I have asked my PM company to contact me in the first instance if any maintenance issues arise, either email/phone unless urgent.
I have also requested copy of all maintenance bills so I can review these and also for ATO purposes.
OK, this is pretty basic stuff but not necessary something that I have found they are interested in doing.
Montly rental statements provide details of maintenance costs therefore PM company believe this is adequate, however, how would an investor know exactly what work was completed on the property etc.
I have persisted and will be receiving copies of all bills, however the other issue will take time.
This may seem trivial, however if I do not keep track of what is happening, I feel it would be very easy to be taken for a ride, I am not implying this is currently the case, however I have heard many stories where property management companies are billing/maintenance on a monthly basis.
So what is your experience to date with PM companies in US??
Get photos of before and after. If over “x” build in 3 quotes……
This is where you just have to stand firm and we all battle it. PM’s may not even be bothered with how much it costs as they just want it fixed…… Why home warranty programs can work well with proper management. Ask for call out fees for essential services….plumbing etc and keep your list at hand.
worldinvestor wrote:Just my two cents …I have asked my PM company to contact me in the first instance if any maintenance issues arise, either email/phone unless urgent. This should be done on a monthly statement , so you know cost of repairs and have records for long term. Answered next statement already. Again this should all be on the monthly statement and not some thing that is that hard. Ours is pretty simple but, shows the information. I can send it over. I do mean simple, but this should go out every month.
I have also requested copy of all maintenance bills so I can review these and also for ATO purposes.
OK, this is pretty basic stuff but not necessary something that I have found they are interested in doing. The little things are key ( to business not just real estate ) but solid business principles. I am learning to increase customer service staff in all areas of business.
Montly rental statements provide details of maintenance costs therefore PM company believe this is adequate, however, how would an investor know exactly what work was completed on the property etc.
I have persisted and will be receiving copies of all bills, however the other issue will take time.
This may seem trivial, however if I do not keep track of what is happening, I feel it would be very easy to be taken for a ride, I am not implying this is currently the case, however I have heard many stories where property management companies are billing/maintenance on a monthly basis. This is very important information. I call it the life of the rehab. Just as an example, ten years from now when you want to sell this property, you should have an accurate, detailed account of everything that has been maintained. This helps not only the future buyer, but you as well. I do try to keep things simple here, but this is not rocket science. I am afraid some companies do not see the big pictures. For me, I want to make sure my personal properties are getting what I call "regular check ups". This helps to keep future maintenance cost down.
Thi
So what is your experience to date with PM companies in US?? I hated the local ones around me in SC. That is why I was forced to start my own. Not my favorite thing to do, but very necessary in this business module for today's cash flow rentals.
Alex,
would the world not be a better place if everyone invested in the TWH model…. These issues would never arise,, ,You and I work them out… Investor gets there check same day same amount every month.
I can tell the US investors love it.
And the big boys are moving in to the arena.
Key properties in Atlanta the biggest wholesale buyer there just cut off all there resale companies… and are keeping all the units in house….
WI,
You will see over time that there is just going to be on going maintanence in any home in the US… Renters are tough on them… You can get very lucky and get one that treats the home as there own and is neat as a pin…. But the tenants know they are tenants and instead of checking little items out that can be easily fixed will call the Service line and next thing you know you have a weekend call to fix a flicker light because the tenant did not know how to use a dimmer switch… Now your 150 dollars in the whole for nothing.
JLH
Aaaaah the voice of the war wounds….
BUT BUT BUT – you are missing something fundamental… the type of person like me….I am talking about the type of person who, whether they were in Phuket, Singapore, Darwin or Tunbridge Wells would pick up a real estate magazine and start crunching numbers…. then just for giggles start looking…
I know, a rare breed but we do exist! I agree, if this is purely investment, an effective "property fund" is great and Jay, to many many extents I wish you had been there when I was desperately looking for anyone reputable Stateside to refer people to back in 2010 but there is a side here that people will start missing (or not!).
I am not saying that I wish US property management on my worst enemy or US Property managers in the main part but you are removing an essence that is unfathomable…. the hunt for the deal, the thrill of the chase etc…. I know, mostly for those over here but still, I equate it to the thought of gold mining.
To wade through the crap, to see the gem, to recognize the gem – I LOVE doing the inspections and writing the reno list…… to polish the house as quickly as you can, to market it with the pretty photos and to try to find the right tenant to love it as quickly as possible………..the trick of yield management????? The precise dollar on the supply/demand curve at which your rent is neither under marketed nor over?? The smell of the hunt even!
