rents2riches property management business fast tracktrack/rents2richespmfasttrack.pdf ·...

Rents2Riches Property Management Business Fast Track

Rents2Riches Property Management Business Fast Track System Coach Pat Rogers

Table of Contents Introduction, Personal Message ................................................................................ 4

Business Establishment ............................................................................................. 5

Business Name ...................................................................................................5

Vision, Mission, Company Commitments: Do This First!!! ..................................7

Licensing ............................................................................................................8

Insurance ...........................................................................................................9

Business Entity Selection....................................................................................9

Marketing Research ................................................................................................. 12

Local Rental Housing Market ........................................................................... 12

Competitive Analysis ........................................................................................ 13

Budget / Financials .................................................................................................. 14

Marketing Plan ........................................................................................................ 19

Website ........................................................................................................... 19

Social Media .................................................................................................... 20

Direct Mail Campaigns ..................................................................................... 21

Physical Advertising ......................................................................................... 23

Google Adwords .............................................................................................. 24

Referral, Word of Mouth ................................................................................. 24

Networking ...................................................................................................... 27

Other Media (TV, Radio, etc.)........................................................................... 28

Your First 30-60 Day Schedule ......................................................................... 28

General Operational Best Practices ......................................................................... 30

Enlist Your Team .............................................................................................. 30

Client Relations ................................................................................................ 31

Client Forms / Contracts .................................................................................. 32

Tenant Relations .............................................................................................. 33

Tenant Forms / Contracts ................................................................................ 34

Laws and Regulations....................................................................................... 35


Key Performance Indicators .................................................................................... 38

Accomplishment Goals Vs. Process Goals ........................................................ 38

Operational Policy Manual ...................................................................................... 40

General Office Policies ..................................................................................... 40

Sales/Potential Client Meetings ....................................................................... 40

Property Rental Amounts................................................................................. 40

Accounting ....................................................................................................... 40

Tenant Policies ................................................................................................. 42

Client Trust Account Policies ............................................................................ 42

Leasing Procedures .......................................................................................... 44

Marketing Properties ....................................................................................... 44

Showing Properties .......................................................................................... 45

Move In Property Inspection............................................................................ 45

Tenant Screening ............................................................................................. 45

Tenant Required Forms Upon Move In ............................................................ 47

Tenant Rent Policy ........................................................................................... 48

Evictions Policy ................................................................................................ 50

Collections Policy ............................................................................................. 51

Utilities Policy .................................................................................................. 52

Pet Policy ......................................................................................................... 52

Tenant Move Out Policy ................................................................................... 52

Maintenance Policies............................................................................................... 55

Functional Business Plan ......................................................................................... 58

Developing Your Business Beyond YOU! ................................................................. 62


Introduction, Personal Message

Dear Aspiring Property Management Business Owner,

This Rents2Riches Property Management Business Fast Track System is intended for anyone who wants to start and run their own property management company. It is also intended for existing Property Managers to utilize as a tool for ideas.

This Rents2Riches Property Management Business Fast Track System are the lessons learned and best practices that my wife and I utilized to start our own property management company from zero properties. Now, important note: this business is not for those that are unorganized. Or, if you are, then learn and utilize the systems I have included that will allow you to be more organized. This business is very administrative and accounting intensive. However, for the right people, this plan will show you how to make $100,000 after year 1 and work only 5 hours a day, or less on average. Oh, by the way, you make your own schedule too! How cool.

How to use this guide: Read the whole thing through once. Don’t worry about memorizing anything or over analyzing the information. Get licensed; reviewing my recommendations for business name, website, entities, etc. Once you are official, get a lease and a contract approved for your state and START MARKETING. Go back and read the appropriate section in the guide as you need it.

The real part of the business that is magical is when you start adding people to manage your properties for you. This is when you can make the $200,000 per year and work less than 3 hours per day average, or less if you develop your systems properly and employ management systems that I teach.… Even cooler. This will come after year 1 or 2. Maybe sooner if you are on fire like I really hope for you.

Everything you need to create a thriving property management business is enclosed in this Rents2Riches Property Management Business Fast Track System, even the Rent2Riches Property Management Forms. However, the top players who want to grow the fastest can become part of our Rents2Riches Group Coaching Program, where we meet for an hour once a week over the phone. This group is for those who are ready now to create a lot of money in property management right now. Once a week, for 6 months we meet with a group of other aspiring property management business owners and from start to finish we get your business rolling. Something special happens to your productivity when you commit to someone else that you will perform an action by a certain date. More details are at the end of this guide.

Bottom line: You need to develop your own systems, using mine as building blocks to ensure that you have your customized system in place. At some point, you are going to use that very same, well documented system and operating plan to train and develop your incoming Property Managers. Without this documentation, your newly hired PM’s will call you all day, every day; because they have nowhere else to go. Makes sense now…doesn’t it?

To Your Success,

Patrick Rogers, Rents2Riches.com


Business Establishment

Business Name

Determine from availability on obtaining a .com and availability in your state business registry online. Search your potential business name up under www.godaddy.com to find an appropriately matching website name. Make sure they are available under both, your state business registry and GoDaddy before you commit. Also, think about your name and how catchy it is. Catchy names are those that are alliterations and repetitions, or those that use double meanings.

If the name is not available under a .com, don’t settle for a .net. If you can be creative and use xxxxxpm.com, then do that (pm stands for property management, in case I wasn’t clear). You will lose traffic and potential clients by registering through a .net alone. In fact, when you buy the .com, you should also buy the .net for $10 more dollars and protect yourself. Down the road, if you do become a large company and attract a lot of online attention, unscrupulous business people will buy your .net and “steal” some of your traffic.

Build Your 5 Year Company Now

Don’t Skip This Section! This Will Determine If You Fail or Sail!

First things first, before you start marketing your company, before you start getting properties, do yourself a favor and read the following book: “The E-Myth, Revisited”, by Michael Gerber. This book explains why 95% of small businesses that start, ultimately fail. I will explain to you as well, however when you hear it firsthand from a national best seller with extreme detail, it might mean more.

If I can summarize this ingenious book in one sentence: “Small Business start-ups fail because owners do not document what they do and how they do it, such that they can create a dynamic infrastructure where employees have clear direction on their duties, expectations and at the same time have a motivational goal driving them.” If you can build your business from day 1 with the intent and expectation that you will be removing yourself from the daily grind and work more on long term direction and actions, then your business will thrive.

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There are a number of steps that are required to do this upfront. The first step will be to create your vision, mission and company commitments. You can do this right now; use mine below as a basis and build your own. These do need to be your own as you will be “selling” this to your employees and ultimately they need to come from you, not me. This will be like creating the framework for what your business will look like 5 years from now, or for whatever time period you are shooting for.

The next step is to go into more detail on what that will look like. For instance, how many employees will you have, what are their positions, create the job descriptions, what is your operational plan, tenant policies, trustee account policies, etc. Now, you may not be able to do this just yet. But the idea is that once you have developed your “best practices”, that you DOCUMENT them! This is the differentiating factor between companies that dive and those that thrive.

Think about McDonalds. How many times have you gone into a McDonalds and not had the appearance look almost identical to every other McDonalds that you have been to? How many times have you eaten a cheeseburger from McDonalds and not had it taste exactly the same as every other McDonalds cheeseburgers that you have eaten. The reason for this is that have developed their ‘system’ for how to operate a McDonalds franchise. They already know that it works, so don’t reinvent the wheel on every McDonalds, just repeat and repeat and repeat, etc. You get the idea.

The same concept holds true for your business. Think of yourself as the very first McDonalds in the John Jones (insert your name there) Property Management industry. When you get up to about 30-60 properties, depending on your abilities and desires, you will be looking to start producing more McDonalds. However, if you do not have your operational ‘systems’ and training documentation in place, you will spend all of your time watching over your new McDonalds, fixing it’s problems instead of it taking care of itself.

Now, if you only want to make $2,000 - $3,000 per month, then don’t worry about McDonalds, all you have to do is maintain your 30 properties or so (which, by the way, is perfectly fine). But if you want to work <6 hours per week, own a thriving company which delivers $300,000 per year, (or more), than systems is where it is at!


Vision, Mission, Company Commitments: Do This First!!!

Vision

This is where you want your company to be 5, 10, 20 or 30 years down the road. This is your impossible future that you want to obtain. Go for something grand that seems unachievable. I recommend establishing a 1 year impossible future separate from your long term vision, usually related to a financial amount.

Our 10 year vision: To be the number one property management company in Southern Oregon, with an unmistakable reputation as the property management company that provides its clients the best service, most cared after properties returning the highest return on their investment.

Mission

This is what you do, who you do it for, and what the benefits are to your customers.

We provide effective, professional property management services for residential and commercial property owners. The benefits to our owners are:

1. Reduced vacancy times, reduced maintenance costs and increased rental incomes resulting in higher profits for their investment.

2. Eliminate the hassles of being a landlord and the associated tenant issues.

3. Improved quality of life as we eliminate the time necessary to properly manage properties.

Company Commitments

These are the ‘core values’ of yourself and your employees. These are important as you build your business. You will want all of your employees to have the same commitments that you have.

1. We are committed to integrity and honesty to our clients, tenants, our team and to ourselves.


2. We are committed to outstanding customer service to our clients and tenants alike.

3. We are committed to being excellent communicators, even over-communicating to our clients and tenants.

4. We are committed to making business decisions that are in harmony with our vision and mission statements.

5. We are committed to personal and professional growth and development of our employees.

6. We are committed to only open, positive and valuable communications with all whom we interact, including ourselves.

7. We are committed to a fun, family oriented workplace.

8. We are committed to being a sales driven organization, seeking continual improvement through specific measurable financial goals

Licensing

Some states do not require a Property Management license before managing other people property. Some states allow you to manage property with a standard Realtor license, some require a separate Property Management exam be passed. You can go to your states real estate department to find out for sure. For states that require you pass a test, you can also usually find companies that offer home study courses to learn from. We found that they were very helpfully in helping us concentrate on the most important factors in our states property management law and they also helped with practice exams. First you must pass your states exam. Then, depending on the requirements for your state, you may need to have a background search completed with fingerprinting, etc. Once this is complete and you have received your proof of passing the exam, you can submit your application with the required state fee. Then you will receive your license after a few weeks. It took about 3 weeks in Oregon.


