Show Summary
Is managing properties on your own saving you money, or actually costing you time, money and grey hair! Many real estate investors start buying rentals to build wealth, and in effort to be frugal, manage themselves. However, managing by the seat of your pants is not only painful, it’s likely costing you more money than you think. Steve Rozenberg is the FlipNerd.com 2015 Winner for the best show on Property Management.
Highlights of this show
- Meet Steve Rozenberg, award winning property manager.
- Learn where many investors that try to manage their own properties, as well as many smaller property managers, fail to deliver results.
- Join the conversation on the importance of your opportunity cost, and excess vacancy, maintenance costs, and lost rents may be costing you far more than you are aware!
Resources and Links from this show:
Listen to the Audio Version of this Episode
FlipNerd Show Transcript:
Mike: Hey, it’s Mike Hambright with FlipNerd.com. Welcome back for another exciting Expert Interview where I interview successful real estate investing experts and entrepreneurs. Today I’m joined by Steve Rosenberg. He’s the co-founder of Empire Industries which is an award winning property management that focuses on serving real estate investors, and they manage around 450 single family homes.
Many would-be property owners go into owning rentals very naively. I know I did. And they don’t think about a lot of important things like processes and procedures, local laws, fair housing rules and laws, worst case scenarios of what happens if everything goes wrong. We go into it very academically saying, “I’m going to estimate 8% vacancy, 10% maintenance expenses annually.” And it never works out that way. If you have a huge portfolio it might start to work out that way, but one or two properties or a small number never work out that way.
And I think the reason a lot of people try to manage themselves is really an effort to save money. I don’t want to pay somebody 10% or 8% to manage whatever it might be. The problem is, is you have a huge opportunity cost of your time, and if you’re not an expert in this space it can end up costing you a lot more money in terms of legal costs, vacancy, certainly maintenance and a lot of things.
So today, Steve is going to tell us all about how to treat this much more like a business and how to cover a number of things that we just talked about. Before we get started with Steve though, let’s take a moment to recognize our featured sponsors.
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Please note, the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
Hey Steve welcome to the show.
Steve: Hey, thanks Mike. Appreciate you having me.
Mike: Yeah. Yeah, it’s funny because I mentor and coach a lot of people. I’m connected to a ton of people in real estate investing. And whenever I talk to somebody that manages their own properties and they say, well we end up having discussion, “Why don’t you manage yours? I’m like, “That is the last thing I will ever do.” I have no interest in managing my own rentals just because I just don’t want to deal with the tenants and toilets, and the drama of being on call. But thank goodness there are great property managers out there to handle it for us right?
Steve: Yeah. I wish I was as smart as you. We actually got into this business by our own necessity, by having our own properties and going through this downward spiral of not knowing what to do. And really, our management company was created because we had about 35 properties and we were losing probably half of them circling the toilet basically. And what was going on, we didn’t know how to fix it, we had a 30% eviction rate. We were doing moving specials and the guy with bad credit, bad credit, okay, and guess what happens when you get someone with bad credit? They’re in one month and the next month the rents due, they’re right out of there. And of course then they like to take their parting gifts of air conditioning units, and wiring and we couldn’t figure out, we’re the smartest guys in the world, what are we doing wrong? I wish I would have taken your approach in the beginning.
Mike: Oh, what I didn’t tell you is there’s a whole bunch of other stuff that I do that I probably shouldn’t be doing either. But yeah, I just think I learned early on. So first off, the caveat here and everything, is being able to find an effective property manager. And I’m not here to throw anybody under the bus, but there’s a lot of property managers that you might be better off doing it yourself. There’s a big difference between somebody that you can just trust implicitly that has your best interest in mind, and somebody that maybe doesn’t, and you don’t know until they’re already managing your properties.
Steve: Yeah. It’s funny you say that because when we were looking for a property management company to manage our portfolio, my business partner and I we actually said, “Okay, we have a choice. We’re either going to sell these and just call it, or we’re going to send them to a property management company and it’ll be their problem.” And we’d already owned some apartment complexes and some other stuff. So we knew what we were doing was wrong, we just didn’t know how to get out of that cycle.
So we started interviewing some management companies. After about three months, we were actually more depressed than when we started. And the main reason was is none of them that at least that we were interviewing at the time, actually owned any properties, and we thought, “How do they know what it’s like to have a vacant property, to have a tenant skip, to have wiring stripped. They’ve never actually experienced it.” And that may not have been a fair assumption, but that’s actually why we created our own company was because we thought to ourselves, “We’re not the smartest guys in the world, but we’re not the dumbest and we can put some policies and structure in place to make this work the way we know it can.” And that’s how our company was birthed basically was out of our own necessity.
Mike: One of my early experiences was that we had a property manager that it became very clear they made the most money by having turnover. Because they get to place another tenant, they were actually in-sourcing the make-readys, so they were actually making a lot of money. Literally, I don’t want to focus on myself here, I want to start talking to you about all the topics. But I’ll give you one scenario here what happened is, there’s a guy that was painting, and we went to look at it and it just didn’t look good at all. But they were charging us $30 an hour for painting, which is insane. And the property manager said, “Well, he’s not really a painter. He’s really more of an electrician, but he was just helping us out for this project.”
Steve: But you were still going to pay it? You’re still going to pay the fee?
Mike: This is crazy, crazy. So that that type of stuff happens. But why don’t you maybe start off by telling us how you got into real estate investing. I know you started as an investor and then found your way to property management, but tell us your back story.
Steve: Sure. So my back story is, I’m actually an airline pilot. I fly for a major airline, and as everyone knows, 9/11 happened back in 2001, and the safety and security that I, as well as many other people, thought that I had as far as a retirement and a long secure career, basically went away. And so I started thinking, “What else could I do if this whole airline thing doesn’t work out?” Luckily my airline didn’t go out of business, but everyone else was. So I started looking into what can I do, and obviously real estate really was attractive to me because I could see that it was something that I could do, and passively do. And so I started buying properties, started investing. And at that time, I joined an investment club here in Houston and met my business partner, we partnered on an apartment complex about a 39 unit complex. And then after that we sold that complex and we started buying some single family houses and within about two years, about a year and a half, two years we bought about 20 properties.
Then we realized we probably should’ve bought 20 properties at about two years and three months because all of a sudden maintenance started to come in due, and tenants weren’t paying. Like I said, we had about a 30% eviction rate and so what do we do? We started buying more properties, because we thought we’re halfway to the mountain, let’s just push our way through, we’ll get to 50 properties, and all these problems will go away. We got to about 28, 29 and things started to really fizzle out and slow down. And we realized we had some problems, some major problems and it’s really because we didn’t have any structure. And like I said, that is how we started the whole looking at a property management company. And we went through the trials and tribulations of forming our own company and it was really for self preservation, wasn’t for to manage it as a business or anything.
