Realty411 Magazine Featuring Eric Counts, Credit Nerds - Page 88

Interviewing Attached is an appendix of Leading Questions that need to be asked at the interview. They should be sent a couple days beforehand so the potential manager can prepare properly. This also projects a businesslike image of the investor to the manager. This list of questions is not exhaustive as these will lead into others as the interview progresses. Managing the Managers Property managers typically charge 8­10% of collected rents. In other words, they don’t get paid during vacancies. This motivates them to get vacancies filled promptly. Some managers charge a “turnover” fee when they re­rent a unit. This is fair because it’s extra work for them. Some investors see a challenge in grinding the manager on their pay. This is not an area to push the limits. Managers who feel well­paid will manage better. All it takes is one $6,000 damaged unit to wipe out any perceived savings. So, pay your managers well. Another thing is to remember that the manager works for you. Some managers are firm with their clients about what they will and won’t do. (They try to treat you like a tenant!) When they try this, be polite but assertive. THEY WORK FOR YOU! Talk to your manager about inspecting your unit(s) quarterly. They need to get inside, ask about needed repairs, and assess how the unit is being treated. You don’t want a $6,000 rehab in two years because the tenant paid well but ran the place down. If possible, try to visit the manager from time to time. Drive by the property first. Try to find a scraggly lawn, broken window, inoperable car, or something to ask the manager about when you get to their office. This “surprise audit” will help keep them from going slack handling your account. Remember, they work for you, and you are paying them well. A final issue is the report(s) you will receive monthly. Large management companies have professional reports which load easily into income tax­preparation software. Part­time managers usually do not. So, you will need to set up an EXCEL spreadsheet or purchase your own software and load it monthly. Do not wait for “tax time” for this. GOOD LUCK! Bruce Kellogg has been a Realtor® and investor for 38 years. He has transacted about 800 properties in 12 California counties. These include 1­4 units, 5+ apartments, offices, mixed­use buildings, land, lots, mobile homes, cabins, and churches. Mr. Kellogg is a contributor and copy editor for two national real estate wealth­building magazines: Realty411, and REI Wealth Monthly. He is a recipient of an Albert Nelson Marquis Lifetime Achievement Award, listed in Who’s Who in America – 2019. He is available for consulting with syndication, turnkey, joint­venture, and other property purchasers and note investors nationally, and other consulting assignments. Reach him at brucekellogg10@gmail.com, or (408) 489­0131. 88