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Commercial Wholesale TrainingCommercial Wholesale TrainingEd and Bob Diamond
Module VIII
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Agenda for TodayAgenda for Today
Module VIII – Managing The Building(s)
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Chapter One – Professional Chapter One – Professional Property ManagersProperty Managers
The Property Manager can make or break your building - they are in a “high leverage” position and can lose money or steal money from you
Select them very carefully!
Get a good one and you can “manage the manager” and have a life outside the building
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Rental Properties are NOT PassiveRental Properties are NOT Passive Property Management is not a passive activity -
to manage requires you to be detail oriented, tough, and to be present to:– Pick up and deposit rents and leases– Supervise maintenance and repairs– Check on the building– Deal with emergencies
You must have a manager if you don’t want to do the above items
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Selecting A ManagerSelecting A Manager
Interview at least five - 90% are not goodGet references and check themCall their office as a tenant and see how
they areCheck on line for their reputation - “Yelp”
and other similar sites and Google themCheck if they have been sued in the local
court system’s on line docket system
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Selecting A ManagerSelecting A Manager
Find an investor who is satisfied with their manager for referrals
Check what reports the manager intends to give you
Demand on line access to your bank account
Demand they deposit your rents in a separate account
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Selecting A ManagerSelecting A Manager
Interview questions are in the book Select a manager with experience in your type of
building Check their knowledge on local vacancy and
rental rates and neighborhood knowledge If you cannot find a suitable manager do not buy
the building There are more details in the book on the
contracts, reports etc.
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Chapter 2 - The Art of ManagingChapter 2 - The Art of Managing
You need weekly reports on all activity from your manager
If the manager uses Yardi, Rent Manager, Propertyware or Tenant Pro it will have the reports you need programmed in
90% of Managers are poor - expect to fire a few and for it to cost you some money
Fire early and Often if they are not satisfactory!
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Chapter 2 - Manage Your ManagerChapter 2 - Manage Your Manager
Check up on the manager with a physical inspection of the property (surprise inspection)
Check up with monthly planned visitsSurvey your residents via email with
survey monkey and monitor the customer service email with a google email forwarded address or property website
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Chapter 2 - It is Critical to Manage Chapter 2 - It is Critical to Manage the Managerthe Manager
A poor manager can cause a property to fail or under-perform
Under-performance means you will not make money
Improving performance is a way to make a lot of money because the building value goes up when the performance goes up
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Chapter 2 - Poor Management Chapter 2 - Poor Management Creates OpportunityCreates Opportunity
Poor management frustrates owners and they want to get out. Creates a buying opportunity
This is also why you need to see actual numbers from the seller’s tax return (accountant certified) and NOT “Pro-forma” numbers
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Chapter 3 - Ways to Control Poor Chapter 3 - Ways to Control Poor ManagementManagement
Watch the money - managers will spend it unwisely and poor management will show up in less cash then should be there
Make sure you set aside funds for adequate maintenance and repairs
Plan for replacement of roofs and other expensive items by setting aside money
Major refits every five to seven years
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Getting to ClosingGetting to Closing
• Next Class is Getting to Closing and Managing the Transition to Ownership