Insurance

Commercial General Liability (CGL) insurance and Errors and Omissions (E&O) are a necessity in this business. There are some Property Managers that operate without it, however in my opinion they are lucky to still be in business. Every day that you operate your business without insurance you are operating with a serious liability. Once you start having payroll and employees you will need to acquire workers compensation insurance as well.

E&O insurance is geared towards protecting against claims of negligent acts, misleading statements, or representations committed in the course of performing your property management duties. General liability insurance protects you against physical injuries and property damage, including a customer who is injured on a business’ property or a damage that is caused by an employee on a customers property. It also covers personal injury and advertising injury (damage from slander or false advertising).

For example, let’s say that you manage a 3 bedroom house and you just had a new tenant move in 2 weeks ago. You receive a call on Friday afternoon that her house is flooded. She states that the leak came from a faulty pipe and she also states that she told you about it twice. Whether she did or not, guess what….you have a potential legal suit on your hands, especially if insurance would not cover for some reason.

There are a million things that you could get sued for as a Property Manager, remember we are a sue happy society. There are a lot unscrupulous people out there that didn’t pay attention in Kindergarten when we learned “Do onto others as you would have done onto you”. Don’t be a liability to yourself or your family, get proper business insurance.

We obtained $2,000,000 general liability insurance and $500,000 E&O insurance. The costs that you will pay for your insurance depends a lot on you, your zip code, physical location, etc. It takes less than 10 minutes to call and get 3 quotes from insurance carriers.

Business Entity Selection

What type of business should I be? The age old question, do you get taxed less as an LLC or as a C or S-Corp? Well, you really need to look into this for your own reasons, but I will explain y we chose an LLC over anything else. My


purpose is not to teach a course in legal entities, nor to give legal advice. To get the real details and find more information, type “business legal entities” into Google and you will find a lot of references that can explain this topic far better than I can.

First of all, it allows my wife and I to be co-owners of our business. This rules out Sole Proprietor. Secondly, it provides legal shielding from our family. This rules out partnerships. This narrows it down to LLC, C Corp or S-Corp. C Corporations are for very large corporations and have a lot of requirements that come along with. Also, C Corporations get double taxed. In other words, the profits for the company get taxed and then the employees get taxed on top of that. Overall, C Corps are very complex, have a lot of requirements and are for very large companies with more than 75 shareholders.

That narrows it down to LLC’s and S-Corps. These two entities are very similar in that they both allow for “pass-through” taxing. This means that the income of the companies are passed through directly to the owners and is reported on their personal income tax. The differences between the two entities is that with an S-Corp, you have the same reporting guidelines and formalities. This means you must have a Board of Directors and hold regular meetings with documented minutes. The other difference is that with an S-Corp you do not have much flexibility with distribution of profits. With an S-Corp, profits are distributed evenly with the percentage of shares that you hold for that company.

So having said all that, why would anyone choose an S-Corp versus an LLC? The benefit to an S-Corp is that as an S-Corp you are considered a true corporation and not “self-employed” in the governments eyes. Since you are not self-employed, you are not subject to paying self-employment tax as an owner of an LLC would be. The entire net income of the business is subject to employment tax in an LLC. With an S-Corp, instead of all income passing directly through to personal you will be paid a “reasonable and fair” salary from your S-Corp. Lets say that your S-Corp earns $100,000 per year and you are getting paid $45,000 per year as salary for being a Property Manager from your S-Corp. The difference, ($55,000), is still passed on to you, however it is a distribution versus salary and is not subject to employment tax. As an LLC, your total employment taxes would be $15,300 (15.3% of $100,000). As an S-


Corp, your salary would be subject to the employment tax: $6,885. Therefore saving you $8,415 per year.

So, the monetary benefits are there. The downfall is the operating an S-Corp is a relatively difficult task in comparison to an LLC. As an S-Corp, you now have to perform payroll and payroll tax for yourself. Payroll taxes must be paid on time throughout the tax year. LLC’s only have to pay once on April 15th.

You need to choose the entity that is right for you depending on your skill set. However, we have chosen an LLC to start out for simplicity reasons. Now that we are going to need payroll anyways and are starting to build a larger company, it is more than likely the right time for us to transition from an LLC to an S-Corp. We will let you know how it goes.


Marketing Research

Rental Housing Market

Starting out, you don’t really have to be an expert on the statistics and demographics for your strategy. If you need to get technical to obtain a business loan, then you better get your pencil sharp and roll up your sleeves. For the purposes of this document I will assume that you are a start up from your house like we were.

However, statistics do come in quite handy in talking with potential clients. You can sound very smart, very easy by taking a quick look at the following information at www.bestplaces.net:

- Local Rental Vacancy Rates - Local % of Homes Rented Vs. Owner Occupied - Median Home Cost and Recent Appreciation - Rental Amounts for Certain Areas / Suburbs

Housing Medford, OR United States

Median Home Age 28 27

Median Home Cost $234,380 $202,300

Home Appreciation -13.30% -4.60%

Homes Owned 56.08% 64.07%

Housing Vacant 4.51% 14.48%

Homes Rented 39.34% 21.45%

Property Tax Rate $10.42 $13.28

OWNER-OCCUPIED HOUSING UNITS BY VALUE

Less Than $20,000 1.51% 3.01%

$20,000 to $39,999 1.65% 4.37%

$40,000 to $59,999 1.63% 5.74%

$60,000 to $79,999 1.38% 7.07%

$80,000 to $99,999 3.06% 8.41%

$100,000 to $149,999 24.58% 19.74%

$150,000 to $199,999 28.50% 14.06%

$200,000 to $299,999 24.63% 16.59%

$300,000 to $399,999 7.94% 8.21%

$400,000 to $499,999 2.07% 4.53%


$500,000 to $749,999 1.94% 4.75%

$1,000,000 or more 0.52% 1.86%

HOUSING UNITS BY YEAR STRUCTURE BUILT

1999 to October 2005 9.94% 10.15%

1995 to 1998 9.36% 6.69%

1990 to 1994 10.98% 6.70%

1980 to 1989 14.15% 14.75%

1970 to 1979 19.26% 17.11%

1960 to 1969 12.24% 12.78%

1950 to 1959 9.51% 11.64%

1940 to 1949 5.69% 6.64%

1939 or Earlier 8.88% 13.55%

Competitive Analysis

Competition Analyzed: You will need to perform this for your area. For ours, we performed a detailed analysis all of the data that could give us strategic information as to their operations. The research is easy to do: Call each competitor and tell them that you are an Assistant for your boss, state that he is an Attorney in town and has instructed you to find an appropriate Property Management Company in town to take care of the 18 units that he has. He is unsatisfied with his current company and wants a new one. If they ask for your bosses name or other information, inform them that your boss does not want to give any information until he narrows his selection down to the Top 3 companies, than he will create a request for proposal. Now ask them the following questions: 1. How many years have you been in business? 2. How many Property Managers do you have? 3. How many on staff Maintenance people do you have? 4. How many Properties do you manage? How many properties does each property Manager handle individually?


5. What is your average vacancy rate among all of your rentals? 6. What separates you from your competitors? 7. Do you specialize in residential or commercial? 8. How do you advertise primarily? 9. Why should we choose you? 10. What is your monthly charge or percentage? 11. Do you handle evictions? Is there an extra charge? 12. What is your policy for maintenance, what do get charged for their time at my rental repairing general items? How about electrical, AC, etc? Assemble all of this onto an excel spreadsheet and analyze the data. You know have a serious competitive edge on everyone else. This information will help guide you to strategically craft your offering.


Business Budget / Financials

Start Up Capital

Minimal Capital: Start Up Costs Monthly Recurring

Cell Phone: $100 $100

Business Cards, should get you at least 1,000 cards $100 $25

Letter campaign: Absolute Necessity. Cost Varies $250 $200 depending on level of aggressiveness.

Local networking groups $50 (BNI, Chamber of Commerce, NAA etc.) (Optional)

Local Real Estate Associations $10 (including realtors, PM’s, landlords)

Quickbooks $189

Computer: (Use home computer and printer if can, if not: $750)

Yard Signs: $150 (Buy 10 for now, you will not $100 Need anymore than that)

Website Costs $500 $10

State, Local Business Set Up Fees $50 $20

Licensing Fees $200

Insurance $100 $100

Miscellaneous Office Supplies $100 $50_____________

Recommended $1,500 $560

Barebones Minimum $989 $335

The barebones minimum holds off on buying a website, does not join any networking groups, and also doesn’t included the annual costs of the state, business cards, networking organizations and office supplies that are spread into monthly increments for financial planning purposes. Also, almost everyone has a cell phone, so to start just use that one. At some point, you will probably need to upgrade your cell phone service contract to cover high minutes. We typically need over 3,000 minutes per month to cover our needs.

It really doesn’t need to be much more complicated than that. Notice that ½ of the above cost is that of the website. If you need, you can wait to implement the website. Although this gives you a professional appearance, it


is not necessary to start. However every reputable business has a website as defined by today’s culture, so I wouldn’t wait too long.. That means you can start up you property management company and be in business for less than $900!

Many people use specific property management software, we found that we were able to use Quickbooks just fine for all of our needs, especially while you are small. Definition of small; less than 200 properties or so. When you get larger than this, it fiscally might make sense to upgrade to one of the available $3,000-$20,000 software packages (yeah, anything worth paying for there will not be cheap)

If you take part in our Rents2Riches Group Coaching Program, we include our Quickbooks template with our package. This can save you hundreds in paying a CPA or worse off, trying to wrestle with it yourself. Also, for one of our group coaching sessions, I pay my CPA to walk through a personal lesson for you on how to use Quickbooks for Property Management.


Work from Home to Start….Smart Start

Explanation of Start Up Costs Not Discussed ElseWhere

Cell Phone

Get a cell phone with unlimited minutes, believe us. You will find that you will be on the phone an extraordinary amount of time. If you try to cut this corner and sign up for a $40/month plan, you will be hit with over usage charges and end up spending $300 in extra costs. The Verizon unlimited plan is $99, other carriers will be similar I am sure.

