All Forum Posts by: Robert Taylor

I was just going to say the same thing basically as K. Marie, my thought would certainly be to get in contact with the bank that's foreclosing and see if they will play ball on this, sometimes they are fairly easy to deal with and others are not at all! Also, is this the only mortgage on the house? Are there any other liens attached to it? I see the NC is a non-judicial foreclosure state, I'm in WI and have bought numerous auction houses but we're a judicial state, so I guess there are some differences. Another option for you would be to contact a realtor in your area who says they're experienced with short sales, which it sounds like this may end up being. Hopefully you'd find the right one, but if you get a realtor that's truly experienced in handling short sales, they might have better luck talking to the bank and seeing if they'll agree to something before sending in to the auction.

@Dan C. thanks for the local perspective there, I'm planning on checking with some of the various local PM's to see exactly what they're charging for various scenarios, because I can already see how from the PM's point of view, when someone calls with say 50 units that they need managed, well there are many different factors there which would greatly effect what it would cost the PM to provide those services. If I do dive into this, I'd be personally involved in all of the various aspects of the operation at the beginning for sure, to get a feel for what's actually going on as we perform different tasks, to train the people I'd have helping me, make sure that things are being done correctly right from the start, etc. As I think I mentioned, part of why I'm looking to do this is because I'm looking more and more at the idea of specializing in being a broker to serve investors, both from this area as well as anywhere else and they'd need PM's, so I can see it helping to be a "one stop shop".

Now, the other part here and what I think would certainly become the biggest selling point for my PM biz would be once we're in operation for a while and we're able to build a good reputation. I think that would sell far better than any other method!

@NA Burkart -I will send you a PM for that info, thanks!

Well, I'm working on getting them all in a row! I'd still like to hear from anyone as far as what they're expecting out of their property manager and what everything costs. So far, based on the answers here as well as several other threads I've been reading here, it sounds like most property managers are providing:

-Collecting rent each month from tenants and then obviously forwarding that rent to the owner. Sounds like usually this is charged as a % of the total rent, I've seen it everywhere between 5% and 12% and also I see some debate as far as charging based on the rent actually collected vs what should be collected. In most cases, I would think that charging based upon the rent actually collected is more fair, I mean if we're supposed to pick up say $5000 total in rent and we only come up with $3500, why should the owner pay for the lost rent? The exception on that which I see would be if we're talking about a property where its notoriously tough to get rent paid, although I'd think that's an extreme example but say if its a dumpy property that the owner refuses to improve at all, in a bad area and whatever else, if we're spending huge amounts of time trying to track down the tenants and are having trouble getting paid, that's not really fair to us either if we get paid zero for all that work. Hopefully, that's an extreme case though.

-When a tenant needs to be evicted for whatever reason, that we would handle that work. This is one thing I haven't seen much about, if there's usually a charge for that or what. I know it takes some time and effort to evict a tenant.

-Keeping any common areas and the exterior of the building clean as well as cutting the lawn if there is one, here in WI of course, someone has to shovel the sidewalks and stuff whenever we get snow too. I haven't seen too much as far as what people pay for that, but I'd assume it would be a monthly charge based on what needs to be done since obviously some properties require very little while others require a lot of work.

-Basic maintenance work like unclogging sinks and toilets, fixing things like a garbage disposal, etc. From what I've seen, it sounds like there's usually a set charge for whenever this is required and it makes sense to me to have set prices for this where if say a sink is really clogged, from the owner's point of view you don't want to get gouged on this stuff.

-When a tenant moves out, bringing the unit back to good shape to be re-rented, which could include repainting the place, having carpet cleaned or in extreme cases replaced, patching holes in the walls, could be a lot of different things there and that's one I would also say the owner would be concerned about being gouged on by the manager.

-When a new tenant is needed, selecting the right tenant. This is an interesting one, I see where often the mgt company will charge either a flat fee or sometimes its a full months rent or half of a months rent, etc. Another important one for the owner because if the mgt company keeps getting bad tenants in there, that could end up sinking the entire investment!

Basically, my impression so far is that property management isn't rocket science but whenever you're dealing with a variety of people it does take some skill to keep everyone happy, its much more a job that requires getting a list of jobs done each month and doing them correctly, as well as a business where I'd want to hire some people who are good at detail work, as there would be a lot of paperwork and recordkeeping involved and that's got to be well organized and someone needs to make sure that all of the various details are covered 100%.

So, I'd love to hear more opinions on any of this! Thanks!

