Is Holton Wise PM company any good?

Question

Hi guys, brand new guy to this forum and rei in general. I live in NYC and I am evaluating who/what company I should purchase cashflowing properties OOS. I have been speaking/researching various turnkey companies but what really caught my eye was the Ohio market. Mainly @JamesWise videos. The price for a multifamily in a A and B(grading according to @Jameswise) class neighborhood on these properties seems remarkably better than anywhere else I looked so far. There are a few things that concern me that I hope someone here can shed some light on.

1) How is Holton-Wise's PM company? From what I gathered from some of Biggerpocket's posts, it's that they are notoriously hard to get into communications with. Have they improved in that area?

2) I've also seen complaints by at least one poster about Holton Wise not being able to fill a vacancy for 7+ month, though from what I gathered during that forum argument this was possibly due to the building being located in a C-/D class neighborhood. Is this a consistent Holton-Wise problem? Can anyone talk about their experiences in regards to vacancy's in detail?

3) How accurate is @JamesWise Cleavland Neighborhood guide? Is it reliable? Is what he says in his various videos reliable?

4) Can anyone comment on their rehab work? Are they decent? Are they timely?

Thanks for all your help in advance.

Kristopher Hanks · Answer

@Wei Jie Yang

@James Wise

1) I have never used them for property management. So I will not comment on this. However, they are a large professional company. I used a mom and pop property manager that ended up costing me many thousands in loses, not to mention I could have been sued because he failed to respond to tenant complaints and did not fulfill his legal obligations to maintain the properties and take care of repair requests, including an opening in one of the houses that was letting large rats into the home, only to have the father pulling his baby boy out of his crib because a big rat was on top of his son. Communication with this "manager" was horrible. It would take up to and including legal action threats to get an email or phone call back from him to get an explanation about where months and months of missing rent was. So I do not think that Holton-Wise would be this bad with their communication, I just don't see it happening.

Another thing about their communication: I have been a Holton-Wise customer. They sold two houses for me in "D to F" neighborhoods in the City of Cleveland, and they did so very quickly because they have the contacts and established business in the area to make it happen. They (including Mr. James Wise personally) communicated with me, when it was necessary, no more, no less. I am sure that is how they would have to run their property management business as well. Communicating with owners when it is necessary. Property management to me means, handle the property for me. Only contact me when it is necessary. Otherwise I would run the property myself. As for the reverse, they may have delays in communication because they need to have an answer for the owner before they make contact. Some questions take time to answer. So there will be a delay in communication until the answer can be given. Some questions can not be answered until the property manager goes out to the property and and makes contact with the tenant.

2) One of my houses went unoccupied for 8+ months before I liquidated it. It was in the Glenville neighborhood. Bad, bad neighborhood. Sometimes it is not the lack of trying that is the problem with renting the house. Sometimes it is just not a good fit for the majority of the renting public. High crime and illegal firearms being found in one of the houses you own is not a good sign, and will likely lead to poor financial returns for the owner = empty house for 8 months before selling it.

3) Very accurate. I have taken trips to Cleveland and I have laid eyes on almost the entire Cuyahoga County area. I have been in the bad neighborhoods and received many confused looks by locals that were asking me with their eyes" what are you doing here? I have owned houses in those neighborhoods and I can tell you that his guide is accurate, based on my experience.

4) I have no idea. I have not used them for these services.

Russell Brazil · Answer

I dont know Cleveland, but the reliability of his his videos and maps seem pretty honest.  I dont know a lot of commercial guys who sell things that seem as honest as he does.  He is pretty blatant when he says a neighborhood is C/D, or when he tells you all the major things that are wrong with the properties.  Watch a bunch of his videos on specific properties, and he really gets into whether they need a $30k roof, or need 20 water heaters replaced.

People still buy bad properties from them, then complain about them...but at least he seems pretty forthcoming about the properties.

Barb Mattis · Answer

There are so many factors to consider when deciding on a property management company.  There will be good and bad about every company.  It all depends on what each individual's needs are.  If you are new to investing and have a lot of questions, a large management company may not be right for you.  The best way to find the right fit is to ask for references and compile a list of what is important to you regarding the services you feel you need.  Always important to find out how many properties each manager is responsible for, too many properties for one person is usually not good.

Jim K. · Answer

@Wei Jie Yang

James Wise is an active member of the Bigger Pockets community and I can tell you from my perspective as a self-managing landlord in not-so-nice neighborhoods in my own neighboring city, where we face quite similar problems, that he doesn't say painfully stupid things about the realities of urban property management or rehab work. If I were going to invest in Cleveland he would probably be the first person I'd reach out to.

James Wise · Answer

I'd like to speak to a couple of the things you've mentioned in your list.

1) How is Holton-Wise's PM company? From what I gathered from some of Biggerpocket's posts, it's that they are notoriously hard to get into communications with. Have they improved in that area?