I spent many a year heading other people's companies or answering to Boards of Directors and every day I get to cherish (and I do) that I haven't a CLUE what day of the week it is….. and I don't really have to worry what city I am in….but by gosh I am scouring the sites to see what is out there. No boardrooms, no townhall meetings, no planning commissions??? I LOVE IT.
Addiction: the point at which your social life is affected and normal life rotates around this…would I do anything to continue it?
Every one I deal with is an enabler of this addiction and I suppose at some point someone will have to intervene but I genuinely and utterly and absolutely am completely addicted and will continue this until the day I day with absolute pleasure. It is SO SO SO not about money.
HOWEVER, It is a dangerous passion if you don't FULLY know what you are putting your hand up for though and sadly all those people who are just entering the US market in the past 2 years – BE AWARE – it IS fun but by GOD you are, just like WI, and just like many of the Australian based facilitators (and ultimately what I think happened to Andrew Allan) going to have the downs that make the highs seem questionable….and in the worst cases be eaten alive by this market…….So, if you are going through a facilitator just REALLY analyze how long they truly have been in this market and I swear, if they don't handle the back side of this, and only shove sales out there… be VERY aware that running 2 construction crews without oversight daily is a SKILL. It is called project management and if your facilitator says "I have an amazing team"… WHO IS OVERSEEING THAT TEAM FOR YOU – if they aren't a licensed real estate agent and can't directly stomp the streets renting the property for you…….find out who is and does handle that for you….(and how many others they handle that for) because the purchase is 1% of your US experience – and that, dearest, dearest Jay is where I agree that 90% of people just wanting an investment would be better RUNNING to you…. because half of the people helping you will not be in existence in the US in 5 years time and if you are planning to hold even a second longer than 3 years, you may well find yourself trying to deal with offshore repairs and complete uncertainty.
Plan NOW and learn the market NOW while you still have someone desperate to sell you something. If they haven't evicted someone, don't know the process, haven't a clue how to fill in Section 8 paperwork, wouldn't be able to be there to help you if something happened, find the person who does and get to know THEM.
I think one of the important aspects of this conversation as it relates to WI is that she has sufficient MASS or SCALE… I think she mentioned that she has 8 properties to date, So probably a 400 to 500k investment on her and her husbands part….
As well as based on what she has shared she has bought in the easier to manage areas of Atlanta and did not go for the cheapest thing on the market, And this is a big AND,,, last year is not this year in the market, All those who were trying to time the bottom well you missed it by and large at least in the Metro ATlanta market…WI I and others timed it well just because they made a decision to proceed…
So WI has again by what she has stated on the forum 8k to 12k coming in monthly gross ( if everyone pays) and or more.
With this kind of financial commitment and investment you have the scalability to run this as a little business… And here is my point I bet WI spends a pretty good amount of her month e mailing skyping and other management duties managing her managers. And running her small rental business… I doubt seriously that she just sits in her easy chair collecting her rents as is portrayed buy the Turn Key companies
And yes if they have to travel to Atlanta 1 or 2 times a year for the 5 to 10k a year that would cost, its just the cost of doing business. so you add in those cost to Property management, vacancy when and if she will have any,, and on going repairs… TAx’s insurance. etc etc. And its a nice cash flowing business, but it is a business and needs to be treated as one.
Where this model goes Squirrly is for the investor that buys 1 or 2 properties.. There is no scale and no mass.. So fixed expenses travel expenses they cut into the return in an inordinate % of gross rents… if you have one property and you pay 5k to come and look at it before you buy it. there went year one 50% of your rental yeilds.. add in other costs and your brake even or negative geared year one.
So I think the comparison to the TWH model for the smaller investor the one that would like to dip their toe… Is pretty easy,,, No need to come view your Note purchase as you do not own the property just the debt with equity, NO closing costs or any other fee expect the purchase of the note… And thats kind of how it goes in our market here in the US. I have only had 1 client actually physically visit there Note purchase out of over 5 million dollars worth of note sales in the last 12 months… I mean the CPA and doctors from Perth invested with us specifically because they did not have the time to spend 2 weeks running around the US….
At the end of the day of course the US welcomes the OZ investor and love it that they are coming here and spending money on properties hotels food rental cars… Airline tickets.. Although Qauntas probably gets the lions share of those fees.
