Landlord On Autopilot?

Question

Hello all...

My name is Corey and I am currently in the Las Vegas area, but am looking at other markets that are a little bit cheaper. The town I grew up in is about an hour and a half away and I have been able to find a few deals where the numbers work. The problem is of course, my lack of capital. I do however, know a few buyers. My thought is to wholesale the deals that I find to these buyers, start a property management business and manage the properties for them. I am tired of not doing anything real estate related and I thought this would be a good start.

Is a property management from a distance a terrible idea or do you think this can be done?

Aaron K. · Answer

You probably wouldn't be able to hire someone full time, it would certainly be sporadic, I think you are also underestimating the demand for services like this as well as the legal liability.  If you wanted to do something like this just start a management company where you live, it would be way easier, just because properties that meet your criteria are an hour away doesn't mean that is the case for everyone else.

Anna Sagatelova · Answer

I think there are a lot of questions you need to ask, much of the advice you are getting is correct but there are certainly creative solutions in how you can structure your business. You can have your core business be based away from where the properties are, as long as you have personnel, vendors, and technology in place to make yourself locally competitive and ultra responsive.

But if you are doing this because you want to do “something” in real estate, starting this from scratch wouldn’t be worth it and you’d be so busy just trying to compete to stay afloat you won’t have time for those sexy deals that got you into RE in the first place.

TL;DR Just because you (probably) can, doesn’t mean you should. But it would be a fun exercise to come up with those creative solutions, especially considering many would be based in brand new technology.

Corey Johnson · Answer

@Kenny Dahill @Anna Sagatelova @Aaron K. Thank you for your feedback! I can definitely see it being an uphill battle. I work for an AC/Plumbing company that is big in the area and can take care of those types of problems quickly, (and cheaply) should they arise. I know there are things that can only be done by boots on the ground, so I thought hiring 1 person to do walk through's and things of that nature is the only way I could get by. Am I still being too naive?

Kenny Dahill · Answer

@Corey Johnson, property management from afar is a possible solution if you're the landlord.  If you're the hired manager, it does not make sense.  It wouldn't make sense because landlords are paying and not getting the local exposure.

Landlords long-distance manage to save money and have more control of their rental.

Landlords who hire PM's are willing to sacrifice cost and control for a local presence.  It would be extremely hard to compete with a local PM who has relationships and the flexibility to get to the property pronto.

Anna Sagatelova · Answer

Would your PM business handle maintenance calls for the residents? If so, how do you plan to coordinate this from afar and keep quality controls in place? If not, will your business be profitable?

Aaron K. · Answer

@Corey Johnson Property management from a distance is a terrible idea, you need to be present for showings, inspections, move outs, to post notices etc.  Also very few investors would pay a property manager who is not local, that is sorta the whole point in what they are paying for.

As for wholesale, where are you finding these deals?  If it is off of MLS you can't really wholesale them because everyone has already seen them and passed.