In this episode, Jason Hartman focuses on property management education. He discusses why you should identify weak spots in all your investments and create safeguards against them. He discusses that property managers tend to be the weakest link in your income property investments. In the second segment of the show, Jason continues on the topic of management with a client case study with Muthiah. They discuss issues he had with a vendor and how he was able to get support.
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 0:53
Welcome to Episode 995 995. Guess what, we’ve got a special treat for you With Episode Number 1000 something I’ve never done before. And as there is a thunderstorm out, and it is raining some badly needed rain here. I love storms. You know, it’s like God putting on a show. It is thundering and lightning out there. It’s really cool. But I will give you a clue about Episode 1000 coming up here is the clue for Episode 1000. We’re only five episodes away.
Jason Hartman 1:44
Okay, we better shut that off quickly because you know, there are copyrights and so forth we have to respect but yes, Episode 1000 will be none other than fabulous. Colby callay right and that is her most famous song bubbly. I interviewed her yesterday. Great interview She was really awesome and talked about her music career and how she started it in such a unique way online. You know, of course the music industry is massively changing. So we’ll talk about that as well as how she writes songs and I just love singer songwriters. There’s too few of them nowadays, but it’s a lost art largely, but Colby callay, along with a fairly small number of others in the music industry are still singer songwriters. So it was great to interview her. And as you know, Episode 1000 is a 10th episode show. So we go off topic and we don’t talk about real estate investing per se, but I did ask Colby Kelly what she thought about real estate investing. You can hear her answer five episodes away. Well, actually four after you’re finished listening to this one, right. So a lot going on in the world. First of all, the self management revolution property management, getting the middleman out dis intermediation the power to The investor. Remember, I am a consumer advocate, I am all about the empowered investor empowering you. So you can get better returns, have an easier life, make more money with your real estate portfolio, and just have it all work better. And that is why we teach people how to self manage, because we have done our research. And you know, I’ve been doing this for what, 14 years now the nationwide investing thing. And before that I was in traditional real estate as a low information investor for many years before this. Now I am a high information investor, because I not only taught myself when I started getting out of my little sandbox in Southern California, thinking I was an investor but really I was a speculator a gambler. You know, I made some money for sure, but could have done a lot better. Had I been a linear market investor And invested for ROI, yield, cash flow, call it what you will. But this is the right way to invest. This is what really being investor is all about. Okay? It’s what it’s all about. So what we have discovered in our research, listen to this, folks, we have discovered that 39.7 2.1 5.17% of all property managers suck. Yeah, they suck. Almost 40% What was that number again? play it back, Mr. Podcast Producer, because I can’t remember what I just said. Obviously, I just made that number up, right? Yes. You know, I made it up. Don’t hold me to the 39% ish number of property managers that suck. They suck. And some of them are just downright crooks. And we don’t want you to fall victim to that now. Hey, listen. The question we’ve always got asked herself is what What question Do we have to ask dear listeners, we have to ask ourselves compared to what? Compared to what? Compared to Wall Street? Well, Wall Street sucks even more. Yeah, I know I’m talking slang here. But sometimes it makes more impact to talk that way. As Tony Robbins who drops the F word every other sentence, it’s really kind of repulsive. Honestly, Tony, I think we got your point. Yeah. So property managers. They’re the Achilles heel of our business. There are some great ones out there. Certainly, most of them are in between mediocre and lousy. You know what, we just want you to have more control. We believe in direct investing, you get the middleman out of the game. Think about it in the real estate game. When we invest for the long term, right? These buy and hold rental properties, the most historically proven asset class in the entire world. We only really have one intermediary The property manager and we are drilling down, finding ways to disintermediate them when appropriate when possible. Not always, if you have a good property manager, Hey, keep them they’re fine. They’re great. But if you have one that’s mediocre or lousy, fire them, you’re fired. I think our president said that right. And he said it a lot in his cabin endured quite a bit of criticism for it. Some is probably legit. But, you know, sometimes you have to shake things up, drain the swamp. Yeah, you know, drain the swamp and replace some of the people in the swamp with some other swamp dwellers.
