All Forum Posts by: Chris Schwagerl

After that, it sounds like you need to figure out what you want? Is this a transaction or a partnership? If it's a transaction, take your dough and get on with it. If it's a partnership, do one deal (date a while) and see how you two work together.

When vetting partners, I always do a DISC test to compare our styles. After that, I recommend checking out the partnership questionnaire below. (Copy and pasted, so sorry about the huge post)

PARTNERSHIP TEAM QUESTIONS CHECKLIST FORM

Task	Date	√	Notes
Questions to ask yourself PRIOR to partnering with another person:
What kind of investing business do I want to build?
What are my money goals?
What do I value as a person and as an investor?
What is my core genius skills? (Things I do exceptionally well)
What are the top skills, knowledge, and experience I bring to the table?
What is my personality style? What are my strengths? What are my blind spots?
What is my personal mission statement?
Why do I want to partner with this person?
What is the goal of this partnership?
When it comes to working with a partner, what does success look/feel like?
When it comes to working with a partner, what are your biggest fears/concerns?
How much time can you dedicate to this new partnership?
What assets can you bring to the table? (i.e. personal guarantee, money to invest, network of private money partners, special skills, etc.)
Questions to ask your potential partner:
What kind of investing business do you want to build?
What are your money goals?
What do you value as a person and as an investor?
What is your core genius skills?
Why do you want to partner together?
What skills, knowledge, and experience do you bring to the table?
What is your personality style?
When it comes to working with a partner, what does success look/feel like?
When it comes to working with a partner, what are you biggest fears/concerns?
How much time can you dedicate to this new partnership?
Can you bring any assets to the table? (i.e. personal guarantee, money to invest, network of private money partners, special skills, etc.)
What expectations will each of us handle? What happens if someone does not accomplish his/her expectations?
Questions to answer together:
What do we value as a potential team?
Where do you want to be in 5 years?
What do you want to achieve as a team short term and long term?
What legacy do we want to leave behind?
Tell me more about a partnership that did not work out. What have you learned from it?
Where are we similar and different when it comes to our personalities? (Tip: Make sure to take a personality assessment and compare the results!)
More questions to answer to clarify the business goals and focus:
What are we going to do as a company?
How are we going to do it? (process and system?)
Where are we going to do it?
Who is going to do what?
What skills, knowledge, and personality style do we need to achieve our goals?
Where do we fit?
Where do we have some gaps?
Here are some “What IF Questions” that must be answered together:
What happens if one of us dies?
What happens if both of us die at the same time?
What happens if we need to put more money into the business and/or project out of our pocket?
What if we need to bring in another partner?
What if one of us does not want to do this anymore?
What if we cannot agree on something?
How will we set ourselves up to ensure we keep building our relationship?
How will we ensure we keep working ON the business not just in the business?

What would an attorney ask if we were setting up an LLC with someone else?
How can we protect each other using a life insurance policy?
R Factor Question: If we were having this discussion in 3 years from today, and you were to look back over those three years to today, what has to have happened both personally and professionally for you to feel happy about your progress?

0 Votes

Fargo, North Dakota

Hey James! Welcome to BP!

I'm guessing you are talking about 30-day rental stuff? Is that the case?

Are you looking in Jacksonville? That's a booming market with great upside potential.

I would recommend connecting with superhosts on Airbnb to get their perspective.

Find out where the hospitals are and draw a radius around each one on a map.

Then call Suncoast Property Management to get their perspective. Draw circles in the submarkets they like.

Now, you've got a good look at a few zip codes to target.

Maybe a REIA or local meetups for perspective?

Just pointing you in a direction and rooting for you brother. All the best!

2 Votes

Jacksonville, Florida

Quote from @Shane Bishop:

Quote from @Chris Schwagerl:

We use ACH payments, and that's the only way we roll these days. It's so convenient for tenants to pay that way.

*Quick tip, we split utility costs by square footage of units. For example, one side is 1500 sq ft and the other is 500 sq ft, the larger side will pay 3/4 of the utilities.

We have multiple duplexes with only one meter. I did an experiment to see which method was best:

1) Calculate the monthly utility costs and upload them to the property mgmt software - variable costs per month

2) Charge a fixed rate each month. Last year's utility costs +10% inflation. (Extra costs were either added to the last month's rent or given back to tenants as an overpayment refund)

*Note - properties are in Minnesota, so there's a wide range of temps throughout the year.

Which one do you think was the winner? Well, I was wrong.

EVERY TENANT PREFERRED #2.

I know that as a current tenant myself in an apartment complex, I appreciate a flat rate. My only concern with that would be that the tenants would, unintentionally, overuse the utilities since they no longer need to worry about paying based on usage. Currently, my wife and I, pay based on our current usage and are very conscious about how much water we're using, how long the AC is on, turning off lights when they aren't needed, and so forth to help lower those utility costs. In previous apartments when the utilities were charged as a flat rate, we naturally did not keep as close of an eye on that.

Have you experienced an increase in utility usage with charging a flat rate? Or does the overpayment refund mitigate that because the tenants see an incentive to use less of the utilities?

Thank you for the feedback! These comments have been extremely helpful!

