid on the 16th, not the 15th. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why did they change the date?
Should we start the eviction process?
What are you going to do to get the tenant to pay the rent this time?

Day 15.

Property Manager sends out your monthly report. It states that the tenant hasn't paid rent & that the property manager's policy is to issues 3 day notices to all of their tenants who have not paid their rent yet in the next day or so depending on weekends & holidays. Based upon weekends & holidays the eviction will be filed with the courts between the 18th-22nd & the court day will be 4-6 weeks thereafter.

Property Manager fields a multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

You said they were going to pay on the 16th. Why are you going to evict them?
Do you think the tenant will pay rent tomorrow so you don't need to evict them?
Do you think they will pay tomorrow?
What can we do to get them to pay tomorrow?

Day 16.

You call Property Manager at 1pm to see if rent was paid. It hasn't been paid yet. Property Manager agrees to email you by the end of the day to update you. End of day comes & no payment is made they explain that they will be filing eviction if rent isn't paid by end of 3 day notice. In this case given when notice was posted, when weekends & holidays are the Property Manager can file for eviction on the 20th day.

Day 17.

Tenant calls Property Manager to say they will now be paying on the 19th.

Property Manager calls to tell you the rent will be paid on the 19th. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why did they change the date?
Are we still evicting them on the 20th if they don't pay?
Do you think they will pay this time?

Day 18.

Tenant calls Property Manager to say they will actually be coming in to pay today.

Property Manager calls to tell you the rent will be paid later today. You are very excited.

Day 19.

Property Manager calls to tell you that the tenant never came in yesterday. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant come in yesterday?
Why did they say they were coming in if they weren't?
Are we still evicting them tomorrow if they don't pay?
Do you think they will pay this time?

Day 20.

Property Manager files for eviction. Property Manger notifies you that they filed for eviction.

--------------------------

Option 2.

Property Manager provides you with the appropriate amount of timely notices as per their streamlines policies & procedures.

--------------------------

Day 2-14.

Tenant doesn't pay rent. Property Manager follows their normal collection protocols to attempt to collect the rent.

Day 15.

Property Manager explains to you that they will be in contact with you when the 3 day period has expired and the eviction has officially been filed. Property Manager fields a multiple questions from you.

How much will this cost?
Is this the only option?
What have you done to collect the rent?

Property Manager explains they have done everything in their power to collect the rent and that this is the only option. Property Manager explains costs & says they will reach out to you on the 20th based on weekends this is the 1st day they can legally file the eviction. They will let you know if they filed or if rent was paid at that time.

Day 20

Property Manager files for eviction. Property Manger notifies you that they filed for eviction.

-----------------------

As you can see above Option 1 had an amount of labor that would be logistically impossible to devote to every client & still remain profitable given the amount of money a client pays to the Property Manager every month. If the Property Management company isn't turning a profit they won't be around to provide the service. On top of that I think we can all agree that Option 1 was also incredibly inefficient and much time was spent discussing situations that never actually happened.

Option 2 is what a client should expect from a Property Management company. Enough information in a timely fashion to keep you updated but also allow the Property Manager to effectively run their business without putting you through an unnecessary emotional roller coaster ride.

