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Dana Dunford with Hemlane Property Management joins us once again to share 3 more rules to effectively manage your properties. From building a solid local team, aligning incentives with both PMs and tenants, to loving the process - these rules will help remove the painful aspects of owning multiple properties, save you time and money, and bring an element of enjoyment into your wealth-building journey.

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Transcript

Before we jump into the episode, here's a quick disclaimer about our content. The remote real estate investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.

 

Michael:

Hey, everyone, welcome to another episode of remote real estate investor. I'm Michael Albaum and today I'm joined with my co host, Tom Schneider. And with us today is a very special repeat guest Dana Dunford, co founder of Hemlane property management. Today, Dana is gonna be talking to us about three additional rules that remote landlords need to be aware of and should adhere to when investing remotely. So let's get into it.

 

Michael:

Dana Dunford, with Hemlane, so great to have you back on. Thanks for joining us.

 

Dana:

Yeah, thanks for having me.

 

Michael:

No, it's always always a pleasure.

 

So we had you on a prior episode, and you were talking about some tried and true rules to be mindful of when investing remotely. And if you just want to give us a quick recap, for those of you that may not have listened to that episode, or caught that episode, and then we'll jump into a few additional rules that you're gonna be sharing with us today to ensure a successful remote real estate investing experience?

 

Dana:

Yeah, great. Thanks. Um, so as far as remotely investing, that's kind of the future right, that the best investments aren't in your backyard, you go on to Roofstock and purchase a property. But now a new trend that we've seen, is this whole concept of remote landlording? How can I manage my property from anywhere and like you, Michael, be on the road, and still have access and data to what's going on with your rental property?

 

Michael:

Yeah!

 

Dana:

Um, so what we went through and and what we discussed was, um, what are the kind of first two corner stones to being successful with remotely a morning, investing out of state and then being able to manage it. And the first two rules we talked about one was, you need to be professional, you need to treat it like a business, it is a business, buy a property on Roofstock, get your LLC set up, right.

 

Make sure that you don't treat it like, Oh, this is just a friend who's going to be living in this property. And I'm going to give them my personal cell phone. Um, so that was the first rule we talked about. And then the second one was, obviously the operations making sure you're on, you're on top of it.

 

You know, everyone kind of goes between, should I manage myself? Or should I hire our property manager? And really, it comes down to you, and what's best for you? And are you going to be on top of it and be able to make decisions? Or do you think you need to send that off to someone else? Who can do it better for you? So anyways, those were the first two. And I'm excited to go over three more rules to remotely unloading today.

 

Tom:

If anyone who didn't catch Dana's clever little remote comment about Michael Michael, if those of new listeners Michael is in his van right now, he's converted, I think a bus or something into a house and he's living the remote living life. So nice little reference there, Dana.

 

Michael:

Yeah, it was actually it was a mobile golf showroom. So it's not anything I had ever seen before. It looks kind of like half Uhaul half sprinter. Not as sleek as a sprinter. Not as clunky as a Uhaul. So it's right there in the middle. And it was perfect. Because everyone was buying sprinters during the pandemic. And so no one this is like the redheaded stepchild that no one seemed to want. We're like, perfect.

 

Tom:

Leave a little like putting green in there just now.

 

Michael:

That's good. That's a great idea. set up some glasses. Awesome. So all right, Dana, take us away. What is our third rule that remote landlords should be aware of?

 

Dana:

Yeah. So the third one is that you definitely need to have a great local team. I actually laugh about this because I'm in technology. I think a lot of folks who listen to your guys's podcast are in Silicon Valley as well. They try to automate everything. And there's no such thing in real estate. And it's been advertised that they have these robots that will show your property and that keyless entry will you know, just do everything. But how do you ensure that during the turnover, the work is being done properly? How do you actually make sure that the tenants who are moving in are who they say they are.