Anyway something to think about.
emma171 wrote:…the type of person who, whether they were in Phuket, Singapore, Darwin or Tunbridge Wells would pick up a real estate magazine and start crunching numbers…. then just for giggles start looking…To wade through the crap, to see the gem, to recognize the gem…try to find the right tenant to love it as quickly as possible………..the trick of yield management????? The precise dollar on the supply/demand curve at which your rent is neither under marketed nor over?? The smell of the hunt even…don't really have to worry what city I am in…No boardrooms, no townhall meetings, no planning commissions??? I LOVE IT…It is SO SO SO not about moneyIt's like you live in my head
))Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
jayhinrichs wrote:I think one of the important aspects of this conversation as it relates to WI is that she has sufficient MASS or SCALE… I think she mentioned that she has 8 properties to date, So probably a 400 to 500k investment on her and her husbands part…. As well as based on what she has shared she has bought in the easier to manage areas of Atlanta and did not go for the cheapest thing on the market, And this is a big AND,,, last year is not this year in the market, All those who were trying to time the bottom well you missed it by and large at least in the Metro ATlanta market…WI I and others timed it well just because they made a decision to proceed… So WI has again by what she has stated on the forum 8k to 12k coming in monthly gross ( if everyone pays) and or more. With this kind of financial commitment and investment you have the scalability to run this as a little business… And here is my point I bet WI spends a pretty good amount of her month e mailing skyping and other management duties managing her managers. And running her small rental business… I doubt seriously that she just sits in her easy chair collecting her rents as is portrayed buy the Turn Key companies And yes if they have to travel to Atlanta 1 or 2 times a year for the 5 to 10k a year that would cost, its just the cost of doing business. so you add in those cost to Property management, vacancy when and if she will have any,, and on going repairs… TAx's insurance. etc etc. And its a nice cash flowing business, but it is a business and needs to be treated as one. Where this model goes Squirrly is for the investor that buys 1 or 2 properties.. There is no scale and no mass.. So fixed expenses travel expenses they cut into the return in an inordinate % of gross rents… if you have one property and you pay 5k to come and look at it before you buy it. there went year one 50% of your rental yeilds.. add in other costs and your brake even or negative geared year one. So I think the comparison to the TWH model for the smaller investor the one that would like to dip their toe… Is pretty easy,,, No need to come view your Note purchase as you do not own the property just the debt with equity, NO closing costs or any other fee expect the purchase of the note… And thats kind of how it goes in our market here in the US. I have only had 1 client actually physically visit there Note purchase out of over 5 million dollars worth of note sales in the last 12 months… I mean the CPA and doctors from Perth invested with us specifically because they did not have the time to spend 2 weeks running around the US…. At the end of the day of course the US welcomes the OZ investor and love it that they are coming here and spending money on properties hotels food rental cars… Airline tickets.. Although Qauntas probably gets the lions share of those fees. Anyway something to think about.I started investing in US about 12 months ago and I was initially looking at purchasing 10-15 properties, however as a fellow investor mentioned I have been spoilt with the great deals I secured at $35,000-50,000 and now most of the deals/properties that fit my criteria are more like $60,000-70,000 where 20% gross return will be very difficult to achieve. I am sure there are still plenty of great deals — just harder to find and with the Aus$ falling back will just add further pressure.
I agree for this to work you need to be buying multiple properties, its a numbers game.
You are correct Jay my investment in US is around $500K approximately $62,000 per property (fully rehabbed & associated costs/fees), I do not sit back watching the money flow in, though at the moment I am enjoying a healthy bank balance in US, just a shame I am having problems trying to work out the best way to bring the money back to Oz…. JFrom my experience anyone purchasing multiple properties in US will benefit if they are involved at all levels from researching structures that will reduce exposure but also ways to reduce tax in US, ie setting up loans against each property. Its also taken time to source an accountant and almost 12 months to understand what he is talking about, that’s another story. If you are not prepared to be proactive be prepared to get burnt.
Property management I am finding is another beast, no surprises here, I always knew this would be a challenge. Clearly it is early days, absolutely not easy from OZ, however I believe I am having some little wins here and there. I think the key is to get involved from ensuring you understand rental statements, request invoices for all costs and ensure they are itemised. If I need to I also contact the Operations Manager and keep him in the loop via emails. It is work for sure, I email/phone regularly but I have the time and it really is the only way I know how to do things — as us Ozzies say "Keep the B….ards Honest".
Cheers, WI
jayhinrichs wrote:Alex,would the world not be a better place if everyone invested in the TWH model…. These issues would never arise,, ,You and I work them out… Investor gets there check same day same amount every month. The Singapore group said they are not concerned about properties but want me to explain the TWH Module. So yes I am seeing buy and hold as the way to go .
I can tell the US investors love it. Yes seeing and hearing more about groups that want to buy and hold . So things are changing here in the USA markets.
And the big boys are moving in to the arena.