What happened after that was we got our property stabilized. We kicked out about 70% of our deadbeat tenants that really shouldn’t have been in there, but they were just keeping the house warm I guess. And then what happened was is, after they stabilized, we had other investors that we knew, approach us. And they actually said, “Hey, you guys seem like you fixed all these problems. What did you do?” So we told them what we did, and they said, “You know, that’s the same thing I have. Could you guys manage our house?” And I was an airline pilot, my business partner was running an IT department for a very large company and we thought “No, we’re not property managers. We’re investors. We’re like you, we’re buying stuff.” They said, “Yeah, but you guys seem like you figured out a system to make this work.” And so we thought, “Okay we’ll try it.”
So we started managing a couple houses, and we thought “Okay, if we can do this through economies of scale and we can grow this thing, we can get better pricing from vendors, we can maybe get some people working in the office so it’s not us doing it. We can leverage some staff members.” And from there it just has taken off. We had people just giving us their properties left and right. Like I said, now it’s about three and a half, four years later, we’re managing about 450 houses, we have a staff of about 13 people. We’ve won numerous awards both locally with the Better Business Bureau and nationally with some marketing awards. We must be doing something right, I got to say.
Mike: Yeah. That’s fantastic, that’s fantastic. Well maybe you could start off by telling us why at the beginning when I gave the intro, I talked a little bit about how there are so many people that I know that manage their own rentals, and they don’t really have that many. Usually, you always start off with one usually, and so there’s always this thought of, “Well I’m going to just manage it myself until I get a certain number of them and then I’ll hand them off to somebody else.” Which I always thought as like totally backwards.
It’s like, let somebody else manage them until there’s enough skill for you to jump in and do it. And even then I don’t want to do it. But I think it’s always, from my perspective, comes from a cost saving standpoint. Like, “Well, why would I pay 10% to a property manager?” That’s fine when things are running smoothly but as you know, it’s just a matter of time before things don’t run smoothly.
But just talk about your experience, not necessarily the sales pitch as why people should work with property managers, but why that doesn’t work when people are trying to do it themselves without having . . . without really treating it like a business. It’s more of just, they’re trying to figure it out on their own and other people have already figured this out.
Steve: Yeah, and the way that I can equate it to is just like you said, I get people that say, “Well I have one property. I’ll wait till I have five.” And my question to them is, “Well, how big do you want the lawsuit to be to realize that you made a mistake?” Because when you own a property, whether it’s one property, three properties or 50 properties, you are a business and the landlord is the highest suit in real estate. And I feel the reason they’re the highest suit and the most subjective to being under scrutiny, is because they don’t treat it like a business. The IRS says, you’re a business, Federal Housing says you’re a business, discrimination, here in Texas we have a Texas property code.
Everyone is watching this owner because whether we like it or not the tenant living in that property has more rights than you and I combined once they start renting that property. And if you don’t know those rights, you’re going to get in trouble. And I say, why would you want to learn that mistake when you’re standing in front of the judge saying “I didn’t know I couldn’t accept someone with two kids. I didn’t know that someone with PTSD is considered a disability and they’re protected under federal law.” Why would you want to wait to learn that lesson? To me it’s like saying, “Well I’m going to try to fly an airplane from here to Hawaii on my own, and maybe on the next time when I get a little bit more money, then I’ll get an airline ticket and I’ll just buy an airline and have them take me.”
So I don’t see that and when I talk to investors, especially when I talk to them initially when they’re looking to buy something, I tell them that this is a business. You’re going to have costs, you’re going to have expenses and if you don’t think that those are going to be the case, then you may be in the wrong business or you have the wrong expectations because having a . . . that’s like buying a car and saying, “I’m never going to change my tires.” Or “I’m never going to have to change the oil.” It’s going to happen.
You’re going to have expenses with your car, and putting gas in your car to me is just like having the right team of a property management company taking care of the things that you either don’t want to learn, or really don’t want to take the time to learn because like you said, I didn’t want to learn these things. But I almost went into bankruptcy because I was making all these mistakes, and luckily I had a job that I was able to bail myself out of it. In hindsight I should have waited and said, “You know what, I should have just bought maybe 10 houses,” factored in that cash flow and done it from there.
When I talk to investors, I tell them, “When you’re looking to buy a property, you either, you do your due diligence. You spend all this time trying to find the right deal, whether you use a real estate agent, a wholesale, or whatever it is, you’re doing your due diligence. Then when you get the loan, you’re using a bank or a hard money lender, you’re using a professional. You’re not going to the guy with money in the trunk.”
When you close on the property, you’re using a title company. So up until this point, you’ve done everything right. But the most important part is actually getting the return back out of that property every month to actually give you the money in return. And that’s the part that you want to cut the corner on. Why don’t you just factor that in in the acquisition and factor in the management fee and why learn that lesson down the road and say, “Oh, this doesn’t work. Real estate is horrible. It doesn’t work.” It doesn’t work because you didn’t treat it like a business. That’s what I’ve seen at least.
Mike: Yeah, there’s so many . . . I think when you look at it like, cost savings, is it going to save me money? I’m trying to be cheap. I have no doubt that any property management company that would come recommended, a company like yours or lots of other property management companies depending on where people are at, can turn around a house faster than me to get the rent ready again so it won’t be vacant as long, can evict somebody much faster than me if they have to get somebody out. And you start to look at all those days and weeks that add up, that if I had to do it myself, I know it would take longer. And that’s going to end up costing me money.
And I think a lot of people don’t really . . . a lot of people don’t really . . . even aside from those costs there, they don’t really take into account their opportunity cost of them actually spending their time on doing what they’re good at, which might be finding more deals, or working a job or spending time with their family, or anything other than what they’re doing there. Their time is not worthless.
Steve: Yeah. It’s funny you say that because a lot of people I talk to, the one thing they don’t value is their own personal time. They don’t put any kind of value on that. And I say, that’s got to be worth something. The only thing that we can’t get back in life is time. You can make more money, you can get a better deal, you can negotiate, you can have more time. So you’re driving to Home Depot to meet a guy or do this.
Like I tell people, if you have one house, and you were self managing it, and you call the plumber at 2:00 a.m. on Saturday because of course, that’s when everything seems to break, and you tell a guy to get out there. And we call our plumber, who manages . . . who works on 450 of our properties that we give volume discounts on, and you ask him to go out there, and we tell him you need to go out there, who do you think is going to go out to you first? And who do you think is going to overcharge or not overcharge?