@Joey Dwyer I certainly appreciate the answer! Based on your answer and some reading I've done on other threads here regarding property managers, I'm definitely already starting to come to conclusions here, but I'd also love to hear more as well. One of the things I'd assumed going into this would be a variance in charges depending on the type of property, what sort of area it is located in,etc basically that you have to figure in that some properties are much easier to keep running right than others. Anything in a "war zone" will very likely be more work, even much more work for several reasons, tenants are more likely to default on the rent and end up getting booted and when they are on their way out are probably more likely to leave damage behind, etc whereas in the better areas, this is less likely to happen. Same would go for lets say one client has a total of 30 units, but they're all duplexes or single fams or even small multis, like up to 4 units. Well, that compared to a client who owns one single 30 unit building, I'd think your costs would be lower for sure managing the one 30 unit building.

As far as the other costs involved, such as for repainting a unit or more minor repairs like installing a new toilet or a new faucet or whatever, my current thought would be to hire on some of the good or great painters and handymen I've met over the years with my rehabs, I do have a few of them. (as well as a much longer list of the ones who DIDN'T do a good job, too!) My current thought would be to hire on a crew to work for me and then bill the client for the work, but hopefully with proper management I can keep those costs nice and low. As I also mentioned, I think anyone needing major rehab work, like if an out of town client buys an REO house or whatever that needs major work, that I'd sub out or refer to an outside company, I just don't want to get personally bogged down in a major rehab project like if lots of big surprises come along, which we all know is very possible!

My goal here would be to provide a complete package of both realtor services for the original purchase as well as the management, so that as time goes on, I can build up a great record with my clients, I see that as a much better way to hopefully grow into something big one day. Besides being totally unethical, for me to keep burning my clients with inflated painting bills or whatever, even if I was able to greatly increase my income right away, I think it would look quite dumb for the long run when in the second year the investors really start catching on to that and by the third year my clients are all gone and I can't find new ones due to the bad rep I earned for myself! That's not good at all compared to having the third year be better and better because good things are being said abut me!

Actually, that's a good point, I actually think that even beyond that, investors often forget to check on all of the contractors they hire, etc. and yes, its one thing to see a proof of insurance form and another thing to actually call up and verify it!

I can definitely tell you that's part of my research as well, as far as exactly what do I need as far as insurance coverage, licensing if any, or anything else. I like to sleep at night and not have to worry about getting sued for something or having the IRS snatch my house or whatever else!

Due to all of the interest that people from all over have had in the Milwaukee market (where I live and work) and because I've been a WI licensed broker since 2004, I'm now looking in to focusing my business towards working with investors, both in and from out of town, could be anywhere in the USA as I've been getting contacts from all over the place. Then I saw that nearly everyone asks me the exact same second question-do I know of a good property management company I can recommend here in Milwaukee. I guess that's kind of obvious, since anyone owning property 1000 miles away isn't going to be flying in to pick up the rent or unclog a sink! So, my next thought was why wouldn't I consider getting in to the property management biz as well? That way, I could offer a "one stop shop" for out of town investors looking to get in on what is a great and very stable market here!

So, I've been gathering info already from some of the local management companies as far as what they're charging and what they provide for the price. I'd like to hear from some fellow BP members as well with experience or knowledge on this, what do you look for in a property management company?

-What services do you want them to provide?

-I'm especially interested in where you draw the line between what you'd like the property manager to do vs hiring a contractor for repair, rehab type work.

-What have you been paying for their services?

-Have you had any issues or complaints with them?

-Anything else related to this?

My plan would be to gather up as much info as I can and then assess what it should cost to operate the same services and then make sure that I could price my own service very competitively, I want this possible future part of my operation to be able to sell itself on a stand-alone basis, not just expect people to hire us to manage things just because I also was their realtor for the purchase and if someone for some reason wants me to be their realtor for a purchase here and for whatever reason wants to go with another management company, that's fine as well but my plan is to make it attractive enough so that never happens!

Another aspect here is when someone from out of town's property needs some work beyond the scope of what you'd have the property manager do, when it gets more into renovation work, etc. First, lets say a long time tenant moves out and its really time for some new paint. Is that something you'd want to get from the property management co. to do or something to hire a regular painter for? What if I'm offering services like painting, minor renovation work such as installing new toilets, sinks, counters or things like that.

I think I would avoid getting directly involved if someone buys something requiring major renovations, but that's where I've built up some really great contacts over the years and could certainly refer them to someone decent.

Just thought I'd put this out there, especially considering the decent amount of talk that the Milwaukee area has been getting here on BP lately. I've already been working with a couple of "out of towners" looking at the market here and would be happy to try to help more as well!

