All Forum Posts by: Shane Short

Thanks everyone for your responses. This has definitely given me a more positive view on investing in real estate as this makes properties that have only been cash-flowing 100 dollars in my analysis now cash flow upwards of 5-600 dollars. Of course I can make the time, I'm currently working 60+ hours a week as an Engineer on Nights and I work another 15-20 hours a week doing Real Estate Broker work, but ideally I don't want to sell houses, I'd rather be using my license to manage my own properties and find great deals, and by managing my own properties it opens up a LOT more great deals. It just made this so much more exciting.

Thanks again!

Regards,

@John Warren Good Point! I honestly didn't think about that lol 

Good Evening/ Morning, wherever you are on the planet.

I'm currently saving for my first Multi-family investment in December. I've done a few minor flips in the past for profit, but I'm looking to get into Passive income from Rental Properties. I try to practice daily by doing 2 property analyzations. The other day, I was having a discussion with another investor about Turnkey rental properties (he is not a fan of Turnkey companies) and one thing he mentioned was about how Turnkey companies make their money, he was saying they aren't just going to do everything for you and hand you a great deal or else they would just invest themselves, which I believe to a point, but that got me thinking.

No matter how "passive" my future income may be from Real Estate, I have to be doing something. It's impossible that I'll be job free, which I didn't expect anyways, but after he said that it actually really hit me, whether it be Property Management, Deal Analysis, Management of some sort, or accounting, I have to do something or else I won't be making money.

So why aren't more people doing their Property Management? Especially those with Real Estate Licenses like me? The average charge I come across when talking to Property Management companies is 10%, and the average property I analyze at 10% comes in at about 200-300 dollars per month in Property Management, not including the one time, one month rent fee each company seems to charge. So let's say $200 per property, and I accumulate 30 doors. That's 6k a month, or ~72,000 per year that I am paying someone to manage my properties... So why aren't more people just managing their own? If you own an LLC and hate math, couldn't you just hire a booky/ assistant an hourly salary for 20 hours a week to do the math portion and contracting scheduling for all the repairs, and use your license to oversee the company? Better yet, hire a licensed assistant and they can do all the contract work as well. At 72,000 a year you could save yourself from having to accumulate another 20 properties just to make up for the loss that you're paying a property management company? Even if you're paying your assistant 40k a year to work virtually part-time and you'd still be saving 32k plus per year.

I guess I just don't see why more people aren't doing this? What are the downsides other than the obvious basic hassles of dealing with tenants? 

Thanks for all of your responses!

I like this idea a lot. We have a lot of options like that here at my agency, however, like @Derek Dombeck said, it's all about the agent and their broker. I would look for a newer agent that is hungry, they'll be more willing to take on exciting new journeys and willing to accept big new learning curves/ challenges like these, unlike a long time agent that has work come to him a lot easier might not want to bother with the challenge and extra work. 

@Andrew Greene I'm a new Real Estate Agent, so I don't know how valuable my input is on this, but I just moved to Portland, OR 3 or 4 years ago and my network is extremely small, especially when compared to home. If I were home I can think of mulitple people I could network through. Being in a new area is EXTREMELY difficult. You're starting from scratch of scratch because you don't even have a base to build on, you have to build that base. I'm not trying to be a negative nancy, I hope for my sake as well that it becomes easier, but from what I can tell now, it's going to be a journey for sure.

Personally, I'm aiming for investors at the investment meetups I go to. I'm hoping that it won't be so based on rapport like residential and more so based on good properties with a solid analysis. With commercial I also feel like it will be a little easier for you to get your footing, not only do you need less sales overall, but I feel like your networking will be more business based which I feel is a new network for anyone no matter how long they have lived in an area. It's not so much based on your uncle and aunt, or cousins, or high school friends you grew up with spreading the word, but more based on business network connections. 

These are just my personal opinions though. I wish you the best of luck! Let me know how it goes. 