Like you said, it’s economies of scale and it’s just a cost of doing business, that the smart investor knows that. The ones that want to save money, don’t. And it’s too bad because statistically those are the ones that end up failing and think that real estate is a horrible way to go.
Mike: It doesn’t work yeah.
Steve: It doesn’t work, and it’s really, it’s them that’s not working. They’re not taking the time to educate themselves and one thing I always tell investors is, just because you have the financial means to buy a property does not mean you’re financial educated to run your property management business. There’s a big difference with that. And I need to learn that there is a difference.
Mike: So for those that want to educate themselves, that want to learn all these things that maybe want to do the right thing, like that’s my problem, I never wanted to do those things. If I ever would have managed them myself it would be a necessary evil. But we’d almost feel up front because I don’t want to be good at those things. That’s not what I want to do.
Steve: Absolutely.
Mike: But for those that say, “Hey I want to . . . maybe I’ll source my property management and bring it back in-house eventually, or I’m going to just try to get it set up right from the beginning and do all the things right.” Can you take some time talking about all the things they need to consider. Like if you were to have a business plan of “These are the things you need to be great at. You need to consider,” where would we start?
Steve: If you’re going to do it yourself, and I sit down with people all the time and I talk to them on the phone and I sit with them in person and I look at, are you better off outsourcing it to property management? Or are you better off self managing it? Because some personalities are better off self managing. And I say if you’re going to do that, investing as a team, you have to have a team in place, you have to make sure that, whoever you’re using whether it’s a real estate agent, whether it’s a real estate attorney, title company, set up that chain.
And then if you’re going to self manage, like I said the tenant is the highest protected person in real estate. They have more rights than any of us. Learn those laws, make sure that you know that you’re not doing something that is going to come back and bite you that you’re going to get sued, or get in trouble legally. Make sure you know when you’re doing the leases, learn the leases get a state promulgated lease, or something that . . . on your website there’s a lot of stuff of people helping you, learn to educate yourself.
Go out there and get as much information as you can before you do anything. And the way that you’re going to be successful is having the right people, making the right connections. Like on this website, you can go meet a lot of people, or like-minded people and just set up a team and it doesn’t have to be a property management company. To me a good property manager is somebody who just has a lot of systems, policies, procedures in place and they stick to them. That’s what it comes down to is, make sure that if you’re going to do it yourself that you stick to those policies, you stick to those procedures and you make sure that whatever you’re doing, you’re not going to deviate from that. What you do for one, you do for all.
Mike: Yeah, hey talk about some of the systems that people need to have to be successful.
Steve: Yeah. It comes down to simple things. For example, we try to be very, very consistent in what we do. And by law we’re very consistent because we don’t want to get in trouble, meaning we have a very strict set of standards of who we will accept. When we first started, like I said investing on our own, we had about a 30% eviction rate. Why? Because we were horrible at picking the right tenant, horrible.
What we learned is when we hired our certified property manager and she came on staff, she said, “95% of your problems are because of who you’re putting in these properties. You look at their past, you’ll see their future. You start getting strict on the front end and start regulating how you’re going to do business with them, all your problems are going to go away.” So of course we were nervous about it, but we did. And we became very, very strict of who we accept. What our qualifications were and if anybody goes to our website, they can get all the information. We share everything for free on our website.
But by being strict and by having these policies and procedures of who we will accept and then when the tenant moves in, we’re even more strict with them on the front end. A lot of investors always say, “Oh, this is going to be great if you have any problems give me a call. We’re going to hold hands.” That’s not true. We explain to them, “Look we are in business, and we will do what we need to do per the lease. You’re going to do what you need to do per the lease. And by having this on the front end to explain to them that if you don’t pay your rent on the third, you will get evicted, we will sue you, we will throw you out of the property.
We set those expectations from the beginning to let them know, “Look, we will do what we have to do, but if you deviate at all from your responsibilities, you are the one that is not going to be living there.” And one thing I talked to investors about a lot, talking about procedures is, I was in court one time on an eviction, and I heard the judge ask an owner, “Well, have you ever let this tenant slide on the rent before?” The guy said, “Yeah, his dog died, and his mother died, and he ran over his cat. He had every reason in the world, and it’s been eight months and I’m just tired of it, so I want him out.”
And he said, “So did you charge him those late fees when you did that?” And he said, “No because he always had an excuse.” And he said, “Well why is it now that you get to choose to enforce the lease at this time when you didn’t at that time? You Mr. Owner actually breached the contract first by not enforcing the lease on the fourth of the month and charging late fees the first time.”
I remember that and I thought, you know what? That’s pretty important. So it goes to sticking with the policies. I tell owners, if you write it in the lease, you better be prepared to back it up. A lot of these owners say, “I want to charge a $250 service charge because I don’t want them to call.” Well you know what? When they call, you better be prepared to enforce that $250 charge because the first time you don’t, you’re setting up precedent possibly with whatever judge to say, “Well you didn’t accept it the first time, how are you going to accept it now?
Mike: Yeah, we found in the past from our experiences, if you don’t set those expectations up front and early, then if you give somebody an inch they’ll take a foot every time.
Steve: Yeah. And if you treat it like a business . . . I equate it to the airline business. If you run to the gate and they’re pushing the airplane back and you say, “I was stuck in traffic,” they’re not going to pull the plane back up. They’re going to go, “Sorry, you missed your flight.” That’s how it is, and that’s how it is in rentals. And if you treat it like a business, meaning you have policies, you give them a way to pay their rent. We accept all our rent online with our tenants. We have online access so tenants can log into their portal to pay their rent. Owners can log in online. So we have a lot of systems in place that every . . . nowadays with technology, anyone can go ahead and get these things in place.
But they’ve got to take the time to set it up, create the policies, make sure whatever state they’re in or locale, they are within the confines of the law. Fair housing discrimination and all that. Can you do it? Absolutely. It’s not the hardest thing in the world. But you have to take the time and it’s . . . I would say you can buy a bad deal and turn it into a good deal over time. But if you buy a good deal and manage it wrong, it’s never going to be better. And I equate it to, you go to the nursery and a tree farm, and you buy the best tree in the world and you plant it in the ground, you get the best soil around it, and you never water it. And then the tree dies and you wonder why it never beared any fruit for you.
It’s the same thing with things. You could buy the best house in the world, it could be the best deal in the world, you got it, you wholesaled it, you’re going to make ready, and you don’t know how to put the right tenant in, and you go, ‘This sucks. I’m never buying properties again.” You didn’t water it correctly.