Another consideration is upgrading to a texting plan that includes at least 500 texts to start. As technology continues to be accepted by society, more and more people are texting instead of talking. We have found that it actually saves us a lot of time. Instead of getting stuck in a long conversation with a tenant, we can now text to get a short answer and get to the point. You will find that you will be looking for every opportunity to conserve your time and be more efficient.

Business Cards

You may think that you have to pay a designer to develop your business cards for you…bah humbug. Everyone has Microsoft office on their computer, right? Use power point and design your own. Microsoft word has some business cards you can use as well. However the best quality for the cheapest price I have found are www.123print.com, with templates pre-made with real estate themes…hey, even better. You can even upload your logo onto the business cards! I recommend heavy weight business cards with a glossy finish. Through 123print, this will cost $53 plus shipping. No-one in my area can come close to competing with that, especially with the ability to design online. More Available Capital If you have more money available and want a quicker start, then you can obviously invest more. However, unless you have Property Management experience, and experience running another type of business entity, we highly recommend starting with a minimal budget and working out of your home. It

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is very easy to get excited about the business and spend a lot of money to look and feel “official” with a leased office space, desks, big fat sign in front, etc. However, this is unnecessarily placing yourself into a difficult situation with instant overhead. You may be asking for failure. You can take significant chunk of the risks out of this start up by keeping costs minimal.


Marketing Plan

First Things First: I will discuss a number of highly recommend marketing techniques that work below, you need to measure the effectiveness of each one for your company. You do that by ASKING every person that calls your number “How did you hear about us?” If you don’t do this simple step, you will have no idea what marketing media is kicking but for you. (with the exception of the internet, which done properly you should know the answer already)

Website

Get Internet Exposure ASAP: You want to develop a website as soon as possible. Interview local website developers and be careful who you choose here as well. If you go with the $400 guy that can build a basic website, yes that is great and will save you some duckets; but will he help you with search engine optimization? I assume that you would like to utilize all sources of potential marketing that is available. The internet is the fastest growing piece of the marketing pie that there is. In the past, the yellow pages was the only way to advertise, maybe sprinkle in some television or radio advertising as well. Now most people are transitioning to going to their computer and searching for what they are looking for under Google or Yahoo!. I am personally a strong Google fan, they have far exceeded Yahoo! In my opinion. More on that later.

But to prove a point, when you are thinking about going to the movies, do you open the yellow pages and look up the cinema or movie theatre number and call them? Or more likely, do you click on your computer on the Yahoo! Movie link that quickly and easily shows every movie in your local theatre, with times of play and a trailer to watch in case you forgot what it was about. I can’t tell you the last time I called a movie theatre phone number and sat through the 10 minutes that it takes for them to finally get to the movie I want. OK, that horse is dead, I think you get the picture, the internet is amazing and you need to capitalize on it.

Hire someone who is an Expert in SEO (search engine optimization) to work on your site. For about $300-400 extra dollars, they can help make you the top search for your local area. It takes time to get there, but it is worth it in the


amount of extra revenue that you will bring in. Think about it, even if it cost you $1,000 to optimize your SEO and be the #1 searched company for property management in your area, how many residential houses will it take to pay for itself? With a 10% fee on $1,500 / month houses, you have paid for itself after 7 houses. You should get a lot more than 7 houses from this alone in your first year!

Don’t go the .net alone to get the perfect name that you want for your business! Don’t do it. You will lose so much business it is not even funny. You HAVE to get a .com. For instance, the website that we were looking for was already taken. So, we added a pm to the end of it to get it to the .com. Probably not the best answer, but we were just learning at the time.

You can go to www.godaddy.com to search for your business name availability on the internet. Also, I recommend using them because you actually OWN the domain name. Be careful, there are a couple online sites that just “register” the domain name for you and own it themselves. Basically you would pay for the cost to register it. Be careful if you don’t use godaddy.

The bottom line is, for a website name; the easier to type, the shorter it is and also is a .com, will be your best bet. Now, you do want to also get the .net and the .org to protect yourself from would be competitors that want your name as well. The cost is minimal, ~$10 each to protect it for a year.

Social Media

This is the latest craze, for good reason. However, this is a craze that can prove to make or ‘break’ you if you are not on your game. For example, there have been companies that are taking a beating online from customers making complaints. Companies have recognized this and have gotten online and started communicating with their customers. Many companies have used the social media as a customer feedback tool and even a way to develop new business, not to mention keep current.

You can find me on twitter as “CoachPatRogers”. Please get yourself a twitter account and follow me. I post the latest property management news, articles

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developments almost every day. Introduce yourself to me, I would love to know and follow you!

So, there is so much that goes into developing yourself in the social media. I will be starting my accounts on facebook, logged in, you tube, etc. I will not even attempt to give you a course on the social media in the business plan, however I recommend that you obtain one once you have gained some traction under your property management business. There are some amazing things that can be done in reaching potential customers through these online social media networks. You can search “how to use twitter for business” into google and you will be prompted by plenty of ads that offer exactly this.

Direct Mail Campaigns

Direct mail campaigns are how we penetrated the market and started to build our business. The thing about any business model and sales in general, is that at any given time, there will be a company that is not delivering value to its customers. So, the goal here is to send mass mail to targeted prospects and targeted demographics to capitalize on your marketing budget.

Many people reading direct mail campaigns would probably frown at the idea at first. What if I told you that you can get, for free, the names and mailing addresses for all of the houses in any area that are non-owner occupied, (ie. they are renting their house out currently). I believe that you would say…no way! The truth is you can.

Can you really get a more targeted mailing list than that? I don’t think so.

Here is how you get it, and believe me, not many Property Managers are doing this, in fact none in my town that I now of. Go to any Title Company and tell them that you are a Property Manager and refer a lot of people to different real estate services. You are looking for a good Title Company to work with and refer business to. Also, you will be buying and selling real estate and would use them as well for that. Ask them for access to their online property information system.

Almost every national title company has access to an online property information system. For example, Western Title has ReiSource, First America


has FirstAm. If for some reason you cannot find a Title Company that can allow online access, then EVERY Title Company should be able to produce paper copy of the reports for you and you can come pick up at their location. This is how we started out.

Simply ask for a “Farm Package” or “Farm Report” from them with certain guidelines that I list below. You can pay for these without a Title Company (ie. Dataquick.com), but why bother when they will give for free? With these programs, you can perform numerous types of farm and search reports that deliver information in any format you like. For instance, when we performed our searches, we picked a zip code that we wanted to target. From that, we defined a certain mileage radius (1 mile, for example) from the center of the zip code. We also only want owners that are not living in the unit itself (non-Owner occupied properties). This is identified by those that have out of town mailing addresses compared to the local physical address. The delivered product was 2,000 names and mailing addresses of all of the landlords within a 1 mile radius of the zip code. Now, send a letter to the folks that live in another state. Wow, does this work.

In our opinion, there has never been a more targeted and cheaper method for anyone to perform marketing. Do you want to know a secret? This is the only method of paid marketing and advertising that we ever used for our company in the entire first year(not regarding business cards and referrals, to be discussed later). And the only thing that we paid for was postage, paper and envelopes. Since then we have found some cheap, online marketing methods that yet again our competition is not utilizing (shhhhh, I don’t want them to find out!)

Think about the facts of utilizing media in advertising: Local Property Managers are marketing and advertising all over town. Think about this, when are people most likely to want to use a Property Manager….when they live far away, not when they live in town. Although, there are some people that do live in town and want to use a Property Manager, but your lions’ share of customers will not come from this. Our demographic of in-town residents that use our services, out of our total clientele, are 10%.

This doesn’t mean you shouldn’t advertise on your automobile, or put an ad in the yellow pages. We can talk about this more in the next section.


By the way, please use the Title Company that is allowing you to use their product, or refer your clients when they sell their properties. It does cost the Title Company something and you don’t want to be dishonest, do you?

Physical Advertising (Signs, Car wrap, etc..)

First step, you need to define who your target market is for each marketing and advertising segment. When we advocate the direct mail campaign, we are targeting the prospect directly. Now, as we discussed, only about 10% of all of your property owners will come from people that live in town. So, if you are advertising a. on your car, b. with signs, or c. through the yellow pages, they either need to: a. happen to see you on the road while they are in town buying their rental property, b. Happen to drive by one of your properties or your sign on the freeway, or c. look through the yellow pages while they are in town buying their rental, respectively.

Chances of a: none. Chances of b: slim to none. Chances of c: none, they are likely staying in a motel, working with a realtor who will refer their favorite Property Manager. Ah-hah, I said it. The key of all of my mumbo-jumbo in this entire section: Create relationships with other people in the real estate industry.

By the way, I highly recommend wrapping your car and making your signs as visible as possible. Do you need to pay for a 20’ x 10’ sign on the freeway: no! However it is amazing what happens when you spend the extra $400 and wrap your car with your logo and advertisement. Everyone around town sees your car all of the time. It is amazing, all of a sudden you are appearing in places that you haven’t even been to. My point: people remember a wrapped car, even if it has been a long time since seen.

As far as Yellow pages, I would really only recommend this when you get large enough to be able to afford a large display ad. Since you are starting out, you probably don’t have $200+/month that you can fork over right now for a 1” x 2” ad in the bottom right hand corner of the inside page under property management. By the way, we did this for 1 year and did not get 1 call from the ad! Lesson learned: hold on this one for a while.


So, all of the in town marketing and advertising that you do is not to directly go after prospect property owners, but instead to go after Residential and Commercial Real Estate Agents, Home/Commercial Property Inspectors, Landscapers, Mortgage Professionals, etc. Developing in town, local relationships is crucial to your success. This is discussed further in the referral and word of mouth marketing described below.

Google Adwords

Ultimately, you want to be the #1 result when someone types in “property management your town, state” into Google or Yahoo. The truth is, organic SEO takes a long time to build up to. However, if you join my Rents2Riches Group Coaching Program, I show you how to get to the first page every time on Google, the most powerful search engine out there.

There is something else powerful about this: People can search for “property management your town, state” form anywhere in the world. Nowadays, if I lived in Minnesota and wanted to find a property management company in Raleigh, North Carolina, I wouldn’t have a Raleigh, North Carolina yellow pages book. All I have is the Internet, and believe me people are using it…You found me on it, didn’t you?

As of 10/2009, we have just started using the Google Adwords and for the $0.20 charge to allow someone to click on my advertisement, I was able to obtain a new property bringing us $120/month. I think that is money well spent.

