The SECRETS to Successful Property Management

A great seminar on Property management and how to be a successful property manager.

Here are a few things you will learn from this video.

1) How to set yourself up for success by establishing and communicating metrics of success to your property manager
2) Why your property manager should be the most important person on your investing team.
3) What is and is not reasonable to expect from a great property manager.
4) Three warning signs your property manager is stealing from you or worse!
5) How to interview for a great property manager when you are new to a market.
6) The dos and don'ts of firing your existing property management team.
7) Four property management secrets to improve your profitability and cashflow!

Enjoy! Check out http://www.russ-o-matic.com for an interesting perspective on Business and Entrepreneurship.

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Closed Caption:

hello everyone and welcome to two dates
webinar this is professional real estate
investor David Campbell got a fantastic
program for you today joining us from
cox from their properties is my personal
property manager and friend Jason cops
hello everyone so we've got a great
program here for you today are very
important . so we're gonna cover our
metrics of success for property
management how do you know your managers
to a good job going to talk about why
your property manager is the very number
one most important person on your
investing team we're gonna talk about
what's reasonable and not reasonable to
expect your property manager to do for
you will show you some warning signs
that may be a clue that your property
manager is not doing a great job for you
we're going to talk about how to
interview for a property manager and
we're talking about what to do if for
some reason you get into a property
management relationship didn't work out
and you need to fire your property
manager how to handle that situation and
if you hang into the end we're gonna
give away for property management
secrets to make you more money as an
investor little bit about myself i am
the founder of hassle free cash flow
investing i'm a real estate investor
developer broker with our business does
connect people like you to financial
ideas that promote prosperity we do
broker properties we develop properties
and if you like what you see here today
i really encourage you to visit our
website hassle free cash flow
investing.com jason molina cocks are the
owners and managers of cocks premier
properties from dallas texas and they do
a great job managing property and i
encourage you to visit their website and
one of the big clues that a manager does
a good job or that they take their job
seriously is that they're a member of
the National so see
action of residential property managers
or narp for short and cox from your
properties are members so let's get the
legal stuff out of the way this is not
legal tax or investment advice this
information educational only there even
though Jason licensee and I in licensed
as a risk broker there's no agency
created between us and you by be on this
call Jason going to talk about a lot of
things just our opinion is no guarantee
that what we say is accurate and
ultimately consult your own legal tax &
investment advisor before making any
decisions so here's a basic premise
which is we all want to make more money
with less invested and the way that we
can do that is by making more profit
that's good but what if we made the same
amount of profit with less money that
would be good
what if we made the same amount of
profit with less time that would be good
and with less hassle that would be good
too
so really what we're after is not just
how to make the most money or even the
highest rate of return
how to make the highest rate of return
when it's adjusted for the time and the
hassle that go into making that decision
he's just a really brief picture on how
we make money is real estate investor
and it's a lifecycle and so you start
with the property and you lease the
property and then your tenant goes to
work and then it makes money the tenant
pays you the money and then you use some
of that money to pay the expenses like
the taxes and insurance you pay your
bank and then you get to keep some money
and that's what we like that is the life
cycle of real estate investing when your
tenant disappears
unfortunately for Spock spain or loses
their job or one of those parts of this
life cycle are broken either your don't
get the money you're not rented your
tenant loses their job they don't have
the money to pay you
unfortunately the landlord your expenses
and your mortgage keep going
so it's really really important
that we figure out how to maintain this
healthy life cycle of collecting money
from red to keeping your employer so
happy so one of the fundamental
questions it
who is your tenant you know what kind of
tenant are you after and you know i have
fortune 500 companies is my tenants i
would love to get more federal
government type and so it would be great
you know but i also have properties like
the one that you see here where the toe
sucking tenant with sloppy house and the
magic of being a landlord is you get to
choose you can cut it a guesstimate at
the beginning what your tenant is going
to be liked by the property that you
choose and the reason that investing has
such high returns and you hear stories
horror stories of people say oh my
goodness i bought the property and went
so badly because they didn't really have
the idea that real estate investing is a
business and investment right so
business produces income investment
produces income businesses have expenses
but an investment doesn't have an
expense like if you bought apple stock
as investment know Apple the company has
stocked but your share in that company
doesn't have expenses real estate has
expenses and what we're trying to show
with this slide here is that real estate
is both it's an investment and business
and the question is can real estate be
hassle-free and I have it passes do i
need the interact with people who I have
to invest time the answer is maybe in
