All Forum Posts by: Tyson Hill

@Jacob Sampson

1. My own properties are managed within my company, but I don't charge anything. Seems counterproductive.

2. No doubt, this was biased report I provided. And there was not single repair all year :) The point was to illustrate that having a PM is not a guarantee to lose money. I have properties that perform great and others that struggle a little more.  But that is usually a result of age, location, deferred maintenance by owner, etc. 

3. You are correct sir. There is no doubt that there are way more bad PM's than good ones. But I have to stand up for the ones that do it right. Iv'e seen a few on BP that I can tell know what they are doing and have integrity.  @Nathan Gesner 

@Jacob Sampson @David Faulkner

Great detective work guys, why would I charge myself a management fee if I owned the property AND own PM company? Additionally, you think I am going to go back and alter accounting over the last year? You obviously don't understand PM software on a large scale. Come on guys, you're smarter than that. 

Self managing can be very good for certain scenarios. I actually recommend my friends and family to do it because they have a resource they can learn from, ME.  Saying it's a 100% guarantee to lose money and you should never do it is irresponsible and you are not helping young investors. 

It's like this, I don't mow my lawn anymore. You know why? It's not worth my time. Can I mow i and save the money? Of course, but it isn't worth the $100 to me anymore. Everyone hits a point where their time is better spent elsewhere. So Jacob and David, maybe someday you will hit that point ;)

The blanket statements of how PM's are a guaranteed way to lose money is absurd. No doubt there are some bad companies out there, but if you got hosed on a bad PM, that's equally a reflection on you, as well as the PM. Put the time and effort to get the right one. 

In Phoenix, most (not all) self managers are small time investors who have an average income, and have the time to do it. The big timers, for the most part, don't have the time nor do they want to deal with it. Do you think $75-$100 a month on a SFH is going to scare off a big time investor or someone who makes 250k + a year? Of course not. It's the penny pinchers that get bent.

To those that said it's a guarantee to lose money if you hire a PM. Read this report and tell me how this investor is losing money. I've got plenty more that are just like this.  I don't mark up bills, no leasing fee, no vacancy fee, just flat fair price so the investor knows what to expect each month. There are plenty of good people and companies that do the same.  When you make comments to those new investors who are really trying to learn, you are doing them a disservice.  Be fair about it. 

Report is hard to read: $14000 income, $680 total expense (repairs and management).

 Hi Rico, 

I would absolutely consider hiring a PM under certain circumstances. What is you time worth? If you can better utilize your time in your career, that can be way more financially beneficial than the money you save with self managing. I manage a 4-plex for an attorney and he is bent on doing all repairs, painting, etc. His hourly rate is probably in the range of $300-$500, yet he spends his weekends painting to save a couple hundred bucks. Makes no sense to me :)

Secondly, tenant screening is where most self managed investors go wrong. As a PM I have all the tools to properly screen tenants.  I have processed thousands of apps. With that experience, I have gotten pretty good at avoiding evictions and bad tenants. There are little subtle things I look at that most don't consider that leads to great tenants.  I recently took over a 4-plex for a self managed investor. They had just bought it 3 months prior and rented to gypsies (12+ people in a 2 bedroom), a person who chronically gets evicted every few months and moves around, and a felon with Pit Bull dogs. All three had to be evicted. I totaled the loss of rent and eviction expense and it was north of $9000. With the clean up and repairs to re-rent the units that number was up to around $12,000. Did the owner save a few bucks by self managing? Yes, but ended up costing them thousands by doing so. 

Now if you have the time and know what you are doing, by all means, do it! But there are so many cases where investors cost themselves a dollar to save a dime. 

Last comment, not all PM companies are equal! Truth is there are more bad ones than good ones. You have to properly screen them just like you would a tenant to get the right one. 

Good luck Rico!

Hi Ryan,

I own a PM company and my fees are based on "aligned interests" with my owners. When my owners do good, I do good. I look at it as a partnership.

We do a percentage of rent with no "junk fees." PM companies are notorious for this unfortunately. What you thought should have been 8-10%, ends up being the 13-15% that you quoted. Find a company that has simple pricing so you know what to expect each month. 

Last tip, don't strictly base your decision on price either. The company that is 1-2% cheaper might end up costing you much more that you save. I always say locate the absolute best company first, then deal with the pricing and see if you can come to a fair price for both parties. 

Good luck!

I agree with @Nathan Gesner, I have attended the NARPM owner/broker retreat in Vegas 3 of the last 4 years and every year I take a few things and apply them to my business. It is a great way to continue to improve and progress. It is a great platform to learn from some of the best in the business. 

Welcome Terry! 

Way to take the leap and go for it! Good luck in your real estate endeavors. 

Like Jayden, feel free to reach out, we share the same market so maybe I could help if you have any questions. 

The higher the move-in costs, the smaller your window gets with potential renters. Deposits are very important, but don't let it hurt the main goal of collecting rent!

I personally do lower deposits than my competition in my market. The reason I can get a way with this is by putting good tenants in my homes. If you properly screen, you won't have the catastrophe and usually the deposit, or very little of it comes in to play. 

Good luck!

@Andy W.

I'm a little late to this party, but I think I might be able to help. I've done thousands of applications and here is a nice tip:

I charge $50 per applicant, but I tell them it is 100% refundable if they don't qualify as long as the answer everything TRUTHFULLY. This accomplishes 2 things

1-They tell me EVERYTHING. I mean, stuff that doesn't even pop up on a credit report. I have found out criminal, evection info, etc. that was never on the report. Tenants open up so they can get their money back if it doesn't work out.

2-I get so much honest info on the application, I don't process it unless I think they have a chance to qualify.

The fact that they have a chance to get their app money back makes them accept the $50 fee, as I recognize that it is on the high end. I can't tell you how many tenants have told me they have lost hundreds of dollars applying for units. It's not that they are terrible people, it's just that PHX has been a white hot market and you can get 5 people applying on one property. 4 people are going to lose out on that. 

So for me, I don't feel good taking app money from 10 people when I know only one will get it. Thats why I have set it up to be refundable if they don't get it. I think it's a good way to do business and also get the most accurate info from the tenant possible!

PS- I use Appfolio, they charge $15 a credit report (credit, credit score, eviction, criminal, public record, etc.) For those paying $40+, check around. There are better deals!

I think Zillow is great. I don't really care what number they tell me on their rent "Zestimate." Most relevant managers/landlords post on Zillow, so I comb through similar properties within a mile or so and base my price on my direct competition. That's the best way to dial in a price. 

Sites like rent-o-meter base price on the past, when what is current is what will dictate your rent price. Something that rented for $1200 6 months ago does me no good today. It's a good reference point, but I need to know what the house down the street is asking so I can outcompete ;)

Good luck!