 

So while you can remotely manage from anywhere and you can be like Michael in his new golf van, or you can be in Europe, right? No matter where you are. You don't physically have to be there. You can remotely manage it, but you need someone else to physically be there. And that's where I think the team is so important. And it starts with a leasing agent, it starts with someone who can find in place the tenant, because they're going to do everything from making sure the place is mov in ready. So making sure the smoke detectors are working, making sure the light bulbs are all replaced show showing the rental property to making sure that when they hand over the keys, the tenants are happy, and it's going to be a very smooth process.

 

Now, you might remotely decide, okay, I'm going to be the one who accepts or declines applicants based on the data that I have. But you still need someone to physically there. And what we found and what I've personally found with leasing agents, is there's a huge difference on who is good and who was not. And one of the things that I found that you can you can ask leasing agents, 5000 questions. But one of the things I found that makes a really good leasing agent is response time. Because how they treat you is how they're going to treat the tenants. And so say, you know, Tom is out looking for a new place to live. And he goes in inquires, if he doesn't hear back about the showing for four to five days, he's already found another place. And so I think that speed and that, you know, hey, I'm quick to things I can get things done is really, really important for it. But also someone who's been there, someone who's done leasing before, understands how to qualify, tenants understands how to, you know, go over and be like, Oh, you know what, this door kind of creaks, maybe we should get it fixed before the tenants move in. Being kind of that eyes on the ground with everything is really important. And there's a huge difference between them.

 

Tom:

Love it, I mean, just kind of to the point about team, that's so true. Like, well, we can get so far with automation and systems, like at the end of the day, like there's people as a major aspect, I'd say, like with technology, a lot of it is about getting people in a position to be successful. And just to your overarching point of rule three, like team team team. My my tidbit that I'll throw there from my experience is, you know, don't sleep on vetting multiple people. So be it your leasing agent or being your property manager or be at your lender or whatever. It's worth that extra effort of talking to, you know, two to three to four to whatever that number is, and have a codified process. So, you know, we have some great stuff at Roofstock Academy of questionnaires to ask all these different types of vendors, but have a process where when you speak to them, you're asking them the same question and asking for more people and don't sleep on references to those my Alright, quick blurb clip quick blurb in there. Great, great point Dana.

 

Dana:

Yeah, no. And I think that asking the same question and having that formalized process is super important. I see it with contractors as well, because a lot of times when someone says, Oh, I'm upset about this contractor, I don't think they did well, or I think that they charged me too much. It's because you didn't have an Excel the questions of like, are you licensed? Are you insured? Are you bonded? You know, what's your service call fi? Does that fee go towards the work you're doing? Or am I going to charge more? Do you charge a fee for emergencies? Is it hourly? Or per job? Do you mark up on parts, because some will mark up 15% on parts. And if you know all of this stuff, and you can take a look at all of them. You know, even with leasing agents, I don't necessarily take the cheapest leasing agent, usually the cheapest is assigned to me of like, Oh, I look through that spreadsheet, like you said of those questions. And it's like, Okay, this is why they just started, they have no idea.

 

But if you can do that, then you have data to say okay, out of these three or four, whether it's a contract or a lease at each end. Okay, this is exactly why I'm choosing this person to move forward with. So yeah, I think that's really important. And again, it becomes emotional landlording if you don't do it correctly, and set up those processes, and have the right people and you might even have backups. So you might say this is the leasing agent, I'm going to choose. This was my second favorite. Make sure to follow up with them and say, you know, I love to meeting with you at this point in time I'm, we don't need your services, but I'd love to keep in touch because the other leasing agent may get sick, or they may move somewhere else and you need to jump back on to have someone else do it.

 

So I think that part is super important. And then with the local team, one thing that I find if you're remotely landlording that's a huge benefit is you're not locked into annual contracts with any of these people. A leasing agent is usually a 30 day contract, and then you can do a termination on it. contractors. You don't have contracts It's just per job. And so it's great because then you do all this upfront work. And then if something's not working with someone, you can just switch them out for someone else in the area. And you can use your own experience to understand who's going to be good or and who's not.

