All Forum Posts by: Lisa Doud

 I was forced in to property management path purely because I was on my own in a city with no family and  12 units, infant twins and a husband that was underway 90% of the time....  I had to give up my day job because I could not find anyone that would manage the properties with the diligence and attention to detail that I have.   I interviewed 10 different property managers in my area, and the one important question that no one could answer was how many rental properties did they personally own.  I keep getting the answer  "I have been manning property for years and I currently have XX units that I manage".  It was very clear that they really didn't understand what being an owner was all about, and definitely missed the point I was trying to make.  

I would definitely tell you that if you want to know if your property manager is doing their job, make random visits to the property.  Obviously you are not going to be able to go in unless you have given the tenant proper notice, but you should do do as I call the "Drive Bys" at least every 6 months.  

Also make sure that you learn your property manager's cycle.  For instance our company collects rent from the 1st-5th (pretty standard), we start processing money as soon is it is available (depending on how a tenant paid it could take 4 business days for ACH/E check to process or 7-11 payment to come through) between we are typically finished paying owners by the 11th of the month (depending on where the days of the week fall).  You can always tell if you have a good management company if they process is like clockwork, there are no extra or hidden charges every month, and how they respond to your inquiries.  

Once communication is breaking down, If they are trying to avoid your phone calls or emails you definitely want to find someone else to work with.  But If at any point you don't trust that your Property Manager is working in your best interest it is time to find a new one. 

You are going to have to find a Broker that is willing to work with you.... I say that because there a lot of the larger companies that will not even entertain what you are looking for, but if you were closer to Portsmouth, I would have a sit-down conversation about having you affiliate with my company.  

To answer your question it is the broker's discretion on how much they will let you do.  Before I got my broker's Licenses I worked under a small company called Gallery of Homes Realtors In Virginia Beach.  The Broker gave me full autonomy to conduct my business as I saw fit, and I did everything just like you were talking about, except all deposits and bills went through Gallery of Homes...  I (or my assistant) would uploaded all the bills to be paid to the property management software, and the office manager would cut the checks and get them signed (bills), and I would actually pay the owners with EFT transfers through the PM Software we used.

I started My company because the broker at Gallery of Homes was more focused on growing her sales force and had no interest in Property Management, and would not allow me to implement new online tools to faciilitate growth (she was afraid of technology).     

Just to give you some info it is not the E&O Policies It is Broker Preference. My E&O Insurance covers all areas of Real Estate, and It runs me about $720 a year.

No Curtis, You do not need a Broker's licenses to manage property.  As a sales Agent you would have to affiliate with a licensed Real Estate Firm (a Broker), and they would have to handle all the money for you.  

Curtis,

  First let me state that I was in the same position as you are right now in april of 2009.  My husband an I had 15 units, and a lot of the people at his Command where he worked (he was active duty Navy) were transferring and asked for help managing their property while they were gone.  So I like you already had my property management S corp opened, and went to register for NARPM (National Association of Residential Property Manager's) and I was very disappointed when I found out that they wouldn't accept me because Virginia Required that you have a minimum Sales licenses.  

Then I started doing my research, and this is what I found out.   

Code of Virginia § 54.1-2105.2. Cease and desist orders for unlicensed activity; civil penalty.

A. Notwithstanding any other provision of law, the Board may issue an order requiring any person to cease and desist from acting as a real estate broker or salesperson when such person is not licensed by the Board in accordance with this chapter. The order shall be effective upon its entry and shall become final unless such person files an appeal with the Board in accordance with the Administrative Process Act (§ 2.2-4000 et seq.) within 21 days of the date of entry of the order.

B. If the person fails to cease and desist the unlicensed activity after entry of an order in accordance with subsection A, the Board may refer the matter for enforcement pursuant to § 54.1-306.

C. Any person engaging in unlicensed activity shall be subject to further proceedings before the Board and the Board may impose a civil penalty not to exceed $1,000 for any real estate transaction or the compensation received from any such real estate transaction, whichever is greater. Any penalties collected under this section shall be paid to the Literary Fund after deduction of the administrative costs of the Board in furtherance of this section.

So the answer to your question is No you will not go to jail, however you can face a pricey Penalty. 

But there are also exemptions, and and here is the other part....

• §54.1-2103 Exemptions
• a.The provision of this chapter shall not apply to:
• 1.Any person, partnership, association or corporation, on their regular employees, who as owner or lesser perform any of the acts enumerated in §54.1-2101 with reference to property owned leased by them, where the acts are performed in the regular course of or the management of a property and its investment therein;
• 2.Any person acting without compensation as attorney-in-fact under a power of attorney issued by a property owner solely for the purpose of authorizing the final performance required of such owner under a contract for the sale lease purchase, or exchange of real estate;
• 3.Services rendered by an attorney-at law in the performance of his duties as such;
• 4.A person acting as a receiver, trustee in bankruptcy, administrator or executor, any person selling real estate under order of the court;
• 5.A trustee under a trust agreement, deed of trust, or will, or the regular salaried employee thereof;

So if you are not interested in getting licensed, and don't want to manage any more, then I would say have your friend give you a power of attorney to manage the property for him.  

