Picking (and Switching) Property Managers
Aaron Howell, pharmacist, realtor, and real estate investor, discusses how he manages his 29 unit rental portfolio while maintaining his career as a pharmacist. Aaron digs into the importance of having an excellent property manager, how to find one, and how to know when it’s time to get a new one.
About Today’s Guest
Aaron Howell is a pharmacist and realtor, originally from Princerton, West Virginia. He is a graduate of West Virginia University School of Pharmacy and has served in a number of pharmacy related roles at Kroger Pharmacy, Walmart Pharmacy, Charlottesville Free Clinic Pharmacy and the University of Virginia Health System. As a real estate investor since 2011, Aaron owns 29 rental units across 3 states, ranging from single family to small apartment buildings.
In his personal life, Aaron is a bit of an adventure seeker. He has had his pilot’s license since 2014 and has summited 29 state high points (including Oregon, California, and Colorado). He is currently married to his wife Megan and they have two cats and a dog.
Summary
Aaron Howell discusses the importance of a property manager on this podcast episode. As an investor with properties in a number of different states, some a great distance from his location, Aaron has always had a property manager for his rental units. Aaron explains the many benefits of having an excellent property manager, the duties that they fulfill, and how this key team member can make or break your experience as a landlord.
For a small percentage of the total rent amount, property managers are typically able to handle much of the day-to-day activity required for investment properties, making your life as a landlord significantly easier. As part of the regular operations of running his rental units, Aaron’s property managers find tenants, run credit and background checks on tenants, collect rent, do the books, deposit funds into your account, coordinate and outsource maintenance, handle monthly reporting, and when units turn over they will clean and prepare units for new tenants. Aaron’s property managers also are able to handle evictions when necessary.
Aaron describes some of his difficulties with a particular property management group, in the past, and how their growth led to some shortcomings with managing his rentals. He provides details on knowing when it is time to break up with your management company and how to find a new one that meets your needs as a property owner and landlord through networking in real estate investment groups as well as tapping into your own personal real estate investing team and network.
Mentioned on the Show
- YFP 129: How One Pharmacist Built a 29 Unit Real Estate Portfolio
- Bigger Pockets
- Join the YFP Real Estate Investing Facebook Group
- The Rich Dad Radio Show with Robert Kiyosaki
- The Chris Miles Money Show
- Email Aaron Howell: [email protected]
- Connect with Aaron Howell on Bigger Pockets
- Connect with Aaron Howell on LinkedIn
- Connect with Aaron Howell on Facebook
- YFP Real Estate Investing
Episode Transcript
Nate Hedrick: Hey, David, how’s it going?
David Bright: Hey, good, thanks, man. How are you doing?
Nate Hedrick: Good. It’s been a busy week. You and I have been again on the phone a bunch together, but it’s been a good one.
David Bright: Yeah, yeah, because you’ve got a closing coming up on a rental for yourself, right?
Nate Hedrick: Yes, sir. Yeah, it should be done by the time this podcast goes live. We’re closing here hopefully in the next couple of days. And then we’ve got to figure out where to go next, which will be fun. But yeah, I’m excited about that one. And then I know you and I have been doing a bunch with another deal that didn’t work out but I still think is an interesting story. So maybe you can tell our audience a little bit about that.
David Bright: Yeah, yeah, this was a fun one that just popped up on the MLS. And so we started looking at it. This is one too where, yeah, like you said, we backed out during the due diligence period, which always sounds like a negative thing. But I don’t know, it just — can you as a realtor explain the due diligence period and why that’s really valuable to make sure you have in a purchase agreement?
Nate Hedrick: Yeah, especially in this market, right? Because a lot of people are going in and saying, “OK, no inspection period, no contingencies. I want to make sure I get this property and nobody else can steal it from me.” But that due diligence period is absolutely essential, especially on this one. This one — trainwreck doesn’t quite describe it, but it’s close. This one had so many holes in the roof and in the siding that it was literally snowing in the house all winter long. And so that was something we looked at and said, we need to make sure we have a good, long due diligence period on it. And so as part of the purchase agreement, as part of our contract, we said, “We need 3-5 days to get our contractors in there and review it.” And so the way we write our due diligence is that it’s a pass/fail. So we get our contractors in there on this investment, if it does not pass, we can back out of the contract and get all of our earnest money back. So that’s exactly what we had to do.