Key properties in Atlanta the biggest wholesale buyer there just cut off all there resale companies… and are keeping all the units in house…. Yes spoke to the group that picked up 5 of our Atlanta homes good profit on their by the way. They are not taking on clients but just putting houses toward the fund they built…
WI,
You will see over time that there is just going to be on going maintanence in any home in the US… Renters are tough on them… You can get very lucky and get one that treats the home as there own and is neat as a pin…. But the tenants know they are tenants and instead of checking little items out that can be easily fixed will call the Service line and next thing you know you have a weekend call to fix a flicker light because the tenant did not know how to use a dimmer switch… Now your 150 dollars in the whole for nothing. Most people are talking about property management they are forgetting to speak about renters and their mind .
Renters do not take care of properties like home owners I do not care what any one else. The mind set of USA renters is and must be different from other places .I suspect they are the same every where. They don"t care most of the time, even the higher end homes we have similar problems.
So the mind set of renters need to be taken into consideration on buying and holding these properties .
Sincerely
Alex
JLH
jayhinrichs wrote:I think one of the important aspects of this conversation as it relates to WI is that she has sufficient MASS or SCALE… I think she mentioned that she has 8 properties to date, So probably a 400 to 500k investment on her and her husbands part…. As well as based on what she has shared she has bought in the easier to manage areas of Atlanta and did not go for the cheapest thing on the market, And this is a big AND,,, last year is not this year in the market, All those who were trying to time the bottom well you missed it by and large at least in the Metro ATlanta market…WI I and others timed it well just because they made a decision to proceed… So WI has again by what she has stated on the forum 8k to 12k coming in monthly gross ( if everyone pays) and or more. With this kind of financial commitment and investment you have the scalability to run this as a little business… And here is my point I bet WI spends a pretty good amount of her month e mailing skyping and other management duties managing her managers. And running her small rental business… I doubt seriously that she just sits in her easy chair collecting her rents as is portrayed buy the Turn Key companies And yes if they have to travel to Atlanta 1 or 2 times a year for the 5 to 10k a year that would cost, its just the cost of doing business. so you add in those cost to Property management, vacancy when and if she will have any,, and on going repairs… TAx's insurance. etc etc. And its a nice cash flowing business, but it is a business and needs to be treated as one. Where this model goes Squirrly is for the investor that buys 1 or 2 properties.. There is no scale and no mass.. So fixed expenses travel expenses they cut into the return in an inordinate % of gross rents… if you have one property and you pay 5k to come and look at it before you buy it. there went year one 50% of your rental yeilds.. add in other costs and your brake even or negative geared year one. So I think the comparison to the TWH model for the smaller investor the one that would like to dip their toe… Is pretty easy,,, No need to come view your Note purchase as you do not own the property just the debt with equity, NO closing costs or any other fee expect the purchase of the note… And thats kind of how it goes in our market here in the US. I have only had 1 client actually physically visit there Note purchase out of over 5 million dollars worth of note sales in the last 12 months… I mean the CPA and doctors from Perth invested with us specifically because they did not have the time to spend 2 weeks running around the US…. At the end of the day of course the US welcomes the OZ investor and love it that they are coming here and spending money on properties hotels food rental cars… Airline tickets.. Although Qauntas probably gets the lions share of those fees. Anyway something to think about.Real estate is just like the simple game of monopol . The concept of owning the whole block. The new SC property management company we are going to use has 2200 units under his company. Now even for them it is a numbers game so the more homes the more potential income. To off set any losses ….
worldinvestor wrote:I have asked my PM company to contact me in the first instance if any maintenance issues arise, either email/phone unless urgent.
I have also requested copy of all maintenance bills so I can review these and also for ATO purposes.
OK, this is pretty basic stuff but not necessary something that I have found they are interested in doing.
Montly rental statements provide details of maintenance costs therefore PM company believe this is adequate, however, how would an investor know exactly what work was completed on the property etc.
I have persisted and will be receiving copies of all bills, however the other issue will take time.
This may seem trivial, however if I do not keep track of what is happening, I feel it would be very easy to be taken for a ride, I am not implying this is currently the case, however I have heard many stories where property management companies are billing/maintenance on a monthly basis.
So what is your experience to date with PM companies in US??
Property management and the mind set of renters in the USA are two topics. That we all could speak on for ours. Both good and bad for some many reason. I would like for WI not asking to much I hope. To give quarterly reports on property management. That should give most fair idea of what is going on in the USA management side. Just food for thought.
emma171 wrote:Aaaaah the voice of the war wounds….Shopping at home depot over Lowe's would be my only issue for you. Just picked up 100 boxes of tiles ( actually using them in my own house as well. Got them for 57 cents a tile.BUT BUT BUT – you are missing something fundamental… the type of person like me….I am talking about the type of person who, whether they were in Phuket, Singapore, Darwin or Tunbridge Wells would pick up a real estate magazine and start crunching numbers…. then just for giggles start looking... Once it is in your blood you will always look at real estate no matter where you go.
