All Forum Posts by: Brad Larsen

@Eddie Lehwald Reach out to us on our website about how we can assist.  Also, try the automated free market estimate provider we have.  You can fill in the basics and get a lot of good information about the area your homes are in within 3 minutes of submitting.  It's really neat! Check it out.  You will love our three tiered pricing and single owner point of contact.  Thank you @Kim Meredith Hampton for the referral! 

Maybe we need to train and deploy a team to Corpus Christi?  Our General Manager grew up there! 

@Tyler Esparza The New Braunfels area is a great place to invest in.  If you just look at the growth in the last 10 years, imagine the same for the next 10.  San Antonio and Austin are growing into each other to sort of create "San Austin".  The I35 corridor is filing up with commercial businesses and with that comes the need for good housing.  We see the trend going North just as you do and manage a lot of homes in the New Braunfels area for "smart" investors.  When I say "smart" - I mean corporate level investors with more analytics at their disposal than you can imagine.  Another fun tidbit....go where Costco goes!  Seriously.  Ever notice that whereve a Cosctco goes up, things are trending well!  

Acquiring property management companies these days is a challenge and you will find out that even if you have a large check book, you are essentially buying someone's identity and future (in their eyes).  Getting someone thru closing is difficult. 

The small mom and pop property management companies are getting acquired by several large national players these days (with large check books!) because the industry as a whole is starting to warrant more and more attention.  

Just one observation is that if you end up dropping $600k for the business with stagnant growth, it will take how long to see that initial amount returned?  And - you will have to be a turnaround specialist possibly hiring and training overpaid staff with little motivation.  

Stagnant businesses have stagnant team members.  Why push for growth?  They don't get paid anymore.  Their jobs are not on the line.   

Also, what does that mean for your Client Acquisition Cost?  As an industry wide range, you should be able to acquire a new client for between $400 to $600.  If you BUY a PM Company - your cost goes where? 

@Jason L. @Danny Randazzo  Comment above was that it was an irritation to see the PM get paid more when a tenant non-renews, than if they renew.  Exactly!  This is why we purposefully built our initial leasing fees to be very small, often simply covering the Tenant Realtor Commission making the PM Company (us) near nothing.  

When we get a tenant renewal, there is a small commission there and that is split between the company and the Portfolio Manager handling the home.  We get paid more on a renewal with a lot less work! 

So, to your point, we look to align our interests with the owner's interests everywhere we can.  That's what I feel is fair and more PM companies should embrace.  

Good luck out there!  

Here is what has NOT been mentioned yet - we as property managers are required by law to withold funds if we do not get a completed W-9.  

Every year we get a few sign ups where the owner does not have a TIN (Taxpayer Identification Number) when they begin services with us.  Telling us they have to double check with their CPA or whatever....  And every year we end up chasing investors down, usually a small handful, and threatening to withold rental income - PER THE IRS LAW!!!  No fun for us, we come off looking like the a-holes, but we have been audited for this and fined by the IRS.  

Bottom line - Fill out your W9 form for your Property Manager and make sure all of the information is correct.  We then run that through tax1099.com to do a TIN match.  

Good luck out there! 

@Luke Jackson  Awesome start Luke!  One thing to consider is your longer term angle for what type of property you want to manage.  Managing the crap will get you on a dead end path to burnout and being non-profitable.  Figure out a way to get better properties to manage for better landlords.  Easier said than done.  You now have your foothold in the market.  Pay your bills and look to grow with acquiring better homes. 

Also look into joining some local organizations that can assist with your property managemement business such as the National Association of Realtors (and state board), Leading Property Managers Association, NARPM, and IREM.  

Good luck out there! 

@David Trinh  Here's a good article about working with a Property Manager that will ask some deep questions about YOU as an investor.  It's not always someone else's fault!  

https://www.biggerpockets.com/forums/52/topics/402...

Good luck out there! 

@Alex Corral @James Wise  Here's another example on the back side of that.  For about 2 years, when we would give someone a full - 100% - security deposit refund after their stay with us, we would ask for a 5 star google or yelp review in the letter, with their full check.  ZERO reviews.  Some even were bad after they go all of their deposit back.

My point being, tenants are not the ones to be looking at for reviews.  Our negative online reviews are almost all from tenants.  And - here's the other thing - we wear those like a badge of honor!  Meaning we did our job to best represent the owner's home we manage by enforcing standards. 

James is completely right about the Wal-Mart mentality.  Sadly, we (The Housing Provider Industry) have also trained people to run to Fair Housing as that's the real potential pay day.  They can allege whatever they want, at no cost to them, and it may be cheaper to settle than fight it.  

PM is a tough business.  I can't for the life of me figure out why some people want to self-manage.  

Good luck out there! 

@Betsy A'Neals  There are couple of points here you need to consider with your question and some areas of concern.  

1) You are working with a Realtor.  Good news there.  Are they advising you on what makes a good rental property because the home looks "cute" and has "good schools".....or are they presenting you with a cash flow analysis worksheet containing projected rental income that you would need to make a business decision?  

It's a good question to ask because we as a management company have seen this time and time again.  We ask the investor WHY they bought the home they did to turn it into a rental home and they tell them their Realtor said it was in a good area.  Really???  

Example:  One CALI investor bought two duplexes.  The POS Realtor told them they would rent for $1,200 a month.  As brand new units, we were lucky to get $1,050.  A year later they were getting $950 because the neighborhood was full of rentals.  That POS Realtor was long gone and made their $10k in commission.....but we were stuck with picking up all the pieces - finishing their job - and having to coach an owner into reality.  

2) The average Realtor has no idea how rental property pricing works, what attracts tenants, how to screen tenants, and how to sell investment properties.  That's OK - just know what you are getting into.  The other one is "good schools".  Well, that's a bit difficult to quantify as a lot of it has to do with political scoring and public perception.  "Good" is in the eye of the beholder.  

RECOMMENDATION and ALTERNATIVE IDEA:  We offer Package Investments and Cash Flow Analysis buying when assisting an investor in buying a home.  

- Package Investment - Is where an owner already working with us in our inventory of near 800 single family homes says they are ready to sell. Rather than put that on the MLS when the time is due, we present that as an off market listing to our investor pool. It has reduced commissions, it's less than retail, no off market time for the seller, and the investor (buyer) already has a tenant with a lease agreement and property management in place. The only hook to that is we have to manage the home. That's fair right?

If you are interested in something like this - Ask your Realtor if they provide these two things.  If not, there are certainly other opportunities out there.  Feel free to contact us.  

Good luck out there!