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Global Investors Podcast
GI70: Finding the Right Property Manager For You with Jim Murray
October 21, 2020
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Jimmy is a millennial house hacker turned corporate dropout. He co-founded Lyon Property Management in February of 2015 and is co-host of the Cashflow Kings podcast. Lyon Property Management manages 600-units in Rhode Island and Southern Massachusetts; helping real estate investors from across the globe.

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Transcript:

Announcer:
Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host, Charles Carillo, combined decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now here’s your host, Charles Carillo.

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host Charles Carillo. Today we have Jim Murray. Jim owns Lyon Property Management in Rhode Island and manages over 600 units across both Rhode Island and Massachusetts for property owners located both in the US and abroad. So thank you so much for being on the show, Jim.

Jim:
Thanks for having me. I’m excited to be here and hopefully can share some golden nuggets with the listeners.

Charles:
Yeah, definitely. For sure. So Jim, give us a little background on yourself prior to starting your current business line management.

Jim:
Yeah, so I went to college, well, actually, I’m going to start a little bit further back. So growing up, my dad was a carpenter and I’d watch him working on projects and doing all these different things. And he always told me, Hey, pick up a book rather than swinging a hammer like me. So fast forward I go to college, get a degree in finance and I land a job for fidelity investments, where it was a financial analyst and I was actually there for six years. But one year into it, I bought my first multifamily and I literally called my dad every weekend and he was kicking himself for telling me to pick up a book and not swing a hammer. So now I am well versed on, you know, all things, renovation, rehab multifamily and single family investments. But yeah, it’s been a heck of a ride. And I think that my financial background really helps out building out the performer and the analytics and gaining the financing on the projects that we tackled day in and day out.

Charles:
Yeah. It gives you a really well rounded approach to the properties. And what was the book you picked up that you, what got you into real estate?

Jim:
Honestly. So I’m going to go a completely different route here. I read a book last summer in 2019, it was called the soul, the soul’s code. And it talks about acorn theory where all this little acorn trying to grow into this giant Oak tree and Lee, I always wanted to invest in real estate. So when I graduated high school, I received this letter that our sixth grade teacher had us write to ourselves for when we were to graduate and like that there were three questions. There was, what college are you going to? What stocks are you investing in? And have you bought any real estate yet? This is my sixth grade self writing to my senior high school self. And it was just kinda like innate. Like I just always wanted to be a real estate investor. And then we all go through that journey to, to figure out one how we’re going to get there, but what we want to be when we grow up.

Charles:
Yeah. Right. So we have some sort of some sort of path, but we’re figuring out the the trip for getting there.

Jim:
Yeah.

Charles:
So tell us about your property management company. What types of properties do you guys manage size of properties? You focus on being in the, in new England? I imagine it’s a lot of small multi-families or mixed in with what else you do.

Jim:
Yeah. So the majority of what we manage our three to six unit multifamily buildings. So the way that those break out is they really built, you know, late 18 hundreds, early 19 hundreds. So they need a ton of maintenance and upkeep. And they were built for the factory workers that were working in the mills in factory buildings as a part of the industrial revolution. So the housing stock is old, it’s it really kind of caps out at 16 units. There are newer developments, there was a whole bunch of stuff built in Rhode Island in the eighties, like larger 5,000 unit complexes, but those are kind of owned by the five families of real estate and Rhode Island. So that’s what we focus on and specialize in and that’s where we play every day.

Charles:
Okay, cool. Yeah, that’s the same thing throughout all. I think all of new England, we have Massachusetts, I started buying those properties in Connecticut and some of them are so beautiful when you’re inside of them, the ornate woodwork and everything like that. But they are very they’re a lot of them are in tough shape, so there’s value to be made, but there’s I bought one property and I was, it was built in 1900. I think it was my second property was a three family. And I was literally, I think the fourth owner, I still own it now, but the fourth owner of that property and like a hundred and whatever years, it was crazy. And but it’s amazing how it is up there, but it’s, yeah, that’s all it takes to write property manager to handle those type properties, to understand everything that goes in with properties pre you know, pre led and everything being down in Florida. Now people consider properties. I always laughed to myself. I’m built in the sixties as being old or in the seventies. And you’re like, I’ll be like,

Jim:
Hold on. Those Romax in here were good. Or maybe it was like BX cable or Luminex, but yeah,

Charles:
there’s no knob and tube.

