All Forum Posts by: Michael Smythe

@Rodeline Paul not as hard as you may think, but does take time to research a market.

You can use Zillow info to map out cities or neighborhoods in a large city, and then look at the sales and rent data.

Geographic patterns will emerge in the data:)

No website, no owner or tenant portals, not properly licensed.

@Ryan Holtz guessing you are looking at Class A properties.

Historically, these have NOT cashflowed for the first 3-5 years of ownership! 

Everyone got spoiled with the historically low interest rates caused by COVID that did make it possible for Class A rentals to cashflow from acquisition. 

Historically, most DIY landlords have bought Class B or C rental properties, that cashflow immediately, or soon after being properly repositioned with higher rents.

@Yalin Xiong check out NARMP.com for professional PMCs.

Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.

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, they often select the first PMC they call or that calls them back!

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!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

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😊

@Shaunta M. so many people here on BP think that a PMC can get their own liability insurance on property they don't own and only manage!

NOT THE CASE!!!

A PMC can get a master policy they add owners to.

OR

A PMC can require an owner to add them as "additionally insured" to the owners policy. 

Those are the ONLY TWO OPTIONS for a PMC to have liability insurance on properties they manage.

Why do they want liability insurance?

Because the most common landlord-tenant lawsuit is for slip & fall. The tenant's attorney will sue EVERYONE they can think of to get as much money as possible. 

So, a PMC needs liability protection.

Most states allow an expired lease to automatically become a Month-To-Month lease.

So, the old lease may still be technically valid.

Are you trying to be a good landlord or a good friend?

You can't always do both!

Recommend you hire a PMC and start making money!

@Nicole Johnson we see this all the time, but still frustrating!

OOS investors are bidding up Detroit real estate, yet locals can't get past decades of negativity about Detroit to invest there:(

You should take a real tour of Detroit and consider investing there!

This has been going on for years in the Metro Detroit area.

Hire a PMC if you can't keep your emotions out of your business challenges.

Transferring your property with an FHA loan on it will trigger the due on sale clause.

So, you should speak with an experienced real estate attorney.

Of course, many will post here that they've done it and were never caught.