Mike: That’s a great analogy, yeah. So talk about . . . maybe you can shed some light on . . . I’m guessing one of the things as we’re talking here that hit me, that we do this in our house buying business and other things. We never let the person we’re dealing with know that I’m the owner or the decision maker and I think a lot of smaller property managers, the person knows that they are the owner or the decision maker, and therefore they try to negotiate with him, they try to do things instead of just saying, I don’t lie about it, but I just say “Well, we have to ask the company or I had to go back to the company. I talked to my boss,” which is my wife. It’s true, my wife is my boss. So things like that. But just talk about . . . my guess is that that’s a big problem for a lot of smaller property managers is, that tenant knows that they’re the decision maker.
Steve: Yeah. It is, and we get a lot of owners, especially a lot of out of state owners, or out of country owners that own properties. I mean Houston is such a booming place. There’s, like I said, 50 to 60% of all our clients don’t live in the state or in the country. So there’s a lot of people buying investment properties in Houston. They may buy and say, “Well I’m going try it on my own,” and then they come to us when they have a huge spaghetti mess of a problem because the tenant knows that the owner is out of state, or out of country, so obviously, like you said, give them an inch, they take a miles. So they start taking advantage of the situation, and then it goes further and further and they don’t really know how to draw that line. They don’t know where that line should be drawn.
So when they ask us “Hey, can you please help? I don’t know what to do. I’m going to sell this or I need to do something.” And case in point, we had an owner that was in Saudi Arabia working in the oil business and he was from Houston. He had 12 properties and when he came to us, he said, “I just got to get rid of these. These are horrible. I’ve got to get rid of them.” He was probably one of our first clients almost four years ago, he kept all those properties, loves it now, because he’s not being taken advantage of.
Basically what happens is, we step in and we explain to them, “Look, we are a company, we know the law. We know what the lease states, we know how to enforce it, and we understand if you have some maintenance issues that the owner couldn’t get to, we will take care of them. You’re a client, and the owner is a client. You have certain responsibilities, they have a responsibilities.” And by being that firewall, in the middle between the owner and the tenant, it gives them that insulation where they can’t emotionally get upset at us. We never have tenants that trash a house when they leave, mostly because we’re just doing our job, we’re just a business. We’re not taking it emotionally.
What happens a lot of times with owners is, they let the tenant slide on rent, they let them slide on something because of a future promise and then when the tenant doesn’t deliver on that huge promise then they get emotionally upset and they say, “Now you owe me. Now you got to do this.” Now it’s an emotional confrontation where we don’t do that. We have a business model where they don’t pay, we understand, but we’re starting the eviction process. We hope you can stay, but now you have late fees and court costs and if you don’t do that then obviously the constable will be knocking on your door, and we can discuss it in court and that’s fine. And by having that professional demeanor I think it helps insulate the owner.
We tell the owner, “Look, your job is not to guess what they’re going to do. You signed a contract with the tenant that they were going to pay. They signed a contract that they were going to pay. Someone’s not doing their job. We’re going to step in and we’re going to take care of it. We’re not asking your opinion. We’re not asking your advice. We know what we’re doing, just let us do what we know how to do, and we’re going to take care of it.”
Could this cost you money and vacancy time? It could, but you know what? By getting the right tenant in there and setting this up correctly from the beginning, it’s probably going to make it easier. Our goal is to keep the tenant in, and we tell the tenant, “Look we’d love for you to stay. We’ll take care of anything you need. But all communication is through us now. Do not talk to the owner because he’s just going to redirect you to us because legally he is no longer involved. We are the voice of contact for the owner now.”
Mike: Yeah. Yeah that’s great. Well Steve, we have just a couple minutes left here. First I want to see if you can give some advice or tips on how people that are listening to this that are saying, “Yeah, I really don’t want to manage these myself,” or they’re just getting started and they want to try to find a property manager. How does somebody find a good property manager? What are some tips you can provide us there?
Steve: The best way to find a good property manager. There’s an association out there called NARPM, National Association of Residential Property Managers. My business partner Pete is actually the Houston chapter president, and I think it’s a good way to . . . if you’re going to start vetting good property management companies, at least they’re held to a little bit of a higher standard as opposed to just somebody that wants to just start collecting a little bit of rent and do it on the side. So at least you’re getting some professional caliber.
And I would ask, when I’m vetting a management company, and if they want to email me, I’ll give them the list of questions. There are certain questions you want to ask them. How many days on market do your properties sit? What’s your average vacancy time? What is your average rental range? So there’s certain questions you should ask several property management companies, and you’re going to get an idea when you start asking them.
The funny thing is, is the reason a lot of people come to us they see us online, they see us that we’re the highest rated on Google and they see all that, but most of the time they say, “You’re the only one who called me back. None of them called me back.” And I’m thinking, why would you not call back a client? That right there, they’re trying to be on their best behavior and they’re not calling back. How would it be when you really need them? So I think if you start, again, doing your due diligence just like anything else, and you have questions, and you ask them these questions and call references, you may even want to call references of clients they don’t have any more. “Why’d you leave them?”
It could be, “Well, I sold my property, or I didn’t like this, I didn’t like that.” Personally we survey all of our owners all the time. We want to know, what do you like? What do you not like? Nobody likes to hear what they don’t like, but that’s what makes you better. When they tell you, “I don’t like when you guys do this, I don’t like when you do that.” We say, “Okay. Well is this something we can change?” or “Sorry, we can’t change this,” but at least we’re asking.
Mike: Yeah. That’s great. Steve, so tell us a little bit more about your company and how folks could learn more about you if you happen to be in the Houston market.
Steve: Sure, sure. You can look us up at www.EmpireIndustriesLLC.com, again you can look us up on Google, we have the highest reviews. We have a ton of educational videos, video blogs, quick two, three minute bursts of how to lease your properties quickly, things you should know about fair housing. We try to take good information of what’s going on in the industry and educate owners. We also have tons of free information on our website.
I’ve been fortunate enough to speak at seminars across the country. I do podcasts and radio shows and for what they invite me to. But we really try to educate and we try to do our best to pass that on. I didn’t have anyone to educate me when I got into this, and I had to self learn a lot of this. Had I had somebody, it probably would have accelerated my path with a lot less headache and I probably would have a little more hair like you by now.
Mike: I’m coming your direction my friend.
Steve: Okay. We really try to educate, we try to give away as much information as we can and because of that, people appreciate that and we get a lot of business, because we are investors. We walk that walk. I know what it’s like to open up a door and see a property with stripped wiring or tenants skipped out. I can empathize with that, so when I talk to an owner, it’s not like, “Oh well, just deal with it.” I get it and I understand and they like the fact that, hey, a lot of people would just call me and say, “Hey, what would you do in this situation? How should I handle this?” And I don’t need to manage a house just to give them ten minutes of my time. To me that’s just giving it back to people and trying to help them avoid the same pitfalls that I did.