the way that you can get all of those
time the interaction with people making
passive you know not requiring
specialized skills and understanding
tenant landlord law and understanding
out to fix toilets and things like that
the idea is if you outsource all of
those things that a professional
property manager can do
then your investment can be passive it
can be hassle-free real estate by itself
is not necessarily hassle-free you know
real estate is actually a pain in the
neck but it can be passive and
hassle-free if you have the right
management team if you're buying the
kinds of properties that attract the
kind of tenants that would appeal to
appeal to you and appeal to your your
personal medicine philosophy so one of
the first metrics of success is making
sure that your alignment of vision that
if you're expecting that that really
happy pretty family in your property and
you buy something in the blue-collar
low-income neighborhood
it might not be pretty happy family I or
if you buy studio apartment you're
probably going to get a lot of single
people out of itinerant people you buy
commercial property great you've got a
commercial tenant as that's a great
thing easier to manage so we're going to
be talking with Jason about what makes
for a good manager and I had this
conversation with Jason and really
trying to say how do we quantify what it
could manager is easy to say I want a
good manager
what does that look like so Jason when
someone has a professional residential
manager in place but how quickly should
they expect to get their money from from
the manager
typically they should expect to get
their buns no edit end of the month
providing we don't have a crazy month
like with a holiday weekend the very
beginning so before we go too much
farther in the program i just want to
encourage everyone or thank you for
attending live in this is a live event
and if you do have questions you can use
that chat box as part of the GoToWebinar
control panel just go ahead and type
your questions in if we can get to them
in time you as we're going we will and
if for some reason we don't get to your
question we will have a Q&A section at
the end and we'll be sure to follow you
via email if we don't actually get to
your call
colony so we're working with our
property manager if our property manager
Jason if you know that I expect my money
by the 10 and it doesn't come in by the
15 am I gonna be a happy customer
no you're not and so the idea is if my
adjacent knows what I expect he can
deliver on that if for some reason i was
expecting to get my rent by the fifth of
the month and Jason was happy that he
got it to me by the tenth of the month
there might be disconnected our
relationship where i'm expecting
something that he didn't know and
because he didn't know he didn't deliver
on that expectation and then there
becomes a conflict so a lot of what
we're talking about today is really
adjusting your expectations with your
property manager making sure that your
property manager communicates with you
on what they can reasonably provide so
Jason you have any thoughts for us on
this particular slide in what is
reasonable community how you communicate
with the new owner on whether what the
metrics of success look like well I just
believe that you should go sit down with
each of your owners and go over how you
run your business as a property manager
and it's ultimately once they have that
information
you know it's ultimately up to them if
you know they feel that based on what
you tell them that their the secure the
right property manager for them so for
example when I went to hire Jason is my
property manager I think he has a great
job he came as a referral to me from a
friend and client of mine has been with
our company for years I said Jason what
i'm really looking for
it's important to me that I can read and
understand your reports so Jason before
I make a decision to hire you please
send me your property management reports
so i can see what I'm going to get
when that is it created an expectation
to Jason he knows that i'm going to read
what he sends me and it better be
legible and in a way that I understand
her why she won't get my my book of
business so the other thing I was
talking to Jason about is vacancy loss
and I want my properties full-on a
percent of the time but that isn't
reasonable right i would love a hundred
percent occupancy that's not reasonable
and so I built into my performance
vacancy lost assumption and what I'm
looking for is saying Jason tell me you
know is it reasonable that my property
would be rented at the market rate of
occupancy Jason how would you figure out
what that would be in order to figure
out the market rate we would run your
property or run that particular area on
multiple listing strips and see what the
other properties within the last six
months have rented for and then you know
similar comparing apples to apples as
far as the property and then from that
we would be able to determine what that
property should rent for and how long it
should take it to rent and so the
important part is i asked Jason how
would you answer this question and he
gave me his metrics of success right
he told me how he was going to solve
that that answer so any time I can call
him up and say looking using the
methodology that you explain all right
using the mls and collecting the data we
are we are not achieving our metric of
success which is hitting a certain
occupancy rate right and so Jason I kind
of worked out this slide between him as
my manager at me is the owner and these
are the things that we can check off to
see is Jason doing
good good job and it was very ate a good
process for us to go through and this is
going to be different for you and your
manager so when we're setting our
management relationship up for success i
really believe that the manager's job is
to educate me as the owner on what how
my property can perform and once I
communicated or not communicated but the
manager and I understand what success
looks like we quantified that then I
want the manager to help me stay in
touch with the market she can give some
awesome
absolutely anytime let's just say the
