The Real Estate Service Group at Keller Williams

Steve, you have been an inspiration my entire life. Since the moment I touched my original Macintosh Plus in 1984. The moment I started at Apple twenty years later in 2004. The moment we started building the developer ecosystem at Facebook. And, the moment that we started Path.

You led an…

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

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—	STEVE JOBS, in a commencement address at Stanford, 2005. *(via the Wall Street Journal)*

Success as a Rochester Real Estate Investor

Success as a Rochester Real Estate Investor depends upon a series of things including, proper financing and the right amount of cash in reserve, the right REALTOR, the right team, attorney, contractor and handyman, property manager and of course the right property and location.

What many investors don’t consider, is how they manage their business themselves. If things go wrong, in most cases Investors immediately blame the property manager, the REALTOR, the contractor, the previous owner, but what checks and balances do most Investors put in place? None!

The Rochester Real Estate Investment Market is extremely lucrative and Investors can make a full time living, but it starts with how you manage your business.

Checks and Balances!

How do you put checks and balances in place as a Rochester Real Estate Investor? Separate Duties!

In most cases, an Investor purchases a property through a Realtor, once the deal closes they turn the property over to a Property Manager, send money for an escrow or repairs, sit back and await monthly rental payments to start pouring in. What about repairs, the property manager will take care of it, what about rental collections, landscaping, city and county inspections, renting vacant apartments, tenant discrepancies, it all gets handled by the Property Manager.

When business is done this way, you are the owner of the Real Estate, but the Property Manager has total control of your business! The same person who collects your money (rent payments) should not, I repeat SHOULD NOT be the same person with the authority to spend it! Of course there may be exceptions, but in most cases; and I will say it once again the person who collects your money should not be the same person with the authority to spend it! How many businesses do you know of that are successful with no checks and balances?

You must begin to look at your Real Estate Investment as a Business and not just an Investment! Most Investors think, like other Investments, they will invest money and simply wait for a return. But, you will be managing people, purchasing supplies keeping records, this is more than an Investment, this is a business!

So how do you begin to create Checks and Balances?

Separate Duties! I repeat, Separate Duties!

Build a team around each aspect of your business! Your team should consist of the following:

Someone to Collect Rents

- This role would be ideal for a property manager. Make sure they are a licensed Brokerage, this protects you because in order to collect money, a property manager is suppose to be a licensed broker, and a licensed property manager is held to standards that an unlicensed manager may simply ignore. Quite frankly, this is your business, this is your money and you need your money if this is going to be a successful venture.

Someone to Rent Vacant

Apartments- This role is ideal for a REALTOR! Realtors are licensed professionals who lease and sell real estate for a living. Unlike a property manager who has to worry about repairs, landscaping, inspections, vacancies and everything else that comes with management a REALTOR simply worries about leasing your vacancies. In addition, REALTORS belong to the Multiple Listing Service, which will allow them to place your unit on the MLS (open market) for all other agents to participate in leasing it as well!

Someone to Do Repairs-

In most cases, we are not the “biggest fans” of property managers doing repairs, the idea of the same person who collects your money having the authority to spend it creates too much room for error in our eyes. We suggest simply hiring a handyman that you make payments to yourself for small repairs. You may choose to have tenants call you directly, or they may even call him directly and his sole responsibility is general maintenance of your units.

Someone to Complete Large Projects-(Inexperienced Investors should stay away!)- If you are an inexperienced, non-local Investor, one of the quickest ways for you to loose A LOT of money, is to attempt a large rehabilitation of a property, especially “over the phone” or “through email”. If you do attempt it, our advice is attempt to purchase supplies yourself, and no matter what, pay in draws! Not two or three draws, create a schedule (ex. floors, roof, drywall, painting, etc.) agree upon a total price, pay for each area of work separately, and do not pay for the next until the previous is completed!

Landscaping- you are an Investor, these are Investment properties. Do not pay a lot to keep the lawn cut! Utilize a neighbor of your property, search craigslist, pay someone a bulk price for all of your properties, but do not pay a lot!

Most people may think they should simply hire a property manager to handle all of this, but would you want anyone other than yourself to have total control and access to your business? In what other business would you have someone managing, doing accounts receivables and accounts payables, customer service and everything else? In no other business would this be acceptable. So don’t make it acceptable in yours.

Be a calculated Investor, take your time, hire a great team, but always, always, always, stay in control!

The Real Estate Service Group at Keller Williams

(This is not legal advice; this is experience-based advice)

The top 10 Mistakes New Investors make in the Rochester Real Estate Market… Coming Soon!