| by Kenneth Chase | 6 comments

6 Steps to Hiring the Perfect Property Manager! ?

Much of my real estate success comes from
having a good property manager, which is in NO WAY easy to come by. And believe me, I’ve been on both sides
of it – my manager before this one, stole money from me, cheated my tenants, and ended
up suing me for a sum well into the 6-figures. I’ll give you all the details. Coming up! Hey there, my name is Stephen Spicer and it’s
my goal to help you Invest Smarter – whether that’s with real estate or stocks, I wanna
share my experiences with you to help you on your journey. Don’t forget to subscribe and hit that notification
bell so that you don’t miss any of this value. If you’ll bear with me for a moment, I’d
love to share with you my mixed history with property managers. It’ll show you that this is not an issue
to take lightly. These are lessons that would have saved me
10’s of thousands of dollars if I had known them (and taken them seriously) a decade ago. I’m gonna (1) take you through my story
– my personal experiences. And then, (2) I’ve put together a quick
list of tips to help you determine if you’ve found a property manager you can trust. And if you won’t bear with me for my story…
well, then just use the detailed timestamps that I always carefully put together for you
down there in the description. So here it goes… I purchased my first rental property, in my
hometown in 2008. I was in college during that time …an hour
away from this property. I was coming up on the weekends and some evenings
to take care of my landlord duties, but I quickly realized that that wasn’t going
to be sustainable, or at least, not the best use of my time, from an investment perspective. So, I started looking for a property manager. Now, the problem with my hometown – and many
cities that have the types of properties I seek – is that there aren’t very many property
management companies around …if any. In this case, there weren’t any. So, I found a friend that was pretty handy
to manage my rental for me – it worked out well because he also had an interest in investing
in rentals himself in the future and wanted to get a feel for it. He did a fine job. The following year, I purchased a 6-plex and
this became a pretty steady part-time job for him – with 7 units there was pretty much
always something that needed to be repaired or dealt with. But about a year after that, my manager – we’ll
call him Manager #1 – moved. I had just started my full-time job as a financial
advisor and was putting in more than 80 hours a week there. I couldn’t handle those rentals back home. I hadn’t realized how much I had been depending
on him. Once again, I asked around at all the real
estate firms and no one wanted to take on any property management duties. And honestly, unless you’re handy yourself
and would be doing repairs, thus making money from that side of it as well, I can understand
the lack of interest. So, I did what they tell you (and what I’m
about to tell you when we get to the tips) to do… I asked around. I found somebody who was currently managing
a bunch of rentals for someone else. He seemed to have just enough time to add
mine in the mix. It appeared to be a perfect fit. Problem solved. I was desperate… Manager #2 was hired. I was distracted that following year – always
scrambling to catch up with what was going on with my rentals, my books (…keeping track
of who had paid me and my expenses) were constantly behind …it was bad. There was a lot of negligence on my part as
I was distracted being newly married, starting my new career, and moving into my new house
– a lot happened in that year. So, much of my problems that arose out of
that year, come back to me and my negligence. I definitely could have seen some of the warning
signs if I had been paying more attention. Like I said, this experience taught me a lot. And although it’s a little embarrassing
for me, I hope hearing how bad I let this get, will help you avoid any of these issues. It wasn’t until I got a call one day in
2011 that I was forced to renew my focus on my rental properties. I even remember exactly where I was because
this call set in motion a series of events that played out over the following three years
that forced me to become a better steward of my assets. I was 24 years old when I got that call from
Manager #2 saying he had fallen off the top of one of my units, a 2-story building. He said he was messed up pretty bad. He sent me some pictures… he was! He was calling to tell me that he’d be out
of it – bedridden – for a while. I felt terrible. I … for whatever reason, felt responsible. I told him of course, to take as long as he
needed. To let me know how else I could help. I would deal with the rentals for the time
being. Later that day he called me again, just to
make sure that I had insurance on that building. I said of course. He said he wasn’t going to file a claim
but was just curious. He thought his insurance would be enough to
cover everything. I told him to do whatever he needed to do. Well, it didn’t take him long… the next
day he asked me to see about that claim against my insurance. I did. They informed me that there was no way insurance
would pay out since I was in no way negligent. Well… the nuances aren’t important here. Manager #2 didn’t like that answer. So – under the instruction of his ambulance-chaser
lawyer – he sued me. At the age of 24, while I was gone working,
my wife, sitting home alone, was served with papers for a multiple-6-figure lawsuit. I’ll spare you all the details of the proceedings
and the time and money wasted over the following 3 years, as this thing drug out. Here’s the cliffnotes version:
Turns out he didn’t fall off my roof. He hurt himself – severely – somewhere else
and just blamed me because he assumed I had insurance on that property. This all became obvious during his deposition
when he entirely changed his story from the one he had told me and a handful of others
– and to think… up until that point, which was about a year into this, I’d believed
him and felt bad. His own lawyer even confessed confidentially
that he knew he was making the whole thing up… To make this worse, as my lawyer and I interview
the tenants trying to understand what happened, it became clear that for months he had been
pocketing some of their rent payments for himself and overcharging them in some cases. Again, I should have been paying closer attention. That’s on me. — So, at this point, as this was all settling
out, I had to find a solution. I had way too much going on in my life to
be able to handle all these rentals an hour away by myself. I had to have help. I didn’t want to give up my rentals, because
they’d been providing me with some cash flow over the years – even despite these problems
– and I knew the potential they could have. Now, I got lucky here (with what happened
next), and I know my situation is unique. That’s part of the reason for this video,
because I want to be fully transparent with you about all of these deals that I’ve been
sharing with you and that I’ll share with you in the future. You see, my brother-in-law, had just graduated
high school. He’d been working for a contractor for years
– so he was more than qualified to help with many of the issues that came up, including
roofing and plumbing… the kid was pretty handy. He was also confident and well-spoken – a
national-qualifying debater during his high school years. So he was good with handling tenants. He needed work and I needed a lot of help. He stepped in and we worked side-by-side for
