You know Kris it seems to me like this whole property management business stuff
is kind of an unnecessary expense in real estate you could really take home a
lot more money if you didn't need one of those. Well true. In fact, you might
actually have a point there. Today on limitless TV, I'm going to be
talking about property management and is it something that you really need?
I love property managers. In the beginning, I didn't have one. I was the
property manager. And you know what ?When I bought my first real estate deal, I was
thrilled about being my own property manager because I really didn't want to
take 10% of the gross rent and actually give it to somebody else. I was making
$1,500 a month on my home and ten percent of that is a hundred and fifty
dollars. And when I didn't have a lot of money a hundred and fifty dollars was
enough that said I'm gonna be the landlord. Now by the way, what does a
property manager actually do? Well they put tenants in homes, they collect the
rent, they do the background checks and make sure you got the right kind of
people. You have to sometimes deal with evictions or getting people out or
having hard conversations and then if there's repairs and maintenance then
you're basically watching over those things and ensuring that they're taking
place. Property management is a vital function in all real estate. And in the
beginning for my first 25 homes I was the property manager. On my first 10
homes I loved it. On my next 10 homes I started liking it
less. And on the last five homes of the 25 that I ever personally property
managed I started very strongly disliking management. Because that was a
lot of phone calls and it was a lot of headache and it was a lot of work and
then there was a lot of accounting and I was doing it all by myself while I was a
full-time student going to school full-time. And it just felt like it was
starting to take 20 hours a week and I called a buddy of mine in Florida and I
said I want to give you an opportunity. I want to pay you $3,000 a month to manage
all of my properties so that I can get busy on building a bigger portfolio and
bringing more properties in. He moved his family from from Florida and I taught
him how to do what I was doing. I taught him how to place tenants, I taught him
how to do open houses, I taught him how to select and do background checks on
the right tenants that had better-ish credit that had greater incoming and
more stability and good jobs that weren't going to bring smoker pets if
possible into the homes. And he did a brilliant job managing that I also had a
property manager accountant whose job was just to receive the money, put it in
QuickBooks log it all appropriately so that I could do my taxes appropriately
at the end of the year. And the moment I hired my friend to come in town and do
that it was like this massive burden got released and it was when I
discovered the efficacy of my new belief, if you want something done right don't
do it yourself. Property managers are vital. It might be you in the beginning
but if you want to grow and perpetuate then ultimately you need to get to a
place where you're no longer doing the property management. What they do is
super valuable I'll tell you that a hundred and fifty dollars a month on a
fifteen hundred dollar gross rent some months their jobs are easy right?
The tenants paying on time, they don't have to call, they're receiving, they're
cutting the rest of the money to me, there's no maintenance. And it's like why
am I paying you that money but the moment the evictions kick in or the
moment the hard conversations or late payments, the moment they have to issue
and file paperwork, the moment they have to put a tenant in the house, I become
deeply grateful for that money that I pay. Property managers essentially are
going to do the maintenance, put people in the homes, do the background checks,
collect the money, and do the nasty hard things when it comes to evictions,
paperwork's, hard conversations, collecting on late, collecting late fees
etc etc etc. Recently one of my property managers even went to court because
there was a tenant and by the way that will happen if you're on a lot of homes.
First time I actually had someone take me to a small claims court over an issue
of saying we put money in the house and we're leaving but we think we should get
some of that out and blah blah blah. My property manager, they handled that for
me creates a stress-free world for me. But what I really want to share with you
is how you game the system to your favor. Do you want to know how to take property
management, have other people do the work, and get the most out of it? check this
out. Let's talk about how you game the system.
It comes down to the property manager right? To you paying if you're collecting
a thousand dollars of gross rent and paying them a hundred dollars so that
10% that may feel like a lot of money to you but a hundred dollars doesn't buy a
lot of loyalty. A property manager with several homes however, you actually end
up purchasing a lot of loyalty. That's the game that I play is that I'll have
all of my clients buy real estate in one area so we give all of our properties
and there were the kingpin. We have four hundred properties place with them which
means that you now matter and it means that instead of 10% they're
often charging 8% or 7%. A discounted rate and they know they gotta run the
operation squeaky clean and keep you happy because they're tied to something
way bigger. Volume is how you win in real estate when it comes to repairs and bids
and winning and buying and absolutely in property management, the game is all
about volume. So even if you were to buy three homes in an area with the same
property manager, those three homes purchase far more loyalty than if you
just have one home. So when you're thinking of your system of where to do
deals, think of the power of volume and leverage that to your benefit. And that's
what a property manager does. Thank you so much for watching the video today I
really appreciate you. If you haven't already, hit that subscribe button. Take
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