Hybrid Property Management Strategy with Joyce and Drew
Jason Hartman brings on two guests, his mother Joyce, and client Drew. THey discuss their experiences with property management. Joyce is an advocate of self-managing and gives tips on how she has become successful at doing so. Drew discusses using a property management as he doesn’t feel ready to step into self-management. Jason brings up the idea of doing both, in a hybrid set-up.
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
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 on now. here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:03
Welcome to the creating wealth Show Episode Number 951 951. Thank you so much for joining me today. This is your host, Jason Hartman. And we are going to do a show with three people today. We’ve got our client drew Baker on the line, and our other client, my own mother on the line. We are going to talk about self management. There are a lot of misconceptions in this area. And I want to clear some of those up today. Drew has several properties. He has property managers for all of them. My mom has several properties, and she’s self manages all of them. So we’re going to go into this great, maybe great debate today about these different concepts and different ways to deal with self management and how that opportunity is available to you. But first, a couple quick reminders and announcements if you were at meet the masters of income property. Thank you so much for joining us for that Go to Jason hartman.com slash photos. Jason hartman.com slash photos and get your photos. And if you are into voyeurism. You can go there too. And check out the photos of everybody else. How do you like that? Check that out. And for the Ice Hotel, we’ve got another registration. Congratulations to Jeff and Shannon who are joining us for the bucket list Ice Hotel adventure in Sweden. We need a few more people to greenlight this trip. Check out the details at Jason Hartman Ice Hotel calm Jason Hartman Ice Hotel calm. Also we’ve got another event coming up a J. Jason Hartman University in San Jose, California Silicon Valley, and that is coming up on March 3 very exciting event. We haven’t done this one in quite a while. We only do these about once a year. Let me just explain kind of the overview of some of our events just real quickly before we get our two guests going. Hear, basically we do a couple different kinds of events. We do our annual conference meet the masters of income property. And at that conference, I don’t talk very much. That’s basically a conference where we have a bunch of different guest speakers. And you kind of know what that’s about, probably because I’ve been talking about it lately. Then we have our creating wealth, one day seminar, okay, creating wealth. And that’s my core content that I’ve been teaching for 14 years. And we’ve had thousands and thousands of people come through that it’s sort of philosophical in nature, philosophies, mega trends on investing, things like that. And then we have Jay Chou. And we added Jay Chou, Jason Hartman University A few years ago, because people were requesting some real interactive content. They wanted to know how do i do the math of investing? How do I keep score? How do I decide which properties to buy in which properties not to buy? How do I figure out the calculations. And so this is a very hands on event where you will need a pen and paper or maybe a pencil, and you will be writing and you will be doing the equations and analyzing investments. It’s a very interactive event. So that’s what Jq is, this is on March 3, early bird pricing at Jason Hartman calm in the events section. So grab your tickets today. We’ve only got 15 tickets available at that early bird price. So we do have a partner on this event selling tickets for us as well. A local Ria Real Estate Investment Group up in San Jose, and so they will be selling tickets as well. These will sell very, very quickly. So Jason Hartman, calm in the event section for your tickets for that. So first of all, Mom, welcome. How are you? I’m fine. Jason, it’s good to have you back on the show. You’ve been on several times. And people always love it when you’re on the show and have You’ve spoken meet the Masters as well with my aunt Joan, your sister talked about the way you guys built and manage your your real estate portfolios. And then we’ve got drew Baker Drew, welcome. How are you? Hey, thanks for having me back. It’s good to have you. Good to have you and drew thanks for setting up the three way call. You know, folks, a lot of things bugged me in life. I complained a fair amount. I know that horse leaf blowers are one of the biggest evils and scourges in modern history, modern life. The other one that just amazes me and shocks me on a daily basis is What a pathetic piece of junk Skype is. We’re talking on Skype now. And it has the world’s worst user interface. And every time they update the program, it gets worse. But it does have a benefit. It has very good sound quality when it works. So I drew had to set up this three way call because for whatever reason, Skype cited it Didn’t want to do a three way call today. It’s mind boggling. Anyway, enough of my pet peeves. But you know what else really annoys me? Maybe you guys will have a comment on this. People that drive really loud cars and motorcycles. I mean, how is that legal? to have these incredibly loud vehicles that I can hear in my high rise when I’m trying to sleep? They make noise, they echo for blocks and blocks around. It’s crazy. Do you guys agree with this?
