All Forum Posts by: Tony Castronovo

@Juan Vargas Sounds like you have a great setup!  What activities if any have you kept for yourself?

@Bjorn Ahlblad Congrats!  Sounds like you are in a good place right now.  Unfortunately, my wife is just as busy as I am and would make me sleep on the couch if I even suggested she get involved in managing this.  :)

@Henri Meli That is an interesting thought on the virtual assistants.  I'll investigate this more.  My first reaction though is that the things that can be done virtually I can handle.  It's being onsite that is tougher.

@Michael Le Yes, was thinking the same thing about the leasing agent.  The only concern is that I am relying on a single person (single point of failure) and if it didn't work out it might be challenging to replace.  But I suppose there is always that risk with anything we sub out.

@Jeff Kehl All good points. I just read an article on starting your own PM company even if to manage your own properties. Part of me wants to rip the Band-Aid off and go for the professional PM now while I have a burning platform of sorts. It was very hard to justify on my SFR's because I could easily handle all of them.

*** Assuming I did in fact go with a PM....what would be reasonable rates/fees for a property my size and condition?

Hi @Ray Harrell. What I meant was that I would not try to "do it all solo" like I have with my SFR portfolio.

I know every investor is faced with this question. Self manage or hire property management? I have self-managed my SFR portfolio (8 properties) quite successfully and developed some great systems and processes. But they were all located within a 30 min drive. Now I am taking on a 16-unit apartment complex that is 60 miles away.

To be clear, I will NOT consider pure self-management.  If I do not hire a PM my plan is to leverage a local handyman that I connected with for repairs and maintenance and his wife actually runs a 140-unit nearby, so she offered to help me on the leasing front (meet prospective tenants for showings, etc.).

I have a couple of PM's that were referred to me that seem to have some competitive pricing.  But when I tally it all up between monthly fees, renewals, and marketing/placement fees it's still quite a big nut to cover.

What are your thoughts and also, what kind of rates/fees would you consider "good" for something of this size that has 100% occupancy and minimal deferred maintenance?

Actually, I cannot make it now.  I just realized a friend had invited me to the annual Lifestyles event downtown.  If anyone is interested let me know. 

I’m going to try and make this.

I just sold my SFR portfolio, but had held properties in the areas you are interested in...Katy/Cypress. My average COCR was 10.6% (with one exception). It's definitely not easy but you can certainly find some great rentals in the area.

While I bought my first off the MLS I leveraged wholesalers for the others. What everyone has said...you compete against wanna-be owner occupants when you buy from the MLS and there is no rehab. You can find them, but it's very competitive. We looked at about 75 homes and put in 20 offers before we landed the first deal. Once I started taking on rehabs everything changed.

My bread and butter was typically buying homes around $100-110k, putting in around $20k +/- on the rehab and driving ARV to around $150-170k. I purchased with HML or private money and refinanced within 90 days. At 75% LTV I could reduce my cash left in the deal. No deal was a home run....but when you string together enough of these, it's a pretty awesome business.

Personally, I feel waiting for “great” deals is a poor way to grow a business. Not saying to take on bad deals. But a string of “good” deals will keep your business growing and moving in a positive direction. The more business we do, the more opportunities to unlock more possibilities. Plus, it will force you to improve your processes and operations to find ways to make money on leaner deals. When you land a fat one you’ll be crushing it. Just another perspective.

@Thomas S. and @Mike Malfitani Thank you! 

Not sure if we are at the peak, but there was a lot of demand for my portfolio and I received several very good offers.  (Makes me think I should have asked for more ha ha).

Tips for new investors, Mike....here is what I would say....some of which you hear a lot but so true. 

• Take Action! - You can miss out on a lot of opportunity if you are always swinging for the fences trying to get that home run of a deal.  Recognize "good" deals (they don't have to be "great")....don't change your criteria....but do move quickly once you find something that fits your requirements.
• Realize you will make mistakes and be ok with it. - Use mistakes as learning opportunities to improve.  Perfection can kill you if you are not careful.  Do good work and run your business ethically.  But know that things will go wrong and don't let the fear of that stop you from getting started or pressing forward.
• Seek and nurture relationships not transactions.  - Treat contractors, lenders, agents, title folks, etc with respect and reward good work with referrals and continued business.  I've developed some great relationships and people I feel have my back.  But I have also lost some great contractors because I pushed too hard on pricing.  In hindsight I probably should not have sweat the small stuff in order to maintain the relationship.  It's tough when you are trying to be efficient and drive profits.  But I learned from that and now see things somewhat differently.
• Be a great operator. - If you are in the buy & hold business you need systems, processes, and discipline.  Whether you have 1 property or 100, run it like a business not a hobby.
• Market Yourself. - At every opportunity, tell people you are a real estate investor. Tell them what you do (or want to do). Get involved in networking....virtually but in person also. I have met so many people through places like Bigger Pockets that were local to my area (even met a colleague once from another state who reached out to have coffee when he was traveling into the area). You can't do this alone. REI is a team sport!