Jason Hartman 6:42
You know, it’s almost impossible not to have swamp dwellers. You know, it’s just it’s just the way the political environment works. The way the system works, the establishment works. I mean, what is Trump supposed to do? You know, hire people that don’t know their way around the financial system. I don’t even know if that’s really possible to do do that. Right. So, I don’t know, a lot of his criticism against him is warranted, but he definitely deserves some credit haters. You haters need to give him some credit, too. We have Do you know that they believe I heard this on the news yesterday, they believe that the next unemployment report, well, officially, and I know the official statistics aren’t accurate, but at least we’re comparing apples to apples, right? It’s a benchmark, that’s all it is. It’s kind of like my scale in the bathroom which I rarely use and I probably don’t need to use it that much. But you know, when I step on my scale, it’s got those little electrodes in the bottom that shoot some electrical current that I can’t even consciously feel through my body to tell me what my body fat composition is my hydration level and of course my weight and something else tells you something I can’t remember anyway. Oh, you’re like bone mass index or something like that. Anyway, look at that thing is an accurate I know it’s not accurate. I know. The scale in my bathroom that cost 79 bucks and test your body fat is not accurate. I get it. But there are some things you can do to make it a little more accurate like never use it before going to the bathroom. Always go to the bathroom first have an empty bladder. And also do it at the same time of day. Do it with clean feet. Clean feet, yes, that will make the scale more accurate. And if you do that, you will have a relatively decent benchmark. Now what does a benchmark do? It tells you the compared to what question it doesn’t compare to dunk in your you know, letting every ounce of air or I should say cubic inch of air maybe or cubic centimeter that even be better of air out of your lungs and dunking yourself into a tank of water. It’s very hard to do that. That is a more accurate test than my scale. But it’s a benchmark right? And if we do it at the same time of day in the same way, every day and we do it over time we establish a pattern That’s what we want to do with our investments. So one of the best decisions I made when I got into this business 14 years ago, okay, is I decided you got to have a consistent benchmark. And that’s why we use the property tracker software. Go to Jason Hartman comm click on the resources page, get a hold of it. It’s very handy software. And we use it as a benchmark. If you go to Jason hartman.com slash properties, you will see the performance there static. If you use the software in our subscriber, you get the non static version, right, you can manipulate the numbers change the assumptions, right, but you’ve got to have a benchmark. And so many people in our business are out selling and promoting properties with no good benchmarking data, right. They don’t impute a real vacancy rate, the numbers change of the assumptions change. How can you evaluate this stuff? You can’t it’s just too hard to evaluate. things with fluctuating benchmarks. Okay, you can’t do it, you gotta have benchmarks. So that is a very, very important thing to have a benchmark and abide by the benchmark. So when you come and join us in Philadelphia on May 19, after registering at Jason Hartman comm slash events, or Jason Hartman creating wealth calm if you want to get directly there, you will learn how to benchmark better, right, and we will play the portfolio builder game that formerly we never did it the creating wealth event, we only did it at the Jason Hartman University event. But that is so popular and people liked it so much. We’re actually adding it to the creating wealth program that we will do together. Only one time this year. It’s the only one we’ve got planned on May 19 in Philadelphia. So join us go to Jason hartman.com get registered for that. And today, we’re going to do some complaining some rather serious He’s complaining now, I want you to ask yourself compared to what? Remember, the other investment choices out there in the marketplace are either I mean, of course, this does not cover everything I know there’s more. Either you can invest in this highly speculative stuff like precious metals, or cryptocurrencies that aren’t backed by anything at all talk about the ultimate Fiat, right. It’s cryptocurrency. You can invest in those things purely speculative, they produce no income. Strictly, it’s buy low, sell high. That’s the plan, Stan, good luck with that one. A lot of people have lost a lot of money with that plan. over the ages right over the millennia, buy low, sell high. Hey, you might be right. And you’ll win, but you might be wrong, and you’ll lose and you have no other recovery method. See, we were talking to one of our web development teams today. By the way, they are not a customer of ours. We just hooked up with this company recently. And we would love to be spending this money We are spending with all these outside vendors in our own ecosystem. So if you have a service that you can provide to us, we’d love to support you and keep it all in the family. You know, nepotism is good as long as you keep it in the family. Well, I’m talking about our