Podcast Summary
Insights from a Professional Property Manager and Real Estate Expert: Learn about managing tenants, dealing with property management companies, and the benefits of no money down investment opportunities from a professional property manager and real estate expert in Las Vegas.
The Bigger Pockets podcast, episode 62, features an interview with Phil Dwyer, a professional property manager, real estate agent, and appraiser from Las Vegas. The discussion covers various aspects of real estate investing, including managing tenants, dealing with property management companies, and the benefits of no money down investment opportunities. The hosts, Josh Dorkin and Brandon Turner, share their experiences and provide valuable insights for both new and experienced investors. They also mention resources such as show notes at biggerpockets.com/show62 and a YouTube channel for those interested in seeing video recordings of their interviews. Additionally, they promote Rent to Retirement's no money down investment opportunities and Airbnb as a potential source of extra income. Overall, the episode offers a wealth of knowledge and practical advice for those looking to invest in real estate.
Understanding the market dynamics and potential costs: Thorough research and consideration beyond the initial price tag are crucial for successful real estate investments.
Real estate opportunities come in various forms and prices, but it's crucial to assess the value beyond the initial cost. Philip Dwyer's journey into real estate began with an exposure to his grandfather's rental properties, which he initially saw as too much work. He later got into appraising in Detroit during the 2003 housing boom, where he encountered extreme property price disparities. From appraising a $500 house in the city to a multimillion-dollar house in the wealthier county, Dwyer learned the importance of understanding the market dynamics and potential costs involved. This lesson holds true for all real estate investments, emphasizing the importance of thorough research and consideration beyond the initial price tag.
Risky strategy of buying cheap properties in Detroit for future appreciation: Understanding population trends and focusing on relocating areas within the market leads to successful real estate investments. Combining appraiser's data analysis skills and real estate agent's consumer insight provides a more comprehensive property valuation.
Buying extremely cheap properties in areas like Detroit with the hope of significant appreciation in the future can be a risky strategy, even if the city is showing signs of revitalization. Instead, focusing on understanding population trends and relocating areas within the market can lead to successful investments. As for appraising properties, having both the data analysis skills of an appraiser and the consumer insight of a real estate agent can provide a more comprehensive understanding of a property's value. The speaker, who has done over 3,000 appraisals in their career, shared that gaining this combined experience made them a better appraiser and agent. Lastly, the speaker moved from Detroit to Las Vegas due to snow, and becoming an appraiser and agent in a new location presented new opportunities.
Starting a business in a desirable location with favorable conditions: A clear vision of your goals and persistence in acquiring necessary skills and experiences can lead to success in your chosen field.
Starting a business involves careful consideration of various factors, including desirable location, economic conditions, and personal goals. For instance, a business owner named Phil moved to Las Vegas to start his business due to its booming economy, favorable demographics, and ease of business entry. His career path included appraisal and real estate agency before he transitioned into property management. Phil shares that the most challenging aspect of property management is dealing with people, specifically managing the expectations and needs of both property owners and tenants. Despite not currently being an investor, Phil's determination to learn the field and work closely with clients sets him up for success when he is ready to make a purchase. The key takeaway is that having a clear vision of your goals and being persistent in pursuing the necessary skills and experiences can lead to significant progress in your chosen field.
Finding a competent property manager for successful real estate investing: Ask for referrals, assess customer service, use an interview checklist, consider location, align management philosophies, and ensure legal licenses for a successful property manager partnership
Finding a good property manager is crucial for successful real estate investing, and it's essential to view the relationship as a partnership. When interviewing potential property managers, investors should ask for referrals from trusted sources, call property management companies to assess their customer service, and use a property manager interview checklist. It's also important to consider the location of the properties, as local resources and personal networks can be helpful in the vetting process. Property managers should be interviewed just as thoroughly as investors interview them, and it's important to ensure they share similar management philosophies. Additionally, property management companies must have the necessary licenses to operate legally. By taking these steps, investors can increase their chances of finding a competent and reliable property manager, ultimately contributing to the success of their real estate investment business.
Scaling and managing growth in property management: Focus on one area but expand through referrals, hire internal bookkeeping and assistant, ensure transparency with vendors, and balance growth, staffing, and relationships.
Effective property management involves careful scaling and staffing, as well as building trustworthy relationships with vendors. The speaker shared that they manage 50 properties out of 500 in their brokerage, and while they aim to concentrate in one area, they often expand through referrals. They highlighted the importance of having internal bookkeeping and a qualified assistant to handle administrative tasks, allowing them to focus on property visits. The speaker also emphasized the challenge of scaling up and ensuring the right staff are in place to manage growth. Regarding vendors, they advised against being required to use a single vendor and instead recommended asking for monthly statements and invoice reconciliations to ensure transparency and avoid potential kickbacks. Overall, successful property management involves balancing growth, staffing, and vendor relationships.