property because of the beginning stages
as we discussed before you know it's you
know it's taken its just been turned
over we use the mls to determine what
the best step the best rate $PERCENT of
rent should be and then we put it on the
market for that but moving further down
the line say the tent is up for renewal
well you don't want to just say okay
well we'll review at the same write a
good property manager is going to pull
up the mls again or whatever they use in
their area and take another look at the
market because a lot can change over the
course of a year lease o'clock a change
of the course of six month lease up and
then determine if there is a rent
increase that needs to be put in place
or potentially rent decrease and i would
love it and friends always went up but
sometimes they don't
for whatever the reason is and so by
being in touch with my manager I can
empower Jason to set the market rent the
place where a lot of investors get in
trouble is they say well my mortgage is
a thousand so I need you to read it
for 1100 and how do you even know what
the property is like write the rent
might be 830 might be 1500 for the owner
to base their rent on their need is a
false economy right the market sets the
rent range and so using your property
manager they can help you determine what
that rent range will be so this is a fun
slide 22 put together and talking about
Jason's stories working with
unreasonable owners and very admittedly
when I was a new investor even now as an
investor I've got very high expectations
and I want to make sure that i'm being a
reasonable owner and so let's just talk
about a decent sort of your thoughts
with about working with unreasonable
owners and why some of these bullet
points are unreasonable
well wanting to rent to be paid on the
first of every month it's impossible
just through the dynamics of the
transaction that it has to be a lot of
tensile mail their rent or they'll do a
ACH transfer so there's you know there's
a timeline in there that's why we say we
you know we won't get your it to you
our goal is to get it to you by the
tenth of every month that allows for to
pay different times and four different
financial institutions to you know get
the money transferred or for the Postal
Service to get it to us and it
vertically our bank the rent paid
directly to the owner that would just be
an accounting nightmare
there's there would be just no way to
track that and here's why because let's
say my property manager's job is to get
the rent from the tenant and tenant
doesn't pay I want my property manager
to notice not me
and if the rent goes to me I would have
to call the manager and say look my
I didn't get the red from the technical
do something about it and whatever extra
unnecessary step that would be so a lot
of these bullet points on what makes an
owner and unreasonable owner
it's where the owner is stepping in to
actually do parts of the property
manager's job for them and it's kind of
like saying to a car mechanic
hey I would like to hold the wrench and
have you turning right we'll best
cumbersome you might just have the
mechanic do his job right
so some of these things that him and
went through experience owners come up
with
I want my property inspected every 30
days well what in the audience to the
tenant it's not the property managers
unwilling to look at your property is
just that if every 30 days a stranger
came into my home and looked around I
wouldn't want to live there very long
the tenants want their privacy and the
property manager's job is to kind of
look for signs that say through maybe
doesn't need to go inside right
looking at the exteriors are is a clue
how the inside books the red starts
being slow
that's a clue that there might be
something going on in the the property
maybe loss of the job or something like
that and the other thing is a lot of
landlords really want to meet every
tenant and I think that's a terrible
idea
I never want to know who my cannon is
and it's kind of a cold way to think
about it but my tenants are people and
my property is a business and its really
tough to kind of separate yourself
because i'm a very compassionate person
and if i had my tenant call up and say
you know gave it i lost my job at my
child passed away and I really need more
time paying the rent and that is just a
terrible terrible situation to be in
because as a human being i want to say
of course what a horrible situation I
would never want that you know I can
only imagine how terrible
feel take your time right well my job
isn't to provide welfare to this person
I could be empathic but is my job to pay
their bills and to be their own source
of personal income and so by separating
myself from the humanists of you that to
the tenant is then the professional
property manager gets to say I'm sorry
mr. Tennant your problem is unfortunate
but I'm just the messenger my job is to
enforce the lease and we have an
agreement you pay rent or you've out and
if you'd like some help movie perhaps we
can help you you know arrange to get a
property that you can afford to move out
or a workout some type of a different
payment plan etc but by removing myself
from that personal connection with
tenant it allows you 12 scale larger
into to really make your your
investments hassle-free right the the
tenants are the messy part of investing
and it's just unfortunate the tenants
have lives and their I just want to
remove myself from that kind of
situation you have thoughts on that JC
absolutely owner should as you said
should never meet their tenants that is
absolutely what your property managers
for is to take the human aspect out of
the equation as cold as that sounds
but you cannot effectively run your
business synonymous with your property
mean you can't i if you throw the human
condition in there and become
sympathetic to you know whatever you
know they throw at you and I mean you
know what's sad is a lot of owners will
get played for lack of a better word I
mean we've had tense that I did but you
could have that many grandmother's
passed away in one year but i didn't
know you can have many grandmother's for
that matter but I mean you see
