In this article I am going to cover the most important aspects of our management system that separates us from all other property managers.
The areas of interest for you are as follows:
1) 3 year lease
2) Option to buy
3) Due diligence on tenants
4) Master Lease with owner
5) Landlord Protection Plan (LLPP)
6) Tenant Protection Plan (TPP)
7) Common Sense and long term relationships
3 Year Lease
The biggest expense of property management is turnover. The more often tenants move out, the more it cost the owner by way of lost rents, rehab cost, new fees to the property manager and time. We take a psychological approach to management and increase your cash flow by keeping tenants longer without the need for fix up on an annual basis. Most property managers want a 1 year lease and most get half of the first month’s rent for renewal or a full month rent for a new tenant.
Option to Buy
With every 3 year lease, we give the tenant an option to buy their home for the same reasons we use a 3 year lease. It’s psychological. Some will buy and most will not. We look for a tenant that wants to be in your house for as long as possible to reduce turnovers. If they decide to buy, it will be at a price significantly higher than you paid. Don’t worry about income taxes or finding a replacement house. If you bought with retirement account funds (IRA or Solo 401k) there are no taxes. If you bought with personal funds or a corporation or an LLC, we can assist you with a 1031 exchange and no income taxes will apply to your sale.
Due Diligence on Tenants
This is a big one and can be the beginning of the end for many investors. We have a full time person that only works on tenant applications. Every potential application is then reviewed by me, Anthony prior to their approval. We do all the usual due diligence on the applicants most recent landlords, personal references, verification of employment and income and credit background check.
We also visit their current residence and see how they are living. We inspect it for bugs, pets, junk automobiles and talk with the neighbors if appropriate. Large management companies don’t do this as it takes a lot of time. We want to make sure that they can vacuum the carpets, cut the lawn, maintain the shrub beds and keep the property in the same condition the property is in at the time of rental. If they don’t have vacuums, lawn mowers and hedge trimmers, they must hire out these services and whenever possible we want them to use our crews. At minimum, we want to know who is doing it and have their contact information.
For the same reasons, we always have at least one of the neighbor’s phone numbers so in the case of late rent or if your tenant is not maintaining the property or acting right, we can call them or they will call us.
And yes, we will still get fooled from time to time as tenants could lose their jobs, get transferred or die. It’s the part of the business that we refer to as human element that is outside of our and your control.
Master Lease with Owner
Most property managers use a long drawn out property management agreement that requires an attorney to review. Our master lease is simple and easy to understand. You get 90% of the rent collected, pay one full month’s rent upon rental and a 6% commission on the sale which includes a reality agent.
If a tenant renews their lease in three years, you pay a half months’ rent.
Landlord Protection Plan (LLPP)
We created the LLPP to increase the safety of your investment. In addition to providing safety, there are cost cutting measures by potentially reducing property taxes and lower homeowner insurance cost. It provides you with three inspections per year that could not otherwise be done with an interior and exterior check up on the property. As a freebie, we also guarantee zero eviction cost for that year, should you ever need to evict a tenant.
Tenant Protection Plan (TPP)
The only way to make the LLPP be financially feasible is to offset the cost with the tenant. All new tenants must pay $200 a year for the TTP while each investor pay $399.
Besides the extra income from the TPP that allows us to afford the provided services, it is psychological.
The tenant knows that inspectors are coming and they know we are not their average property management company.
They realize we expect the property to be maintained in excellent condition and more important, we are checking on the house and on them.
This is part of the NES difference that separates us from other property management companies.
It’s also why we won’t manage houses for investors that don’t appreciate how important the psychology is with the tenant and the safety this program along with the LLPP provides them.
Most investors that are cheap and want to negotiate everything to the lowest price usually screw themselves up.
Tenants have to be trained and the TTP is critical to that training.
Common Sense Approach and Long Term Relationships
Did you ever hire a cheap contractor? If you did, you realize that it’s less expensive to make repairs properly the first time.
It’s like the repairman that fixes the ceiling leak without checking out the roof. He didn’t solve anything.
Property management is my life. I love what I do and am excited to wake up each day and be productive.
Every procedural change we make is so we can offer our owners exceptional service that they can’t get anywhere else.
In essence, we use common sense in our decision making with the ultimate goal of delivering the best service possible to the owners and the tenants.
It’s a difficult business at times and we understand the financial intent you have in the US. We will always make the best decisions possible for you to mitigate losses and increase revenue.
Last month we got $5000 option money upfront for an owner. Why? Because we asked for it.
We had one owner’s property taxes reduced over 40% as a result of our real estate tax appeal program with the LLPP.
We had a hail storm a few months back. Due to the fact that we allow owners to be on our master insurance policy: one owner pocketed over $8000 on an insurance claim.
The fact that we don’t ever markup repair fees for any of the contractors provided to us by BCFP will save you of dollars over the time you own your cash flow houses. And eventually, your house will need some type of repair if you hold it a long time.
You know why? Eventually tenants move out and the property needs repair. Since you bought your house from www.buycashflowproperties.com, that allows us to use all of the repairmen and rehab crews and they don’t make any money off of this. Why? Because they appreciate your faith in them and they understand the value of a long term relationship. We have to systematic everything we do for cost efficiency for you.
By using 3 year leases, you have less t and turnovers. By utilizing the LLPP and our due diligence on tenants you will make more money over time.
As we continue to grow, we want you to grow with us.
If you have a friend or coworker that wants to buy cash flow houses, BCFP has offered to pay you the property management fees for 1 year for every house your referral buys.
Thank you for the opportunity to serve you
The NES Team