Property Managers (PMs) are real estate professionals
specialized in managing properties on behalf of the owner.
Due diligence is one the most complex task in the acquisition of a multifamily, especially when dealing with a large scale building or any type of building located in a hard to analyze submarket.
Regrettably, the consideration that investors often give to these professionals doesn’t go beyond the scope of managing their Assets. Therefore, during the acquisition process, PMs are often left on the sideline, perhaps voluntarily or by ignorance of what they can bring on the table, especially when probing a property for acquisition .Whether you’re a new or a seasoned commercial investor, it is highly recommended to have PMs as part of your team , even if you’re not ready to buy anything yet, because they’re one of the most valuable assets and contributors to your success in this business for, at least, two important reasons:
1/ Business insiders.
An insider is someone, in a group or in a community that holds valuable information unavailable to the others. In the commercial real Estate ecosystem, PMs are deemed to hold those type of information. Let’s consider leads for example. Because they manage Assets, they know who will be unloading its portfolio very soon , which loan of their portfolio is coming due, which of their properties is underperforming, which owner is going through some kind of financial hardship etc. So, if an investor has the right connection with PMs, these leads will be available to him/her before anyone else.
2/ Markets insiders
PMs have a wealth of skills and information that can be
leveraged because they have boots on the ground. Their opinion matters,
especially if you’re an out of State investor and relying on a third party to
manage your property. A thorough Understanding of the local market can be a
critical component of the underwriting process. As Paul Hugh Clitheroe,
Australia’s best-known financial adviser said: “Before you start trying to work
out which direction the property market is headed, you should be aware that
there are markets within markets.”
A quick
Case Study:
I got up one morning when a fresh deal was waiting for me in my
inbox, coming from one of my wholesalers with whom I’ve developed a good
working relationship .It was a fully occupied six units apartment located in
Maine, When I looked at the numbers, everything was just what I wanted. Right
off the bat, I sealed the deal under contract subject to 15 days due diligence.
I immediately started a simultaneous deal probing. Meaning that, I started
doing Physical, financial, legal and local Market analysis all together in parallel.
For the local market part, I called three PMs (local market insiders, as I like
to call them) to have conversation and – more importantly as an incentive to
cooperate- to offer them the management in case I close on the deal. Usually,
when I do this, I ask them to tour the property with a checklist in hand.
After each of them visited the property on separate occasions, they all came back declining to take the job in case I’d have closed on the deal. When I asked why? Well, long story short, their answers came down to two issues:
1/The neighborhood was notorious for being part of the town where it’s hard to find and retain quality tenants.
2/The property was too old with many visible deferred
maintenance issues.
Albeit I rusted their feedbacks, I decided to have one last
opinion, by calling a local Realtor that deals with Property Management as a
side job. He went to the property and came back with the same conclusion. This
is what he told me: “Hey Charly, I’d have loved to take the job, but to be
honest with you, this is going to be a headache.” This statement was the final
bullet that killed the deal for good.
The point here is to shed a light on the power of PMs, by
showing how helpful they can be in the decision making process while acquiring
a multifamily property.
Not only they saved everyone’s time, but also, they helped us to
hold on to the inspection’s expenses. The question now is: Did I miss an
opportunity or a deal? My answer: It is possible. But it must be reminded that
if you’re running your business as it should be, you must have a guideline. Because
we don’t mange any of our portfolio, we put a high value on PM’s opinion. In
fact, we don’t pull a trigger on any acquisition unless we have found three or
four PMs willing to take the management side of the project.
Questions:
1/ Have you (or your business partner) used PMs before in your
due diligence? If yes, how was your experience?
2/ Do you think I’ve missed an opportunity in my quick case
study? What would you have done differently?
Thank you for spending your precious time to read this article
and to share your thoughts.
Sam was very excited when he learned that the apartment he has been waiting for was finally ready for its new occupant. So, he signed the lease and, voila! Moved in. Few days after, he noticed, especially at night, some very bizarre activities in the house. For example: he woke up one morning to find out that all lights in the house were on, despite the fact that he turned them off before going to bed. But the most unnatural and strangest even occurred when he saw figures moving around in the dark and then, suddenly, something grabbed his shoulder and pushed him from behind. That same night, Sam vacated the property and never looked back. The house was haunted!
Wiktionary defines a haunted house as “a house that is believed to be a center for supernatural occurrence or paranormal phenomena”
Basically, those activities are carried out by a spirit, a phantom, a specter commonly referred to as a Ghost.
It’s commonly admitted that a Ghost is the soul of a deceased person (generally by accident or violently murdered) separated from the body and appearing to the living. They’re many schools of thought on this issue. But I won’t go into that.
