All Forum Posts by: Leroy K. Williams

Many municipalities are intentionally difficult to work with because they want to keep speculators and buy-and-hold investors away.  City planners advocate for this sort of treatment to preserve the ratio of homeowner to renters, or planners are attempting to change the direction of investment in their city altogether.  

if you feel the inspection process is unfair, I suggest meeting with the planning department and formally introducing yourself and explain your intentions for their community.  intend to add value with your projects.  

Gregory, I get it and agree that the objective of a good PM is to grow the wealth of the investor. In my view we achieve this primarily by scaling not by recalibrating the way your PM does business.  In your example of being called into the office you were obviously working as an employee of an investor or PM however this example doesn't work well when compared to the function of an independent management "company". Companies typically have business models which of course are not set in stone, however, changing the way a company operates should not be imposed by a single client simply because it works better for them and not the management company.  We have to keep in mind that the PM is running a business that has to make a profit. 

I want to reiterate that I am not advocating for inefficiency or waste. I am suggesting that a good PM understands the pros and cons of how they operate. You hired the PM to Captain the ship, you, the investor, must surrender the helm and let them do what they do best.  

Property Managers receive this polite request for a talk all the time and we know how to read between the lines.  If your properties under management are generating steady income for you close to or even exceeding your initial expectation, yet you scan the work orders and find more fat that can be trimmed which would yield even more profit. Well that is a sign of greed.  

If a maintenance item "could" be done for less, it doesn't mean that it should be.  There are critical items such as -Plumbing, HVAC, electrical items, roof repairs, appliance repairs- that you want extremely competent professionals to handle to ensure that you the PM and owner avoid liability and to ensure you aren't shelling money out again for the same issue because you were being cheap the first time.  

As with anything you can find examples of PMs who abuse this, however, if its not blatant and excessive try your best to relax because I promise if you keep pressing that button you will be looking for a new Property Manager.  Word to the wise.  

Referrals and Fees can both be tricky business.  I have read some of the comments where some people offer referrals fees and practically take possession of the client.  Once the fee is paid in essence the realtor loses the first position to do business with the client so if additional properties are to be purchased the realtor isn't guaranteed that business. This is why I think the best reward for a referral is the promise that you will take care of the client and send them right back to the realtor for all future deals.  

If a realtor needs extra income we can arrange for the agent to place the tenant and collect the placement fee.  

 Hi Nicholas,

My team is currently helping members of the Biggerpockets community create Section 8 cash flowing properties here in Detroit. Its our area of specialty.  Send me an inbox if you would like to discuss.  

There are items in every home which will require constant maintenance, meaning yearly or every other year such as the furnace-A/C, toilets, faucets, main drains, and gutters.  You should calculate the annual maintenance for an occupied property to be 10% of the Gross income. 

As it relates to your roof, windows, doors, hardwood or vinyl flooring you should expect a serious issue to present itself every 5 years.  The best roof will suffer wind damage, doors warp etc.  

Maintenance is a fact of life in owning property. That said, a good way to reduce costs is to hire preferred vendors. Explain to your contractor that you need a reduced price and if he/she will accommodate you will always bring your business their way and you will refer everyone you know to them.  

Hey Brandon, 

Should you hire a property manager for your out of state rental?  Ask yourself this, if someone offered to handle all of the property maintenance, watch the property, place the tenant, handle rent collections, deliver rent to your bank account every month, and deal with any inspections and nuisance issues and they were asking for like $30 to $40 per week would you pay that? I am sure you would take that offer.  That is what a Property Manager brings to the table.  Its a no brainer. 

 Hi Michael,

From reading your post it seems that your project needs a heavy infusion of incentives to make it feasible.  Many of the development projects here in Detroit, even projects in areas like Corktown, Wayne State, West Village, all see their share of incentives to complete the capital stack.  

Detroit is still in a late incubation stage however man oh man are we poised for serious growth.  Detroit has so many features that make it the obvious stand out as America's next major Metropolis. 

Inbox me and lets talk. I think I can help point you in the right direction in terms of resources to help pump life into yuour project.

Pretty impressive Johnathan,

As you stated, the majority of your spending in Detroit has been turnkey properties that required very little work.  I would assume that they were already tenanted with Section 8 renters since most of the time properties that pass municipal code requirements don't necessarily meet requirements for Section 8 rentals, meaning there is typically a list of repairs generated by the Section 8 inspector that need to be addressed even if the home previously passed a city inspection.  

One of our firm's areas of focus here in Detroit is scalability and repeatability for our clients. Buying turnkey Section 8 rentals which are also positively cash flowing is wonderful, but you cannot calculate how much of that will be available at any given time. I think the real magic comes in when you develop a system that allows you to create these cash flowing rentals from the vast number of vacant homes in the inner city. Converting blight to cash flow has two rewards, the first is that you don't have to hunt for opportunity that shouldn't exist (i.e, investors selling positive cash flow which require little to no CapEx). Buying and rehabbing ensures you grow at a pace you control. The second reward is that you add value to the community by renovating eyesores. This revitalization lifts the spirit of community residents and it raises property values including your own. If you repeat this in the same geographic footprint the reward intensifies.

Hi Michelle,

Our management company specializes in Detroit Section 8 rentals. As we speak we are helping another BiggerPockets investor with their first Section 8 in Detroit. Inbox me and lets chat.