All Forum Posts by: Chris Grenzig

@Alex K. we started out managing our own properties and now we also manage for other owners too. We've always applied deposit towards owed rent first then damages. In this scenario I personally as the PM would probably opt to not apply it towards the late fees since we didn't collect the rent, even if our PMA said we could, because I understand that sending an outstanding balance to collections has a low likelihood of success. 

Also, I probably know that the owners is going to have to come out of pocket with thousands of dollars in the next couple months, including a fee for us to place a new resident. $100-200 in this scenario is an easy chip-in for us when a situation goes bad to ease the owner burden slightly. However, there is also a very fine line for this as the PM can only do this so much and so often because our margins are not ridiculous and since we aren't the owner we don't get any upside appreciation when money is being spent to potentially fix things and make the unit better, rent for higher and/or be worth more. We understand this since we're owners ourselves, but it's definitely a fine line to walk.

@Tim Bee it's not uncommon in a property management agreement for the management company to keep late fees or to split them. However, for us usually the late fee is $100 on the 5th and then another $5-10 per day they are late to incentive getting it in faster. When other managers do a percentage usually the percentage is of the monthly charge not of the outstanding balance, but it could be different where you are. 

If you're really intent on keeping the resident in place then I would just have a conversation with the manager and see what can be worked out, but if they're sticking to their agreement they signed with you, than you might have some decisions to make. 

Most property managers know management, but only some also understand what it means to be an owner. I started our company in 2020 buying multifamily properties in Jacksonville florida and doing the property management myself, overseeing the renovation myself, keeping the books myself, and doing all the asset management myself. 

We've owned properties from single families up to 82 unit multifamily properties, and I've previously overseen a 1,000 unit portfolio in Jacksonville when working for my previous company. 

We have a deep understanding of real estate and real estate investing and we are able to bring that knowledge and experience to our owner clients. The past 3 years in Florida has been tough for rental properties owners, and we're no different. We've felt the same pinch everyone else is feeling. We've also experienced having to go from $2,000 to $5,000 to replace an HVAC unit. We've had our insurance go from $500 a unit up to $2,000 a unit! We've shared the same pain on our own properties that our clients have and we know it hasn't been easy. 

We used to just manage our own properties until we had enough people ask us about managing their properties that we decided to get fully licensed and insured to start managing for other owners. We've bought over 150 units and still own and manage 51 units while also managing hundreds of units for other owners too. 

Being one of our clients means you don't just get the basic services of a property management company, you also get our years of knowledge and experience which can help you optimize the value of your properties and investments. 

We know how to help you best position your property for whatever your goals are.

Thinking about a refinance?

We can help make small tweaks to get your the most value on your loan and work with your lender to help you achieve it.

Thinking about selling?

No problem, we'll do what we can to help maximize your sale value. Most PM companies might try to convince you not to sell or to sell through them so they get the commission. We know most owners will eventually sell at some point, so we would be doing you a disservice by not helping you maximize your return and trying to sell the property when we are not sales experts. 

Or maybe you do want to own this property for 10-20 years, well we can have intelligent conversations and tailor our recommendations to meet those goals by choosing higher quality materials that last longer and save more money over the long term.

Whatever your goals and needs are, we can help you achieve them, because we understand them. Be sure to check us out at our website orlandoproperty.management or give us a call today at 904-420-7292!

@Daniel Windingstad someone else mentioned Florida, I'll just chime in and say Florida is probably not much better for cash flow unless you go C/C- properties, but regulations probably are better than your current situation. Much/most of Florida is still very much an appreciation investment, especially in and around the major metros.

Cash flow opportunities are probably better found in midwest markets but I'm no expert so I don't actually know that for sure. 

@Desstani R. I agree with @Jonathan Greene it sounds like you're a little early for analysis paralysis. That comes when you've started looking at properties you could actually buy and you start over analyzing because you're afraid to pull the trigger.

I experienced this in a different fashion when we bought a property and we were gutting our first kitchen and I didn't want to pull the trigger because I was a little afraid of just ripping everything out and what would actually happen. Luckily my partner pushed me and we did it and everything was fine, but thats more of an example of paralysis. 

The only other thing I caution about is debt. A lot of investors want to buy as many properties as they can and utilize as much debt as they can. Debt is a great tool, but you have to be very careful with it. Too much of a good thing can be bad. Over leveraging a deal is the fastest way to losing your investment and losing the property. If you overpay for a property but put no debt on it you will probably still cash flow some money, even if it's less than you thought. If you put a ton of debt on that same property you might break even or actually start losing money every month. 

Make sure you really understand what your expenses could be, and what they could be in worse case scenario. Make sure to inspect all the major systems thoroughly (HVAC, plumbing, foundations, roof, electrical) and make sure you know what they look like today. I recommend spending a little extra money and pay to have trade specific people inspect the property too, not just an inspector. Pay to run a camera in the sewer lines during your inspection because a few hundred bucks lost is better than $5-10k lost.

Also, keep some money in cash reserves. Don't put all $150k in down payments and renovations. Maybe put some of that into a money market account or the stock market, so if an HVAC does go out in 2 months you can pull out $4-8k to replace it (depending on size, location, etc). 