Mike: Awesome. Well Steve, thanks for your insights today. Good stuff and I really appreciate you being here with us.
Steve: Thank you, thank you very much. I appreciate it.
Mike: We’ll add a link for your company down below the video here if anybody wants to check it out. Sounds like you have a lot of information on your site so it would be worth checking out.
Steve: We do.
Mike: Steve, thanks again for your time today. Have a great day my friend.
Steve: Thank you. Bye-bye.
Mike: See you.
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Many would-be property owners go into owning rentals very naively. I know I did. And they don’t think about a lot of important things like processes and procedures, local laws, fair housing rules and laws, worst case scenarios of what happens if everything goes wrong. We go into it very academically saying, “I’m going to estimate 8% vacancy, 10% maintenance expenses annually.” And it never works out that way. If you have a huge portfolio it might start to work out that way, but one or two properties or a small number never work out that way.
And I think the reason a lot of people try to manage themselves is really an effort to save money. I don’t want to pay somebody 10% or 8% to manage whatever it might be. The problem is, is you have a huge opportunity cost of your time, and if you’re not an expert in this space it can end up costing you a lot more money in terms of legal costs, vacancy, certainly maintenance and a lot of things.
So today, Steve is going to tell us all about how to treat this much more like a business and how to cover a number of things that we just talked about. Before we get started with Steve though, let’s take a moment to recognize our featured sponsors.
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Hey Steve welcome to the show.
Steve: Hey, thanks Mike. Appreciate you having me.
Mike: Yeah. Yeah, it’s funny because I mentor and coach a lot of people. I’m connected to a ton of people in real estate investing. And whenever I talk to somebody that manages their own properties and they say, well we end up having discussion, “Why don’t you manage yours? I’m like, “That is the last thing I will ever do.” I have no interest in managing my own rentals just because I just don’t want to deal with the tenants and toilets, and the drama of being on call. But thank goodness there are great property managers out there to handle it for us right?
Steve: Yeah. I wish I was as smart as you. We actually got into this business by our own necessity, by having our own properties and going through this downward spiral of not knowing what to do. And really, our management company was created because we had about 35 properties and we were losing probably half of them circling the toilet basically. And what was going on, we didn’t know how to fix it, we had a 30% eviction rate. We were doing moving specials and the guy with bad credit, bad credit, okay, and guess what happens when you get someone with bad credit? They’re in one month and the next month the rents due, they’re right out of there. And of course then they like to take their parting gifts of air conditioning units, and wiring and we couldn’t figure out, we’re the smartest guys in the world, what are we doing wrong? I wish I would have taken your approach in the beginning.
Mike: Oh, what I didn’t tell you is there’s a whole bunch of other stuff that I do that I probably shouldn’t be doing either. But yeah, I just think I learned early on. So first off, the caveat here and everything, is being able to find an effective property manager. And I’m not here to throw anybody under the bus, but there’s a lot of property managers that you might be better off doing it yourself. There’s a big difference between somebody that you can just trust implicitly that has your best interest in mind, and somebody that maybe doesn’t, and you don’t know until they’re already managing your properties.
Steve: Yeah. It’s funny you say that because when we were looking for a property management company to manage our portfolio, my business partner and I we actually said, “Okay, we have a choice. We’re either going to sell these and just call it, or we’re going to send them to a property management company and it’ll be their problem.” And we’d already owned some apartment complexes and some other stuff. So we knew what we were doing was wrong, we just didn’t know how to get out of that cycle.
So we started interviewing some management companies. After about three months, we were actually more depressed than when we started. And the main reason was is none of them that at least that we were interviewing at the time, actually owned any properties, and we thought, “How do they know what it’s like to have a vacant property, to have a tenant skip, to have wiring stripped. They’ve never actually experienced it.” And that may not have been a fair assumption, but that’s actually why we created our own company was because we thought to ourselves, “We’re not the smartest guys in the world, but we’re not the dumbest and we can put some policies and structure in place to make this work the way we know it can.” And that’s how our company was birthed basically was out of our own necessity.
Mike: One of my early experiences was that we had a property manager that it became very clear they made the most money by having turnover. Because they get to place another tenant, they were actually in-sourcing the make-readys, so they were actually making a lot of money. Literally, I don’t want to focus on myself here, I want to start talking to you about all the topics. But I’ll give you one scenario here what happened is, there’s a guy that was painting, and we went to look at it and it just didn’t look good at all. But they were charging us $30 an hour for painting, which is insane. And the property manager said, “Well, he’s not really a painter. He’s really more of an electrician, but he was just helping us out for this project.”
Steve: But you were still going to pay it? You’re still going to pay the fee?
Mike: This is crazy, crazy. So that that type of stuff happens. But why don’t you maybe start off by telling us how you got into real estate investing. I know you started as an investor and then found your way to property management, but tell us your back story.
Steve: Sure. So my back story is, I’m actually an airline pilot. I fly for a major airline, and as everyone knows, 9/11 happened back in 2001, and the safety and security that I, as well as many other people, thought that I had as far as a retirement and a long secure career, basically went away. And so I started thinking, “What else could I do if this whole airline thing doesn’t work out?” Luckily my airline didn’t go out of business, but everyone else was. So I started looking into what can I do, and obviously real estate really was attractive to me because I could see that it was something that I could do, and passively do. And so I started buying properties, started investing. And at that time, I joined an investment club here in Houston and met my business partner, we partnered on an apartment complex about a 39 unit complex. And then after that we sold that complex and we started buying some single family houses and within about two years, about a year and a half, two years we bought about 20 properties.
Then we realized we probably should’ve bought 20 properties at about two years and three months because all of a sudden maintenance started to come in due, and tenants weren’t paying. Like I said, we had about a 30% eviction rate and so what do we do? We started buying more properties, because we thought we’re halfway to the mountain, let’s just push our way through, we’ll get to 50 properties, and all these problems will go away. We got to about 28, 29 and things started to really fizzle out and slow down. And we realized we had some problems, some major problems and it’s really because we didn’t have any structure. And like I said, that is how we started the whole looking at a property management company. And we went through the trials and tribulations of forming our own company and it was really for self preservation, wasn’t for to manage it as a business or anything.
What happened after that was we got our property stabilized. We kicked out about 70% of our deadbeat tenants that really shouldn’t have been in there, but they were just keeping the house warm I guess. And then what happened was is, after they stabilized, we had other investors that we knew, approach us. And they actually said, “Hey, you guys seem like you fixed all these problems. What did you do?” So we told them what we did, and they said, “You know, that’s the same thing I have. Could you guys manage our house?” And I was an airline pilot, my business partner was running an IT department for a very large company and we thought “No, we’re not property managers. We’re investors. We’re like you, we’re buying stuff.” They said, “Yeah, but you guys seem like you figured out a system to make this work.” And so we thought, “Okay we’ll try it.”