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Steve RozenbergPro Member
Specialist · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
7y
I would ask them what their policy and procedures are for these types of scenarios. If they do not have any then there is your answer
Just because a company can find you a good deal does not mean that they can get you the monthly return year after year on that property
Always remember you own four walls and a roof ,they owned the business system it’s operating inside of that to give you the actual return that it was promised and that’s easier said than done if they don’t have correct policies procedures in structure
Always make sure that your business model aligns with theirs to make sure that they are going to help you reach your ultimate goals well if they cannot have that conversation with you then maybe they were the wrong team to leverage your properties with
0 Reply
Mark Fries
Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes
7y
@Michael Lewis Pull the plug, fire them. Property management companies prey on out of state investors because they are cash cows.... the local investors are just base hits for PM companies but out of state investors are the home runs for property management companies...
1 Reply
Natalie Schanne
Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
7y
Michael Lewis - you probably have a contract with the pm for at least 6 months unless you don’t want your rent guarantee. I’d ask them to clarify both their rent guarantee payment policy and their eviction policy. Sometimes they’ll charge you to initiate an eviction so if the tenant may be depositing money, you may want them to wait. I try to file pay or quit and eviction ASAP so they know I’m serious. Who knows if they placed a tenant with evictions / bad credit in your property. Overall the turnkey model is for “mailbox money” and you’ve chosen a hands off approach where they’re not going to call or email you if your tenant is late on rent. You need to stay on top of your statements and ask for answers or clarify your wishes like please file pay or quit on day 2/6 and eviction as soon as possible after that. If they won’t comply, I recommend using a different company. With so many problems with morris invest and others, I recommend buying the finished turnkey instead of a junker that they’re going to rehab for you because many people have found they’ve been billed for renovations that never took place.
0 Reply
Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y
Im not sure I understand the issue here. You have a rent guarantee. Does your contract state that they will pay that rent to you on a certain date if the tenant defaults? Before the end of the month seems reasonable to me.
Working with a tenant, especially if it is not a habitual offender to get their rent in instead of just immediately moving onto eviction just makes good business sense. You cant file for eviction everytime someone is late. You have to apply common sense to each situation.
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3 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
7y
@Michael Lewis
This is a major over reaction on your part. By your account it's the 15th of the month & you've already been notified of the payment issue, yet you are also upset that you haven't been notified of the payment issue. How much sooner & in what way are you expecting to be notified?
The only possible gripe you can have that would have some legs would be that they are sending you an owner statement as opposed to providing you with an online portal to possibly view things sooner but to expect them to call you about every minute detail the moment it happens is not a realistic expectation. They cannot call you the day it's late & then everyday thereafter to personally update you on this tenant's rental payment. The rent collection process is not as smooth as some believe. There is some serious leg work that goes into collecting rent from tenants. On top of that tenants say a lot of things that do not come to fruition & or get followed up on. Contacting you about every minor update that likely won't come to fruition would be a waste of your time, their time & result in them managing your property for net loss when you factor in the time & labor involved in all of these unnecessary updates.
Let's take a look at the two ways that this could go down.
--------------------------
The rent is due on the 1st & the tenant doesn't pay it.
--------------------------
Option 1.
Property Manager personally contacts you every step of the way.
--------------------------
Day 2.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
- Why didn't the tenant pay rent?
- Do you think the tenant will pay rent tomorrow?
- Should we start the eviction process?
- How much will the eviction cost?
- Does this happen often?
- What are you going to do to get the tenant to pay the rent?
Day 3.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
- Why didn't the tenant pay rent?
- Do you think the tenant will pay rent tomorrow?
- Should we start the eviction process?
- How much will the eviction cost?
- Does this happen often?
- What are you going to do to get the tenant to pay the rent?
Day 4.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
- Why didn't the tenant pay rent?
- Do you think the tenant will pay rent tomorrow?
- Should we start the eviction process?
- How much will the eviction cost?
- Does this happen often?
- What are you going to do to get the tenant to pay the rent?
Day 5.
Property Manager calls tenant about the rent not being paid. Tenant answers & says that that they will pay the rent on day 11.
Property Manager calls to tell you that the tenant is going to be paying the rent on day 11. Property Manager fields multiple questions from you about this new agreed upon arraignment with the tenant that they do not have the answer for or at best can only provide you with speculation.
- Why didn't the tenant pay rent?
- Do you think the tenant will be able to pay rent on day 11?
- Does this happen often?
- What happens if the tenant doesn't pay rent on day 11?
Day 11.
The Tenant does not pay rent as agreed to on day 5.
Property Manager calls to tell you the rent hasn't been paid as agreed to on day 5. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
- The tenant said they would pay the rent, why didn't they pay the rent?
- Do you think the tenant will pay rent tomorrow?
- Should we start the eviction process?
- How much will the eviction cost?
- Does this happen often?
- What are you going to do to get the tenant to pay the rent?
Day 12.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
- Why didn't the tenant pay rent?
- Do you think the tenant will pay rent tomorrow?
- Should we start the eviction process?
- How much will the eviction cost?
- Does this happen often?
- What are you going to do to get the tenant to pay the rent?
Day 13.
Property Manager calls tenant about the rent not being paid. Tenant now agrees to pay rent on the 15th.
Property Manager calls to tell you the will be paid on the 15th. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
- Why didn't the tenant pay rent?
- Do you think the tenant will pay rent tomorrow?
- Should we start the eviction process?
- How much will the eviction cost?
- Does this happen often?
- What are you going to do to get the tenant to pay the rent?
Day 14.
Tenant calls Property Manager to say they will now be paying on the 16th & not the 15th.
Property Manager calls to tell you the rent will be paid on the 16th, not the 15th. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
- Why did they change the date?
- Should we start the eviction process?
- What are you going to do to get the tenant to pay the rent this time?
Day 15.
Property Manager sends out your monthly report. It states that the tenant hasn't paid rent & that the property manager's policy is to issues 3 day notices to all of their tenants who have not paid their rent yet in the next day or so depending on weekends & holidays. Based upon weekends & holidays the eviction will be filed with the courts between the 18th-22nd & the court day will be 4-6 weeks thereafter.
