All Forum Posts by: Stewart Guthrie

Hello Yuri,

I have a referral to a great PM in the Jacksonville area.  

Gene Bennett is a fellow RPM franchisee and sort of a legend within NARPM for the years of training he has provided nationally.  

It has offices in Orlando, Jacksonville and Ocala.  

Good luck

+1 on Andrew's advice.

As you build out your network/team, a local property manager that knows your philosophy and preferences is going to be important.  

Depending on the market, they may be able to help prospective tenants with leasing services, (if they use the MLS in that region for rental listings, Sacramento doesn't).

On the owner/investor side, they are likely in contact with contractors, investor clients and sales agents that work with investors that will be likely outlets for the deals you find.  

The PM may or may not directly benefit from connecting you with part of his network, (though he may be an investor/flipper/B&H himself), but Zig Ziglar was right when he said, "You can get everything in life you want if you will just help enough other people get what they want."

If you're interested, I can connect you with a good friend and property management colleague in the Indianapolis market.

Good luck.

Hello @Jim Wollmer,

I have a property management colleague that operates in Milwaukee and runs a very good business.  Let me know and I will forward his contact information to you.

We deal with a number of investors/agents where we have developed a relationship that allows us to speak VERY freely about potential investment units.  

The upside for you is that there is no incentive to "polish a turd", (sorry, there really isn't a better way to put it).  If a property is going to be tough to manage due to it's condition or location, a property manger will say so, (that doesn't necessarily mean they won't manage it, they will make sure everyone's eyes are wide open).  This is especially important in the "D" class properties that you opened the conversation with.  The spreadsheet always looks very attractive at that end of the market, but as another poster put it, you're going to develop some thick skin. 

I would think that most property managers can get units rehabbed for you, (we do), but how much they can do and what it's gong to cost depends to a great degree on your local statutes.  In CA for instance, any job over $500 is supposed to be performed by a licensed contractor, which inflates pricing for relatively simple repairs, whereas some states have much higher limits opening the work up to the much more competitive "handyman", market.

Good luck.

Welcome to BP Robbin,

Lots of great advice already.

Depending on your plans and financial position, you might want to build out a "general" network through attending local Chamber Networking events in addition to the RE events.

They can broaden your reach and may offer you a path to generate some traditional income while your build momentum in your real estate business: www.thechamberlink.com is a great clearing house for all the local chamber events you can attend based on your criteria. I don't have a dog in that fight, I've just found that keeping track of all the potential mixers and events you could possible attend in a given area is laughably difficult. Getting a digest emailed to me a few times a month is much easier.

Don't forget to get involved in your local veteran's networking and business organizations as well. You paid the price of admission, use them: The National Marine Corps Business Network, (www.nmcbn.com), is one I belong to, (I am also one of Uncle Sam's Misguided Children), and @Stephen Haynes belongs to a local chapter of the Semper Fi Association.

Looking forward to hearing about your progress, ping me if you'd like to get coffee; I'm buying. Or we can invite the Air Forcc, (@Zachary A.), and make them buy, they always have money... 

@Mansoor Fazel

Congratulations, and compliments on a great choice.  IMHO the sweet spot in the single family market is the four bedroom, and there is certainly a level of "frantic" in prospective renters right now.  

So many folks are exiting the SFH rental market, (either they never really wanted to be in it in the first place and got stuck, or they are investors and they're taking their profits elsewhere), and most of those homes aren't being returned to the rental inventory. It's a good time to be a landlord in the Sacramento market.

@Zachary A.,

Welcome to BP.  

In terms of getting your license, (especially if you are still on active duty and can't join a brokerage and get their training), I recommend Allied Schools.  We're a property manager in the region, and I think that every licensed person in our office obtained their license, (including our brokerage license), through Allied.  No skin in the game, I've just had good experiences with them.

Happy to discuss the market from a rental/investor's standpoint if that's of any interest to you, but I can summarize by saying that single family rentals throughout the Sacramento MSA are very hot right now and south Placer county is the hottest of all.  Basically that translates to the same, higher acquisition costs discussed earlier.

