In this episode, Jason Hartman interviews Muthiah Nachiappan. They start the episode by talking about property management contracts and how it always favors the person who is drafting them. The discussion then revolves around managing the properties through self-management, a la carte services, and flat-fee property management. Muthiah shares how he got interested in income properties and also explains his Property Management Survey. Jason also discusses the four options for property management that should be available to every property owner.

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Announcer 0:12
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. Real estate investors.

Jason Hartman 1:04
Hey, it’s my pleasure to welcome one of our clients back to the show, we actually recorded another show a while back. We didn’t air it yet, because we kind of thought we could do it better. And he’s just such a great contributor. He’s been to several of our events. He’s got nine properties through our network, and that is Messiah from Los Angeles. mithya. How are you?

Muthiah Nachiappan 1:21
I’m good, Jason. Thank you. How are you?

Jason Hartman 1:23
Well, welcome. Welcome. And thank you so much for the preparation you did for this podcast interview, I think the information that you’re going to share here is going to be very valuable to all of our other clients. So I just want to first say how much we appreciate that. I’ll say that on behalf of my company, but I want to say that on behalf of all of our clients, because I just think what you did here is really, really valuable. I’m looking at the stuff you sent me in preparation for this interview. You may be more than any of our other clients have really delved in to property. Management contracts. And what I believe is this outdated, outmoded, in many ways dysfunctional model of property management. And as I say, you know, the two biggest challenges we have in our business is well right now, and this will change, it always does its dynamic and ebb and flow, but lack of inventory of properties. So we really, inventory is very scarce very tight for the past few years, seems to be getting worse, frankly. And property management. Those are the two biggest challenges we have. If we can, if we can solve those, everything will just be rosy and wonderful. But Matthias what kind of caused you to get so interested in the property management part of the business being an investor with nine properties?

Muthiah Nachiappan 2:54
Jason, I have a habit of reading everything in time.

Jason Hartman 2:57
It’s a good habit.

Muthiah Nachiappan 3:00
To my detriment I did I do read all these property management contracts that come that I have to sign and there are things in there that don’t seem don’t seem like it. So anytime, you know, I’ve seen a lot of leases over my time and a lot of the leases and agreements they always pay with the person who’s drafting it. And in all these agreements were drafted by attorneys for on behalf of property management companies and you know, as a as an investor, you know, always looking at myself, obviously, each investor and so there are things in there that I’m not really comfortable with and you know, half the time you go back and forth and, and the argument often from the property management company is hey, look, you know, this is what everybody signs and, and we can change it just for you. You know, that type of thing. And so, I was I was able to change a few things, you know, here and there that seemed important to me, but you know, certain things I don’t really bother even negotiating because it’s not worth in the long run the big the big pictures of personalities. reactions. Well, you you gotta you gotta As the old saying goes, you got to pick your battles, right? So,

Jason Hartman 4:05
yeah, yeah, absolutely. But what I think ultimately needs to happen is I want to disrupt the property management industry. I want to see self management become more popular. And certainly we have made a dent in that it has become more popular as we’ve been teaching it for the last six or seven years now. And I also want to see all a cart Property Management Services. Why is it that most property managers out there expect you to just sign up with them? And they do the whole kitten caboodle? Why can’t you just buy the service you need? Right? So those are two things that I want to see. And then the third thing is what I proposed maybe four years ago, God I don’t know time goes so fast. Maybe it was five years ago now. At our meet the Masters event, which was this flat fee, property management and you did a beautiful spreadsheet on that, that I am looking at now, and we’re going to talk about that, where the manager just charges a flat fee. And I think this is the way to go. I really like this plan. So where would you like to start with it as we dive into this?

Muthiah Nachiappan 5:14
Well, we can start with, you know, like, like, like in any business right there good property land companies and bad property management companies. And as an investor, you know, going into this, you know, not everybody’s, you know, experienced investor, you know, most of us are just starting out, you know, I think that what what do you look for in a property management company, when you first get started, I think that would be a good place to start and then maybe that, you know, from that it can evolve into other areas.

