All Forum Posts by: Faisal Sami

@Lynn McGeein

Lynn M.

You bring up a very good point. Must be a w2 worker to landlord property as a landlord extender. Can't be 1099 otherwise has to be licensed broker. So we pay w2 wages to stay in compliance.

Alex Applebee , Nicely done. Great pictures. I like how you managed the subs yourself and figured out their BS. Way to go !

@Jerry W.

I don't live in Cleveland. I am more than a thousand miles away. But I have cultured a team on the ground there who handle most of the day to day operations for my properties . I visit Cleveland 4 times a year,, sometimes more.

We have software in place to keep everyone organized. We have weekly conference calls to keep us on track to meet our goals. And everyone knows where they need to be and what they need to do. 

We train our team for problems and commonly occurring scenarios. We have a process in place to handle a tenant that decides to pay late. We have processes in place for how to handle tenant related city fines, tenant disputes, evictions, rehabs for tenant turnover, rehab for new property acquisition , dealing with Cmha section 8, EDEN section 8, VASH program for veterans, all manner of inspections ,, list goes on and on. 

We train and devlop culture in our people and a sense of working together for the long term benefit of the team. We treat tenants with courtesy and work with them to help them meet their goals for they stay with us. We sometimes act like innkeepers and I have teammates who bake cookies on their own for some of the tenants.

We are fair but we are also firm. We don't get taken advantage of because we set expectations clearly upfront and communicate that in person when signing leases and during follow up inspections.

I hold my team accountable. We work off task lists with global accountability in our software. All stakeholders can see what is going on in our business to the level of access they need. Often times our team hold each other accountable without my input. But I watch on the newsfeed from my iPhone.

We use WhatsApp for immediate and continuous communication between team members. I have teammates who message the group on their own at 3am to update the thread on what they have done.

Probably a longer winded answer. But a SMALL investment in people can go a long way. My two cents 

@Dustin Graham

I don't even know what flamebait means. 

It's not that an investors time is NOT valuable. A better question might be how much does an investor actually pay per hour to a manager if we are to find out how many hours are ACTUALLY being spent on/in our property and what value do we get for those hours? 

Even Warren Buffet won't pay $20 for a single Big Mac even though he may be able to buy all the Big Macs in the world .

I guess for the TOTALLY passive investor that seems to be the way they are going. 

I hope people out there are making good returns.

@Michael Henry , agree

Fascinating points by all.

@James Wise,, I don't think the dinner analogy holds true. Respectfully, I think the dinner analogy is a lazy analogy. I don't go out eating dinner to make money. Eating out for most is a LUXURY and most people don't eat out as a viable business--unless maybe a mystery diner ?

People eat out because it's nice to have someone cook for you ONCE IN A WHILE and be served.  I eat out all the time. The price of the meal is disclosed up front and itemized . if I am in the mood for fast food I expect to pay under $20 bucks but if I want filet mignon , I know I can spend more than $100. Not true with property management in my experience . 

Enter the hands in the cookie jar paradigm. Why do property managers insist on collecting and holding on to all the money ? 

I have never really gotten a good answer to that question. Why not give it to the landlord directly and then bill for the monthly management fee and any suggested repairs to be approved by the landlord ? Does anyone actually do it this way ?

Is there a way to LIMIT and define what property management FEES are going to cost any given month upfront ?(please don't say it depends on the repairs needed) .  It's varied WILDLY from month to month when I had managers. After I took over , suddenly repairs were much less, tenants stayed longer and overall costs just went down. 

A more apt analogy than the dinner analogy I think is using a taxi to drive you around town all day long while trying to deliver gift baskets and earn a living. You will probably get from point a to point b in a professional , courteous and efficient manner but can you REALLY afford that level of retail service EVERY day in a business that is trying to cut down on costs? Is that really an efficient way to MAKE MONEY?

Anyway , could go on and on. From the comments it seems to me there are a subset of investors for whom a real estate investment is a wholly "touch me not" passive investment, like a mutual fund or a blue chip stock. For whom a fallen gutter or a late rent payment could be spooky event. Booh ! .  I get that . For them , sure a property manager can do the whole process and get paid handsomely for it like the hedge fund guys on Wall Street do, junk fees and all.