Referral, Word of Mouth

There cannot be enough said for word of mouth and referral advertising. Once your business starts taking off, referrals are critical in continuing momentum to grow. As briefly discussed above, your in town advertising will go miles in people recognizing your name.

You will not get referrals right away. How could you, you haven’t established yourself yet. However, as you prove your worthiness to clients and other professionals, you will start to naturally see referrals, even if you don’t ask for


them (ask for them). Referral marketing is a significant part of any business. When you have done great work for someone, (like fixed a problem that they could not fix, or taken on anything that your client deemed as noteworthy), now is the time to strike and ask for a referral. Try, “John, I really appreciate you saying that, that means a lot to me. I was wondering if you might know of anyone else that could use me as their Property Manager?”

Sometimes a great way to break into a property management market very quickly is to go after condos in a complex that is not managed by one Property Manager only. Look around for one that might have a lot of “for rent by owner” signs up. Going after this type of market will allow for the following benefits:

1. Once you obtain a reputation with a few owners, they like to make it known to all of the other owners that your services are fantastic.

2. You can develop a relationship with the Homeowner Association Manager. Once you are on their good side, they will recommend you to anyone that buys and anyone they hear of that is unsatisfied with their current Property Manager.

3. Property Owners of condos also own other houses as well. Many of our owners approached us after a couple months of experiencing our fantastic service to ask if we would also manage their other rental properties. Which, by the way, bring in real money compared to the small $70/month that a condo brings in.

Last note in word of mouth referrals; remember to tell your friends, neighbors and family what you are doing. It is very disheartening to see your neighbor list a rental with a competitor because you forgot to tell them that you are now a Property Manager. Believe me, they want to list with you, don’t be afraid of imposing. You are not imposing; you will deliver them way better service than anyone else could.

All of this is an investment in your professional referral base in town. When you meet people in the real estate industry either at a property or at an association meeting, you will have instant credibility.


Once you start gaining some experience with some properties, you will naturally start running into real estate agents, inspectors, etc. These ‘run-ins’ should be taken serious advantage of. If you don’t have any sales skills, learn some real quick-like. Learn the following:

1. People like to talk about themselves, not you. Not to mention, especially really good real estate agents. They are good and they know it.

2. Relate with them through the current property that you are at, local real estate associations, current property conditions, etc. In order for someone to ever give you a referral, they have to get to know, like and trust you.

3. Nothing is sweeter to a person’s ears than the sound of their own name.

4. If you want to get something, you have to give. Try to honestly help these contacts that you meet; give them referrals, help them in some way, etc.

Develop excellent relationships with as many people in the following professions as possible:

1. Commercial and Residential Real Estate Agents

2. Property Inspectors

3. Landscapers

4. General Contractors

5. Pest Control Companies

6. Your neighbors. Believe me, there is nothing tougher than to see your neighbors who live three doors away, listing their property with a competitor because you had not yet told them about your business. We did this wrong and lost out on 2 properties in our first month. I suggest that when you are official, you send a letter to everyone in your subdivision or where ever you live. Number 1: people LOVE to help other people, whether they will use you personally or refer you to a friend or family. Number 2: if they need to move and rent the property, then they will definitely use you because they know that you as the Property Manager will physically see their property every day. They get a free exterior inspection every day….works out nice!


Networking Organizations

Networking organizations are powerful ways to penetrate more potential clients and build those in town relationships that I discussed above. Early on in your Property Management career, I recommend that you only join those organizations that are specifically geared toward the real estate industry. This will allow you to make powerful connections that will lead to excellent, targeted referrals quickly. Organizations that are not related to your industry may prove to be beneficial for contacts, but they will likely unnecessarily consume a lot of your very precious time early on.

There are a number of networking avenues out there that will try to attract your attention and promise untold stories. Be careful of your money and more importantly your time while starting out in your business. It is very easy to get complacent on relying on somebody else to give you business. Don’t be. You can’t be; you are the only person out there that you can truly depend on to build your business.

Having said that, networking organizations and volunteer organizations will lead to referrals. They will not be your main source of business, but they will help. The following are networking organizations that you can consider:

- Business Networking International: This is an organization that relies on the ‘givers get’ mentality. This means that the more referrals you give, the more you get. Only 1 person from each profession can be a member in each chapter. I would meet with the people that are related to the real estate industry. If you are not impressed with them and the potential benefit of having them as your exclusive referral agent, I would not join.

- Chamber of Commerce: Visit your chamber and find out what functions they put on to support networking amongst members. Some Chambers are poor, some are outstanding. For example, our local Chamber sponsored weekly ‘meet and greet’ meetings at 8AM at differing locations. This was a great opportunity to meet people in the business community. Again, continuing to build that in town professional referral organization.

- Church: Church is an amazing source of referrals. If you are not religious, obviously I wouldn’t recommend going for the wrong reasons. I mention this in case you already attend and had not thought of discussing with your


fellow church goers. We are personally not very religious, so we were not able to take advantage of this.

- Volunteer Organizations: It is all about building relationships with people that are in, or affect your target market. You are after the wealthy home owners that don’t want to bother with the hassle of managing their properties. In my experience, many wealthy people volunteer at organizations that are making a difference in your town.

- Social Networking Organizations: Knights of Columbus, Masons, Lions Club, etc. Again I would recommend visiting only if you are also looking for a social atmosphere. We did not take part in any of these to build our business thus far, however down the road we may consider.

Other Media (TV, Radio, etc.)

The underlying question again is: Who is your target audience and will your advertising achieve it. We did not and likely will not participate in any radio or TV advertising as we feel that we will not be reaching our target market efficiently compared to other methods.

30-60 Day Schedule

Below are the actions that we found produced the fastest results in obtaining new clients and picking up new properties. For the 1st 30-60 days, we recommend the following detailed schedule which will allow you to concentrate on marketing your services:

1.7:30-8:00 Read newspaper, find For Rent By Owner Ads. Review craigslist for rent by owner ads; write them down to call on later. 2. 8:00-9:30 Create and mail direct mail campaigns. Post ads on Craigslist under “Services Section” for your services. Use my letters and ads directly from the Start Up Guide. 3. 9:30-10:30 Introduce yourself to Realtors, Property Inspectors, etc. Use the scripts I include in the Start Up Guide. 4. 10:30-12:00 Drive around, find For Rent By Owner signs. Call on these and those from the newspaper. Use my script in the start up guide. 5. 12:00-1:30 Lunch with potential clients, Realtors, other professionals.


6. 1:30-3:00 Work on Marketing Materials, Websites, etc. 7. 3:00-4:00 Respond to all calls, emails, property viewings. The most important part of this plan is to stick to your marketing efforts every day. This persistence is what will lead to new clients.


General Operational Best Practices

Enlist Your Team

You will need to surround yourself with as many competent professionals as you can. They can make or break your time, money and reputation among your clients and tenants and among your professional network.

When you first start out, there are a number of professionals that you will need. The first and foremost professional is a real estate attorney for your state. You will need to have them review your forms before you use them with your tenants and clients. This is very important, it will take a little monetary upfront investment but is well worth the money in secure transactions. DON’T just use the forms that you can buy at Staples or Office Depot. You will be exposing yourself to a lot of risk.

The second teammate that you will need to find is a maintenance person who is a “jack-of-all-trades” type of handyman. DO NOT hire the first person that you find on craigslist. Trust me, there are good people to hire, however there are more people that will tell you anything you want to hear to get a job. You will find that most people you find out of craigslist looking for work will end up being unreliable, will cause you rework and headaches with promptness on completing jobs.

We went through this for a number of months. After much headache of trying to save a buck to make a buck, we ditched attempting to hire oddball folks off of craigslist. Also, we didn’t fully understand how much of a liability we were placing ourselves under by not utilizing licensed individuals.

We decided that we would only hire licensed, insured and bonded contractors to do our work for us. What we found out was that, for a small incremental increase in $/hr, we were able to hire very dependable, skilled individuals that were also insured and licensed. Save yourself the headache and skip right to this step. And, here is the real benefit: our headaches of having to babysit our contractors went away. We are also much more clear and concise in our direction giving, which has helped as well.


Client Relations

The #1 key to success in property management is OVER-COMMUNICATION. This is not at all an over statement. Property owners need to hear from you on a regular basis, even if there is nothing that important to say. You, as the Property Manager are a key to their success. They view you as a very important person to their wealth and overall success. If you are not a good communicator, then either become one, or be ready for a slippery slope.

What does it mean to be an over-communicator? There are 3 primary things you can do that will distinguish you from the pack.

Property Manager Distinguishers:

1. The first is that you call or email your property owner once a month, even if there is nothing to report. The funny thing about property management is that it is still a sales driven process. As a Property Manager, you are in sales as well. In sales, you must maintain your relationships with your clients or else your competition will maintain it for you, to your dismay. Remember; call or email your clients at least once a month and continue to build your relationship with them.

2. The next step of becoming an over-communicator is to let them know when things go wrong or not as expected. However, there is a tactful way of doing this. Your property owners don’t want to hear you coming to them with a problem. They are paying you to deal with problems. So, depending on the situation and severity of the issue, you have two choices in dealing with challenges. #1. For minor issues, deal with the problem at hand and let the property owner know what actions you took. Or, #2, if the issue is important enough, inform the property owner WITH options for a solution and a recommendation. Now, instead of just presenting them with a problem, you have already thought about the options and given a concrete recommendation. Their trust level in you will skyrocket because you are taking the time to think about the correct actions, and because you are taking the time to pick up a phone and let keep them in the loop on the important occurrences of the their property.

You may be thinking “Well, yeah, all of this is common sense.” The problem is that most property management companies are pretty big in size. The salaried


Property Managers, for the most part, don’t operate like this. Communication is a minimum and owners feel left in the dark. If you can separate yourself from the pack here you will earn a phenomenal reputation and gain business like wildfire.

If you say you will achieve something and you cannot, then let them know asap. DO NOT let them know after the deadline is due, this is poor communication and will lead you to losing properties.