Vetting a Property Manager for Honesty and Competence: To ensure hiring an honest and competent property manager, thoroughly vet them, report any dishonest behavior, and hire someone with a good reputation and proven track record.
When hiring a property manager, it's crucial to thoroughly vet them to ensure their honesty and competence. The fear of being overcharged for simple repairs is valid, but finding an honest property manager can be achieved through testing and reporting any dishonest behavior. The property management industry as a whole could benefit from stricter vetting processes and a system that highlights the good managers and weeded out the bad. Unfortunately, the existence of shady managers is not unique to the property management industry, but it's essential to remember that the majority of property managers are trustworthy. It's important to build rapport and trust with the chosen property manager, but ultimately, hiring someone with a good reputation and a proven track record is the best way to mitigate the risk of being taken advantage of.
Checking references is crucial for assessing tenants or employees: Call previous landlords or property managers for authentic references, avoid dealing with fake references, and be cautious of red flags during the application process to minimize risk of renting to problematic tenants.
Checking references is a crucial step in evaluating potential tenants or hiring new employees, yet many people fail to follow through on this important task. References provide valuable insight into a person's past behavior and can help predict future actions. In the context of renting properties, calling previous landlords or property managers is an effective way to assess a tenant's reliability and behavior. However, it's essential to approach the process carefully to ensure the authenticity of the reference. One tip is to call from a private number and ask about rental availability to avoid dealing with friends posing as references. Additionally, when managing properties, it's important to be on the lookout for red flags during the application process, such as incomplete applications, eviction history, and dishonesty about pets. By thoroughly screening potential tenants, landlords can minimize the risk of renting to problematic tenants and maintain a successful rental business.
Check local court records for ongoing eviction cases during tenant screening: Landlords should verify eviction records through local court records to ensure accurate tenant screening and avoid misunderstandings
Thorough tenant screening is crucial for successful landlording. While running credit checks and eviction history is essential, it's not enough. False positives from shared names or incomplete reporting can lead to misunderstandings. To avoid this, landlords should check local court records for ongoing eviction cases. Additionally, landlords have different policies regarding renting to tenants with evictions. Some may give second chances, while others may not. It's essential for landlords to have clear criteria for selecting tenants and communicate effectively with property managers about these expectations. Thorough tenant screening is a professional responsibility, and neglecting it can lead to significant issues.
Airbnb and Vacation Rentals as Stepping Stones to Real Estate Investing: Airbnb and vacation rental platforms offer income opportunities, cover expenses, and potentially fund property purchases. Vacasa provides full-service management for vacation homes, ensuring ease and profitability. Listen to the Walker webcast for insights on commercial real estate, entrepreneurship, and the economy.
Airbnb and vacation home rental platforms like Vacasa can provide valuable extra income and even serve as a stepping stone towards full-time real estate investing. Sharing your personal space while you're away can help cover expenses, and in some cases, even fund trips or the purchase of additional properties. For those considering vacation home ownership, Vacasa offers full-service management, ensuring ease and profitability. Additionally, the Walker webcast provides insights into commercial real estate, entrepreneurship, and the economy, offering valuable knowledge for those in the industry or interested in investing. Lastly, when dealing with tenant issues, it's essential to approach each situation delicately but firmly, maintaining a balance between empathy and lease enforcement.
Consistency and following rules in property management: Maintain clear rental expectations, communicate consequences for late payments, and promptly address maintenance issues to ensure tenant satisfaction and property preservation.
Consistency and following rules are crucial in property management. The speaker shared a personal story about a tenant who had been paying rent on time for years but suddenly missed a payment. The speaker initially gave the tenant some leeway, but when they failed to pay again, the speaker was forced to file for eviction. The speaker regretted not sticking to the rules and emphasized the importance of training tenants on rental expectations and consequences for late payments. In another situation, a tenant called about a backed-up toilet. The speaker advised addressing the issue promptly and clearly communicating with the tenant about the repair process and their responsibility to maintain the property. Overall, the speaker emphasized the importance of being consistent, following rules, and setting clear expectations with tenants.
Effective communication and setting expectations in lease agreements: Clearly outline tenant responsibilities and non-negotiable issues in lease agreements, discuss terms with tenants, and encourage neighborly behavior through HOA rules and community engagement.
Clear communication and setting expectations through a well-drafted lease agreement can help property managers effectively handle maintenance issues and tenant conflicts. The landlord in this discussion emphasizes the importance of tenants taking responsibility for repairs within a certain cost limit and outlining non-negotiable issues in the lease. He also suggests discussing the lease in detail with prospective tenants and addressing any concerns early on to prevent potential conflicts down the line. While tenant conflicts in multi-family properties can be challenging, the landlord recommends encouraging neighbors to abide by HOA rules and regulations, and even going the extra mile by introducing yourself to neighbors and providing them with your contact information. By fostering a sense of community and clear communication, potential issues can be addressed proactively and effectively.
