If I was going to select a property manager, I would select the person that had a predominance of “street smarts” over “book smarts.”
Anyone can read a book, go to seminars and answer questions about the theory of property management. But when you’re “on the street” trying to determine what to do when a variety of situations come up with tenants; I want the person that’s been in all the trenches and has the experience from being involved in thousands of situations.
Nothing takes the place of the experience of a seasoned property manager. When you think about all the attorneys and doctors in the world, you realize that some make it to the top of their profession and others never seem to get off the ground. It is the same with property managers.
If you need heart surgery, would you select the surgeon who has only performed three procedures, or would you opt for the experienced surgeon with over a thousand operations under his belt?
I remember when I quizzed my knee surgeon how many knee operations he had performed. He shot back a question, “This month?” Before I could answer he told me he had performed thirty in just that month alone. For me, that was the comfort level I was looking for and he eventually operated on my knee, but only after I asked one more question, “If it was your knee, what would you do?”
When qualifying someone to manage your money or your assets such as stocks or houses; find someone that has “skin” in the game.
You wouldn’t hire some young stock broker that doesn’t have any of his own money invested in stocks, would you?
Let me put this another way, would you trust your investments of hundreds of thousands of dollars to someone with very little experience managing their own money, let alone someone else’s? I hope not!
You want to hire someone that is battle tested, and refined by the fire of prior mistakes made not on your dime, but theirs. It’s like hiring a practicing attorney. Forget it. You don’t want someone “practicing” with your life whether it’s regarding the law or investments. This is especially true with property managers.
If they don’t have the experience managing properties that they own, then they are going to be “practicing” with yours.
At an earlier time in my life, I owned and managed over 250 single family houses. Other investors would come to my office and ask me to manage their properties, and I always declined. I would explain to them that I wouldn’t be able to do a good job for them because I would always try to rent my houses first. Plus, my houses were always much nicer than the competition’s. I would end up showing their houses to “set up” the perspective applicant and then we would show them the houses I owned. It wouldn’t have been fair because my houses would always show better and rent faster.
That’s what we used to do then, and here’s what we do now:
The economy has changed, the area I live in has changed and the area in which I buy cash flow houses has changed. When the cheese gets moved, you have to follow it! When I really figured out why the houses (250-350 at one time) I owned were in the wrong part of the country, which was also reinforced by government intervention, I moved. To read the story on this Click Here to download the free book, “Buy Right, Retire Rich.” I am the character, Boo Boo in the book.
With my tail between my legs, I abandoned the “lefties” in the Northeast and moved to Florida. When I arrived in Florida in 2002, I created a “wholesale machine” by running TV ads, signing up houses to purchase and assigning the contracts to other investors. My crew of “house buyers” was wholesaling between 8 – 22 houses per month. I expanded to Tallahassee, Jacksonville and Charlotte, North Carolina.
It was the easiest money I had ever made. Actually, it wasn’t easy but it was the most money I had ever made in a short period of time – until the market collapsed. I fell out about the same time and we ultimately switched gears. Without laboriously going through the entire metamorphosis on how we ended up in Georgia, just assume for the moment that all of our research and personal experience buying in Georgia has led us to establish a property management system in the Atlanta area that allows us to serve others.
“Anything worth doing is worth doing to excellence.”
We have created a property management system for investors that buy the houses we sell. We are not interested in managing anything unless we are familiar with the house and the area.
And you know what? We tried to use local property managers in Atlanta. We hired and fired three companies in ninety days one of which was more abysmal than the others. These alleged property managers didn’t own any properties themselves. They didn’t respect my money and they subsequently did a horrific job doing what they called property management. We soon realized we had to do ourselves if it was going to be done to excellence. I don’t want to be like anyone else. I want to be the best at what I do.
That is why we are “hands on” with every house we buy and then re-sell to investors. That’s why we moved our property manager to the Atlanta area. So he can better serve us on “our investments” by providing an exemplary property management platform for you.
The real key to being a successful property manager is the experience gained managing your own properties. After you’ve proven your management abilities on the properties you own yourself, then you can consider the management of properties owned by investors. No one is going to watch your money better than you. In these crazy economic times, it’s more important that you investigate the people you do business with and whenever possible – go to their office or homes and see how they operate and live. The guy that lives in a van down by the river is not the guy you want to manage your money.
The quality of the tenants you get is usually determined by the quality of property and the neighborhood in which you acquire that property. That is the first step when buying an investment house for cash flow. Buy the best house you can afford that can deliver safe predictable dividends every month.
To find out more about property management, come to Atlanta! If you are serious about buying cash flow houses then come and visit with us! We will show you the “ins and outs” of property management done right!
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