All Forum Posts by: Calvin Thomas

Hello,

I've had some issues with excessive costs through my property management company over the years.  I'm a passive investor and these properties are in a different state than I reside in so I'm not there in person often.  These properties typically turn over once a year as they are mostly student rentals.  I put a significant amount into bringing all the units up to par when I purchased them several years ago and revisit anything that they need annually so there is no deferred maintenance.  This year I received a bill from the PM with the following line items and costs: 

- Bathroom 1 : Shower/Tub Caulking | Re-caulk tub
- Bathroom 1 : Toilet bolt caps | Missing bolt cap
- Bathroom 1 : Window Covering | Missing miniblinds
- Bedroom 1: closest to the front door : Door/Knob/Lock | Door know needs tightened
Needs deadbolt installed
- Bedroom 1: closest to the front door : Window Covering | Broken miniblinds needs repaced
- Kitchen 1 : Wall/Ceiling | Pull nails and spackle
- Living Room 1 : Wall/Ceiling | Nail and holes in paneling
- Living Room 1 : Window Covering | Miniblinds need repaired

Line Items
Description Amount
Macomb Glass Invoice $40.99
Sherwin Williams Invoice $40.60
Walmart Invoice $62.37
Total $2,271.27

1 of 2

Ace Hardware Invoice $82.93
Ace Hardware Invoice $28.33
Ace Hardware Invoice $42.50
Macomb Glass Invoice $188.58
Walmart Invoice $135.30
Ace Hardware Invoice $65.19
Ace Hardware Invoice $9.78
Shop Supplies $3.00
Labour hours 24.18 @$65 rate $1,571.70
Total $2,271.27

This is a very small, one bedroom apartment in a fourplex.  I'd like to get other investors takes on these repair rates.  24 hours of labor seems excessive to me and $65 per hour seems excessive for non skilled labor.  These repairs are through a contracting company owned and operated by the PM.  When I inquired if they charged a flate rate per job, they said no, actual hours the jobs take.  I asked for actual days and times the repairs were done and they came out to 1/2 of the hours charged so I'm assuming they are using a 2 man crew and charging $65 per worker.  Here is another example.  

This is a small 3 br house.

Work Order Instructions:
- Entry 1 : Security/Screen Door | Replace Exterior Door Screen
- Entry 1 : Wall/Ceiling | Spackle and paint
- Bathroom 1 : Door Stop | Replace door stop
- Bathroom 1 : Light Fixture | Replace bulb
- Bathroom 1 : Shower/Tub Caulking | Re-silicone tub
- Bathroom 1 : Toilet bowl/lid/seat | Replace toilet seat
- Bathroom 1 : Toilet Paper Holder | Replace toilet paper holder
- Bathroom 1 : Tub/Shower | Relay loose shower tiles
- Bedroom 1: closest to the front door : Closet/Door/Track/Shelving | Install Closet Rod
- Bedroom 1: closest to the front door : Light Fixture/Fan | Fan light does not work - replace fan
- Bedroom 2: 2nd closest to the front door : Closet/Door/Track/Shelving | Replace closet rod
- Bedroom 2: 2nd closest to the front door : Window Covering | Replace blinds
- Bedroom 3: furthest from the front door : Switch/Outlet | Install smoke/CO detector
- Bedroom 3: furthest from the front door : Window Covering | Replace blind
- Dining Room 1 : Window Covering | Replace Blind
- Hallway/Stairs 1 : Light Fixture | Replace bulb
- Hallway/Stairs 1 : Other | Replace blind
- Kitchen 1 : Window Covering | Replace other blind
- Laundry Room 1 : Light Fixture/Fan | Replace bulb
- Living Room 1 : Switch/Outlet | Replace Outlets
- Living Room 1 : Window Covering | Replace Blinds
- Basement 1 : Light Fixture/Fan | Replace bulb
- Systems 1 : Thermostat | Reattach thermostat

Line Items
Description Amount
Labour hours, replace several blinds, screens, door stopper, replace toilet seat and toilet paper holder, reset shower
tiles, install closet rods, replace necessary bulbs, smoke detectors and outlets, touch up paint

$2,096.38

Shop Supplies $3.00
Ace hardware invoice I51016 $44.64
Ace Hardware I50619 $53.69
Ace Hardware I50569 $43.57

Total $2,552.16

The gross rents on these units are great but so much of the profits get eaten away by the turnover costs it just makes less and less sense every year.  Advice appreciated.  Thanks.  

G'Day everyone,

The team (@Dominique Osborn, @Sean Mahoney) and myself have an opportunity to on-board 189 units.

This would be a very nice "chunk" of new business but to be honest, I'm inclined to pass.

I have always believed in doing business on your terms and for terms not to be dictated by someone else.

Especially when you are looking to hire us/me to do the work for you.

Also, business done right needs to be a win/win for all involved and this doesn't seem like a win for us.

I do however understand the caution and reluctancy to "let go of the reigns" per se as many landlords get screwed by property managers.

But at the end of the day, you have to "let go" and let someone else do it or just do it all yourself.

I'd love your advice on the suggested terms given to us below:

1) In AppFolio they want admin level access to their account.

2) They want a standardized list for maintenance items so they know in advance what repairs would cost.

3) They want a copy of all invoices from contractors to us so they can verify we are not marking up more than promised.

4) They want to be able to talk to our contractors before work is done (each time) so they can talk contractors down in price themselves.

5) They mentioned that they pay around $300 for full paint in a 2-bedroom unit.... we do not have a contractor that will touch a full paint on a 2 bedroom for $300

6) They want tiered PM Fees based on occupancy.... for example (their example): at 90% they would pay 8% PM fees, at 70% occupancy they would pay 2% PM Fees, and at 50% occupancy we would part ways.

The deal breaker in my opinion is points 4, 5 and 6.

With the lack of oversight/control on maintenance we have little control over the occupancy and it kills our process and efficiency.

So in a way, we are destined to fail from day 1.

Also, if someone does want so much control why not just self manage.

The unit count justifies hiring 1-2 full time people to run it.

Otherwise, let us do our job.

@Drew Sygit and @Jay Hinrichs I'd appreciate your professional opinion.

@James Wise I already know your answer but want to hear your unprofessional opinion so I feel better about my own thought process haha

Thanks everyone 

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Thanks for taking the time to read this and to share your thoughts.

I believe People With Financial Intelligence Can Change The World For The Better".

Hi BP Community,

I work full-time and am interested in some of these turnkey solutions I see online that almost seem like one-stop-shop and hassle-free. It seems to be a good way to diversify my investment portfolio if the numbers make sense compared to other asset class options.

I can't buy in my current market, so I'm looking for more affordable options out of state.

I was curious about people's experiences using turnkey real estate investing solutions, and if anyone recommends a different tool.

Thanks!

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