Property Manager fields a multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
- You said they were going to pay on the 16th. Why are you going to evict them?
- Do you think the tenant will pay rent tomorrow so you don't need to evict them?
- Do you think they will pay tomorrow?
- What can we do to get them to pay tomorrow?
Day 16.
You call Property Manager at 1pm to see if rent was paid. It hasn't been paid yet. Property Manager agrees to email you by the end of the day to update you. End of day comes & no payment is made they explain that they will be filing eviction if rent isn't paid by end of 3 day notice. In this case given when notice was posted, when weekends & holidays are the Property Manager can file for eviction on the 20th day.
Day 17.
Tenant calls Property Manager to say they will now be paying on the 19th.
Property Manager calls to tell you the rent will be paid on the 19th. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
- Why did they change the date?
- Are we still evicting them on the 20th if they don't pay?
- Do you think they will pay this time?
Day 18.
Tenant calls Property Manager to say they will actually be coming in to pay today.
Property Manager calls to tell you the rent will be paid later today. You are very excited.
Day 19.
Property Manager calls to tell you that the tenant never came in yesterday. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
- Why didn't the tenant come in yesterday?
- Why did they say they were coming in if they weren't?
- Are we still evicting them tomorrow if they don't pay?
- Do you think they will pay this time?
Day 20.
Property Manager files for eviction. Property Manger notifies you that they filed for eviction.
--------------------------
Option 2.
Property Manager provides you with the appropriate amount of timely notices as per their streamlines policies & procedures.
--------------------------
Day 2-14.
Tenant doesn't pay rent. Property Manager follows their normal collection protocols to attempt to collect the rent.
Day 15.
Property Manager sends out your monthly report. It states that the tenant hasn't paid rent & that the property manager's policy is to issues 3 day notices to all of their tenants who have not paid their rent yet in the next day or so depending on weekends & holidays. Based upon weekends & holidays the eviction will be filed with the courts between the 18th-22nd & the court day will be 4-6 weeks thereafter.
Property Manager explains to you that they will be in contact with you when the 3 day period has expired and the eviction has officially been filed. Property Manager fields a multiple questions from you.
- How much will this cost?
- Is this the only option?
- What have you done to collect the rent?
Property Manager explains they have done everything in their power to collect the rent and that this is the only option. Property Manager explains costs & says they will reach out to you on the 20th based on weekends this is the 1st day they can legally file the eviction. They will let you know if they filed or if rent was paid at that time.
Day 20
Property Manager files for eviction. Property Manger notifies you that they filed for eviction.
-----------------------
As you can see above Option 1 had an amount of labor that would be logistically impossible to devote to every client & still remain profitable given the amount of money a client pays to the Property Manager every month. If the Property Management company isn't turning a profit they won't be around to provide the service. On top of that I think we can all agree that Option 1 was also incredibly inefficient and much time was spent discussing situations that never actually happened.
Option 2 is what a client should expect from a Property Management company. Enough information in a timely fashion to keep you updated but also allow the Property Manager to effectively run their business without putting you through an unnecessary emotional roller coaster ride.
9 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
7y
Originally posted by @Mark Fries:
@Michael Lewis
Pull the plug, fire them. Property management companies prey on out of state investors because they are cash cows.... the local investors are just base hits for PM companies but out of state investors are the home runs for property management companies...
By that logic I assume you believe that nobody has ever made any money investing in property outside of the state they live in?
2 Reply
Jeff Schechter
Developer · Nashville, TN · Member since 2016 · 484 posts · 406 votes
7y
I'm not sure what the major infraction is here. The only issue I see here is one of not being able to connect via telephone. If you have a rent guarantee, you'll have to let the TK company do their thing, then fill in what's not being collected. The onus is on them to collect, not you.
I agree with @James Wise in that the PM is working ON YOUR BEHALF to take care of the situation...they're not working WITH YOU every step of the way. That would be wholly inefficient.
Also, you must take into consideration that there are a multitude of reasons why a tenant doesn't pay. Sometimes, they're just good people that are not so good at money management. Sometimes, they're trying to game the system. A good PM will give it a little bit of time to find out what's really going on, before just jumping into an eviction - which is costly to the investor, and pretty much guarantees you'll have a vacancy until the unit is re-leased.
My suggestion: Remember why you did this in the first place. It's a LONG TERM investment. It can't be judged on what is happening THIS WEEK. There will always be bumps in the road...that's just REI.
2 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @James Wise:
@Michael Lewis
This is a major over reaction on your part. By your account it's the 15th of the month & you've already been notified of the payment issue, yet you are also upset that you haven't been notified of the payment issue. How much sooner & in what way are you expecting to be notified?
The only possible gripe you can have that would have some legs would be that they are sending you an owner statement as opposed to providing you with an online portal to possibly view things sooner but to expect them to call you about every minute detail the moment it happens is not a realistic expectation. They cannot call you the day it's late & then everyday thereafter to personally update you on this tenant's rental payment. The rent collection process is not as smooth as some believe. There is some serious leg work that goes into collecting rent from tenants. On top of that tenants say a lot of things that do not come to fruition & or get followed up on. Contacting you about every minor update that likely won't come to fruition would be a waste of your time, their time & result in them managing your property for net loss when you factor in the time & labor involved in all of these unnecessary updates.
Let's take a look at the two ways that this could go down.
--------------------------
The rent is due on the 1st & the tenant doesn't pay it.
--------------------------
Option 1.
Property Manager personally contacts you every step of the way.
--------------------------
Day 2.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 3.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 4.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 5.
Property Manager calls tenant about the rent not being paid. Tenant answers & says that that they will pay the rent on day 11.
Property Manager calls to tell you that the tenant is going to be paying the rent on day 11. Property Manager fields multiple questions from you about this new agreed upon arraignment with the tenant that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will be able to pay rent on day 11?
Does this happen often?
What happens if the tenant doesn't pay rent on day 11?
Day 11.
The Tenant does not pay rent as agreed to on day 5.
Property Manager calls to tell you the rent hasn't been paid as agreed to on day 5. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