customer family here, right? So go to Jason Hartman comm slash ask and tell us if you’re a blogger, writer, video producer, an audio editor? Do you specialize in search engine optimization or web design? Or are you a programmer? We got a lot of super smart clients out there. If you are looking for some freelance work, let us know. We’re just maybe we won’t do it today. But we’ll keep you in mind and in the future, we’ll do it. So Jason hartman.com slash ask for that. Anyway, talking with the software people today we had a two hour conference call with several people on our team and their team, you know, and we’re on the zoom meeting. And one of the things you always want to try and avoid in business In life with systems of any sort, is this concept right? the fewest points of failure possible. You don’t want a lot of points of failure. The old saying a chain is as strong as its weakest link. So as you apply this to investments, right, what is the weakest link? Well, certainly a weak link for any investment would be for it to be one dimensional, a one dimensional asset class like the speculative things, the precious metals, the non dividend paying stocks, or the cryptocurrencies, right, those are one dimensional, it’s buy low sell high, then you’ve got two dimensional well, that includes dividend paying stocks, and it includes other investments that might pay a return to investors a dividend pref rate, whatever. But then you’ve got in most of these things in the vast majority of things, you’ve got intermediary party risk, right? So you want to disintermediate because when you disintermediate you get more more control and you get better returns and you get fewer people with their hand in the cookie jar. Folks, look, commandment number three, thou shalt maintain control of my 10 commandments that without a doubt resonates with the most people, thou shalt maintain control. Three major problems when you relinquish control you might be investing with a crook, Allah Bernie Madoff WorldCom you know, I just watched a thing about Bernie Ebers recently, and you know, you got Enron WorldCom global crossing, I mean, you know, the list is like endless, right? All of these right, MF Global, blah, blah, blah, etc, etc. There’s a zillion of them. Then you’ve got the ones who are doing it legally, right. And they’re, they’re legally putting their hand in the cookie jar and they’re taking some of your money, right? You’ve got these property managers, that litigation that I’ve been in with results property management now called Quincy property management, Kansas City, Missouri, and now they branched out they got a big lawsuit from a bunch of their employees for a hotel they own. I mean, these people are taking advantage of people, okay, it’s just wrong. And in all these years of litigation, they still can produce any document that clears them. But will you win in court? I mean, who the hell knows it’s a crapshoot. You know, it’s the mood of the judge. You know, the attorneys, technicalities loopholes. You know, I’ve been watching this show, maybe you’ve seen it, it’s called Better Call Saul. Right. And he’s this kind of sleazy attorney, but I don’t know if he’s really sleazy as this character develops. You see, the guy actually seems to be a kind of like me, right? Like a person who’s a fighter for the underdog, which I love that because I used to be an underdog I spent half my life as an underdog. Whenever I see someone taking advantage of the underdog or bullying someone or you know, and there’s a lot of financial bullying out there. It just really bothers me. I want to be a consumer advocate and stick up for them. So you got these intermediaries and they’re the property managers in our world is the only one but you know, a wall street type investment, right? Even if it’s two dimensional, never multi dimensional, like income property, but two dimensional, where you get your profit from buy low, sell high if it works out for you. And maybe you get some dividends along the way two dimensions of profit, income property, multi dimensional many dimensions of profit, right? At least five. And so you’ve got this, but the one last point of someone with their hand in the cookie jar is the property manager. It’s the only last bastion right? We’ve only got one hurdle to clear with our income properties. And if we self manage them, or do better yet the hybrid approach that I recommend where you self manage on the monthly basis, but you manage the tenant turn and hopefully you will minimize those with your without a property manager. you minimize the turn with an agent or a property manager offering unbundled all a carte services to handle the term between the old tenant and the new tenant. And that is the best plan out there. That’s the best way to go. So we’ve discussed that on many episodes, we’re gonna do a little complaining today. So please don’t take this as too negative, I want you to ask yourself compared to what, throughout this interview, it’s a case study with one of our clients who’s been on the show before. He’s a great client. I think he’s up to like 21 properties now. That is Messiah. We’re gonna play about half of his interview today. And then on the next episode, we’ll play part two, but remember something you know, I’ve been accused many times of being a complainer and I want to just submit to you that I know
Jason Hartman 17:34