Jim:
Right. Right. Exactly. Yeah. Cause you go into those old, you know I actually, I bought one, two months ago and it was riddled with knob and tube and that is a whole nother project. That crazy good stuff.

Charles:
Yeah. If you don’t know what it is, just Google it and you’ll see and you’ll be like, Oh my God, is that even safe? And it’s not anymore. So

Jim:
It’s very difficult to insure. So don’t let your insurance inspector in until it’s cleared out.

Charles:
So you know, I always say that when I talk to people that property management is the most important element in real estate investing. You’re the ones that have contact with the property, contact the tenants, what are some traits of a good property manager and how would an investor go about finding one?

Jim:
Yeah. So I think it’s really important to view your relationship with your property manager as a partnership. So I always talk when I’m trying to onboard prospective clients about how we’re going to work kind of arm and arm to generate that return on investment that you’re looking for. So that’s number one, kind of having that mindset on the way in the second part is your property manager has to share a similar investment style and approach as you are for that property. So if you onboard a property in a C neighborhood and your property manager is like, Hey, we’re just going to rent strictly a section eight. And you’re like, nah, you know, I want to go after maybe try and target a B demographic or, you know, go out to the general public rather than section eight. Like you really get to share that similar investment approach so that you can meet your goals for the property, meet that ROI that you’re trying to generate.

Charles:
Okay. And so what’s the best way that someone would go obviously to in their local market and find someone that would best fit. You know, where would you, where would you go to find a property manager was the best way of doing it?

Jim:
Yeah. So I’d start on Google. So there are numerous different resources. The crazy thing is we built our business from Thumbtack, which is insane. So Thumbtack is a service where you can push out a quote or get five people that respond back they’ve shifted their platform. But I go to Google and look for property marriages within about a 30 minute radius of your property. You can try and pick the ones with the highest Google ratings. I would say the really strong property managers are going to be focused on reputation management, read through the reviews. Now this is one thing that I do. So I recognize a Pat on the back as you know, foot away from the cake. And then, you know what but we’re, we’ve been able to secure more clients is in my responses to the bad reviews. So literally I respond to every single bad review as a property manager and clients respect that. So one thing to acknowledge when you go to onboard a property manager, you’re on Google, you’re looking through the reviews. There is no such thing as a five star property manager, if they are doing their job in trying to generate that return for you, you are not going to find a perfect property manager because they are going to upset somebody doing the job that you sent them into too. So really pay attention to those bad reviews and how they respond. And maybe ask some questions during the interview process of like, Hey, talk me through the scenario. I saw this, you know, really upset tenant. What happened there? How’d you handle it? Would you handle it any different in the future? That’s really important. You need a property manager, that’s going to be able to have those difficult conversations in order to drive that return on your property.

Charles:
So you’re working with a lot of smaller properties. What systems and technology does your company have in place to assist with making property management? A more efficient process?

Jim:
Yeah. So coming from fidelity fidelity taught me even, even during the downturn, like when I came up, I came into college in 2010, right. They invested hundreds of millions of dollars into their platform and into technology. And I brought that into our property management business where huge emphasis on technology so that our team, as they’re on the road, they can essentially work for their smartphone, right. And have all the information at their fingertips, whether it be, you know, a maintenance technician or a showing agent. The platform that we love is app folio. So app folio is our core system. I have played in building them a little bit. I’ve played in property where we went to property, where for a year in 2019, it almost literally destroyed our business. I am so glad to be back in polio, just really easy platform to use. And we’re actually in the plus version. So we have a on-call concierge. So if we get any wild client questions, we can on the phone with a concierge within two hours to help solve that problem. We think it’s the most all-inclusive software. The one piece of software that we use that a lot of other people just are unfamiliar with is called tenant Turner and that’s our showing platform. So there are three main players in that space. One being friendly, the other being show mojo and then tenant Turner is kind of the new entrant over the last couple of years. But even for a DIY landlord, if you’re listening in tenant, Turner is worth a book, it is going to help you streamline your free rental process and helps you gain efficiency on a number of different levels.