you want students a word I'm saying here
it's it's you don't it's just a bad plan
for an owner to have direct contact with
their tenant I remember when I was a
brand new investor and I was managing my
own property
I have a particular tenant that went six
months without paying their rent and it
was my own fault i just was slow to
start the eviction process and when we
finally evict the tenant she had nicer
furniture and newer clothes and newer
everything and I did and I just kind of
thought this is crazy i've been paying
this woman's housing for the last six
months and she's got all of this you
know night
nice stuff and so that's where it's
really key just to have a lease have a
business agreement may get business
don't make it personal with your
dependents there is a video recording be
made today's presentation and if you
registered for today's event will make
sure that you get a copy of that video
as well as a copy of this lights so why
the property manager is the most
important person on your team I like
when I go to a new market to start my
due diligence with the property manager
right more important than the property
is the person available to meet and
greet my tenants to help me avoid
lawsuits to help my property stay in
compliance with codes i owned properties
that i have not been to in five years
and the only person who's been to that
property is my manager and I'm
comfortable with that because i keep on
top of my manager already have good
relationships with my managers and the
manager's job is to isolate the owner
from hassle the manager's job is to
allow me economies of scale or leverage
with my time my job is to run my
business my manager's job is to manage
my properties
Jason I couldn't have said it better
that's absolutely what we're here for is
to take take the load off of the owner
and do our job so that owning property
does become as hassle-free as possible
yeah that's great so when people are
interviewing for a manager it's kind of
like interviewing for a business partner
or a date right you're you're deciding
on the first date with your property
manager which is your interview is this
someone that you want to jump into a
long-term committed relationship with
right you're not quite getting married
but you're deciding to move in together
and start sharing toothbrushes it's that
kind of a personal relationship so Jason
he talked about what are some of the key
questions that would be important for
people to ask a residential property
manager but you definitely want to meet
the broker that is the person that is
ultimately responsible for the property
management company and how they perform
being a member of North is very
important that will tell you a
legitimate the company is being on the
MLS that's going to let you know because
we get paid to be on the first of all
it's not it's not inexpensive but that's
going to let you know that your property
is being marketed in the most effective
way possible at least in our area here
in Texas it's a big point because if the
broker is not a member of the multiple
listing service then your property is
not going to be exposed on the multiple
listing service and that's a some areas
that's a really big deal for rentals
right you go to realtor.com
and you search for property the only way
to get a property on realtor.com is to
have it in the multiple listing service
and it was Jason sentence it's not cheek
so if your property manager doesn't pay
for that service you're not going to get
that benefit so these are some great
questions to ask your manager and these
days technology is such an important
part of the management experience I
would really focus a lot of my questions
around how the manager is implementing
technology to make his job easier which
makes my job easier it as well and some
of the key points that I i think are
absolutely number one are the number of
units under management and the vacancy
in their overall portfolio and the types
of units that make up that portfolio i
want my property be relatively
consistent with the makeup of that
managers portfolio for example let's say
the manager says I'm very experienced i
have a hundred and fifty units under
management which is a good number right
that's enough to create a full time
income for property manager and I say
great that's a good check the box for
what kinds of units are they well
they're all c-class ghetto properties
and well I've got a brand new super
luxury house on the other side of town
that's a different type of customer
service experience it's a different type
of vendor expectations etc so I'm i want
to make sure that the i'm going to ask
the manager one of the leading questions
is if you were going to buy a property
in this area
what kind of property would you like to
manage Wow
Jason you know how many times people say
what property would you like to manage
remembers you're the only person that's
ever s3 for a loop
but yeah that's a great question to ask
your breath to ask your property manager
for your potential property manager
yeah because the answer that comes out
is could be all over the map
I mean they might say I really enjoy
cleaning human hair and the toilets so
give me the ugliest dirties property
possible and are they might say I really
like you know four-bedroom homes because
the families live there and I like
working with families because they tend
to be longer term and as a manager
here's an interesting you know paradigm
shift to break
Jason's you make more money when and i'm
going to say money per hour
like which is more which would you
prefer right spending a lot of time and
leasing a property and making fifty to
sixty percent of the first month's rent
or doing nothing and getting a
10-percent of the month's rent doing
nothing and getting it to ten percent
yes
so your manager does a lot of work
finding the right tenant for you and
once that tenant is in the managers goal
is that cannon never calls that they pay
their rent on time they don't call and
ask for repairs and they basically do
not a whole lot and they get paid to ten
percent of the rent the reason you have
a manager is because when they do call
they put in so much more work than what
