I made the decision last week to leave my part-time job to focus exclusively on the business. I need to get my husband out of rental management so I he can concentrate on more lucrative aspects of our business, like finding houses to flip. Real estate entrepreneurship is a fun adventure – challenging, never boring, and at times quite lucrative. There are two aspects of our business, however, that are great drains on mental energy, and they both involve Dealing With Other People.
Rental management – dealing with tenants (and potential tenants if you have vacancies)
Crew management – dealing with contract workers in the construction trade
I have come to the conclusion that any one human being can, if they are mentally strong, well-rested and fortified with a sense of purpose, deal with one of these groups of people on a daily basis. But not both. Dear GOD not both!
Poor Steve has been dealing with both for a while. No wonder he’s ready to snap like a twig! I think the decision I made last week to leave my former career completely behind will end up saving our marriage as well as our business. Now maybe the poor guy can find time to go to the gym and blow off some steam! He’ll still have to deal with the contract workers. Two of which didn’t show up to work on one of our flips this week because they were in jail. Then there’s the guy over at one of our rentals putting in a floor – and doing a subpar job of it – who needed to be paid in cash immediately because he didn’t have the gas to get home. These people quickly get replaced. The problem is, 2 out of the 3 replacements hired will end up getting flushed out due to similar issues. Their mindset, their philosophy of life, is much different from ours. Everything is somebody else’s fault. Circumstances are to blame. You can’t change somebody like that. They have to figure it out on their own. You just have to get them away from your building project as soon as possible, get someone else on the job and hope they are the exception to the rule. Steve has found a few Exceptions. We will have lots of work for them, believe me!
I’ll do a blog post about contract workers at a later date. Today I want to focus on rental management, which I am doing with a sense of humor. One thing in my favor is that I’ve done this before. I am not naïve, like I was in 2008. I have seen and heard quite a bit, and I know enough to know I haven’t seen everything. There will always be something new dealing with tenants. And this is perfect for me, because I need to blog every week! No shortage of material, folks! And one day I will write a book…
I put in maybe 10, 15 hours on rental management this week. We have three empty apartments we’re trying to rent (two more will be coming up once renovations are finished) so there’s a lot to do, in addition to managing the 19 occupied units.
Filling Rental Vacancies with Technology
We have help – thank God. With Steve out of town all week there were three of us showing apartments. Steve set up an online system to book showings using the free site setmore.com. It’s not great, but it is free. Kind of like Google Voice. We are leaving Google Voice and going to a paid phone service, Grasshopper. Google Voice served its purpose, though, and it’s better than giving tenants your personal cell phone number. It was good, but we’ve outgrown it.
But at the moment our Craigslist ads for the vacancies list a Google Voice number, and our friend and fellow wholesaler Sherri was going through the voicemails and texts this week, screening potential tenants.
Where are the qualified rental applicants???!!!
We have a very reasonable requirement – income must be three times the rent. So if our one-bedroom rents for $500/month, your income needs to be $1500/month. That’s $18,000/year. Any entry-level full-time job would supply that, even in the Valley. But we’re getting a lot of calls from people collecting Social Security disability income, at $750/month. They get a check for $750 but the rent is only $500, why can’t they just move in? Because. You can’t. I’m sorry.
I screened one call myself from a young woman whose sole income was babysitting, cash under the table. Another guy was working 10 hours/week at Kohl’s. It’s heartbreaking. I was poor once, too. But I had roommates. Our two bedroom for $575 has a monthly income requirement of $1725. Two people working at Amazon for $11/hour 20 hours/week bring in $1760. They can move in tomorrow, provided the background check comes back clean. The problem is we have to wade through 500 unqualified callers to find them! Thank you so much, Sherri, for doing this. I’ll be able to take over as of April 4th.
Another big help has been our Penn State intern, Mark. Mark came to us through reading this blog. He contacted me and set up a lunch meeting, and talked us into taking him on for a credit internship so he could learn some facets of the business. He came up with an interesting way of getting through the backlog of calls – sending a text or e-mail to each applicant, detailing the income requirements, and inviting them to contact Mark if they’d like to see the apartments during a window of time Mark set aside for showings. It’s not as personal as calling everyone back individually, but effective at cutting through a huge swath of messages we would never be able to reply to unless we opened a call center. Seems like everyone wants an apartment, but only a handful can actually afford one. Kudos to Mark for coming up with that idea. And no you are not “chopped liver” – that’s a reply to an earlier comment he left on this blog. Au contraire, you have been a Godsend. Mark will be wrapping up his semester right around the time I resume full-time property management. I have a feeling Mark will remain involved in our business, in some manner, if he wants to be. He’s a smart guy. Has the right mindset!
Our friend and sometimes painter/cleaner Illana has been showing some apartments. Illana is older, and she doesn’t really understand how to read the calendar on setmore.com. It is a bit confusing, even for me! She doesn’t text either, so I ended up calling her to let her know when the showings are and with whom. She’s great with people, though, and hopefully she has rented our one bedroom! The guy needs help from social agencies to afford the rent, so we’ll have to see if the paperwork goes through. In the meantime, we still show it.
I am happy to say I survived the week and Steve is back in town. This coming week I am working a lot of hours at the job I am leaving – they decided to load me up for one last hurrah, I guess. But I’m actually looking forward to that first week in April, when I am free to take on full-time rental management responsibilities. The empties will be filled. A system will be built to manage it all. I look forward to the challenges! At the very least, I will have some hilarious stories to tell in this blog.
I am already compiling a list of quotes, “Sh*t Tenants Say”
Lol