Mr. Property Manager informed us yesterday that he has collected from Unit #3, and another $100 from Unit #4. That means that here on the 18th of December, we have collected $1100! Of course we are still looking for another $400. And incidentally, that would be our cashflow for the month, sitting out there staring at us.
But wait, didn’t we buy the property so that it would be cash flow neutral at 25% occupancy? We sure did. 1 Unit covers debt service, a second unit puts money in the repairs/maintenance account and the third unit is pocket-money. Big surprise we have a huge UTILITY BILL! $600 water bill. And while it is sort of our fault for not taking care of it way earlier that is ridiculous and it is costing us a huge amount of cash every month.
Lets add on to it that Arlene and Zavala are vacant (well, not actually vacant, I am living in Zavala, but my rent is going towards rehab work). And another month has gone by and we are out of pocket on three properties. When the partner comes out in decemeber we will have to talk about our plan and get our butts in gear. Start our marketing campaign to get our units leased to the right people.
A quick summary of Ideas for Future Management Contracts:
- Don’t waive our right to Late Fees
- This Should’ve been a big RED FLAG
- Elimination of Inhouse Contractors
- While I don’t feel like we are getting ripped off on it, I feel like I am not in control of what is going on.
- Always keep a set of keys
- I’m not sure how we didn’t get a set of keys, but this is not something that will ever happen again.
- Increase rent by $75 and offer it as a discount when Rent is received on the first
- Advice from REIClub.com members
- Monetary Reparations from the PM if Rent is not ACH’d by the 5th.
- Bonuses to the PM if Rent is ACH’d by the 2nd.
- The Carrot & The Stick Clause
- Targeted Occupancy/GSI Bonus to the PM
- Increase GSI by 15% over previous year, not only does this increase the amount of money that the PM is collecting at 8%-10% right? So I would be working on getting the rent’s increased, but at the same time they deserve something for increasing my net income!
What are your Incentives that you offer your PM to run your properties?