Holland & Picht: Recent Episodes
Thom Holland
Learn from some of the brightest local minds in and around Real Estate. Join us weekly for an off the cuff discussion with local experts, investors and business leaders.
Have questions about how to use the Buildium Owner Portal?
This article is meant to provide a quick reference for using the portal and answering frequently asked questions.
If you find that you still need help, please don’t hesitate to give our office a call.
Let’s dig in.
How do Owners access the Buildium portal?
The first step to using the portal is to log in.
- Open up the browser of your choice and navigate to HollandPicht.com
- Next, click on Owner Login to access the Buildium Owner Portal
- Log in using your credentials.
What if I forgot my password?
If you can’t remember your password, you should find a “Forgot password” link on the login screen.
Click on that link and complete the process. The system will send an email to the email address on file and prompt you to reset your password.
If you continue to have trouble, please feel free to call our office.
How do I see expense details for my properties?
Once you’ve successfully logged in to the Buildium Owner Portal, you should see a screen that resembles the above.
To view details around repair expenses:
- Start by expanding the property you’d like to view.
- And then drill down on the month you’d like to view.
As shown above, once you drill into the monthly repairs, you’ll be able to see all of the repair expenses for that particular properly.
- Start by setting “accounting basis” to “accrual” and, if needed, change the filters.
- For repairs that were performed by a 3rd party vendor, you will see an attached invoice next to it. You can click on these and download them if you’d like.
How Do I Contribute Money Electronically for Repairs?
If you need to contribute funds for some reason, you can do so electronically via the Owner Portal.
- Simply navigate to the Financials tab.
- Then click the “Send Funds” button.
Once you click the “Send Funds” button, you’ll be sent to a wizard that walks you through contributing the funds.
If you have questions about this process, you can call into our Office or simply submit a request via the portal.
How do I submit a request via the portal?
To send a request via the portal:
- Navigate to “requests”
- Click the “Add Request” button and complete the form.
From the requests page, you’ll be able to see any requests that you’ve submitted.
Similarly, you’ll be notified via email when a request is updated.
What is a good cap rate?
If you’ve been around real estate investing for any period of time, you’ve likely heard the term “cap rate”.
But what is a cap rate? What is a GOOD cap rate? As an investor, when should you use cap rate? Does cap rate really matter?
In this article, we’ll dig in to answer those questions and aim to give you some real life perspective on the value of cap rate.
Let’s go.
Why buy foreclosed homes?
Contrary to what many want to believe, buying foreclosed homes isn’t always as easy as it might seem.
This guide is mean to help you, a real estate investor, better understand the foreclosure space so that you can make better investment decisions.
Let’s dig in.
What is a foreclosure?Here is how Wikipedia defines foreclosure:
Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.
In other words, someone borrowed some money to purchase a home and has now, for whatever reason, stopped paying that money back. In an attempt to recoup that money, the lender is now attempting to force the sell of the home.
This is foreclosure.
What is The Foreclosure Process?To properly have this discussion, it’s important to understand that there are different stages of the foreclosure process.
For the purpose of this article, we’re going to bypass the idea of buying foreclosed homes at auction and focus on the following two generic stages:
- Pre-foreclosure
- Post-foreclosure
Pre-foreclosure
As you might suspect, a property is in pre-foreclosure when the home owner is no longer making proper payments to the lender but the lender has not yet taken back ownership of the home.
Post-foreclosure (REO Foreclosures)
Similarly, foreclosure is when the lender has formally taken back ownership of the property. This is known as a “REO” or “real estate owned”.
This stage is reached after an unsuccessful attempt to sell the property at a foreclosure auction.
Buying foreclosed Homes Pros and ConsEveryone gets really excited about buying foreclosed homes.
However, as you can imagine, there are two sides to every coin.
Let’s take a moment to quickly look at both the pros and cons of buying foreclosed homes; specifically homes that have already been taken back by the bank.
