How many sfh units do you manage? - Posted by buster

Real Estate Investing Self Storages
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Posted by Keith (OH) on August 09, 2009 at 12:41:22:

Tony,

I do like the idea of selling to investors but I have also found what Celeste says to be true in my area too.
To overcome this you may want to consider getting the end investor buyer onboard very earlier in the property. Like just after acquistion. Let them witness the repairs you made right through the performace of the tenant in place. They’ll be much more familiar with the property and the tenant when it comes time to make the purchase. Heck you may even be able to charge for the service of educating the investor.

Just a thought,

Keith

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How many sfh units do you manage? - Posted by buster

Posted by buster on August 08, 2009 at 12:29:44:

I know this is a tough, and generic question. If you do most of the simple work yourself, and hire out the complex, most being close to your home, how many units can a one person effectively own and manage. I have 10 as of now, and people can’t beleive it can be done, where i feel you need 20 to make it a full time business. Just a question to stir up some thoughts. Thanks

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Re: How many sfh units do you manage? - Posted by Steve-WA

Posted by Steve-WA on August 23, 2009 at 10:16:23:

on the first, not enough - every other day of the month, too many

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Re: How many sfh units do you manage? - Posted by buster

Posted by buster on August 12, 2009 at 10:17:26:

Thanks for the replys. I enjoy talking with others and learning about thier operations, and management. I feel I need more units to do better and use my time more wisely. In a few days I may post on the main site and get a few more ideas. There are still others who my want to “chime in” and tell us about thier setups.

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Re: How many sfh units do you manage? - Posted by shawn sisco

Posted by shawn sisco on August 09, 2009 at 08:32:24:

I manage my MHP (84 spaces) I currently have 15 MH’s leased, and I hold 14 notes, and have been bringing in houses to fill lots. I also operate a self-storage,and do some landhome buy-refurb-resale.

I personally run the office, show houses, sell, lease. My team currently consists of an retired plumber resident of the MHP who works on average 50 hrs per month on smaller repairs and in getting pull-ins ready to show, a lineman who works 1 day per week on the larger projects, and my wife who puts a top-notch clean-up on the houses, she also covers for me at the office when I am out, she works about 12 hrs per month average.

I think I could handle 10 more leased units or 30 more note sale houses with this team. Being the “right size” is critical to profitability.

Also, the absense of effective resident screening, and prompt competent service will quickly cause retention rates to suffer, which really increases the need for time and $$ intensive refurb.

I think these operations are never static; they are always either improving or declining.

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Re: How many sfh units do you manage? - Posted by Celeste-fl

Posted by Celeste-fl on August 08, 2009 at 18:39:35:

I agree with tony 100%. There was a time when I wanted 50 all leveraged. That was before I knew what I was doing. What a nightmare that would of been. I have 13 free and clear,3 are houses and 10 are mobile home land deals. I manage and do small repairs on them myself. I also flip a few houses a year for fun money. I have learned less is more and to live a debt free life style

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Re: How many sfh units do you manage? - Posted by Tony Colella

Posted by Tony Colella on August 08, 2009 at 13:12:15:

This is a very good and interesting question. Both Scott and I recently spent a great deal of time contemplating the lifestyle we were seeking vs. the number of units we needed.

While this is not unusual the perspective we took might be viewed as such. In most cases we are taught to buy more and more units. During the early stages of each investors career this is the goal but in time we all face the type of question you have asked here.

I found that I wanted fewer units and lower bills. The best way for me to do this was to sell off one of my small parks and pay off other properties.

I managed 30 of my mobile home rental units including my small parks and land/home packages. This is not a lot of units by most standards. Most courses have you envisioning owning hundreds of units. I never wanted this. I wanted a low key lifestyle that allowed me to dictate more and more how I spent my time. Financial security comes in many forms and is based upon our own dictates.

I liken this approach to folks downsizing when they retire, paying cash for a smaller home and moving some place that better suits this new life.

I know folks who like me do all their own work repairing, rehabbing, landlording etc. and have 50 units or more but it definately takes its toll.

If we start with the end in mind, I think many of us would realize we don’t really need that many units and perhaps don’t really want that many. A few properties operated more efficiently offer us less exposure to risk and costs than many units managed poorly.

If we know what our basic, comfortable standard of living is, chances are it won’t take long or take much money to get us there. If we want to live the lifestyle of the rich and famous, chances are we will be working on these units for many years to come.

The choice is ours. If you can purchase more units than you need when we are first starting out then chances are we can sell a few off, pay off others and live a more retiring lifestyle.

Tony

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Re: How many sfh units do you manage? - Posted by buster

Posted by buster on August 23, 2009 at 13:03:35:

Steve, I agree. I once wished and still do, to have a tired old landlord call me and say, they want to sell me a “package deal” and I could increase my numbers over night. Then I remmeber last winter, I had to crawl under a house, in freezing weather and fix a leak, and then it struck me, I may be that tired old landlord who may offer a package deal for a good price. I then thawed out, and remembered all occupations have bad days.

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Our numbers are nearly the same Shawn - Posted by Briton (IN)

Posted by Briton (IN) on August 10, 2009 at 23:50:39:

I own and manage 4 parks consisting of 82 lots, one small house, 12 mobile home rentals, and currently 6 notes. I also operate a self storage operation consisting of 36 units. Strikingly similar huh?

