All Forum Posts by: Sam Valme

Hey @Zafer Khourdaji! Welcome to BP! This is a great place to get started with your investing knowledge! Be sure to check with your local REI Groups and Podcasts as well. Starting on the path to financial freedom as earlier as possible is awesome!

If you have any questions around Property Management I'd be happy to help!

Good luck!

Very interesting! We'll have to connect. This is one of the missing links we have to get down our here. Glad to know there are some progressive companies out there willing to put in the work! 

We've actually been advised by NVAR to have all deposits held by the owner. Now this raises the issue of potential commingling or misappropriation of funds. But it completely eliminates this issue. This is what NVAR recommended to my Broker, my Broker passed it to us, Legal counsel agreed. So that's what we do. 

Also, as a small side note we got a statistic that 70% of all real estate related legal action in VA in 2015 were around securities and EMD.

But to answer your question. If that did happen and let's say the PM company actually stole the money. They didn't use escrow or their brokers accounts or some other recoverable third party. In VA at least, there is a fund established to compensate such loses to individuals. They essential strip the offending party of their license as apart of this process. Your state may have something similar. I'm also not 100% of the rules when a bankruptcy is involed either. When in doubt, as an attonrny!

Good Luck!

Hello @Cassandra Staffieri! Its funny you mention Airbnb leading you to dabble in property management. That's one of the strategies we're developing here in Northern VA. There is a ton of money on the table from short term renters in the contract arena around here. I'd be interested to hear how your company handles the coorination of the cleaning services as well.

Hey @Jason Stephens, If you'll be keeping your full time. Then it sounds like you're targeting some passive buy and hold investments. Flipping out of state with no boots on the ground or at-least a trusted resources to walk the project can be difficult to manage. Believe it or not there are some brokerages that specialize in purchasing and managing for buyers out of state. We run that very ship here in VA :)

At the end of the day it comes down to a level of comfort. Who ever you end up working with. They need to know the numbers cold. Especially if you don't have a previous relationship and they're out of state. They should be able to provide you a report with options in their area based on your criteria and then explain how they got it there numbers. Then take that report and have a third party validate it. 

In the grand scheme of things, obtaining an extra $7,000 per month is extremely obtainable. Depending how risk averse you are, it doesn't have to be a decade project either :)

Good luck!

Hey @Steve Lee have you considered working with an Agent? One that specializes in purchasing for investors.

Having 0 visibility into that market I'd have to say that those numbers don't look promising for rental potential. At face value I'd suggest continuing to rent of the year. However, most situations aren't that black and white. 

If you're set on purchasing something for the equity pay down and to have potential rental. Work with an agent who specializes in purchasing for investors. Depending on your reserves for initial construction. You may be able to swing a light fixer upper to tend with. The work going in might allow you to get better numbers when the next year is up. There is an opportunity. Just gotta find it. 

Good Luck!

@George Gipson III, I think the various messages in this thread already have driven the point. But I'll say it again. To say that "Rental Properties are overrated" is an extremely bold statement. One that should be taken with the smallest cosmic grain of salt. That's an opinion. As Investors we want facts. 

Your market is going to make the greatest decision on what method you choose. The truth behind being an investors is recognizing the opportunity in any situation. There is almost no situation where a piece of real estate cannot be monetized to a higher and better use. Once you've found an opportunity type you're good at recognizing and converting then master it! Be it Buy and Hold or Flipping. 

Good Luck!

Hey @Steven Paul, 3 questions for you.

#1 What are you going to school for/Do you plan on getting into Real Estate full time in some way?

#2 How did you make the initial $4,000?

#3 How long do you plan on staying in the area?

Hey @Joshua Sclafani,  

#1 Not to plug the site or anything but... The Book on Managing Rental Properties by @Brandon Turner is a great place to start. We used it as the foundation of our Property Management company. Without giving straight up legal advice, they cover pretty much everything there is to know in this business. 

#2 After you get the foundation. Lawyer up. Transition your thinking from "If I get sued when this happens... " to "When I get sued when this happens..." and then add "... What will I do?". We unfortunately live in a very litigious time. Every professional tenant had their first victim. Don't be surprised and have a plan if you end up being on that side of the fence. The best thing you can have in place is a bullet proof lease and a legal team with teeth. 

#3 Be firm but fair. Another take away from Brandon & Heather's book. If you stick to your guns and follow your own rules then in my opinion (Assuming you have the systems in place and the time) you really don't need  PM company to manage your properties. I'm sure some famous PM just rolled in their grave. But honestly, your paying for the service of someone who has already gone through the hopes in setting these systems up for you. It just takes time. Providing your willing and able to spend it and maintain capex schedules, maintenance requests, rent collection, eviction processing, etc. Then you'll be just fine! :) 

Good luck! 

@Craig Moore, We could have hours of conversation around this topic. As a newer Property Management Company ourselves. Establishing pricing and fee structures should be top of mind. I agree with @Tom V., being new and coming in with the lowest price might push some folks away. We approach our fees as a solution when speaking with clients. If the first thing a potential landlord wants to know is our fee percentage and that's all they're interested in. Then I don't see the relationship going far.

But if I can start a conversation with them and begin to understand the "why" behind why they reached out for our services then we can start to an agreement on where our company might fit. For example:

Landlord A - I want to transfer my 3 properties to a PM that actually answers the phone and responds to my calls. (To keep the math simple) They all have mortgage of $1200, Tenant pays utilities and currently rent for $1800. 

In this scenario I know there are $1800 ($600*3) available in my Landlords potential cash-flow. In the back of my head I know I want at least $200 per door. So now I have to get an idea about the property and maintenance / capex schedule to estimate if they're still cash flowing.

From there it becomes fact finding and building a relationship. At the end of the day. The numbers may only workout so that there is $100 per door realistically on the table. Less $50 to my broker per door per month then that's $150 in my pocket. At first glance some companies might say "no" just for that fact. But there might be more to the story. Does this personal carry a lot of influence in the REI community? Do they have more potential properties if they like their experience with these?

There are just far too many scenarios in my opinion to have a blanket "This is our percentage. Take it or leave it." So older companies may disagree. But to me, pricing, should be a part of you coming to a solution for the client. But I digress... 

TL/DL Version- 
We don't charge for most of these but they are common in my area. (Northern VA)

Leasing Fees - Typically one months rent. 
Up-charges to Maintenance - Typically seen if its in-house.
Project Coordination Fees- Having folks oversee a renovation beyond a normal repair. 
Late Fees- Charged to Tenant
Programs... Eviction Protection, Rent Protection, etc- Charged to Landlord. Be very careful here...
Tenant Application Administration Fees- Charged to Potential tenants
Turnover Fees- Charged to Tenant out of security deposit typically.