If you want to be licensed (which might be a good thing for you as an investor) you need to do your research and find a real estate firm that you can affiliate with that won't charge you an arm and leg.  

Hopefully hou have got the answers that you need.

Take care

When compiling a security deposit disposition you need to remember that the tenants have a right to live in the property, they do not have a right to destroy it.  Before you move a tenant in, you need to make sure that your give them a list of charges that you are going to charge in the event that do not clean up the property, or there are repairs that are necessary.  I personally have a condition addendum that clearly states exactly the charges of what everything is going to cost to fix if they don't do it,  also at the bottom it clearly states that we have the right to charge an actual repair invoice for any services performed to return the property back to the condition that it was when it was rented.  Also did the tenants complete a move in-out inspection form?  The only reason why I ask is you have to take them to court, you can show that the tenants acknowledge that it was in perfect condition when they moved in.  

Cabinets should not be discolored at all,  I can see minor nicks and scratches, but there should be nothing that you can't take a touch up marker and fill in to make it darker.  As for the inside of the cabinets, if they were clean when they moved in with no stains or damage, then clean when the move out stains are damage and not normal wear and tear.  Cleaning is always a hard subject because tenants usually don't have the same concept of cleaning as you do, so you are you are always going to have tenants that think the property was clean when in actually.  As for the Carpets you should have a very good carpet cleaning services on speed dial,  and just know that you always have to clean it be fore you can judge how bad the carpet is.  If the bleach stain is bad in one room, you might want consider either replacing the carpet in the room, or install some laminate flooring in that room, but the cheapest way to get ride of the stain is to have the carpet dyed a little darker than what it is right now, or at least that one room.  

Also I have started doing annual inspections of a property, prior to the renewal of the lease... This way if they are not taking care of the property you can give the notice without to vacate, hopefully their security deposit will be enough to take care of the damages if they have only been there 1 year.  

Philip,

  I actually still have an ongoing management agreement with City National Bank.  Any time that a property is foreclosed on with tenants they send them over to me.  Because of the in and out I charge a larger than normal commission of 12% management fee.  The reason why is I have a sales agent that is trying to sell the house as fast as they get it and I never know how long I am going to have a property before it is sold.  It can be quite challenging because when the properties are foreclosed on that us usually because owners have neglected the properties for so long, and the tenants are usually living in unbearable conditions.  I literally had a lady tell me that she hadn't had hot water in over 4 months.  I also had another property covered in mold, my recommendation to the bank is to try to move the tenant before she started getting sick from the mold and sell the property as is.  

It is all about negotiation, make sure that you are definitely making money out of it.  

Sean,

  I am not sure if you use a property management software, but the software I use a property management software called Appfolio.  Within this property management software it allows me to enter the amount  of the utility bill and it actually calculates each tenants portion based on the ration that I put in.  For instance on my properties that are all the same square foot, I have the 90% occupancy and 10% square footage.  It will actually take a count for each occupant in the unit and charge the tenants based on the date they moved in, and any prorated charges between bills.  

I took over managing a 20 unit apartment building in Norfolk and August of 13 the water was around $1300 a month,  Now that the tenants pay their portion of the bill the total bill last month August 14 was $798.00.  Not only are tenants actually conserving water, but they don't want their water bill to go up like it did in December and reported all units with unauthorized people living in the units.  I now have a very tight control over who comes and goes from that property just based on the tenants only wanting to pay their fair share.  

Here in the Norfolk, Virginia Beach Area, our late policy is that the rent is due in our office no later than that 5th by close of business.  If it is not there then it is late and the tenants incur a late fee of 10% of their rent .  We have a lot of military that don't know how to prioritize their bills and would choose to wait to the 15 in order to pay their rent over 1 paychecks, which is unacceptable, which is why that is very standard here in our area.  Also we have a habitual lateness clause in our leases, which states that for every 3 consecutive late payments the rent goes up $30 a month for the rest of the lease.  Again this help prioritize the rent and make it the 1st bill paid every month.  

My tenants also have an opportunity to pay their rent via a credit card so if they haven't to be late, the tenants do have to pay the credit card processing fee $17.00-36.00( depending on their rent amount) but they don't incur any late fees.  

Justin,

  To be honest with you I have found some my best tenants, have been convicted fellons,  they know that they have been turned down from most companies, and the fact that I gave them a chance really goes far.  Before I approve anyone that has a criminal record, I always ask if they are on probation, and if they are on probation I get permission to contact their parole officer.  I always ask the parole officer if this were their property would you rent to them.  Since they are ultimately the person that knows their character, and knows their past behavior that is the best person that you can ask because they have no reason to tell you something that is not true.  

Also you treat them just like any other tenant and they must have a security deposit/ pet fee (if necessary).  I know that you want to help him out, but maybe you should give him a payment plan, and if he doesn't meet the payment plan, but you do need to get some money up front incase this doesn't turn out well.