3. The last step in being an over communicator deals directly with tenants versus owners and will save your bacon someday. Simply put, document any conversation that you have with a tenant that is of importance. For example, we always document the following discussions:

a. Maintenance issues that could develop into larger problems if not handles correctly b. 30 day notices c. Reiterating lease statements of any policy not adhered to in the lease d. Rent payment plans

The last part of the Client Relations section is the necessary discussion of the 80/20 rule. This is paramount not only for owners, but as you will see for tenants too. 80% of your attention and problems will arise from 20% of your owners. You will always stumble upon certain property owners that, for whatever reason, like to be a pain in your bah-hooky and take up a lot of your time. For example, an owner of one of our 4-plexes would require justification on anything that we recommended. She didn’t trust our handyman, so she wanted to hire a 3rd party to double check all of the work that we recommended. She doubted every job that we wanted to do and she was cheap on top of it all. Finally we calculated how much she was costing us instead of how much we were making off of her property. We were losing $!

Here is what you do with pain in the but property owners. Calculate what your time is worth to you. As a starting out Property Manager, I would say $50/hr. After you start having more properties and experience, this should rise to $100/hr. Now, calculate how much time you are spending on each property and compare that to what you are making on it. Anything over that should be charged as a “project management fee”.


Depending on your personality, you will either be excited about this or shy away from it. If you are afraid to have this conversation with the owner, think about it in a new way. You are losing money by spending more time than necessary on this property. Are you in business to make money or lose money? Bottom line: get over your fear of a little confrontation and bring the issue up to your property owner. 1 of 3 things will happen when you confront them, lets diagnose: (let me enter a quick note: there may be other reasons to not confront the issue and suck it up, like this property owner having an in with other owners, etc.)

1. They realize they have been a pain in the but and back off. Now you are making more money off the rental because you are spending less time…..Yes!

2. They continue to bug you more and you charge a nominal $50/hr consulting fee for anything over the 3 hours/month, making you more money……Yes!

3. They argue with you and decide you are out of line, you lose the property and stop losing money because you are spending so much time there…..Yes!

Example: 3 bedroom house, rents for $1,500/month. You are making $150/month on it. If you are finding that you are spending more than 3 hours per month dedicated to this property because of a troublesome owner (after a couple months in the business, 1.5 hrs), than you should start charging more than the $150/month.

During your conversation you can explain to the owner that you are in the business of making money as well just like them, not losing money. Remember, you are a “For Profit Business”, if you operate it as a “Not For Profit Business” or feel like you need to give away things, then you will not be in business for long. There will always be property owners out there that feel you need to give away this and give away that, DO NOT even think about not getting reimbursed for anything you do above and beyond your agreed upon duties.

Client Forms / Contracts

Attached in the appendix is the form that we use for our property management contract with our property owners. Always get a client to sign


this form (tailored for your state via your attorney) and completed in its entirety.

Other forms that you may need to have the property owner sign throughout your management of their property are direct deposit forms.

Tenant Relations

80/20 rule here, similar to owners: 80% of your tenant issues will come from 20% of your tenants. Some tenants will just feel the need to constantly talk to you about anything and everything. You will need to gauge this for yourself as you grow, but obviously if you allow yourself to be sucked into a constant conversationalist and overly friendly with all of your tenants, you will be spending all of your time doing this instead of making money. What works for us when a tenant starts getting overly friendly or calling too much, just ignore them. Sounds rash and cold hearted, but again, I am in the business of making money, not losing. They will get the idea after a couple calls are not returned. Caveat to all of this; I am not advocating to ignore a tenant that is calling about a legitimate concern or question. I am referring to the tenant that begins to call about petty items or about non-property related issues.

You may be tempted to become friends with some of your tenants. This would be a mistake and can cost you down the line. Becoming friends with tenants can lead to you not being able to exercise your authority as the landlord if they fall through on their lease obligations. If they lose a job or for whatever reason do not pay their rent, you may find yourself in a tough position and in your mind try to rationalize allowing them to slide. They may feel like you will allow them to slide since you are friends. Or worse than that, helping them with your own money (illegal, by the way) Bottom line: be friendly, but that should be all.

The last part of tenant relations that is crucial to discuss is the property maintenance. Some tenants are great, when something small breaks, instead of calling you, they fix it. What a wonderful world it is when you don’t get the phone call about changing a light bulb. However, the remainder of the tenants will call you and try to get you to fix things that are clearly not your responsibility. These will need to be outline well in your lease agreement. See in appendix.


Tenant Forms / Contracts

Attached in the appendix are all of the forms that we have tenants sign prior to moving in. Also attached are those that you may need to evict or deal with other problems. They are detailed in the Operational Policy Manual section of this guide.

Laws and Legal Regulations

If you are in a state which requires you obtain a Property Management license, you will be intimately familiar with the laws and guidelines governing the property management industry already. However, if you are not, you will still be held to their expectation and must be familiar with them. I will briefly discuss them, but you really will want to read them in full.

Federal, State and Local governments have their own laws and regulations and you should be familiar with them all.

Federal:

The Equal Credit Opportunity Act:

The Equal Credit Opportunity Act makes discrimination unlawful with respect to any aspect of a credit application on the basis of race, color, religion, national origin, sex, marital status, age or because all or part of the applicant's income derives from any public assistance program.

Big picture is that you require a credit check for one person over the age of 18, then you have to perform a credit check on everyone over the age of 18. Additionally, you must use the same lease for all applicants. Lastly, you must use the same evaluation criteria when determining screening approvals of prospective tenants.

Fair Housing Act:

Prohibits "any preference, limitation, or discrimination because of race, color, religion, sex, handicap, familial status, or national origin, or intention to make such preference, limitation or discrimination."


Americans with Disabilities Act (ADA)

Title III of the Americans with Disabilities Act prohibits discrimination against persons with disabilities in places of public accommodations and commercial facilities.

As a Property Manager you cannot refuse services to persons with disabilities based on those disabilities. Additionally, a Property Manager cannot charge a pet fee for an assistance animal, (ie. eye seeing dog).

The other section of the ADA that will affect you someday is that once an employer has over 15 employees, the employer is required to practice non-discriminatory procedures for employment determination. Additionally, employers must make accommodations for disabled employees to be able to perform the essential functions of their job.

Section 8

Some Property Owners and Property Managers cringe when they hear the term ‘Section 8’. We are not really sure why. Section 8 is a Federal Department of Housing and Urban Development program in which low income families are subsidized a certain amount of money every month for rental property costs.

Section 8 does not pay the full rental amount, but a portion. It subsidizes anything over 30% of their adjusted monthly income. The house monthly rental amount must be approved for Section 8 as well. If the tenant makes $2,500/month, the maximum the tenant would pay is $750/month (30% of $2,500) towards their rent. If the going rate for a 3 bedroom house (which Section 8 has determined is their suitable need), is $1,300, then HUD will subsidize up to $550 additional monies to allow them to afford the $1,300 rent.

The advantages to using Section 8 are :

1. The HUD portion of the rental income will be paid on time, every month directly to you.

2. There is always a steady stream of tenants on the Section 8 waiting list.


3. You will spend less money on marketing costs and also reduce vacancy times.

4. Tenants are also more likely to pay their remaining share of the rent for fear of losing their Section 8 benefits.

The disadvantages of Section 8 are:

1. Stringent inspection guidelines prior to approving your house for Section 8 tenants. For the most part the Inspectors are realistic, there have been a few that made some unreasonable requests.

2. Annual property inspection to ensure continued adherence to the minimal requirements.

3. More paperwork intensive compared to a standard lease to a non-Section 8 tenant.

4. HUD will only allow you to charge a certain amount for your property, regardless of your opinion.

The reason that Section 8 has gotten a bad wrap is that there are bad people in Section 8. If you do not screen your tenants just like you would otherwise, then you could end up renting to poor tenants. We have had great success with using the Section 8 program.

State and Local Laws

State and local laws often provide broader coverage and prohibit discrimination based on additional classes not covered by federal law.


Key Performance Indicators

Here is another distinguisher of those start up companies that will either make or break. Reviewing and holding yourself accountable to your set goals is crucial. Even better yet, if you can have a business coach hold you accountable to your goals, then your business will thrive. Something amazing happens when you are not just accountable to yourself and someone else has an expectation out of you. If you would like help in this area, let me know and I will be glad to give you more information about our Rents2Riches Group and Individual Property Management Coaching Programs. Email me at [email protected].

Accomplishment Goals Vs. Process Goals

Many start up business make the fatal flaw of only creating only accomplishment goals for their business. For instance they set a goal to be making $2,500 per month after 4 months. And that is it.

Now, if you want to set yourself up for failure and feeling very bad about your business, then go ahead and set only accomplishment goals. Because when that 4 months comes and you haven’t achieved that $2,500 yet, how good are going to feel? Let’s say that you only achieved $750/month, are you going to be motivated to continue? Likely not as much. You will say I can’t believe that Patrick PM Business coach, this is a bunch of bull. I am going on to the next free business plan on the internet….Oh wait there aren’t any out there.

So then, that is not where we want to be. Where we want to be is feeling good about our business and achieving the goals that we want to. Accomplishment goals are good and absolutely necessary, because without them we cannot set our sights and achieve what we want in life. However you need more than that. You need to determine exactly what it will take, down to your weekly and daily actions to achieve your accomplishment goals: these are your process goals.

For example, let’s assume you want to receive the $60,000 per year after the first year, like I advertised in my craigslist and adwords advertisements. This boils down to $5,000 per month income. How many single family homes will it take to achieve this? Lets’ assume that your average 3 bedroom rental is $1,500 per month. For each 3 bedroom rental that you obtain, you will make


$150/month. Therefore, for you to reach your $5,000/month income level, you will need to obtain 33 three bedroom houses. You will get some commercial that will bring more and some condos that bring less, but for simplicity sake, lets’ assume you live in an area where all they have is 3 bedroom houses.

What will it take for you to obtain 33 houses in 6 months? This comes out to about 5 houses per month, or a little more than 1 house per week. OK, so now we have something that we can work with. What do you need to do every day to obtain 1 house per week? These would be your process goals.

Well, you may not be exactly sure and that is OK. Don’t hold yourself to obtaining 1 house per week, because it won’t work like that. You will likely not get your first house for a couple weeks or more, depending on a lot of things.

What will it take to achieve about 1 house per week? The actions that you should hold yourself accountable to are those in your marketing plan. How many direct mail campaign letters are you going to send every day, every week? How many realtors are you going to introduce yourself to every week? How many local real estate organizations are you going to get involved in? How much time will spend every day, driving around and calling on “FOR RENT by Owner” signs? These are the process goals that you need to hold yourself accountable to.

