Newbie from Rhode Island

[Mike Bruno]

Hi, my name is Mike Bruno.  I currently am an Investment Consultant.  During my talks with clients I kept on experiencing a recurring theme.  My clients who are real estate investors are all successful, very enthusiastic about talking about, answering questions about real estate, and are eager to share their learning experiences.  I am closing on my first four unit rental property later this month.  Needless to say I am very excited and at the same time a little nervous. My immediate need/questions are around what are the best practices as soon as I sign on the dotted line and receive the keys to the property?  Is there a checklist of sorts?  I believe I should meet with the tenants, introduce myself, explain my honest intentions.  Should I also act like I am renting out the apartments for the first time?  Meaning do a walkthrough with renters as a base point for condition of property?  Should I also have them fill out an application so I have all their personal information on my forms and filed?  Lastly, what about rental agreements can the existing owner rental agreements with tenants suffice or should I execute new ones?  Any an all help is greatly appreciated.

[David Thompson]

Mike

I have an idea for you, it will cost you a little money upfront but you will be able to learn while having a successful experience from the outset. I call it a hybrid PM approach.  Find an investor friendly RE agent w/PM experience or approach a good PM company. You manage the property, but they find, screen the tenants, draw up the lease and help you get them in. You manage the relationship w tenants including lining up any repairs, PMs will have referrals for you. The cost is usually a one-time fee to the agent, maybe 40% to 50% of first months rent that pays both the renters agent and your agent. Believe me, a well screened tenant that is under a solid lease is worth it. Once you get the hang of it, you can decide if you want to continue this approach, totally outsource PM or DIY.  

Hint: getting some PM experience is recommended to start your REI career, but to scale, you want to work your way out of the PM role and focus on higher value-add opportunities such as finding great deals.