All Forum Posts by: Joseph O'Sullivan

Remember: cheaper doesn't mean you'll make more money. 

Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Try interviewing at least three managers.

1. Ask how many units they manage and how much experience they have. Feel free to inquire about their staff qualifications if it's a larger organization.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, a leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.

4. Review their lease agreement and addenda. Consider all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. A tenant complaining online might indicate that the property manager handled them appropriately, so be sure to ask the manager for their side of the story.

7. Look at their marketing strategy. Are they doing everything possible to expose properties to the broadest possible market? Are their listings detailed with good-quality photos? Can they prove how long it takes to rent a vacant property?

This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!

@Joseph O'Sullivan, great question.

I'd ask how they handle generating and delivering 1099s. Mine were mailed to me and I prefer digital.

My recommendation: if you really trust your agent, ask him/her to refer you to a property manager. I found my lender, insurance agent, and property manager through my agent. Quality people attract and keep quality people.

Hello Joseph,

Typically I would suggest to take a look at their reviews and FAQ's before jumping on a call with them. When you get on the line, make sure to ask about their processes, what they look at when screening applicants, how you will get paid, if you will be able to see all money going in and out with regards to your property in an owner portal, what they do if they have not received rent from a tenant, if there is anything they require you to do in order for the property to be "renter ready". 

I hope this helps!

Have them send you a management agreement and review it, most of what you need to know is in there. 

Ask them when they issue distributions (anything before the 15th of the month is a red flag), do they require reserves, how is maintenance charged, do you see copies of outside contractor bills, do they upcharge materials (PM's have LAR accounts with Lowes and often get 20% off), do they keep all late fees or just the management fee, what other fees do they charge (renewals, inspections, etc), where are tenant security deposits held, how are evictions handled and are you consulted before filing, what screenings do they run, what qualifications do they require from tenants, ask for a couple other owners to visit with for a reference. 

Hi Joseph - welcome to REI! I'm a local investor and Realtor here in Jax and see numerous successful strategies being implemented. I'd be happy to connect to chat further. Feel free to shoot me a PM and we can link up!

@Joe - Thanks for the message - first deal for me like this, but a few quick thoughts to your questions!

We will evaluate the deal both ways (and probably a combination of other ideas as well), and decide what makes the most sense long term.  Splitting the parcel depends on the local government, so hard to say, but our understanding for this specifically is that it is relatively simple / not very costly.

Whether we split the parcel or not is somewhat the reverse of "greater than the sum of its parts". The split would be determined by whether the value to us by selling off a few or not.  I'm sure as owners there could be some benefits on the cost side either one time or recurring...we'll see as we evaluate.

@Joseph O'Sullivan start going to local meetups, talk to other new investors, but don't spend on trials because you will be looking without 20-20 vision if that makes sense. You will only see what you want to see (good deal) and not what you should see (the basement, the issues, the block values).

If you are new to real estate, foreclosures are not a good place to start. Almost all properties on foreclosure.com have been there before. Some will be sight unseen, some will be third party mediated and those "auctions" always have ghost bidders to get to the reserve so you will see a property come back again and again.

What was your goal in going on here? Do you have cash to purchase? Almost all foreclosures are going to be cash deals with healthy rehab budgets attached.

When it comes to teaching your kids about real estate investing, one book that's often recommended is "Rich Dad Poor Dad" by Robert Kiyosaki. It breaks down financial concepts in a really accessible way. Another option is "The Millionaire Real Estate Investor" by Gary Keller. As for the RichDadPoorDad game, "Ratrace," I've heard mixed reviews. Some say it's a great hands-on way to learn, while others find it a bit outdated. Might be worth checking out some online reviews before diving in.