All Forum Posts by: Ryan Parnow

@Gita Faust How do I get the 35% discount?

Thanks in advance.

Hit me up when you are ready to expand to the Cedar Rapids area.

In Iowa, the method is that you bid down the percentage of ownership if you end up foreclosing at the end of the redemption period.  One auction I was at, everything was bid down to 1%.  What is the thinking behind that?  Do you get back to full ownership once you pay the follow up taxes?  Does this seem to be different in different counties?

Welcome. There is a good REIA in Cedar Rapids that meets on the 3rd Tuesday every month. Lots of interesting topics.

Remember that the more accounts you break things out into, the more difficult it gets to manage and keep track of.  Some of my thoughts:

- what is the deferred maintenance account for?

- I would get rid of the appliances/extra parts account.  Are you planning on buying appliances and parts in advance and then when you install them in a house, make another journal entry for the various parts?  That seems like a lot of extra work

- You are missing late fee income acct. 

- I would include bank fees (bounced checks, wire fees, certified checks), professional fees (think CPA, lawyer, etc),  and License fees as an expense accts. 

Ask the lender to report your payment history to the credit Bureau. 

@Katrina M. I thought it was fun to think about as well.  I might also try and propose a plan to the property manager if I can come up with something that makes sense.  

I like the bonuses for performing above a certain level.  What do you think those levels should be?  What about reduced fees for not meeting the goal? 

I am not sure how I feel about minimizing repairs and maintenance.  I would like them to do the appropriate maintenance and repairs and do them cost effectively.  I think too often a tenant will call about a garbage disposal that doesnt work and instead of pushing the button on the bottom and unjamming the disposal, they simply replace it. 

What about some of these?

Bonus for filling vacancy in a certain time period. 1 week? Penalty for going over a month.

Lease renewals same fee for filling vacancy (put the focus on tenant retention).

Education program for tenants to teach them how to change batteries in thermostat, flip breakers, provide plungers, reset GFCIs.....(anything else?) to reduce maintenance calls

Scheduled preventative maintenance program

Checklists for move in/move out/new properties with timelines.

Obviously the goal is to maximize the return on the property.  Having a good management team is critical.  My goal isnt to pay my manager less, I would actually prefer to pay them more as the result of good performance and reduction of costs.  They should be paid well for a job well done as we all know how hard it can be to find good managers.   

The rent you "pay" is not considered income.

I had initially done the property management my self until my full time job required that I move about 1.5 hours away from my properties and at that point I decided to hire it out.  I am back in town now, but I figured that if I wanted to continue to grow, I needed to outsource the work since I still work a full time job.

I agree that 6.5% is inexpensive.  I was actually surprised that it was that low, especially considering the size of the company that I was working with.  I also agree that a property manager isnt going to have an owners mentality unless I can think of a way that their compensation structure aligns with my goals and interests.  How could you design a compensation plan to do that?  

I am in discussions with a new property manager and have the opportunity to negotiate a fee structure.  I am currently paying a flat 6.5% fee, but haven't been happy with the results.  I was recently approached by a smaller property management company that seems to be pretty flexible in their fee structure.  That got me asking the question of how can I better align the property managers fees with my interests?

My goal for my properties are to maximize the return on my investment by finding quality long term tenants at close to market rent, minimizing turn around time during vacancies, and doing repairs and preventative maintenance in a cost effective manner.   

How could an owner best set the fee structure so that a property manager that performs well in these areas is better compensated and possibly paid less when they dont?

Has anyone considered bonuses or penalties based on tenant surveys?  Set the pay structure for filling vacancies based on the time it takes to get a new lease?  Set a higher fee for lease renewals? No leasing fee if the previous tenant leaves before the lease is up?  

I am not trying to go cheap on the property manager.  I understand the impact that they can have on my investment and want to make sure that they are paid well when they perform well.  

Any ideas?