you shouldn’t be negative right? Yeah, ultimately, I’m I think of myself as a rather positive person. But sometimes I get complaining complaining is that a word? I had a girlfriend years ago. Name Laney Laney complaining Well, I never told her that But hey, we still broke up anyway. She She was not a complainer, but I’m a complainer people say that sometimes. Right. You’re a complainer. I would submit to you complainers are the people who change the world. Was Gandhi a complainer was Martin Luther King a complainer was George Washington and the other Founding Fathers of the country of the United States. Were they complainers? They were all definitely complainers. In fact, I remember a lot of these original complainers about England, they were complaining about England. They had a big Tea Party, didn’t they? Yes, they did in Boston Harbor. And those complainers. Well, they changed the world, didn’t they? for the better, I would submit to you the thing that came out of that the Constitution and the papers, the founding documents of the United States of America, which makes it such a special country. Hey, listen, folks. I know we got listeners from 165 countries around the world. I’m not some America freak. Okay. I’m just lucky. Okay to happen to have citizenship here. There are certainly a lot of other great countries but the US is pretty special experience. Okay, at the time, the only experiment before the US that really kind of had it right was the Magna Carta. Okay, where you actually gave people rights against the government. And that’s a very unique concept in human history. Okay. And, you know, at least up until recently, I don’t know, you know, I don’t have any specific data on this. But up until I’m gonna say 3040 years ago, the US was the only country on earth with the word happiness, the word happiness in its official chartering documents. Try that on for size. That’s pretty cool. So we’re going to give you the first half of this interview, just in the interest of time, we’ll play the next half on the next episode. And remember, compared to what, there can be difficult sellers, there can be difficult property managers, but we want to empower you against them. We want to empower you and make you the empowered investor. That’s what we’re here for. You know, we want Want you to have as much control as possible with as little involvement and responsibility as possible. Now listen, if you’re going to have control, you’re going to have some responsibilities. But again, what we do here is we make that easier. So hats off. We’ll see you on the 19th and Philadelphia. And maybe we’ll even see you the next weekend in New York for the venture Alliance mastermind. Go to Jason Hartman comm for more info about these, Let’s welcome our wonderful client, Messiah, who’s going to share some of his story with you today. In part one, here we go.
Jason Hartman 20:42
Want to welcome back a returning guest that is our wonderful client and now friend of the show Mutharika few months ago, I recommended when Messiah was having some problems that he file a complaint against the seller and property manager of his property and he did it He got some justice he got some recourse out of that. So very exciting. This is something I want to recommend to everybody listening, be the empowered investor, be an empowered investor, be an empowered consumer, do not be a victim. So there are ways you can hold people accountable without without having to go out and hire a lawyer and taking them to court and dealing with that whole mess because that is just a mess. And it usually doesn’t work. And I’m telling you that from my own experience, but you know, there are some other things you can do. We’re here to talk about those today. And and remember something else before we dive into this, an ounce of prevention is worth a pound of cure. an ounce of prevention is worth a pound of cure. Another old saying like that I used to hear from my aunt burness is a stitch in time, saves nine stitch in time saves nine so you know that’s another thing we’re doing. Talking about today, right? And Matthias is going to share a couple of best practices, learned the hard way from mistakes he made that now you know, he will never make those mistakes again, the real world University of hard knocks the school of hard knocks, and then we’re going to talk about what you can do. Even if none of that works, the prevention doesn’t work. Okay, so, so Messiah. Welcome and thank you for sharing your story with all our listeners, we really appreciate it. You’re welcome. So what happened,
I bought a couple of properties in Alabama. And one of those properties that I bought turned out to be a big disaster, the property had a pool and never own the property or the pool, just wanna have a pool and that brought some problems along with it. One of the mistakes I made I hope others will learn from this is to make sure that you conduct a home inspection when I’m when I say a home inspection or a home inspection the entire property I mean, not just the home in my case, I did not inspect the pool, which turned out to be a problem later on. There was some problems with the line. As the fool and so on. So, it’s important to make sure that you get a complete inspection. And after the inspection is done, and the seller has done the repairs, you need to send the inspector back to go back and re inspect it to make sure that the absolutely backed up.