 

But I do see that some folks who purchase real estate properties, they purchase rentals out of state, and they say, Oh, well, you know, I'm just going to pay per showing, and I'm not going to have you know, them do the turnover coordination, I'm just going to have this Joe Schmo who I've never met, do the handiwork and hope they do a good job. And a lot of times, that's just increasing your risk. So as much as you can mitigate it with a really solid agent, and a really good vetted contractor network, you'll really set yourself up for more success.

 

Michael:

That makes so much sense. As a follow up to that, Dana, before we jump into fees, I'm curious, talk to me, like I'm a five year old and explained to me how I do this, how do I go find a leasing agent? Because that all sounds well and good. And now I'm excited to go find a leasing agent, someone who's good. And I understand about the vetting process, but like, what are the steps that actually have to take to find this type of person?

 

Dana:

Yeah. So there's two that are major, I mean, obviously, we have a database, so you could actually search through our database. But I would say if you're starting out, the first thing is to talk to real estate investors in the area. So understand who else has purchased properties in the area? And who were they using for leasing?, and ask them the questions that, you know, the Roofstock Academy has, as well as asking them like, how many times have you worked with them? How many times was the property on Market to get some additional data, because you're talking to the real estate investor rather than the leasing agent.

 

And then the other thing that I do is actually, I would recommend you look at who are the top agents just agents buy and sell agents in the market, and ask them who is the top leasing agent, I need someone who has 10 plus years experience, who is the top agent that you would recommend for leasing, and go down that list because most likely those top agents who have like top five star reviews and 5000 of them on the buy sell side, they usually won't do the leasing. But they will know who in their office who does. And because they're a top agent, they've built up a really solid network.

 

And so you can call them and just ask them, you know, hey, I'm looking for a leasing agent, who do you recommend, and then sometimes they'll refer you to a property manager, you can actually use a property management company to do leasing, if they have a leasing only package as well. So that is definitely another another avenue to go. And that's what's exciting that we like is building up there isn't a database of leasing agents. That's what we are building up that Hemlane is like who are the good agents? And how do you know that they're good time and time again, there's databases of property managers, but not if leasing agents yet.

 

Michael:

That's awesome. And to dig a little bit deeper, remember, I'm five years old? So I don't know how to go about finding the answers in the area. How do I do that?

 

Dana:

Yeah, so um, I mean, there's a ton of great resources out there to network with investors, there's groups online, there's bigger pockets, I see people writing on those. Usually, I don't do the forums so much as like reaching out of just figuring out who's, who has actually posted that they have a property there and reaching out and connecting with someone from there. The other thing is, I don't know, does does Roofstock have that? are you guys thinking about creating some sort of community with all the properties that you guys have? for people to network?

 

Michael:

Mr. Schneider?

 

Tom:

Yeah, we're working progress. I mean, there's, you know, there's a lot that goes into building a community and you know, you don't get a lot of different shots of the apple of launching a community. So we'll see. I mean, I think at the heart of whatever we do, is it just needs to add a ton of customer value. So we'll see could be something we see later this year. But you know, as kind of part of the the podcast ecosystem and Roofstock Academy ecosystem, definitely something that we're looking into.

 

Dana:

Yeah, yeah, cuz I could definitely see that as something super valuable there. I mean, the biggest network is obviously bigger pockets that we see on there, people, forums of people talking and connecting, but I feel like Roofstock is one that's non promotional, because it's people who have actually purchased properties. And they all are very much the same they purchased for return on investment. They're typically like working professionals who have purchased a property and really want it to succeed with minimal effort. And so I could actually see your guys's community being of great value, if you were to build one.

 

Michael:

Thanks for that Yeah.

 

Tom:

More to come. And just we love We love the BiggerPockets community super excited about their conference they just announced coming out in New Orleans later in the year islands. Now islands Yeah, I was just talking to Michael about it. Are you guys gonna be there?