When you look back at the week and review your process goals, even if you have not yet gotten a rental property, you will know that you are achieving what you said you would. You can feel good about achieving these. And believe me, if you stick to this, the properties will follow.


Operational Policy Manual

General Office Policies

Answering the Phone

The phones will be answered with: “Hello, this is XXXX Property Management, how can we help you?”

Tenant/Client Complaint: If the tenant or property owner has a complaint or a problem, the following statement will be made: “Mr. XXX, I am sorry that you are experiencing this problem, we will do our best at addressing this for you”.

Tenant/Client Out of Control: If a tenant or property owner uses vulgar language, is degrading in conversation or otherwise seems out of control, reassure them that we are here to help them but they need to refrain from being demeaning in order for us to work wit them. “Mr. XXX, I understand that you are upset, I want to solve this problem for you, however the only way I can help you is if you calm down and we work together on this.” If the tenant or client continues to be unruly or out of control, let them know that they can call back when they have calmed down and are ready to properly communicate.

Tenant/Client Panicking: If a tenant or client is panicking about a situation, help them relax and reassure them that we are here to help. “Mr. XXX, I understand that you are upset, we can solve this together. Lets work through what we know so far….”

Sales / Potential Client Meetings

Property Rental Amounts

Many times property owners can be delusional about what their property is worth. Some may think that their property can bring in more than the market can handle. It is your duty to be honest with them. Don’t just agree with them on monthly rental amount to get their business. You may think that they will go with the person that tells them the highest rent amount. If that is true, you probably don’t want them as an owner anyways, they will likely be a problem client later on


If you agree with them about a rental amount that is higher than the market will bear, and then the property doesn’t rent, they will naturally hold you accountable and your reputation could suffer. Also you might be tempted to just go with their rent amount for now and lower later. However what you are really doing is a disservice for them. They will be sitting on an empty house and still making the mortgage.

Again it is your duty to be 100% honest and let them know what their property can bring. Be sure to educate them as to the reasons for your figure. Sometimes property owners are not aware of the local trends that are affecting rental amounts.

If you are dealing with a potential client that insists on the rental amount and they still want to hire you, list the property at their price for 1 week. If the response is significantly less than normal compared to a similar property at a lesser amount, than it is agreed prior that the property will be reduced to your recommended value. This should be included in the paperwork with your client.

Property Review / Presentation

If you are interested in knowing exactly what to say to your prospective client, I offer an e-book and very soon a home study course that details exactly what to say. This dialogue makes the property owner beg for you to take care of their property. It is a step by step method of EXACTLY what to say and EXACTLY what to do during your first meeting with the prospect to close the deal almost every time.

Email me directly at [email protected] for details on my “Rents2Riches Residential Property Management Sales” e-book, or I include for free to all of my Rents2Riches Group Coaching Members.

Accounting Procedures

Quickbooks

The best recommendation that we can make for you is to hire a local CPA and have them set up your Quickbooks for you. You may even want to call around local CPA’s and ask for one that has specifically worked in helping another PM company set up their accounting.


Beyond that, email us if we can help further. We will be offering this as part of our “Rents2Riches Property Management Group Coaching Program”, which is always starting new sessions. Also, as part of my program I hire my personal CPA to join us for an hour and give a brief tutorial called Property Management & Quickbooks: 101. Again, if you would like details on the Rents2Riches Group Coaching Program, email me directly at [email protected].

Tenant Policies

Client Trust Account Establishment and Operation Policy

Refer to your local real estate department to ensure that the information provided here holds as some states may differ in requirements. Some states do not allow for a single master trust account and require separate accounts. In Oregon you can have 1 master trust account utilized for your properties and one for security deposits.

You will establish 2 client trust accounts for your property management company, the first is the general client trust account and the second is the client trust account for security deposits. They must be kept separate by law, as with your business income funds and general account.

The accounts that you set up at the bank will be just the two accounts; the general client trust account and the client trust account for security deposits. The next natural question is: How do you differentiate from one property owner and property to the next? This is where excellent bookkeeping and accounting skills will be needed by you. You will be keeping track of each owners client trust account separately on your own through Quickbooks. Under each client trust account you will have separate sub-account numbers (our state department calls this an identifying code) for each property owner.

When rent is received every month, this is then documented as income into the client trust account in your records and this same amount is placed into your client trust account, along with all of your other property rental amounts. For instance, if you manage 10 properties that bring $1,000 per month in rent, you will be depositing $10,000 into your client trust account. In our state, you have only five days to make the deposit into the bank from when you collect the rent.


In Quickbooks, you will differentiate the deposit rental amount specific to each property owner. Once the deposit has been made, you can pay the appropriate bills and disbursements from your client trust account. Again, these bills will be paid from your established single client trust account, however you must keep excellent Quickbooks records and pay from the correct internal property owner sub-account. Additionally, in our state, the checks that you write from client trust accounts need to state “Client Trust Account” or “Client Trust Account, Security Deposits”.

For example, Property Owner A rent amounts to $1,000. You document as received $1,000 in Quickbooks under Property Owner A and deposit the $1,000 into your companies’ client trust account along with all other rent money received that month. Property Owner A wants you to pay the water bill from the rent received, so you then cut a check to the water company for $40. You also charge your companies’ management fee of 10% ($100), and the remaining $860 gets disbursed to Property Owner A. All of these checks have “Client trust Account” below our companies name, by law.

Your $100 management fee gets deposited into your business account, which must be 100% separate from all client trust accounts. So you cut a check from Quickbooks Property Owner A’s account and make out to your company. You then deposit into your bank account and note as such in Quickbooks.

The biggest piece of advice that we can give to any aspiring Millionaire Property Manager is to reconcile your Quickbooks to your bank account EVERY MONTH. Lesson learned here: we didn’t reconcile for almost 6 months and when it came to our first one, it took us about 1 week, (8 hours a day) to get it all straightened out. When you are fiscally responsible for other peoples’ money, your bank account and Quickbooks HAS to marry up 100%. If you are off by even 1 penny, that shows an error in accounting and could lead to larger problem. Trust me, any amount, even $.01 is too much. Figure it out now and get in the habit of reconciling every month. You will save yourself a lot of heartache down the road.

Security Deposit Client Trust Accounts are a special animal all in themselves. In our state, the property owner can elect to maintain the security deposit themselves. That is OK with us, as long as it is all properly documented. In some states this security deposit needs to be kept in an interest bearing


account and the accumulation documented and given to the tenant. You will need to become intimately familiar with your states requirements regarding client trust accounts. Once the money has been collected from a tenant and deposited into the Security Deposit Client Trust Account, it must remain there until the funds are utilized either for repair after move out and/or for tenant repayment after move out.

Just as with the General Client Trust Account, the Security Deposit Client Trust Account MUST balance every month.

Leasing Procedures

Marketing Properties

Upon receiving a new property listing, perform the following:

1. Place a sign on the property. If it is a nice neighborhood, utilize the nicer L-shaped posts versus the h wire stands.

2. Post it on the website the same day.

3. Create a Craigslist advertisement and re-run the advertisement every other day. This keeps the property fresh and more likely to be seen by prospective tenants. The Principle Property Manager must approve of the advertisement before it is placed.

4. If there are local newspapers that target the specific demographics or ethnicity of tenants in a certain area, this can be utilized right away because it is to a targeted audience. This does not include the city newspaper. The Principle Property Manager must approve of the advertisement before it is placed.

5. We will not list classified ads through the local newspaper. It is expensive and we receive just as good of a response through Craigslist. If a Property Owners insists on this method of marketing, they will pay for the ad and the express approval of the Principle Property Manager must be obtained for the advertisement.


Showing Properties

Safety: When showing properties, do not ever shut the front door behind you. Do not lead the prospective tenants, allow them to look at the property for themselves. Say “Here is the home, feel free to look through the house, let me know if you have any questions.” Stay near an exit and wait for the prospective tenants to either complete or ask questions. Your safety as an employee is paramount. Do not allow yourself to be placed into a dangerous situation with a prospective tenant.

Make sure that the house is properly cleaned, walls painted, carpets professionally cleaned. Exterior needs to be spotless as well. Don’t get caught in the trap of trying to do all this yourself to save money for the Property Owner. Remember, you are in business to MAKE money, not lose it.

Move In Procedures / Property Inspection Details

On the day of the move in, the respective Property Manager will meet the new tenants as the property and complete all necessary paperwork if not completed already. The Property Manager will perform a brief walk through, exchange keys and leave the new tenant with the move in property inspection report. The move-in property inspection report needs to be completed and returned to the respective Property Manager within 10 days of move in. If the inspection sheet is not returned to the Property Manager within 10 days of move in, than the property is considered to be in flawless shape upon move in.

Explain to the Tenant that it is in their best interest to complete the inspection sheet upon move in. They will be responsible for any damage that was not documented on their move in sheet.

Screening: General Applicant Review Procedures

For a Property Managers 1st 5 general applications, review with the Principle Property Manager prior to reviewing applications alone.

1. Do not review incomplete applications. Return to applicant for completion.


2. Call previous landlords and ask the following questions only:

“Has Mr./Mrs. John Doe ever received a 72 Hour notice?”

“Did Mr./Mrs. Doe receive their full deposit back upon vacating your property”?

“ Would you rent to Mr./Mrs. Doe again”?

You have to be careful what you ask a previous landlord. You cannot ask anything that could be construed as an opinion about the tenant from the previous landlord. This could get back to the tenant and the previous landlord could get sued for slander.

3. Call place of employment and verify employment. Most employers will require that you fax them a letter requesting verification of employment. If they do work with you, ask the following questions only:

“Does Mr./Mrs. John Doe work there?”

“How long as he/she worked there?”

“If they were to be laid off due to budgeting and the budgeting came back, would you hire him/her again?”

You have to be careful what you ask an employer. You cannot ask anything that could be construed as an opinion about the tenant from their employer. This could get back to the tenant and their employer could get sued for slander.

4. Verify Banking Account Information

Screening: Credit Approval & Report Policy

1. Tenants will pay a non-refundable $37 for every applicant over the age of 18. The tenant screen report costs anywhere from $19 to $29, depending on the level of report that you do. We always choose the Basic Tenant Screening & Background Check from e-renter. Currently the cost for this is $29.95. The little bit extra covers our time and cost for completing the application review.


