How do you manage your Real Estate portfolio?

Question

I'm really curious how everyone manages their real estate portfolios/investments. I know lots of people here are part time investors, who also have a day job, family, ... etc.

Managing a real estate business means you have to wear multiple hats and have to manage: your Property Management Company, your Leasing Agent (commercial), your Lawyer (who reviews your leases), your Tenants, Insurance Company (to ensure they don't screw you), your financial institution, county, state and federal politics to see how those might impact your business, Tax questions/issues, Income and Expenses, your own LLC and its obligation and compliance,  ... etc.

How do you keep track of all of this? Do you track the hours you spend on the business? At the end of the year, do you go through a "Lessons Learned" to see how you did and where you could improve?

I recently went from Single Families to a Commercial Building and found myself spending a lot more time on each one of the points above. I'm trying to figure out if there is a better way to do this.  Any wisdom to share from the more experienced investors (part time or full time??

Andrew Johnson · Answer

@Henri Meli I don't have any specific advice, only to say that once you've done it for a year it gets easier. Once you have a property manager in place (that you can rely on) it gets easier. Once you stop sweating the small stuff (like break/fix repairs) it gets easier. Once you've gone through one tax period and know what to prepare for your CPA it gets easier. And everyone makes different mistakes. I should have used an insurance broker earlier on. I did it myself and overpaid. Things...just...happen...and learning from the mistakes is far more impactful than learning from a bullet point list.

One thing that I will say is that since I do invest out-of-state I started following local news anchors on Twitter. Listen to the local radio stations (stream them) quite a bit. That doesn't exactly keep me abreast of all "local politics" but you start to hear things and sense trends like areas where there is crime.

One thing that I will say is that since I do invest out-of-state I started following local news anchors on Twitter.  Listen to the local radio stations (stream them) quite a bit.  That doesn't exactly keep me abreast of all "local politics" but you start to hear things and sense trends like areas where there is crime.

Levi T. · Answer

You really have your attorney review each lease? Ouch

Been “self-employed” my entire life, I’ve never not owned a business, but that does not mean I worked at it.

I’ve worked 80hrs a week at another job and managed all this. It’s easier than working for someone else, because your the shot caller.

First secret is don’t waste time on dumb stuff. Attornies love to bill you hours, just like all other services, they will never recommend to use them less. Grain of salt on all their advice...

I just don’t let me PMs handle it, I require it, or they are fired. They handle leasing, collections/evictions, invoicing, bill payments, everything related related to managing a property. Everything.

I let my insurance guy and my CPA advise, they do all the leg work. That’s what I pay them for..

You would not pay someone to cut your grass, then go cut it yourself would you? So why hire anyone just so you can do some or most of the job you just paid them to do.

Account Closed · Answer

@Peter T.

Hi Peter.  I know exactly what you're talking about as I was wondering the same thing a couple years ago.  I use a custom Google spreadsheet that I built to track everything.  I add new columns and rows onto it whenever I need to and have graphical charts showing how many conventional loans and private loans I have, location of properties, and much more on the sheet.  It gets pretty big, but in the end I get used to tracking it all and it's very easy now to find the info I need.  I can easily share it with my wife and she sees all updates I make to it.

There is no dedicated software that I know of to track a custom portfolio so that's why I opted for Google Sheets instead.  Just build all your property addresses in a left hand column, and then all their individual attributes like taxes, insurance, mortgage terms, property manager info, etc in the vertical rows.  You may end up with 40 vertical rows but it will contain everything you need.

Peter Tverdov · Answer

My recommendation (as someone who works a 12 hour job when you include my commute) is to streamline everything.

Matthew Olszak · Answer

Your last sentence rings so true.

When working with a professional, be it a doctor, agent, attorney, or inspector, if you are going to question and direct their work, why bother hiring them in the first place? On the property management side, I am very hard on my handymen/contractors that I don't want to hear about how hard a job was, what they have to do, etc - I gave them a problem, and I expect them to solve it. I just want a call to explain that its fixed, here's what we did, here's what it cost. If I have to solve the problem for them, we have an issue because I have now spent too much time and might have well just done the job myself.

For each of the professionals you hire, you have to trust them to get the job done right. When they don't, they are gone. If you have to investigate each time or direct them to do it "right", you are taking the wrong approach. For commercial, your involvement should be even less than residential. Reassess if you have the right people in the right corners.

Jeff Kehl · Answer

@Henri Meli did you enjoy the experience or did you see it as work? Did you find it detracting from the life you were looking to live? The reason I ask is, if so, you probably should just be investing passively. There are plenty of sponsors out there willing to sweat the details for you if it's not your cup of tea. Sure you won't make quite as much but in most of them you can still earn a great return and just vet the deals and monitor the reports.

I see myself going that route eventually but for now I still actually enjoy dealing with all of the tax, legal, accounting, insurance and management issues so I still do it.

How do you manage your Real Estate portfolio?

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