Exhausted! Tenant suicide this month, flips, and rental turnover!
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
Exhausted! Tenant suicide this month, flips, and rental turnover!
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Shiloh LundahlPro Member
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes@Todd Powell I encourage you to get an assistant, not a property manager.
I did what a lot of people on BP are against and I went through a guru program and I had a real estate coach for a year. One thing he told me every week was get an assistant, get an assistant, get an assistant. After 6 months of hearing that, I finally got an assistant and I was able to focus on my therapy practice and leverage my time. For every hour I worked in my practice, I could pay my assistant to work 7 hours. And she could take care of the things I didn't want to take care of.
I am now on my second assistant and my business has scaled incredibly. We would not be near where we are now without my assistant and my net worth would be dramatically lower because I wouldn't be able to handle the purchases, leasing, and managing of my properties (around 80 doors) and still run my therapy practice. My assistant takes care of a lot of things with my multiple businesses and personal life. She is AWESOME!
47 Replies
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes7y
1 job + 3 flips = 4 jobs, mon'. You're busier than the Jamaican family on In Living Color
https://m.youtube.com/watch?v=fXdj6fzjxak
Student rentals are a 5th job this time of year and is expected. The suicide was an unfortunate part of our biz. I've had similar with one passing last fall and another going to an old folks home. Dealing with next of kin can be a pain but you'll get through it.
If peace and choices are what you seek, flips and student rentals contradict both. Sell any dog properties into the froth, get a PM maybe on the student rentals and quit flipping. High transaction costs and 40% tax rate. No thanks!
- Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes7y
I recommend aligning your strategies with your goals and, if passive income is your goal, I would move away from flipping and property management, which are businesses rather than passive investments. Real estate is supposed to make life better.
@Steve Vaughan that's hilarious (and spot on)!
- 7yShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
@Todd Powell I encourage you to get an assistant, not a property manager.
I did what a lot of people on BP are against and I went through a guru program and I had a real estate coach for a year. One thing he told me every week was get an assistant, get an assistant, get an assistant. After 6 months of hearing that, I finally got an assistant and I was able to focus on my therapy practice and leverage my time. For every hour I worked in my practice, I could pay my assistant to work 7 hours. And she could take care of the things I didn't want to take care of.
I am now on my second assistant and my business has scaled incredibly. We would not be near where we are now without my assistant and my net worth would be dramatically lower because I wouldn't be able to handle the purchases, leasing, and managing of my properties (around 80 doors) and still run my therapy practice. My assistant takes care of a lot of things with my multiple businesses and personal life. She is AWESOME!
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Shiloh Lundahl:
@Todd Powell I encourage you to get an assistant, not a property manager.
I did what a lot of people on BP are against and I went through a guru program and I had a real estate coach for a year. One thing he told me every week was get an assistant, get an assistant, get an assistant. After 6 months of hearing that, I finally got an assistant and I was able to focus on my therapy practice and leverage my time. For every hour I worked in my practice, I could pay my assistant to work 7 hours. And she could take care of the things I didn't want to take care of.
I am now on my second assistant and my business has scaled incredibly. We would not be near where we are now without my assistant and my net worth would be dramatically lower because I wouldn't be able to handle the purchases, leasing, and managing of my properties (around 80 doors) and still run my therapy practice. My assistant takes care of a lot of things with my multiple businesses and personal life. She is AWESOME!
One of my business partners and mentors was the president of a fortune 500 company.. and he would always tell me you cant move up the ladder if you don't replace yourself.. so for those looking to scale a business like Shiloh this is a must.. IN our business you need good accounting ( I have had full time CPA on staff for 25 years) My banks love her they don't even call me anymore .. Being I am Mr. Blue sky and they are well CPA... If you don't want to really scale and just run what you have time to manage and or enjoy being self employed that's good too.. Like Steve.. I mean we have to have something to do.. and futzing with your rentals is some work at some level. Passive income is investing in others business's that are run by others.. when U run your own your self employed.. not passive.
- Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes7y
Hi Todd,
That is way too much work for 1 person to handle. You are now in the lovely position that "Time" is more important than money. What a beautiful spot to be in. I think you know you need to let some control go and pay someone to deal with your workload. Get some of your personal life back.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes7y
I encourage all of you to check out the BRAND NEW Biggerpockets Business Podcast!!!
The first episode is with @Joshua D. explaining how he built BP. It's a really interesting episode and I'm looking forward to learning how to grow my business just like BP taught me how to grow my investments.
I agree with @Shiloh Lundahl that you may want to consider an assistant. Much cheaper than a PM and you have more control over them.
The DIY Landlord Book4.7248 Reviews - Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes7y
Great input guys. I flip to generate cash, but definitely the taxes are not fun. I also have been flipping to accelerate paying down debt so i can retire and live on my rental cash flow. The naive goal was 45, but now realistically it’s 55 years old. That’s the motivator.
I guess i am having a hard time letting go of the rental side. I like the idea of an assistant but it would only be seasonal need in April or May possibly. I just don’t trust anyone to screen and advertise and then show the units. Namely, i am showing units while my current tenants still reside there until June 30th ends. Btw, the do pay people to do the turn around and any repairs ongoing. But, this last month as been abnormally busy. College rentals are a love/hate relationship. I love the consistent client but I hate that every year or two it’s a massive turn around!
Thanks @Jay Hinrichs @Nathan Gesner @Frank Wong @Mike Dymski @Shiloh Lundahl @Steve Vaughan
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Nathan Gesner:
I encourage all of you to check out the BRAND NEW Biggerpockets Business Podcast!!!
The first episode is with @Joshua D. explaining how he built BP. It's a really interesting episode and I'm looking forward to learning how to grow my business just like BP taught me how to grow my investments.
I agree with @Shiloh Lundahl that you may want to consider an assistant. Much cheaper than a PM and you have more control over them.
Nathan I comment on Mindy's post.. while the pod casts for the movers and shakers out there are very encouraging for newer investors they tend to be self serving for the guest I E the guest is usually selling something etc.. But they are still motivating I am sure for most.
but one tied to actually scale and run a business and more nuts and bolts without selling anything.. Other than maybe the book that J wrote which is fine to do.. I think as the audicance advances will be quite beneficial.. I wonder if they can set those up so he can take Q and A in real time at the end of the pod cast? not sure how those things work.. but that would be something I think could be good too
- 7yShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
@Todd Powell You would pay your assistant hourly as a contract worker. That means that during the busy time she would be paid more and during the off season she would get paid less. But she could take care of a lot of other things too. For instance, my assistant coordinated getting my garage door fixed earlier this week and she is going to list something to sell on Craigslist for my aunt. She picked me up from the airport a week ago and she has taken my 12-year-old son round to show him how she manages our properties. She helps with everything and then bills me for her time. I can't say enough good things about her and how valuable she is to our success.
I had a hard time letting go of the control at the beginning, but once I did and I got a good assistant, I found out that she was much better than me at a lot of things. She screens tenants, she coordinates repairs, and now she project manages a lot of our rehabs with the growing list of subs she is creating.
Because she does such a good job, we helped her get her first investment property that she should have lease optioned out within a few weeks and she stand to make about 30-40k on this property within a 3 year period of time. So she is really excited about that and I think it creates more loyalty.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes7y
Originally posted by @Shiloh Lundahl:
@Todd Powell You would pay your assistant hourly as a contract worker. That means that during the busy time she would be paid more and during the off season she would get paid less. But she could take care of a lot of other things too. For instance, my assistant coordinated getting my garage door fixed earlier this week and she is going to list something to sell on Craigslist for my aunt. She picked me up from the airport a week ago and she has taken my 12-year-old son round to show him how she manages our properties. She helps with everything and then bills me for her time. I can't say enough good things about her and how valuable she is to our success.