So we started managing a couple houses, and we thought “Okay, if we can do this through economies of scale and we can grow this thing, we can get better pricing from vendors, we can maybe get some people working in the office so it’s not us doing it. We can leverage some staff members.” And from there it just has taken off. We had people just giving us their properties left and right. Like I said, now it’s about three and a half, four years later, we’re managing about 450 houses, we have a staff of about 13 people. We’ve won numerous awards both locally with the Better Business Bureau and nationally with some marketing awards. We must be doing something right, I got to say.
Mike: Yeah. That’s fantastic, that’s fantastic. Well maybe you could start off by telling us why at the beginning when I gave the intro, I talked a little bit about how there are so many people that I know that manage their own rentals, and they don’t really have that many. Usually, you always start off with one usually, and so there’s always this thought of, “Well I’m going to just manage it myself until I get a certain number of them and then I’ll hand them off to somebody else.” Which I always thought as like totally backwards.
It’s like, let somebody else manage them until there’s enough skill for you to jump in and do it. And even then I don’t want to do it. But I think it’s always, from my perspective, comes from a cost saving standpoint. Like, “Well, why would I pay 10% to a property manager?” That’s fine when things are running smoothly but as you know, it’s just a matter of time before things don’t run smoothly.
But just talk about your experience, not necessarily the sales pitch as why people should work with property managers, but why that doesn’t work when people are trying to do it themselves without having . . . without really treating it like a business. It’s more of just, they’re trying to figure it out on their own and other people have already figured this out.
Steve: Yeah, and the way that I can equate it to is just like you said, I get people that say, “Well I have one property. I’ll wait till I have five.” And my question to them is, “Well, how big do you want the lawsuit to be to realize that you made a mistake?” Because when you own a property, whether it’s one property, three properties or 50 properties, you are a business and the landlord is the highest suit in real estate. And I feel the reason they’re the highest suit and the most subjective to being under scrutiny, is because they don’t treat it like a business. The IRS says, you’re a business, Federal Housing says you’re a business, discrimination, here in Texas we have a Texas property code.
Everyone is watching this owner because whether we like it or not the tenant living in that property has more rights than you and I combined once they start renting that property. And if you don’t know those rights, you’re going to get in trouble. And I say, why would you want to learn that mistake when you’re standing in front of the judge saying “I didn’t know I couldn’t accept someone with two kids. I didn’t know that someone with PTSD is considered a disability and they’re protected under federal law.” Why would you want to wait to learn that lesson? To me it’s like saying, “Well I’m going to try to fly an airplane from here to Hawaii on my own, and maybe on the next time when I get a little bit more money, then I’ll get an airline ticket and I’ll just buy an airline and have them take me.”
So I don’t see that and when I talk to investors, especially when I talk to them initially when they’re looking to buy something, I tell them that this is a business. You’re going to have costs, you’re going to have expenses and if you don’t think that those are going to be the case, then you may be in the wrong business or you have the wrong expectations because having a . . . that’s like buying a car and saying, “I’m never going to change my tires.” Or “I’m never going to have to change the oil.” It’s going to happen.
You’re going to have expenses with your car, and putting gas in your car to me is just like having the right team of a property management company taking care of the things that you either don’t want to learn, or really don’t want to take the time to learn because like you said, I didn’t want to learn these things. But I almost went into bankruptcy because I was making all these mistakes, and luckily I had a job that I was able to bail myself out of it. In hindsight I should have waited and said, “You know what, I should have just bought maybe 10 houses,” factored in that cash flow and done it from there.
When I talk to investors, I tell them, “When you’re looking to buy a property, you either, you do your due diligence. You spend all this time trying to find the right deal, whether you use a real estate agent, a wholesale, or whatever it is, you’re doing your due diligence. Then when you get the loan, you’re using a bank or a hard money lender, you’re using a professional. You’re not going to the guy with money in the trunk.”
When you close on the property, you’re using a title company. So up until this point, you’ve done everything right. But the most important part is actually getting the return back out of that property every month to actually give you the money in return. And that’s the part that you want to cut the corner on. Why don’t you just factor that in in the acquisition and factor in the management fee and why learn that lesson down the road and say, “Oh, this doesn’t work. Real estate is horrible. It doesn’t work.” It doesn’t work because you didn’t treat it like a business. That’s what I’ve seen at least.
Mike: Yeah, there’s so many . . . I think when you look at it like, cost savings, is it going to save me money? I’m trying to be cheap. I have no doubt that any property management company that would come recommended, a company like yours or lots of other property management companies depending on where people are at, can turn around a house faster than me to get the rent ready again so it won’t be vacant as long, can evict somebody much faster than me if they have to get somebody out. And you start to look at all those days and weeks that add up, that if I had to do it myself, I know it would take longer. And that’s going to end up costing me money.
And I think a lot of people don’t really . . . a lot of people don’t really . . . even aside from those costs there, they don’t really take into account their opportunity cost of them actually spending their time on doing what they’re good at, which might be finding more deals, or working a job or spending time with their family, or anything other than what they’re doing there. Their time is not worthless.
Steve: Yeah. It’s funny you say that because a lot of people I talk to, the one thing they don’t value is their own personal time. They don’t put any kind of value on that. And I say, that’s got to be worth something. The only thing that we can’t get back in life is time. You can make more money, you can get a better deal, you can negotiate, you can have more time. So you’re driving to Home Depot to meet a guy or do this.
Like I tell people, if you have one house, and you were self managing it, and you call the plumber at 2:00 a.m. on Saturday because of course, that’s when everything seems to break, and you tell a guy to get out there. And we call our plumber, who manages . . . who works on 450 of our properties that we give volume discounts on, and you ask him to go out there, and we tell him you need to go out there, who do you think is going to go out to you first? And who do you think is going to overcharge or not overcharge?
Like you said, it’s economies of scale and it’s just a cost of doing business, that the smart investor knows that. The ones that want to save money, don’t. And it’s too bad because statistically those are the ones that end up failing and think that real estate is a horrible way to go.
Mike: It doesn’t work yeah.
Steve: It doesn’t work, and it’s really, it’s them that’s not working. They’re not taking the time to educate themselves and one thing I always tell investors is, just because you have the financial means to buy a property does not mean you’re financial educated to run your property management business. There’s a big difference with that. And I need to learn that there is a difference.