I hear you brother! You are a natural homeowner and investor, so you were conscious of lowering costs. Tbh, and this is a little controversial, utility costs don't change much with usage. I know that goes against the preaching of every dad in America :). It's true though. I'm more concerned with people renewing their leases. Besides, this year's flat rate is based on last year's usage. Likely, many of the same people are using the utilities again.

1 Vote

Quote from @Laura Shinkle:

Quote from @Chris Schwagerl:

We use ACH payments, and that's the only way we roll these days. It's so convenient for tenants to pay that way.

*Quick tip, we split utility costs by square footage of units. For example, one side is 1500 sq ft and the other is 500 sq ft, the larger side will pay 3/4 of the utilities.

We have multiple duplexes with only one meter. I did an experiment to see which method was best:

1) Calculate the monthly utility costs and upload them to the property mgmt software - variable costs per month

2) Charge a fixed rate each month. Last year's utility costs +10% inflation. (Extra costs were either added to the last month's rent or given back to tenants as an overpayment refund)

*Note - properties are in Minnesota, so there's a wide range of temps throughout the year.

Which one do you think was the winner? Well, I was wrong.

EVERY TENANT PREFERRED #2.

Just curious the time commitment/work required on your part. Was it comparable between the two, or was one easier than the other? I would have though the second would be a pain.

Great question! I love that you're thinking of the operational side. That's super important and often overlooked. Well done.

#2 - charging the flat fee - is MUCH easier. You do 1 calculation for the year, and you're set.

#1 - charging monthly is time consuming. I'm getting a little sweaty thinking about it :).

You will have to collect multiple bills from different utility companies, reconcile them all, do a calculation for every tenant, crap, I'm stopping there. Too much!!

0 Votes

Quote from @Dave Wyman:

Quote from @Chris Schwagerl:

Before you contact any brokers, you have to know EXACTLY what your "buy box" is. Trust me, you don't want to upset a bunch of brokers because you looked at a thousand deals and couldn't pull the trigger.

Which zip codes?

What sq footage, # of beds and baths, budget, level of renovation needed, financing options?

Figure it out and write it down.

Then spread this message to every broker you can find.

Give quick no's when deals don't meet your criteria.

After you've made a purchase and the broker made their fee, give them a tip. Throw them a few hundred bucks.

You've made a partner for life, they're happy and surprised, and deals will flow your way.

@Chris Schwagerl I do need to get a little more clear on my "buy box" and I love the idea of tipping after the transaction. Wouldn't have thought of the tipping so thanks for that!

Just last week, the lender I used on my first property in 2013 called me out of the blue. We've talked every couple of years or so. He told me he has the thank you note I wrote him (that I sent along with my tip) framed on the wall in his office. I was just trying to say thanks since he did some heavy lifting to get me over the finish line. People want to be recognized and will remember you when you take an extra minute to do so.

1 Vote

Omaha, Nebraska

Quote from @Jeff Rogers:

@Chris Schwagerl That's an interesting experiment. Did you survey your tenants or was it learn-by-doing? I'm undergoing the same experiment actually. I haven't gotten direct feedback but I get the sense that tenants prefer getting charged the flat rate. Only starting to bill back utilities on the multis.

Good question. I just presented the numbers and asked them. They ALL chose the flat rate. This experiment (among other things) helped me realize that tenants want simplicity and ease.

0 Votes

In a word, yes.

Of course we don't want the place trashed. We have strategies to mitigate that risk: not renting to locals, smaller units, multiple-day stay requirements, no pets, must have a picture and at least one other review on your platform profile, must respond to an email from us, exterior cameras, etc.

And 99% of people naturally tidy up after themselves.

If there are stains or damage, the cleaning crew takes a picture and sends it to us. Then we ask for the release of some or all of the security deposit. That user also gets a bad review. People generally understand the sharing culture.

2 Votes

BIG YES to pets.

BIG NO to deposits for pets.

Deposits are to be paid back to tenants unless you can prove excessive wear and tear. Even though we know pets add to wear and tear, we usually can't prove this through photos.

We charge $50/month for pet rent. We allow up to 2 cats and one dog under 40 pounds.

So if you have 2 cats, we're collecting an additional $100/month in rent.

Not in deposit. Not giving it back. Increased cashflow.

If pets DO ruin the place, the security deposit will go toward fixes. Anything above that, we've been collecting additional funds for the entirety of the lease.

0 Votes

Philadelphia, Pennsylvania

This is a sticky situation that was avoidable. For next time, communicate much earlier in the process.

Our leases require a 45-day notice of renewal or non-renewal from us or from the tenant. Around the 60-day period, we put out some feelers to see what they prefer to do.

With the Zelle thing, can you contact Wells Fargo directly to get your questions answered?

1 Vote

Chicago, Illinois

All Forum Posts by: Chris Schwagerl

Chris Schwagerl has started 2 posts and replied 31 times.

Post: Need a special type of Lending

Post: Partnership Structure Advice

Post: Any information on purchasing the first mid-term rental!!

Post: Utilities: Who pays?

Post: Utilities: Who pays?

Post: Using a single broker vs. many to find deals

Post: Utilities: Who pays?

Post: Charge cleaning fee AND ask guests to clean?

Post: Why I accept pets for my rental properties

Post: Tenant lease expires March 31.I am not renewing his lease. To Refuse rent on Zelle?