Benefits of Buying Foreclosed Homes:
- Motivated Sellers - When a property is in foreclosure, the lender is trying to get their money back. In some scenarios, this naturally puts the buyer in a position of leverage.
- Deferred Maintenance - When a home has been foreclosed upon, it means the previous Owner couldn’t or wouldn’t make the payments. If they couldn’t make the payments, it’s also reasonable to think that they would stop investing in the on-going maintenance of that property as well. Most people will see this as a negative to buying foreclosed homes. However, as an Investor, you should realize that it will scare of away some potential buyers and leave you with less competition.
- Less Emotional - Dealing with Banks and not homeowners.
- Fewer Liens - In most cases, by the time a property is taken back by the bank, it will have had any liens placed against it settled. This makes your life as an investor easier.
Risks of Buying Foreclosed Homes:
- Competition From Investors - Believe it or not, buyers don’t always have the upper hand when buying foreclosed properties simply due to the amount of competition from Investors these days. As with anything, to win as an Investor in the foreclosure space, you need to be able to do this better than your competition.
How to find foreclosed homesAlright. So now that we have a general idea of the foreclosure process, let’s dig in to how to find foreclosed homes.
Again, you can really break this down into pre-foreclosures and REO foreclosures.
What you’ll notice is that the way you go about finding foreclosed properties doesn’t really differ much to how you’d go about finding any investment property.
Pre-foreclosures
- Buy a list - One option for finding pre-foreclosure opportunities is to purchase a list from businesses who track this sort of thing.
- Driving for dollars - A somewhat passive option is to do what’s called “driving for dollars”. This is where you simply note troubled looking houses as you drive around your city. If you see a dumpy property, chances are it’s in trouble. Make a note of the address and do a little digging.
- Online sites - Lastly, sites like Zillow and Trulia are able to track properties that are likely to be in pre-foreclosure. While you should always take these sites with a grain of salt, they do provide some level of insight into properties that MAY BE in trouble.
For a deeper dive, check out this REO properties resource compiled by the folks over at BiggerPockets.
REO foreclosure
- MLS - Probably the best way to find a REO foreclosure is to simply have a great Real Estate Agent working on your behalf. This person will have access to the MLS where the REO foreclosures are listed. The good news here is that the seller (the bank) will typically cover the costs of the agent.
- Online sites (not perfect) - As I mentioned earlier, you can use online sites like Zillow or Trulia. Please just make sure you understand that their data is not perfect. You should consider it just insight and do your own investigation from there.
How to Buy Foreclosed HomesAs an Investor, the overarching available strategies you have when buying foreclosed homes really doesn’t vary much from how you would approach any other home investment.
The same investment strategies are available. Below are a few of our favorite:
- Buy and rent (BRRRR) - Buy, renovate, rent, refinance and repeat…just with a foreclosed property.
- Buy and sell (flip) - Buy, renovate and flip it.
- Live in flip - Buy it, move in to it and renovate it over a period of two years. After two years, flip it.
Regardless of which approach you take, make sure you take your time to plan out and professionally manage your project.
Similarly, if you plan to hold the property as an investment, make sure you take into consideration any holding costs you will have; such as property management fees.
Financing a Foreclosed HomeBuying foreclosed homes, particularly those not in great condition, can be tricky.
Here are your typical options:
- Standard bank financing - if the home is in decent shape, chances are, you can pursue the traditional bank financing options. FHA, VA or conventional.
- All cash - if you’re an Investor, it can really give you a leg up on your competition if you have enough cash to purchase and renovate the property.
- Private money - If you don’t have the cash yourself to fund the purchase and renovation, you can go to private individuals and try to convince them to fund your investment.
- Hard money - Similarly, hard money lenders are another option for those who do not have the needed cash available to fund the investment by themselves.
ConclusionSo to wrap this up - buying foreclosed homes can be a great path to take in some scenarios. However, as with most things, you can’t expect this to be a silver bullet that will make you rich over night.
Instead, take your time to really understand the foreclosure process and invest your time and money incrementally to get more experience in the space.
