Ep 95: Property Management Insights with David Grabiner
We don’t often have owners that self-manage on the show but David Grabiner is one of them and he joins us today to share his experiences from this side of the business. David starts by telling us about how he got into real estate and then jumped head-first into managing 120 units after leaving his hospital administration job in DRC and moving back to the U.S. For David, managing properties is fun, and his approach from the very beginning was to be the first point of contact for tenants and handle many of the problems himself – even repairs. In taking this approach instead of outsourcing, David got to learn the business from the inside out, and we explore the many upsides of this philosophy. David is a believer in buying in one’s local markets and we explore this idea in today’s show too. We talk about how you can always find the best deals in the areas you know, which means that investing in deals in foreign markets has to leave you wondering whether a particular deal is so good, because if it was, why wouldn’t a local have scooped it up already? Toward the end of the show, we talk about why David recommends people start out buying properties with a cash-on-cash return policy, the value of being an ‘easy buyer’ for forming good broker relations, and the sense in learning about tenant eviction rights and re-leasing timeframes as a first-time property manager. Tune in today for some tips from an insider about the world of property management!
Key Points From This Episode:
David’s transition into real estate and how he got into self-managing his properties.
The amazing deals to be found in Chattanooga where David focuses his purchases.
How David scaled fast by partnering with his dad and having good financial discipline.
The power of living on a minimum, partnering with friends and reinvesting even a year’s savings.
Why David decided to move back to the U.S from the DRC and start managing properties.
David’s approach to managing 150 units with no prior experience; doing everything himself.
Why David likes doing repairs himself and learning from repair experts too.
David’s use of Buildium to optimize workflow and the different ways he uses it.
Bad property management company practices; poor responsiveness and more.
How David’s experience of doing things himself will help him vet future managers.
The danger of playing the middleman too much: Not understanding your business.
Caution around turnkey properties: If a deal is so good, why is the buyer offering it?
The advantages of buying in your local market and the great deals you can scoop up.
Investing in unknown markets – surely the good deals have been taken by the locals.
The sense in starting with a cash-on-cash return policy and getting more creative later.
Being an ‘easy buyer’, so brokers remember you, while still underwriting properly.
A deal Chris and John lost out on and when to send in a PSA versus use an LOI.
Properties of David’s that he is selling and why he is selling the property he manages for another company.
The slog of getting into syndication and David’s thoughts about whether it is for him.
Advice for would-be property managers: Learn the tenant eviction rights!
“You have to start somewhere with good financial discipline.” — David Grabiner [0:12:18]
“The property manager wants to make money without having done any work and I took a different approach on it.” — David Grabiner [0:14:30]
“There’s a lot of other things to life besides cash-on-cash return, but as a new investor, that’s probably the best place to start.” — David Grabiner [0:33:37]
“Having someone in your place that is not paying and being able to fill it quickly, those are your two main danger areas if someone is going to manage it or if it is your new place. So know how long it is going to take to kick someone out and then also know the market as far as how long it is taking stuff to fill. Because people don’t believe this but a month’s vacancy can make you non-profitable for a whole year.” — David Grabiner [0:49:36]
Links Mentioned in Today’s Episode:
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