All Forum Posts by: Dave G.

@Chris C.

Agree with @Matt K.

I'm not sure I have any kind of "service charge" defined in my leases. I would need to check with my PM.

I know it's not specific to your question, but your comment "they were the first to sign" sounds a bit concerning.

Does your PM have a robust tenant selection process including credit report, criminal background check, employment verification & paystubs, references (going back 2 or more landlords, not the last), etc? My experience is that responsible people with normal lives don't have time to play such games.

@Ian D. wow that's a bummer situation. Agree with @John Barrett. Spend the $$ on a real estate lawyer so the letter of the law is followed and your "friend" is sent on his way most expediently. If you don't know a RE lawyer, get a referral from colleagues at your local REIA or here on BP.

As a point of reference, if I was in this situation in AZ, I would refer to the Arizona Residential Landlord & Tenant Act for guidance regarding the absence of a written lease (and then the eviction process which does not differentiate between oral and written).

Good luck.

Very much like contractors, it should not be hard to stand out as a good realtor. In my experience, so many realtors just plain suck at being a realtor. Many are clueless on just basic principles of being in the people-business.

A laundry list:

Poor communication

Poor responsiveness

Poor market understanding

Poor inventory awareness

Poor etiquette

Poor negotiation skills

Poor contractual understanding

Poor transactional/procedural understanding

Poor client management (like the nuances with 1st-time buyers)

Part-timer/not committed

Inability to understand client needs (especially prevalent for investor clients)

Lazy

Rude

And the harsh list goes on....

I've never done the vinyl so can't speak or compare to that. 

I've done a lot of tile work though. And porcelain (not ceramic) tile is damn-near indestructible. If I'm planning to keep the property for some time and it can work from a design perspective, I'll go with porcelain tile. 

Note - I have condos and the HOA CC&Rs disallow the installation of anything other than carpet (other than bath & kitchen) for non-1st floor units due to noise.

You need boots on the ground to view the property immediately. Maybe they have someone in it and are keeping the rent for themselves. Or the place is a mess as mentioned previously. Or they don't care about your business also previously mentioned. Whatever it is, the PM sucks and needs to be fired. 

If it was me, I'd be getting on a plane and going there myself. Then I'd drop in unannounced on the PM to have the termination discussion and talk about whatever was observed at the property. I would also use that trip to interview 3 other local PM candidates and hire the best one before getting on the plane home. A 2-day trip probably.

I refuse to sign a PM contract that ties my hands on termination. I also only sign up a PM if their compensation is aligned with the financial performance of the property (e.g. % of rent collected vs monthly flat fee). 

I've lived through multiple hiring/firing of PMs and they can really cost you a lot of time, money and calories. But it's part of the gig if you must have someone else managing the property. So stick with it and leverage the unpleasantness of the experience to improve the performance of your investments going forward.

Good luck to you!

If the expectation is that whoever is doing this work is providing business management recommendations & guidance (IE, they are part of the business team), then I would look a the CPA. 

If they are just doing the books and preparing data that you and your partners will use for decision making, I don't see why it couldn't be a bookkeeper. Could even be a 3rd or 4th year Finance/Accounting major college student doing it part time.  

Good post by @Nathan Gesner I would start shopping around for another PM option right now even if you're able to get them back on-course after talking. There is a lead-time to choosing another pm as you'll want to do some research and conduct phone "interviews". You should always have another pm option on queue if things start to go sour with your current PM. 

Remember, you are either managing your property or you're managing your property manager. This is no different to me than if you have direct reports in your w-2 day job. The expectations have to be set and performance discussions had periodically either scheduled or unscheduled, good or bad. 

Here's a follow-up for whatever it may be worth to anyone.

After spending a little more time looking at options, I am going to go with the Vanguard VMRXX money market. A key thing for me is to not have to open anymore accounts. I already have more accounts than I like that I have to pay attention to and manage. So while an Ally account or equivalent option looks good at ~1.85%, I am happy to take ~1.5% or so via Vanguard that I can purchase in my existing TD Ameritrade account. 

Cheers,
Dave

This is a good thread as I am in the same situation. I've looked into some of the high interest accounts and I ran into restrictions (velocity limits) on how you could get your money back out on one of them. It capped withdraws to like $2k/day which doesn't work at all for me. I'll look into Ally and some of the other recs here. 

My 2 cents on mortgage paydown & HELOCs - I am a big advocate of using HELOCs, but I don't make extra payments on my mortgage. The 3.875% I pay on my house is super cheap money to me (I remember paying 10% back in the day) and you truly cannot get your extra principle payments back out until you refi or sell. The HELOC is not a guarantee that you can always get to your principle. And besides, I use a combo of resources to make all-cash offers on property. So this has required liquid cash+HELOC+401k loan. In most cases only HELOC+401K would not be enough.

@Timothy Howdeshell

I agree with @Frank Jiang that those salary numbers look very high.

@Timothy Howdeshell you indicated that you wanted to be into real estate full time in 11 years or less. Based on that alone, I would think you'd want to focus all your spare time and energy on that goal. If your time horizon to be working a W-2 job was longer, the payoff of an MBA would make more sense to me.

Also, I would not underestimate the amount of effort that a demanding grad program will require. I did my MBA program while I worked full-time and I had pretty much no life during that time. I know people that have almost gotten divorced while pursuing a grad degree due to the drain on family/spousal time. 

Good luck in your decision!

Dave