The tenant said they would pay the rent, why didn't they pay the rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 12.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 13.
Property Manager calls tenant about the rent not being paid. Tenant now agrees to pay rent on the 15th.
Property Manager calls to tell you the will be paid on the 15th. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 14.
Tenant calls Property Manager to say they will now be paying on the 16th & not the 15th.
Property Manager calls to tell you the rent will be paid on the 16th, not the 15th. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why did they change the date?
Should we start the eviction process?
What are you going to do to get the tenant to pay the rent this time?
Day 15.
Property Manager sends out your monthly report. It states that the tenant hasn't paid rent & that the property manager's policy is to issues 3 day notices to all of their tenants who have not paid their rent yet in the next day or so depending on weekends & holidays. Based upon weekends & holidays the eviction will be filed with the courts between the 18th-22nd & the court day will be 4-6 weeks thereafter.
Property Manager fields a multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

You said they were going to pay on the 16th. Why are you going to evict them?
Do you think the tenant will pay rent tomorrow so you don't need to evict them?
Do you think they will pay tomorrow?
What can we do to get them to pay tomorrow?
Day 16.
You call Property Manager at 1pm to see if rent was paid. It hasn't been paid yet. Property Manager agrees to email you by the end of the day to update you. End of day comes & no payment is made they explain that they will be filing eviction if rent isn't paid by end of 3 day notice. In this case given when notice was posted, when weekends & holidays are the Property Manager can file for eviction on the 20th day.
Day 17.
Tenant calls Property Manager to say they will now be paying on the 19th.
Property Manager calls to tell you the rent will be paid on the 19th. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
Why did they change the date?
Are we still evicting them on the 20th if they don't pay?
Do you think they will pay this time?
Day 18.
Tenant calls Property Manager to say they will actually be coming in to pay today.
Property Manager calls to tell you the rent will be paid later today. You are very excited.
Day 19.
Property Manager calls to tell you that the tenant never came in yesterday. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.
Why didn't the tenant come in yesterday?
Why did they say they were coming in if they weren't?
Are we still evicting them tomorrow if they don't pay?
Do you think they will pay this time?
Day 20.
Property Manager files for eviction. Property Manger notifies you that they filed for eviction.
--------------------------
Option 2.
Property Manager provides you with the appropriate amount of timely notices as per their streamlines policies & procedures.
--------------------------
Day 2-14.
Tenant doesn't pay rent. Property Manager follows their normal collection protocols to attempt to collect the rent.
Day 15.
Property Manager sends out your monthly report. It states that the tenant hasn't paid rent & that the property manager's policy is to issues 3 day notices to all of their tenants who have not paid their rent yet in the next day or so depending on weekends & holidays. Based upon weekends & holidays the eviction will be filed with the courts between the 18th-22nd & the court day will be 4-6 weeks thereafter.
Property Manager explains to you that they will be in contact with you when the 3 day period has expired and the eviction has officially been filed. Property Manager fields a multiple questions from you.
How much will this cost?
Is this the only option?
What have you done to collect the rent?
Property Manager explains they have done everything in their power to collect the rent and that this is the only option. Property Manager explains costs & says they will reach out to you on the 20th based on weekends this is the 1st day they can legally file the eviction. They will let you know if they filed or if rent was paid at that time.
Day 20
Property Manager files for eviction. Property Manger notifies you that they filed for eviction.
-----------------------
As you can see above Option 1 had an amount of labor that would be logistically impossible to devote to every client & still remain profitable given the amount of money a client pays to the Property Manager every month. If the Property Management company isn't turning a profit they won't be around to provide the service. On top of that I think we can all agree that Option 1 was also incredibly inefficient and much time was spent discussing situations that never actually happened.
Option 2 is what a client should expect from a Property Management company. Enough information in a timely fashion to keep you updated but also allow the Property Manager to effectively run their business without putting you through an unnecessary emotional roller coaster ride.
by far one of your top 5 posts... people expect such perfection in PM that its simply not realistic in any manner.. the PM is not sitting on the people front porch watching their every move.. and peeps being peeps and especially tenants they just dont always tell the truth or do what they say..
most pM's have appfolio or buldium or one of those the owner can log on in real time at anytime and that is on the owner.. PM cant and should not be there hand holding owners they would never get anything done.
Rent gurantee's I would imagine would come in after they tried to collect.. not like an auto pay the day you were notified again completely unrealistic expectations.
Podcast Guest on Show #222
JLH Capital Partners51 Review
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3 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @James Wise:

Originally posted by @Mark Fries:
@Michael Lewis
Pull the plug, fire them. Property management companies prey on out of state investors because they are cash cows.... the local investors are just base hits for PM companies but out of state investors are the home runs for property management companies...
By that logic I assume you believe that nobody has ever made any money investing in property outside of the state they live in?
Mark does not care for Brokers LOL....
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
0 Reply
Kenneth LaVoie
Rental Property Investor · Winslow, ME · Member since 2008 · 826 posts · 281 votes
7y
That's a tough one. If I was in their shoes and knew I was going to make you whole anyway, I would consider the decision on when and whether to start the eviction process my decision (I'm the only one at risk). That being said, we managed a couple of properties for one year for a man who bought them from us and we did a "mid month" report (written, descriptive) just to let him know what was going on so there wouldn't be any surprises when we did our report on the 3rd (we always did our "end of month" report on the 3rd, after bank statements cleared and were reconciled, at which time we could also tell him if all rents for the next month were cleared, and if not, why.
0 Reply
Kenneth LaVoie
Rental Property Investor · Winslow, ME · Member since 2008 · 826 posts · 281 votes
7y
Another note: I think it's probably reasonable for them to wait till' end of month to make you whole, ONLY because if they did it right away, then the tenant paid, they'd have to reverse their payment to you, which over time would create extra transactions. That's my guess on the reasoning.
0 Reply
Michael Lewis
OP
Rental Property Investor · Los Angeles · Member since 2018 · 49 posts · 13 votes
7y
I genuinely appreciate everyone’s input. This is exactly what I hoped to hear. I am accustomed to dealing with a single property manager with my other out of state properties so I am certainly used to the “working with” approach.
2 Reply
Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
7y
@Michael Lewis. I’ve had this happen before, usually it’s not a big deal but it depends on the tenant and the company. Can you list actual numbers or an area of Cleveland it’s in? I think those matter more then just a tenant getting a NSF.
0 Reply
Michael Lewis
OP
Rental Property Investor · Los Angeles · Member since 2018 · 49 posts · 13 votes
7y
Originally posted by @Caleb Heimsoth:
@Michael Lewis. I’ve had this happen before, usually it’s not a big deal but it depends on the tenant and the company. Can you list actual numbers or an area of Cleveland it’s in? I think those matter more then just a tenant getting a NSF.
Caleb this property is in Cleveland Heights.
1 Reply
Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
7y
Originally posted by @Michael Lewis:

