Ep. #27 - Are You The Owner? No, I’m The Property Manager.

Ep. #27 - Are You The Owner? No, I’m The Property.
Ep. #27 - Are You The Owner? No, I’m The Property.

“The secret to success is to own nothing, but control everything.” - Nelson Rockefeller

So last week in Episode #26, I spoke on the need of Landlords to treat this profession seriously and run their Rental Properties like a business. Well, this week I speak on why you should avoid the title of "Landlord" and being known as the property (business) owner entirely - own nothing, but control everything.

But for me, its a matter of pride that I own over a dozen Rental Properties - so my default answer to the question of "Are you the owner" has always been to quickly and proudly say "YES!" - and claim full Landlord status. Why shouldn't I?

Well there are reasons you shouldn't. A better answer to that question may be "No, I'm the Property Manager". And so in this episode of the [... and Landlord!] Podcast, I go into details as to why being known to be the owner, is not likely to your benefit. Its better to be known as the Property Manager than Landlord or owner.

Because the owner is a mean and greedy SOB in the eyes of many; whereas the Property Manager is just a hard working employee (just like the Tenant) - who must unfortunately adhere to the lease in all dealings.

The Property Manager would love to waive the late fee for the Tenant, but they must adhere to the lease and treat all Tenants the same. As Property Manager, you'd love to let the Tenant out of their lease early, but you must adhere to the full term of the lease. You have no problem with allowing the Tenant's boy/girl friend move in, but as the Property Manager, you must adhere to the lease's stated authorized occupants.

When you're the owner, you're the bad guy. But when you're the Property Manager, the lease becomes the bad guy. This may sound like semantics, but it gives you tremendous freedom from negative perceptions from Tenants when you can point to the lease (that they agreed to and signed), and explain that you must adhere to the lease in everything - no exceptions. And when you are not seen as the owner (who is thought to be able to make exceptions at will) - life as the Property Manager becomes smooth in comparison.

So in this episode of the... and Landlord Podcast, I talk about my initial desire to claim full Landlord status, proudly being known to be the owner. But how I've since come to realize that this is not necessarily in my best interest. And so upon coming to this realization, when now asked by a prospective Tenant, "Are you the owner?" - my response is now always, "No, I'm the Property Manager." - listen to this episode to learn why you might want to make that your answer to this question as well.

Ep. #26 - The Business & Tools of Rental Real Estate Investing & Being A Landlord

Ep. #26 - The Business & Tools of Rental Real Estate Investing & Being A Landlord
Ep. #26 - The Business & Tools of Rental Real Estate Investing & Being A Landlord

Are you a Landlord? If so, did you know that being a Landlord and owning Rental Properties is a business? If not - that's the problem I discuss in this episode of the [... and Landlord!] Rental Real Estate Investing Podcast.

You see, there are a lot of Landlords out there who SUCK at being a Landlord - often because they fail to treat their Rental Properties like a business. Your Rental Properties are both your product and your service, and your tenants are your customers. But this is one business in which the customer is certainly not always right (although I'd argue that may also be true of ALL businesses).

Landlords tend to have a bad reputation. This goes back hundreds of years, and in many cases, this reputation is well deserved. Much of the Landlord / Tenants Laws that exist throughout the world came into being to protect Tenants from abusive, dishonest and unethical Landlords. And in many cases, that pendulum has swung so far in the Tenant's favor, that well meaning Landlords cannot make a profitable endeavor out of owning Rental Properties in such locations.

Thankfully, that is not the case everywhere. Most places managed to strike a reasonably fare balance between the rights of the Landlord and those of the Tenant - as BOTH do have rights. But this does not relieve a Landlord of the responsibility to uphold certain standards. To know the law and uphold it in all dealings with Tenants, as well as, to maintain professional handling of all matters, communication, and on.

We as Landlords don't want to be doing anything TODAY, that further damages our reputation - that bad reputation obtained from past wrongdoing by others in our name. This stigma on the title "Landlord" is one of the reasons many have taken to calling themselves "Property Managers", which is something I'll speak more on in next week's Episode #27 - "Are You The Owner? No, I'm The Property Manager".