I don't believe Holton-Wise has or has ever really had a communication problem. What does happen from time to time is an investor who's got communication expectations that can not & will not be met by Holton-Wise or any other large property management company. Often times investors, especially new investors will go through things they've never experienced before such as a non paying tenant or an eviction. While I understand that's a very scary thing to deal with at first it is not logistically possible for a company running a portfolio of our size to have staff available to make or take a phone call the very moment every bump in the road occurs.

Another member of BP started a thread about another Cleveland Property Manager with similar communication complaints. I dropped by that thread & broke down in great detail why an over the top communication level would be unrealistic & unattainable to expect. Check out that conversation by clicking the link below.

https://www.biggerpockets.com/forums/52/topics/639688-not-happy-with-my-pm-company-need-advice-please

The level of communication that we do provide is something we explain right up front. We do not over promise & under deliver. We tell you exactly what you can expect from us. Below is an exert from the Property Management FAQ on our website. When working with Holton-Wise as your property manager below is how we will communicate with you. If you are an investor who wishes for a more hands on or personalized approach a larger company like Holton-Wise would not be a good fit. What'd make sense for that type of person would be a one man mom & pop shop who's running a handful of properties. There are of course pro's & con's when choosing between a large company & a small outfit but that is a topic for another day.

Q. How do you communicate with owners?

A. Holton-Wise provides all of our client's with a free online owner portal that can be viewed in real time. This portal will have the most up to date information on your portfolio of properties. This includes files such as tenant leases, repair estimates & invoices as well as events such as tenants moving in or out of your property, tenant rent payments & notifications if your account becomes delinquent. Other than that, Holton-Wise communicates with property owners on an as needed basis via phone or email. Holton-Wise prefers to use email communication over phone communication whenever possible. We find that email is much more efficient & effective. When we have a written record of communication it helps to avoid any miscommunications & the inevitable "he said, she said situation." Phone calls with a Holton-Wise team member can be scheduled within 72 hours & all emails will be returned within 24-48 hours. More information on our communication process & the owner portal can be found in the video below.

This next comment I am not sure is an accurate representation of what you've read.

2) I've also seen complaints by at least one poster about Holton Wise not being able to fill a vacancy for 7+ month, though from what I gathered during that forum argument this was possibly due to the building being located in a C-/D class neighborhood. Is this a consistent Holton-Wise problem? Can anyone talk about their experiences in regards to vacancy's in detail?

The Holton-Wise staff collects a non refundable security deposit from tenants within 30 of any property being made rent ready on almost all of our available properties. We have an aggressive marketing strategy and we follow up with adjustments every two weeks a property is vacant. There are situations where a property owner chooses not to take suggestions such as including an appliance, upgrading the unit or making a price modification. In those instances extended vacancy can occur. However I do not believe there has ever been a situation where we've had a 7 month vacancy. We'd probably end up dropping a client in a situation like that as that's just not possible under normal circumstances where we are properly pricing & renovating the properties.

Terry Lao · Answer

Nice videos by Holton Wise. Price maybe a bit on the high side and cashflows good. BUT those high property taxes, which is about 4-5% of sales price. I can only imagine that the reason for such high property taxes is a direct result of local and state government mismanagement. The last resort is to tax homeowners since the property is fixed and cannot run away. Look at Chicago, New Jersey, New York, and California.

Once property taxes goes up........will never come down.

Terry

Joel Owens · Answer

If you are serious about that market for that type of asset then you should consider planning a trip there. Go see the local market and what some companies are claiming to be A,B,C areas and properties. Ask the tough questions and meet multiple companies there over your stay.

Property management contrary to popular belief there is very little money in it at all. It basically keeps the employees/ contractors working at these companies and pays the bills. Management is one of the lowest forms of return for anyone to do. They some ask WHY do companies do it? Because it is a NEED that is constantly there so can provide operational cash flow in between other profitable ventures. You can have constants and then intermediate big pops of income.

Instead of management my clients buy commercial properties and I make money transacting for retail. I personally enjoy that much more. To each their own.

You have to look at your net worth and annual income and decide if long term equity growth and less headache is the main driver or higher cash flow with a more intensive asset? There is no right or wrong answer just investors at different levels and points in their lives when views and strategies can change over time.

James Galla · Answer

Pretend to be a prospective tenant, call them, and see what they are like. I'd also ask to see if he is willing to share data on the performance of the properties he manages.

Larry Fried · Answer

I won't speak to your question about James Wise, but rather something you may not be factoring in when you consider cash flow in Ohio.  That's property taxes, which can considerably higher than in some other nearby states.  Be sure you factor realistic property tax numbers into your cash flow.  Ohio can be a good place to invest, but be sure you do it with your eyes wide open.

Is Holton Wise PM company any good?

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