I had a hard time letting go of the control at the beginning, but once I did and I got a good assistant, I found out that she was much better than me at a lot of things. She screens tenants, she coordinates repairs, and now she project manages a lot of our rehabs with the growing list of subs she is creating.
Because she does such a good job, we helped her get her first investment property that she should have lease optioned out within a few weeks and she stand to make about 30-40k on this property within a 3 year period of time. So she is really excited about that and I think it creates more loyalty.
An assistant sounds like it could be a great idea.
What do you think is a fair starting hourly rate, Shiloh? And my other big question would be how best to find one ?
I've had a couple people submit resumes unsolicited just 'to be around REI' but they were over-qualified college graduates. Didn't know what to do with them or how much to pay. Thought maybe social media stuff some of us hate and don't understand anyway.
Thanks for any insight!
- Investor · Biddeford, ME · Member since 2017 · 282 posts · 180 votes7y
If I were in your shoes, I'd be looking into quitting the full time job asap. The time you're there could be better used it seems.
- 7yShiloh LundahlPro MemberRental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
@Steve Vaughan Starting hourly rate really depends. We started our assistant out at $14 an hour. But then we would give her bonuses when she brought a someone she knew to us to lease option a property. As she really showed us how valuable she was we gave her a raise a couple of dollars but then we also helped her get an investment property of her own and we are working on giving her different bonuses.
She really loves working with us and she loves everything she is learning from us in real estate (as stated in her email to us this morning).
We found her because she was a bird dog for a wholesaler and my partner and I took her out to lunch and just got to know her. We started her out with doing a few things and she did a great job with them. Then we gave her more things to do and she accomplished everything we asked right away. So I let my other assistant go who was not getting things done well or in a timely manner and I had this assistant start to manage everything for me form my counseling appointment calls to running the mobile home park. She goes to court for us if there is an eviction in the mobile home park, she walks properties for us, she files my paperwork, she manages the rehabs and she does pretty much everything in a super efficient way. So we are happy to have her on our team. We are going to try to help her get a couple more investment houses this year. So even if her hourly pay is not as high, her net worth will be going up a lot.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes7y
Originally posted by @Shiloh Lundahl:
@Steve Vaughan Starting hourly rate really depends. We started our assistant out at $14 an hour. But then we would give her bonuses when she brought a someone she knew to us to lease option a property. As she really showed us how valuable she was we gave her a raise a couple of dollars but then we also helped her get an investment property of her own and we are working on giving her different bonuses.
She really loves working with us and she loves everything she is learning from us in real estate (as stated in her email to us this morning).
We found her because she was a bird dog for a wholesaler and my partner and I took her out to lunch and just got to know her. We started her out with doing a few things and she did a great job with them. Then we gave her more things to do and she accomplished everything we asked right away. So I let my other assistant go who was not getting things done well or in a timely manner and I had this assistant start to manage everything for me form my counseling appointment calls to running the mobile home park. She goes to court for us if there is an eviction in the mobile home park, she walks properties for us, she files my paperwork, she manages the rehabs and she does pretty much everything in a super efficient way. So we are happy to have her on our team. We are going to try to help her get a couple more investment houses this year. So even if her hourly pay is not as high, her net worth will be going up a lot.
Excellent info, Shiloh. Thank you.
A desire to learn about RE and grow wealth I believe is key and the $14-$15/hr rate is what I was thinking, too.
I will compile a list of potential tasks and maybe run it by my 'applicant'. She viewed one of my FSBOs last year as a buyer then confessed she tours houses just because she loves RE and meeting owners. And btw, attached is my resume. LOL Thanks again!
