All Forum Posts by: Michael Rossi

An average would be about 20%.

Jerry,

There are LOTS of ways to buy rentals besides simply going to the bank for the money - owner financing, lease option, land contract, sub-2, etc. What I would NOT do is refinance the property you have, thereby destroying the cash flow you have.

There is NOTHING better! Today was Monday here in Ohio also, but it was raining so I simply took the day off. I'm planning to work on my rentals tomorrow - but it might rain then also and I might be motivated to take another day off! Unless you love your job, it's definitely worth a few years of very hard work to get out of the rat race! Come on in - the water's fine!

AMEN Andy! That's EXACTLY what I have done. I have several dozen rentals and do virtually all the management and maintenance myself. I make a nice living and typically work 3-4 hours a day, 3-4 days a week. I didn't work at all today (because it was rainy this morning and I just wasn't motivated). I consider myself to be semi-retired and have no intention of ever changing that. I LOVE IT!

That won't happen to you overnight. You'll have to work like a dog for a few years to get to that point, but it is definitely worth it.

To answer your original question, YES, doing the management and maintenance yourself will lessen the 50% number for expenses. More accurately, you are EARNING the management and maintenance fees and the 50% expense number stays the same.

Good Luck,

Mike

Rent is due on the 1st and late after 5pm on the 4th. I do it that way because some government checks to tenants don't arrive until the 3rd. I post eviction notices on the morning of the 5th.

As for when my bills are due - EVERYDAY! When you have dozens of rentals, you get bills in the mail literally everyday. I usually pay bills about once a week.

Be sure to get a LANDLORD POLICY for your rentals. Homeowner's insurance will not pay if you have a loss in a rental.

Joe,

The biggest mistake YOU can make is to pay too much for your rentals. See the 50% Rule sticky thread at the top of this forum. If you did that right and STRICTLY enforce your lease (promptly evicting late pays), then you should do fine!

Good Luck,

Mike

That's more than double the number of people that is really required, although it's pretty typical for an apartment complex of that size.

The reasons that you have so many people working for the apartment complex are:

1. Inefficiency - many large apartment complexes use complex computer programs for managing the property. The PMs end up doing a RIDICULOUS amount of unnecessary computer "work" that adds absolutely nothing to the bottom line.

2. Employees don't work at the same pace as owners.

3. As the number of employees increases over 1, the amount of screwing around goes up.

IMO, Jeff is absolutely right - managing 150 units is a full time job for 1 person.



Why would he have to work weekends or any other time when he didn't want to work? That's one of the best things about the rental business - being able to set your own schedule. The ONLY reason that I can think of to work when you don't want to is an emergency - like a water line break; heating and cooling emergency when the outside temperature is extreme; or a refrigerator going out. These things happen VERY infrequently - if you keep your property properly maintained.

I hear people frequently say that they don't want to manage their own property because they dread the 3 am call that a water line has broken (or some other crisis). In the 7 years that I've been in business, I've NEVER had to go fix something in the middle of the night - and that is with several dozen rentals. The 3am (or weekend) emergency is more of an urban legend than reality! Furthermore, if you did have that elusive 3am or weekend emergency call, you always have the option of simply calling a plumber to fix the dreaded water line break or calling the HVAC contractor to fix that furnace/air conditioner.

The ONLY way to stop having problems with the property manager is to manage the property yourself!

I would go one step further and say DON'T BANK WITH THESE GIANT BANKS! You can't build a relationship with a giant machine! You can't negotiate with a giant machine - unless you're another giant machine.

Find a SMALL, local bank and build a relationship with them. You'll get a LOT better service.

I agree with Jon. If this tenant has resided with you for many years and has been a good tenant AND your rental market is weak, I would probably grant the request. If this isn't a good tenant; hasn't been with you a long time; or your rental market is good - then I would say no.

How is your rental market?

The rental market here in Ohio is still VERY GOOD! I hadn't had a SFH available for rent in many months. Then, this month I had a sudden move out (without notice) and an eviction. I rented the "sudden move out" before their belongings were even out and I have people waiting for the evicted scum to be set out (in the next few days). I'm raising rents and will only do month-to-month leases - so that I can rapidly raise rents as hyper-inflation and costs rapidly rise during the coming economic crisis.