 

Dana:

To be determined? Yeah. So we were a partner of bigger pockets as well. So hopefully, we'll be there a couple folks on our team.

 

Michael:

Awesome. And one, one other resource now putting back my investor hat on taking off my my baby cap is you mentioned online groups. I was really impressed. I've joined a couple of Facebook groups, just investor, you know, whatever city and then investor and search that in Facebook, and I think a lot of people will be pleasantly surprised with how many groups are already in existence, talking about that particular market, posting needs, wants, wants and haves. I've been very impressed. So that's another great one check out as well.

 

Dana:

And Michael, how are you finding those groups? Are you just typing in the city real estate investing?

 

Michael:

Yeah. Yeah, literally that simple. I wish it was it was more sexy than that.

 

Dan:

Yeah, that's a great, that's a great.

 

Michael:

Yeah, yeah. So super easy. And then a lot of these are private to request access, and I've never been denied. So as long as you are posting within the guidelines that are called out, it's been a very big help.

 

Dana, can you give us a little bit of insight, we're gonna circle full fully circle back here into what people should expect in terms of fees, or costs associated with different leasing agents?

 

Dana:

Yeah, so we've actually spoken with all the real estate bureaus, and they've made it very clear that we can't set rates for leasing agents, what we typically see in the markets are anything from 50% to 100%, of one month's rent for their leasing commission. And, um, they also include turnover coordination in that. So it's the coordination to make sure the properties move in ready, especially for remote investors, they know you're out of state, they will go ahead and do that whole process for about 50% to 100% of one month's right.

 

Michael:

And when you say coordinate the turnover, is that truly like a unit turn? So if there's paint, flooring, you know, minor rehab that needs to be coordinated and executed? Is that part of the turnover? Or is it literally just the kind of baseline cleaning, and then getting a new tenant ready and exchanging the keys?

 

Dana:

Yeah, mostly seen agents that I work with and qualify, do even the painting the flooring, like make sure carpet cleaning is done, really make sure that it's ready. Um, but it depends on the leasing agent. I think if you have a less experienced leasing agent who hasn't done a lot of them, they haven't built up that team. And so to them, it's like, Oh, that's too much work. I'm not going to do it. The moment you get into the big leagues of like, the good leasing agents, they're gonna be like, Oh, yeah, I have a guy that does just all of that, for me. He's in there. He's got a fantastic team at a great price. And he does all my turns for me, and then they get them in there, and they turn it over pretty quickly.

 

So like the top leasing agents will act a lot in that sense, like a property manager of Hey, we can get someone in help turn it over. The one thing that some of them don't do are renovations or I would say majority. So if you're looking to do a major rehab, so like a huge capital expense, leasing agents won't get involved in that. But as far as a turnover, and you know, carpet cleaning floors need to be redone, painting, things like that. A top leasing agent will definitely do that.

 

Michael:

Awesome. That's great. Tom, anything else on leasing agents before we move on?

 

Tom:

No, that's great. I mean, my favorite takeaway is like, you know, the concept of value, you know, just because someone is cheaper doesn't mean they're there. They're better. I mean, ultimately, we want value we want return on investment, and just hunting for the lowest price is not often the best way to get there.

 

Dana:

Yeah, you have to think like if someone is charging $500 less in the leasing fee, but the property is on market for 30 days longer, or even 15 days longer, most likely, you're losing money, just by virtue of that. So definitely I I've actually learned this myself over time that it's it's definitely on the quality side. And every time I hear a low price, I kind of questioned it. And sometimes I get lucky. Sometimes I have a leasing agent who I'm like, gosh, they should really triple their rates. But again, if you have that spreadsheet and you ask the same questions, and then compare, you'll be able to see a lot of gaps usually with the people who are lower, lower on the price point.

