TheLandlordBlog.com

After reviewing all of the applications that came in (13) I had two clear finalists.  I was interested in four candidates, but two of the four were renters.  As long as I had two home owners that both looked great, I decided to interview those two and hopefully choose one of them.

Candidate #1:

37 yr old male, lives 4 blocks from 3 of my buildings, computer consulting business, works part time at a technical college as a computer technician, owns and self-manages 27 units that he rehabbed himself, lives in one of his multi-plexes.

Candidate #2:

27 yr old male, lives 5 miles from my units, works full time from home for an asset management company (corporate-style property management/acquisition of large buildings).

Both candidates seemed very stable as far as having no plans to move away.  Both were in the business and had some experience, although I was not looking for this and thought it could be a detriment.  From the application, both were strong in sales and organization, and had good work ethic. (more…)

After advertising my property management position for a month, I received 59 email inquiries, and 13 completed applications.  I sent every inquiry a written job description so they would understand more about the buildings, the skills and responsibilities, and the compensation.

The job description was coupled with an application they were asked to fill out and email back.  Some people emailed me questions before taking the time to fill out the application, such as do I pay for cell minutes and gas, can they bring their kids to work, and how many hours/week is it.  I answered all the questions that came in.

The application is pretty simple and brief.  It asks for their name, birth date and address.  How close they live to the units is important to me.  I had one applicant that lived three hours away with no explanation about the distance.  The rest were as close as a couple of blocks and several were 45 minutes or so. (more…)

So once you know what you’re looking for in a property manager, it’s time for the hunt to begin.  The key is for the candidates to come to you.  For one, you want to cut down on the time and effort you have to spend in this process, and for two, when the candidates come to you they are demonstrating that they want the job.  They are pursuing an opportunity, vs you twisting someone’s arm into taking you on as a client.

Have you ever shopped property management companies?  If you have, you’ll notice this approach is a stark contrast.  Enough calling around waiting for returned calls, dealing with take it or leave it attitudes, and reviewing BS management contracts.  The process I’m talking about sets up a filter, and you only deal with the gems that make it out of the small spout.

You need to write an ad and put it in the paper in the employment section.  This is going to cost you about $300 if you leave it in for a month, and I recommend you do in order to get a lot of inquiries.  It’s important to think about the wording of your ad, and what it instructs the candidates to do. (more…)

I’m happy to report I offered my property management position to someone today.  I expect he will accept and we will be able to move on to training asap.

I said I would chronicle how I’m going about finding this new manager, so here we go!

The very first step, as is the case when looking for anything, is to know what you want.  This is hard for some people because they get stuck on the limitations before letting their mind run wild.  They are convinced they will not find exactly what they want, so they try to be realistic and reduce their expectations to what they believe they will find.

I think it’s a great exercise to let your imagination go and conjure up the best thing possible.  Then you start looking and you go with whatever comes the closest to your ideal.

So as for a property manager for these units, I wanted to find someone who:

• Lives or works close to my buildings
• Doesn’t go out of town a lot
• Seems stable enough that they won’t be moving away anytime soon
• Is organized
• Can sell
• Has integrity
• Is teachable
• Is handy (minor electric, plumbing, painting, general fix-it type)
• Has tools
• Has a vehicle that can transport a lawnmower
• Has social skills
• Is assertive, can be stern when needed, can push back
• Is not too proud to scrub a toilet
• Owns their own home
• Is computer-proficient
• Owns a computer, digital camera, cell phone
• If they own rental properties, it’s a bonus

Once you know what you want, you have to figure out how you’re going to find out if they have it.  This comes from writing an ad to solicit qualified applicants, then crafting an application that asks key questions, and finally talking through a good interview.

Tomorrow I’ll talk about how I wrote my ad and what the results were.

Greed and speculation contributed to the run up in property values in the last few years and now emotion and perception are contributing to how quickly the market makes its adjustment.

Lording the Land has a great writeup on what we can learn from human behavior in the context of REI.

So I’m looking to replace a property manager for some units I have in the midwest and I’ve created a system that I’ve been following to do this.  It’s a reusable system that could be used anytime anywhere, whether you are near your units or not.

Our existing manager for these units has not been cutting the mustard and I’ve finally decided to buckle down and take care of it.  This after months of rationalization, justification, second chances, third chances, and just not wanting to have to deal with it.

This week I’m going to start posting how I went about this process.  It’s getting close to completion and I’m getting excited about the change.

Some interesting stats for starters: I’ve had 59 inquiries about my position, 13 applications submitted, and I’m interviewing 2.  I interviewed one yesterday and hope to complete the other by Wednesday.  I’d like to select my new manager by Friday.  I plan for him/her to start on Nov. 1, although I am running a bit behind schedule.

More to come.

A couple days ago we cancelled purchase contracts on two homes.

Update: The builder has now turned around and put these homes back on the market.  They have increased the price $11,000 to $235k and are offering a $22k incentive that may be used to cut the purchase price or may be split between closing costs and a price reduction. 

Interesting.  So they pumped up the price in order to show a better discount.  It’s the way the game is played.

So with the current terms and our same strategy, we’d be out of pocket $11,050 per home.  This assumes we put $8k of the incentive toward closing and all closing costs would be covered, and we put the net toward the purchase price.

Also interesting:  The first deal we signed up for was so-so, then we negotiated and they came up with a worse deal so we cancelled, now they put it on the market for a better deal than they were willing to negotiate with us.  Look:

• Original deal out of pocket: $15,516 per house
• Revised offer: $18,800 out of pocket
• Repackaged and back on market for: $11,050 out of pocket

Apparently they never heard the old adage that it’s easier to keep a customer happy than it is to find a new one.  Wonder why they didn’t just offer to us what they had planned to offer to the public?  We could now repurchase at the better offer, plus this time they’re offering a 7% realtor commission.  We’d get paid roughly $5k to buy each house.

Interesting!

We had two more new-build homes pending and have decided to walk away.  It’s not that they are bad deals, it’s an issue of where to put our money to the best and highest use, right now.  A lot has happened since we signed contracts on these homes last December, including several more purchases, market changes, and other new business endeavors. (more…)

Well, since I started advertising for my new property manager, I’ve received 45 inquiries and several applications.  I’ve skimmed through some of the apps and see some good ones.  Some of them have been quite interesting.  Today I plan to look through them all and select a couple of final candidates to interview by phone.

The plan is to train the new person in Oct. yet and have them start Nov. 1.

This post over at Lording the Land explains my strategy with this far better than I have to date.  Kudos!

If you are borrowing money through a mortgage broker, one of the things you will need to be aware of is that your mortgages will be sold.  They may be sold before you even close on your loan!  More relevant, they may be sold after you close, but before your first payment is due, causing a degree of confusion and potentially a late first payment.  You can send your payment in and it could be returned, all without you knowing that the loan was sold and who you were supposed to have sent the payment to.  Not good for a credit score!

Lording the Land wrote up a great post on what happens to mortgages.  It’s good to know what’s happening behind the scenes and why.