All Forum Posts by: Steve Rozenberg

Congrats on the baby!!

By now you are realizing that if you are serious about growing your real estate portfolio and achieving your goals you really do need to have a team, otherwise you may end up running yourself into the ground.

Something that is very important to remember is that the people you start out with on your team will most likely not be the people you end up with.

Some people may not agree with your business model or concept of the vision of where you want to go and that is perfectly ok.

Sometimes people will phase into and out of jobs or careers and to be honest sometimes the skill sets needed from certain roles will change at the different levels you will be operating at along your journey.

Remember the person you are today, and the people you are around will most likely not be the people you are around when you become your future self of who you want to become.

It is always important to assess and reassess the people on your team as well as the people in your life.

People on a team will follow a leader, and they will stay with that leader as long as he or she has a vision that they can see, one that relate to, most importantly one that will invigorate them to want to be a part of because they believe in it. If not then they may be a sub-par team mate or just change teams to be lead by someone else.

I see many investors hire property managers, contractors, realtors etc.. and they only think about how it will help themselves win and achieve their own goals, this makes it a very one sided operation. Now I understand that you are paying them for a service, but money alone will not create long term partnerships.

When a person is constantly going through different members on their team I know several things are going on.

Either it is not a win / win situation for everyone involved or the person is not being a leader and inspiring people with their vision and communicating it with them correctly.

Now don't get me wrong, I am also a realist and believe in capitalism. Just because I am talking about leadership, vision and communication does not mean I do not understand that whoever you use as a part of your team needs to be compensated for their services.

Their business has needs, such as expenses, profit margins and goals of their own that need to be taken care of and these are their priority.

You have no control of how they run their business and how to ensure they have a successful model.

Many times I have seen smaller business owners which is what you will normally be working with especially in the beginning get either lazy or greedy when they get comfortable with getting steady flow of income from a client.

This makes absolutely no sense to me that they decide to overcharge their most loyal client, this is the exact opposite of having a team mentality and concept.

The only way you can potentially mitigate against this from happening is to have an initial expectation conversation with them, Let them know what you want and expect out of the business relationship and as well as finding out what they want and expect out of it as well for them.

This is also the time and place of letting them know your policies and procedures of how you operate, when you will be paying them, as well as what is considered acceptable grade work and what is not.

One of the most important things for you to discuss with them is what your plans are for growth and how they fit into those plans.

If after this conversation you realize this may not be the perfect fit for your team you are better off waiting to find the person or company that is a fit.

It can be more stressful and expensive fixing what someone else messed up then just finding the right person the first time.

This is why you do a lot of this work in the beginning before you own a bunch of houses and have a huge problem on your hands with bad team members or subpar work and service.

One of the challenges when you are building something the first time is that you do not know what to look for or what questions to ask.

Nor do you know what your needs are going to be until you actually start needing them.

Remember the more you plan, prepare, execute and evaluate the easier it will be to notice if someone is not being the right fit for your business and should no longer be on your team.

Test and measure along with key metrics aligned with your strategy and goals are key for long term success.

I like how you have an end goal (Destination), I think you need to be more specific in the details.. THe more detailed you are the better so that you can reach a specific goal. For example 20 properties paid off, earning $20,000 per/month cashflow, worth $2 million in Assets in 10 years.

Then you work it backwards, meaning you have to have the properties purchased in 5 years so that you can have them paid off in the following 5 years. Meaning that you have to purchase 4 properties per year that will be set up to give you the cashflow after debt paydown will give you what the expected return will be.

The next question is, can you buy 4 properties per year (1 per quarter) for the next 5 years? 

If the answer is no then you have to change your strategy, meaning find a new city that can supply those types of returns. Or you have to change the end goal and adjust your plan.

Congrats on taking the step towards wealth in real estate. My suggestion is that you take the time to figure this out. As it is the most vital part to your success. Many people (Myself included) think that they should just start and figure it out on the way. This is a for sure recipe for disaster (I know first hand myself)

Really think about why you are investing and what you want your life to look like as a result of owning real estate. What is your grand horizon and retirement look like... Finding that end goal and life you want to have is key. 

Then you figure out what that actual number is attached to it. A simple example is in 20 years I want to own 20 million in Assets, Giving cashflow of $20,000 per month, owning 20 properties free and clear.

Now you have a number, a specific return and time.. These are called SMART goals.

Once you have these then you create the strategy to get you to that goal, so whenever you are looking at a property this will help you to determine if this is taking you closer to your goal or further away. 

You should always be asking that question when doing something like this.

BP has great education and connections here, take the time with focus and intention to learn this first in my opinion.

First thing is you Need to be much more specific it’s going to be what’s called a smart goal.

Need to be much more specific it’s going to be what’s called a smart goal.

I would suggest you put an actual time specific date on it a certain amount of revenue certain amount of asset holdings etc.

For example you could say in 20 years you are going to have $20 million in assets, 20,000 per month in cash flow, only 20 properties out right

now you have a time associated with it ,you have a specific goal and have a specific amount of revenue you want to make. Now when you are looking at properties and looking at strategies do you want to make sure that they aligned you to your end goal

@Ashley Budyak

Make sure you take the time to really define your end goal as to why you were getting involved in real estate.

Once you know what your end goal is then you create the strategy to get you to that goal

lastly you decide what tactic you were going to use to get there.

many people just start trying to buy properties only to find out that these are not aligned with any goal and there’s no strategy and that’s why most people I think are not successful in real estate for the long term

@Eran Magen

It is very important that you make sure you take the time to interview and have candid conversations with a PM company.

