All Forum Posts by: Greg Weik

2021 Goal: add 300 more doors under management between Denver and Colorado Springs. The most we've ever added in a year is about 100.  This year we are going to make a statement. 

@Carmel DuffyIt is an electric snowblower, so no maintenance. @Greg Weik"

@Carmel Duffy Well that's good news at least.  All the other issues are still important to consider. 

@Carmel Duffy We have a saying at our property management office: “No good deed goes unpunished.”

When it comes to items like snowblowers, lawnmowers, etc., it’s usually best not to leave them at your rental (or purchase), partially for the reason of theft, but also for other reasons.

-Functionality. Snowblowers need to be properly winterized with fuel stabilizer. It’s unlikely a tenant will do this.

-Maintenance. Gas engines require maintenance, and tenants are unlikely to do this, which leads to...

-Negligence. If you provide a potentially dangerous piece of equipment and the tenant or an invitee is injured using said equipment, you could very well be sued. They could claim the item was in poor condition, dangerous, etc.

I would non-renew this tenant.

@Alexi Schreier.  Don't walk, run.  PM is a business that, by definition, requires the ability to operate at scale.  No PM is going to be a signer on accounts for all of their clients.  That is sketchy at a minimum.

More likely, the PM is trying to evade statutory guidelines requiring PMs to have an escrow account for rent funds.  I wouldn't be surprised if he handled security deposits the same way - the owner's account where he's a signor.  If the rent goes directly to the client, the PM can avoid the hassle of reconciling that account monthly, as is a requirement in every state as far as I'm aware. 

In terms of when you'll be paid: find that out on the front end, it should be in their Management Agreement or they should be able to easily articulate their process to you.  A good PM is a good communicator and will keep you in the loop on late rent, when you'll be paid, etc. etc. 

A great question to ask a PM is if they've ever been audited by the state.  Most states have a real estate division tasked with random audits.  My company has been audited twice since 2008, and it has helped us ensure we are doing everything to the letter.  We're those sickos who actually enjoy an audit as a chance to show off.  :)  

Check out your potential PMs license information online.  Is it in good standing?  Any complaints?  

How are the google reviews? 

I would generally steer clear of a 1-man-operation when it comes to PM.  Unless the guy is just starting out and seems very sharp and trustworthy, go to a company that has an established track-record and one that is easy to get ahold of. 

@Adam Regos, there is some great advice in here, and I originally came in to echo the "don't try to time the market" sentiment.  

But I also thought your 5-year timeline to get out of corporate America and into full time investing intriguing. 

Probably not on your radar, but there are more ways to make money in real estate than ONLY owning properties (which is a good way and I recommend.)  Specifically, if you started a property management company in San Diego (or elsewhere) you could very well be a millionaire in 5 years if you hustled at it.  Take that $170k and invest it in yourself and in building something that's recession-proof and worth more every year - your own company.  Then, if you want, take that PM company 5 years down the road and sell it for 1.5X annual revenue.  Boom. Or just keep raking in the monthly recurring income and have your staff run it. 

Once you have an established PM company, you will have all sorts of connections.  Pocket listings from your clients who want to sell, Realtors you interact with, etc. etc.  Doors simply open.  Ask me how I know.  :) 

Anyway, just a thought outside of the usual box. 

My lens as a property manager is a little different.  I locate and buy my own deals because no one knows the market like a property manager.  No Realtor will have the volume and data to draw from that a busy property management company has in a given market. 

Our smart clients contact us before they buy.  They ask us what areas and types of properties have the best return, and they are not solely focused on the cap rate.  Cap rate doesn't take into account things like "what kind of tenants can I expect in this area", or "what kind of turnover can I expect", or "what is the trend in this area in terms of rental rates and vacancy times."  

Most of the people I've worked with since 2008 who claim to be investors aren't.  If they own multiple properties, the portfolio is usually made up of the worst of the worst in terms of property condition, location, and tenants.  As others have said, the self-proclaimed investor is often a very difficult and demanding customer to work with as well.  The investor moniker doesn't imply wealth or wisdom in my world; I would suggest people use it more sparingly!  :) 

Some great insight in this thread.  From a pure appreciation standpoint, this comment is golden:

@Maria Bakaj "I personally tend to stay away from areas where there's a lot of land for new developments. I'd ask yourself the question, "In 10 years why should someone buy my house if there's a brand new one with the latest styling and fixtures down the road for the same price or slightly more." 

Whether you are buying rental properties (my specialty) or looking for your primary residence, if appreciation is your goal, you want to buy in an established area where there is little-to-no room for new construction.  This is where appreciation consistently is strong. 

@Kate Cavanaugh, that's interesting that a new construction home will rent for 1.5% of the sales price. 

Are you sure?  Sometimes, I find that new clients get bad information on rental rates, either from a Realtor trying to close a deal or a neighbor who dramatically inflates the actual rental-rate. 

In my experience, new construction is a poor play for a rental property.  When you buy new construction you are always buying at "top of market".  

If you buy new construction, at the top of the market, you will not see any significant appreciation for years to come.  This is why I always advise my clients to look for homes in established neighborhoods, preferably without HOAs.  Owning a rental property - in my opinion - is not about cashflow only.  This is missing the forest for the trees.  

Example: $500,000 new construction home near me rents for $3,000/month.  Meanwhile, a $500,000 home in an established neighborhood rents for $2800/month.  

The new construction home makes $200/month more in cashflow.  The new construction home does not see any appreciation for 5 years.  

Meanwhile, the established neighborhood home appreciates 5% (conservatively)/year.  $525k year 1, $551,250 year 2 and so on.  So that $200/month or $2400/year cashflow on the new construction home is a red herring when compared to $25,000+ in appreciation annually. 

Hope this helps you! 

Time, expense, liability are all reasons to hire a professional property manager.  

The questions matter less than what can be proven via documentation (i.e., income, credit score, reliable rental history.) 

If you're lucky, there might be a PM company that offers free tenant placement and only charges on the monthly rent collected. I would search google reviews of PM companies in the area. 

Time, expense, liability are all reasons to hire a professional property manager.  

The questions matter less than what can be proven via documentation (i.e., income, credit score, reliable rental history.) 

If you're lucky, there might be a PM company that offers free tenant placement and only charges on the monthly rent collected. I would search google reviews of PM companies in the area.