I have no “team” My wife does not do much as far as the business, she has her own job. My father does my accounting and my grandmother does my “monthly books”.

I have 2 handymen that do my repair work. They are not my employees, just small business owners whom I call when repairs are needed. (I am not handy at all!) I am doing less and less of the mowing, although I used to do it all.

I have an “assistant manager” at my largest park, however all he really does is mow, watch the well house, small tasks, and be a honest contact(spy). I deal with the tenants.

You make a great point about effective resident screening. Good screening saves so much time, effort and money. I have bought my parks one at a time and it has taken between 0-5 years to get the parks running efficiently due to bad management. I will go to applicants homes, work, parents house ect. whatever I have to do to feel comfortable renting to the applicants.

After 6 years I am still fine tuning how I do simple things, and how I deal with simple tenant issues. The longer I am in the biz the more I realize that its not worth dealing with people that will not put their best foot forward when a situation occurs. I no longer am interested in customers that seem to “work against me” instead of “work with me”. I offer a great product, great service, and reasonable prices if they don’t like it then I will find someone who does. Many of my customers will be customers for life, in part because they like my product and service. Its much easier to manage a park of 50 great tenants than it is to manage a park with 25 bad tenants. It takes knowledge and effort BEFORE you even hand over the keys. These same principals will carry over to SFH or rentals.

I believe I have the “no how” to manage hundreds of pads. I believe it would take a full time office worker, and a handy full time field worker. Ideally I could deal with major issues, and managing a couple employees and a couple managers. Dave Reynolds posted an excellent post on the other site regarding a little about how he runs his multipark operation.

The more I think of it, there are countless factors regarding how many properties an individual can manage. I could work 100 hours a week on my properties, or I can hire the mowing, repairs, bookwork, ect out and work 40. Or I could hire a desk worker and/or a guinny pig for daily tasks and sit on my butt most the day. Of course that would require owning them free and clear. :frowning:

Briton (IN)

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Re: How many sfh units do you manage? - Posted by Tony Colella

Posted by Tony Colella on August 08, 2009 at 19:12:49:

Celeste, your numbers look a lot like what my target is now. I like the idea of having the time to focus on one property, get it up and rented and then try and market it to an investor. I have never had the “flippers” blood in me so I gravitate towards what call a “slow flip” by keeping an income stream coming in and either selling to an investor or perhaps a lease/option type approach down the road.

Great to see others of similar mindset.

Tony

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Re: How many sfh units do you manage? - Posted by Celeste-fl

Posted by Celeste-fl on August 08, 2009 at 20:03:20:

Tony,

It has taken some time and soul searching to get to this mindset. I wish I could of seen it years ago. It takes many less rentals when you are debt free to live off cashflow. It gives me so much more freedom and time. Sounds simple,but it took me years to figure that out.

I,m glad you have found success with selling to a investor with a tenant in it. I have tried to do that here and it does not work as well as a empty house does. Flipping is still alive, but a little beat up. I have to buy super cheap and sell cheap to make it work.

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Re: How many sfh units do you manage? - Posted by Tony Colella

Posted by Tony Colella on August 08, 2009 at 21:02:20:

The idea of flipping to investors is still one unproven accept for my mobile home park but my theory stems from that sale. This type of land/home rental deal would seem to fit a newer investor with fewer funds and perhaps less time for rehab. My idea at this point anyways is to doll house the homes up with our landlord friendly repair approach and get a good tenant in place. If I hold the property for a year I can reduce the tax hit and have a proven tenant in place.

If not an investor then I would probably market to the tenant/buyer via lease/option as Bruce Berger does here.

I like the idea of having the property and tenant in a turn-key status before marketing. Being conservative on deals by nature I like the fact that the home will be providing cash flow while waiting for sale. This is one reason I have never been able to flip.

Tony

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Re: How many sfh units do you manage? - Posted by Celeste-fl

Posted by Celeste-fl on August 09, 2009 at 07:16:33:

Sounds great in theory, but in my experience once you have a tenant,your home will not show anywhere near as nice as when its empty. It also cuts way down on your pool of buyers with only a small percentage of investors looking to buy compared to home buyers. A new’ly rehab house around here with tenants would take 3 times longer to move and sell for 20% less then if it was empty.

I understand what your saying and it would be a great way to keep cashflow and get your price. Maybe your area is different,but around here landlord investor sightings are about the same as seeing bigfoot.

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Re: How many sfh units do you manage? - Posted by Tony Colella

Posted by Tony Colella on August 09, 2009 at 10:11:45:

I can certainly see your point. My theory is little more than just that at this point. If however the theory does not work, then I will have a rental unit set up just the way I like it and will keep it.

The investors I would probably look for would be local folks who have gotten into the mobile home game and see the benefits of the price point vs. income.

In Asheville the stick builts that cash flow are not easy finds by any means. Land/homes packages are being purchased cheaper and cheaper due to foreclosures but the market is not flooded with them.

If someone was looking to make a move into cash flow investments then this type of deal may be a good start. If this market is too slim for me to target then lease/option via Bruce Berger’s techniques or just keep them for rentals as we talked about.

I find that once I make our landlord friendly repairs, folks do little damage to the homes. Hardwood style laminate flooring throughout, ceramic tile in wet areas, solid steel (not mobile home) house size doors, pex plumbing etc. leave less and less room for traditional damage.

Great string of posts, thanks for the comments Celeste.

Tony