Charles:
Can you go over those other ones? I know we’ve used a Brentley before with our property manager. Can you explain those, those different those different products and services?

Jim:
Definitely. So Brentley is really where they cut their teeth is on that lockbox showing software. So I think I’m like the West coast where people are used to using that lockbox technology. I think it works on the East coast. If I were to put a lockbox on a pro actually a property manager went with Brentley and the lockbox system. And they went out of business last year. But people in the East coast, they’re just, I mean, you know, growing up in Connecticut, like different tilts. So if I publish a listing and I’m like, Hey, you gotta give me your credit card information and pay a dollar to get the code. And then do herself showing people like this is a scam. There is no way this is going to work. So you have to pay attention to what works in your market. Readily doesn’t it doesn’t work for us. Just, I don’t think people trust it. We use show mojo for the better part of one and a half to two years. What I recognize was is that show mojo charges, the property manager by the lead, and then they’ve recycled the leads. So if I have a two bedroom on Donal Avenue, but talk at Rhode Island and I get 600 leads, and then I get one at three 45, but tuck it Avenue, they’re going to recycle those 600 leads and charge me twice. And I was like, nah, I’m good with this. So I’m not trying to bad mouth them. The other, the other big thing is that I was getting a lot of phone calls from owners. So clients are like, Hey, I know you have the listing out, but like, what does it look like in chomo? Joel had this math book of a report and it just, it wasn’t clean. And I even talked to the founder on the phone and I was like, listen, like, she was like, well, send it to my developers. I’m like, you’re the founder of the company. You send it to developers to work on it because you’re gonna lose this as a client, which they did. So the cool thing with tenant Turner is that tenant Turner’s going to follow up 24, eight and two hours before. So we get more prospective tenants out to the property. We then conduct group showings, which in COVID we’re no longer able to do, but there’s a ton of built in functionality where literally I can set up tenant Turner where if someone books a showing it to, I can have somebody else log in at two Oh one, two, two, two Oh three and stack all the showings. So it can be anywhere from one minute to, I think, 30 minute increments, maybe 60 minutes for those showings. The other big thing is within an hour after the showing tenant terror is sending them a blast email saying, Hey, how’d you like it? Leave feedback. And by the way, here’s the link to the application. And then it’s going to continue every 48 to 72 hours of send a link to the application. So we’re able to drive more prospects, applying to properties, and we can roll those applications across any property that we manage. The last huge piece with tenant Turner is that you set it on a weekly basis to send a report to your owners. So this is an automated way for me to show my owners who may be we have an owner in Germany and in Germany on a completely different time zone and fully different way of life. He can see what I’m actually doing for his property back in the States and provide him that higher level of comfort. In the sense of that report for us is sent every Sunday at 9:00 PM Eastern standard time, it’s going to show the number of leads for the week, as well as, since the listing has been launched. The number of showings books, the number of showings actually completed and then live feedback. So say I go out there pre-listing and I say, Hey, listen to the bathroom really needs to be painted. It kind of looks like junk. And the owner’s like, no, I don’t want to pay for that. Well, now that that live feedback, the owner is going to be able to see it to say, Oh wow. You know, we had three prospects come out and they all set the bathroom kind of looks like crap. So, you know, we, we should address that. So I think that those reports are critical because it shows the owners that we are putting in the work and we are getting leads. Or another example is some owners will come out and they’ll say, Hey, listen, I want 1900 a month for this unit. I’m like, I think you can get 1600, 1900 as a push, but I’ll tell them, Hey, listen, well, listen at 1900. And now every week we can come in and diagnose based on the number of leads that we’re getting, the feedback that we’re getting and it allows them to make a more informed decision. So it’s kind of a form of coaching as well.