Originally posted by @Caleb Heimsoth:
@Michael Lewis. I’ve had this happen before, usually it’s not a big deal but it depends on the tenant and the company. Can you list actual numbers or an area of Cleveland it’s in? I think those matter more then just a tenant getting a NSF.
Caleb this property is in Cleveland Heights.
That is helpful but doesn’t tell a lot. You need to look at what you’re buying the property for vs what others in the area are selling for. What’s the purchase price and rent ?
0 Reply
Junior Soares
Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
7y
@Michael Lewis
Good afternoon Michael,
You've got to look at the big picture. This is just a small bump in the road and all too common in any market not just the Cleveland Market. You're investing in an area that produces tremendous cashflow, however there is risk associated with that and some of it is what your experiencing right now but the good will outweigh the bad if you're going to truly buy and hold.
As an out of state investor like yourself, I want to be as off hands as possible and let my PM's take care of issues like this. They know what they're doing and will work to get the problem handled as quickly and as efficiently as they can because frankly, if they don't collect rent they dont get paid and they dont want to toy around with that tenant just as much as you dont want to. The last thing they want to do is bombard you with phone calls and emails every day regarding the issue because it will not only stress them out more it will stress you out.
For me, when these issues arise, a quick email that they're working on it will suffice and then they can update me as they make progress. I've personally never had an issue that was on-going longer than a month.
Some good advice if I may is to have a really good insurance policy that covers rental loss, and 3-6 months of full expenses in each of your rentals bank account. This will give you peace of mind as well as get you through these humps and allow you to focus on your business or job to work towards accumulating more properties.
Holton-Wise is by far one of the best in the Cleveland Area and if they're who you're currently using, I wouldn't worry about it. @Jameswise knows what he's doing.
Best of luck and Happy Investing!
Junior
1 Reply
Mark Fries
Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes
7y
@Jay Hinrichs Correct...lol
1 Reply
Ian WalshBusiness Member
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
7y
It's really hard to find a top notch management company and TK company. They are out there, but it's very much worth the time to research each company and meet with them. Over the phone it can be hard to tell if it is a legit operation or a fly by night situation.
0 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
7y
Originally posted by @Jay Hinrichs:
Originally posted by @James Wise:
@Michael Lewis
This is a major over reaction on your part. By your account it's the 15th of the month & you've already been notified of the payment issue, yet you are also upset that you haven't been notified of the payment issue. How much sooner & in what way are you expecting to be notified?
The only possible gripe you can have that would have some legs would be that they are sending you an owner statement as opposed to providing you with an online portal to possibly view things sooner but to expect them to call you about every minute detail the moment it happens is not a realistic expectation. They cannot call you the day it's late & then everyday thereafter to personally update you on this tenant's rental payment. The rent collection process is not as smooth as some believe. There is some serious leg work that goes into collecting rent from tenants. On top of that tenants say a lot of things that do not come to fruition & or get followed up on. Contacting you about every minor update that likely won't come to fruition would be a waste of your time, their time & result in them managing your property for net loss when you factor in the time & labor involved in all of these unnecessary updates.
Let's take a look at the two ways that this could go down.
--------------------------
The rent is due on the 1st & the tenant doesn't pay it.
--------------------------
Option 1.
Property Manager personally contacts you every step of the way.
--------------------------
Day 2.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 3.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 4.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 5.
Property Manager calls tenant about the rent not being paid. Tenant answers & says that that they will pay the rent on day 11.
Property Manager calls to tell you that the tenant is going to be paying the rent on day 11. Property Manager fields multiple questions from you about this new agreed upon arraignment with the tenant that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will be able to pay rent on day 11?
Does this happen often?
What happens if the tenant doesn't pay rent on day 11?
Day 11.
The Tenant does not pay rent as agreed to on day 5.
Property Manager calls to tell you the rent hasn't been paid as agreed to on day 5. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

