All Forum Posts by: Rob B.

We tried AppFolio, Buildium and Propertyware at different phases in our company. We have found AppFolio to be our preference as it's very intuitive and doesn't require much training to start using. While the cost does add up, I can't imagine running my business without a property management software like this. Biggest time savers are online payments, bookkeeping, owner payments, tenant portal and advertising. Having all of those in one place is invaluable to us. 

We have been using it with our company, approx 250 rentals. It's a nice safety net, but I wouldn't say it's game changing. The main advantage to me is being able to honestly tell owners and tenants that we have a 24 hour maintenance line for emergencies. 

I sold a property in Lancaster, CA back in November. I made the mistake of not switching over the utilities. Then I received a bill from the Utility company for December and part of January. We reached out to the buyer's agent and the buyer has refused to respond. The basic response I got from my agent and theirs was "Good Luck, try small claims court." The problem is that I live in Northern California and I don't want to drive down to LA County just to file for a $600 Utility bill, especially when I'll have to go back for court. Does anyone have any experience with owed Utilities and filing small claims court out of the area? I know some people will say that I should just let it go since it's not a large amount of money, but at this point, people have been trying to screw me over so much lately that it's more the principle of the thing than the money. 

Hi David,

I know this is a little delayed, but how are things going with your goals? Santa Clara is a nice area, but it's a difficult place to get started as an investor. San Jose or parts of the East Bay have potential. I own a small Property Management company in the South Bay, so I see the returns that people get for the equity that they have in their property. 

Good luck. 

Hi Mark,

I grew up in Menlo Park, off of Valparaiso and Elder, so I know the area well. To be honest, I wouldn't even bother trying to invest in Palo Alto and Menlo Park. I own a property management company that goes from San Jose all the way up to Menlo Park, and I can tell you that the rate of return is going to be abysmal. You should look for something in the San Jose area. 

4-plexes are a great way to go, especially if you are willing to live in one unit for a year or so in the beginning. There are also some deals in Hayward/San Leandro/CV area. I love living in the Peninsula, but it's not a place I would ever invest. 

Rob

I've got a 16 unit building in El Dorado Park, AKA Sin City. It's been a less than profitable year, mainly because of some bad property management companies, but the PF is still better than the Bay Area.

For anyone interested, I've been working with James Hendricks and Associates for about three months now. I can't say that I'm really happy with them. It's been three months and they haven't filled any of the units, so the building is still sitting at 9 Occupied, 7 Vacant. They've spent a lot of my money on repairs and they claim that the reason they haven't filled any of them is because the units weren't rent ready and the building needed work, but I have a hard time accepting that. They've spent about $15,000 on repairs in three months, which I understand and I want it to be a good building, I just have a hard time believing that they couldn't have filled a single unit in this time. 

I would also say beware of their contract. They structure it so that it renews for another year unless you cancel within a very narrow timeframe (I think 90 day notice). They also give themselves the exclusive right to sell your property while it's under management, which is complete crap. Since the contract keeps renewing, unless I decide to sell at the right time or wait a year to sell, I would have had to let them list it. Thankfully I read the fine print and told them to take it out or I wasn't signing it, but I found it to be a deceptive business practice. 

Yelp is a useful tool for screening PM Candidates once you have them. Just keep in mind that sometimes tenants get upset over things when the PM company is doing the right thing or they try to blackmail the PM company into giving them their full deposit back even if it's not warranted. Check for owners reviews over tenants. 

In regards to that sentiment, I hear it a lot from people, but I have yet to experience a lot of late night calls. We have set good boundaries with out tenants and it's very rare to have to deal with those kinds of issues. A lot of it is preventative maintenance on the property and teaching owners to put money in when necessary. 

The other side of it is that I hired an assistant three months ago and put him in charge of all of the tenant issues, so that made things even easier. I don't have to work either for the same reason as you, John, but I genuinely enjoy the work. My clients are good professionals and I enjoy our business dealings. I also like the fact that it makes me an unofficial financial advisor. Just the other day I met with a client and his father who needed advice on whether to rent or sell to provide cash flow for his father as he was going into a senior living facility. It's not for everyone, but I enjoy it and I would recommend it for someone like minded. 

 I've also gotten as many listing from my PM clients as I got from any other form of advertising as an agent. And it helps me retain clients after I help them buy a property which increase the chances of them listing with me in a few years. And not to brag, but I make more money from Property Management than I ever did as an agent. A good month will clear me $10K, and that's after paying my assistant a good salary. If I did it all myself, I could probably take home $15K/Mo, but I'd rather make $10K working 20 hours per week than $15K working 60. 

Ironically, I used to own a cleaning company in southern California and for me, it was a lot more stressful. Just not my thing I guess. 

I recently purchased a property management company here in San Jose. It has about 100 contracts, but it's the Bay Area, so the revenue is a lot higher than other parts of the country. Gross Management Fees are about $18,000/Mo. Commission split with my Broker is hard, but it caps at about $40,000/Year and it also means that my real estate transactions aren't split because I've already capped. 

One thing that's nice is that it's consistent and steady. There's a decent amount of turnover of clients selling property or taking over management when things have been stable for a long time, but we keep pretty steady. In Real Estate, there are dry spells when there are no listings, but with PM, you know more or less what's coming in each month. 

It's also delegateable. I hired an assistant to handle all of the tenant and maintenance issues, which is about 80% of the work, leaving me to deal with the owners and keeping an eye on the big picture. He costs me about $6,000/Mo, but paying 1/3 of my revenue for 4/5 of my work is a good trade. Also, it means there's room to grow. When it was just me, I was practically overrun and I had to turn away new clients because I couldn't handle them. 

As an agent, it's also nice because you have a good shot at the listings when your clients do sell.