I’ve heard that there’s a strategy behind it to say that they don’t want to get hit.
Jason Hartman 6:3d
That’s for the motorcycles. But how do you explain the obnoxious cars that are modified? And you know, and they modify them so their exhaust is really loud? It’s just obnoxious, frankly. But yeah, I know the safety
every time somebody drives by like that. I just look at them and say out loud, Wow, you’re so cool. In irony, because it’s such a joke. It is really a joke, mom.
Jason Hartman 6:56
Now you have allowed car only because it’s an old car. My mom and drew have the same philosophy on automobiles, they drive them forever and get a lot of value out of them.
Why should I throw away something that works perfectly?
Jason Hartman 7:12
Drew Baker 7:13
I’m just the steady horse. I want to just stick with something and drive it till it dies. And it’s our creature of habit. So why change it? If it ain’t broke? There you go, there
Jason Hartman 7:22
you go. Well, there is something to be said for a rational amount of frugality in life. I agree. But hey, both of you are pretty darn wealthy. I gotta say that much. You both have, you know, had different issues and frustrations with your property portfolio. And that’s what I want to talk about today. Because drew every time you come to me and talk about a property manager problem. I talked to you about how the hardest part of our business is property management. It’s where the rubber meets the road. It’s challenging, and I have recommended to you self management and I would recommend For a lot of people now, look, folks, this is not for the newbies. If you don’t know anything, don’t self manage, right away, learn some stuff from your manager, learn about management. But my mother has been self managing her real estate forever. And I always self managed my local properties when I was strictly investing locally. But now that I invest across the country about 10 years ago, and I’ve told the story many times, I became an accidental self manager of a property I had never seen, and with tenants I had never met. And I still haven’t seen that property. And you know, I have self managed very successfully, actually, several of my properties for years at a time. And the self management thing I think, is really something to consider. You know, in every area of life. Sometimes, it’s actually easier to just go direct and cut out the middleman Sometimes it’s better to delegate things, I admit, but sometimes it’s better to just do things yourself. Right. And with management, audibly, it might be counterintuitive to some except my mother. My mother is an extreme do it yourselfer. That’s what I call you an extreme di wire. Okay? She’s self manages everything and she’s got properties in several parts of the country. So I just wanted to compare and contrast these two approaches for bet. So Drew, you’ve always had managers you started buying in Indianapolis, how many years ago did you start and how many properties do you have now?
Drew Baker 9:37
I started in 2010. And it was sort of a funny thing because I’d saved up a bunch of money to put a down payment on a house in California. And when the prices went in half, I had enough to put about half down for a house. And since I was self employed, everybody just looked at you and laughed. If you were thinking you were going to get a loan, so I took the money and bought investment properties at a state that required cash only deals because they were all bank foreclosures through your network and I’m up to 10. Now, so
Jason Hartman 10:09
congratulations. I picked in Indianapolis and I have four in Memphis. Okay, so six in Indianapolis four in Memphis. And I remember you were buying stuff. I mean, you got some good buys on stuff back in 2010. So did everybody else, you know, of course, and I think the first property you bought I remember that property in Indianapolis. It was about what 55 $60,000 something like that.
Drew Baker 10:32
Oh, Jason, how dare you know, I got some. I got some amazing deals. all the places I bought in Indianapolis were between 40 and 50,000. Wow. Wow. All fairly new construction. You know, I think my prep my crown jewel was I got a four bedroom, two bath 1400 square foot house, you know, built in 2003 and I got it for 40 grand.
Jason Hartman 10:59
Oh my Got it. And so that was that was that was really a class a property, wasn’t it? I mean, it’s an adult in 2000. No, Class B.
