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All Forum Posts by: Matt Friesz

Matt Friesz has started 11 posts and replied 44 times.

Post: Property management Nightmare

Matt FrieszPosted
  • Rental Property Investor
  • Oldsmar, FL
  • Posts 48
  • Votes 15
Quote from @Peter Tverdov:

Sounds like there is more to the story but what I am finding lately is investors dumping properties on us the property management company that are not rent ready or even close and expecting us to work miracles. We are backed up with construction work for all the properties we manage and we keep getting more investor clients who want to use us but also think we have an endless supply of labor in a very tight labor market. 

Hire another contractor to do the work perhaps but this is why I don't recommend out of state investing. You're better off putting your money in an index fund. 

Hi Peter, Thanks for your reply. I did go into this thinking that they are a property management company and should know what to do to get my properties rented. They finally replied to an email that was sent out last Monday stating that they’re down to a crew of two guys doing the rehab work for their properties. They admitted that they’re having trouble finding good reliable workers. I’m flying up to assess what needs to be done and to go over the contract with the PM. This is a good learning experience for me, and is giving me good insight how to manage moving forward.
Thanks again,
Matt

Post: Property management Nightmare

Matt FrieszPosted
  • Rental Property Investor
  • Oldsmar, FL
  • Posts 48
  • Votes 15
Quote from @Theresa Harris:

Go up there and find out why they are still vacant and what has been done in terms of renos.

Ask for links to the two units that are listed for rent.  See what other units are available in the area and track how long they are listed for rent.

Start taking charge. I see you've now asked for a scope of work, hindsight is great, but you should have given them a detailed list after walking through the place. You should have got a completion date from the contractors and what happens if it isn't complete.  If it is what you listed (sheetrock, flooring, paint and trim), that shouldn't have taken 7 months-that should have been done in a month if the PM is good and has trades lined up (which they should).  If the PM agreed to do the work, then they should have got it done.

Nathan's post is spot on.

Thank you Theresa! I’m flying up there next week. I’m learning!

Post: Property management Nightmare

Matt FrieszPosted
  • Rental Property Investor
  • Oldsmar, FL
  • Posts 48
  • Votes 15
Quote from @Nathan Gesner:
Quote from @Matt Friesz:

I thought I’d give a try at being an out of state investor.I  purchased two duplexes in Davenport, Ia this year, One in January and one in April. Both of these properties are STILL vacant. I’m on my second property management company, and I’m just forking out money. The properties have needed some work, but it’s taking them sooo long to get them ready, and they keep charging me for management fees. I’ve been paying two mortgages, utilities, their third party contractor (handyman). My hands are tied because I have to run my business down here in Florida. any insight or help would be appreciated.


IT doesn't take six months to renovate a rental and it sure doesn't take that long to find a renter. You need an honest PM that works for their money and you need to stop letting people walk all over you. If the PM says it should rent in 30 days, then you need to put your foot down when it hasn't happened after 30 days.

Remember: cheaper doesn't mean you'll make more money.

Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Regardless of how you find them, try to interview at least three managers.

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.

4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact that a tenant is complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?

This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!

Thank you Nathan! I’ll be flying up there next week. To go over everything with the PM. I’m learning!

Post: Property management Nightmare

Matt FrieszPosted
  • Rental Property Investor
  • Oldsmar, FL
  • Posts 48
  • Votes 15
Quote from @Richard F.:
Aloha,

Have you been successful with similar properties in your local area? What are you doing different with the out of state properties?

It sounds like the properties were not adequately inspected prior to closing, and you had no detailed plan to prepare them for rental. If you are blindly relying on a PM, in a new relationship, what are the terms of the management agreement? Who is determining the rental quality standard they need to meet? Did you agree to pay management fee for vacancy...with BOTH PM's? Did they provide you an appropriate estimate for all work needed? You indicate this is being done by a handyman. Is the repair list minor handyman items, or does it include larger projects that apparently one man cannot handle?

The definition of quality is conformance to requirements. What requirements did you provide to the PM?

Are any of the units actually rent-ready? If so, how are they marketing them? what are comps?
Aloha Richard!
I’m still new to investing…I don’t have any rentals in the area. I did own and manage one property in the Chattanooga area for a while, which was the reason that I hired a PM company for the Davenport duplexes. I sold that property last year.
I’ve done a couple of flips here in the Tampa area so far.
You hit it on the nail. I went into this not knowing that the PM company needed to be interviewed. 
I did have the properties inspected by a reputable company who I trust. But failed to have a detailed plan to rehab them. The PM contract does say payment for vacancy, but there is a sentence that states
“ The Contractor charges $85 per month per unit that is being contracted on regardless of occupied or not. The $85 fee is waived after 30 days without a new lease in place”.
Ive been with them since the first of June, and they just charged me another $170 for one of the properties. 
No SOW has been sent to me stating what should or will need to be done to get the other place rent ready.
I just received an invoice with a $3200 fee for “unpaid bills”. I’ve asked them to send me detailed invoice explaining what the bills are for. I’m waiting for their reply.
I was up there in April trying to do some of the work myself and firing the previous PM company. The work was and is (a little bit of sheetrock work, painting, installing baseboards, flooring, and a deep cleaning.
I did not have a list of requirements for them. I had figured that being they are a PM company, they would know exactly what to do…which I guess they do, and are doing. Gladly taking my money.
I’m going to purchase a plane ticket today and get up there as soon as I can.
thank you for pointing out that I need to have systems in place. I’ll keep you posted.

