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SHOW NOTES FOR EPISODE 085–FINDING THE BEST PROPERTY MANAGER
Growing your real estate investment portfolio from one duplex up to 64-units can be both very profitable and extremely challenging. This weeks guest, Mark Walker, shares his journey to success, along with a few of the pitfalls along the way, including how to find a good property manager.
What You Will Learn
- How he went from a duplex to over 64 units
- The 4 key areas to evaluate a property manager
- How not properly vetting a potential partner almost ruined his business
- How “bigger is better” when it comes to multifamily investments
- How you can begin practicing as an investor without spending any money
About Our Guest
Mark Walker
Mark is founder of Luxmana Investments, which focuses on residential and multifamily investments. Mark was able to go from being a part-time investor with a full-time job in high tech, to someone who quit the corporate rat race in pursuit of his passion and now thrives as a multifamily investor.
How Mark Got Started
- Started with a career in high tech
- Read Rich Dad, Poor Dad in 2003
- Stirred his entrepreneurial spirit
- In 2004, bought a duplex in South Denver 36% cash-on-cash return
- Still working full-time job
- Sold duplex 2-3 years later
- Stopped doing real estate for a while
- Crash came 2008-2009
- 2010 went back into REI
- Met contractor and partnered on some development deals
- Scraped some single family homes to the ground in trendy part of Denver and replaced with 3-story duplexes on each lot
- Partiwell agreement (?) deeded each duplex side off
- 2011 wanted to go into more passive income and create “mailbox money” – started buying rental properties
- 2011-2014 – Bought quite a few SFR properties
- 2013 – bought first apartment unit – 12-unit
- Able to quit W2 job and work full-time in real estate
- 2015 – Bought 64-unit in Irving, Texas with 2 silent equity partners, repositioned property
- Owns 35% of deal and is managing member
- Spent most of 2016 working on the 64-unit
- 2017 – Goals focused on family and health but would grab a deal in Colorado if it became available. Is also looking in Texas
Won’t Just Take Any Deal
- He said he doesn’t want just any deal he only wants THE perfect deal
Finding a Good Property Manager
- Needs to have 4 things:
- Local market knowledge
- How they do marketing and tenant screening
- Their services and fee structure
- Experience
1. Local Market Knowledge
- He starts off quizzing them on questions he already knows the answers to
- What is the current state of the local market?
- What are the local demographics?
- Do they recognize seasonality in the area – good/bad times to lease?
- Find a good property manager before you find your property?
- Let them help you find the best properties
- What properties get the highest rents? Condos? Townhouses? SFRs? Apartments
- Features and amenities that bring higher rents? Washer/dryers, garages?
2. Marketing and Screening Tenants
- How quickly can they turn empty units to “rent ready?”
- What’s their average marketing time?
- How to they screen potential tenants
- Background checks
- Credit checks
- Criminal checks
- Verify income – call employers
- Look at tenant lease agreement
3. Services and Fee Structures
- Monthly management fees
- Lease-up fees
- Bill back for utilities
- Full-time maintenance fees
- Mark-up third part contractors
4. Experience
- Talk to references
- Are they an investor
Biggest Mistake
- When he sold his first property (the duplex) was looking at doing a 1031 exchange
- He called this mistake his PhD in real estate
- Found a builder who was building duplexes
- They also had:
- Property management division
- 1031 Exchange Intermediary division
- Non owner occupied financing
- Unfortunately they were committing fraud
- He lost money
- Testified to the grand jury at the official trial
- They also had:
- Didn’t do good enough due diligence – run background checks
Biggest Success
- 64-unit apartment
- “The bigger the deal, the easier it is.”
- It’s also more profitable
- Lenders more sophisticated
Advice for 50plusers Looking to Become Real Estate Investors
- Never stop learning
- Learning leads to action – Action leads to success
- Has to lead to action
- Action doesn’t have to cost you money
- For example, start analyzing deals
- Interacting with owners
- Practice evaluating deals
Where Does He See His Business Going?
- Will continue to hold properties
- $20K per month in cashflow
- Surpass that goal – retire to South America
- Looking for larger and larger deals
- Build track record
Rap-It-Up
- Favorite real estate book: Best Real Estate Investing Advice Ever (Volume 1) by Joe Fairless
- Favorite business book: Rich Dad Poor Dad by Robert Kiyosaki
- Most valuable web site for success (other than your own): BiggerPockets.com
- Favorite app: Property Evaluator
- Favorite quote: “I never lose. I either win or I learn.”
- If you had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? Use $1K to buy leads from property sellers.
Special Offer
- Free Whitepaper: 10 Not So Obvious Ways to Boost Your Multifamily Property NOI
- To get it, go to: www.luxmana.com/OldDawg
How People Can Reach Mark
IF YOU LIKED THIS PODCAST, we would love if you would go to iTunes, Stitcher, GooglePlay, or iHEARTRadio and Subscribe, Rate & Review our podcast. This will greatly help in sharing this podcast with others seeking to learn real estate investing as a means to achieve a successful retirement.
Check out our other podcasts at olddawgsreinetwork.com.
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Episode Sponsor: Meno Studio – menostudio777@gmail.com