Charles:
Yeah. Yeah. That’s a, that’s a great way of doing it. When I was self managing properties, years back in Connecticut, I had certain units and properties, as you know, are kind of weird shapes. There’s no comps for them, you know what I mean? And comparables and I would start them at one number and it would be like, okay, I’ll just drop it like 15 bucks a week until I find someone. Cause there’s no, there’s no way, you know, you have no way of knowing if this is going for a thousand or my end to get, you know, 875 for this, for this unit. So it just takes a little bit, and that’s a great way of keeping an eye on it and also letting your cause I do that with my property managers, when I have calls with them, I’m like, where do we stand with this? What’s going on? And that’s something I’ll bring up to them to kind of streamline that. But

Jim:
So the other thing if your property managers use that folio if they have the plus version, they can push out insights. I don’t love the leasing software built an app folio. They are making it more robust. They spend a ton of money on development, but literally you could log in 24 hours a day and you would have that leasing dashboard that would show you all the way down to the application level, what they’re doing for your property please.

Charles:
So what do you suggest for like say small mom and pop owns a few units, maybe one property, like a, a three family or our quad. They don’t have any software at this point. What would, what’s an easy way inexpensive way of them advertising units online, is it, is it putting it on Zillow that goes out through all hot pads and all the other ones? Or is there a different way that you would suggest?

Jim:
Yeah, so this is going to be blunt. I hate Craigslist, like Craigslist doesn’t work in our market. And I think that you’re really scrubbing the bottom of the barrel in terms of tenants. If you’re a mom and pop to two, one would be Zillow, rental managers is a great spot. I can remember when I was doing it myself and it was Postlets, Postlets got bought out by Zillow. So I think that’s the best route. And the reasoning behind that is the cream of the crop tenants that you’re looking for. They’re signed up on a Trulia or Zillow to get push notifications as soon as listings come live, because that is how hot the rental market is. Contrary to popular belief that the media pushes out the rental market is still extremely hot with all of the, you know, economic pain that’s being pushed around. Also if you’re a mom and pop, I think another great platform, I haven’t personally used it, but I know a lot of other DIY landlords locally that use it as cozy and cozy provides more of that all inclusive approach where I think you can also run screening reports and take applications.

Charles:
Okay, cool. Yeah. I’ve heard about them and I know they have, they used to have a free version or something for smaller landlords, I believe, but yeah, Zillow is, it’s amazing. Cause they’ll have so many different platforms that are part of it now that you can put an ad on Zillow and and it goes everywhere. Number one. And then number two, I mean, you’re getting new leads that are coming in through that system every 15, 20, 30 minutes. I mean, it’s crazy

Jim:
Price it. Yeah. If you price it correctly, your phone could literally light on fire with how many leads you guys.

Charles:
Yeah. I was looking at it. I was getting stuff I was reviewing the day after. It was like Saturday night at like, you know, it was like 10 o’clock, 10, 15, 10 30, 10 45. It was like, you’re just sitting there and you’re like, okay, here’s a, you know, and I’m just getting CC’d on it. My property managers are doing, I’m like, if you can’t rent the property, you know what I mean?

Jim:
So that’s the big thing that I coach our showing agents on is like, Hey, listen, we invest in this great technology. Your job is to go out and close the best prospect,

Charles:
Right.Yeah, no for sure. So you manage properties for a lot of foreign investors. You’re just talking about one out of Germany. What special considerations you make for an investor that resides outside of the U S and maybe this is their first investment in the U S or as you said, it’s a whole different way of life and different rental, obviously market from international.