Let them know your strategy, your goals and what your business plan is to ensure that your business plan aligns with theirs and you can both work towards the same goal. If they are not aligned then simply keep looking till you find one that is.

I used to own a company that managed almost 1,000 single family homes before I sold it.

Below are some questions I would think would be a good starting point for you to see who really treats their company like a business or a hobby.

Questions to Ask prospective management companies

1. What are your average days on market for vacant homes?

2. What is your average rent amount for all properties managed?

3. What is your average work order cost for the owner?

4. What is your average make ready cost for the owner?

5. Are all my invoices uploaded to my owner portal?

6. How do you advertise your vacant units?

7. Do I receive video of my pre and post make ready?

8. Do you have a setup fee?

9. Do you upcharge on maintenance?

10. When do you make owner payments? How often?

11. Are you a Certified Property Manager?

12. Are you a member of NARPM?

13. What is your Guarantee?

14. Do you provide move in and move out reports

15. How many pictures do you take of the property prior to tenant moves in and after the tenant moves out

16. Do you get weekly reports when the property is vacant what prospective tenants are saying about your home

17. Do you provide monthly newsletters to your tenants

18. Do you hold investor education classes to help me become a better investor

19. Do you have single point portfolio based management services?

20. How many properties do the owners actually own themselves?

21. What do you do to ensure that the tenant is responsible for security deposit disputes since that is the largest reason for owner lawsuits

22. How familiar are you with the newly changed laws that can affect you the owner if they are not used correctly?

@Willard Clark

Honestly what I would tell you to do is you need to do nothing first.

What I mean by that is before you spend any money or buy any properties or do anything you need to make sure that you’re educated.

I would first focus on what my goals are and I would focus on what my strategy is going to be to achieve that goal and make sure I knew that crystal clear and I knew how I was going to achieve that

meaning the strategy and what types of properties which are the tactics are going to help you get there

Just because somebody says this area is a great area or a hot market does not necessarily mean it’s a hot market for you based on your goals and based on your strategy

it could actually be something that makes you go bankrupt if you have different goals then this market provides

Slow down to speed up And educate yourself as much as possible before you do anything

I would suggest you take in all the information, learn the differences as much as you can. Then you need to create your specific goals that are set for you. They need to be a SMART goal and most important you have a to have a date associated with it.

Once you know what your goals are and what you want as a end result of owning real estate, then you create your strategy to get you there (Buy and Hold, Flipping, Wholesaling, Notes etc..._ you create non negotiables associated with the numbers you need to make sure you are on the right strategy that is taking you to the goal.

Lastly once you have the end goal and the strategy you decide on the tactic. This is where you determine if it is SF or MF as the vehicle that will get you to the strategy to achieve your goals.

Both SF and MF have pluses and minuses, you have to make sure that is part of your strategy to take you to your goal.

The reality is that when you own real estate you own a business, that business has processes, procedures and structure.

Part of that are systems wrapped around those tactics so that your are not dealing with the actual property if you are truly running it like a business it wont matter because owning real estate is a purely mathematical equation based on the numbers not on emotions.

Just my opinion for what its worth.

Hi @Joshua T Poulin

First sorry for your loss and I commend you for all that you do and trying to do. There is never a road map in life and all the things that get thrown at us. I can understand and empathize with what your going through. The industry you are in is a very tough one, myself coming from the airline pilot industry as being so cyclical I and appreciate many of the things you are going thru, especially with the downturn that my industry is currently experiencing.

If I were to give you some advice I would suggest that you first define your end goal which is seems like you have already, Now you need to make that a SMART Goal with and end date attached to it and then actionable steps that you can take on a daily, weekly, monthly , yearly track. This is a life long journey and you need to take the planning of this as serious if not the MOST serious part of the process. 
Over the past 20 years I have seen many people fail due to lack of planning and execution, I know because I was one of them. I never had a defined goal and that almost made me go bankrupt owning 35 of the wrong properties.

As for the things you hear or the what you think, I believe those are just stories you are hearing in your head, To me that is not reality. The fact is there are deals everyday that you probably see or drive by. THe challenge is that unless you have clearly defined goals and a strategy defined to take you to that goal, You will NEVER see these deals.

Do not let the negative self talk convince you that the strategy you need does not exist. It is there just like it is there for the thousands of other investors on these forums. The difference of the ones that are successful and the ones that are not is Action and they do not let the negative self talk clutter their minds with all the WHAT IF scenarios of all the bad things that could happen.

But in reality never do

Not sure if this helps but just my 2 cents of opinion. 

Hang in there and think of the generational wealth you are creating for you children that you will be passing down one day.

My son bought his first rental property at 14 years old, You can do it but take the time to create your goals and strategy.

Good Luck!!

Thanks @Kevin Leahy . 

I think this is a strategy like any other strategy that people use. As long as this strategy is thought out and it aligns with your end goal and will help take you to the final outcome you want it to then yes it makes sense. But remember that this strategy is a new business model and you want to make sure that you understand and have the ability (Time and Money) to operate in any new type of business model. 

Many people I have seen over the years buy the property (The tactic), then figure out how to use it best (The Strategy), and never once think to see if it really is taking them to THIER desired outcome (Goal)

To me this is completely backwards.. Goal first, then Strategy, and Tactic last 

See the success mentally first and know the plan. Purchase the properties that align and take you close to the goal not further away