- Specialist · New York, NY · Member since 2019 · 10 posts · 4 votes7y
It's funny because people always say that they have an investment property - but unless it's enough units to have a live in super, there's a ton of upkeep and maintenance unless you really luck out with your tenants! My mother is constantly doing things as small as "changing a lightbulb" at her rental condo. I think she's crazy.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes7y
@Jay Hinrichs I quit watching the BP podcasts. First, they generally regurgitate the same information so less than 10% is applicable to me. Second, I like David but he's not as entertaining as Josh was.
BP Business Podcast will be right up my alley if they produce the same level of value as the standard podcast does for a new(er) investor.
The DIY Landlord Book4.7248 Reviews - 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Nathan Gesner:
@Jay Hinrichs I quit watching the BP podcasts. First, they generally regurgitate the same information so less than 10% is applicable to me. Second, I like David but he's not as entertaining as Josh was.
BP Business Podcast will be right up my alley if they produce the same level of value as the standard podcast does for a new(er) investor.
cant honestly say I have watched a pod cast of anyones.. I watch a few minutes of MOrris and his wife blaming all their problems on others.. and I listened to about 10 minutes of Mike Quarles podcast.. I liked him.. he is a pro no doubt.
I never listened to mine either.. but I like talking about everything other than what is usually talked about on BP like how to get rich in the timber industry LOL
- Alpharetta, GA · Member since 2015 · 44 posts · 23 votes7y
Originally posted by @Jay Hinrichs:
Originally posted by @Nathan Gesner:
@Jay Hinrichs I quit watching the BP podcasts. First, they generally regurgitate the same information so less than 10% is applicable to me. Second, I like David but he's not as entertaining as Josh was.
BP Business Podcast will be right up my alley if they produce the same level of value as the standard podcast does for a new(er) investor.
cant honestly say I have watched a pod cast of anyones.. I watch a few minutes of MOrris and his wife blaming all their problems on others.. and I listened to about 10 minutes of Mike Quarles podcast.. I liked him.. he is a pro no doubt.
I never listened to mine either.. but I like talking about everything other than what is usually talked about on BP like how to get rich in the timber industry LOL
I would love to listen to a podcast that talked about how to get rich through buying and selling land as well as selling rights for timber, mining, what have you. Does one exist??? Kinda kidding around in my question but would seriously love to learn more. Seems like the right land purchase at the right time and right price could net much more for much less effort than doing rentals and flips (which I currently do).
- Asheville, NC · Member since 2017 · 170 posts · 242 votes7y
I also self manage with an assistant. I get the control thing - no one will be as motivated for good tenants as I am, and no one will care about my properties like I do. BUT you can eliminate a lot of BS with an assistant. Mine is fantastic. She’s paid hourly and wants to learn real estate and she has the perfect balance of knowing when to make insignificant decisions herself and when to consult me. It’s hard to find someone like this but entirely worth it. She runs the open house ,collects pre-applications, meets contractors for estimates and repairs and I get to make all the fun decisions.
- Rental Property Investor · Kalamazoo, MI · Member since 2018 · 117 posts · 235 votes7y
@Todd Powell
To be honest your either really confused or fishing for compliments. If you wanted passive income you’d delegate yourself out of work. You’re the exact opposite. So either you want people to dress you up with compliments about how hard you work, or you don’t understand fundamental real estate concepts, all while managing 30 units....
Something tells me you know what you’re up to here, Compadre.
Advice: find a property manager and stop pretending you’re the only one that can run your properties well. There are different degrees of what well means, but your goal of becoming passive only happens one way.
- Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes7y
Originally posted by @Todd Powell:
Hey BP peers! When does this RE stuff actually become passive income? It’s been a trying month for sure. I work that full time job, manage 29 doors, and flip for profit and debt reduction.
But, on April 12th I get a call that on April 8th my tenant committed suicide. luckily, not in the unit. That Bubbly little 5 foot woman decided life wasn’t worth it any longer and pre mediated this action by jumping out in front of a logging truck. I then dealt with trying to remove her guest peacefully and a mom and sister who fought over her belongings, meanwhile trying to contact the attorney handling her affairs.