But what concerns me more is the dumbing down of the otherwise keen investor who wants to have a go at it and actually LEARN real estate. This investor who has been beaten down, paralyzed  into thinking that they simply can't make a move without the blessings of a real estate "professional" has been corralled into the same pen as the touch me not investor. This investor has been told that by only by being able to spout out what is happening on every street in every neighborhood can you pick the right investment house.

How did we get to this point? 

I was just talking to an investor friend today who absolutely swears by his property manager and what a great guy he is , knows all the neighborhoods and all the zoning laws,  but how he keeps losing him money, month after month after month. The manager has all the accolades, good references , and a nice office-- checked out in the "due diligence" department. Still a money losing proposition for the investor. Just doesn't make sense to me.

I don't mean to rain on anyone's parade who makes a living by selling turnkey properties and the ongoing management fees that go with them. Heck it's a GREAT business model-- sitting all day long in a stream of rental cash that is generated from the cash fountains in the pockets of investors who are obligated to cover every hiccup at a property with major surgery.  One rife with opportunity for abuse. 

I am open to being corrected on this. I by no means am any sort of real estate expert nor do I claim any expertise whatsoever.  I have literally failed my way over and over again making every mistake possible in my real estate investments. 

But it has and continues to be one heck of a learning experience and one I truly enjoy doing a few hours every single day. And over the years I can say that I have learned a thing or two but there are probably many out there that for sure know it better than me, may know a nuance or two more about real estate valuation , or may be able to spout off the latest statute in zoning laws. Who cares ? If it works it works. 

Happy investing 

@Jay Hinrichs,, at the end of the day people gotta live somewhere. i like my government tenants. Get along with them just fine. At have a different answer for you 300 later 😀

@Jay Hinrichs  ,, lol,, I do stir the pot. All I can say is that I don't find it THAT hard as people make it out to be. I used to worship at the altar of property management but after pulling back the curtains a bit I realized that it's mostly common sense stuff mixed with failing your way to success. I am certainly no big Whig with 300 plus units or 10,000 posts (kudos to you for getting there) but like with any business it's about people , process and product. There are many a successful landlord that don't do any physical work and live far from their properties. Im not the first nor the last. 

I'll not only sell the dream @Jay Hinrichs,, I'll live it too ;)

Mike McKinzie I think we are talking about two different things. What you are describing to me as a handyman or a realtor who leases a unit for a landlord is more better termed a "landlord extender". There is no law that says landlords literally can't use ANYONE to help them. To the contrary a landlord using landlord extenders is totally different than a peppery manager sitting in the income/rental stream. Your landlord extender does not have his/her hand in the cookie jar. This is a MAJOR problem with managers. IF they agree to have rents directly deposited into your account FIRST that is a different story. That's a manger worth talking to.

@Ali Boone , appreciate the thoughts. I used to think like that too. That somehow you needed to be an "expert" or a "professional" to landlord your properties. 4 property managers later when I finally HAD to do everything myself , I found it MUCH easier in my case to manage my own tenants than managing the manager.

I think you hot the nail on the head: there are a lot of bad property managers out there. You mentioned there is risk in someone reading this and thinking they could landlord their own properties but the reverse is also true. It's funny how everyone says property management works IF you have a good property manager.. That's a really really big if. I have seen the same exact thing happen to investors namely lose a fortune in properties managed by manager only to find out many months later they are being taken for a ride. Many a would be investor has given up in this fashion as well and lost tens if not hundreds of thousands .

Key I think is do your own due diligence but I think people put WAY to trust and faith in the hands of property managers when with a little effort, study and patience a lot of the same work can be done more cost effectively.

Bottom line in my experience : NO ONE is going to care as much about your property as you are. :)

@Elizabeth Colegrove

I think it can work for lower demographics as well, especially with guaranteed government rent. We are doing it. Most landlords get into trouble because of neglect.