that eight to ten percent pays you know
for example maybe you've got a five
hundred dollar-a-month rental and the
management fee is fifty dollars a month
for ten percent you're hoping that that
tenant doesn't call but when they do
call is probably going to take you three
or four hours to fix their problem and
then you're only making you know 12 or
15 bucks an hour and property major
wants to make more than that they want
to set you up for success by getting
that that residual income just like you
you want that residual income tax and
talk about you know what
what your company does to ensure that
your clients have a good management
experience and what kinds of questions
would you want people to ask you so that
you can show off you know how good a job
you
oh we we definitely want you know the
proper expectations set up front so that
you know everyone understands what's
expected from from each other
I you know I would definitely want
people potential clients owners to ask
me you know what about is my company
ensure or what steps do we take to find
their tenant and make sure that we're
doing everything possible to place a a
good tenant in that property it's just
very important to put two minutes
through the screening process to to look
at their background look at their income
put them under a microscope because it's
the property manager's job to treat your
investment as if it were their own and
that's our that's our policy and that
that should be every property managers
policy and and if you if you start out
with a tenant on the right foot
you're you're more likely to be set up
for success with that tenant mean nobody
has a crystal ball but it there are
things that you can do or ask your
property manager to put yourself in the
best possible position for success with
any particular tenant the questions that
we have on the slide really seem like
they should be obvious but they aren't
not all property managers have
after-hours emergency response right and
not all managers have a privacy policy
for your essential documents your
your property manager has your social
security number because they have to
file a tax form for you right they got
tax reporting obligations and they've
also got your tenants personal
information they have a copies of your
keys and are they having a good policy
is set for separate the keys from the
address to go with those keys so that if
someone were to break in and steal the
keys they wouldn't necessarily have
instant access to your property there's
a lot of best practices that go into
property management and I think it's the
hardest job in real estate and I
sometimes will really look at investing
heavier in a market when I find a good
manager that I want to expand my
relationship with unfortunately not all
property managers do a good job and some
property managers are unethical and it's
really unfortunate that you know and
resistor people who do ethically and
people who don't do it ethically and
when your new investing is easy to get
taken advantage of and it's easy taken
advantage of by your tenant season to
get taken advantage of by your property
manager sometimes your property manager
takes advantage of you know ethically
but by not meeting your expectations
right if the manager doesn't know what
your investment goals are and you
haven't had a conversation about what
metrics of success look like for you as
a manager sometimes the manager could
very innocently think they're helping
but simultaneously hurting you know for
example i had a manager who said my AC
broke down and the manager didn't spend
a hundred dollars fixing it and I was
good right
but what I didn't communicate to my
manager was you know this AC is on its
last legs anyway next time it breaks
down don't patch it i want you to
replace it with a new unit and it was my
error that i had communicated that to
the manager and the manager error
was not understanding what my objectives
were that property in and not really
understanding what I wanted from the
property and what my policy on expenses
were so that was not necessarily in an
unethical situation but it was still a
mismatch in management or a bad
management relationship not the manager
did a bad job but the relationship
wasn't working because he had gone
through those questions and answers
right but sometimes and this happen to
me I've had a manager that was not doing
the job just a terrible terrible manager
and I want you to look for these things
happen to you
these are big red flags that you need to
i get some help or really digging your
manager at to see what's going on some
ways that managers steal from you is
they can give a red credit to the tenant
for fixing a repair and then building
the owner for that same repair
well that's like one bill and two
payments and people who are not good at
accounting aren't going to necessarily
recognize that the rent was debited and
there was an expense as well sometimes
the manager can duplicate expenses or
multiple months
we're here is a legitimate invoice for a
repair in September and then
oh by the way in November here's that
same invoice again they take it out of
your rent for two different months it
could be that the innocent mistake or it
could be a way for a manager to be
stealing money from you and not know it
collecting management fee on the tennis
security deposit this has happened to me
and I pitched a fit you know because
their accounting department just our
revenue and they put a management fee on
that entire revenue but it's not all the
same tendency security deposit is not
income and there's no management fee
online deposit because I'm an obligation
to pay back sometimes and I am being
nice position as a counselor I get
people telling me all there are stories
about investing and not all investing
you know has to be horrible right some
people who have a stamina for this the
this kind of laughing oh that's a good
one at that
another story didn't go tell my investor
friends next time we hang out some
people just affects them emotionally and
I steer them towards more your
commercial tenants or triple net tenants
or real estate syndications or having an
active partner or maybe one person is
