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All Forum Posts by: Michael Smythe

Michael Smythe has started 2 posts and replied 4525 times.

Post: Looking for Real Estate Agent and GC in South Chicago - Investor

Michael Smythe
#1 Classifieds Contributor
Posted
  • Real Estate Agent
  • Metro Detroit
  • Posts 4,626
  • Votes 2,972

@Ajay Panwar

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 give you a referral, don’t make the mistake of assuming that PMC will meet your expectations, just because they met the expectations of the referral source.

We also can’t believe how many owners hire the first PMC they speak with!

Then they complain their expectations aren’t being met!

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 – and they often select the first PMC they call!

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: Renters Insurance for 3 to 9 month rentals?

Michael Smythe
#1 Classifieds Contributor
Posted
  • Real Estate Agent
  • Metro Detroit
  • Posts 4,626
  • Votes 2,972

Renters Insurance really only covers tenant personal possessions.

LTR landlords typically require it as just another level of protection to avoid tenant lawsuits when backups, floods, etc. ruin tenant possessions.

If you are providing a fully-furnished home, all they are bringing are clothes and personal items. So, why would they care about or want the additional expense of Renters Insurance?

Post: Opportunities for Remote Property Management Work?

Michael Smythe
#1 Classifieds Contributor
Posted
  • Real Estate Agent
  • Metro Detroit
  • Posts 4,626
  • Votes 2,972

You should put this under the Classifieds forum

Post: Out of State Contractor

Michael Smythe
#1 Classifieds Contributor
Posted
  • Real Estate Agent
  • Metro Detroit
  • Posts 4,626
  • Votes 2,972

@Emma Santana 

1) YOU will need to be familiar with all phases of construction. Educate yourself with Youtube videos as necessary. Otherwise, contractors will screw you.

2) Require videos for everything. See if you can do live Zoom video walk-thrus.

3) Try to pay as little upfront as possible. We have our contractors buy materials via our Home Depot account, so they can't claim they need 50% upfront for materials.

4) You may need to visit the worksite for your own walk-thru before final payments.

Post: Property Manager references for Cleveland Market

Michael Smythe
#1 Classifieds Contributor
Posted
  • Real Estate Agent
  • Metro Detroit
  • Posts 4,626
  • Votes 2,972

@Ankit Gupta search here for @James Wise or:

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 give you a referral, don’t make the mistake of assuming that PMC will meet your expectations, just because they met the expectations of the referral source.

We also can’t believe how many owners hire the first PMC they speak with!

Then they complain their expectations aren’t being met!

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 – and they often select the first PMC they call!

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 Property Management Companies will to manage (3) Section-8 Properties

Michael Smythe
#1 Classifieds Contributor
Posted
  • Real Estate Agent
  • Metro Detroit
  • Posts 4,626
  • Votes 2,972

@Jim K. You nailed it!

Which makes it all the more interesting that so many new investors are contacting us and wanting to buy ONLY Class C/D houses with S8 tenants! 

They're watching videos by "gurus" with an alternative agenda and doing little, if any, of their own research.

Post: Rental StartUp Expense of Current Home

Michael Smythe
#1 Classifieds Contributor
Posted
  • Real Estate Agent
  • Metro Detroit
  • Posts 4,626
  • Votes 2,972

What @Bill B. said:)

Post: Looking for a investor friendly agent in Allentown, PA

Michael Smythe
#1 Classifieds Contributor
Posted
  • Real Estate Agent
  • Metro Detroit
  • Posts 4,626
  • Votes 2,972

@Johnnie Schneider make sure you get a good referral!

Most investors don't realize that 95%+ of agents have no clue on how to really work with investors. All they know how to do is work with owner-occupant buyers & sellers.

Don't believe that? Try asking them to calculate ROI on a target property.

Post: Property management friendly brokerages.

Michael Smythe
#1 Classifieds Contributor
Posted
  • Real Estate Agent
  • Metro Detroit
  • Posts 4,626
  • Votes 2,972

@Marieta Ilieva-Petkova one challenge that often gets overlooked is how many doors do you need to manage to make it worth your while?

Just a "few" can be easy, but not profitable.

Industry standard is about 100-150 to actually make a living, but then it's a full-time job+.

Post: borrowing when 1099

Michael Smythe
#1 Classifieds Contributor
Posted
  • Real Estate Agent
  • Metro Detroit
  • Posts 4,626
  • Votes 2,972

If your credit score is high enough, you should be able to get a personal loan or credit card for $20k.