All Forum Posts by: Drew Osifalujo

@Nathan Gesner

Thanks for the feedback. I don't see this as waiving a fee at all. I see the 1st month's rent as compensation for performing the duties of placing a tenant. Landlords change property management companies with existing tenants all the time. PMs don't really offer a money back guarantee for placing bad tenants who slip through their screening process. I have 0 experience in tenant screening, but would be willing to try, fail and learn what works best for me. With that said, I am curious how you have approached management relationships where you did not select the tenant. Do charge a different fee, adjust your agreement, or do you pass all together?

@Drew Sygit, 

Thanks for the lengthy and detailed response. You mentioned a premium. What % of rent would you say I should expect from a property manager to manage an existing tenant?

I have property that i have recently rehabbed and that I am about to being marketing for tenants through my PM. While I am a big fan of using a PM for day to day activities, the first month's rent that is charged for tenant screening and placement takes a huge chunk out of my ROI calculation. I am curious how often investors have had luck placing their own tenants and bringing in a PM once the tenant is in place. I cant see a company turning down a contract because it doesn't have the cherry on top, but would be curious how many would pass on that offer.

I know a good property manager helps protect my investment from bad tenants in screening, but I really see tenant screening, showing and renting the property as a one-time activity that I should own, especially if it will cost me $2,000 for only a few hours of my time.

@Nghi Le

Can you clarify what you mean when you say lenders wont reimburse you for your time? Would it be materials only? Also, if you are your own GC (leveraging subs) and present a competitive bid for financing that includes typical overhead and profit, why would that make a difference to a lender?

Great insight on this thread. When trying to find niches and opportunities in leads, I too was curious about selling leads to an agent. This 4-year-old post has helped me understand that this tactic may not be the best use of time or energy. 

Hey Jake, very cool story on how you used seller financing. Thanks for sharing. 

@Eric Schultz

Thanks for the follow-up feedback. The process you outlined above makes the most sense to me. The first few times through it may not be 100% smooth and until I have the materials process on auto-pilot I will likely leverage the contractors for materials recommendations, but I like the idea of eliminating any question about the materials cost or relying on contractors to supply to materials in a timely manner. 

Thanks again!

@Eric Schultz

Thanks for the feedback. I will definitely be setting the expectation with all contractors that only itemized bids will be considered, but I was hoping that you could shed a bit more light on why materials should be omitted form the bid. I was hoping to have materials and labor split out because I figured that different contractors would make differing recommendations on materials. Even though I plan to purchase myself, I am hoping this step in the process can serve as additional education on the specific materials that go into each part of the rehab without committing to allowing a contractor to run up the costs on me. However, as I am always looking to have my assumptions challenged, let me know if there are any pitfalls to labor only bids vs bids that specify labor and materials costs separately. 

Thanks again!

@David Avery 

Thanks for the feedback. Love the insider tips. The feedback on incorporating a real estate agent is not falling on deaf ears. 
I had really over-looked their role in my current project because I will be working with the homeowner to rehab and convert the house to rental property. My thinking was that an agent would only want to help me if I was actively looking to give them commission from purchasing a property. I see this now as a very transactional vs relationship-building mindset. After taking in the feedback, I will look to connect with a local investor-friendly agent. I am hoping that agents will recognize the potential for partnerships on future investment purchases even if one doesn't exist right away. 

Thanks again! 

@Dave Spooner

Thanks for the feedback. Love your use of the word "interrogate" because it is a constant reminder that, as the customer, any contractor I do business with works for me and as an investor the expectation is that work to help maximize my investment. I'm pretty easy going by nature so one of my chief concerns with becoming an investor was being able to firmly negotiate with contractors. Will definitely look to find a solid middle ground between price, reputation and prior work. Looking forward to putting this into practice. 

Lastly, you mentioned references. Is there a preferred source where you have found the most credible and helpful references/reviews for your ? I would expect the contractor to only provide their top clients for contact, while independent Yelp-like testimonials tend to skew negative. Hoping to source a middle ground for the most relevant feedback.

Thanks, 

Drew