All Forum Posts by: Chris Grenzig

 @Sara Donohue I would re-iterate what someone else said and make sure you have cash reserves for any real estate you're doing because problems happen and sometimes you have to come out of pocket to fix them. 

However, my general guidance is usually to work backward. Figure out your future goals of what you want to do and work backward to find a strategy that helps you accomplish that goal. Do you want to be passive or active? Do you want to replace your salary and be full-time in real estate? Do you want higher risk and more return or low risk and lower returns?

Once you start answering those for yourself you'll be able to find a few strategies that could work, then you can start researching them, and then you just pick one and start trying to do it. Once you pick one give it a serious dedicated effort, but if it's producing no fruit after several months you can always pivot and shift. 

I started trying to flip homes in NY, then flip out of state, then buy tax deeds in Philly and all 3 of those I failed at. Then I started doing small MF investing out of state and did a few deals with mentors, then worked for a company doing 100-500 unit MF for 4.5 years. Then moved to FL and bought 150+ units with partners and investors and we owned, managed, and renovated them. We still own 51 units today. Then we decided to also get licensed to start managing for other people while still buying MF too. 

Real Estate is a journey, so enjoy the ride

@Jenny Yu sorry to hear about your experience, we own and operate 51 units we own and manage for other clients in Jacksonville and Orlando. Unfortunately, many of these companies that do property management and brokerage services include exclusivity clauses in their contracts which I don't think is right. However, saying that there are many companies that do both that are amazing and don't do things like this, so I'm not suggesting that doing both is inherently negative. I know we wouldn't include a clause like that if we did offer brokerage services because our Property management agreement has a 30-day notice to terminate at any time for any reason no penalty. 

The only thing I will say is Jacksonville has had rents drop in many areas, so you're not alone in having the same property rent for less today than it did in previous years. Jacksonville has been building at record levels and is/was one of the highest cities in the country delivering new housing units as a percentage of existing housing units. So Supply and demand have really shifted quickly. 

It sounds like you sold, but if we can ever help with anything in the future please don't hesitate to reach out, even if I can't help someone in my network probably can. Friendly reminder to anyone else reading to carefully review your PMA before you sign it and before you decide to change property management companies.  

Thanks for sharing your experience, I'm sure it will help someone else in the future, so at least hopefully something good will come from it. 

@Vin Gupta Shawn is right and he's probably one of your best resources on BP for the Orlando area. From a rental perspective things are definitely taking a bit longer to rent and it's becoming more common to see concessions than 1-3 years ago. Insurance premium relief is trickling back into Florida, as Shawn said, but it's not widespread yet. Rental rates are pretty flat in the Orlando area, and vacancy has expanded and you'll see rates in the 7-10% range, but it just depends on what source you get it from. 

The "good news" is I think there are some tailwinds behind rental properties coming int he next 1-4 years. There has been a ton of new construction all over Florida, so supply and demand tipped very quickly in 2022-today. However, new construction starts have plummeted since 2022/2023, so within the next 1-3 years current projects that were started in 2022 will finish up, but the pipeline of projects that started in 22/23 is way smaller so projects being completed in 2025-2028 will be significantly less so supply and demand should tip back (all else being equal). I've seen some reports saying new supply for that 2025-2028 range will drop below the levels of 2015-2018 in many markets in FL but I don't have actual sources and changes in different markets and areas. 

I think the combination of fed cuts, insurance carriers slowly coming back, population/job growth being steady, future new supply dropping off, and a few other things bode well for rental properties in the coming years. So if you can find deals that work well today, I think they have a good chance to perform really well in a few years, it's just tough to find those opportunities in FL today. 

I say this both as a property manager and also as someone who owns 51 MF units too. 

 @Hannah Meyer the one consideration not said yet I would point out, is if you thought you might want to manage other people's rentals in a few years but not now, you need to wait 24 months after getting your agent's license to get your broker's license. If you don't have your broker's license you would need to find a broker of record for you to manage other people's rentals and come to some agreement with them. Yes, you'll have some costs and time spent to keep your license active, but having your own broker's license would give you extra flexibility in the future. 

If you're really not planning on representing other people and you're not going to do more than 1-2 transactions of buying and selling per year I don't think it's worth it to get your license. Plus, you could always get it in the future, if you change your mind or get more active. 

@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).