Drew Baker 11:07
Yeah, I would say the problem is that with these areas that everything was built at the height, the market sort of evolved where everyone that came in got foreclosed on. So the neighborhood is sort of a little bit destabilized. But you know, build isn’t a build. So you got an A house, but you know that the neighborhood is probably more of a C plus neighborhood. Right? Right. Hey, house,
Jason Hartman 11:32
because because, because they were giving loans to everybody who could fog a mirror. Yeah, absolutely. So thanks for sharing that. And Mom, tell us about your situation. I mean, you were investing all around Southern California. And then you move. And I finally even though you never listen to me, I finally got you interested a little bit in investing in some of these lower priced markets. And you’ve got a couple of properties in those markets. Right. Alabama, Mississippi. Yeah.
I do. And I had property managers for both of them. And the happiest day was when I got rid of those property managers.
Jason Hartman 12:10
I love it. And folks, I want to tell you, you can be free of property managers too, if you want. But there’s an interesting thing and I think I want to, I’m gonna take the middle ground in this discussion between the two of you on one corner, you know, if it’s a boxing match, we’ve got my mother who’s the extreme, do it yourselfer. And in the other corner, we’ve got Drew, who has property managers for all of his properties. But Drew, since I know you, you’ve been a client for many years and a friend before that. You are a do it yourselfer in many other areas of your life. So I don’t think you’re like afraid of doing this but you do have questions about it. And so I’m in the middle of all kind of referee this discussion. And here’s what I want to just start with to make the conversation faster. I do a hybrid selfie. management approach. That’s what I recommend. So the hybrid part comes when you need to get a new tenant, when you’ve got a tenant that is moving out, and you’re between tenants. That is the part where I believe you should always hire a real estate agent, or better yet a property manager just to simply do the lease up between tenants. Now really, you give them a little more responsibility than the lease up itself, okay? Because of course, in order to do the lease up, they need to meet with the tenant who is leaving, they need to get the keys from them. They need to go and say hi to them. They need to do a walkthrough of the house and take pictures and send them to you. So that you see what condition the house is in when that tenant was leaving. And you know, they can help you determine how much of the security deposit you want to give back and so forth. And you need to send the tenant away letter saying, Hey, you know, your security deposit was 1500 dollars, but I kept $300 for this, that and the other thing, and you need to itemize that. And there is, by the way, a time limit on that security deposit letter, I think in California, it’s like three weeks around the country, it’ll vary. So just know that and then you get the real estate agent or the property manager, doing all a CART services, all a CART services, if they’re a manager, okay, where they will screen that tenant, they will take applications they will advertise the property, etc, etc, and you will pay them strictly to do the lease up. Now, if you had a full property management contract, what that would include is them receiving the rent every month in handling everything. Okay? So this is understand. My opinion of this is it should be a hybrid approach. Now, Mom, the funny thing about you, and I loved I loved it. I thought it was hilarious when you said it. You said it from the stage it meet the masters. I think I was bugging you or someone had asked a question about why do you do all this yourself? You do it 100% yourself. You don’t get the help of anybody except maybe some free help from a local realtor occasionally and, and you can comment on that. And you said, Well, I’m retired. I don’t have anything else to do. I thought that was so funny. You carry comment on that?
Well, yes. Because, you know, it just keeps you kind of active in in the game. When you’re retired, you have to go to all these stultifying women’s luncheons and raise money for charity and that is the most important thing in the world. So I like I like to begin business.
Jason Hartman 15:43
Drew, does that just make you laugh with my mom? It’s hilarious.
Drew Baker 15:49
Yeah, I love it.
Jason Hartman 15:51
You’ve got to go to all these stultifying women’s lunches.
I mean, you have to do something with your life.
Jason Hartman 15:58
No, of course not. I
think that’s a little bit boring to me. Yeah,
Jason Hartman 16:04
Well, I agree. You know, I have zero interest in ever retiring. You know, I think he’ll the people that live the longest are the ones that keep themselves busy and occupied and stimulated. So I love that you do that mom, I think it’s great. But it doesn’t mean that you need to deal with every little thing on all your properties. But Drew, what were you gonna say?
Drew Baker 16:24
Oh, I just was gonna say I remember one time that’s an April Fool’s. You said you were gonna retire?