2. For the best online tenant screening and background check products for the money, click here:

http://www.propertymanagementbusinessplan.com/erenter

3. Credit Score Evaluation Guidelines

Credit score: >650; acceptable results, no co-signer or additional funding required.

Credit score: 550-650; If the score is low due to evictions, car repos, credit cards, student loans, utilities, or the like, then ½ month rent security deposit required in addition to the standard security deposit or a co-signer is required. The aforementioned are items that are in the control of the Tenant and indicates a lack of general responsibility. If it is due to medical, foreclosure, or an explanation that makes sense and is believable, the ½ month rent and/or co-signer can be reviewed by the Principle Property Manager on a case by case basis.

Credit score:<550 unacceptable unless co-signer utilized or 1 month additional rent security deposit applied, in addition to the standard security deposit.

Review the reasons for a low credit score carefully. Sometimes good people are placed into previous bad situations that were unpreventable. For example medical bills, lost jobs etc, on their record, then discuss with potential tenant. We are in a turbulent time right now and many people will have foreclosures that are causing their credit scores to plummet. However, many times these potential tenants would end up being excellent renters.

Tenant Forms Required Prior To Move In

We have included in the Rents2Riches Property Management Start Up Guide the Forms that we use for our Property Management business. You will need to contact your local Real Estate Associations to obtain the correct forms for your state, and/or real estate attorney. We have decided to be even more conservative compared to our local Real Estate Associations. Either way, your forms need to be approved by an approved Attorney in your state.

http://www.propertymanagementbusinessplan.com/erenter�


The following forms that are required to be signed by a Tenant prior to move in are:

1. Lease agreement

2. Smoke Free Addendum (reiterates on a separate document that the Tenant is not allowed to smoke in the unit)

3. Smoke Alarm Addendum (reiterates on a separate document that the Tenant alone is responsible for proper maintenance on battery)

4. Check In/Check Out Inspection Checklist (To be returned to the respective Property Manager within 10 days of move in)

5. Give them a local Utilities Informational Sheet (Helps save you a lot of time in finding information regarding local utilities for every Tenant that usually doesn’t have a phone book upon move in)

6. Lead Based Paint and/or Asbestos Disclosures (Obtain from your state, asbestos may or may not be applicable)

7. In Oregon, you are also required to give your Tenant a Lead Based Paint Informational packet. You will need to obtain this for your state.

8. Pet Addendum, if applicable

Tenant Rent Policy (This entire section needs to be tailored to the laws and guidelines in your state. Ensure that you consult and attorney and the Landlord-Tenant laws for your state. You cannot follow these directly. This section is to provide an example only of rent policy.)

The tenant will pay $ 25 for each dishonored bank check. Time is of the essence and failure to pay rent in accordance with these terms and conditions set forth shall constitute a default of the entire Rental Agreement.

If any rent or utilities money owed, which is normally paid for in check is returned “insufficient funds”, then the tenant will only be allowed to pay the aforementioned with a cashier’s check or certified funds, personal checks will no longer be accepted from this tenant.


Rent is to be delivered in the following preferential order:

1. Automatic withdrawal and deposit

2. Delivered to the office and placed into the rent collections drop box. (We opened an office after 16 months into the business)

3. Postal Mail, to be postmarked no later than the 5th of the month.

4. If the Property Manager or any employee has to drive to any location to pick up rent an automatic $25 additional fee will assessed and collected the following month.

Rent is due on the 1st of every month. Rent is late if it is received after the 5th of that month. If a Property Manager does not receive rent by the 5th, perform the following in order:

1. Call the Tenant, find out what the problem is.

2. If the tenant does not return your calls by the 7th, apply the additional $75 late fee and deliver the “72 hour notice to pay rent or quit” notice to their door. Properly document and date paperwork delivered to Tenant. 9 times out of 10 you will receive the rent very shortly. Being a Property Manager requires that you be very firm and not allow yourself to be walked on. I expect you to be firm.

3. If the Tenant is in a financial hardship, ask how it will be resolved and when the rent will be paid. If this is their 1st violation of the rent not being paid on time and they are communicating well with you, allow a 1 time exception to the $75 late rent charge. Document that they are late in rent and in the future will receive the $75 late fee. After their 1 time exception, this fee is non-negotiable for rent paid after the 7th.

The approval of the Principle Broker must be obtained to allow for acceptance of rent beyond the 7th, whether it is promised in whole or in payments. If the Tenant indicates that they will be able to pay the late rent within a certain time period, you will still deliver the “72 hour notice to pay rent or quit” notice. This notice is a requirement for all tenants who fail to pay by the 7th. That allows you to proceed with the eviction process if they do not pay as they have promised. In our state, you cannot file for an eviction until after you


have properly delivered the 72 hour notice. If you delay to post this notice, the Tenant may not take you serious and when their promise of payment falls through, if you have not yet posted the 72 hour notice, you are then another 3 days away from being able to proceed with an eviction. (Reminder: It may not be called a “72 hour notice to pay rent or quit” in your state. Ensure that you are properly licensed and follow all of your states landlord laws 100%. Not doing so is illegal!)

Document any and all extra fees charged to the tenant in the tenant property file.

Evictions Policy (This entire section needs to be tailored to the laws and guidelines in your state. Ensure that you consult and attorney and the Landlord-Tenant laws for your state. You cannot follow these directly. This section is to provide an example only of how to handle Tenants that don’t pay on time.)

If the Tenant has failed to pay the monthly rent by the 7th, perform the following:

1. Notify the Principle Property Manager. Work with the Principle Property Manager, Property Owner and the Tenant on when the rent will be paid. If the Owner is willing, allow for a 1 time re-payment plan in the case of a financial hardship.

2. If this is the 1st instance of late rent, do not apply the $75 late fee. If it is not the 1st, apply the $75 late fee.

3. Post the 72 hour notice on their door. If they are home, deliver personally. Even if they promise to pay very soon as you are delivering, do not retract the notice.

4. If they have not paid within the 72 hour timeframe of you posting the notice, proceed with the Evictions process. Contact the Principle Property Manager and go to the courthouse to file for an eviction. Many counties have their evictions paperwork online in a downloadable format.

(Reminder: Eviction laws and guidelines will vary state to state. Ensure that you are properly licensed and follow all of your states landlord laws 100%. Not doing so is illegal!)


Collections Policy

Evicted: When a tenant has defaulted on their rent payment and has been evicted through the court of law, continue to attempt to collect funds directly from the tenant for 30 days. Collections fees are expensive and if we can avoid them, this would be the preference. They can take anywhere from 30-50% of the total charges. If they have not paid after 30 days, send them to collections.

Tenant moved on their own: If the Tenant moved out on their own and has not paid their rent money owed, continue to try to collect the rent money directly from them for 2 weeks. After 2 weeks of no payments received, send them to collections.

Choosing a Collections Company: You will need to choose a local collections company to process your collections. These companies are usually only licensed state by state to operate. Interview a few collections companies about their documented success rates and ask for at least 3 references.

The information and paperwork that you will need to send a Tenant to collections will usually comprise of:

1. Copy of the itemized statement showing the date of the last charge and the amount now due. (easily print from Quickbooks)

2. The signed collections agency assignment agreement allowing them to work your accounts. (obtain from the collections company)

3. Copy of the tenant signed lease agreement.

Utility Policy

Unless otherwise noted specifically for a property, resident/tenant shall be responsible for the payment of any and all utilities. Resident/Tenant shall make arrangements at his/her expense to initiate service of utilities, including but not limited to electric, gas, fuel oil, water softener and garbage pickup, no later than the first day of tenancy, and shall pay the utility expense in a timely fashion. Failure to comply strictly with the terms of this provision shall


constitute a default and all rights and remedies shall accrue to owner thereon as provided by law.

If a tenant does not pay their utilities on time, then their utilities will be likely shut off. This can be an issue during the summertime if the water is turned off and you live in an area where sprinklers are needed.

Pet Policy

Pet policies are dependent upon the Property Owners requirements. The following policies are in place in addition to any property and owner specific requests:

1. Tenant must review, agree to and sign the Pet Policy addendum.

2. No Pitbulls and/or Rotweillers.

3. All animals must have written proof of up-to-date shots and vaccinations and be licensed where applicable. Written proof must be provided to owner/representative within 10 days of acquiring pet.

4. Pets must be licensed with the local county / city in accordance with appropriate jurisdiction ordinance laws.

5. Ensure the appropriate Pet Deposit and Pet Fee is applied. This must be applied to all pets regardless of size.

6. If there is damage caused by the respective Pet, the cost to repair the damage will be funded from the pet deposit fee.

7. If the tenant is evicted for non payment of rent, then keep the pet deposit until until rent money is paid.

Tenant Move Out Policy

If tenants are in a month to month lease, then a 30 day written notification to the Property Manager of their intent to vacate the property. This notification must have the intended date to vacate included.

If tenants are in a committed lease period, for example 6 months or a 1 year lease, they may break their lease with a 30 day notice if an appropriate replacement renter has been found. The current renter may not break the


lease unless another lease has been signed to minimize the amount of time the house is vacant.

Send a copy of the “Items to be cleaned upon move-out” to the tenant upon notification of 30 day notice to vacate premises. Tenants will leave the property as clean, if not cleaner than when moved into. At a minimum, the following will occur:

• As stated in the lease, carpets are to be professionally cleaned with proof of receipt upon move out. Carpets needs to be vacuumed prior to carpet cleaning.

• Tenant will Mop all areas such as linoleum/tile. • Back patio sweeped (if applicable) , weeds pulled and front/back yard

mowed. • If applicable: All pet feces cleaned. • Clean windows, window tracks and blinds must be wiped down and clean. • Bathrooms: Clean toilet and bottom base of toilet, sink, bathtub/shower,

mirrors, counter tops, wipe out drawers and cabinets, mop floor. • Wipe down baseboards; wipe out all drawers, cabinets and shelving. Don’t

forget to wipe down the molding above doorways. • Change filters and wipe down the filter vent and vents/fans in bathrooms. • Kitchen: Clean refrigerator, sink, oven, and microwave, wipe down all

shelving in cabinets and drawers. Clean top of refrigerator. Clean the lining inside the dishwasher. Clean or purchase new drip pans if you have electric oven burners. Wipe down Range Top/Hood/Filter.