The tenant said they would pay the rent, why didn't they pay the rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 12.
Property Manager calls tenant about the rent not being paid. Tenant does not answer, Property Manager leaves voicemail.
Property Manager calls to tell you the rent hasn't been paid. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 13.
Property Manager calls tenant about the rent not being paid. Tenant now agrees to pay rent on the 15th.
Property Manager calls to tell you the will be paid on the 15th. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant pay rent?
Do you think the tenant will pay rent tomorrow?
Should we start the eviction process?
How much will the eviction cost?
Does this happen often?
What are you going to do to get the tenant to pay the rent?
Day 14.
Tenant calls Property Manager to say they will now be paying on the 16th & not the 15th.
Property Manager calls to tell you the rent will be paid on the 16th, not the 15th. You become upset. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why did they change the date?
Should we start the eviction process?
What are you going to do to get the tenant to pay the rent this time?
Day 15.
Property Manager sends out your monthly report. It states that the tenant hasn't paid rent & that the property manager's policy is to issues 3 day notices to all of their tenants who have not paid their rent yet in the next day or so depending on weekends & holidays. Based upon weekends & holidays the eviction will be filed with the courts between the 18th-22nd & the court day will be 4-6 weeks thereafter.
Property Manager fields a multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

You said they were going to pay on the 16th. Why are you going to evict them?
Do you think the tenant will pay rent tomorrow so you don't need to evict them?
Do you think they will pay tomorrow?
What can we do to get them to pay tomorrow?
Day 16.
You call Property Manager at 1pm to see if rent was paid. It hasn't been paid yet. Property Manager agrees to email you by the end of the day to update you. End of day comes & no payment is made they explain that they will be filing eviction if rent isn't paid by end of 3 day notice. In this case given when notice was posted, when weekends & holidays are the Property Manager can file for eviction on the 20th day.
Day 17.
Tenant calls Property Manager to say they will now be paying on the 19th.
Property Manager calls to tell you the rent will be paid on the 19th. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why did they change the date?
Are we still evicting them on the 20th if they don't pay?
Do you think they will pay this time?
Day 18.
Tenant calls Property Manager to say they will actually be coming in to pay today.
Property Manager calls to tell you the rent will be paid later today. You are very excited.
Day 19.
Property Manager calls to tell you that the tenant never came in yesterday. Property Manager fields multiple questions from you that they do not have the answer for or at best can only provide you with speculation.

Why didn't the tenant come in yesterday?
Why did they say they were coming in if they weren't?
Are we still evicting them tomorrow if they don't pay?
Do you think they will pay this time?
Day 20.
Property Manager files for eviction. Property Manger notifies you that they filed for eviction.
--------------------------
Option 2.
Property Manager provides you with the appropriate amount of timely notices as per their streamlines policies & procedures.
--------------------------
Day 2-14.
Tenant doesn't pay rent. Property Manager follows their normal collection protocols to attempt to collect the rent.
Day 15.
Property Manager sends out your monthly report. It states that the tenant hasn't paid rent & that the property manager's policy is to issues 3 day notices to all of their tenants who have not paid their rent yet in the next day or so depending on weekends & holidays. Based upon weekends & holidays the eviction will be filed with the courts between the 18th-22nd & the court day will be 4-6 weeks thereafter.
Property Manager explains to you that they will be in contact with you when the 3 day period has expired and the eviction has officially been filed. Property Manager fields a multiple questions from you.