Mike: So for those that want to educate themselves, that want to learn all these things that maybe want to do the right thing, like that’s my problem, I never wanted to do those things. If I ever would have managed them myself it would be a necessary evil. But we’d almost feel up front because I don’t want to be good at those things. That’s not what I want to do.
Steve: Absolutely.
Mike: But for those that say, “Hey I want to . . . maybe I’ll source my property management and bring it back in-house eventually, or I’m going to just try to get it set up right from the beginning and do all the things right.” Can you take some time talking about all the things they need to consider. Like if you were to have a business plan of “These are the things you need to be great at. You need to consider,” where would we start?
Steve: If you’re going to do it yourself, and I sit down with people all the time and I talk to them on the phone and I sit with them in person and I look at, are you better off outsourcing it to property management? Or are you better off self managing it? Because some personalities are better off self managing. And I say if you’re going to do that, investing as a team, you have to have a team in place, you have to make sure that, whoever you’re using whether it’s a real estate agent, whether it’s a real estate attorney, title company, set up that chain.
And then if you’re going to self manage, like I said the tenant is the highest protected person in real estate. They have more rights than any of us. Learn those laws, make sure that you know that you’re not doing something that is going to come back and bite you that you’re going to get sued, or get in trouble legally. Make sure you know when you’re doing the leases, learn the leases get a state promulgated lease, or something that . . . on your website there’s a lot of stuff of people helping you, learn to educate yourself.
Go out there and get as much information as you can before you do anything. And the way that you’re going to be successful is having the right people, making the right connections. Like on this website, you can go meet a lot of people, or like-minded people and just set up a team and it doesn’t have to be a property management company. To me a good property manager is somebody who just has a lot of systems, policies, procedures in place and they stick to them. That’s what it comes down to is, make sure that if you’re going to do it yourself that you stick to those policies, you stick to those procedures and you make sure that whatever you’re doing, you’re not going to deviate from that. What you do for one, you do for all.
Mike: Yeah, hey talk about some of the systems that people need to have to be successful.
Steve: Yeah. It comes down to simple things. For example, we try to be very, very consistent in what we do. And by law we’re very consistent because we don’t want to get in trouble, meaning we have a very strict set of standards of who we will accept. When we first started, like I said investing on our own, we had about a 30% eviction rate. Why? Because we were horrible at picking the right tenant, horrible.
What we learned is when we hired our certified property manager and she came on staff, she said, “95% of your problems are because of who you’re putting in these properties. You look at their past, you’ll see their future. You start getting strict on the front end and start regulating how you’re going to do business with them, all your problems are going to go away.” So of course we were nervous about it, but we did. And we became very, very strict of who we accept. What our qualifications were and if anybody goes to our website, they can get all the information. We share everything for free on our website.
But by being strict and by having these policies and procedures of who we will accept and then when the tenant moves in, we’re even more strict with them on the front end. A lot of investors always say, “Oh, this is going to be great if you have any problems give me a call. We’re going to hold hands.” That’s not true. We explain to them, “Look we are in business, and we will do what we need to do per the lease. You’re going to do what you need to do per the lease. And by having this on the front end to explain to them that if you don’t pay your rent on the third, you will get evicted, we will sue you, we will throw you out of the property.
We set those expectations from the beginning to let them know, “Look, we will do what we have to do, but if you deviate at all from your responsibilities, you are the one that is not going to be living there.” And one thing I talked to investors about a lot, talking about procedures is, I was in court one time on an eviction, and I heard the judge ask an owner, “Well, have you ever let this tenant slide on the rent before?” The guy said, “Yeah, his dog died, and his mother died, and he ran over his cat. He had every reason in the world, and it’s been eight months and I’m just tired of it, so I want him out.”
And he said, “So did you charge him those late fees when you did that?” And he said, “No because he always had an excuse.” And he said, “Well why is it now that you get to choose to enforce the lease at this time when you didn’t at that time? You Mr. Owner actually breached the contract first by not enforcing the lease on the fourth of the month and charging late fees the first time.”
I remember that and I thought, you know what? That’s pretty important. So it goes to sticking with the policies. I tell owners, if you write it in the lease, you better be prepared to back it up. A lot of these owners say, “I want to charge a $250 service charge because I don’t want them to call.” Well you know what? When they call, you better be prepared to enforce that $250 charge because the first time you don’t, you’re setting up precedent possibly with whatever judge to say, “Well you didn’t accept it the first time, how are you going to accept it now?
Mike: Yeah, we found in the past from our experiences, if you don’t set those expectations up front and early, then if you give somebody an inch they’ll take a foot every time.
Steve: Yeah. And if you treat it like a business . . . I equate it to the airline business. If you run to the gate and they’re pushing the airplane back and you say, “I was stuck in traffic,” they’re not going to pull the plane back up. They’re going to go, “Sorry, you missed your flight.” That’s how it is, and that’s how it is in rentals. And if you treat it like a business, meaning you have policies, you give them a way to pay their rent. We accept all our rent online with our tenants. We have online access so tenants can log into their portal to pay their rent. Owners can log in online. So we have a lot of systems in place that every . . . nowadays with technology, anyone can go ahead and get these things in place.
But they’ve got to take the time to set it up, create the policies, make sure whatever state they’re in or locale, they are within the confines of the law. Fair housing discrimination and all that. Can you do it? Absolutely. It’s not the hardest thing in the world. But you have to take the time and it’s . . . I would say you can buy a bad deal and turn it into a good deal over time. But if you buy a good deal and manage it wrong, it’s never going to be better. And I equate it to, you go to the nursery and a tree farm, and you buy the best tree in the world and you plant it in the ground, you get the best soil around it, and you never water it. And then the tree dies and you wonder why it never beared any fruit for you.
It’s the same thing with things. You could buy the best house in the world, it could be the best deal in the world, you got it, you wholesaled it, you’re going to make ready, and you don’t know how to put the right tenant in, and you go, ‘This sucks. I’m never buying properties again.” You didn’t water it correctly.
Mike: That’s a great analogy, yeah. So talk about . . . maybe you can shed some light on . . . I’m guessing one of the things as we’re talking here that hit me, that we do this in our house buying business and other things. We never let the person we’re dealing with know that I’m the owner or the decision maker and I think a lot of smaller property managers, the person knows that they are the owner or the decision maker, and therefore they try to negotiate with him, they try to do things instead of just saying, I don’t lie about it, but I just say “Well, we have to ask the company or I had to go back to the company. I talked to my boss,” which is my wife. It’s true, my wife is my boss. So things like that. But just talk about . . . my guess is that that’s a big problem for a lot of smaller property managers is, that tenant knows that they’re the decision maker.
