Welcome to Cleveland real estate investor. On this podcast, you'll hear about every aspect of the real estate investment business. You will talk to your rockstar investors about their businesses, how they built them, where they came from, and where they're going. Who am I? I'm Joe Lieber and I've made millions of dollars from the real estate investment business over the last 20 years. If you're ready to hear the good and bad from a guy who's learned this business from the school of hard knocks and get educated by some bad ass entrepreneurs, then put your helmet on, strap on your chin strap. Let's ride.
(00:36): Hey, what's up there everybody. Thanks for tuning in with me today to talk about property management. Now to protect the innocent, I'm not going to talk about the management companies that I recommend here on this show. If you want to have a conversation about them, just contact me and I'll tell you the couple management companies I like to refer and why I like to refer to them. But today I'm going to talk about choosing a management company and which is the right one for you. And what to expect from the management company so you don't have misunderstood expectations from a management company. So I've been doing this, you know as everyone knows a long time, 20 years in the biz and I self-manage, I self manage my own properties. Truth is is it can be a lot of work to manage properties, but it can also be very, very passive too.
(01:23): It's really just hit or miss. You can self manage if you have access to handymen and contractors and it doesn't mean just open up the yellow pages. They even have those anymore. The yellow paint only. I've seen yellow pages in a long time. Well who knows? But you can just open up whatever the J B dollar stretcher. I would think they have that anymore to be honest. But you can't open that up and just randomly point to a window guy and say, ah, come stole my windows. You're going to pay about three times what a trained seasoned person would. Real estate investors should pay. So you have to have a good team if you're going to self manage. But there are tricks to, there's websites out there where you can upload jobs you want done, like you know, painting the inside of the house. You can say, Hey, bid this and you can get five or 10 bids on that.
(02:16): I will say this, there is a website out there called service sold. That's it. Service sold. And I'll go out of my joint venture partners are doing that right now if they can't find someone to paint or we needed a tub. We had a big one of those big old tubs in the basement of a house that needed to be removed. We just put a picture of it on service sold and contracts were bidding. Hey, I'll do it for 100 bucks. I'll do it for one 50 you know, I'll do it for 80 and then he can kind of see the reviews and we just picked one and said, go, you know, go get it. Go get the tub out of there. But you can do that. It's going to be a little more work, but it's dollar for dollar. You know you're going to put some time in what you're going to save the dollars.
(02:57): If you want to begin, you know, hands off for the most part, then you're going to want to hire a management company. So let's look at both. Let's keep talking about, since we're going down that road, let's keep talking about self managing. So can you self-manage? Yes. I have clients that do it right now that live in California, Arizona, Utah. A lot of them self manage, but they do it under direction of a local handyman. So they've come into town, they've, you know, been in the field, they've met contractors and they've kind of developed a relationship with the contractor where it's kind of turned to that, where it's like, Hey, you know, look, you're the one that handles all the maintenance and turnover kind of thing on my properties. You know, why don't you just make sure they collect the rent and I might give you, you know, a couple of bucks.
(03:43): I don't know, pick a number, 3% 4% 5% instead of the standard 10% but it's more involvement, right? Cause there's different things to do with self-managing, like water bills, right. As we all know, he can put them in the tenants names here in Cleveland by the owner, still responsible. So you still gotta make sure they're paying that bill. So there is a mansion piece to that, chasing late fees, making sure rents come in on time just to name a few. So someone has to do that. And if it's you, you know, yeah you're going to save that 10% fee, but it's work at the same time. So that's what we do. We self-managed. But I have a lot of doors as most of you know, so it just makes better sense for me, for me to manage my own stuff. But for most of you, most of my turnkey buyers hire the services of property management and it works very good.
(04:35): You know, I spend a lot of time with property managers trying to see who has heart and passion and who's really trying to build a quality business and make good relationships. And I believe I've been through a few now or for the about the last two and a half, three years. We have a real good management company that I like to refer to. They do a real good job. Everyone's happy with them, the guy cares. He's got a real business and it's working and it's working very well. So the most, the biggest thing was a company is, is the property maintenance, rehabs, things of that nature. You know, someone will say that's where they make their money and it is, it's true. I mean that 10% management fee is for the most part used for overhead, right? For a property manager that takes a lot of staff to run a property management company.
(05:21): That's probably why I never got into it. They say you gotta be upwards of three to 400 doors before it becomes profitable. A management company, the money is typically made in repairs and maintenance and turnovers is where these management companies will see a lot of their profits from the construction side of the business, which is okay, it's a lot of work. Something always goes wrong. And the rehabs always come in over budget. That's just the name of the game. Even now I'll start a rehab budget at 10 grand. It comes in a 13 five I mean every time there's unforeseen expenses that just happen. Very rarely do I come in under but it does happen of course. So I'm just thinking here while we're sitting here having this conversation about management companies and there are some good ones out there. I mean like I said earlier, just call me if you want to talk about who those are because I don't want to talk about it here on the show, but I'll tell you who I recommend and what are the expectations is that you should have all of your management company and really let them just take care of rent collection deposit into your account.
(06:24): I know some of them will even pay your tax bills and insurance bills for you. I wouldn't be that disengaged to it to be honest. I would pay my own tax bills and pay my own insurance and stuff like that. Just so you can keep an eye on it cause it was out of sight, out of mind. And you know how these insurance agents are over time. Then insurance goes up, you're like, Hey, I can do better. Maybe I should switch insurance companies. And she always kind of tried to keep an eye to it a little bit. Make sure getting the right pricing, what the property management company know you're engaged and you care as well. And it's a lot of work guys. So be appreciative of their services as well. It'll help you in the long run. I think they'll try to do a better job for you.
(06:59): As I like to say, you will catch more honey with sugar than shit. So try to be nice and respectful to the ones out there managing your asset, whether you live in California or Singapore. Believe it or not. I've sold a lot of a lot of houses to you guys and London and Australia and all over the world. So I'm very grateful for that. And thank you. And I know these managed companies are doing a great job for you because I still stay in contact with a lot of them and talk to them about you, so I know you're having a good experience. Good. Glad. So yeah, that's about it. That's why I really, what I want to talk to you about today with property management, I will help you look for the right one here in the Cleveland area. We've got them. Thanks for tuning in to a little short episode here and have a great day.
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