a while as I tried to get everything back in working order. I realized that he was the perfect candidate
for the job. By this point, I had enough obligations like
this in my hometown to justify a full-time position. But I didn’t think that would be enough
for him. He was overqualified and too ambitious. So, I offered him partial ownership in my
personal real estate holdings. I had identified the ideal person for the
job, and I gave up some equity to lock him in as a partner and get him excited about
growing our holdings. So, any time you hear me say “we” or “our”
when referring to our rentals. That’s who I’m talking about. Considering my circumstances, and more specifically,
where I want to focus my time, that was one of the best decisions I’ve ever made. The following few years, while I was raking
in excess cash flow from my job, we were acquiring several properties a year and having a lot
of success. — Now, I understand that this story – that my
unique experience – will likely not directly apply to anyone else. But it’s the only experience that I have. And it is a BIG part of my success today – I
want that to be clear – want to be honest and transparent with you. Specifically, he consistently gets us above
market rent rates; our vacancies are low; he’s quick to respond to tenants and extremely
handy – keeping them happy; he knocks out roofing, plumbing, and many of those major
jobs that sometimes come up for half what I could get another contractor to do it – remember
the repairs on that last video coming in at half our projections… well he’s why! So, coming up with a creative deal to bring
him in as a partner and not just a property manager – specifically, giving up some equity
while still paying him that standard 10% management commission – FOR ME – it’s been well worth
it. — But I get that’s not going to be the case
for everyone. At least not at first. So, if this is possible for you, here’s
the 6-step process I recommend you go through to find that perfect property manager for
you. And this is what we’ll do whenever we start
to expand into areas that are outside of Manager #3 – my partner’s – range. Step 1… and this is essential… you have
to scroll down and click that like button. …no really, the first step is to: Find other landlords in the area where your
property/properties are. Network with them. Get to know them. This’ll be helpful for you anyway. Especially if you’re just getting started
in an area, these people may have years, sometimes decades, of experience with different contractors,
different rental contracts, maybe some tenants that might end up trying to rent from you,
AND different property managers. Some of them won’t use managers, but some
will… and this can be one of your best sources of information and credibility – these firsthand
accounts. But don’t stop at just one. Ask around – especially if you’re in a bigger
city and there are a lot of options. See what all they do for them, see what their
fees are, figure out what complaints the landlords have with them, if any. This will be your best resource for finding
a property manager and many other things going forward. Especially if you’re young – you may be
nervous to reach out to a more experienced rental owner – but when you do, I think you’ll
find that most would be more than happy to help out a young upstart! So, once you have a list of 3 or 4 from these
credible sources… Step 2… Find out as much as you can about them. See what rates their getting on the properties
they’re managing – and how those compare to the average for the area. What are their vacancies? How much do the landlords end up paying for
repairs each month. You should even go check out their work for
yourself. See how they advertise. Visit some of the properties they manage to
see if they’re well-maintained. Step 3. Interview several of them. Are they well-spoken? Would you as a tenant, enjoy interacting with
them? As you narrow your search, you may even ask
to speak with some of the tenants. Do the tenants feel like their complaints
are addressed? How long does it take for a repair or maintenance
issue to be fixed? Is the building clean? Is the building quiet? Does the tenant plan on signing a new lease? Why or why not? These questions will help you decide if the
current tenants are happy with management’s performance. Step 4. Of course, you want to make sure they have
the appropriate licenses – which will vary by state. Step 5. Once you’ve narrowed it further, consider
the terms that the different property managers will work into your contract with them. — Who would your main contact be – the manager
directly or someone on their team? Make sure you’re able to communicate with
your property manager through various means, phone and email. — Figure out how much they charge for their
services. Make sure any fees are documented. And then make sure those fees are within the
average for other managers in the area? Beware if the fees are too low or high, either
could be a red flag. — How many days notice does the property
manager require to terminate the relationship? If you aren’t satisfied with their services,
it’s important to be able to terminate your contract within a month or two, which will
give you enough time to find a replacement. — How are maintenance and repairs handled? For example, are repairs outsourced, and do
they charge a percentage fee on top of the cost? How much of a retainer does the property manager
require for emergency repairs? Will they only call you if the repair costs
more than the retainer, and are you okay with that? — When should you expect to receive the tenant’s
rent each month? Will it be direct deposit, or will you receive
a check in the mail? — Will the property manager be responsible
for keeping the tenant’s security deposit, or will you? — How will the manager deal with a delinquent
tenant? What are their eviction proceedings? Ask them to describe their process in detail. Finally, step 6. After running through this process with a
few of these candidates, you’ll likely be leaning toward one of them. Here a few additional considerations you may
want to run through with them before making your final decision. — How are late rents handled? Is the process clearly written and will a
tenant understand the consequences? — Who will the tenant call with questions? Sometimes, property managers have different
contacts for leasing questions versus maintenance issues. — Just make sure that you have a thorough
understanding of the expectations of each party involved here – the tenant, the property
manager, and yourself, the landlord. If your properties aren’t in a location
with multiple options, like I just outlined, …you may just be out of luck. Or, like me, you may just have to try to create
your own luck. Just learn from my mistakes and don’t take
this part of building your real estate empire lightly. Finding a good property manager that you can
trust is not easy. Devoting extra effort in the beginning to
thorough due diligence can save you hours of headaches later on. And if you find a really good one, like I
have, it can pay dividends for you in the years to come – freeing up your time and energy
to build another business or… research stocks! So, if you’re trying to invest smarter and
you’d like to learn from a experienced and practicing professional – I hope you’ll
subscribe and click that notification bell. I wish you all the best. Take care!


