After many personal experiences – good and bad –hiring property management companies and managing properties on our own, we’ve figured out some key elements to keep in mind when choosing a property management company. Here are four that we think lead to a successful business partnership.
It may seem like a cliché to put integrity on the top of the list; however, a property manager’s decisions and actions have an effect on the property owner’s profit. Tracing the actions and decisions that result in a lower return on investment after the fact is difficult.Therefore, integrity is the most important component to look for from the onset. The best way to find out whether the property manager in question is reputable to use the following tools:
• Have a face to face meeting to get a sense of the person or team and their attitude.
• Check references from current property owners who entrust their property to the...
“The fight is won or lost far away from the witnesses, behind the lines, in the gym, and out there on the road; long before I dance under those lights.”
We just finished rehab on a new rental property in a great location in Philadelphia, close a major transportation hub and a University. However, majority of the work in entrepreneurship is not glamorous. These are stories that don't come with cool shiny photos, these are stories that will definitely not make it to Instagram. This post is highlighting one of those stories and the lessons learned from that. I wanted to share this because it will help a new investor navigate through adversities in their journey. The day we closed on the property, right before we could even change the locks, there was an unfortunate theft at this property. One of the items stolen was the boiler among many other things. My contractor called me genuinely upset about this. A theft can...
I'm a huge proponent of the 80-20 rule wherein 80% of the tasks / projects must be outsourced or eliminated and only the most important 20% must be performed by entrepreneur. Even if the owner is in the same general vicinity, property management is one aspect that seems to fall under the 80% for a lot of investors. Over the course of the past few years, I've come to realize that managing one's own properties isn't just to save money, it has other advantages as well. With process streamlining and outsourcing key elements of property management, the tenant landlord relationship can be some thing an investor can maintain without a lot of time commitment. Here are the four key advantages that aren't always apparent.
The amount of money one can save by not hiring a property management company (5-10% of the rent) can be used to make both the tenant's and the landlord's life easier which helps provide high quality service. Time and again, my tenants...
Look, I get it. We live in an information-overload world. We listen to hundreds of podcasts and read numerous stories about how people started in real estate and wonder, “Which strategy is the best? Which market is the best? Which is the best stage of the market cycle to invest?”
Fear of failure resulting in hesitance to invest affects male and female investors alike. There’s even a name for it: analysis paralysis. But if you try to understand the science behind it, you will see why these questions are undermining your ability to get started.
Gretchen Rubin, author of The Happiness Project, talks about satisficers and maximizers: “Satisficers make a decision once their criteria are met; when they find the hotel or the pasta sauce that has the qualities they want, they’re satisfied.” On the other hand, “Maximizers want to make the best possible decision; even if they see a bicycle that meets their requirements, they...
Have you ever had an idea brewing in your head for years and then woken up one day and decided—no excuses—you’re going to just do it?
And you do, going so far as to execute it with the fervor you had dreamed about. You’re unstoppable!
This is the attitude I had the day I jumped into real estate full time.
However, after rehabbing a few properties, my progress came to a standstill. I was held up by the second-to-last “R” in the BRRRR strategy—the dreaded “refinance.” I wouldn’t have more cash to deploy in more deals until I was able to refinance.
Limited capital is the single biggest reason newbie investors are unable to scale. But I wanted to avoid knocking on the doors of private lenders or exploring partnerships. To keep growing my real estate portfolio, I had to find more capital within my existing properties.
And I did! How? Through the power of home equity.
In one year, I grew my portfolio from three to 20...
“Your level of success will rarely exceed your level of personal development, because success is something you attract by the person you become.”
~ Jim Rohn (From: The Miracle Morning)
Do you use independent, passionate and perhaps perfectionist to describe yourself? Let me guess, you have a thriving career, great family and friends and are generally happy. Yet, something is missing, you find yourself wondering if you were meant to do big things, if this is all there is. However, despite this nagging feeling, you feel stuck.
These attributes that you just used to describe yourself, those are your strong suits, right?… Wrong! It’s time to start looking as them as your drawbacks.
These attributes allow us to achieve growth and progress. They allow us to be liked by our employers and customers and have great relationships with friends and family. But that’s just the problem, you see! These are the same qualities that stop us from...
One of the acquisition strategies many seasoned real estate investors swear by is REO properties. However, it is a very challenging field to step into and requires patience, relationship building, and risk taking that might not be for the novice investor. There are certain aspects that one needs to be aware of when trying to acquire an REO property. Perhaps the most important aspect is that investing in the REO market is a strategy that requires a high level of sophistication and diligence. The learning curve is far beyond what most people realize. This overview is intended to get you familiar with complexities the REO property market.
So, what are REO properties? REO stands for “Real Estate Owned”; a real estate owned property is a property whose ownership has lapsed back to the bank or mortgage lender. There are many steps through which a property goes before attaining the infamous REO title. Below is the life cycle of an REO Property.
“What would you do if you weren't afraid?”
After my father passed away when I was very young, my mother – a teacher – dreamed to see me in a steady full-time job. Climbing the corporate ladder was the gold standard. So, when I made it to a managerial position she was thrilled, and I was too – for having made her proud.
For us 9 to 5 folks this dream, the gold standard, trains us to be risk averse. It makes us comfortable in the cycle of steady paychecks – despite marginal yearly wage growth, mortgage payments, and retirement accounts. Saving for a few weeks of vacation, cars, or some other indulgences reinforces our feeling of security, though rarely satisfies our desires. This tentativeness is generally even more pronounced in women, who are conditioned to keep their head down and be grateful for what they have. A risk averse 9 to 5 job further closes women off in a society which already puts them into a box.
Have you considered investing money into a passive rental for additional income but not sure where to start? This blog post is a peek into how I choose properties to invest in. The number one thing to remember is that picking a passive rental different than choosing a home for yourself to live in. When it comes to investing in a passive rental, it is all about numbers and not about falling in love with the property. Though the analysis is complex, I have broken my strategy down into four key components for simplicity.
Location is key in any real estate investment. For single family passive rentals, this is specifically important in finding tenants quickly and also for retaining tenants which in turn is helpful in reducing the vacancy rates. I look at these specific elements:
a. Access to public transport and expressways
Note that if public transport isn't available and expressway proximity is what you're considering, ease of parking becomes a factor as well.
“It's not the notes you play, it's the notes you don't play."
I have mentioned the 80/20 rule in a previous blog post, so writing a proper introduction to the concept made sense. If you haven’t read about it before, you are in for a epiphany… this could potentially change your life.
The 80/20 rule, also known as the Pareto principle, the law of the vital few or the principle of factor sparsity was originally observed in connection with population and wealth. Italian economist Vilfredo Pareto noticed that 80% of Italy's land was owned by 20% of the population. He then found a similar distribution in various other countries he surveyed. Since then, this principle has been successfully applied to sports, taxation, software, health and I have personally used it for many years when applying Six Sigma principles during my previous life as a Mechanical Engineer. It wasn’t until I...