the passive partner deals with the money
and the other person's the active
partner the deals with the management of
the asset etc
I've heard stories where the manager
collects rent and they tell the owner
its vacant or maybe they fudged the
move-out date right all your tenant
moved out but they moved out you know on
the 20 you know they moved out in the
first but they told you that they moved
out you know a week earlier and the
manager gets the pocket that extra rent
here's a really big one that is
straight-up illegal that a lot of
brokers don't actually know right and
it's commingling funds in a broker's
trust account that means your money that
comes from the tenant but it belongs to
you that goes into the brokers trust
account if the broker make some money in
his own portfolio or he gets a
commission check or something like that
they're not legally allowed to put those
funds into the same account because
they're mixing their personal funds with
your your funds so i would ask you know
just as a leading question asked a
broker what their policy is on
maintaining their broker trust account
and they just kind of look at you
glassy-eyed then you know that that's
clue they might have the experience
sometimes a broker will collect the
deposit move in and they're gonna hold
the deposit and then when the tenant
moves out the tenant wants their deposit
back and the broker says to the owner
will you or have the deposits because we
gave it to you and then moved in and now
we're going to deduct it from your your
rent etc and that's a sneaky one because
sometimes people forget who's holding
the deposit is the broker habit or do i
have right because the lease sometimes
doesn't say right the least might say
the positive thousand dollars
but the least doesn't say who's holding
it is that the owner is the broker so
this is a sneaky one and sometimes it
could be innocent and sometimes it can
be malicious but is an owner you're
gonna want to know very clearly who's
holding the deposit
I like when I see my property management
statements on a monthly basis it just
reminds everyone that the broker is
holding the deposit for that tenant and
if the broker is balancing the broker
trust account then it's going to be
obvious who's holding the deposit
I'm and you know this is a sad one that
sometimes property managers bill owners
for repairs that didn't even happen
right and so here's some red flags you
see these red flags right i just showed
you that the the dishonest tricks that
the property manager could use here's
some red flags those tricks are being
used against you right if the managers
using the same service company for every
repair right that's a red flag the the
same company that does your HVAC should
not also do your plumbing and your
painting in your carpeting and your
window repair and your landscape those
are different skills so you're going to
want an invoice from each of those
companies right if you're not getting
those invoices that's a red flag your
property manager should be giving you
your invoices or maybe having a dropbox
and on my dropbox we put those invoices
so you can go look at them they want if
the income and expense statements are
vague or illegible right if you don't
understand your income and expense
statement call your manager have
explained it to you they can't explain
it to you
big red flag right sometimes when your
property is vacant
you're going to have utility and
landscaping expenses right so if you've
got 30 days vacancy and you never see
the utility bill or the landscaping bill
that's an interesting red flag because
maybe your property isn't really bacon
maybe there's a tenant paying rent there
and the managers just talking the rent
because
if the tenant still the property of the
utilities are gonna be in their name and
they're going to be paying for the
landscaping etc i'm a red flag obviously
if you're getting notices from the
neighbors HOA in the city etc I'm I've
tried it both ways sometimes when I own
a property all communicate with the
neighbors and say hey look I'm the
property owner hears the business card
for my manager if you have a problem
call my manager if you can't reach the
manager I've written my number on the
back of the card as a courtesy to the
neighbor so that they feel empowered if
there's a problem with the property that
they have someone to talk to
just you want to talk about best
practices you think that's a good idea
to be in communication with your
neighbors or not
no I think that's great the neighbors
they are especially if their owners or
they have a mortgage they can to feel
higher up in the hierarchy when in
reality we're already from somebody
unless you completely pay for your house
but those neighbors are going to watch
your property like a hawk
if you give them that that sense of
empowerment and that they're there
twenty-four/seven so you know that is a
great tool up neighbor two or three
watching that property you know at any
given time and you know calling you to
you know sometimes it can be bothersome
because you could get that nosy neighbor
but still it's better to have too much
information that that not at all
yeah for example one time I had a water
leak in one of my properties and the
tendon was out of town and the water was
running down the street and the neighbor
called me a city but i just want to let
you know that there's water coming out
of your front door and like well thank
you very much for calling and I call my
property manager and say the neighbor
called me and let me know this is a
problem
the manager went out there fix the
problem and no no no problem so that
kind of eyes on the property can be
very very helpful your manager should be
giving you before-and-after photos of
the property and if they tell you that
it's any convenient for them to do so
they are not the right manager for me
alright so easy today with smartphones
right just for the manager to take their
smartphone take a picture and email it
or text it to me and it doesn't have to
be a big fancy presentation that can
literally be a text message with the
photo of the property i also like I've
been very impressed when a manager had a