I know, a rare breed but we do exist! I agree, if this is purely investment, an effective "property fund" is great and Jay, to many many extents I wish you had been there when I was desperately looking for anyone reputable Stateside to refer people to back in 2010 but there is a side here that people will start missing (or not!). Everything in life happens for a reason so I hear.
I am not saying that I wish US property management on my worst enemy or US Property managers in the main part but you are removing an essence that is unfathomable…. the hunt for the deal, the thrill of the chase etc…. I know, mostly for those over here but still, I equate it to the thought of gold mining. Love the hunt , love finding the next deal, but after dealing with US tenants for last 3 years no thank you their
To wade through the crap, to see the gem, to recognize the gem – I LOVE doing the inspections and writing the reno list…… to polish the house as quickly as you can, to market it with the pretty photos and to try to find the right tenant to love it as quickly as possible………..the trick of yield management????? The precise dollar on the supply/demand curve at which your rent is neither under marketed nor over?? The smell of the hunt even! This is the best part of the business when my real estate partner and I can go look at homes all day long ..
I spent many a year heading other people's companies or answering to Boards of Directors and every day I get to cherish (and I do) that I haven't a CLUE what day of the week it is….. and I don't really have to worry what city I am in….but by gosh I am scouring the sites to see what is out there. No boardrooms, no townhall meetings, no planning commissions??? I LOVE IT. Been my own boss for almost 16 years now which is pretty awesome in it self.
Addiction: the point at which your social life is affected and normal life rotates around this…would I do anything to continue it? Well social life and family ,social life ( not big concern my family is) so knowing when to shut down is the key.Months ago even some of the people on this forum can attest to it.My hours were 430 am – 1030 pm, not worth it for any one. Stress is very bad and to over work is just as stressful. Now we shut down at 5 pm daily (once in a while I work late. )Come Friday at 5 no phone or computer until Monday morning. Our transition out of property management is already feeling like a winner for our company.
Every one I deal with is an enabler of this addiction and I suppose at some point someone will have to intervene but I genuinely and utterly and absolutely am completely addicted and will continue this until the day I day with absolute pleasure. It is SO SO SO not about money. Not about money its passion , and loving what you do.
HOWEVER, It is a dangerous passion if you don't FULLY know what you are putting your hand up for though and sadly all those people who are just entering the US market in the past 2 years – BE AWARE – it IS fun but by GOD you are, just like WI, and just like many of the Australian based facilitators (and ultimately what I think happened to Andrew Allan) going to have the downs that make the highs seem questionable….and in the worst cases be eaten alive by this market…….For all that think this is easy this is very dangerous investment game as is wall street with out know how. For those who made the jump and are expecting long term 20 % returns or better . Expect your expectations to be less then expected ( tongue twister their) say that 10 times.
So, if you are going through a facilitator just REALLY analyze how long they truly have been in this market and I swear, if they don't handle the back side of this, and only shove sales out there… be VERY aware that running 2 construction crews without oversight daily is a SKILL. It is called project management and if your facilitator says "I have an amazing team"… WHO IS OVERSEEING THAT TEAM FOR YOU – if they aren't a licensed real estate agent and can't directly stomp the streets renting the property for you…….find out who is and does handle that for you….(and how many others they handle that for) because the purchase is 1% of your US experience – and that, dearest, dearest Jay is where I agree that 90% of people just wanting an investment would be better RUNNING to you…. This buy and hold fund I will give Jay the credit for introducing it to me. This is now happening with most turnkey guys .Our new partner in Charlotte started similar fund 4 years ago. For just buy and hold clients . So this is not completely new to all .
because half of the people helping you will not be in existence in the US in 5 years time and if you are planning to hold even a second longer than 3 years, you may well find yourself trying to deal with offshore repairs and complete uncertainty.
