All Forum Posts by: Doug H.

Yeah, I'm following the trend here. Don't give up control. You are better off writing into your lease that if a leak starts to happen and they don't tell you then they are responsible for the cost of the excess damage/water. It motivates them to tell you so that you can fix something when it is small.

"by a landslide" .... Stupid iPhone....

As someone with 20 years of in-depth experience dealing with multifamily, both large and small, there isn't even a second of consideration that over garage is better than basement.... by and landslide. My only question was why not both...

Over the garage will be far more marketable. Also, most of the time, below ground square footage won't be considered in an appraisal.

Russell Brazil - I have a similar rule. If someone does a no call/no show, their number/email gets added to a contact named "Blocked Blocked" in my iPhone, which just happens to be blocked.... If they demonstrate irresponsible behavior on first impression, why would I ever saddle myself with them as a resident?

The first step is to realize that you need 25%, or more likely 30%, down for multifamily.

I'm curious, what's the "large percentage"? (Vacation rental management usually goes 20-40%.)

In fact, funny story, I have a really good friend who has about 50 units here in 6 class C buildings. He burns through a third-party property manager ever 2 years or so, and, even with the management companies, he constantly bemoans the amount of involvement he, as the owner, must undertake. Also, it's always "the property manager's fault" that the properties aren't performing as they should. The first couple years I heard this, I would try to gently bring him around to the realization that this pattern kept happening and the common denominator was his portfolio and his expectations. He can't get there. He never celebrates his success. He has passed up countless opportunities. His portfolio is a weight around his neck. He fantasizes about the day he gets past pre-payment penalties on some large mortgages and can cash out. I absolutely believe if his portfolio had a slower start in class B buildings, without the class C drama, his portfolio would twice or three times the size it is now, and he would be happier. It's also worth noting that he, like a number of other investors I know who started in Class C/D, never managed to transition to a higher grade of building. It feels like they get stuck in their opinion of how things should work/math out.

Bill Florence - class D properties are almost their own business model. Back when I did third-party management, I managed a 30-unit class C building. It easily required 3 times the work of the other 30-unit buildings in that same portfolio which were what I would characterize as class B, solid commodity buildings. More importantly, the additional work load was composed almost entirely of headache-y, Mickey Mouse nonsense - painting over graffiti twice a week, tin foil over windows, residents in physical conflict with one another, problems with sketchy guests causing problems, etc. It took three years and a lot of effort to turn that property around. Sadly, it took all of 6 months under the manager who came after me for that 3 years of work to be un-done. In other businesses, people often talk about the wisdom of dropping the clients who demand high labor (disproportionate) in relation to what they yield. My feelings are that this is the same situation. A person can ultimately manage fewer Class C/D properties than Class A/B. Manager(Owner) burn out, manager fatigue, manager replacement, etc all have to play into the long term math. If nothing else, ask yourself how many midnight nuisance calls you want to have...

@Keith White

@Tony He

Experience has shown me over and over again one very important thing:

No one will ever manage your properties with the same focus and determination that you will. 

That's the reason so many large owners go to the trouble of being self-managers.  

You either have to build a business model that allows for less efficient third-party management, or you have to do it yourself.