If you find yourself in a similar situation as described above with Sam, follow the following steps:
1/ Beforehand action: Be proactive. Before you decide to move into an apartment, be a little inquisitive about the area. Talk to the neighbors. A haunted house is generally known by the people living in the close proximity to the subject property. If you have already moved in the property and believe that the house may be haunted, first, don’t panic.
2/ Take some Helpful Notes Make sure to take some notes. Keep a journal of the phenomena as soon as they happen
3/ Use the recorder from your smartphone You could use it to record the mystery voice. For example: in a silenced room where you believe you have noticed something unusual, speak and ask questions. For example: Hey, who are you; what do you want? Most likely the ghost will reply.
4/ Snap a photo with your smartphone Walk around your darkened house taking pictures and review them later to see where in the shadows might be. The spirit shines or illuminates on a flashlight like the one from a camera.
5/ Call the Expert If you have your journal ready with enough evidences, it’s time to call a Paranormal or parapsychologist expert for further investigation.
6/ Perform a house cleansings: If you’re a Christ Follower and empowered by the Holy Spirit, the authority of Christ (Luke 10:17-20), you could easily perform a spiritual house cleansing. (Deuteronomy 7:25-26 and 2 Chronicles 29:15). If not, talk to a local Pastor for help
Charly— Disclaimer: I’m not a paranormal Expert. I like to share what I know from learning through the University of Life (or School of Hard knocks).If you’re like me, Kindly share with others.
Real Estate transaction is a time consuming and sensitive activity. How do we balance the highest and best quality of service to our clients and productive? Technology seems to be the solution. Most real estate practitioners are switching to new technologies in order to remain competitive and generate more revenues. In this paper we’ll talk about some of tool been used.
Tool number one: Virtual Assistant
A Virtual assistant can be helful
What
your time worth is very important. To be more productive, you have to figure
out the entire redundant daily tasks and get someone to do them for you at a
reasonable cost
because,
it’s impossible to do it all yourself. Most of the time I hire independent
contractors for a specific jobs. Virtual assistant (VA) is just one of them.
This may not sound like technology, but my VA is out of the country and she
manages our office using the power of internet. From posting ads on Craig list,
sending out emails, making offers online, responding to phone calls and basic
email inquiries etc. Virtual assistant is one the tool I’m currently using in
my business.
Tool
number two: Craigslist Automation with IFTT.COM
The National Association of Realtors stated that in 2013, For Sale By Owners (FSBO) represented about 9% of home sales. 26% of them used online classified
to
get a buyer on their homes. In other words, there is a market for FSBO.A good
place to find these sellers are Craig’s list and Back page. One of the tools
that can help to capture these passive leads is a portal called ITTT.COM..You
set up your criteria using key words such as For Sale by Owners, price range,
location, number of bed and bath, etc. The moment a property is listed on the
classified website, ITTT will capture that listing and put in your inbox for
consultation. This saves a lot of time. You only go after the lead you want to
pursue.
Tool number three: e-fax
Fax machine has become obsolete. Scan to email and e-Fax are now widely used as alternative. They’re very efficient when combined with Adobe or Docusign., drop box , Google drive etc. No need to print.
Tool Number Four: Global Call Forwarding
Real
estate professionals often travel, not only nationally, but to other
countries.But how to stay connected to your business from long distance?
International toll free seems to be a solution. I’ve been using Toll free
forwarding.com.
Conclusion
There’s an abundant tools available that we use to achieve the goal of productivity. Even though they’re helpful for the most part, they do bear some drawbacks that ,sometimes, make their use questionable. But the true is, Technology is here forever. Where do we go from here? Where is the constant innovation in technology is leading us? The future will tell.
“How much more effective would our
efforts have been if we had spoken with the voice of Africa’s millions. With
all our minerals and power and fertile LAND, is it not a cause for shame that
we remain poor and content to plead for aid from the very people who have
robbed us of our riches …”
That was over half a century ago when
Kwame Nkrumah gave this speech at the July 19, 1964 OAU Summit. This powerful
message continues to resonate as it was just yesterday. In fact, since Africa
has become the world new frontier, predators are rushing to the gold mine.
Africa accounts for over 60 percent of the world’s arable land. No wonder in a
recent years, we have witnessed an increasing demand for that special product
from the western and the Asian foreigners. USA, China, Saudi Arabia, Qatar etc.
are grabbing LAND in Africa like no others.
Questions:
1. How should African
governments handle this land grabbing issue?
2. Should African trade
their land for infrastructures just because they’re poor?
I need you contribution.
Let’s make this blog a place of positive thinking.
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