All Forum Posts by: Anthony Johnson

I take 25% of one months rent for a renewal.   I VIP the tenants and because of me the tenants stay over 6 years on average.   "The fee guarantees the service".  The owner saves from costly turnovers.   I also keep 100% of the late fees as I am the one emailing late at night on the 5th and making calls early on the morning of the 6th and the  owner never knows.  The owner pays this fee for me to absorb the hassle factor of the tenants.  I also charge a secondary mgmt fee of  $150 every six months for a very thorough property and tenant assessment, and the second one is timed 45 days before lease end.   This fee, is to guarantee maximim property appreciation, by not having any deferred maintenance and keeping the tenant in line.   A 200k property will appreciate  $8800 annually based on the 50 year average of 4.4% so this fee is  for the property appreciaton, the greatest source of wealth accumalation an investment property can provide, assuming it is properly leveraged.   I am a fee based professional, the fee guarantees the service, and I  may be  $300 or so more a year from the other companies, but you will never have a multi thousand dollar rehab from a bad tenant on my watch.    Fees are also insurance, but only pay the fee for the excellent service.   I can tell you owners that use more than one company, always switch all their doors to me, and my fees are very high, as they know the property is  being well taken care of.    I also charge $35 for each door to e-file the 1099, and send the owners operating statement.  I am a  millionaire real estate investor myself, and I analyse the numbers at the end of the year and recommend to the owner what they should do with the door, remodel, sell, refinance, repurpose, etc.  I do not just mail a 1099.  You do not get that with  the other companies, at least where I live.    Also, can you honestly say without the fee you would spend the time on the property every 180 days, with a clipboard, a 4 page report, photos, full exterior inspection, usually I invite my GC, very thorough and the tenants are like privates in the army, they know we are coming, and this is different than just sticking your head in the door at renewal time and we educate our owners that is what the other companies are doing when they tell us "the other company does not charge the fee"  We are fee based professionals, and the fee guarantees the service.    So my main point is, the fees are a great investment if the service is very high as you get peace of mine and protection.  One day when I retire and hire a PM company for my portfolio, I  will offer high fees as I want the job done right and I want peace of mind and no surprises, and that will cost you a little more. 

A wall could be a sign, telling you to go a  different direction.   You could say, well if the PM does not appear, maybe I could invest with a syndicator and take my return.   Or maybe you could by a larger building with mgmt in place, etc.  When I would plateau, I would get frustrated at the lack of growth, and one of my early coaches told me that you are hitting a glass ceiling, it hurts, do you bust thru?   If the glass is too thick here, maybe you move over there and it is thinner( different business plan)  If I was your mentor I would say to understand if this is  a challenge that needs to be overcome, or a natural/spiritual/subconsious driver trying to turn you in a different direction.   Buying one or two doors at a time in states far away is not what I would recommend for most people.  I manage for absentee owners, and my company does turn key from  purchase to rehab to mgmt for many out of state investors, and this is good for some, not for all.   When I read you post, my first thought was you need a mentor who can look at your entire financial picture and see what the best step is.   When investors call me, the first thing I do is analyze the big picture, and we take a holistic approach.   best. 

We do turnkey packages for out of state investors here in Florida. We have one full time agent that overlays our strict purchase criteria to finding the property, usually a SFR or duplex, then we have a GC rehab, then we coordinate the cash out refi or 1st mortgage if they paid cash, and then we rent it to long term multi year tenants and our brokerage does manage that door. I only hire agents that are investors and buy rental properties so that we can understand our investors needs. Tampa Bay area Florida, near Clearwater Beach.

Stay at your current job until your ratios are maxed out, go buy a 2- 4 plex FHA 3.5% down and keep buying until your ratios hit their limits. Once you can no longer borrow based on earn income, then decide if your earned income can fund a few private lender deals before you go on your own. I managed my own and I was so good at it, I opened a company to manage for others. I own many homes and just barely quailifed for a HELOC and I have 811 credit score. It will be years until your income is high enough as a PM to get a real conforming FHA type product, unless you can also do sales and raise the income fast.

I enjoy managing my rentals.   It is still semi-passive income and when you place long term multi year tenants, give them your handy mans phone number, it is not too hard, and you avoid the expense.    I manage a portfolio I own, and as a Broker I manage for others, with one part time helper.   I  had a prop mgr once and it did not  help, but I am a systems guy and I love cash flow, do not want to share it. 

Craig, yes,  the decision is to only take on active partners who will take a role and hole duties, so it will by a Joint Venture and not a syndication.   I  plan on doing a meet up of potential investors soon, and I will reach out to you then, best.    

Lucas, thank you, I will make sure to go over this with him and all the investors at our  first meetup.  He  had become a friend over the years as he does all maintenance for my two PM companies so I care about his business.   If I can ever help you with my expertise, residential prop mgmt let me pay you back. 

First of all, thank you for your valuable time sharing you wisdom with me, I value it.   I read about the Howie case and it is clear to me.      SEC attorney will be the next stop for me.    I have a new appreciation for the multi family arena and the knowledge  required to do these deals, soundly.   I will now follow the directions of the SEC atty, and from there have a clear path for entity structure that the commercial lenders will approve.      One of the investors will be the maintenance co/GC so they will be "active", I could find roles for the investors to do like property mgmt but as I go forward doing more deals that will be hard if not impossible to do so SEC filing would be a better long term plan.  But if I was going to just do one or two deals I could find ways to make them active investors.   This is why I love being in RE, I never stop learning and there are so many things I do not know as I grow my company, and myself.   best. 

Is there a way to do these   deals without SEC?   I am not soliciting(?), these are friends and current bus partners.   With 4 investors plus me, 20% each, I sign for loan with recourse and I am the decision maker.    What would you do?   As we go forward the investors will be rotating on and off the deals as I have about 12 solid commitments to go forward right now.  One of my investors owns the maintenance/rehab co. and will be on every deal and that will get me all maint. at huge discount, but the 4 will change as the deals go by.  One of my investors has 3 million committed to going far and wide with me, she is selling a resort in the Carolinas that has a 1% cap, makes 36ka year, she is like a mom to me and I want to get her in on these deals.  So I have a windfall of trust and capital.  I currently have a 35k rent roll, 800 credit and 10+ years experience with my prop mgmt company, and the commercial lenders all say I will get thru underwriting.     If I have to do SEC I will,just want to rule out there is not a simpler way.    My friends will call me "Anthony Cardone" when they hear this.  (Grant Cardone) ha ha

Bring in the new investor and take $400,000, you could even ask $500k, and keep 25% ownership interest and go and do more deals. You seem to have the pedal down and two years is a long time to miss out on other deals waiting for a refi. Then after two years you can still do the refi and take your 25% then also. I would be scared to death of the AFB closing, make sure it is not on any DOD lists for review. In full disclosure I have only done SFR deals and I just started syndicating deals 400-600k. Just my initial intuitive thought when I read your post. I take 20% equity and put no skin in as I sign for the loan with recourse, doing my first deal now.