So, when does this finally become passive income ? I say this sarcastically as I know it’s always going to be hard work. 3 flips back to back so far in 2019 and 8 unit turnovers for upcoming college students is quite exhausting.
Maybe it’s time to hire a PM but I have zero vacancy the way I run things and cannot let go. Flat exhausted and wondering if anyone else feels the same out there in the BP world? Thank you
If you're looking for sympathetic commiseration, I'm your Huckleberry! Having a similar year to yours: suicide/OD last week, ugly eviction earlier this year, 5 other turnovers of longterm tenants (which as you know means addressing lots of deferred maintenance issues/full-blown rehab during make-ready) and several unexpected cap ex issues ($30k roof that hemorrhaged several leaks into the building after a hail storm, sewer line that blew up under a newly remodeled kitchen, furnace that crapped the bed on the coldest night of the year, etc.). I'm just having the kind of year where replacing a few stair treads leads to discovering the stringers are completely shot and I end up rebuilding the whole stairwell plus a few walls. This isn't any different than my overall experience as a rental property owner, just a lot more issues in close succession this year.
I may even have to one-up you because my wife is having our third boy in a week (two others at home; a rambunctious 3.5 year old and a 1.5 year old Tasmanian devil). I even have a great PM but I end up doing almost all of my own work because I do a better, quicker job for a lot less money and am able to fill units faster just banging it out myself. I find that maintenance/repairs is where using a PM can get really expensive and I'm the rare bird that finds enjoyment working on stuff (most of the time). I don't have any advice for you except an assistant sounds like a great idea if you can afford one, although during the hiring/on-boarding/training stage they'll probably take more time than they'll save. Longterm that could work out great for you if you are able to find the right person. You might just find a great PM like mine that charges a low percentage for the basic leasing/emergency duties and offers additional services a la carte. Took me a while to find one that agreed to those terms but I'm happy with our arrangement. My plan is to ride out the storm, leverage my PM a bit more, pray to whatever gods will listen, and not acquire any more properties or have any more babies until things are stabilized. Good luck, I feel your pain!
- Investor · Jonesboro, AR · Member since 2017 · 136 posts · 79 votes7y
@Todd Powell
Spring is in the air
I lost 2 of my long term tenants in last 3 months very heart breaking.
- Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes7y
Originally posted by @Steve Vaughan:
quit flipping. High transaction costs and 40% tax rate. No thanks!
I keep hearing this on BP, but flipping returns even after taxes are much higher than rentals. The only thing that should deliver a higher return is ground up development.
I understand how busy you are OP. I am similar. I have 2 other businesses + flipping + rentals + 1 large ground up development. Aka 5 jobs.
My only advice is to hire an assistant and learn to delegate. I delegate a lot of the minor things. The only other thing I can recommend is work more lol. I work like no one else today so I can live like no one else tomorrow.
- Member since 2016 · 13k+ posts · 12k+ votes7yTodd Powell I am in a similar position as you except I retired 10 years ago. My guess is you are not really looking for change. I also flip and 100% self manage 30+ doors. I do 100% of all repair/renovation work. I do it because I am a workaholic and love it. Tenants die, they come and go and there are weeks when I put in very long days. 12-15 hr days are not uncommon. I am not interested in "scaling up" since I have all the income I need already and I am not looking for help or relief. Unlike you I am not interested in pay off my properties. I am hoarding my income and diverting it into passive investments instead. My properties are all highly leveraged. I expect my money to earn it's keep which it can never do locked up in real estate. I will not stop till I sell everything which I plan on doing in the next few years. As long as I own rentals and flip the only way for me, or you, to slow down is to stop cold turkey and enjoy life outside of working. You would benefit from diverting your money away from paying off your properties and put it to work for you. Parking it in real estate is not investing. If you truly want to retire you will need to sell everything.
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