Cheers.
In this episode, Thom Holland and Jason Picht discuss Thom's recent rental renovation and the lessons learned through it.
How much does property management cost?
If you own rental properties, chances are, at some point, you’re going to start trying to wrap your head around property management fees so that you can make a wise decision as to whether or not to hire a property management company to manage your rental properties.
The intent of this article is to help you make that decision.
Let’s dig in.
Variables That Impact Property Management FeesSo, how much does a property manager charge?
As you might suspect, there are a handful of variables that could end up impacting the property management fee a property manager ends up presenting you.
Let’s review a few for context.
Property ConditionOlder or neglected properties tend to need more love and attention.
In most cases, that means a property manager will want to charge you a higher management fee as it will likely take them more time to manage the property.
What makes a rental property in “good” condition?
A good rental property is one you feel great about renting to others. If you feel a bit guilty about taking renter’s money, something isn’t right.
To get a bit more practical, in a spreadsheet, list out each major component of each room in a column (doors, lights, flooring, etc).
Next, create a drop down list that populates the second column. The drop down list should contain the following three options:
- Rent-ready
- Needs minor repairs
- Needs complete replacement
Once you have your spreadsheet laid out, go through and inspect your properties for each of the items you’ve listed. Once you have everything “rent-ready”, you have yourself a rental property in “good” condition.
The Holland & Picht Approach
We always start by helping property owners develop a property improvement plan. The goal here is to improve the property to a point in which it is capable of being rented. The plan also includes what improvements should be made over time and when. Since this typically happens before we even find tenants, property condition doesn’t have a direct impact on the monthly management fee.
We also don’t charge a fee for helping Owners develop or execute a property improvement plan.
Property Location and Crime RateSimilarly, property management costs will likely vary based on the location of your rental property.
There are really two questions a property manager is looking answer here:
- Is the rental property within my service area?
- Is the rental property within an area that has an acceptable crime rate?
The Holland & Picht Approach
At the moment, we only manage properties within or near the Tallahassee city limits. For us, we’re not willing to charge a higher fee for one or two properties outside of our service area as we don’t think we’d be able to provide the same level of service we do to the properties we manage within our service area.
Crime rate, however, is very important to us; as we’re only interested in providing housing in safe and clean neighborhoods. Similar to location, for us, crime rate does not impact the monthly management fee as it would some other providers; we simply will not agree to manage unsafe properties.
With that being said, here is an example of how those of you in Tallahassee can determine the crime rate of your rental property’s neighborhood:
- Go to https://www.talgov.com/gis/tops/
-
Apply the following “historical search”:
- Address
-
Incidents
- Aggravated Assault
- Aggravated Battery
- Arson
- Assault
- Assault LEO
- Battery
- Battery LEO
- Bomb or explosive
- Bomb threat
- Carjacking
- Homicide
- Homicide - Attempted
- Kidnapping
- Prostitution
- Robbery - Armed
- Robbery - Snatching
- Robbery - Strongarm
- Sexual Battery
- Theft - Grand
- Weapons Violation
- Days = 365
- Buffer = 1/4 mile
From there, you can create a scale that objectively evaluates the neighborhood:
- 0-2 crimes = safe neighborhood
- 3-4 crimes = not a safe neighborhood
Property Management Services Included
As illustrated in the image above, pulled from a report published by Buildium, property management companies can often provide a wide variety of different services to their clients.
As you can imagine, what services you are receiving will impact the property managers fee.
Let’s take a quick look at some of the common property management costs in the next section.
Overview of Common Property Management FeesInitial Setup FeeAs I mentioned earlier, we don’t charge an “initial setup fee” and we don’t tack on a fee for helping property owners get their property up to speed.
However, it’s very common for companies to include a fee in the $300 ballpark for setting up your account and preparing your property to be rented.
This typically covers the costs associated with those activities.
Monthly Management FeeA monthly management fee can range any where from 6-12 percent.