I know this area darn well, having lived nearly all of my 40 years in the Milwaukee area and have been a WI licensed broker since 2004. Besides my rehabbing activities, I'm a landlord as well and have TONS of connections for getting whatever needs getting done-DONE! I also have my bachelor's degree in Bus Admin-Accounting, so I know my figures quite well, too!

If anyone is interested in getting in on what is a great-and quite stable-market, send me a PM here or give me a call! Thanks!

I've been working on three simultaneous flips over the past several months. In this case, it actually took longer than that, longer than it should have (often the case!) although the work done here was quite extensive. I bought the house last fall (early Oct closing I believe?) and got it at quite a discount due to the fact that it needed major basement work and bad! It was built in 1904 with a brick basement, which was the common method then, at least in this area. The house is on the "east side" of the city of Milwaukee, which is an upscale to very upscale area of older homes bordering on Lake Michigan. It has always been a "hot" area to sell in, so hopefully this one will sell quickly!

I basically ended up doing a nearly top to bottom rehab here.

http://www.realtor.com/realestateandhomes-detail/2947-N-Farwell-Ave_City-Of-Milwaukee_WI_53211_M71296-22814?source=web

I'm still a bit confused on your HELOC scenario, are you basically saying that if he ties up most or all of his $180k cash buying and/or rehabbing the first home, you'd want to get a line of credit based on the value of that first home purchased for cash, thus to use the HELOC funds to buy and/or rehab more houses?

As far as the owner-occupant only periods they'll often put REO's up for sale for at first, be very careful on that front. From what I've heard, they're pretty wise to all sorts of attempts to get around that owner-occ period by investors and will have you sign whatever iron clad docs stating that you will be actually occupying the home for whatever period of time after purchasing it and if you violate that, you can get in all sorts of trouble (financially at least)

@Account Closed Just saw this thread and briefly skimmed the many responses, but my first and biggest thought wasn't brought up until near the end by @Tony Cavalli and my thought is exactly the same (and I learned this one "the hard way") STAGING SELLS HOUSES!!! I know Tony mentioned finding a great interior designer who does staging, that's certainly one idea, or if you just look around a bit, you'll likely find a bunch of home stagers and for good reason, its certainly a growing business. I'm a broker as well as a flipper and I know several "big time" high volume brokers who just won't list a house unless its either staged (if vacant) or if its occupied, they'll bring someone in to assess the seller's furniture, etc and make whatever changes they see necessary to make the place look just right to sell. Honest to God, there are a lot of times when sellers will have even decent furniture and stuff but a good stager will come through and want to make major changes! For instance, I was selling a house that a former partner was living in, it was a newer 3000+ sq foot home that had a rather smallish living room. My former partner put a MASSIVE sectional couch set in that room that nearly took up the entire room! It was a nice one as far as sectionals go, I forget how much he said it cost but it wasn't cheap but my stager took one look and said its got to go! The sectional was so big that it made an already smallish liv room look like a joke! If the sellers refuse to stage, they refuse the listing because they know they'll have many more coming and don't want to waste their precious time trying and trying to sell an unstaged home. Another option is if you're already doing other flips or are definitely planning on doing more, you could take some time and shop for some deals on buying your own furniture and accessories (remember, great staging is much more than just plopping a rug and a couple couches in the living room-its really setting a mood with little knick knacks, accessories, art, etc) but often on craigslist you can find barely used decent furniture for some good or even great deals. If worse comes to worse and you never do another flip,. maybe you could keep the stuff or else sell it to someone else on craigslist.

My other thoughts mirror what several have already said, your pics need work. I'm a believer in using all 25 that my local mls allows-ASSUMING-the house has enough unique subjects to fill all of them. Since I usually always work on the mid to higher end, I usually have no problem. FOR SURE get rid of the opening shot that includes the f#&ked up sidewalk and steps-why in the world is that on there on any pic, let alone the primary pic???? Why all of the exterior shots-its not a particularly attractive exterior? Now, moving inside, things actually look quite nice, especially those wood floors, but again no staging. Kitchen looks nice, although as others have mentioned the floor is a bit on the funky side, I don't think its a deal killer though. The tiled shower surround looks quite nice as well. Another issue that I believe I saw mentioned already as well is how the pics jump back and forth exterior to living room to kitchen back to liv room back to kichen to bath back to kitchen back to bath-get them in some sort of order and FOR SURE ditch ALL of the exterior pics that show the rather poor yard condition OR spend a few bucks and do a little landscaping, a little money in mulch, plants, etc can go a long way there too!