All Forum Posts by: Kenny Dahill

Hi @Allen Hodges, welcome to BP!

Any specific requests or services that you need from a property manager? It's helpful to provide more details about your portfolio so you can get better recommendations. For example, number of units, class of properties, SFR vs. MF, etc.

@Brian Black, a few thoughts.

15%:  Seems very high.  Standard is 8-10%.  You're paying 1.5-to-2x average rates!  No bueno.

Justify 15%:  Have you asked your PM to justify the higher than industry rates?  Perhaps it's all the maintenance, challenging rent collection, units are spread out across town, they include additional services you're unaware of (i.e. tenant placement guarantee, eviction protection).

Quality of Portfolio:  What type of properties are in your portfolio: A, B, C, D grade?  For newer dwellings or recently remodeled, it requires less work.  As well, if your tenant pool has more stability and better credit, it's much easier to manage since rent collection is important.  In a perfect world, your tenants pay with no reminders.  Perhaps the 15% indicates a high risk portfolio that requires a lot of effort just to collect rent.

Some ideas/suggestions:

Co-Management:  If you're willing to take on some of the management responsibilities, you could find a person hyperlocally to assist with some of the local tasks.  Meanwhile, you could handle the tasks that do not require you to have a physical presence.  By taking on some of that workload, you could reduce your management expenses.

On-Time Rent Bonus:  If your property is lower income and higher risk, instead of the 15% then perhaps your PM would consider an on-time rent bonus.  If the tenant pays on the due date, the PM gets .5-2% of rent as a bonus.  If the tenants always pay on time then this probably isn't needed.

Seeking landlords in the Phoenix market that are interested in being a beta user for our new co-management service.  Co-Management puts the landlord in control and allows you to delegate specific tasks to a co-manager.  To accommodate, Burbz will provide a reimbursement for a portion of your monthly co-management fees.

Message me directly if you are interested to learn more.

@William K., are you looking to self-manage, hire another PM, or perhaps a hybrid?

What are some of the pain points you're looking to resolve with the PM software?  There are lots of solutions and most of us provide the same features and functionality.  However, sometimes landlords have specific needs they want to address.

@Inna Piskorska,

Contractor in Hospital:  I absolutely have to start with this because it's infuriating! Their problem is not your problem.  Hopefully their guy is okay but that is not an excuse to not send a contractor to find a serious situation.  They should know in a situation like this that time is of the essence because water does more damage than fire.  This is negligence, IMO.

Small leak / Minor repairs:  I'm going off of your description but it sounds like a significant amount of water, enough to flood upstairs and drip to downstairs. If that's repair, I'm curious what their threshold is for major.  Anything water related should be rushed.  Repeat: water does more damage than fire.

Not Happy:  You provided 3 full days, 2 business days to address a major issue that prevented a tenant from moving in.  Who cares if they're not happy!  They had their opportunity to address a major issue and didn't, for 3 days.  That's negligence and, depending on their management agreement, would be embreach of their own contract.

Inna, very sorry you're having to deal with this.  They sound extremely unprofessional.  After you're officially done with them, I'd submit a report to the state board and write lots of bad reviews of them online.  This is a major issue because a) tenants can't move in, b) water is destructive if left unattend, even if the flooding was shut off, and c) the potential cost is $10k+.

@Ryan Cleary, I agree with @Joe Splitrock.  No personal experience here, luckily.

I would also read the terms of the purchase contract to see how it indicated the occupancy would be.  If it states vacant, perhaps they were in breach of contract which provides you more ammo.

Out-of-state investors should always be boots on the ground at least 2-3 times, unless you have another capital partner.  Lots of capital and risk to be completely blind.  A single day of round trip is $400-800, on a $10k+ investment that is money well spent.

@Chris Lo, response to your last reply.

Turn Key:  Correct.  Similar to PM, they generally have a bad rep.  Similar to PM, there are great ones and terrible ones.  The fearful part of turnkey is when they select the tenant and you acquire their tenant.  You don't know their screening criteria and process.  They'll accept whomever to get the sale completed.

PM vs Realtor:  Reality is most PM's are realtor's as well.  To your point, they do have that tenant market data.  However, you could easily do your own due diligence and research market rates in the area.  Generally speaking, you should have a good idea of the type of market class you're investing.  And, if a PMC brings you a deal, guarantee they're going to ask for a commission.

Tax Deduction:  Sure, it can be deducted but you're still paying for it.  Most landlords try to be zero sum anyways with their taxes.  By the time you deduct depreciation, interest, taxes, and other maintenance expenses then there's probably not much to gain from that 10% PM deduction.  At least from my experience.  Therefore, you're unlikely to realize that tax savings.

@Jats A., is this one property or multiple properties?  Depending on the situation, it could warrant a different PM for each type.

@Inna Piskorska, 

Certified Letter:  You can use USPS to send as certified.  They'll require the receiver to sign a receipt.   And just because they don't communicate via email doesn't mean they don't have it.  Use the Chrome extension 'Hunter' and you can see any emails connected to their domain.  Feel free to DM me with their website and I'll check it out for you.  If they only do phone, send a text.  Still better than phone because you can take screen shots.

Sweet Time:  Not surprised.  Don't wait on them tho, take control and get a contractor out there ASAP.  It's not their risk right now, it's yours.  Yes, they may still be ultimately responsible but if they know they're screwed then of course they'll drag their feet.  I would not wait for them.  Get the remediation started pronto, figure out the costs later.  Or else, the cost can get worse and worse.

Penalty:  Typical agreements will have a Termination clause which will state how to communicate the notice and penalties.  Penalties are often the remaining contract's dues.  For example, if you fire them after month 4, you'll owe them 8 months of their anticipated dues.  Real fair, I know.  Some have a flat rate or flat term (i.e. 3 months worth of dues).

Switch PM:  This is easy and allowed.  Follow your management agreement.  If the new PM is good, they'll help with that transition.  Switching PM's is common; judging by this PM's behavior, I assume it's very common with them.

@Veronica Fort, follow your Management Agreement terms exactly as they state.  

Heads up, sometimes the 30 days notice doesn't take effect until the next billing.  Similar to lease notices.  For example, if you gave it today, it could take effect March 1st with March 30th being the last day.

Your state law will provide details about the PM's requirements to transition records, funds/deposits and payments within a specific duration.  Typically 10 business days but it varies state by state.