Jason Hartman 5:43
Absolutely. Okay. Good. Talk about that, you know, in terms of what you look for, you’ve got the, what you call the property management company survey. And I just love this, you know, you’ve you’ve, you’ve gone over, you know, several items like the lease up fee, the re renting fee or the renewal fee. Other fees, if any, you know, monthly management fees, pet fee and deposit, maintenance advertising, late fees, rent do uncredited and you know, statement of accounting of rents. Tell us about that?

Muthiah Nachiappan 6:13
Well, I broke these fees down based on the nine different agreements. And I actually may have seen up to a dozen, you know, I looked at these and pulled out the different fees that these companies charge and, you know, and so I figured that, you know, good to see what were the biggest chunk of your your rent is going, you know, the biggest chunk of your hands, obviously going to the to the to the management company, and the management team, just really, maybe not a whole lot at 10%. But then you start, you know, nickel and diamond with these, you know, other fees and they don’t want to share those fees.

Jason Hartman 6:51
I call I call those garbage fees. There’s a bunch of garbage fees in there. But listen, folks, as I as I say that don’t think of it as too derogatory because everything has been Garbage fees, you know, hotels are now doing resort fees, this fee that fee, you know that these are all garbage fees, you know, they’re all over the world. So, you know, it’s not just managers doing that, but But yeah, you know, they’re not the they’re not the apparent obvious fees, right are these extra things they, they kind of slip in there and a lot of people aren’t really thinking about him. And Mutharika. Before we dive into this, I’m actually Sorry, I didn’t ask you about this before, but it’s always nice to know where someone’s coming from. You’ve got nine properties now. What do you do for a living and you know, give us a little bit of your background first, just so we’ll understand kind of how you how you think maybe?

Muthiah Nachiappan 7:36
Sure. Well, look, you know, I mean, I’m actually a real estate broker. I’ve done some loans and things of that nature but I you know, it kind I started out as a broker. And really what the rates all got started was I became a broker and I went to get my fingerprints and I couldn’t find a place in downtown LA to get my fingerprints. I had to drive 15 miles to get my fingerprint. And I thought, well wait a minute, this this looks like it was a market this was around 2008 that time where mortgage brokers are not doing that well and so I said, Wait a minute looks like this might be something that there might be a need, you know, and always when there’s a need for need to make some money, that’s generally the business concept where people make money. So I slowly got into, you know, setting up this business where we got, I got certified to the FBI, the Department of Justice, what the equivalent went through training, and then you know, just started and then the mortgage brokering business fell off and this picked up. So that’s what happened. So I started doing the run background checks and all 50 states we do Department of Justice, the FBI, criminal background checks for, for immigrants for professional occupants and professional licenses, lawyers, doctors, nurses, children, learning people who are come in contact with children, oh elders, those sorts of things. So there’s a there’s been a market for that. So I’ve been fortunate to make a living at that. And so I did that for a few years. And then I just started you know, slow angling, I listened to your podcast and I looked at other things to do as well and, and your podcast got me interested in investing. And I started very slowly in all in a matter of three months, I bought three properties and then slowly started taking up and I’ve been doing properties, I basically refinanced my primary home, took the money out of that and bought some properties. And then I used this conventional financing and you know, what other property so it was not an easy process because it’s family, Fannie Mae, Freddie Mac guidelines are so strict and the requirements are so so rigorous that it took me a while to, to close on the last four properties that I close on, and I closed for before the end of last year. And so it became more and more difficult. And so but anyway, that’s what I did, and I intend to continue, you know, buying, but I’m looking at maybe doing something unconventional maybe doing seller seller financing, some lease options, that type of thing. And other than just going just with the conventional way of buying properties. Yeah.

Jason Hartman 10:14
Okay, good. So what else happened? First of all on your business? Did you open a fingerprinting business?

Muthiah Nachiappan 10:20
Oh, no. Right? No, no what what I was going to say was, the way it works is and I don’t know all the I don’t know the specifics in terms of how they do the the calculations, but when you when you have a business and you have a show a profit, and I have an S corp, so basically, they take the profits that added to your your income, and then just kind of, you know, escalate your income. But by the same token, if you have a loss, they basically offset the income against the loss. And so when you calculate your debt to income ratio, it really hurts you and you’re very tight in terms of qualifying for a loan. So that’s what happened for me. In 2013, the business that I was running was had a little bit of a loss, you know, and and so that affected my my ability to borrow more money. And so that’s why I kind of stopped at nine you’re starting, but for and then I’m looking at other ways of buying property right? Yeah. Okay. Okay, good.

