708: Property Management with Special Guest Kristina Travis - Part 2
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00:01
Welcome to Episode Eight of Season Seven of the Growing Empire Show. Today is part two of my special guest interview with my friend and colleague, Kristina Travis, as we continue our conversation about building the dream team with property management, so stay tuned.
00:17
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.
00:37
So what do you think it takes to be profitable in investing?
00:41
I think to be profitable in investing, you have to be smart about how you're going to spend your money. Oftentimes, we see investors that want to over improve on their properties. We see times that they want to put in countertops that might not make sense, floors that might not make sense, and kind of ignore things that we know are going to create long standing tenants and keep tenants in that property for a long time. So to be profitable, I think it takes just being smart and having experience in what works. And the only way that you're able to do that is if you pair up with somebody that has that knowledge and can kind of guide you in that direction to make sure that every decision that you're making that costs any kind of dollars make sense.
01:24
Yeah, we've talked about that in a previous episode as well. Knowing your marketplace, knowing exactly what the demands are for the tenant, knowing exactly what quality of product you should be putting out so that you're not over improving or even under improving correct, and that'll help create a stable tenancy. So what are some of the mistakes that investors make when utilizing a property manager?
01:46
Well, one, I think, is not using a property manager. As we talked about before, I think that people think that it's a lot more simple than it actually is. So if they're just collecting rent, or how hard could it be this tenants been there for a long time, you'd be surprised. As soon as that property changes hands, all of a sudden, a scroll of problems come along, that maybe you were not made aware of when you were purchasing, and the tenant might have been holding on to and waiting for that exchange to happen. So I think that making sure that you have a property manager is important. But I think sometimes when they grab a property manager, oftentimes people want to kind of insert what they've heard, or what has worked for their friend, or maybe what they heard on a podcast, that might work really well. And it would not be specific to that building or that location or that that specific issue that the property is having. So if you have a property manager that knows the clientele, that knows the area that knows the community, and is successful in that. Partner with that property manager so that you guys can make decisions together rather than kind of dictate to what you think it should be. Because oftentimes, it might not work, what you're thinking may not work. But sometimes you can collaborate together and you come up with something that's really, really good. But just allow it to be like a dynamic relationship of give and take rather than a dictation to the property manager.
03:08
That's such a good point. Because, you know, sometimes we just know better, right? We just know better. And we have watched investors make mistakes before where they just didn't listen to us. And exactly what we say is gonna happen happened. And it's kind of like, you know, you don't want to ever say I told you so but in some respects, we told them so. I completely understand. The other thing that I think I have also seen just from the experience of bringing on clients that have had a terrible relationship with their previous property manager is, there is a very distinct difference between a property management company where you as the investor have to remain very active in the direction that you're given. Because they are taskers, they follow your direction. And then there's a difference between a property management company like Empire, where we allow investors to be 100% passive. Meaning we don't need your advice. We need your approval, but we don't need your advice. We're going to be the ones telling you what you need to know about this property. Because we are, after all, the experts in that marketplace. So I know that I have watched investors fail because they have assumed that the property management company that they hired was going to give them a passive opportunity in investing. When in reality, that property management company that they chose required their direction at all times. So I do think that if you're going to find your property manager, you've got to be very clear on what you're buying into. Because they are definitely not all the same. And if you don't want to be involved in your properties management, you need to make sure that your property manager is going to align with that.
04:52
Yeah. And that's not to say, though, that the owner wouldn't be involved in any of the decision making and my favorite part of being a part of Empire is talking to the owners. And often what I find myself doing is calling like, Hey, how are you, we have a slight issue here, a situation. We have option A, and we have option B. I recommend option B, I think that this is probably the best way to go. But before we do anything, I'd like to know your feedback. I think that all of our investors are really, really smart. And I think that they have a lot to offer, they have a lot to bring to the table, too. So there might always be a piece that maybe we're missing. But I'd like to present all the opportunity to them so that they can kind of hear what we have to say what we would recommend, if they agree perfect. If they disagree, we could talk about it too. Maybe there's a piece of this puzzle that we're not made privy to that they know about. But I think that having that dynamic is important, but at least presenting them with the solutions, not just giving we have a problem. What should we do next? That's not your job as the investor to figure that out. When you have a property manager, your job is to make the decision, like Jen said. Give the approval, but not necessarily give the solution. Where are the experts in the solutions? You would be the final say and what that solution is going to be.
06:12
I completely agree with you. And you're so right about that collaboration, because that is what makes Empire so special. It's what makes it so fun for us. It's going back and forth with that investor, because they're certainly learning from us. But I'm not, you know, I'm not gonna say that we're not learning from them. Because we are, you know. It's really key for us to get to experience how each and every person thinks differently about money and about their property so that we can share that knowledge with other people that may be in the same situation. So I completely agree.
06:42
Yeah. And sometimes there's some stuff that we may not know. I mean, for instance, if we just take over a building, and we're having a sewage problem, we might have talked about a million things. But we never talked about that that's an ongoing issue that you have in your building. So when I call you and I'm like, Hey, I think that we need to jet this line. This is our last solution until we kind of excavate in the basement, you can say Well, hold on, I actually have cam footage that I neglected to give to you guys, or I forgotten about it, it only was 90 days ago. So let's take a look at that. So I think that having those conversations are important because, again, the devils in the details in property management, and I would hate to spend money on something that you might already know about. So true.