Post: Property management Nightmare

Matt FrieszPosted
  • Rental Property Investor
  • Oldsmar, FL
  • Posts 48
  • Votes 15
Quote from @Chris Seveney:

@Matt Friesz

May need to do a day trip to Iowa and a red eye back to Florida to see what is going on.

How long has the second pm been involved? Had did you find this pm?

Are the units renovated and habitable?

Lots of questions as this is not uncommon as people think.

Hi Chris,

You’re right about taking a quick trip up there. I’ve been with the new PM since June. I found them through a thread here on the BP forum. Can’t find that thread however. One of the duplexes is finally ready for occupancy, I’ve been told that both units are being advertised. but can only find the ads for the upstairs unit.

The other reply that I got to this post pretty much hit it on the nail. I went into this venture thinking that the PM company would know exactly what needs to be done to get the places ready and rented. Blindly thinking they would have their investors best interest in mind, which maybe they do, but, I’m learning now that I should’ve had a list of requirements for them to satisfy or at least for us to discuss. I’ll book a flight today. Thanks for your input!

Post: Property management Nightmare

Matt FrieszPosted
  • Rental Property Investor
  • Oldsmar, FL
  • Posts 48
  • Votes 15

I thought I’d give a try at being an out of state investor.I  purchased two duplexes in Davenport, Ia this year, One in January and one in April. Both of these properties are STILL vacant. I’m on my second property management company, and I’m just forking out money. The properties have needed some work, but it’s taking them sooo long to get them ready, and they keep charging me for management fees. I’ve been paying two mortgages, utilities, their third party contractor (handyman). My hands are tied because I have to run my business down here in Florida. any insight or help would be appreciated.

Post: Broke Even On My First Flip!

Matt FrieszPosted
  • Rental Property Investor
  • Oldsmar, FL
  • Posts 48
  • Votes 15

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $144,000
Cash invested: $100,000
Sale price: $260,000

It was my first flip. Everything that could've went wrong did go wrong. I had no intension of working on the property myself, but ended putting in some long nights and weekends. The contractor at the day of the sale said they could do the rehab in about five weeks. I bought the place and it took about two weeks for them finally respond to my numerous attempts to reach them. They told me that they were too busy to help me. Come to find out later, they didn't feel comfortable working in that particular neighborhood. It was pretty rough. I finally found an old friend from who used to go to our church. He came in, gutted the place, and started putting it back together, but had an earlier job that he'd been waiting for permits to come in, the permits came in. So he left and I found another friend who started working for me. By this time I'm working my home inspection jobs during the day and then working at the flip at night. The first guy I had working for me had framed in the doors wrong (not plumb) so we had to reframe the doors. Well needless to say, IT WAS A LOT OF WORK. I basically broke even after closing cost, realtor fees, etc...I did a class B rehab in a class C-D neighborhood.
It was a great learning experience!

What made you interested in investing in this type of deal?

I just had to get into the game!

How did you find this deal and how did you negotiate it?

Wholesale company.

How did you finance this deal?

OPM Hard money, and some personal funds

How did you add value to the deal?

Did a full rehab.

What was the outcome?

I broke even, but learned a hell of a lot!

Lessons learned? Challenges?

Have more time to review the property, Have a contractor with a team ready. A big challenge is still getting systems in place.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Ben Coughanour with Mangrove Bay Realty and his team were and are FANTASTIC! I highly recommend them!

Post: Different Accounts For Rentals

Matt FrieszPosted
  • Rental Property Investor
  • Oldsmar, FL
  • Posts 48
  • Votes 15

Hello BP, 

Things are moving very fast for me and I need some input. I just acquired my first duplex and was given the security deposit for the one tenant that currently is there. I have four other multifamily units that have accepted my offers. My question is-Do I use one back account for all of the monies coming in/going out (security deposits, rent, repairs, vacancy, etc...)? Or should I have a few different accounts (Security deposits) (Rents collected) (Repairs, maintenance) etc...? Let Me Know!

Thank you!

Matt

Post: Buying condo. Need to get tenant out for rehab?

Matt FrieszPosted
  • Rental Property Investor
  • Oldsmar, FL
  • Posts 48
  • Votes 15

@Mason Hickman going over the contract now…

Post: Best way to set up relationship?

Matt FrieszPosted
  • Rental Property Investor
  • Oldsmar, FL
  • Posts 48
  • Votes 15

@Simcha Davidman Thank you so much for the reply. We haven’t done a deal yet. So we still have to talk about how we’re going to set things up.

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