Jason Hartman 11:21
So on the property management agreement side now that you we got a little background on so that was great. Tell us, you know, what, what your thoughts are about this property manager, survey, property management company survey, you’re using this to really understand what you’re getting into. Right.

Muthiah Nachiappan 11:39
That’s the key to it. Right. And I think it’s also important for property managers to look at this survey because I don’t know if they’ve done an internal analysis on what their fee structure is because they know they’ve been doing this for a number of years. I don’t think they’ve sat down and broke me down and say this is what we’re talking with this dad and the other, I think allows them to look at all the fees they charge And make a make an informed decision on whether or not it would be worth a while to just charge a flat fee. No and everything is transparent. There’s no hidden fees. And other things like the markup fees on on maintenance, you know, the, for example, a lot of them become very common practice, among the other many property management companies if they, if you if they call a maintenance person into your, into your rental to fix something, then they will charge, you know, up to 30% on top of what what the maintenance guy charges you. You know, I don’t know how you know why that’s even necessary, right. And I think

Jason Hartman 12:37
the thing to do is to empower the tenant, you know, the property manager doesn’t even know something is wrong until the tenant reports it. That’s kind of the irony of this situation, is that if you just work with your tenant Now, granted, you know, there are bad tenants out there, we all know that. But if you just kind of work with your tenant, a lot of times They can be your best ally. I mean, I get, you know, I try to get my tenants to, I was gonna say I get but I don’t always get I try to get my tenants to, to, you know, basically get into partnership with me here. And you know, you get some there are some really great most tenants are wonderful people, they’re just people, they want to have a nice place to live. And they are our customers, you get some bad ones for sure now and then but by and large third grade, you know, so, so, okay, go go through this survey a little bit more, you know, lease up fee re rent fees,

Muthiah Nachiappan 13:33
right? These are the cheat that I have. And I think people know, it’s like, it’s like mutual funds, right? But they have all these hidden fees. I’m going to sit down and break it down. You don’t really know how people just think that this thing a flat fee, but there’s all these that Tony Robbins had a book published a book not too long ago where he had like 16 or 17 different fees of mutual fund companies charge all hidden, you know, unless you, you know, you you really know what you’re looking at. They’re all hidden and you just think that Getting this your return. But in that within that region, there’s so many hidden fees. So I’m just saying that look, as an investor, if you’re looking for a return on investment, you want to look at all the fees that you’re charging and see if you’ve been charged and see if there’s a, there’s something you can negotiate before, you know ahead of time, you know, and the point, you know, in addition to the fees, right, let me just go through the future use of fees the fee that they normally charge when they find a new tenant for the property. Now, here’s the thing that can be as much as 100% of the first month’s rent, so basically get nothing the first month’s rent and you get nothing, the whole fee is is gone. When they find a tenant for you and the property is vacant. I’d like to buy a property with a tenant in it. But but that’s the least of that. So basically lost the whole first month’s rent. The other thing that returned for you they find a new tenant for the property in the second year. Then they charge you a fee. Again, that’s another you can go from 60 to 80 from 50 to 100%. Average is a pretty big chunk of money, you lose a whole year’s worth. And then

Jason Hartman 15:00
some but sometimes and here’s here’s the odd thing about it. Sometimes there’s no renewal fee, or sometimes the renewal fee is $150, or $100. So it’s all over the board. And here’s the problem. This, this old fashioned philosophy of property management is out of alignment. Whenever you get into a deal, you want to have a strong alignment of interest, the owners interest is to get as much income out of the property as possible. The property’s managers interest is to make as much money as possible, why can’t we put these two things together? You know, rather than having all these diverse motivations, so let me just tell you about that.