Spicer Capital – Invest Smarter

Apr 4, 2019, 6:18 pm Reply

? Hey, Spicer Capital Community! After my first video about my rentals, the most frequently asked question was about my property manager. He is, indeed, amazing and gives me a huge advantage in the world of investment real estate. But it wasn't always that way… the manager I had before him ended up suing me at the age of 24! ? I hope you enjoy my story and are able to take away some lessons from that experience and this list to help you find your ideal property manager.

I sincerely wish you all the best on your investing journey! Take care!

Mike Dickson

Apr 4, 2019, 6:35 am Reply

Thanks for sharing! Soo it's not as easy as those commercials make it sound. Buy apartments and retire. No problem. Just collect the rent checks. Luckily that man couldn't remember his 1st story…..


Apr 4, 2019, 3:33 pm Reply

Very informative video! ? It's better to learn from the mistakes of others than yours, so I think this information is veeery helpful for anyone planning to start investing in real estate ??

Ina Fatoumata Kébé

Apr 4, 2019, 12:08 am Reply

Amazing! Yeah hard to replicate your relationship with your property manager but nice tips! I guess it is more difficult to find a good property manager in small towns.

The Dividend Experiment

Apr 4, 2019, 1:34 pm Reply

That's crazy that people can be such leeches and suck the money in any way they can!

PO 9 WithDaCape

Aug 8, 2019, 2:21 pm Reply

Great video, thanks for sharing your experience ??

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