Jim:
We try to overcommunicate. So in terms of providing additional reporting, additional emails, higher level of touch, they get them comfortable at the initial jump of onboarding that relationship. And then once they got comfortable, it’s all the right level of touch for them. Because I think when a lot of people, if they start in the U S and they move abroad and they’re looking to work with that property manager, I think there’s a high level of sensitivity in terms of them getting adjusted, where they are, but, you know, having control of their financial lives in the U S is, you know, important to them as well. And, and we’re a part of that equation. The other thing is like I have I’m subscribed to Calendly. So all of our clients have accounting link that they can book with it for 24 hours notice they can book a 15 minute client phone call to give them access to us. And that, that gives that client overseas more of a peace of mind that they still have access to us. They’re still in touch and we’re still taking care of the property. Like we told them we would.

Charles:
Nice. Yeah, that’s awesome. And I imagine you’re taking over properties from owners that don’t want to self manage anymore or moving it from a different property manager. What, what do you see, like in regards to most common mistakes that a real estate investors make?

Jim:
Yeah, so I think it’s I think it really comes down to tenant management and strong tenant management in terms of the rental process and then annual rent increases. So I think that investors leave a ton of money on the table by not going through that annual process where they get inside the unit and make sure it’s still in good shape, make sure the right tenants in there. And then also getting tenants accustomed that annual rent increase, even if it’s 10 to $15, get them comfortable with that because when you get that huge tax increase or that insurance bump, the tenant’s not going to want to hear it. Oh, your rent’s going up a hundred bucks a month this year. I haven’t increased it in four years. They’re still going to be upset where if you’d gradually increase it, that’s going to protect you as an investor, but also make it a little bit easier on your towns.

Charles:
Yeah, that’s definitely, I’m definitely guilty of that when I used to self manage. If you had a great tenant in there, you’d let it slip. And then you say, well, you know, now it’s my property, my property your property taxes are going up $1,200 or whatever it is. And now I’ve got to spread that around. So, and they’re there, you know, the, the tenants are, they’re not looking forward to it, but they’re expecting that they’re going to have an increase of maybe not five, 7%, but two, three, 4%. They’re going to expect to have that. And it’s, it’s healthy to keep on doing that. And even if you’re rewriting, like you said, I have some smaller units and we’ll add 10 bucks, you know, in Connecticut. And under those properties, it’s a much different when we’re on our properties in Florida. But yeah, it’s, it’s amazing how it is. That’s, that’s a great, great way of doing it and a great way to check in with them. Cause you want to walk through the property and see what, what the heck’s been going on in there since you gave him the keys to.

Jim:
So I call it a safety inspection where I tell them, Hey, listen, I just want it. And we do this at onboarding when it comes from either a DOE or a landlord or another property manager, I want to make sure that we’re providing you a safe, comfortable place to live. But really this is me getting in there, see if there’s any cap ex and also, you know, how high it can increase the rent. So yeah,

Charles:
Yeah, yeah. And they see what they’re doing in there as well. I mean if, if stuff, cause I’ve gone in place to before and you’re like, Oh, this, you know, your toilets, your toilet’s leaking, you know what I mean? And this is going to end up in North, you know, that’s something on the landlord meter and you’re like, why didn’t you call me? You know what I mean?

Speaker 2:
And they’re like, that’s important. And it’s like, well, yeah, that running toilets cost gotta be, cost me an extra 10, 15 bucks a month. And I know it’s small, but it’s going to get bigger.

Charles:
Yeah. They really add up. It’s amazing on those small little leaks, wherever they are, or a faucet that doesn’t turn off a hundred percent or, you know, whatever it is they, they add up and especially in the Northern States, the older places where you have a landlord meter and you don’t have it separately, metered in which we have in a lot of newer construction. But yeah. That’s, that’s great. So you have a podcast, Jim, tell us a little bit about your podcast.

Jim:
Yeah, absolutely. So I’m co founder of the cashflow Kings podcast and find us on Apple music or sorry, Apple podcast, Spotify. One other platform. I can’t remember off the top of my head but we’re really focused on helping investors either, you know, pick up that first investment property or continue to hone their investing skillset.