Muthiah Nachiappan 15:45
In also, besides the owner in the management company, the tenant, the tenant is the one that’s being a being the thing. So I think aligning the tenants interests as well. You know, if you make it hard for the tenant to stay there, they’re not going to stay there very long. They’re not going to stay. Yeah,

Jason Hartman 15:59
yep. Exactly. So here’s what I was gonna say about that. Some clients will say, the property manager is not aggressive enough on rent increases, they tell me to just not raise the rent or to raise it a very small amount when I know I can get more and and then they’ll they’ll say, well, the property managers being too lazy on getting me a higher yield. But then others will say, well, in they’ll say that one of the reasons is they’re lazy. They don’t want to have to go replace the tenant if they decide to move when the renewal comes up, right. But then, on the other side of that spectrum, you’ll get a different client that says, Well, you know, these property managers, they always tell you to really jack up the rent, so that the client so that the tenant is incentivized to move because if they move out, they can charge you another lease up fake. You can’t win in this debate, right? Nobody knows really what the real motivation is right? We totally see that you see how it’s the exact same set of circumstances in two completely different belief systems, right? So here’s what has to happen. We have to have a flat fee system where you as the investor, pay a higher percentage, but it’s simple. It’s totally flat. every dollar that comes in, the property manager gets a certain defined percentage of that dollar. And if the dollar doesn’t come in, they don’t get anything. And then I believe there is an alignment of interest. That’s why I proposed this idea about four years ago at meet the masters. And, you know, nobody really took me up on it. I, I didn’t really push it too hard. I have mentioned it on the show over the years. But let’s talk about this spreadsheet a little bit. Okay, so we see from just what you haven’t even gone over All of these 18 items yet we see that there’s a misalignment of interest, right? Let’s see if we can get the interest aligned. Okay. Tell us about your spreadsheet here.

Muthiah Nachiappan 18:08
Well, look, I took the I took the three most common fees that are universal in all property management agreements, they were the the managing fee, the lease fee and the property inspection fee. All the other trees exist to some to some extent or the other, but these three trees seem like they exist in all contracts. And, and I analyzed them from 8%, assuming the management fees are 8% 9% 10%, you know, on a $1,000 per month progress, right? I’ll just make the numbers easy. So $1,000 a month. So having if you do that, you know, the basic the total fees on an 8% or one year it’s all annualized. So one year it’s 1710. For the 8% of the total just in fees are 9% is 1008 30 and 10% 1000. 50 but the annual rent is 12,000. Throughout, because you can throw 1000 bucks a month no matter which way you go. So as a percentage of the rent, you’re paying anywhere between 14 and a quarter percent is 16 and a quarter percent. You know, that’s, that’s what you’re paying, you know, if you look at it, that’s, that’s a sizable amount, right? I mean, you could be whatever. I agree. I agree.

Jason Hartman 19:21
And a lot of times this is this is not this doesn’t happen on the first year because the property will be pre rented or they won’t charge the lease up fee for the first tenant. But then after that, you got to pay it right. And sometimes, and to be fair, sometimes the tenant will stay for two or three years or half, maybe even longer. Okay. And that brings that number as a percentage down quite a bit.

Muthiah Nachiappan 19:46
No, it does bring in vendela five percentage points, it brings it down. So that’s why I’m saying even if they don’t charge the lease fee or you bought you buy a property with a tenant in it, or if you already bought a property the tenant in it, then There’s no reason for nissa t because you buying it as it is. And the second year of the Terran continues to stay there, there’s no lease up fee, you know, maybe the renewal fee of 150 bucks, which is negligible if you break it down over 12 months is nothing. So if you can take the same management fee as a percentage of rent, and you remove the lease fee from this equation, you get, you know, between anywhere between nine to 11, or 12%. And that’s why I think that maybe it would be better these if these, that’s one of the questions I have in my survey is, Hey, you know, you know, would you consider switching to a single flat percent of percent monthly? The property management fee, yes or no? If you answered yes, what is the percentage fee would be, what would be the percentage fee? And if you answer No, provide your reasons. See if they look at this, right. I mean, they basically making it 10% anyway, and they’re getting all these bickering going back and forth between the investor and Marissa things they know this will trust versus gotta trust the management company. I gotta tell you something. There are a few companies in your network that I trust implicitly, I’m, I don’t have to do any work at all, they do a lot of the stuff for me, they find the best insurance for me. I mean, they do everything. So on the other hand, there’s some others that I have to go out and shop for this, that and the other, and I have to call them, you know, spends more, it takes more of my time. So the more value that a property management company can add to this relationship, it will be much better for all parties. I couldn’t agree more. And, you know, this comes down to the old thing is that, you know, it’s the question of thinking long term in business, or thinking for today. It’s instant gratification versus long term thinking. And, you know, just humans think differently about that.