Jason Hartman 23:14
That is a good best practice. So, two things there that we’re saying just make sure everybody caught those. Number one, generally speaking, try to avoid properties with pools. It’s not a hard and fast rule, they certainly can be more desirable. So you know, for the hassle and aggravation of this whole extra system and potential piece of liability of course, it could be worth it if it pays for itself and then some, but most properties won’t have a pool. Okay, but you know, here and there, you’ll see one with a pool. That makes sense as a good rental property. Okay, so I’m not saying yes or no, I’m saying mostly No, but you know, not completely. So the first thing is if you have a pool remember, in addition to your normal home inspection, you must also have a pool inspection and that is going to Be almost for sure that it’s going to be a completely different inspector that specializes in pools and pool systems. So, have a pool inspection. The other thing is when you have because you must always have a home inspection. When you have that home inspection, there will almost always be punch list items, you know, and you can decide as the empowered investor and the buyer yourself, but if they’re, you know, just minor little items, you can just let them go and trust that the seller is going to take care of them. If not, though, you must have a re inspection, you have to pay an extra fee to have the home inspector go back to re inspect the property and make sure that all of those repair items are done before you close on the property. Okay, and if they are not done, do not take a promissory note from the seller that says they will do them later. The only thing I would accept is money held in escrow In other words, part of the sellers proceeds held in escrow. If they somehow for some reason, can’t get those repairs done before closing, then the closing attorney, the escrow the title company, they withhold part of the sellers proceeds that requires a mutual instruction or at least your signature before those funds can be released and make sure those funds are adequate. So for example, if they say, Well, you know, the property needs a new water heater, right? And, you know, say you determined that a water heater is going to cost, I don’t know, 700 bucks, right? Then, you know, you withhold 700 at least, you know, maybe a little, probably some extra, okay, because you never know what else you might discover. So if they agree to withhold $1,000 after the closing of the deal, and you control that money that you know, can’t get released to them until it’s fixed, then you’re going to be okay, that’s your insurance, okay, but don’t just accept a note There’s no money behind it, you know, Show me the money as Jerry Maguire says, okay, so Messiah.