How much will this cost?
Is this the only option?
What have you done to collect the rent?
Property Manager explains they have done everything in their power to collect the rent and that this is the only option. Property Manager explains costs & says they will reach out to you on the 20th based on weekends this is the 1st day they can legally file the eviction. They will let you know if they filed or if rent was paid at that time.
Day 20
Property Manager files for eviction. Property Manger notifies you that they filed for eviction.
-----------------------
As you can see above Option 1 had an amount of labor that would be logistically impossible to devote to every client & still remain profitable given the amount of money a client pays to the Property Manager every month. If the Property Management company isn't turning a profit they won't be around to provide the service. On top of that I think we can all agree that Option 1 was also incredibly inefficient and much time was spent discussing situations that never actually happened.
Option 2 is what a client should expect from a Property Management company. Enough information in a timely fashion to keep you updated but also allow the Property Manager to effectively run their business without putting you through an unnecessary emotional roller coaster ride.
by far one of your top 5 posts... people expect such perfection in PM that its simply not realistic in any manner.. the PM is not sitting on the people front porch watching their every move.. and peeps being peeps and especially tenants they just dont always tell the truth or do what they say..
most pM's have appfolio or buldium or one of those the owner can log on in real time at anytime and that is on the owner.. PM cant and should not be there hand holding owners they would never get anything done.
Rent gurantee's I would imagine would come in after they tried to collect.. not like an auto pay the day you were notified again completely unrealistic expectations.
It's funny you say that some people expect the Property Manager to sit on the tenant's front porch. Clearly a tongue & cheek comment however I actually had a client who expected something similar to this.
We had an investor who was a real penny pincher. One of those guys who makes a spreadsheet with an estimated NOI & if the actual NOI deviated from his original estimate by the slightest amount he'd loose his mind. Guy would call into the office every single month complaining about the slightest variation of his portfolio. If a water bill was $25 more than he'd anticipated it he'd want a book report written as to exactly why that was lol. It got to one point where he requested my staff sit outside of the tenant's home for an entire week so we could count the people who came and went out of the property because he was convinced that there must be someone else living in the house that wasn't on the lease.
We told him that his request was well out of the norm but we'd be willing to do it for him. So long as he didn't have a problem paying for it. He'd have been looking at $25 per hour x the 168 hours it'd be to have a staff member in front of the house 24/7 for 1 week, so a total of $4,200. Lol guy couldn't comprehend why it wasn't a service we'd be willing to include free of charge since we were already collecting his monthly Property Management fees. Shortly thereafter we stopped working with this individual, he was surprised to find out that as a customer you too can be fired by a Property Management company.
1 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
7y
Originally posted by @Jay Hinrichs:

Originally posted by @James Wise:
Originally posted by @Mark Fries:
@Michael Lewis
Pull the plug, fire them. Property management companies prey on out of state investors because they are cash cows.... the local investors are just base hits for PM companies but out of state investors are the home runs for property management companies...
By that logic I assume you believe that nobody has ever made any money investing in property outside of the state they live in?
Mark does not care for Brokers LOL....
You know what they say.....Some people don't know what they don't know.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @James Wise:

Originally posted by @Jay Hinrichs:
Originally posted by @James Wise:

Originally posted by @Mark Fries:
@Michael Lewis
Pull the plug, fire them. Property management companies prey on out of state investors because they are cash cows.... the local investors are just base hits for PM companies but out of state investors are the home runs for property management companies...
By that logic I assume you believe that nobody has ever made any money investing in property outside of the state they live in?
Mark does not care for Brokers LOL....
You know what they say.....Some people don't know what they don't know.
sometimes I think civilians don't realize that real estate brokers are independent contractors and do not work at their pleasure.
its the other way around.. when I did retail real estate I suspect I only worked with 20% of the people I came into contact with the rest I just knew it was going to be frustrating for both parties but what I like about my clients most have become life long either friends investors etc..
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
1 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
7y
Originally posted by @Jay Hinrichs:
Originally posted by @James Wise:

Originally posted by @Jay Hinrichs:
Originally posted by @James Wise:

Originally posted by @Mark Fries:
@Michael Lewis
Pull the plug, fire them. Property management companies prey on out of state investors because they are cash cows.... the local investors are just base hits for PM companies but out of state investors are the home runs for property management companies...
By that logic I assume you believe that nobody has ever made any money investing in property outside of the state they live in?
Mark does not care for Brokers LOL....
You know what they say.....Some people don't know what they don't know.
sometimes I think civilians don't realize that real estate brokers are independent contractors and do not work at their pleasure.
its the other way around.. when I did retail real estate I suspect I only worked with 20% of the people I came into contact with the rest I just knew it was going to be frustrating for both parties but what I like about my clients most have become life long either friends investors etc..
Oh yea. It's like that with any how profile service business. We've got a really prominent attorney out here, guy spends millions on TV ads every year. Only works with 5% of the people who contact him.
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