Jason Hartman 16:29
Yes, I did. I did write that on Facebook once. Yeah. Anybody who knows me knows that. That ain’t never gonna happen because I have you know, I don’t care how rich I get. I like working you know, you got to do something. You got to stay engaged with life very important thing and in my opinion. But mom, tell us about some of the issues and things that you deal with self managing your I mean, your self managing long distance, and you are the extreme do it yourselfer. Tell us a little bit about it.
Well, let me make it suggestion. First off to drew crew, there is a wonderful organization called the apartment Owners Association in California
Jason Hartman 17:10
and the country by the way, just go ahead.
Okay. Well, the one that I particularly belong to is the one in California, it’s $79 a year. And with it, you can run your credit reports, and every form that you ever need in the world to do everything legal is a part of that association. Plus, they send you a monthly magazine with all sorts of interesting articles. One of them is cases by you know, a landlord eviction attorney, and it’s just fabulous advice. Okay. So that would be that if you’re going to self manage, that would be the first thing I would suggest that you do.
Drew Baker 17:51
Jason Hartman 17:52
Apartment owners associations are not just for fun, go online. It’s a old usa.com Okay, so apartment owners associations aren’t just what they sound, the name is a little deceiving. I just want everybody to know that they have these all over the country. My mom happens to be a member of that one just because that’s where she used to live in Southern California where I used to live and spent most of my adult life. Let me just give you a little context here to for the conversation. We of course have sell properties nationwide through our referral network. Drew lives in orange, California in Southern California. My mom and I grew up in Southern California and Los Angeles and Orange County. That’s where both of us started investing. You know, she was investing when I was a kid. And then when I grew up, I started investing there too. And I found it to be very speculative. And I wanted to invest in better sort of cash flow oriented properties. So you’ve heard me talk about that before. But just a little context there. The apartment Owners Association, the associations all around the country that they have Have are for any type of properties. So it’s the name is a little deceiving. If you own single family homes, you know, you can still join an apartment Owners Association. And my mom does everything herself. So she runs the credit for the prospective tenants herself, does the background checks, and you can get that service yourself. I am not suggesting you do this. I think for our investors, the hybrid approach is the right approach to have. So let’s talk about that a little bit. Drew, you have questions and concerns about this. And I’ve said a lot about it. Talk to us about some of your questions and concerns and let’s just answer them for you.
Drew Baker 19:40
The first thing is, is I think it’s important to just basically started off with some assumption that you know that you’re not going to live near the property. I know you guys have some property in Orange County, or at least did or LA County. And it was
Jason Hartman 19:52
I wanted to say By the way, my mom now lives in Gulf Shores, Alabama, so she doesn’t live in Southern California anymore, of course. Neither do I. Okay, so she’s she’s across the country, just so you know. Yeah. But she also owns property in Alabama and Mississippi. And even the Alabama property’s not near her home, but go ahead.
Drew Baker 20:11
Yeah. Okay, so yeah, so you’re not you don’t live near the property, you’re not particularly handy. So it’s not like you can go over there and change the light bulb or whatever. She’s
Jason Hartman 20:19
way more hands than you might think. But go ahead. Okay
Drew Baker 20:22
All right. Okay. All right. Well, okay, maybe we’ll change the light bulb we can handle, you know, doing something more complicated, maybe. And you’re not afraid to make mistakes, you know, so make small mistakes, but you’re very afraid of making a big mistake. And then obviously, there’s exceptions to every rule. So, you know, you have to be flexible, because you’re basically a small business owner when you’re having to deal with a tenant and the tenant as almost like your employee, so you have to have some sort of business he feels to approach this and be successful. I hope so. That’s kind of the assumptions I think are fair to make. Starting off. Yeah.
Jason Hartman 21:00
And Mom, you know, if you didn’t do the lease ups on your properties each time, really, I think the rest of the stuff you do is really quite easy. So I’d like to talk about that. I see, I think the area that, like I said, the hybrid approach, hire a property manager to do the lease up, they will probably woo you, and court you to try and get the ongoing account because that’s the part that’s easiest and most profitable for them, I believe. Okay, but you don’t want to do that you want to have the tenants send you the rent every month. So mom, talk to us about how you do that. I love the way you do it. It’s super simple. You make the tenant responsible for just putting the money in your bank account. And you look online, and you’re really on top of it. You know, every month on the first you look and see if those deposits were made. Talk to us about that.