Okay, go ahead. That was the very first thing. You know, the next key point for me was this is something that’s always, you know, ever since I started buying property through the network, it’s been something that I’ve had success and proper with the property management company, you know, I mean, all these property management companies have this standard contract that they have you signed, you know, I think it’s important to read that properly. And so you know, what you’re getting into these also important to have a good relationship with the property management company. And I know it’s a good idea to go with the company that the seller recommends, but I think that they have a beneficial interest. And so I would just shop around if you have time to look at other property manufacturers, but you need to work with somebody you’re comfortable with because they could make it very difficult for you. Going forward by not crediting your account I’m not communicating with you properly. A lot of things and you know, and Jason play honestly, or last two years. This is just My opinion, I could be wrong with this based on my experience. So the bigger the company is, the more layers there are in the company, it’s very hard to deal with them. And you can get lost in the shuffle. I mean, I’ve got properties with something that manage thousands and thousands of properties and they’re just too many layers. Okay. Okay, so more bureaucracy, right. So there’s a trade off for that. And I’m not sure which is best. there’s sort of two kinds of companies in the world. on each end of the spectrum. There’s the big company that supposedly supposedly, okay, has really good systems. You know, they’ve invested more money in technology
Jason Hartman 27:37
and software and they’ve got protocols and got business processes, hopefully that are more established, right. But they’ve got more bureaucracy, right. So that’s the big company concept. It’s good and bad. Okay. On the other side of the spectrum, there’s the small company that is, you know, kind of winging it. Okay. In some ways But, but they’re hungry. I mean, in theory, they’re hungry. And they’re really gonna just give you a great service, right to try and make a name for themselves and, and try and get bigger, right? You know, that’s whatever, but entrepreneur wants us to be bigger, right? And so it’s kind of two ends of the spectrum. And you know, the experiences both either they can go either way with either one, the small guy, it’s sort of not as efficient in a lot of ways, usually, the solopreneur, or the small office with three people, you know, versus the big company with 30 people, you know, I don’t know, I don’t know what the right answer is. It just all depends,
you know, like, no, Jason a while I was trying to say was, look, I think it’s important to make your expectations very clear to the property management company from the very beginning, right, so they know you’re not just passively sitting back and, and then accepting whatever it is, they credit your account. If they do that. $500 or $10. You don’t know why they did nothing. You need to question these things. You know, you need to look at your statement. You need to look at your owner’s portal, and why did you do that? Light. Why is this my response to the attendance response early? And you know those questions, I think it’s important for investors to ask the property management company so that next time, they know that, hey, you know, maybe we should be more careful.
Jason Hartman 29:14
Let me mention a few things here. So first off, I don’t want any of you listening to be the easy customer. I don’t want you to be a pushover. Okay? You know who you are. On the other end of the spectrum. If you’re a pain in the ass, I don’t want you to be too much of a pain in the ass either. Okay? Because, you know, it’s like neither of those people gets very far in life, right? The difficult person, nobody wants to work with them. And they will just put up their hands and say, go somewhere else. Right. The pushover gets taken advantage of all the time. So I think the answer is somewhere in the middle. Right? You know, I would if there’s a continuum, between the totally difficult, impossible client and pushover everybody listening when it comes to dealing with property managers? I want you to be 6560 65% toward the more difficult person I want you to be aware empowered investor. But here’s the thing. You can have high expectations without being a jerk. Okay being a jerk just won’t get you anywhere in life. Okay, you know that always backfires. You know, there’s it’s just doesn’t work, okay? But you can still have good expectations and high expectations. When you were talking about the contract Messiah and the importance of reading it. The importance is way more than reading it, reading it as the first step. The second part is negotiating it. So just because the comment, hopefully you read it, so thank you for saying that. A lot of people don’t even read this stuff. Okay. The thing I want you to negotiate folks, is I want you to negotiate the latitude and this is not new information. I’ve said it on the last, you know, 900 and something episodes okay? But negotiate the latitude, the property manager has to charge you for stuff. So again, they will have these standard clauses in those contracts and they need them. Okay, but just how much to what degree they need them as the question. So the clause will say, in case of an emergency, in other words, a pipe is break, you know, pipe broken, there’s water leaking everywhere, you know, the property manager has the right and you want them to have the right to go over and stop the leak to stop further damage. Right. Okay. But then the next thing will be those sort of optional repairs, the tenant calls and complains about something stupid, like I saw an ant on the kitchen counter, or the light bulb burned out, you know? No, you don’t. That’s ridiculous. This is ridiculous stuff. Right? And I want you to look at that clause the way it’s