Regards,

@Joe Rosenberry I would drop that broker like a bad habit. I am Part Time for now as well, and my broker still provides the equivalent as he would if I was his best broker on the job. You can find someone much better that provides support, training, Credit training for your license, Open Houses, Mentorship, etc. 

Where I'm at now my Principal Broker sits down for 2-3 hours weekly going over a 4 page checklist he has for me and answering any 3 MAJOR questions I have (to conserve time), and going over small ones as well. In addition, for a YEAR before even having my license, they provided me moral support through my licensing process, emailing me and calling me weekly, and having me come to any and all Real Estate meetings they had for the brokers so I was familiar with the industry. They provide any and all office supplies, signs, posters, documents, software, open house, mentorship, etc. 

My point here is that you aren't being taken care of the way you should be. I don't personally know anyone in your area, but you deserve better.

I wish you the best of luck man!

Regards,

Hello everyone, 

I know this is an old post, but using the fantastic questions from above, I put together a little template I've been sending to Turnkey companies as a questionnaire before proceeding to fly to meet them and look at properties, etc.

So for future members reading this, feel free to use the questions below:

1. What are your management fees?

2. Is your company licensed?

3. How long have you been in business?

4. What price ranges do you sell in and why?

5. What can I expect after the sale?

6. What type of renovation do you do to the homes?

7. Vacancy rates for properties under management?

8. How long do your tenants stay in the property (average)?

9. Average vacancy time (how long does it take you to fill a vacant home)?

10. Lease up costs? (for when I do have a vacancy).

11. Do you own all facets of the operation?

12. Do you offer rental or maintenance guarantees? Year three?

13. Do you defer maintenance?

14. How many properties do you manage?

15. Do you own the properties you sell?

16. What percentage of expiring leases will renew their lease each month?

17. What is the average number of days a property is vacant between tenants - Move out to move in?

18. What percentage of billed rent do you collect each month?

19. What is the cost of an average repair bill after move-out?

20. What percentage of collected rent goes to yearly maintenance on average?

21. How do you determine the Rental amounts in the Spreadsheet? Are they based on comps within the local area?

22. What is your average # of months occupancy per property?

23. What programs do you have in place to keep tenants happy?

24. What customer service programs do you have in place? Will you call me every month with an update on my portfolio? How many team members are dedicated solely to providing service to your clients?

25. What has been your biggest mistake as an investor? How do you protect your clients from making the same mistakes? 

Some are kind of repeated, but I like to see if their answers change so I know if they are BS'ing. 

Regards,

Good evening everyone,

I'm wondering if anyone agents here have used the BiggerPockets 'Premium' membership to generate leads? Is it worth the money, and for what reason?

Regards,

@Ali Boone I chose those two areas because I live in Portland now, and I'm from Detroit Metro/ Northern Michigan and frequently visit. I figured it would be nice to have properties in areas I'm regularly in so I can check up easier.

@Keyonte Summers I grew up between Novi/Southfield area and Northern Michigan (Back and forth all year). I haven't spent TONS of time in downtown Detroit... which I think is the same for most people from Metro lol, but I go downtown from time to time. When I was a fabricator my main clients/jobs were in downtown Detroit, Inkster, Wayne, Livonia, Southfield, Dearborn, Westland etc. since that's where we were based out of, and I still spend about a month every year in Livonia and Detroit Metro areas. I'm not particularly looking to invest just in Detroit City limits. When I say Detroit I mean Metro, all of the surrounding. 

@Lane Kawaoka @Melissa Nash I will definitely look into those areas. Melissa, I am sending you a DM now. 

@Everyone, I appreciate all of your input! I'm very grateful to have a community like this that I can ask and receive answers so quickly! Thank you so much!

Regards,

Hello everyone, I'm in search of good Turnkey rental companies that sell properties in Portland, OR and Detroit, MI. Preferably referrals for companies you've personally worked with and have a good history with. 

Regards,