Well, the first thing before that happens you have to let that tenant know that you are an absolute stickler for getting your rent on or before the first day of the month. And that’s what makes it easy. Well, I do that when I meet with a tenant, of course, you want to let the real estate agent handle that? Well, the first mistake they’re going to make is that they’re going to give the tenant that grace period in the reef. And so when it says, you know, when the rent is due, you cross out that grace period thing and you say zero days, and then you inform the tenant, that the late fee will be $70 if the rent is not there in your bank account rather on the first day of the month, and it is $5 each day until the rent is paid in full.
Jason Hartman 22:52
Okay. Let me say something on this. Let me say something on this. The laws regarding late fees do vary, but yours is actually in Not that bad mom, you’re actually kind of easy about it, remember it meet the Masters, when one of our property managers said it’s $25 per day. And I asked them, and that was in Memphis, by the way. And I asked him, I said, Is that legal? And he goes, Yeah, it’s legal. So, you know, you’re gonna have a tenant pay out pretty darn quick. If it’s 25 bucks per day. That’s expensive. So what you’re saying is that a lot of the leases have a boiler plate in them that say, you know, rent is due on the first and on the fourth, you’ll be billed before Yeah. Which is kind of silly when you got to stop doing that. Yeah,
right. That’s just ridiculous, because that means you’re always going to be chasing your rent, right? My rent are typically in my bank account the first day of the month. Mm hmm.
Jason Hartman 23:47
Right. Okay. What else do you deal with on a monthly basis? Because again, my recommendation in this whole discussion, just make sure you hear me is that the owner the investor, the landlord deal With the tenant on the ongoing monthly basis, but not on the lease up in the screening, I think that’s the hard part. So you delegate the hard part and do the easy part yourself. Your tenants, you know, Mom, everybody talks about how, oh, you’re gonna get a call at three o’clock in the morning that the garbage disposal doesn’t work. I mean, I never get those calls. That’s just complete. Like,
that’s ridiculous. First of all, that’s ridiculous.
Jason Hartman 24:25
Tell us about that. Your tenants bug you all the time. This is what people envision. No.
Yeah. Okay. No, the longer you have the tenant, the less hassles you have with that tenant because they start regarding it as their house and they start fixing things. So you never get those. The garbage disposal is clogged, the toilet is clogged. And besides your lease states very clearly, that any garbage disposal that is plugged up because the garbage disposal works perfectly when they take over the house. That is their response. ability to call the plumber, because they’re the ones that put the bad stuff down. It’s the same thing with a toilet. The same thing with changing light bulbs. The same thing with a yard. They’re responsible for watering for growing, edging, trimming, all of those things are clearly spelled out in the leaf. And you do not get those kinds of calls. That’s ridiculous.
Jason Hartman 25:21
I know. It’s kind of like all the lawyers that talk all about this asset protection, you know, this huge need for more asset protection. You know, what if the tenant does a slip and fall? I have never heard of that lawsuit ever. I mean, I hear people talk about how it could happen. And it could I admit that, but I’ve never heard of it actually happening. Mom, have you ever had a slip and fall lawsuit or has a tenant ever actually sued you for anything other than you know, like a dispute in the rent or an eviction when you’re trying to evict them?
No, they’ve never.
Jason Hartman 25:55
And how long have you owned a rental property for 40 years now? someplace, you know, his stuff is just folklore. A lot of times this is just mythology folks
about 1980. I would say,
Jason Hartman 26:07
okay, since 1980, you’ve owned rental properties and a tenant has never sued you drew questions. Oh, I was just gonna add a point of humor. So my wife growing up the bottom unit, the kind of bottom two bedroom apartment that she she lived in a house where the top unit was the main house and the bottom unit was the granny flat and her grandma slipped on the front porch and had fractured her hip. And her parents said, we’ll sue us because that way you can take advantage of the homeowners association.
Drew Baker 26:43
That’s the one that I’ve only heard of. So grandma.