Jason Hartman 21:43
So I say the, the solution to this is number one, you know, there are some options, either self manage your properties and learn how to do that. It’s really a lot of times it’s easier, frankly, if not self manage. You can propose an all a cart Property Management relationship that the blend that I like is having your property manager, do the lease up and handle things between tenants. But the rest of the year, just collect the rent directly, just have them pay you. And then you’ve got that manager there. If you need a local contact, if you need some help, you can just call them up or you know, email them and they can help you and they’re going to be happy to do that because they want to earn your business, right? versus if they have you under contract. It’s more like they’ve got you and they become complacent. You know, it’s it’s just human nature. That’s just the way things are. Okay. That’s the way humans are. So when it’s a transactional relationship rather than a contracted relationship, I say you get better service, which is odd because you pay less to

Muthiah Nachiappan 22:52
it. Well, one of the things I did one I did want to mention before I forget is you know, this thing, I don’t know, maybe you can, you can enlighten me on this. You know, the rent, rent is due on the first becomes late on the set, right? Generally that’s it, that’s the thing. And then you don’t get it till the 20th.

Jason Hartman 23:08
Well, yeah, sometimes Another benefit of your rent sooner, you

Muthiah Nachiappan 23:12
know, sometimes they don’t they don’t credit your account to the following month. There’s no reason for them. That’s wrong. That’s, that’s, that’s ridiculous. Yeah, they float and

Jason Hartman 23:21
I can bring that over 100 properties, you know, you’re collecting month, people’s rent and then holding it, you know, under the pretext of saying, Hey, you know what, there might be expenses. So we want to wait for, for all expenses to be paid. Wait a minute, you already have $500 of minimum reserves that you already holding in a market in a market if there were actual interest rates paid on savings. And you know, this wasn’t a trust account, I would accuse them of making money on the float. I can’t do that now because there’s no money to be made. But yes, in a normal world where we had normal interest rates, not these exceptionally low interest rates, that would be absolutely true. I think right now Just customer laziness, but it’s ridiculous. If you self manage, then you don’t have that you get the rent right away. My mom self manages all her properties all across the country. None. None of them are local to her. She doesn’t own any properties anywhere near where she lives. Okay, you know, some of her properties are 2000 miles away from her, okay, and she self manages everything. Now, I think she does too much. I think she could do a nice hybrid arrangement where she wouldn’t go out and do lease ups. Frankly, she’s retired. I think she just kind of wants something to do. Okay. And I’ve had her on the show talking about that. That’s not very logical. Okay. So, look at the third option. You know, remember, I was telling you three options, you know, there’s really four, you can go into your typical property management relationship. And if you have a good property manager, it’ll be great. Most of them are pretty good or mediocre ish or mediocre to good. You know, they’re on like the, the 70%. They’re like C and above. Right most property managers, but some are like, you know, C and D and some are F’s, they’re terrible, okay? They’re all over the board. So you if you get a good one, a traditional property manager arrangement is not going to be too bad. Okay? It may be fine. Okay, and I have some great ones and I have traditional deals with them and it’s fine. Or the next step is you can have a hybrid arrangement, okay, where you pay all a cart for services. Okay. The next one is you could completely self manage your property. And the one we didn’t mention, which is really what your spreadsheet is about, is you could do a flat fee arrangement with your manager, where you actually pay them a higher percentage, but there’s no garbage. There’s no they don’t get to keep the late fees. They don’t get to charge you renewal fees. They don’t get to do any other fees, except you might pay them say for example, tene percent instead of eight or 9%. And you might be thinking, well, that’s crazy. Not really, okay, you know, that could be a better deal. And even if the deal isn’t better, you can’t hear the dogs that don’t bark. And here’s what you can hear, you can hear that that tenant becomes a happier tenant, because they’re not dealing with a property manager that’s incentivized to be predatory and charge them late fees. Or, you know, they’re, they’re, you’re you as the investor aren’t dealing with a property manager, who’s predatory and wants to ding you for a bunch of little miscellaneous fees, right? Everything is simple and aligned, and it’s just a clean deal. And this is where the industry needs to go. If it wants to survive. You know, one of the old look at your sort of into the technology world I know Messiah, you know, one of the things We’ve really all realized in business the last few years is that successful companies are willing to take the risks of cannibalizing their own business, before a disrupter does it to them. And, you know, look, for example, if the taxis would have done that, if the music industry would have done that, okay, they wouldn’t have suffered so much in the transition. You know, the taxis got killed by Lyft and Uber, the music industry got killed by Casa and what is it Napster? Okay, you know, they wouldn’t have had that if they just were willing to disrupt their own business preemptively. And this is what the property management business has got to do. They need to disrupt and cannibalize their own business and they will win. That’s what I say.

