707: Property Management with Special Guest Kristina Travis - Part 1
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00:01
Welcome to Episode Seven of Season Seven of the Growing Empires Show. Today I'm here with my friend and colleague for the last eight plus years, Kristina Travis, who has been instrumental in helping me grow and build out both our real estate company and our property management group. And I'm really excited to have Kristina share some of her insights on what makes a great property manager. So stay tuned.
00:25
Welcome to Growing Empires hosted by real estate entrepreneur and trusted investment advisor Jennifer de Jesus. Growing Empires provides insight to building wealth through passive income producing real estate investments for those who want to build and manage a more profitable real estate portfolio.
00:45
So welcome, Kristina, to the Growing Empires Show. I'm so glad that you're here.
00:49
Thank you, I'm happy to be here.
00:51
Let's kick off this episode about building the dream team with you sharing a little bit about the work that you're doing now in real estate and property management.
00:57
Sure. So as you'd mentioned, you and I've been working together for about eight years or so. And I've kind of done my gambit here between real estate and property management. So I do have my real estate license. So that allows me to help investors find properties and sell properties for their portfolio. But I also have a lot of experience in property management. From the minor details to the larger portfolio picture.
01:23
Excellent. So today, we're going to talk about property management as a whole and I've asked Christina to join me to share her wealth of knowledge and secrets that she's picked up over the years so that you can avoid the same mistakes that we've watched other investors make. Today, we're going to cover why you need a property manager. What should you be looking for in a property manager? Are all property managers created equal? What makes Empire Property Management so special? What does it take to be profitable in investing? What are some of the mistakes investors make when utilizing a property manager? And what are some of the things that she wishes she could teach investors out of the . So let's just jump right in here. So tell me why you think somebody needs a property manager,
02:05
it's important to have a property manager, if you don't intend to work full time, at your properties. I think that it's a full time job to make sure that they're profitable, to make sure that they're making the money that you're expecting it to, and it's very important to have attention to detail. And if you are working in another arena, you will not be able to focus in the way that you should to ensure that your properties are performing the way that you should have them and expect them to.
02:32
Why do you think people think that it's so easy to do property management? Because we see this all the time, right? We always see people say, Oh, I thought I could do it myself and I have a mess now. What do you think makes people think that it's so easy?
02:46
Well, there's a couple of things that I think make it easy. Number one, I feel like real estate in general, has become really, really hyper-socialized. We see it on TV all the time, we see it on HGTV, where they're doing flips where they're having renovations and properties. And it seems really easy. And when you put it into a 30 minute episode, it is easy. But I really truly believe in property management that the devils in the details, and there's a lot of small pieces that can make the difference between you being profitable, and from you losing money. It's really easy to collect rent, super easy to collect rent, but that is like the smallest portion of property management that we deal with on the daily.
03:27
Good point. So what should you be looking for in a property manager, if you choose to have one,
03:33
I think the most important piece for a property manager to hold for you his expertise. You can have a property manager that could be really eager to work, they could be really interested in learning about property management, they could be really friendly to work with. But if they don't have the expertise and the knowledge base in that specific community, you may as well not have a property manager at all.
03:57
Also a good point. So I assume that your answer to my next question is going to be absolutely not. And it's our all property managers providing the same services.
04:06
There is no way. I think that property managers can go from just collecting rent, for instance, to collecting rent to sourcing tenants, collecting rent sourcing tenants, managing your financial portfolio, collecting rent sourcing tenants, managing the exit of tenants, maintenance turnovers, your bills, your insurance, your mortgages. Those are all pieces of property management that not everybody has their finger on the pulse of and often some of our competition or other programs that are out there, they only do half or a quarter of those services. But Empire does all of them. And I think for the investor to be able to see their portfolio as a whole. Each of those pieces need to be properly calibrated together so that it makes sense.
04:57
So we know that there's quite a few and actually I talked about this in a previous episode, there's several different layers of property management. There's Al a carte services, right? So you can find people to just do one piece of it, you just want somebody to help you lease out a unit, right? You can find people that do general property management, but don't handle any accounting at all, or they don't handle any maintenance at all. So tell me how important you think those two pieces of the puzzle are the maintenance and the accounting side. Because it's really common for property management companies not to handle those two, or one or the other?
05:35
Well, I think that the maintenance side is it's just, it's probably one of the most important pieces. Your maintenance affects your portfolio in in so many different ways. If you're working here in the Lehigh Valley maintenance could be associated with the fine that’s coming from the city. It could be having to deal with a certificate of occupancy or a rental license that's necessary. It could have to do with your tenants happiness, that's going to affect your bottom line in terms of retention and turnover. Maintenance is also going to affect your overall health of your building. If you have deferred maintenance on your building, even though prices right now are super, super high, you're not going to be able to sell it for as much as you could. And it wouldn't be valued as much if there were gaping holes in your maintenance plan. So if you don't have a property manager that's going to focus on that maintenance piece, then you're kind of in the wild out there. And those things are specific on time, they need to make sure that they're done timely, so that they don't create more damage to your building. For instance, they will create more damage between your relationship and your tenant, and so that you don't have any damage between yourself in the city. So I think that it's super important to have your property manager facilitate those pieces for you. Otherwise, it's nearly impossible to be making those calls and taking care of those issues while you're working.
06:57
The episode will continue in just a moment.