 

Michael:

That's such a great exercise. All right. Let's let's transition to rule number four.

 

Dana:

Yes. So this is one of this is one of my favorites. Because it's one of those things where it's strategy and just a little bit of common sense if you if you if you think through it enough. So rule number four is you must always align incentives in this is aligning incentives with anyone and everyone. And you know, an example I’ll give in the traditional management space, which I hate is when a property manager adds adds 10 to 15% markup on repair coordination. It's like, how does that align incentives, if the if you get a higher price, you make more money, I'm actually trying to get same quality, but at a good price. Um, and so it's the same thing for you, if you're remotely managing your properties, you really want to make sure that you align incentives and set yourself up for success. And so what I mean by that is, let's just take some examples with tenants, but then we can talk about leasing agents and contractors and everyone else who's part of the process.

 

One of the ones with the tenants that I see happen so often, is that a tenant asks for something. And a real estate investor just flat out says, No, I'm not gonna do it. And I'm like, one of them that I had recently was a renovation. And the tenant said, Hey, can you renovate the bathroom? I really don't like it. And can you renovate it? You know, some real estate investors would just flat out say, No, I'm not going to I'm not going to renovate it until you move out. Well this particular real estate investor said? Or will you still continue? knew it was important? Would you still continue to pay rent? And can we and they knew they were a good tenant? Can we sign a three or four year lease? If if we do renovate? And the tenant actually said, Yeah, I'll pay rental, I'll move in with my parents, for the month that you do it, I'll still pay the rent, so there's no vacancy, and then you do the renovation, you actually get that increase in asset value from it, and you have a great tenant who's going to live there longer. And so it's, it's a win win for everyone.

 

You see the same thing? Most often I see it in in turnovers, right, where incentives aren't aligned. And you just say, okay, Michael, I'm going to raise your rent by 5%. And that's it. And, you know, take it or leave it. Well, you have to align and understand, well, what are they looking at? What are their other options out there? And potentially, should I give multiple options, and align incentives for them to take a longer lease by having a lower rate? And so there's a ton of examples with tenants. But usually, every time I see that something goes wrong, it's because you haven't aligned incentives. So I don't know if you guys, I'm going to call you guys out on this. I don't know if you've seen like, a difficult landlord or property management case that potentially I could think about how to align the incentives for the tenant and the owner when but it's, it's a good thing for everyone to go through that exercise. Whenever there's emotion that comes into landlording.

 

Michael:

Yeah, absolutely. I'm, I'm gonna put my my five year old baby cap back on here for a minute and ask you how because I think one of the biggest incentive misalignments out there is often between owner and property manager. And so how can we as owners align or help align the incentives between ourselves and property managers? What are maybe three or four kind of key aspects where you've seen things go really well, or maybe really poorly so that we can avoid them?

 

Dana:

Yeah, so if it is with a property manager, or even a leasing agent, with a property manager, I'll start with property manager, then I'll go to the leasing agent. But it

 

Tom:

Also feel freeto plug the business model of hemline because it's honestly like solving one of the big misalignments as well, so just throw that out there. Yeah.

 

Dana:

Okay, perfect.

 

Um, so let me start with property management. Um, there, there is quite a few misaligned incentives. One example is late fees. If the tenant is late, usually your property management contract states that they get 100% of the late fee. And it's like, Wait a second, if the tenant is not paying rent, and you most likely placed this tenant, I should be getting the late fee as the real estate investor.

 

Tom:

I experienced this and it was so upsetting. Sorry. I remember. I remember seeing that and I'm like, forgive it. If you're gonna take it. Just forgive it. It'll be good. Anyways, sorry.

 

Dana:

Yeah,

 

Michael:

I can't have it. No one gets it.