Muthiah Nachiappan 27:47
The group, they’re in the comfort, they’re sitting in the comfort zone. They don’t want to get to get uncomfortable in doing something they’re not used to doing. That’s a problem. But but i’d honestly say if we look seriously at a long term relationship that they have with, with the investor, I think it would be in their best interest to move away from the model that they have right now, because it’s not, it’s not something that’s, I don’t think it’s sustainable given given all the new technology and how you’ve done podcasts on, you know, keys, please and other things where you don’t really need these guys to do stuff for you, you know, I mean, you can, you can like, like to say, maybe do a hybrid, you know, maybe use somebody for just leasing it out and somebody for maintaining it, you know, and then just the checks come to you. And there’s no waiting 45 days to get the check and just just so many different things that that people wanted that get smarter about how to manage these properties. Now, you don’t have to get rid of they’re not i’m not saying get rid of the property management companies, but I think using them in a more in a more efficient manner. And I think once you do that, then the property managers become wise to the fact that maybe they should change their business model. That’s my

Jason Hartman 28:58
Yeah, absolutely. Absolutely, this is the hint. And you know, look at I want to say you mentioned mutual funds or earlier Messiah. And you know, look at even though it sounds like we’re griping and complaining about this stuff, which we are, okay. But you know, we we want to cause some change, okay, we really want to cause some change and disrupt this industry, and be the forward thinking people here. And I’m so glad that we have such intelligent, interesting clients that are so engaged, and we theia Thank you for coming on the show and talking about it. But at the end of the day, this is a zillion times better than any wall street investment, any you know, fund of sorts or any pooled money investment, you know, invest in someone’s private placement memorandum, their LLC, you know, they’re always skimming the profits off the top there, at least here if you read the contract, you know, where the money’s going, right. So, it’s not, you know, it is transparent in that sense, but, and you know, when you gave the mutual fund example, I was thinking Messiah, you didn’t even mention all the skimming that’s going on at the level of the companies in which that mutual fund invests. So the mutual fund has all these hidden fees, right? But then there’s a whole nother layer to the onion. And that’s the graft and corruption of all the executives at the company in which they invest right there. They’re paying themselves the big fat bonuses, they’ve got expense accounts, they’re going on first class trips, they’re going wining dining and people you know spent that’s all your money folks paying for all that.

Muthiah Nachiappan 30:36
All the while while your investment is tanking every day, you’re not learning anything. These guys are living high off the hog. I you know, I’d love the thing is in order for for them to to, to have that kind of, you know, to charge those fees. I mean, they, the problem is is nothing is transparent. Most people are not educated enough to drill to look through their statements and see what the feed was learning open the door. statements. That’s the thing you see. And you know, all you gotta do is open your table you see all this, you know, you got to go through and read your stuff and then you’ll find out all these fees is getting charged and and most people just leave it to someone else to handle it and then they cry afterwards about, Hey, you know, I’m losing money here then. Yeah, they do they do.

Jason Hartman 31:17
And so that’s what I also want to tell people this is not a new thing. You know, I’ve said this many times before, but is it the beginning of the relationship with your property manager? And if you’ve already had the same manager for years, then you know, start today, okay. really pay attention at the beginning and set the tone that you are an aware investor, ask questions about this fee about that fee about that expense, what is that, you know, and and get it all down so they know you are paying attention. They know you are an attentive investor, who is aware and who is not going to be you know, Feed, okay, so just set the tone. And if you haven’t done that, and you’ve had the same property manager for three years, then do it next month when you get your next statement. Okay? And just set the tone for a while, you know, be courteous, don’t be rude, you know, don’t be difficult, but make sure they get the message. You are paying attention.