07:24
The episode will continue in just a moment.
07:27
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 experience and capabilities. But 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.
08:20
So what are some of the things that you wish you could teach investors?
08:24
If I could teach investors anything it would be to collaborate with your property manager. I think that it's just like what we've been talking about. I think it's super important to make sure that you guys are on the same team to make sure that you understand that our goals are aligned with yours. But sometimes, it's hard to kind of navigate that because things move so quickly. So make sure if you have questions that you reach out, if you disagree with something, say something, and to just kind of follow the lead that we're going with. And if it doesn't make sense, make sure to give a heads up.
09:01
What about in relation to investing in general like buying properties? Because we don't always have a handle in people buying properties. But we certainly see some of the challenges that they're facing once they own those properties. So you could give some advice on what they're purchasing. Being an investor yourself, what would be some of those things that you would tell people to stay away from, or go toward when they're buying investment properties?
09:28
Well, I think that unfortunately, one of the biggest challenges is that people use real estate agents that aren't specific or have expertise in investment properties. Unfortunately, I even have a client of my own that bought too high, and there's no way that we're going to make the numbers work. So we currently have the management. We're trying to do our best but unfortunately, I would not have guided them to purchase that building, just generally speaking. But now we have it and we're doing the best that we can with it. But they could have been certainly more profitable in another building. So make sure when you buy, that you're buying with somebody who knows how to help you make sense of the purchase. And make sure that it's someone that understands investments and doesn't just, for instance, love the area, or think that it's a beautiful building. Because those things won't make you money. It'll be nice to look at. But that's really it.
10:24
Or that they just love their commission so much that they want to just sell you a building
10:28
That is very possible to that's very possible to. And and I think that sometimes some agents may be naïve themselves when they're doing these investments with people that they're like, oh, what's the big deal? I sold my cousin house so I can sell this four unit. But they're completely different birds, it's a completely different thing. The way to represent your client is in a whole different way. And I think that some agents just think that they can and it doesn't work out well, for the buyer.
10:56
Yeah. And that's unfortunate. But you brought up a really good point, it's just make sure that you're dealing with people that are experts in that marketplace, and you know, not just winging it because you're their friend or whatever. Right. Right. Well, I definitely think that you provided a lot of great insight. And I really appreciate your time today.
11:16
Thank you. I'm happy to be here. If there's ever any questions, make sure you reach out to Jennifer or myself, we'd be happy to answer them.
11:23
Thank you for listening to our two part segment about building your dream team with a great property manager. So let's quickly talk about what to expect for Season Eight. So Season Eights theme is stabilizing your portfolio. And we are going to talk about how to find and keep the best tenants, how to make the right improvements on your property, how to analyze your portfolio each year, what specifically you should be looking for to make sure that your properties are profitable. year over year. We will have a special guests interview, we will have our usual Question and Answer segment. So please make sure that you send in your great questions that I can share with everybody. We're going to talk about what market rate is and why should you understand the balance between where a building is purchased and what that market rate is? And more importantly, how do you navigate that to get to the full appreciation of your building? I know that this season is going to give you a wealth of information. And I really hope that coming out of the backside of building the Dream Team and buying a couple of investment properties, we want to know what the next steps are. We want to make sure that you're able to stabilize your portfolio once you start to invest in real estate. We never like to hear stories about people failing in real estate investment. Because it's really not rocket science. And if it's done the right way. And if you set yourself up for success, what you're going to have is success. So I hope that through Episode Seven, about building the right team and building the right partners in place, you're starting to get the foundation, which is the core of everything that you're doing. And then season eight, we're going to continue with how to stabilize what you purchase, once you purchase it. I think what's the most important piece of anything that I could give to you as a little nugget is that, it's really important for success in real estate to make sure that you have a plan. That you have a foundation that you start with. But it's even more important to make sure that you're modifying that plan often for success. And what I mean by that is every year you should be looking at your portfolio looking at what properties did well, what properties did not do well, why did those things happen, and then have a plan for what you're going to do the following years. Maybe you're going to sell a property, maybe you're going to pull out equity on a property, maybe you're going to put a little bit more capital improvements into the building, if you found that your building was you know, a money pit for general repairs and maintenance. Maybe we're not making the right improvements on the building which is causing that reoccurring maintenance kind of theme. So again, that nugget really is this, make sure that you have a plan, make sure you start with a foundation you have a plan. But more importantly, make sure that you constantly modify that plan and modify that plan often. And how you're going to know what to do specifically is going back to what season seven was all about building that dream team. You're going to rely on these people more than just for acquisition of investment properties. You are going to rely on your team for long term stabilization of your equity, long term stabilization of your profitability and long term stabilization of your wealth that you're building with these investment properties. So please make sure that you listen to season eight about how to stabilize that portfolio and really make it grow really make it something special. And until next time, take care.
14:51
For more information about how Jennifer can help you plan, develop, and manage a strong real estate investment portfolio visit growingempires.com