 

Dana:

Exactly. So that would be, that would be one. And there's there's many examples of that. The other one on the property management side is this percentage of monthly rent versus flat rate fee. And the reason for that is that with a property, the easiest properties to manage are typically those class, upper class B class A properties where the tenants all pay rent online, there are these hard working professionals too. And now this is not the case in all properties. But I would say that typically tenants are more tech enabled in the class B class A properties, they pay rent online, they might work for a big tech company. And you know, they're working all day behind a computer, a little maintenance on the property itself. And in those particular cases, charging 10% of monthly rent. So if it's a $5,000, rental $500 a month doesn't make sense. And so I actually think the flat rate, rental rates make a lot more sense. From that perspective of aligning how much work it is to manage the property. And what what that price is, that would be another one.

 

That's actually where Hemlane, what we do is just flat rate subscription per property. And it's and the more properties you have, the cheaper it gets, but you don't have a percentage of monthly rent. And then the other one that I see often on the property management side is property managers who charge a really high leasing fee. So if they charge both one month's rent for leasing, as well as the 10% of monthly rent, then the problem comes down to they actually want to turn over the property because they make a lot of money on that leasing fee, they actually make the same amount of money as a whole 12 months of management. And so from that perspective, it's how do you incentivize to have a lower leasing fee, and then monthly management fee can be a little bit higher, or whatever. But it incentivizes you to keep the tenants in long term, because that reduces your risk with turnover with vacancy, etc. So those are the big ones on the property management side. There's a lot of them, but those are probably the largest ones.

 

On the leasing agent side, as far as aligning incentives there. What you want to do is, first with leasing agents, I've seen a lot of them where they guarantee, hey, if I play someone for 12 months, if they don't stay for 12 months, and they default to do to rent that they can't pay their rent, I will place another tenant for you at no additional cost. Or if there's a cost to it, it's only the fee associated with another agent. Because in some states like Texas, you'll have to have agents involved in the deal. But otherwise, I won't charge my fee. And that really aligns incentives to make sure they're not just taking anyone to the property, but really making sure it's someone that they believe in, and they put their money where their mouth is of Hey, I don't get this money unless this person stays and performs for the 12 months. So I'd say that's the biggest one on the leasing side.

 

Michael:

It makes tons of sense. On the property management side, what do you think about increasing a lease renewal fee for the property manager and reducing that new tenant placement fee?

 

Dana:

Yeah, you know, there's a lot of property managers who do that to align the incentive to encourage the tenant to stay and encourage great management, I just I have a problem with charging a huge lease renewal fee. Because at the end of the day, the owner then just has to account for that. Like if you think of your pro forma, and you put together my management fees 10% my vacancies best, if you do have a large renewal fee, then you don't really have that in your calculations. And as far as like your your pro forma, you'd have to include that and it just reduces your cash flow at the end of the day as an investor.

 

And the reason I say that is lease renewals are super easy. Like literally it can be automated, you send out a message to the tenants saying here's the rate to renew, sign this, this lease renewal form. You don't even have to prepare a new lease. Literally, it is a one page document that says everything holds true in the seat in the original lease, we are just updating the end date and increasing the rent to X amount sign here. And that property management software automates that. And so I think my problem from that perspective with the lease renewal is it's a cost to the owner, that really a good property manager, they should know hey, it doesn't cost us that much money. And that's why more of a fan of just saying reduce the leasing fee, typically point where it encourages the property manager to keep the tenants into the property. And then there's more money in the pocket for a real estate investor. So yeah, I've seen I've seen lease renewal fees up to $750. And I'm like, shocked by it. I'm like, you could pay me $750, if you want, I'll do it for you.

 

Michael:

I'll do it. Every every property manager out there charging an arm and a leg is like shut up data, don't do your giveaway or secret. Those are really, really good tips.