There are a few important things to consider and keep in mind:
- Flat fee vs Percentage of Rent - A property management company will either charge you a flat fee or a percentage of the rent. At Holland & Picht, we will charge $75 per unit or 11% of rent collected; whichever is greater.
- Rent Due vs Rent Collected - When you are reviewing your management agreement, make sure that it clearly states that the monthly management fee is paid when the rent is collected. Otherwise, you could end up owing money even if no rent was collected.
Tenant Procurement FeeWhen a tenant moves out, there is a considerable amount of work the property manager will need to do to get the property back up to speed and to secure another great tenant.
It’s common for a tenant procurement fee to be half or equal to the 1st month’s rent.
At Holland & Picht, we charge an entire 1st month’s rent.
We do this because we are willing to cover the eviction costs associated with any tenant that we place in a property.
In other words, we’re confident in our ability to place long-term, low maintenance tenants.
Vacancy FeeIt’s hard to believe that any property manager could get away with charging a vacancy fee; as filling a vacancy for you should be at the core of their job. However, it’s possible in some cases.
If there is a vacancy fee, it will typically be around the $50 per unit park.
Holland & Picht will never charge you a fee for a unit being vacant.
Repair Management FeeIt’s common for property management costs to include a repair management fee of 3-10%.
This typically covers the costs associated to resolving maintenance requests that arise at your property.
At Holland & Picht, we decided to charge a slightly higher monthly management fee and NOT nickle and dime customers with additional property manager fees like this one.
However, if a property management company is charging you a lower management fee, it’s likely that they will want to also charge you for managing and coordinating maintenance repairs.
Property ReservesA good property manager will require you to keep some amount of money in store for emergency repairs. There typically is not a fee for managing this reserve fund.
At Holland & Picht, we encourage property owners to contribute a property reserve that is equal to 1 month’s rent. This fund is kept in a separate, non-interest bearing bank account at Holland & Picht and is used to resolve maintenance requests less than $300. For expenses greater than $300, we always get Owner approval first.
Eviction FeeSo this is a big one and one that we feel strongly about.
Most property manager fees will include eviction fees. In other words, when a property manager needs to evict tenants, they will pass on the eviction costs to you and, in some cases, even charge you a fee to manage that process.
This could be any where from a few hundred to a few thousand dollars.
On top of this, they will then turn around and charge you a tenant procurement fee for finding another tenant.
See the misalignment?
At Holland & Picht, we place serious effort into finding great, long term tenants up front to avoid the eviction process altogether. To further align on this with property owners, we offer to cover the eviction costs for those tenants that we placed.
Is it worth hiring a property manager? (hint: cost isn’t as important as you think)To wrap this up, I’m hoping by now that you’re realizing “how much does a property manager cost?” is the wrong question to be asking.
Assuming you’ve purchased your rental property correctly, it is almost always worth hiring a property manager to professionally manage your property.
Once you’ve purchased a rental property at a price that allows you to hire a property manager, you’ll notice that cost becomes much less of a factor and the focus is more on WHICH property manager to hire.
With that in mind, I’ll leave you with a few questions to consider about potential property managers:
- What are your goals and how can the company help you reach them?
- Are quarterly inspections ACTUALLY performed AND acted upon?
- Are there service level agreements in place?
- What testimonials are available?
- What experience do the founders have and how does it provide value?
- What’s the culture of the company?
Best of luck :-)
In this episode, Thom and Jason answer a common question from the #mailbag - should you create an LLC for a rental property? They talk about a number of advantages and disadvantages before finally providing their 2 cents on how you should go about it.
In this episode, Thom and Jason discuss how real estate investors can find investment properties. They talk about finding investment properties through the traditional brokerage process and dig in some to the unconventional "off market" tactics that the more seasoned Investors can use. Enjoy!
In this episode, Thom Holland and Jason Picht sit down with Tallahassee’s Jeremy Floyd to talk recent Real Estate developments in Tallahassee and how each project had challenging hurdles to navigate.