Charles:
Awesome. one thing I just wanted to circle back before we close out tell us about what you’re doing with COVID. I’m always interested to see how people are managing COVID and since you manage so many units, you have a different perspective. How are you doing it with your tenants and with your own property?

Jim:
Yeah, so the big thing in the beginning more it’s now streamlined, even though we just had the news of the eviction moratorium being extended at federal level. But in the beginning it was providing that human component. So we’ve always positioned ourselves as a relationship business relationship based business on, you know, our client side for the investor, but also for tenants having some level of empathy, but knowing that it’s a privilege to live in our units and the way to earn that privilege is to pay rent. So I know that sounds a little bit cold with COVID, but what we did is when we couldn’t send out eviction notices, because the courts in Rhode Island were closed in a Massachusetts, they’re still close through at least October 18th. We provided a weekly touchpoint, so we would send out a letter. The first one was, Hey, this is how you apply for unemployment. If you’re impacted, let us know if you need help applying. The second one is like, Hey, if you haven’t if you haven’t paid your rent and you have been able to achieve unemployment, let’s get on the phone and talk through a weekly payment plan to align with your benefit so that we can chip chip away at that past due balance. Another one was when the $1,200 similar got pushed out is like, Hey, here’s where you can check on your similar payments. Here’s where you can apply. Here’s where you can see what you qualify for and then around. And they push out another program. And we said you know, $5 million has been a lot by the governor to come into this program. Here’s where you can apply. If you need help with the application or you need you know, a copy of your lease or whatever else we can help you with that. So it was kind of that, it’s that human approach to say, Hey, listen, we’re all going through some stuff it’s different for everybody. But if you need help, we’re going to help you out. Just make sure that you communicate. You know, if you, if you are unemployed, you lost your job. Whatever happened, reach out to us, make sure that we’re familiar with it so that we can help you. You know, if you guys go rogue and we don’t hear from you, then that’s when you know, things are going to go sideways a bit and we may put you on the thumb.

Charles:
Yeah. That’s, that’s one thing I’ve always said, if you’re having an issue communication, and that goes with all types of parts of business, but a lot of tenants just try to avoid it. And you say, listen, you know, same thing you’re saying, Hey, let’s have the conversation. There’s a problem. We can work through it. I’m not seal team six. I’m not going to find you if you’re, you know, if you’re not picking up your phone, if you’re not picking, you know, responding to emails, paying rent, like we have no idea what’s going on. So just be open with us. And we have to work through it that way. So that’s, that’s a great way of doing it. The communication lines open and let everybody know that they have to talk to you if they can’t pay the rent. But so how can our listeners learn more about you and your business? Yeah.

Jim:
So feel free to check me out LyonPropertyGroup.com or give me a follow on Instagram in my hand on Instagram is TheNotoriousCFK.

Charles:
Okay. Great. Well, thank you so much, Jim, for being on the show today, I’ll put all those links in the podcast and YouTube notes and looking forward to connecting with you in the future. That’s good. Thank you.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

Announcer:
Thank you for listening to the Global Investors Podcast. If you’d like to show, be sure to subscribe on iTunes or Google play to get new weekly episodes. For more resources and to receive our newsletter, please visit global investor podcast.com and don’t forget to join us next week for another episode.

Announcer:
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of harborside partners incorporated exclusively.

Links and Contact Information Mentioned In The Episode:

  • Website: LyonPropertyGroup.com
  • Instagram: @TheNotoriousCFK
  • Facebook: Facebook.com/TheNotoriousCFK

About Jim Murray

Jimmy is a millennial house hacker turned corporate dropout. He co-founded Lyon Property Management in February of 2015 and is co-host of the Cashflow Kings podcast. Lyon Property Management manages 600-units in Rhode Island and Southern Massachusetts; helping real estate investors from across the globe.

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