All Forum Posts by: Sheryl Sitman

It is great to have a plan!! Check if your numbers will work with BRRRR given today's interest rates. You may have to wait it out a while for that third R to work. Some gurus will tell you it can still work if you find properties way under market value. That requires A LOT of work and luck and in my opinion if you are not totally dedicated and knowledgeable, can really drain your time with no results.

@Jacob Ocampo something I learned after years of RE investing is to try to always have a pivot plan. I am sorry you had a "failure" with the STR but then I wonder why it could not somehow have been salvaged through a pivot. I see that many people (probably most) go into STR without really understanding the business and the multitude of risks or how it differs from more traditional RE investing. They get blinded by the numbers - earn a month's rent in 3 days. . . Except that it's not exactly that simple ot consistent. S. Jersey surely has some opportunities as do other markets within driving distance. It all depends on what your resources are, your risk tolerance, your patience . . . The market continuously evolves - -what I would have suggested just a few years ago is totally irrelevant today. So make sure you are learning from updated resources and books, podcasts, courses, gurus whomever - that understand today's situation and can guide you to matching your personal situation to the opportunities that exist now.

I totally relate to so many of your comments  - been through all of the confusion, fears and analysis paralysis. 15 years after acquiring my first property, I am still learning. It is never ending - for every investor. I went full time into investing at the end of 2016 without knowing a fraction of what I know today. I thought that some may find this little insight helpful. 

This video was filmed in June 2023 when I was at one of my Philly properties to inspect after a deep clean. The vibe on the block was one of excitement. Neighbors were gathered to watch the cement truck pour two foundations for new construction of two single family homes. It was exciting to see what we expected to happen back when we bought the property, actually happen. Admittedly, we thought it was going to happen sooner when we purchased  but we did not account for a pandemic so there is that!

Buying distressed properties is not the only way to invest. And if you do, you need to understand what you are doing and what the real potential is. You need to have the ability to know if you are truly buying UNDER the market value and not fall into the trap of underestimating how much work needs to be done to the property, for example.

If you walk around the neighborhood where this video is made, you would have to look hard to see the signs of change, many of which are not visible. By the time you SEE the change, it might be too late. By the time there is a Whole Foods or Starbucks – those distressed properties that you may see and think you could grab on the cheap are going to be priced accordingly. The market is very smart these days. So you need to have the ability to make smart decisions based on a lot of data, facts and trends.   Enjoy. Feel free to reach out.   

Quote from @Carlos Ptriawan:

Quote from @Sheryl Sitman:

When i started investing 14 years ago while living overseas, here is what I imagined in my head. A PM will collect rent, have periodic friendly interactions with my tenants, handle maintenance issues the same way they would on their own home and manage getting the unit ready between tenants . . . end of story. I had no idea of the challenges and issues that could arise, of regulations and ordinances I would need to abide by, of paperwork . . . And I was so naive I was unaware of the high rate of non payment and major issues that can arise with a tenant.

Fast forward to today. I actually still work with the same PMs I started with 14 years ago -- in A neighborhoods in other states. It was my entrance into the Philadelphia market that was a rude awakening. The first two PMs that I hired in Philly did not just not meet my expectations. They caused me a lot of damage. 

So what did I learn from the experience and what do I suggest looking for when choosing a PM? 

Review the agreement in detail. If it does not explicitly include something, you can be sure, it is not included. For example, do you want periodic inspections of your asset with pictures? It needs to be in the agreement. Do you want owner draws by a certain date? It needs to be in there. 

Make sure that they define the policy regarding vacant property - will you be charged for months when your property is vacant?

Ask about how they handle correspondence. Do they guarantee response to emails within a certain time? Are they available for phone calls? 

Clarify in detail how maintenance is handled - from the system by which tenants are able to report an issue to how they choose if and who to dispatch and at what point if any, do they involve you in maintenance issues. I prefer a management company that will inform me immediately and allow me to be involved - to bring my own vendor, to ask for multiple estimates, to receive pictures . . . If they seem to be resistant to your involvement, keep in mind that you should be able to maintain records of everything going on in your property. Having repairs made without knowing the details or cost, is not a good idea. 

Many tenants pay late and eviction is something that most owners will need to eventually deal with. Clarify late fee policies, how late payments and evictions are managed. Some PMs are persistent and correspond with tenants. Others will do the minimum and may wait to start the process until you ask them . . .
Basically, a good management company has a defined process for most of the potential circumstances that arise. An example: I received a violation by mail for a property for trash and debris. I worried that I will end up needing to pay if it was not made abundantly clear to the tenant that they needed to handle it quickly. The PM then shared their process with me for managing what is a common occurrence in Philly. meaning that I did not need to ask, worry, check...
My conclusion is that big cities present big challenges for all landlords and management companies. It is a tough business and at the price point demanded by the market, PMs can struggle to provide the perfect service. Economies of scale, trained staff, well defined processes and responsiveness is the minimum that a PM must have in order to provide a good enough level of service.