written very carefully. Okay. The discretionary spending plots, where it says the property manager has the right to control In their discretion, up to $200 per incident of money that they can deduct from your your check. Okay? The funny thing is mkhaya when it comes to like my mom has been on the show several times and you’ve heard her and commented about her, you know, she’s self managing. She’s like an extreme do it yourselfer, and I really am starting to be a real believer in self management, but she doesn’t spend hardly any money on her property. Some of these property managers, they’re just giving away your money. It’s ridiculous and you got to stop them from doing that. Do not be a pushover, okay? Just say this clause, I’m going to limit it to a per month amount, not a per incident amount. First off, there’s a difference between per incident and per month. So the tenant could call twice in one month and say, Hey, Well, today the garbage disposals broken, and then you know, next week, some other things broken right, and suddenly if the property manager Conduct $100 per incident, you lost $400, you just got to eliminate that discretion. It’s not necessary. The duty, though, on you, the investor is that you have to be available and communicative and responsive. Okay, so if that tenant calls about something and says this or that is broken and needs to be fixed, first of all know what you’re actually obligated to do. Okay, you’re not obligated to do everything, you know, the tenant has some responsibilities to okay. So that’s the number one thing. And then the number two thing is you must communicate and approve or deny requests quickly. Otherwise, the managers go say, Hey, we need discretion because I couldn’t reach you for two weeks. And by then the tenants really unhappy, right. But the bottom line is, I’d really recommend people consider self managing, it’s much easier than you think. And we’ve done a lot of shows on that over the years. Anyway, so per incident, and per month, I want you to make it a purchase. month limit of no more than $200, ideally less. So don’t just read your contract, negotiate your contract with your property manager or just self manage, and you can take them out of the equation completely. Okay,
go ahead, right? Yep. Just let me play the devil’s advocate for just a second, you know, property managers that manage hundreds of properties. They have this standard contract and in spite of what they said, I’ve gone back and renegotiate. But they’ll say, Well, look, we can make this change for you. We’ve got hundreds of contracts, we can just change it for you that would screw up our whole system, you know, we don’t have the resources to track your particular property and say, it’ll probably comes up and you know, for some reason, so that it
Jason Hartman 34:43
can you can take your business elsewhere in the place I’d really like you to take your business is to self management without a manager at all. See, there is a inherent conflict of interest with property managers. You’ve heard me say this before, the conflict is that they’re trying To serve two masters, and you know, the rule in life is you can’t serve two masters, you can either serve the investor, which is technically the obligation is to the investor, or you can serve the tenant, you can’t serve both. So the property managers will be liberal in spending the investors money as much as they can usually get away with it in order to make the tenant happy, because you know, what the tenants do, when they’re unhappy, they go to Yelp and they start writing bad things about the property management company. And you know, it’s interesting, whenever you hire a property manager, I want you to go to Yelp and read the reviews now. Look at we all know reviews are a lot of them are false. Okay, you know, they’re false good and bad, because their competitors, you know, will write bad reviews about them that are fake, and their employees will write good reviews that are fake to it. So where’s the truth? Nobody knows.
Jason Hartman 35:58
but it’s probably some We’re in the middle. That’s why you just have to not look at the star rating necessarily. But you have to actually read the things and see if they sound legit and just evaluate them with your brilliant human brain. You know, that’s why we got these great brains, they work pretty well most of the time. And so that’s one thing to do. But if the property manager has a bunch of bad reviews, and they’re from tenants, I don’t know that that’s necessarily the worst thing ever. Right? If they’re from investors, that is really bad. If there’s a bunch of investors saying, Oh, this property manager is terrible, you know, they they ripped me off or this or that, or the other thing that I really get concerned about, if they got a bunch of bad reviews from tenants, because they’re a little more strict with the tenants. That doesn’t necessarily bother me as much. We’re complaining right now. But compared to what is the question, compared to a wall street investment, or some investment in some fund, this is way better, at least hear, you know what’s going on and you have some control. Yes, when you’re a direct investor With the plan that we outline, you’re going to feel the bumps in the road. But you know what, at the end of the day, you’re going to have a lot more money, okay? Because when you buy the mutual fund or the stock or invest in some fund that’s buying apartment buildings or something, you don’t feel the bumps. But guess what? Someone has taken all your money, and you just don’t even know about it. Okay, here, at least you can see it right, and you can control it. So that’s what we want you to do is become an empowered direct investor. You know, that’s commandment number three, thou shalt maintain control. This is about being a direct investor and getting those higher yields because you’re in control. This will be continued on the next episode. Thank you for listening and happy investing. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.