service person go take care of the hvac
at the property you know that is amit
the cooled condenser unit isn't
servicing and when they went into the
property they just took a few pictures
alright not of the air conditioner but
just of the general condition of the
property and then they provided those to
me is the owner
I thought that was really above and
beyond surface that was really awesome i
gotta look into my property just as a
baseline to know what it looks like
right i'm also you are entitled to have
a copy a signed copy of the lease
agreement and any kind of renewals are
extensions of the lease right if you
don't have those i really encourage you
to get them in most states the tenant
signs the lease and the property manager
countersigns the lease and that's a
really kind of a scary thought for a
moment because your property manager has
entered into a binding legal contract on
your behalf as the owner and I want to
know what my property manager committed
me to because they literally committed
me to do something and it that thing
that I committed to is in the lease also
i want to written management agreement
because that spells out with the manager
is authorized to do on my behalf the
broker license thing is really
interesting in every state that i'm
aware of to manage real estate for other
people for a fee
you need to have a real estate brokers
license not just to see
salesperson license not a real estate
agents license a real estate brokers
license
the difference is kind of like between a
difference with a doctor and a nurse
right nurse can do practice medicine
under the supervision of a doctor but if
the nurse wants to just open their own
medical practice and you start doing
their own things that's not usually
allowed right depending on what the
medical thing that's an idea with with
real estate whenever your tenants moving
around the property there's an
inspection form or there should be in
your manager should be giving you a copy
of that and I make sure they maintain
that in my copy of the documents you
know I wish Jason very long and happy
healthy life but if for some reason he
he had an unexpected departure from
Planet Earth
I want to know where all my documents
are so that i can transition smoothly to
a new manager when there's irregular
distribution dates of your money that
means the manager doesn't really have
organizational procedures they don't
know what they're doing on certain days
of the month and how to run their
business that's a red flag to me if one
day I get my money on the 10 the next
day is the 15th next day's 20th the next
day's the 12 it should be fairly regular
when you get your money if your tenants
pay late your manager should let you
know you know usually email is
sufficient for for me hey your man your
tenants running late
I want my manager to recognize that
there there's a problem that they're on
top of their housing practices this is
such a big one and the laws change from
state to state and really one of the
reasons i really like investing in Texas
is Texas is a much more landlord
friendly state then where i live in the
state of California California is very
landlord unfriendly Jason you want to
talk about fair housing and how is a
manager you comply with their housing in
the state of Texas we
here in Texas and it's like this and a
lot of other places as well we cannot
discriminate against your race religion
familial status like that so I mean if
we did that could bring about liability
not only to us but to our owners but we
we take we take continuing education
just to stay up on on the fair housing
laws so that our owners don't have to
worry about that and I mean that that
alone and it's it it's a very big deal i
mean it can cause a lot of problems i
mean if they can come in and shut our
entire company down pull the broker's
license and you know everybody's without
a manager so it's a it's a huge deal
want to give you something about
innocent examples of why for housing is
so tricky and why it's so important to
have a man at professional managing your
property so Jason I'm going to be the
bad landlord manager and you get to be
innocent tenant who's out to sue me
already
ok so I Jason I'm i think this is a
great property because it's just one
block away from the Catholic Church do
you think that's a great asset for this
property
do I think that's what it which wouldn't
you like to live here because it's right
next to the Catholic Church that's a
problem isn't right
yeah with which role was i again yeah
you get to meet me on the the to the
other time
didn't your the tenant yeah I could also
say Jess are you gonna be living here
with your wife and kits I know you can't
play that wouldn't happen to know he
isn't right it's a problem or how about
all you're going to love living here
because you're Hispanic and this
is a really Hispanic neighborhood yeah
you're gonna lose your is there very big
dick knows very very innocently you can
violate fair housing and not $TIME not
know it and so a manager takes training
education and they're really hyper
sensitive to frame their words in such a
way to comply with fair housing other
signs that your manager is not a good
one
they stretch the truth when it doesn't
matter right
for example if I said I hey is my
property ready is is the is ready to go
everything is ready and is marketed if
the manager says yes and what they
really meant is it's gonna be ready
tomorrow
that's a problem with me because I
wouldn't care whether they said it's
done today was going to be done tomorrow
but if they tell me it's done today I
expected to be done today you know once
upon a time I fired a manager because I
said oh you know what a week ago I asked
you to remove some debris from the front
yard was it done and they said yeah I
was done so well i'm standing in the
yard right now and I see the debris that
you're supposed to remove are you still
gonna tell me that you removed it and
this
yes I removed it like well I'm looking
at the debris this is a not the debris
was a problem but it was an honesty
problem that they couldn't just say well
I was about to get to it i forgot
property managers aren't perfect
don't expect your manager to be perfect