 I would add one more:
- I prefer a pMC that has pop-and-mom vibes, very practical and very fast moving, there're just large Pmc outthere that only care with endless software upgrade while overcharging us for repair due to their heavy tech uses. This PMC should not be too difficult business that even without an excel sheet, processs can still moving on.

I would rather work with pmC that pay their staff higher salary , than investing too much into tech or business acquisition while not producing more advantageous result to the investor.

I work with both types.  Mom and Pop shop can work well in some markets. Less in others.  I tend to agree that super big tech oriented companies are not there yet and maybe never will be in this very people oriented business.  Tech can enhance  service. It can mot replace the people. That is not true in every industry but for now, houses, apartments and tenants need human being to manage them :-) 

Lately a lot of people have reached out asking about how to get started in RE investing, what budget they need, where is "best" place to invest . . . I hate giving that annoying answer of "it depends", but it really does. The best way I know to explain to people how to start thinking about investing is to show them the possibilities - of which there are endless options, when you do it right. Take a look at what is happening on a block we own on. This is 5 years after our purchase and not coincidental. 

When i started investing 14 years ago while living overseas, here is what I imagined in my head. A PM will collect rent, have periodic friendly interactions with my tenants, handle maintenance issues the same way they would on their own home and manage getting the unit ready between tenants . . . end of story. I had no idea of the challenges and issues that could arise, of regulations and ordinances I would need to abide by, of paperwork . . . And I was so naive I was unaware of the high rate of non payment and major issues that can arise with a tenant.

Fast forward to today. I actually still work with the same PMs I started with 14 years ago -- in A neighborhoods in other states. It was my entrance into the Philadelphia market that was a rude awakening. The first two PMs that I hired in Philly did not just not meet my expectations. They caused me a lot of damage. 

So what did I learn from the experience and what do I suggest looking for when choosing a PM? 

Review the agreement in detail. If it does not explicitly include something, you can be sure, it is not included. For example, do you want periodic inspections of your asset with pictures? It needs to be in the agreement. Do you want owner draws by a certain date? It needs to be in there. 

Make sure that they define the policy regarding vacant property - will you be charged for months when your property is vacant?

Ask about how they handle correspondence. Do they guarantee response to emails within a certain time? Are they available for phone calls? 

Clarify in detail how maintenance is handled - from the system by which tenants are able to report an issue to how they choose if and who to dispatch and at what point if any, do they involve you in maintenance issues. I prefer a management company that will inform me immediately and allow me to be involved - to bring my own vendor, to ask for multiple estimates, to receive pictures . . . If they seem to be resistant to your involvement, keep in mind that you should be able to maintain records of everything going on in your property. Having repairs made without knowing the details or cost, is not a good idea. 

Many tenants pay late and eviction is something that most owners will need to eventually deal with. Clarify late fee policies, how late payments and evictions are managed. Some PMs are persistent and correspond with tenants. Others will do the minimum and may wait to start the process until you ask them . . .
Basically, a good management company has a defined process for most of the potential circumstances that arise. An example: I received a violation by mail for a property for trash and debris. I worried that I will end up needing to pay if it was not made abundantly clear to the tenant that they needed to handle it quickly. The PM then shared their process with me for managing what is a common occurrence in Philly. meaning that I did not need to ask, worry, check...
My conclusion is that big cities present big challenges for all landlords and management companies. It is a tough business and at the price point demanded by the market, PMs can struggle to provide the perfect service. Economies of scale, trained staff, well defined processes and responsiveness is the minimum that a PM must have in order to provide a good enough level of service.

I manage the Philadelphia Landlords Connect FB group and you are welcome to ask there as well. It took me several tries with PMs in Philly before I found the right one for me. It can make or break you :-) 

@Michael Simmonds  That has to be frustrating. Have you tried to call the city or to go down there for a reality check? The hurricane no doubt had a significant impact but you need to be sure it is not being used as a convenient excuse. I do not know to say whether the 3 bed + den v 4 bed makes a difference but hard for me to believe it does not, unless it is commonly known that families can use dens as bedrooms?  Check into that!  I am not familiar with who you are working with but always recommend vetting any company deeply before signing and paying -- those companies tend to have a lot of overhead they need to pay - out of your bottom line. Sometimes finding small, local partners to do your own thing and do it your way and under your control can be a great way to go that has more accountability built in. But yes, that requires learning a lot and taking initiative. So maybe you are "paying" for the PASSIVE experience with delays and changes that take you for a loop.

Quote from @Tim Delaney:

Quote from @Sheryl Sitman:

How can you make a BRRRR work in today's market and interest rates with hard money? Be careful.

Hard to envision anyone doing it with hard money let alone a new investor

 It is still possible. Much tougher than it used to be, but it can still be done.

How can you make a BRRRR work in today's market and interest rates with hard money? Be careful.