Clear communication and rules prevent potential property damage: Provide neighbors contact info, report suspicious activities, use multiple communication methods with tenants, and have strict income requirements to minimize issues.
Effective communication and clear rules are essential for successful property management. The landlord in this discussion shared an experience where a timely neighbor notification prevented potential water damage to a tenant's belongings. He emphasized the importance of providing neighbors with contact information and encouraging them to report any suspicious activities. Additionally, the landlord highlighted the significance of clear communication with tenants, using multiple methods like phone calls and emails, to ensure everyone is on the same page. Furthermore, he discussed the importance of having strict income requirements and verifying tenants' income to minimize potential issues. By establishing clear rules and regulations, and maintaining open lines of communication, landlords can mitigate potential problems and ensure a smooth rental experience for all parties involved.
Establish Clear Rules and Expectations: Clearly communicating rules and sticking to them helps prevent financial losses and legal issues while maintaining positive landlord-tenant relationships. Landlords should also leave pet policies to property owners.
As a landlord, it's important to establish clear rules and expectations from the beginning and stick to them. Bending rules may seem like the compassionate thing to do, but it can lead to financial losses and potential legal issues. It's crucial to balance being a good person with running a successful business. Proactive communication and setting clear guidelines can prevent many problems and help ensure a positive landlord-tenant relationship. Additionally, landlords should leave pet policies up to the property owners and offer their recommendations based on their own experiences.
Accommodating Tenant Preferences and Mitigating Risks in Property Management: Consider tenants' pet preferences, charge additional fees for pets in a soft market, cats and big dogs cause most damage, single-family homes have lower vacancy but less turnover, and self-manage lawn care in a multifamily property
Property management involves making accommodations for tenants' preferences while also mitigating potential risks. The speaker shared his experience with pet owners and how he approaches renting properties to them. He noted that while some owners might be fine with pets, others are not. He also mentioned that in a soft market, he might consider allowing pets for an additional fee to offset potential risks. The speaker mentioned that cats and big dogs are the most common pets that cause damage, primarily due to cats being "disgusting creatures" and big dogs' nails scratching hardwood floors. When it comes to the best property for new investors, the speaker advised considering the local market and the ease of managing a single family home versus a multifamily property. He noted that while there's a risk of higher vacancy in a single-family home, the cost and turnover time are typically less than in a multifamily property. Additionally, the speaker addressed a quick question about lawn care and shared that in his market, he requires tenants to pay for pool service and takes care of lawn maintenance himself.
Factors in Effective Property Management: Provide appliances or laundry hookups based on market competition, handle maintenance tasks strategically, and consider personal goals, risk tolerance, and local support when investing out-of-state.
Effective property management involves careful consideration of various factors, such as maintenance responsibilities, appliance provision, and market competition. The landlord in the discussion shared their experience of handling maintenance tasks themselves while outsourcing tall grass mowing. They emphasized the importance of providing laundry hookups or appliances based on market competition. Regarding out-of-state investing in Las Vegas, they advised considering personal goals, risk tolerance, and local support. The discussion also touched on potential risks of another housing bubble and the use of AppFolio for property management. Overall, the conversation highlighted the importance of being informed, strategic, and adaptable in property management.
Daily actions and knowledge fuel successful real estate investing: Successful real estate investors have a clear purpose, take daily actions towards their goals, and continuously learn through reading books.
Successful investors, including real estate investors, have a clear purpose and take action towards their goals every day, without making excuses. They break down their goals into manageable tasks and consistently work towards achieving them. Additionally, they find value in reading books, both real estate and business-related, to gain knowledge and insights. As for Brandon Turner, he can be found on the forums or at vegasdiggs.com. His podcast, "The Real Estate Investing Show," provides valuable information and insights from various industry experts. When not working, he enjoys hiking and spending time with family. The Quirr segment of the show features the "Famous Four" questions: favorite real estate book, favorite business book, hobbies, and what sets apart successful investors.
Engaging on BiggerPockets forum leads to opportunities in real estate: Consistently engaging on BiggerPockets forum can lead to podcast appearances, meeting financing partners, learning from others, and increasing visibility for your business or investment profile.
Engagement on the BiggerPockets community forum can lead to opportunities in real estate investing. The hosts of the BiggerPockets podcast mentioned that they often invite active forum members to be guests on the show. Additionally, engaging on the forum can lead to meeting potential financing partners, learning from others, and increasing visibility for your business or investment profile. The hosts emphasized that consistent engagement, even if it's just once a week, can make a difference. They also encouraged listeners to create a profile on the site and connect with them on social media. Overall, the importance of engagement in the real estate community was a recurring theme throughout the episode.