but I want them to have personal
accountability when there's an error and
if your manager never ever ever gives
you that news that's problematic as well
so we're gonna move along do's and
don'ts of fire your property manager
the big one is find a new manager first
give your manager written notice that
you're leaving check your management
agreement to see what kind of what your
agreement how you handle that transition
sometimes there's a fee for the party
sometimes you are take responsibility
that the person that you're firing is
the person that you hired
so you as an owner you can put all the
blame on the manager right it's partly
your fault for hiring that manager the
first place things that you don't want
to do I don't go badmouth your old
manager to your new manager is your new
manager is gonna think that you're a
pain to work with things that you could
do is to say one thing that really
didn't work in my last property
management relationship was that my
statements never came on you know on the
tenth of the month and your new mitt and
I'm looking for a manager who can
deliver their payment and statements on
the tenth of the month
Jason is that something that you can do
so in that context I kind of shared what
I didn't like about the old manager with
but by spinning it into a positive
saying i got an expectation that I'd
like for you like to meet the other
thing is whatever you tell your tenant
or tenants gonna tell your old manager
and your new manager so just be mindful
of what you tell your tenants and we're
almost to the end we've got for property
management secrets1 be a good owner so
that your manager will go the extra mile
for you Jason I know that you would love
to say that you treat all of your owners
exactly the same but I'm guessing that's
impossible is that right that's correct
i would love to I would love to say that
that I don't have favorites but I do and
it's strictly because they treat me
yeah so the cheapest whatever is
cheapest brain surgeon the cheapest
property manager whatever it doesn't
save you money when im looking for a
manager I want to make sure that they
are very good and they are earning
enough money that they're going to take
care of my property and when they have
to choose where to allocate their time
are they going to put it on my portfolio
are they going to put it on someone
else's portfolio and it comes down to
how well they treat them do I respect
them are you going to eat them like
appear rather than is a servant and a
lot of people look at the property
features as servants because sometimes
they do very hands-on work and that
isn't true
they're your number one asset to treat
your manager like gold and they'll treat
you well the other thing is make sure
your whatever market you choose to buy a
property in make sure that it has a lot
of management choices when I was a very
new investor i bought a property in a
very small town there were only two
property managers one of them i really
didn't like and the second one I hired
and then have a conflict and I fired
them and then I was stuck
well there are only two managers I don't
like them both and what do I do now
so that's one reason I gravitate towards
larger accounts town like Dallas Fort
Worth has thousands and thousands of
quality property managers Jason's the
best but if for some reason we ever got
into a disagreement
I'm sure that I could within a matter of
days find another super high quality
manager that keeps me honest right
techniques Jacen honest right he's gonna
do a great job for me because he knows
there's another choice
also I really use property managers to
help me find property to buy and Jason
knows all the time whenever i'm looking
at a new property in dallas or whether
i'm going to decide to develop something
i'll send the address and say Jason what
do you think of this property
tell me what kind of red you think you
can get you think this is a good
property area that would attract a lot
attendants and would you like that owns
property and just yesterday
Jason was telling me of an off-market
deal you want to comment on how you
would get access to off-market deals we
have obviously several owners in our our
our company and then I guess there's a
misconception that every investor is a
brazilian air and they're not their
normal jobs i mean most of them and
sometimes they get over there cut
property and
we have one particular client that is in
that situation and she reached out to me
and said Jason I here's my property you
know we we have a tenant it and she said
you know if I could just get what i owe
$MONEY on this property I'd get rid of
it so here we have a property that you
know is is the owners willing to sell it
well below market and and those come
along all the time just because our
owners aren't all you know wealthy
people there i just made an investment
that got the best up
yeah and so sometimes the problem isn't
even the property is the owner and I had
one client who was telling me about
their property and such a problem at all
it's positive cash flow every month
what's the problem well you see I lost
my job and so I take all the rent money
and I spend it to live on
well the problem is in the property
the problem is you if you paid the
mortgage you have you no money left over
and so people make mistakes and what
happens is the first person know about
it is usually the property manager so
great secret work with your property
manager to help you find deals or
evaluate deals etc this has been a great
event where at the end of our hour
together really would like to point out
some great features of our website
hassle free cash flow investing.com
we've got some great investment
opportunities available real estate
investment opportunities we have a
monthly online property showcase our
next one is coming up and i really
encourage you to attend we've got some
investor training ideas all of those
things are free on our website please
check it out and really thank you so
much for coming today
then you'd like to be a hold of jason
for myself contact information is on the
screen
I hope you have a fantastic prosperous
investing experience and seda partly