Plan NOW and learn the market NOW while you still have someone desperate to sell you something. If they haven't evicted someone, don't know the process, haven't a clue how to fill in Section 8 paperwork, wouldn't be able to be there to help you if something happened, find the person who does and get to know THEM. The education on the USA market should continue for all new and old investors alike .With everything that Emma just mentioned as well as alot of other things . DO UNDERSTAND YOU DO NOT HAVE TO PAY FOR INFORMATION .MOST OF THIS VERY EASY AND ACCESSIBLE ( That why I lvoe the internet)
Alex SC wrote:jayhinrichs wrote:I think one of the important aspects of this conversation as it relates to WI is that she has sufficient MASS or SCALE… I think she mentioned that she has 8 properties to date, So probably a 400 to 500k investment on her and her husbands part…. As well as based on what she has shared she has bought in the easier to manage areas of Atlanta and did not go for the cheapest thing on the market, And this is a big AND,,, last year is not this year in the market, All those who were trying to time the bottom well you missed it by and large at least in the Metro ATlanta market…WI I and others timed it well just because they made a decision to proceed… So WI has again by what she has stated on the forum 8k to 12k coming in monthly gross ( if everyone pays) and or more. With this kind of financial commitment and investment you have the scalability to run this as a little business… And here is my point I bet WI spends a pretty good amount of her month e mailing skyping and other management duties managing her managers. And running her small rental business… I doubt seriously that she just sits in her easy chair collecting her rents as is portrayed buy the Turn Key companies And yes if they have to travel to Atlanta 1 or 2 times a year for the 5 to 10k a year that would cost, its just the cost of doing business. so you add in those cost to Property management, vacancy when and if she will have any,, and on going repairs… TAx's insurance. etc etc. And its a nice cash flowing business, but it is a business and needs to be treated as one. Where this model goes Squirrly is for the investor that buys 1 or 2 properties.. There is no scale and no mass.. So fixed expenses travel expenses they cut into the return in an inordinate % of gross rents… if you have one property and you pay 5k to come and look at it before you buy it. there went year one 50% of your rental yeilds.. add in other costs and your brake even or negative geared year one. So I think the comparison to the TWH model for the smaller investor the one that would like to dip their toe… Is pretty easy,,, No need to come view your Note purchase as you do not own the property just the debt with equity, NO closing costs or any other fee expect the purchase of the note… And thats kind of how it goes in our market here in the US. I have only had 1 client actually physically visit there Note purchase out of over 5 million dollars worth of note sales in the last 12 months… I mean the CPA and doctors from Perth invested with us specifically because they did not have the time to spend 2 weeks running around the US…. At the end of the day of course the US welcomes the OZ investor and love it that they are coming here and spending money on properties hotels food rental cars… Airline tickets.. Although Qauntas probably gets the lions share of those fees. Anyway something to think about.Real estate is just like the simple game of monopol . The concept of owning the whole block. The new SC property management company we are going to use has 2200 units under his company. Now even for them it is a numbers game so the more homes the more potential income. To off set any losses ….
Alex your new manager I think I met him one time,, I was making an offer on 300 homes that one family owns there in Charlotte and he managed them… This guy would literally talk your ear off then your arm and your legs if you let him,,,, But knew his stuff.
worldinvestor wrote:jayhinrichs wrote:I think one of the important aspects of this conversation as it relates to WI is that she has sufficient MASS or SCALE… I think she mentioned that she has 8 properties to date, So probably a 400 to 500k investment on her and her husbands part…. As well as based on what she has shared she has bought in the easier to manage areas of Atlanta and did not go for the cheapest thing on the market, And this is a big AND,,, last year is not this year in the market, All those who were trying to time the bottom well you missed it by and large at least in the Metro ATlanta market…WI I and others timed it well just because they made a decision to proceed… So WI has again by what she has stated on the forum 8k to 12k coming in monthly gross ( if everyone pays) and or more. With this kind of financial commitment and investment you have the scalability to run this as a little business… And here is my point I bet WI spends a pretty good amount of her month e mailing skyping and other management duties managing her managers. And running her small rental business… I doubt seriously that she just sits in her easy chair collecting her rents as is portrayed buy the Turn Key companies And yes if they have to travel to Atlanta 1 or 2 times a year for the 5 to 10k a year that would cost, its just the cost of doing business. so you add in those cost to Property management, vacancy when and if she will have any,, and on going repairs… TAx's insurance. etc etc. And its a nice cash flowing business, but it is a business and needs to be treated as one. Where this model goes Squirrly is for the investor that buys 1 or 2 properties.. There is no scale and no mass.. So fixed expenses travel expenses they cut into the return in an inordinate % of gross rents… if you have one property and you pay 5k to come and look at it before you buy it. there went year one 50% of your rental yeilds.. add in other costs and your brake even or negative geared year one. So I think the comparison to the TWH model for the smaller investor the one that would like to dip their toe… Is pretty easy,,, No need to come view your Note purchase as you do not own the property just the debt with equity, NO closing costs or any other fee expect the purchase of the note… And thats kind of how it goes in our market here in the US. I have only had 1 client actually physically visit there Note purchase out of over 5 million dollars worth of note sales in the last 12 months… I mean the CPA and doctors from Perth invested with us specifically because they did not have the time to spend 2 weeks running around the US…. At the end of the day of course the US welcomes the OZ investor and love it that they are coming here and spending money on properties hotels food rental cars… Airline tickets.. Although Qauntas probably gets the lions share of those fees. Anyway something to think about.I started investing in US about 12 months ago and I was initially looking at purchasing 10-15 properties, however as a fellow investor mentioned I have been spoilt with the great deals I secured at $35,000-50,000 and now most of the deals/properties that fit my criteria are more like $60,000-70,000 where 20% gross return will be very difficult to achieve. I am sure there are still plenty of great deals — just harder to find and with the Aus$ falling back will just add further pressure.