Good luck and thank you for your service, (sorry, can't resist), fly-boy.  This is coming from an old jarhead so you'll understand that it is my solemn duty to give you grief.  

Hello Ian,

I am a property manager in the Sacramento region so if you're looking for one of those...

I have recommendations for investor agents and attorneys.  We don't get involved with the sales side.

@Ellie Hanson, Regarding not letting the tenant know that you're the owner.  

We had the same idea and tried it every time we had a similar situation for a couple years, (it doesn't happen that often). 

Our experience is that the tenants always find out, which certainly isn't a legal problem, but the feedback we received from tenants and owners after the fact is that it made the relationship a little weird once the cat was out of the bag, ("Why did they lie?"), and most agreed that it would have been better to establish firm ground rules up front, developed a little thicker skin, (which is good for everyone), and be firm that any questions or concerns need to be directed to the property management company, (if Duke decides to engage a management company for ongoing service, which is by no means a slam dunk in his case).

Hello Duke,

I am a property manager in the Sacramento region, and the advice you've received up to now has been terrific, (@Steve Vaughan nailed our business environment). 

Since you're hanging out on Bigger Pockets, my guess is that you see RE investment as a big part of your future, so you should probably purchase the Nolo CA book anyway, (whether you choose to engage property management or not), it will make you a better, more informed investor/landlord.  Now, on to your question.

You can engage property management in a couple of ways: 

You can pay for "Lease-Up" service where the PM does the showings, tenant screening and and signs the lease as your agent, (usually a generic CAR or RHA lease), and then hands the deposit and lease over to you to manage moving forward.  The PM is out of the picture until you need them to re-lease the property; you collect the rent and handle any tenant or maintenance issues. 

For lease-up service in the Sacramento market, PM's usually charge, (around), the equivalent of one month's rent when the lease is signed.  They will generally document the condition of the property with an intake inspection/photos/video and do the move-in walk through with the tenant.  When the property is rented, they collect the deposit and one month's rent, they keep the rent and turn the security deposit over to you, (PLEASE don't spend it, put it in an separate account so it is safe and readily available, treat your rental business like a business). From there on, the tenant hands his or her rent directly to you.

Full Service Management is where all the tenant interaction is supposed to go through the property manager and your tenant doesn't know who you are or that you exist.  In our market, the lease-up fee would be discounted, (about 50% of the first month's rent), and you would pay between 8 and 10% of collected rent, (per month), for rent collection, accounting, maintenance dispatch, contract enforcement, move-in and move-out inspections and move-out reconciliation, (basic management services, in other words). 

Much of the benefit of paying for full management is the professional separation that comes with having an agent between you and the tenant.  That is not likely to happen with your situation, and it is likely that you will be subject to all sorts of casual requests for service or leniency based on your personal relationship.  Obviously, you would have these requests if you manage your own property too, but at least you wouldn't be paying management fees for the privilege.

This isn't to say that having full service management is impossible in your proposed scenario; I have seen your exact situation work well well in a number of cases, but it takes a ton of self-discipline to look your neighbor in the eye and tell them to call the property manager for all their questions, concerns and requests and, (in my experience), usually there was some other circumstance as well:  Owner or tenant traveled a lot, owner or tenant are naturally very private and sought no relationship with their neighbor, the property was configured in such a way that the owner and tenant rarely saw each other, etc.

So, like almost everything in life, a decision like this is going to take some self evaluation.  Are you emotionally equipped to have an adversarial, (in the legal sense), relationship with your next door neighbor? What is your tolerance for risk, (learning about/implementing fair housing laws in your rental etc)? Are you comfortable with the likelihood of interruptions in your personal space and time for business issues? 

You CAN overcome your discomfort, (if any), with all of these issues, but is it worth it for you to do so?  Would you time be better spent at your profession or in finding your next RE deal?

I hope this helps, good luck.