 

Dana:

Yeah. And so the fifth rule to remote landlording is you must love what you do. And what I mean by that is remotely managing your properties and having that control and transparency is not for everyone. It is the perfect solution for me, I love being in control. I love saying, Wow, this cash flow, I've completely optimized. And I actually don't spend that much time doing it because everything is automated. And I've 24 seven repair, coordination, and all these things that reduce my time spent in property management. But there are certain people out there who are not process oriented, there are these dreamers and they like can't really put together a process and iterate on that process. So making sure they have really concrete, a concrete lease in place, making sure they have a great solid local team, making sure they've aligned incentives with their tenants, making sure they have a great system in place.

 

There's those people who are like great visionaries, but not very good at execution. And those types of people I actually don't think will love remotely managing their properties, or people who just say I want to give the keys and hand them over to someone and I never want to hear about the property. And if the property manager, you know, charges me for something and you know, I've one case where a property manager recently charged for two water heaters instead of one, I recently heard that and, um, you know, in that particular case, if you're like, not even gonna look at it, who cares, I trust them, they'll just go through it, then you will want a full service like traditional property manager.

 

And so what I say is that, you know, purchasing a property out of state out of your area, you definitely have to do it, you definitely want to do it, you want to get your cash flow, but then the question comes down to the management and if you think that you are going to love it and setting up a great process for success and increasing your cash flow through it, do it. But if you find that it's a headache to you, it's causing anxiety, you're just not good at it, then go ahead and go to a traditional manager who's going to take all of that headache off of you. But I would say when you do get a traditional manager make sure they're a good one because the bad ones will cause you a lot more headache in the end

 

Tom:

Just to layer on to you know the effort you know, the work that it takes and being process minded and all that good stuff. What I like about it is it's it's kind of like an all you can eat buffet where like if you're you know, once you have done some acquisitions and you have some properties under your belt, whatnot, like if it's not a good time and you're busy okay you know don't do more acquisitions you know, you haven't been an auto pilot but if you know if you want to get more into it, there's always more that you can do on the acquisition on the optimization side on the financing side. So it's it's one of those things that's if you're kind of enjoy it like it's there for you to go deeper into the onion but it's not something that is requiring all the time all your all your time. It's it's something that is available for you. Gosh, what was there's a there's a good like, quote about hobbies, having three hobbies, ones that makes you wealthy and one that makes you healthy, and one that makes you happy. Like this is definitely the like, kind of wealthy happy, like little combo combo one.

 

Dana:

Yeah, most definitely.

 

Michael:

Something else that I think folks should think about is it doesn't have to be all or nothing one or the other, for forever. And I think a lot of people lose sight of that, especially when they're in the middle of a transaction thinking, Oh, well do I self manage? Do I use a property manager juggling all the different pieces of the transaction that's ongoing and I often liken it to placing insurance. It doesn't have to be perfect on day one, just go get something that's good enough for right now. Do the transaction close the deal and then figure out what's gonna work best for you. So whether that's a self management or what full self management, whether that's hybrid with Hemlane, whether that's a full full fledged property manager, go let the dust settle, get your kind of kinks out and figure out what your processes even look like and then determine Okay, I either I can do more. Or you know what, this is way too much. I need to take a step back and use something else. So I think that there's so much anxiety and stress just in doing the transaction especially for first time investors. So know that there are it's not a it's not a forever type of relationship. You can change once you decide to.

 

And, Tom, I think you've got a pretty good anecdote about this of your property manager. charge you like a breakup fee or something like that, when you decided that it was no longer working.

 

Tom:

Yeah, yeah. It's like when I sold my property right, there was some good appreciation sold it and then not digging into just finding these, you know, fees that were hidden, hidden the contract that was that was to sell the property. I had to pay them a breakup fee. And it was something like like a five year period or something. Dumb like that. So anyways, yeah. And honestly, like doing this long enough, you have these like frustration. That's why you know, outlets like like this in bigger pockets and learning hearing from people's frustrations and stuff that they've learned. Like, it's that much more empowering for for you to not make those same type of type of mistakes.