• All light bulbs are to be working, don’t forget the light above the oven/range. Wipe down all lights/fixture in all rooms so they are free of dust.

• If applicable: no holes in screens. • If applicable: washer/dryer is to be wiped out. • If applicable: Clean fireplace of all debris. Please remove all trash from

unit.

If any of the above are not complete and/or not in accordance with the property inspection sheet, the work will be performed and deducted from the deposit. The remaining deposit will be processed and distributed to the tenant after completion of work. Document all work completed and save all receipts with the property tenant file.


Property Manager to perform a walkthrough with the tenant. Utilize the inspection sheet what was completed by the tenant upon move-in. Any discrepancies to the check in sheet and/or the “Items to be cleaned sheet” need to be duly noted and remedied by the tenants prior to vacating property. If they are not corrected by the tenant, the project will be funded from their security deposit to remedy.

Any difference of opinion between the tenant and Property Manager will be brought to the attention of the Principle Property Manager for review.


Maintenance Policy & Procedures

Tenant Call Procedure

After-Hour Emergency Call Procedure

After hours, the general phone number will go directly to the answering machine with the pager or cell number for the on duty manager. If this is an absolute emergency that cannot wait until the next business day, and only then, instruct them to text or call the cell number of the on duty manager with a brief description of the problem.

Reactive Maintenance & Emergency Maintenance

Tenants will always call the respective Property Manager for the property. Once we have added an Administrative Assistant, tenants will be instructed to phone the main office number and work through the Administrative Assistant. If the Administrative Assistance is not available, the call will be directed to a Property Manager or the answering machine.

The Administrative Assistant will then call the appropriate Maintenance Professional and coordinate the repair. The policy is that if the damage was due to the Tenants actions, the Tenant will pay for the cost of the repair billed on time and materials. $30/hr plus materials.

As a general rule of thumb, if it breaks, it will need to be fixed. We are not slumlords and operating on a slim budget is like paying your taxes: Pay me now or pay me later. Do not sacrifice keeping items in good order to pinch a dime for your Property Owner. This is not good service.

As a general rule, our lease contracts with our Owners state that we have authority to perform maintenance and repairs for any item under $150. For items over $150 we will need to get the authorization of the Owner to perform work.

If you cannot get in contact with the Property Owner and the >$150 repair requires immediate attention, call the Principle Property Manager for potential authorization.

Routine Preventative Maintenance


Tenants will perform the majority of routine maintenance on the property unless otherwise indicated in the lease agreement. Standard maintenance that is the responsibility of the Tenant includes yard care, watering, changing filters, smoke alarm maintenance, etc.

Client Requested Property Upgrades / Maintenance

Tenant may request for additional features such as fences, sheds to be added to the property. If not performing the work could pose a threat to tenant safety, then the owner will need to be explained the situation and liability associated, as well with a plan for corrective action. Do not allow a tenant request for a safety item be avoided or ignored. This could open the Property Manager, the Property Management Company and the owner to significant legal liabilities.

If the tenant request is not associated with a safety issue, then the Property Owner is not obligated to complete the project. It is our job to minimize the cost outlay of the owner, therefore a request for them to spend money is not allowed. If the tenant would like to perform 100% of all work and costs, then the owner may be contacted and asked if the work can be performed. If the project is anything that would require a permit or licensing to perform, then the appropriate licensing and permits must be obtained. Additionally, the tenant will sign a “work authorization” sheet indicating that any work performed is the sole responsibility of the tenant, all costs will be incurred by the tenant, and any work performed that is considered an attachment to a permanent structure, or a permanent structure itself will become the property of the Property Owner and not the tenant.

When the tenant moves out, they will not be allowed to remove the project if it would create a negative impact on the appearance or functionality of the property compared to move in.

Owner Maintenance/Upgrade/Replacement Requests

Property owners that request project management work to be performed above and beyond the normal scope of work contained in the property management agreement contract will need to pay for the Property Managers time dedicated to manage the work. This is an up-charge opportunity for our company and must not be given away free. Any work will be completed on a


time and material basis. Contractors will be hired at the normal $15-$20/hour and the property owner will be billed double this amount to account for the Property Managers time to attend and manage the project coordination. Materials utilized will be billed separately and will be billed to the property owner once per month, in accordance with when rent amounts are distributed.

If a Property Owner questions this, the extra fee is to cover our insurance, license and bonding fees, Project Management as well as the contracting physical work itself.


Bonus Business Gift: Functional Business Plan

3 Steps To Create Your Functional Business Plan

There are two types of business plans that exist. One is the standard business plan that everyone is familiar with. It is a 22 page document with full financials and marketing plans, and no leaf unturned. You really need to have this document in place as your rock for a plan. However, you also need your ‘Functional Business Plan”. If you use this, you will find that it will be the most important tool you have ever made. I will review later, but it will be your one page summary of your 1 year goal, followed by personal commitments you have made and projects that must be completed in order for you to complete your goal.

Now, remember back to your impossible future that you defined under your vision. Make sure that you have defined, at a minimum your 90 day and your 1 year impossible future, this should be a monetary amount, correlating to the number of properties you will have. This is not your possible future, make sure that you are developing this goal independent of last years results and other past limiting factors.

1. Define exactly what the result is that you want, this is your 90 day and 1 year impossible future. That might look like a previously unrealistic sales figure, profit, revenue, units created, etc. It MUST be a clearly measurable goal that will be your most ultimate achievement for the year.

2. Personal Business Commitments: Define the 5 personal business commitments that must be completed by you, the leader, in order to achieve your goal as defined above. These will again be non-negiotables that you will inject into your calendar that will allow you to become the leader that you need to be. If you are starting up your PM business, these would be sending out 200 direct mail campaigns a week, spending 4 hours per week visiting real estate agents and networking, and another 5 hours per week calling on “for rent by owner properties”. If you are already an established PM business, these are high level tasks that are really an investment in yourself, your people, your leadership etc. An


example could be spending 1 hour a week coaching each one of your VP’s, or it could be writing 2 hand written notes per week to your employees. Other examples are holding a routine sales or marketing meeting in order to review progress. Or perhaps it is meeting with 2 employees per week to get to personally know them, etc.

3. Define the 5 key projects that you will complete over the next year that will support helping you and your team achieve your impossible future. These are not projects that are accomplished by you, but will be accomplished by teams that you will learn to set up in later chapters. It will also be important to establish a date for completion and hold your teams accountable with regular updates for your team leader.

An example might be establishing and implementing a sales call tracker sheet to streamline your sales teams efforts, or creating a key account marketing team to help market key prospects on a corporate level.

If you are a 1 man band Property Management Business, then the teams will be made primarily of yourself. However, be sure to routinely utilize the expertise and help of the professionals you work with. We did not do this, but what about assembling a team of your professional colleagues and paying them for their time? It might cost a bit, but what if the ideas that they came up with were to make you 10X in income. But either way, hold on to the concept, because you will implement these in a couple years when you are a large player in the Property Management Field.

On the following page is an example of what your 1 page Functional Business Plan might look like:


Commitments Yield Impossible Futures 1 Year Projects

Project: Due Date:

1. Project #1 April 10 2. Project #2 May 15 3. Project #3 July 1 4. Project #4 September 1 5. Project #5 November 15

If you are an established property management company, then these projects will be assigned to your newly formed teams that will drive them to completion. You will give the goals, guidance and coaching necessary to establish these teams, but ensure that is all you give. Reasonable questions about team boundaries, goals and timelines are justified, but decisions relating to the outcome of your goals should be solely left for the team to decide.

It will not be your job to run the meetings, establish plan of attack or even be part of the team. You are the company CEO/leader, it will be your job to properly coach, mentor and check in on your teams’ success. You will be their greatest cheerleader.

Your 1 Year Impossible

Future

Personal Business

Commitment #1

Personal Business

Commitment #2

Personal Business

Commitment #3

Personal Business

Commitment #4

Personal Business

Commitment #5

Personal Business

Commitment #6


Once your Top 5 projects are pin pointed to achieve your 1 year goal, you must then break each project down into their own miniature business plan. Detail inside each plan your achievement goals and stick to them. Process goals versus accomplishment goals are a very important concept, by the way. It is very new and many of the top companies globally are incorporating this idea. The concept is that you break your financial goals down into bite size pieces, say monthly. Then, determine what actions, on a monthly, weekly and daily basis that you, and others must do to accomplish your goal. You then judge yourself on your completion of achievement goals, NOT financial goals.

So many people set financial goals (or even other achievement goals like closing 5 accounts this month) and get down on themselves because they did not achieve their goal. However, instead of grading yourself on whether or not you actually closed 5 accounts this month, rather, determine what it would take to close 5 accounts this month. Then, grade yourself based on your follow through on achieving the actions necessary to close those accounts. This allows you to be much more aware of your actions, required further skill training and also allows for a more satisfying venture as you build your business.


Developing Your Business Beyond YOU!

If you followed my Rents2Riches Property Management Business Plan and Rents2Riches Property Management Fast Track System, which I hope you have, then you have already completed a significant part of what is required to go further build your business beyond yourself. You have already laid the foundation for building a team of successful Property Managers. The top level communication and strategic planning is entirely necessary for success.

The next step in building your property management business requires a whole new skill-set in leadership, management and overall employee development and relations. This is not a process that you should try to complete on your own without any specific business development background. Utilize my expertise in helping you achieve the previously thought impossible.

I also offer group and individual coaching for the continuing development of your Property Management business. Group coaching is great because you get to interrelate with other aspiring Property Management Business Owners and share best practices. Individual coaching is excellent as well because you get more 1 on 1 time with me directly working on your business development.

The difference between being coached and not is surrounding yourself with others ‘like you’ and a proven expert versus doing it all on your own. From our Group Coaching session, you will benefit by:

Reduced Time in Better Strategizing Your Actions Rapid Growth Due to Accountability To The Group For Your Actions Questions Answered, Best Practices Shared Having a Certified Business Coach Providing Guidance New Forms/Brochures Distributed As Developed Peer Excitement & Motivation


DISCLAIMER AND TERMS OF USE AGREEMENT

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