07:01
Building your dream team must start with trust, which is the cornerstone of our approach and what allows us to deliver the results that we do. You need to trust your team so they're empowered to bring their best and deliver the results you need to be successful. Your team is your true partner and your growth strategy and trusting their contributions and capabilities is what will free you up to focus on sustaining your growth. Whether you're an active investor or a passive investor, your dream team should be comprised of not just experiencing capabilities of people with heart you can trust as true partners. Wrong choices will cost you lost time, money, and most importantly, opportunities to capitalize and grow. I want to share my experiences with you and help you sidestep those risks when building your dream team. Let's get on a call and talk about your dream team so we can get you set up for success. Book a call with me today at growingempires.com and I will help you clarify what you need to build the perfect team for you.
07:54
And what do you think is the difference between a company that does their own in house maintenance versus a company that doesn't have the capability to do so but will sub out all of the work to a vendor? What do you think the main differences are in that?
08:07
I think having control over the maintenance is very, very important. Being able to prioritize, for instance, like it was an emergency room, what is a triage process to make sure that your maintenance gets taken care of. So that For instance, if you have a hole in your roof that is creating a leak, that is something that would be on the top of the list. But your list might not be the same as a contractors list. That patch on your roof might only cost $400 and they may have a $4,000 job that's more important to them at that time. So when we have the opportunity to source things in house, we can make those decisions. And we make those decisions based on the health of your building the health of your relationship with your tenant, not necessarily on the dollar amount. Because at the end of the day, it all comes out in the wash for us to make sure that you're well taken care of.
08:56
And we both know just from being in it that there's a huge difference in price between in house maintenance and subcontracted work. Not to mention the time that you already mentioned.
09:06
Yeah, it needs to be worth the contractors time. For instance, the reason that we brought things in house, a common maintenance problem in apartment buildings are toilet backups,. That is a 10 minute job for a contractor. Getting the equipment there, finding time in their schedule, getting into the apartment with the accessibility from the tenant. Those are the challenges. We don't have those challenges. We can get in quickly, we can make sure it's taken care of. And we know that even though it might not be a very costly job, it's an important job being that that might be the only restroom that that tenant has. So if that happens on a Friday night, we can expect if I call the contractor that we probably wouldn't be put on their itinerary until Tuesday. For us if it happens on a Friday night, we could be there Friday night and make sure the tenant has a functioning toilet at that time.
09:56
And that's really key. So that's really important. So what makes Empire so special in your eyes, Empire Property Management?
10:03
So, I think what makes Empire so special is that we do take all of those pieces, and we put them together. I think that this is important for someone who's new to investing. This is important to them, because it gives them the opportunity to kind of see their property as a large picture. And we can analyze cost of maintenance. We can analyze their mortgage, for instance. We can analyze income versus expenses regularly, monthly. And I think that it's important for a seasoned investor as well, because it allows them not to focus so specifically on one property, but it allows them to continue to grow their portfolio. They don't have to be focused on the details, because we're handling it. They can look at the larger picture too. So it gives opportunity for growth. and it gives opportunity for passive investment. Pieces that make what we do. So important, though, is that we can focus on the financial aspects for you. Every single dollar that you spend is accounted for every single dollar that comes in is reconciled, every single month. So if there's ever a question about what's going on financially, in your portfolio, it's available, and we kind of manage all those details for you. For instance, you're not going to have a tenant come to your house or throw in the mail a check or money order that you'll have to record somewhere. When that comes to us we make sure it's recorded appropriately, we have a image of whatever was sent to us, and it goes into the bank and reconciled monthly. So you can never say Well, did you give me 50 bucks did I grab it when I went to go get the groceries that day? It’s all accounted for, which I think is super, super important.
11:58
Yeah, you have to know your baseline, you can't do anything if you don't have the facts and the facts of the financial. So I completely agree with that. I think another thing that makes Empire so special, at least from my perspective, and you had briefly touched on that earlier is that, it's the details that make the difference between profitable and not profitable. And you have to understand all the moving parts that lead up to something happening. So if you have a history of tenants moving out, you have to know what's causing the tenants to move out. Because if you can't figure out how to keep tenants in your building, you're never going to be able to make money. Because you're going to have that constant turnover and that constant loss of rent and that constant vacancy. So I think that that is what, to me, makes Empire so special is that we have figured out how to master those details to make sure that we have processes built around why these things happen. So that we can cut back on vacancy, and maintenance costs, and you know, like you set a counting pieces, so that we do provide that whole picture. And there's no question as to what's happening with the units.
13:08
I think, too, that it's important for tenants to have a management company. For instance, if they do make a call at 5:30, on a Friday or seven o'clock on a Friday, we have availability to be in touch with them. We have an open line of communication, we have somebody on call to take care of it, we have a text/phone, we can even drop by the house and make sure that everything's okay. If you are further away, or you're busy, or you have things going on with your family that are going to prohibit that, I think that that makes it challenging. And I think that that has to do a lot with retention. I think another piece too about being able to have that third party kind of in the middle is sometimes we do have to have some hard stand negotiations with the tenant about them staying, about rent increases. And this kind of gives everybody the opportunity to have an open and honest communication. Because it's not directly with the landlord. So they might feel more comfortable talking to us about the issues that are in their property. But you might not get that same response if you were on the line with them. Because they might feel funny talking about a building that you own, that they're unhappy in. So I think kind of even having that little bit of distance between the tenant and the owner is good for the tenant as well as for the owner. So you don't have to take those calls and you don't have to worry about those things. We can handle it for you.
14:27
That's a really good point. So true. I hope you enjoyed today's episode with Kristina Travis. Please stay tuned for part two as we continue our conversation about building a dream team with property management. Until next time, take care.
14:43
For more information about how Jennifer can help you plan, develop and manage a strong real estate investment portfolio, visit growingempires.com