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All Forum Posts by: Drew Sygit

Drew Sygit has started 42 posts and replied 9754 times.

Post: Highest and best use for a Historic 5B/5B home

Drew Sygit
#2 All Forums Contributor
Posted
  • Property Manager
  • Royal Oak, MI
  • Posts 10,051
  • Votes 6,895

@Nathanael Tinaya 

Try to rent individual bed/baths as STR or see if city allows boarding houses or traditional bread & breakfast setup.

Either way, you will need dependable person to provide cleaning and if boarding house maybe one complimentary meal a day.

Post: Need Help Underwriting A Property!

Drew Sygit
#2 All Forums Contributor
Posted
  • Property Manager
  • Royal Oak, MI
  • Posts 10,051
  • Votes 6,895

@Rachel Hettler this is a typical issue when buying at retail prices - lack of cashflow.

What is market rent?

Also, make sure you get a fixed rate, not one that varies with Prime.

Post: Rental Property Comps

Drew Sygit
#2 All Forums Contributor
Posted
  • Property Manager
  • Royal Oak, MI
  • Posts 10,051
  • Votes 6,895

@Rassan Sampson Besides Zillow/Trulia/etc. and rentomete, you can ask your PMC for MLS data.

Just make sure you fully understand how your property compares to the comparables. Note what your property is lacking.

Once you understand the additional rent amount you may achieve, then you should translate that number into a budget.

EXAMPLE: if you project an additional rent amount of $250/month, how many months do you want to spend on improvements? 12, 24, 36, more? So, each 12 months => $3,000

Then rank the improvements from your list of what is lacking, via "bang for the buck" - meaning what improvements will most likely positively affect the rent amount.

Depending on your budget, you may pick items out of order.

A lot of this is not an exact science, but your PMC should be able to offer a decent amount of assistance.

Post: Looking for PM in STR areas.

Drew Sygit
#2 All Forums Contributor
Posted
  • Property Manager
  • Royal Oak, MI
  • Posts 10,051
  • Votes 6,895

@Christopher Brownlee

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

Post: Thoughts on $15k or less homes/multiplexes

Drew Sygit
#2 All Forums Contributor
Posted
  • Property Manager
  • Royal Oak, MI
  • Posts 10,051
  • Votes 6,895

@Jenny Elomaa well at least you understand a bit about property Classes.

You may be able to find a Class B tenant to live in a Class C property, but how realistic is to expect a Class A tenant to live in a Class C property?

Read below for additional points:

We think the Midwest is a GREAT place for OOS investors to consider!

YES, we may be a little biased, but check out our blog here on BP comparing Detroit to other cities and Deep Dives on Metro Detroit cities & neighborhoods: https://www.biggerpockets.com/...

Your biggest question shouldn't be WHERE to invest, but HOW you will invest!

Many OOS investors set themselves up for failure because they don't truly take the time to understand:

1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area.

2) The Class of the PROPERTY they are buying - which is relative to the overall area.

3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area.

4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area.

5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area.

6) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS.

7) That OOS property Class rankings are often different than the Class ranking of the local market they live.

8) Class A is relatively easy to manage, can even be DIY remote managed from another state. Can usually allot 5-10% vacancy factor and same for maintenance.

9) Class B usually also okay, but needs more attention from owner and/or PMC. Vacancy and maintenance factors should be higher than for Class A as homes will be older, have more deferred maintenance and tenants will be harder on them.

10) Class C can be relatively successful with a great PMC (do NOT hire the cheapest!), but very difficult to DIY remote manage. Vacancy and maintenance factors should be higher than for Class A or B. Homes will have even more deferred maintenance and tenants will be even harder on them.

11) Class D pretty much requires an OWNER to be on location and at the property 3-4 times/week. Most quality PMCs will not manage these properties as they understand most owners won’t pay them enough for the time required and even then it’s too difficult successfully manage them.
***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher.

https://www.biggerpockets.com/forums/776/topics/960183-what-they-dont-tell-you-about-cheap-rental-properties?highlight_post=5562799&page=3#p5562799

Also, SERIOUSLY consider - do you really have the time to be a DIY landlord or should you hire a PMC?

Good luck with whatever you decide😊



 

Post: Kansas City Property Managers

Drew Sygit
#2 All Forums Contributor
Posted
  • Property Manager
  • Royal Oak, MI
  • Posts 10,051
  • Votes 6,895

@Johanna R.

Wow, you're potentially setting yourself up to get screwed!

How you ask?

By focusing solely on the pricing you've listed.

Read below for advice:

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

Post: Looking for attorney that deals with real estate

Drew Sygit
#2 All Forums Contributor
Posted
  • Property Manager
  • Royal Oak, MI
  • Posts 10,051
  • Votes 6,895

@Andrew Vincent as long as you don't want them to handle evictions, why does it matter where in Michigan they are?

Yes, traditionally you want to meet everyone face-to-face, but it's really no longer necessary.

Even if it is, you can both meet halfway for an intro meeting, then do everything virtually after that.

What specifically are you looking for input about?

Post: Paying Yourself as Investor

Drew Sygit
#2 All Forums Contributor
Posted
  • Property Manager
  • Royal Oak, MI
  • Posts 10,051
  • Votes 6,895

@Account Closed pretty difficult to pay yourself consistently, without scale.

You can be humming along making money for several months and then a nonpaying tenant or maintenance issue eats up everything you just made.

Post: Property Management & Realtors

Drew Sygit
#2 All Forums Contributor
Posted
  • Property Manager
  • Royal Oak, MI
  • Posts 10,051
  • Votes 6,895

@Andrew Smith

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

Post: Where to start with REI? Mentorship?

Drew Sygit
#2 All Forums Contributor
Posted
  • Property Manager
  • Royal Oak, MI
  • Posts 10,051
  • Votes 6,895

@Lisa Koff you should know what works for you!

How self-motivated are you to keep plugging away at something, or do you need someone to hold you accountable?