I agree for this to work you need to be buying multiple properties, its a numbers game.
You are correct Jay my investment in US is around $500K approximately $62,000 per property (fully rehabbed & associated costs/fees), I do not sit back watching the money flow in, though at the moment I am enjoying a healthy bank balance in US, just a shame I am having problems trying to work out the best way to bring the money back to Oz…. JFrom my experience anyone purchasing multiple properties in US will benefit if they are involved at all levels from researching structures that will reduce exposure but also ways to reduce tax in US, ie setting up loans against each property. Its also taken time to source an accountant and almost 12 months to understand what he is talking about, that’s another story. If you are not prepared to be proactive be prepared to get burnt.
Property management I am finding is another beast, no surprises here, I always knew this would be a challenge. Clearly it is early days, absolutely not easy from OZ, however I believe I am having some little wins here and there. I think the key is to get involved from ensuring you understand rental statements, request invoices for all costs and ensure they are itemised. If I need to I also contact the Operations Manager and keep him in the loop via emails. It is work for sure, I email/phone regularly but I have the time and it really is the only way I know how to do things — as us Ozzies say "Keep the B….ards Honest".
Cheers, WI
WI thanks for sharing,, thats about what I was figuring on your out lay for the props and such…And as you say you stay on them daily to weekly you will mitigate a lot of what goes on…. My point is for everyone that is up for the task like yourselves there are others that are sold this product with the mind set that the PM will just take care of everything and the rentals work like AUssie rentals. And nothing can be further from the truth, as you have shared with the group…
AGain thanks for sharing your business with the group,,,, I refer to you as a business owner not an investor.. Your running a nice little business here in the states.
and for all of us Stateside it is lovely to hear reality……..there are others and it is absolutely true… This is a business and you do need to treat it as such….My personal goal was to teach everyone what I knew to avoid them being ripped off…. Again, back then it was an absolute case of the only options out there were short timers who would be in the market for a few years until too tired and then just disappearing….
Good way of wording it ..l business.. Agreed Jay, and WI, thank you from me for sharing as well.
PS… My method was simply to only take on a few clients…… That way 4 am-ers limited to when I want them… Aaaah but I was also single until March…..!
jayhinrichs wrote:Alex SC wrote:jayhinrichs wrote:I think one of the important aspects of this conversation as it relates to WI is that she has sufficient MASS or SCALE… I think she mentioned that she has 8 properties to date, So probably a 400 to 500k investment on her and her husbands part…. As well as based on what she has shared she has bought in the easier to manage areas of Atlanta and did not go for the cheapest thing on the market, And this is a big AND,,, last year is not this year in the market, All those who were trying to time the bottom well you missed it by and large at least in the Metro ATlanta market…WI I and others timed it well just because they made a decision to proceed… So WI has again by what she has stated on the forum 8k to 12k coming in monthly gross ( if everyone pays) and or more. With this kind of financial commitment and investment you have the scalability to run this as a little business… And here is my point I bet WI spends a pretty good amount of her month e mailing skyping and other management duties managing her managers. And running her small rental business… I doubt seriously that she just sits in her easy chair collecting her rents as is portrayed buy the Turn Key companies And yes if they have to travel to Atlanta 1 or 2 times a year for the 5 to 10k a year that would cost, its just the cost of doing business. so you add in those cost to Property management, vacancy when and if she will have any,, and on going repairs… TAx's insurance. etc etc. And its a nice cash flowing business, but it is a business and needs to be treated as one. Where this model goes Squirrly is for the investor that buys 1 or 2 properties.. There is no scale and no mass.. So fixed expenses travel expenses they cut into the return in an inordinate % of gross rents… if you have one property and you pay 5k to come and look at it before you buy it. there went year one 50% of your rental yeilds.. add in other costs and your brake even or negative geared year one. So I think the comparison to the TWH model for the smaller investor the one that would like to dip their toe… Is pretty easy,,, No need to come view your Note purchase as you do not own the property just the debt with equity, NO closing costs or any other fee expect the purchase of the note… And thats kind of how it goes in our market here in the US. I have only had 1 client actually physically visit there Note purchase out of over 5 million dollars worth of note sales in the last 12 months… I mean the CPA and doctors from Perth invested with us specifically because they did not have the time to spend 2 weeks running around the US…. At the end of the day of course the US welcomes the OZ investor and love it that they are coming here and spending money on properties hotels food rental cars… Airline tickets.. Although Qauntas probably gets the lions share of those fees. Anyway something to think about.Real estate is just like the simple game of monopol . The concept of owning the whole block. The new SC property management company we are going to use has 2200 units under his company. Now even for them it is a numbers game so the more homes the more potential income. To off set any losses ….