 

Dana:

Yeah, and I love love the one that Michael said about just getting started, I feel like so many investors out there never jump in, because they're looking for the perfect process and getting things set up. And you just need to jump in. And if you need to do that termination, or whatever it is, and iterate on that process as much as you can, is super helpful just to get your first property and then start learning from there.

 

Michael:

Yeah, yeah. And then read those management agreements thoroughly. As you're getting it set up, that's, you know, go pick a manager, you have a great working relationship, but don't make the same mistake that occurred to Tom. And some stuff gets hidden in the fine print. So with hemline, do you have a an agreement, that's a contract for a set amount of time, or is it month by month?

 

Dana:

It's month to month, you can do annual and get 20% off, but we do month to month, I don't like marrying anyone until I've actually been able to try it out. Like just with anything. So an annual contract like, it's, it's difficult, it's really hard because you don't know how well it's going to perform for your property. until you actually experience the property manager and their cadence. There's a lot of good people who are great salespeople, but they they're great at sales, but they're not good on the operation side, which is what all property management is. Um, so that's why we designed our contracts as month to month just to make sure that people could try the service, try it for one month free and then go from there. And a lot of these property managers will change clauses, they obviously want your business. So you know, you can go to them and say, Yeah, I love everything about you. And I'd be willing to move forward. But some of your competitors don't have a five year, you know, termination clause in there. Could you consider taking that out? Or could you make it six months? And then maybe at six months, we renegotiate? And potentially I signed for two years or something, but I definitely want to try it out beforehand.

 

Michael:

Yeah, no, that's such a good tip. I think so many people see a clause and think it's set in stone and never think to ask about changing it or removing it. Shout out to one of our Academy members, Nathan, he took a tip that we had that I suggested to him with the property management company said, Hey, your fee monthly fee is up here at X percent. The deal doesn't work for me, I need to down here at y percent. Can you do that? And they're like, yeah, sure, no problem. And his mind was blown. Like, oh my gosh, that's amazing. So just, you don't know until you ask. And the worst they can say is no. So figure out first what it is that you're you know, that you don't like, and then ask.

 

Dana:

Yep, yeah, exactly. And as long as you're being fair on your end, and it's something that's reasonable, I think they'll be fair on there. And if you try to get it down to like an obscene amount, like a really low mount and they go with it, then you're probably like, this isn't a great manager, they really need business. Um, but there's always that middle ground to your point.

 

Michael:

Yeah. And to further Tom's point, I think in chatting with so many and vetting so many different property management, companies or vendor, whatever the role is talking to multiple, helps give you an idea of what the different contracts look like, help give you an idea of what the industry standard is for that particular market. So you can go into that equation equip like with verbiage like you mentioned, you know, hey, some of your competitors aren't doing this. You're not going to know that unless you're having those other conversations possible.

 

Tom:

Awesome, Dana, thank you so much for joining us today. If you wouldn't mind Yeah, give a little How can people get a get a hold of him way and have people get a hold of you love to hear real quick as we as we're closing out?

 

Dana:

Yeah. Um, so we are we're Hemlae property management platform. We work with owners and leasing agents as well as property managers. And you can get a hold of me at Dana@hemlane, pretty quick with email and I do love connecting with real estate investors. And then you can also just check out our website www.hemlane.com. We offer property management services, everything from software only, all the way up to more complete package if you're a remote investor looking to be more hands off.

 

Tom:

Awesome. All right, Dana, thank you so much for coming on.

 

Dana:

Thanks for having me.

 

Michael:

All right, everybody. That was our episode a big big, big thank you to Dana as always for coming on the show. She's always a pleasure. We look forward to having her back on for future episodes. As always, if you liked the episode, please feel free to give us a rating or review wherever it is using your podcasts and we love hearing feedback from all of our listeners about future episode topics, ideas, things that you want to learn or hear more about. Also, check out the YouTube page if you're checking us out on YouTube. Give us a subscribe or like and or comment. And as always, we look forward to seeing in the next one happy investing.

 

Tom:

 Happy investing