Real Estate is get rich slowly, $150k to invest is an amazing place to be and a great achievement, but it's also not going to produce a life changing amount of cash flow every year. Even 10% is $15k and with how much stuff costs today, $15k doesn't get you too far. 

Figure out where you want to invest and what type of strategy you want to invest in first, and have a reason for it. Then start finding properties and I would encourage you to lean towards finding less riskier versions of that strategy at first and get your feet wet, and after you gain some experience you can start evaluating different options and offshoots. 

@Angela Marquez welcome to the area and welcome to being an investor!

I don't do anything STR nor do we manage it so I can't answer many of your questions, but there are tons of great people on here and resources. Maybe @Alice Horn can better answer some of these, they run a great STR property management company in the market. 

You probably don't NEED a CPA or lawyer for help getting an LLC, but if it's your first time the extra money to know it was done correctly probably doesn't hurt if you can spare it. However, you could definitely spend the time to figure it out yourself and do it.

If you have general questions on real estate, renovations, capex, etc. feel free to ask and I can probably help. We've bought 150+ units and still own and manage 51 units on top of managing for other people in Jacksonville and Orlando so we know a ton about owning properties and managing them (at least from a traditional long term rental stand point).

@Lilach Holtzer nice to meet you! I lived in Jax for 3 years but moved to Orlando 8 months ago. We've bought 150+ units in Jax and we still own and manage 51 units there currently. We are also a licensed property management company focused on long-term rentals from single-family, townhomes, condos, all the way up to 80-unit properties and everything inbetween. We have a deep background in heavier value-add projects and we like to take a long term view on our investments. I'll shoot you a PM too, would love to jump on a quick intro call and connect!

@Bryan Field I moved to FL from NY to self manage our 16 unit property, we've bought 150+ units and we still own and manage 51 units in Jacksonville. We also started managing for other owners in Jacksonville and Orlando, so I can speak from both ends. 

You could probably manage it yourself, other people do it and have chimed in on how to do it. In my opinion the biggest thing you're paying for with a property manager is the experience, staying up to date on legal complaince, and having stuff in place already.

If you decide to start self managing you're going to have to spend time up front to figure some stuff out (exactly how much I don't know) and periodically spend some time doing various stuff.

The truth is, if you have a property where you have a great tenant, they pay on time, they never cause problems and stuff rarely breaks, management is very easy. The most difficult part is doing the accounting. However, the stuff that takes up our time is the bigger problems. Evictions, resident's passing away, posting notices, doing preventative maintenance walk throughs, resident complaints, neighbor complaints, skips, move outs, turnovers, emergency maintenance, etc.

I used to be strictly on the ownership side, from 2016-2020 I hired property managers. But now managing my own stuff and now managing for other people, property management companies aren't these huge profit centers unless the company has crazy efficiencies or they nickel and dime for you for every last thing. You can still make good money otherwise I wouldn't be doing it, but property management is still fairly labor-intensive over a decent-sized portfolio. 

The main question is $950 a month worth all the upfront time, and the potential increased time when things go wrong. To a certain degree, but not entirely, hiring a PM company is insurance against your time. 

@Seth Mattox so we manage some that are over an hour away, so we have to do some of this stuff, but not to the same degree. Some keys for managing remote that I can think of are:

-Leasing, are you going to pay local agents to do it or use self showing software like showmojo or tenant turner. What are you legally allowed to do?

-Maintenance, find a local NARPM chapter and they probably have a bunch of affiliate vendors on there. They've all paid to be on that list, so they might not be THE cheapest option, but they want to work with PMs and probably do already which should simplify things. Also other PM companies will be members of that NARPM chapter, you could try networking with them to see if they have any vendors they can share with you. 

-Softwares, definitely use a property management software like Buildium (thats what we use) but there are others like Rentvine, rent manager, appfolio, etc. We also use showmojo for leasing which allows for self guided tours. Lockboxes cost $75-100 per lockbox to use the software. 

- Accounting, not mentioned, but make sure you can confidently run the trust accounting and security deposit which is compliant with state code. 

- VAs, I don't think this is necessary for 30 doors, but depends on how much availability you have and how time consuming these properties will be. You shouldn't hire a VA until you have all your systems and processes in place and you have specific repsonsibilties and roles for the VA to have. Hiring a VA is like hiring anyone else, and sometimes more difficult since they're remote and you can't sit down and show them the ropes every day for a month until they learn it all

- relocation, you might not have to relocate, I know there was one property manager on peter lohmanns podcast who only does remote PM, but they have some employees in the area in which they manage, so that might be worth finding and listening to. Eventually I do think it would make sense to hire someone in the area though to help do somethings as boots on the ground. Usually a PM can handle 50-100 units depending upon the makeup of the portfolio. 

@Ivana Ivanovic we've bought 150+ units in Jacksonville and we still own and manage 51 units there. I also manage about 50 new construction homes for other owners in various places, and even though there is less R&M than older stuff, stuff still breaks and you need to fix it. 

Most markets the physical vacancy is 5-10%, good chance you can find it by googling and seeing what the average is. For R&M it'll depend on the type of property, but I think 5-7% is probably a decent number. However, also don't forget to budget for turnover costs and capex reserves too, which many people ignore.