Alex your new manager I think I met him one time,, I was making an offer on 300 homes that one family owns there in Charlotte and he managed them… This guy would literally talk your ear off then your arm and your legs if you let him,,,, But knew his stuff.
SC guy has 2200 units he talked so much I left Kevin in their with him came back 1 hr later and he was still going. Charlotte guy is younger then me but has 300plus house _ taken on our his is over the 450 market. He is also the one with the fund that is buying and holding so he does not sell many deals to investors any more
emma171 wrote:and for all of us Stateside it is lovely to hear reality……..there are others and it is absolutely true… This is a business and you do need to treat it as such….My personal goal was to teach everyone what I knew to avoid them being ripped off…
Emma was not really a goal but good Business practice for my company. I spoke quite often in California that last few years. Jay would be familiar with the different groups as he was the lender for all of us. They stopped inviting me to speak . After I would do a 15 minute speech on everything that can and will go wrong in real estate. This was not just to help from being ripped off but also the little things to look out for. When dealing with contractors, property management . BASICALLY ALL THE STUFF NO ONE WANTS TO SPEAK ABOUT.. Again, back then it was an absolute case of the only options out there were short timers who would be in the market for a few years until too tired and then just disappearing ( WE saw it as education time because the loans for investors where only to and for new buyers who owned less then 4 homes. The long term investors ( seasoned one who owned 10 plus homes suddenly no loans available) so had to refocus and change our thought process …. Good way of wording it ..l business.. Agreed Jay, and WI, thank you from me for sharing as well. PS… My method was simply to only take on a few clients…… That way 4 am-ers limited to when I want them… Aaaah but I was also single until March…..!
Alex,
Looks like the video guy you know got his posts removed I think he was advertising his services too strongly,
Too bad its definalty a service that would have merrit.
JLH
In some of the larger US Cities such as Chicago, Detroit and Atlanta to name a few it’s important to find a property manager that is relatively close to your properties and has employees that will go by the rental if there are any issues (Such as paying rent on time)
In the Detroit market some property managers in neighboring cities expect the renters to always mail in or drop off the rent to the office and that doesn’t always happen…
So then the property manager tells you they have to start the eviction process and it will cost you a few thousand dollars to legally evict them. Then after that’s all over (Months later) you have to advertise, pay another month’s rent for tenant placement and cross your fingers that this tenant pays.
Save yourself the headaches in the major cities and when interviewing you next property manager ask them this simple question… Do you have an employee that will go knock on the door to collect the rent if the tenant is late? Some tenants know how to work the system and if there is nobody knocking on the door for the rent they’re not going to pay it.
video sad but true statement,
You should have seen me circa 2009,,,, flying all over the mid west and south east in my plane,, renting cars. driving up to homes and introducing myself as the bank ( which is was as I was foreclosing on the landlord) and please pay me the rent.
This was open season for these tenants to stop paying,,,, cried that they were confused, did not understand, who are you etc etc.
Our renter profile is so so far different than OZ as to be " well" other side of the world !!.
One of my clients back in the 80's had almost 200 doors in Alameda CA… even back them that was 15 mil worth of property.
He was a slum lord by that I mean if you drove through Alameda and were pointing out the worse looking properties those were Art's….
He collected all rents in person… These folks paid on the 1st or 15th…. so what he did was drive to each property,, The tenant put the rent in an envelope and pinned it to the front door…Art would just drive up collect the rent push the pin back in the door and on to the next one… If there was no rent there he posted the 3 day notice to pay or quit.
The other thing that stuck in my mind and again this is CA… but he had to pay 15k a month in Alimony the rest of his life, that one just shocked me… I mean if I had a great month in those days I made maybe 7k and a whopper was 10k…
JLH
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