Jason Hartman 26:47
Okay. So mom with this ongoing monthly, you know, rent collection, repair issues. Do people call you and say there’s some answers cockroaches in my house, you know, send over a pest control company. Do they do that kind of stuff?
It’s not my responsibility to do pest control, planning. And you know, you’ve had the company come in, you know fumigated, okay, type of thing. That is a tenant responsibility. That’s my judgment. Okay. And I will not I had a tenant in Canoga Park, who, after three months, she said, the dog got fleas in the backyard. And I said, Well, most people have their backyard sprayed when they have pets. You know, it’s just not your responsibility.
Jason Hartman 27:38
Yep. So here’s the other thing, Andrew, you know, and all the listeners, I’ve talked about this many times when it comes to the self management discussion. The property manager has an inherent conflict of interest. A lot of good property managers will get complaints on Yelp on you know, online, right? Because they’re tougher. With the tenants, you got to notice whenever you’re looking at a property managers reviews online, who are they coming from? Are they coming from owners or tenants? The property manager is inherently and I feel a little bit bad for them. They’re caught in the middle. So they’re trying to serve two masters and you can’t serve two masters. That’s the rule of life, right? It’s an inherent conflict of interest. So they will tend to maybe be soft on the tenant, costing the investor or the landlord or the owner more money, because they don’t want the tenant to go write bad things about them online. You know, they don’t want to argue with a tenant about stuff so they’ll give your money away. It’s kind of like these liberal politicians, you know, they give other people’s money away so that they can be seen as the nice guy like their frickin Robin Hood or something. You know, it’s it’s ridiculous. Talk about like, the late Ted Kennedy. Oh, he was such a nice man. No, he was a person who stole money from some people and gave it to other people to buy their vote. He’s uh, you know, I mean, how is that generosity? Yeah, everybody’s generous with someone else’s money aren’t they? Crazy? Less we digress. Well
Drew Baker 29:10
don’t let him drag you don’t let him drive you to a party. Yeah,
Jason Hartman 29:13
exactly. So, oh, Haha, yeah Chappaquiddick Chappaquiddick.
Why don’t we talk about if a toilet needs to be changed or some particulars, then you might have in mind drew something.
Jason Hartman 29:30
Drew ask ask the extreme do it yourselfers. Yeah.
Drew Baker 29:32
What what I think the important thing is to say I think we’ve already touched on it a little bit. But Joyce, I’m curious. Step one, you have a vacant property. What are you doing? are you flying and putting getting posters and putting them up in the neighborhood? Yes, you know, how are you executing that to get the tenant if you’re not using a management company? I want to start there and then we’ll get into now you have a tenant. But first, how do you have a vacant property? How are you terming the unit and how are you getting the tenant?
Okay, well, this is because I’m doing this all of my all myself and I come to Los Angeles or I go to Gulfport, Mississippi or I go to Northport, you know, Alabama and before I go there, I line up painters and gardening people because I don’t expect the property is probably going to look kanak ready. And so instead of wasting time, I will call 10 different painters and I will make appointments with them every half hour or so now you can’t control when they show up, but they will all give you estimates on painting that property and at the end of the day, you will know what’s a good price for painting that house and what isn’t. And I’ll also have gardening people show up and tell me getting the place you know shaped up what what this like to close. If you think you’ve got plumbing problems, call and have five different plumbers show up. You handle all of that stuff the first day. And in your phone call prior to ever arriving at the property, you say I will be in Los Angeles on January temps. And I would like to meet with you at such and such time. And if we can agree upon a price, you need to be able to go to work immediately or the very next day, because you don’t want to spend a lot of money on motel bills. So within three days,
have no strangers over the band, because those people want to go to work immediately. Right.