So in this episode of the... and Landlord Podcast, I speak about being a Professional Landlord running a Rental Property BUSINESS - and I go into some of the tools that I use to this end.

Businesses have documented policies, repeatable procedures, leveraged systems, tools, and a general consistency of professional high-level operation - from day to day; week to week; month to month and year to year... Always improving at each step along the way. This is exactly what the Landlord and Rental Property profession needs - to be operated as a business!

Ep. #25 - Rental Real Estate – The I.D.E.A.L. Investment

Ep. #25 - Rental Real Estate – The I.D.E.A.L. Investment
Ep. #25 - Rental Real Estate – The I.D.E.A.L. Investment

The acronym is I.D.E.A.L. - where I = Income; D = Depreciation; E = Equity; A = Appreciation; & L = Leverage. These are the benefits of Rental Real Estate Investing and how you make money in multiple ways. This is how it's not unheard of to make a return of something like 50% with Rental Properties; whereas you may be lucky to make 5% with other investments. Even if you are making 10% or 15%, even 20% with other investments - you can often do twice as good with well purchased, well located, and well managed Rental Properties.

So this episode of the... and Landlord Podcast is just to get you thinking about the many benefits and ways of making money as a Rental Property Investor... Does your investment in Precious Metals (Gold & Silver) produce an Income? Do you get Depreciation from your Stocks? Now maybe you have some Equity in your Stocks or Gold if they are now worth substantially more than you paid for them, so you might have some value Appreciation there - but was a Bank or other Lender willing to give you a loan of 80% of the purchase price? If there was any Leverage involved, it was only against the value of other Stocks you already owned.

Rental Real Estate is the only class of investment of which I'm aware that provides all of these I.D.E.A.L benefits. An investment that can pay for itself because it produces an income. Gives great tax benefits because of Depreciation and other expense write-offs. Builds Equity quickly through both Amortization (Mortgage Pay-down) and value Appreciation that is highly likely if you are buying where people actually want to live. And skyrockets your Rate of Return (ROI) by leveraging 80% of the asset price from a Lender, leaving you to only put in 20% - yet you are still 100% owner!

Rental Real Estate is the I.D.E.A.L Investment!

Ep. #24 - Rehab Lending: Down Payments, Appraisals, Reserves & Credit Scores

Ep. #24 - Rehab Lending: Down Payments, Appraisals, Reserves & Credit Scores
Ep. #24 - Rehab Lending: Down Payments, Appraisals, Reserves & Credit Scores

Funding Your BRRRR Deals... BRRRR investing often requires Rehab Lending, be it from Private or Hard Money Lenders. In this episode of the [... and Landlord!] Podcast, I cover the typical requirements of working with Rehab Lenders, and the things you need to be on top of... These being: Down Payments; Appraisals; Reserves; & Credit Scores.

When working with Rehab Lenders, you'll almost always need to put some amount of money into the deal ("Skin in the Game"), as your Down Payment. This will typically be 20%, but it can be lower or higher by 5% to 10% - depending on the specific numbers and terms of the deal.

This will be largely determined by the Appraisal results. There will be an Appraisal of both the "As-Is" Value (to make sure you're not paying too much for the property); and the After Rehab / Repair Value (ARV) to determine what the home may be worth upon completion. And it is the ARV that will be critical in determining how much of the deal the Rehab Lender will fund versus what you'll need to pay out-of-pocket as your Down Payment. As they will typically only fund 70% to 75% of the ARV as the total project cost, which is both the purchase price and rehab budget.

And most Rehab Lenders are going to want you to be able to show a certain amount of Cash Reserves in the Bank, which includes your Down Payment amount, Closing Costs, Holding Costs, and Interest Only Loan Payments.

Lastly, they are most often going to pull your Credit and want to see certain minimum credit scores, along with no liens, no judgements, no collections, and no other derogatory information present on your Credit Report. In this regard, I discuss my personal situation of balancing the amount of Reserve Funds I use to pay off Credit Cards to keep my Credit Scores high, versus what I keep on-hand to be able to meet the Cash Reserve requirements.

Its all good information for those seeking to do BRRRR investing at a high level, which at some point will require Private or Hard Money funding from a Rehab Lender.