Steve: Yeah. It is, and we get a lot of owners, especially a lot of out of state owners, or out of country owners that own properties. I mean Houston is such a booming place. There’s, like I said, 50 to 60% of all our clients don’t live in the state or in the country. So there’s a lot of people buying investment properties in Houston. They may buy and say, “Well I’m going try it on my own,” and then they come to us when they have a huge spaghetti mess of a problem because the tenant knows that the owner is out of state, or out of country, so obviously, like you said, give them an inch, they take a miles. So they start taking advantage of the situation, and then it goes further and further and they don’t really know how to draw that line. They don’t know where that line should be drawn.
So when they ask us “Hey, can you please help? I don’t know what to do. I’m going to sell this or I need to do something.” And case in point, we had an owner that was in Saudi Arabia working in the oil business and he was from Houston. He had 12 properties and when he came to us, he said, “I just got to get rid of these. These are horrible. I’ve got to get rid of them.” He was probably one of our first clients almost four years ago, he kept all those properties, loves it now, because he’s not being taken advantage of.
Basically what happens is, we step in and we explain to them, “Look, we are a company, we know the law. We know what the lease states, we know how to enforce it, and we understand if you have some maintenance issues that the owner couldn’t get to, we will take care of them. You’re a client, and the owner is a client. You have certain responsibilities, they have a responsibilities.” And by being that firewall, in the middle between the owner and the tenant, it gives them that insulation where they can’t emotionally get upset at us. We never have tenants that trash a house when they leave, mostly because we’re just doing our job, we’re just a business. We’re not taking it emotionally.
What happens a lot of times with owners is, they let the tenant slide on rent, they let them slide on something because of a future promise and then when the tenant doesn’t deliver on that huge promise then they get emotionally upset and they say, “Now you owe me. Now you got to do this.” Now it’s an emotional confrontation where we don’t do that. We have a business model where they don’t pay, we understand, but we’re starting the eviction process. We hope you can stay, but now you have late fees and court costs and if you don’t do that then obviously the constable will be knocking on your door, and we can discuss it in court and that’s fine. And by having that professional demeanor I think it helps insulate the owner.
We tell the owner, “Look, your job is not to guess what they’re going to do. You signed a contract with the tenant that they were going to pay. They signed a contract that they were going to pay. Someone’s not doing their job. We’re going to step in and we’re going to take care of it. We’re not asking your opinion. We’re not asking your advice. We know what we’re doing, just let us do what we know how to do, and we’re going to take care of it.”
Could this cost you money and vacancy time? It could, but you know what? By getting the right tenant in there and setting this up correctly from the beginning, it’s probably going to make it easier. Our goal is to keep the tenant in, and we tell the tenant, “Look we’d love for you to stay. We’ll take care of anything you need. But all communication is through us now. Do not talk to the owner because he’s just going to redirect you to us because legally he is no longer involved. We are the voice of contact for the owner now.”
Mike: Yeah. Yeah that’s great. Well Steve, we have just a couple minutes left here. First I want to see if you can give some advice or tips on how people that are listening to this that are saying, “Yeah, I really don’t want to manage these myself,” or they’re just getting started and they want to try to find a property manager. How does somebody find a good property manager? What are some tips you can provide us there?
Steve: The best way to find a good property manager. There’s an association out there called NARPM, National Association of Residential Property Managers. My business partner Pete is actually the Houston chapter president, and I think it’s a good way to . . . if you’re going to start vetting good property management companies, at least they’re held to a little bit of a higher standard as opposed to just somebody that wants to just start collecting a little bit of rent and do it on the side. So at least you’re getting some professional caliber.
And I would ask, when I’m vetting a management company, and if they want to email me, I’ll give them the list of questions. There are certain questions you want to ask them. How many days on market do your properties sit? What’s your average vacancy time? What is your average rental range? So there’s certain questions you should ask several property management companies, and you’re going to get an idea when you start asking them.
The funny thing is, is the reason a lot of people come to us they see us online, they see us that we’re the highest rated on Google and they see all that, but most of the time they say, “You’re the only one who called me back. None of them called me back.” And I’m thinking, why would you not call back a client? That right there, they’re trying to be on their best behavior and they’re not calling back. How would it be when you really need them? So I think if you start, again, doing your due diligence just like anything else, and you have questions, and you ask them these questions and call references, you may even want to call references of clients they don’t have any more. “Why’d you leave them?”
It could be, “Well, I sold my property, or I didn’t like this, I didn’t like that.” Personally we survey all of our owners all the time. We want to know, what do you like? What do you not like? Nobody likes to hear what they don’t like, but that’s what makes you better. When they tell you, “I don’t like when you guys do this, I don’t like when you do that.” We say, “Okay. Well is this something we can change?” or “Sorry, we can’t change this,” but at least we’re asking.
Mike: Yeah. That’s great. Steve, so tell us a little bit more about your company and how folks could learn more about you if you happen to be in the Houston market.
Steve: Sure, sure. You can look us up at www.EmpireIndustriesLLC.com, again you can look us up on Google, we have the highest reviews. We have a ton of educational videos, video blogs, quick two, three minute bursts of how to lease your properties quickly, things you should know about fair housing. We try to take good information of what’s going on in the industry and educate owners. We also have tons of free information on our website.
I’ve been fortunate enough to speak at seminars across the country. I do podcasts and radio shows and for what they invite me to. But we really try to educate and we try to do our best to pass that on. I didn’t have anyone to educate me when I got into this, and I had to self learn a lot of this. Had I had somebody, it probably would have accelerated my path with a lot less headache and I probably would have a little more hair like you by now.
Mike: I’m coming your direction my friend.
Steve: Okay. We really try to educate, we try to give away as much information as we can and because of that, people appreciate that and we get a lot of business, because we are investors. We walk that walk. I know what it’s like to open up a door and see a property with stripped wiring or tenants skipped out. I can empathize with that, so when I talk to an owner, it’s not like, “Oh well, just deal with it.” I get it and I understand and they like the fact that, hey, a lot of people would just call me and say, “Hey, what would you do in this situation? How should I handle this?” And I don’t need to manage a house just to give them ten minutes of my time. To me that’s just giving it back to people and trying to help them avoid the same pitfalls that I did.
Mike: Awesome. Well Steve, thanks for your insights today. Good stuff and I really appreciate you being here with us.
Steve: Thank you, thank you very much. I appreciate it.
Mike: We’ll add a link for your company down below the video here if anybody wants to check it out. Sounds like you have a lot of information on your site so it would be worth checking out.
Steve: We do.
Mike: Steve, thanks again for your time today. Have a great day my friend.
Steve: Thank you. Bye-bye.
Mike: See you.
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