Jason Hartman 31:47
And this is the part everybody that I am saying you delegate This is what the real estate agent or that property manager will do for you in the tenant turn but there’s Magic things about what my mom does I disagree with her doing all this herself. But you know, it’s like her retirement fun, I guess. So, whatever, you know, to each their own. But you know, one of the things I will say is, my mom gets great deals on stuff and drew you get great deals on stuff too. And I’ll just share a personal example. I didn’t even know this I didn’t realize that I have a very good property manager for some of my Florida properties. Okay. You know, I’ve been with this property manager for years. She’s great. Okay. And this is how I decide whether I’m going to have a manager or not. If they’re good, I keep them if they’re marginal or they’re terrible. I get rid of them and self managed that’s sort of how I make my decision. Kind of by default whether I’m going to do it right. And so the other day she reaches out to me I’ve got her trained now to use voxer that’s another thing that makes things very convenient. She reaches out to me on boxer says, Jason, your property on I can’t remember the address, but your property, it needs a new refrigerator and I bought Her back right away. And I say, I didn’t know I owned a refrigerator there. And she says, Yeah, you know, all our properties. They have refrigerators. Okay, well, fine. She says, and it’ll be $870 or something. And I said, That’s ridiculous. I’m not paying $870 for a new refrigerator. I said, you know, maybe we should just go to the tenant and say, we’ll reduce the rent by 10 bucks a month, and they buy their own refridge. And she was like, Oh, no, we can do that. Blah, blah, blah. You know, it’s ridiculous, right? And I said, Well, that’s just too much money. So somehow magically, she finds a better deal for me. And the next deal is, well, I’ve got this one. It was returned this refridge there’s a mom and pop appliance shop here right nearby. And this refrigerator is returned. She sends me pictures of it looks beautiful, looks perfect. Right? And you can get it for $350. It’s basically new under full warranty. It was just returned and my guy will pick it and install it and get rid of the old one for 160 bucks. I said, that’s fine. I’ll do that. But the hundred and $60 is too much. I’m happy to pay 350 for the refridge then somehow that refridge sells out from under me and I’m a little bummed out. Then she finds a new one. Brand new one on sale with delivery included. And disposal. The old refridge included, okay, from I don’t know, maybe it was Lowe’s or something I can’t remember. She sends me the link and the whole price all in for everything brand new, beautiful. refridge was like $460 Isn’t that amazing? Just because I resisted and didn’t accept what she told me. This is one of the things I’m saying, look, folks, I’m a wealthy guy. Okay, I got more than enough money, okay. But why waste it number one and number two, it makes you better to go through the exercise sometimes and push back a little bit. And you’ll be amazed just by asking a couple questions. Suddenly you See $400 It’s amazing.
Drew Baker 35:04
Yeah, one time I had a tenant who wanted a security door, you know, others have wire mesh doors on top of their door because they felt like they heard that there’d been a local break in or something. And so the property management came to me and said, it’s going to be $300 to do this. And I said, Well, if they want to add some security door to the front door, that’s their prerogative. I mean, that they rented it as is. And I said, Well, you know what, okay, I’ll do it. We can add $10 to their monthly rent, or I’ll split it with them, you know, and so they ended up going with a split, and then I thought that was fine, because they’re adding it to my property. So I shouldn’t have to pay for some of that,
Jason Hartman 35:43
in theory, it’ll improve the value of your property. Right. And so that’s the other principle I want to say and Mom, I I kind of doubt you do this, but I’m willing to do it like Drew. I did that deal on that first self managed property in San Antonio, Texas, where I didn’t know the property didn’t have a great garage door opener. And you know, the tenant sends me a note with the rent when my property manager gets out of the business, suddenly I’m self managing by default. That’s how it happened property I’ve never seen tenant I’ve never met. And he says, you know, I’d really like to get a garage door opener. So what I did is I basically said, Look, if you will pay, I think, I can’t remember the amount so forgive the exact numbers here. But I think I made a deal with him. If he would pay like $15 a month more in rent, I would buy the garage door opener, and he actually installed it. He was a super handy guy, and he installed it Now I know what some of your thinking you’re thinking, Oh my God, that’s gonna create liability. You know what if he gets hurt installing it, you’re gonna get sued? Yeah, I guess so. That’s possible, but it didn’t happen. And so here I am basically financing his garage door opener. And in about 14 months, he paid me back for it and I improve the comp, the value of the rent overall. So You know, there are lots of options here. Yeah, make deals. Don’t be afraid to make deals with your tenants. A lot of times they want to improve the property. And you know, improving your property is okay. They’ll help you finance the improvement many times. 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 Hartman. Mediacom for appropriate disclaimers
Jason Hartman 37:34
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