Muthiah Nachiappan 32:20
Okay, right, absolutely. No, I need to know you’re spending your money. You know what you’re spending nine. There’s certain things I’ve tried to follow your philosophy, okay. $250 per per, per month per property. You know, this, I mean, it’s difficult to enforce that a lot of them want $500 just fine, you know, but don’t you know, I mean, you’re going to spend you know, spend investors money let them know where it’s going, you know, I mean, that’s all I mean, so you can’t argue them for every like you said pick your battles right you know, but if they’re going to charge you all kinds of fees and which you didn’t even agreed to, you know, I mean, I look there were there was a I got my bank. My Account was credited you know, for With a 10% fee, and I said, Wait a second, I just signed an agreement you guys for 8% What are you doing? Oh, I’m sorry, it was a mistake, we’ll credit you the other 2%. So those kinds of things, you got to catch them, right? Otherwise, they just you just think that Oh, they crediting you nobody’s perfect. And that’s all being done by human beings anyway. So you know, somebody will make a mathematical error or somebody may make an error. It’s your money if you if you want to, you know, see, make sure it’s done well, you know, you need to do it or hire a bookkeeper to do it. But you know, I mean, I don’t know. I mean, just paying attention to the details I think is important. Absolutely. Well, I think

Jason Hartman 33:33
we covered it in Messiah. Thank you so much for preparing this information. Really good stuff, you know, on the positive side, what’s next for you with your investments in your portfolio? Are you looking to buy in any more markets? Tell me Yes. No, I am Jason. I am you know, I I like new construction, you know, only because they require less maintenance. You know, I’ve got one in Ohio that I’m buying one in Tennessee. That buying Yeah, you pay a premium for it, but it is more convenient. There’s no question. Yeah. So you’re buying in Ohio and Tennessee right now.

Muthiah Nachiappan 34:06
Right, right, Ohio and Tennessee. We’re both new construction is gonna be done in March or April. And I think there’s something that carries me saying something’s coming up in Dallas, and we’ll look at that, but I don’t want to go too far out, you know, I’ve got four markets and then Tennessee, Ohio, Alabama, Mississippi. So that’s where I’m at. And, you know, I like Tennessee myself. Stop at five. Don’t go Don’t go more than five don’t go more than five just just double down in the same market now. Okay. You know, this is one of the mistakes I made and don’t make the mistake I made that’s,

Jason Hartman 34:42
that’s, that’s why you’re here listening to you know, you can learn I spend the money and I make the mistake and you just get the lesson. Okay? So, don’t over diversify. Definitely do diversify. It’s a you know, it’s a commandment, thou shalt diversify one of my 10 commandments, but don’t own diversify. So three to five markets are enough. That’s enough diversification not more than thought

Muthiah Nachiappan 35:06
okay, I mean I’m still looking at you know, every day and looking at different different things that are coming up and looking at these deals and seeing what would work and you know, some you know, I know the inventory is limited but there’s still some that are good you know, I mean, I’m just a matter of looking and going through stuff and hopefully making the right decisions, you know, it’s not all Gavan golden I’m sure you make mistakes and I’m sure I’ll make them I made mistakes and make them but hopefully at the end of the day, you know, with these rental incomes will allow me to just retire that’s the whole that’s the objective objective of doing this so that no, we don’t have to you can do what you want when you want and drive a Tesla when you want. Yeah.

Muthiah Nachiappan 35:55
Good stuff. Good

Jason Hartman 35:56
stuff. Well, hey, Matthias. Thank you so much and happy investing. And we really appreciate you contributing to the show and sharing with everybody and, and folks insist on some of this stuff we talked about with your property managers. And let’s together, let’s move the needle on this and let’s get some new thinking into this industry. We have thousands of clients out there, and way more listeners than that. We are a powerful group, folks. So let’s move the needle. I have a dream. There you go. Not quite as inspiring as the original guy who said that but you know, there we go. Alright, Matthias, thanks a lot happy investing in thanks for having me on your show. Jason. Thank you.

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