Tune in to hear:
How Floyd thought his stay in Tallahassee would be short lived but ended up being a pleasant and long term move for him and his family.
Floyd’s thoughts on real estate trends in and around Tallahassee.
How Floyd and the team played a role in recent real estate developments such as Braemore Park and the Freight Yard and
In this episode, Thom and Jason sit down with Leon County’s Chief Resources Development Officer, Barry Wilcox, to talk ordinances that impact real estate development in Leon County.
In this episode, Thom and Jason sit down with Chris Petley; the President of the Tallahassee Soccer Club to talk starting an organization from nothing, tackling meaningful initiatives in Tallahassee and building community assets.
In this episode, Thom and Jason sit down with Leon County Commissioner and CEO of America’s Second Harvest of the Big Bend; Rick Minor, to talk a wide variety of topics around local real estate development and politics.
Tune in to hear:
Rick’s background and how he’s really come to enjoy living and working Tallahassee.
The challenges Tallahassee faces with quality affordable housing.
Insight in to challenges investors have when it comes to storm water restrictions.
A coming forum designed to encourage neighborhood advocates and local real estate investors to engage with each other about coming development projects.
Rick’s take of the state of the local economy and even the current political climate in our country.
In this episode, Jason and Thom sit down to discuss local economic development and investment opportunities within Tallahassee with Cristina Paredes and Richard Fetchick from the Tallahassee-Leon County Office of Economic Vitality
Tune in to hear:
What the Office of Economic Vitality does and how they can help local Real Estate investors.
How local research at the Magnetic Lab is making an impact on industries and companies like Danfoss.
How real estate investors and developers can take advantage of Opportunity Zones; as well as make a meaningful difference in our local community.
And more.
In this episode, Thom and Jason break down some of the worst tenant experiences they’ve ever had and the lessons they’ve learned.
Enjoy.
Tune in to hear:
How mold can be a landlord’s worst fear and why regularly inspections are so important.
Jason’s advice when it comes to being a “nice guy” with tenants.
How Thom finally caught the raccoon that was terrorizing his house.
In this episode, Jason and Thom answer some of the Internet’s best (and worse?) real estate investing questions.
Tune in to hear:
The craziest thing Jason has ever walked in on as a Realtor in Tallahassee.
How much money you need to start investing in rental properties.
Whether or not partnering with other investors to buy rental properties is a good growth strategy or not.
Thom’s story of the giant moth that attacked his family this past week.
As you grow your Real Estate portfolio to a certain point, you’ll find that you can no longer finance your investments in the same way you’ve done in the past. You’ll find that you need to utilize commercial lending options; which can vary quite a bit from a traditional loan. In this episode, Josh DeSha, local business banker in Tallahassee, will walk us through the ins and outs of commercial lending options.
If you’re just starting your career in Real Estate investing, chances are you spend a lot of time thinking about the numbers and profitably scaling your portfolio. In this episode, we sat down with local real estate investor Will Peters who explains his experience achieving those things; as well as the underlying purpose that keeps him going.
In this episode, Thom and Jason interview John Harvard of Harvard and Associates CPA to discuss the basics of real estate tax strategies for investors.
In this episode Thom and Jason discuss “ARV” or “After Repair Value”; a critical calculation that real estate investors need to understand in order to properly gauge a potential deal.
Growing a Real Estate portfolio is not as complicated as you might think, suggests Charlie Peters; long time Tallahassee real estate investor. In this episode, we’ll explore Charlie’s background and how he went from selling pharmaceuticals to scaling a large, multi state real estate portfolio.
As an investor, it’s good to understand the traditional financing options available and how they can change over time, says Dana Cummins; Assistant Vice President at Fidelity Bank. In this episode, Dana highlights the options for first time home buyers, growing investors and even investors who have reached the residential loan limit set by Fannie and Freddie.
In this episode, Thom and Jason introduce themselves, their new real estate podcast "Holland & Picht" and why you should tune in.