David Bright: Yeah, and I think that speaks a lot to the value of having a team in place, someone that can get in there quickly and check that out and has that expertise and someone that we trust in advance because I think that ended up being super helpful in this as we had the team that went in there and said, “Yeah, from the initial photos to what we’re actually seeing in person, this is a lot worse. This is going to be a lot more expensive.” So that was a major downside. There was a really strange upside on this one too, which was weird and made it really intriguing because this is one that it was listed as a single family home and it ended up once the team got in there, they said, “You realize this used to be a duplex, right?” And so there’s potential for this to be a duplex again. So it had us really intrigued, which I think is why we spent so much time on the phone like, can we make this work? Can we find a way? But no, I think in the end, it felt like a smart one to just walk away from, unfortunately.
Nate Hedrick: Yeah, budget just got a little too high, and there was just one too many unknowns, so it wasn’t worth it, worth the price.
David Bright: But fun just to look at like what’s the highest and best use of a property and have that open-mindedness after getting an offer in but also to try to not get too overly emotionally invested and try to make something happen, even if the numbers don’t work. So sad to let it go, but I think it was the right call.
Nate Hedrick: Yeah, I think if anything, I’m going to start looking at properties a little bit differently than I did before, right? Because we really were starting to think about can we carve this up into a triplex and maybe make the whole thing a quad? We got really interested in that, and so I think maybe going at it from a perspective of, OK, this is a big single family home that we just found, but it could be a duplex and having that conversation with the zoning board ahead of time is a way to, like you said, look for that highest and best use. So lessons learned, even though it didn’t work out.
David Bright: Yeah.
Nate Hedrick: So speaking of lessons — like that transition? — speaking of lessons, I want to make sure we talk about Aaron. So Aaron is our podcast guest this week, Aaron Howell. Really great guy. We were really happy to have him on the show. He’d actually been back on the YFP main show back in Episode 129, so if you haven’t heard that, make sure you check that out. Aaron is a pharmacist down in Virginia and also a real estate agent, so a fellow weirdo like me, pharmacy and real estate together. I love it. And he owns 29 rental units across three states. Some of those are single family, some of those are multifamily, apartment buildings. And so one of the things we really wanted to talk to Aaron about is how do you manage that many units, right? Most people listening to this show are dealing with one or two or three units, not 29. And so the question became well, now a property manager becomes essential if you’re still going to have that career as a pharmacist. And so wanted to talk to him a lot about what that property management looks like.
David Bright: Yeah, and coming full circle to what we were just talking about, the deal that we were looking at and how you have to have that team in place and you have to be able to trust that team, he talks a lot about building that team through referrals, web searches and reviews and networking and how to find those really good, trusted people, particularly when you don’t have boots on the ground because when he’s investing in all these different cities, he’s not necessarily walking every deal personally, kind of like what we did. Neither one of us went through that house, but we had people that we trusted that went through that for us. And that team just being super, super critical if you’re trying to do this and have it not interfere with your pharmacy world.
Nate Hedrick: And what I really like is his story in there about switching his team. So having a great team is important but also recognizing that team may not be working out the way that it was before, especially the way that it started. And so make sure you listen midway through about how he had a property manager and switched and the result of that switch. It’s pretty incredible numbers that come out from that.
David Bright: Yeah, and that always feels like a painful process, like a bad breakup or something. But I think that he talked through that and how that ended up really making his investing that much more successful.
Nate Hedrick: Great overall episode. So hope you guys enjoy. We’ll take you to the interview.
Nate Hedrick: Hey, Aaron, welcome to the show. Thanks so much for being here.
Aaron Howell: Thanks for having me. Pleasure.
Nate Hedrick: Yeah, it’s nice to have you back. We had — you were on the YFP main channel, Episode 129, we covered your rental property exploits at that point, but it’s really fun to have you back on for the YFP Real Estate Investing show. So appreciate you being here. So for those that didn’t hear your story back on Episode 129, can you dive in a little bit and tell me about that pharmacy story? We always want to lead with that pharmacy side of things. So can you tell us about that?
Aaron Howell: Yeah, sure. Graduated 2000 from West Virginia University. I graduated on a Saturday, I moved to Charlottesville, Virginia, on Monday. I didn’t know anybody. I didn’t have any family here, didn’t have friends here. Just had a job. At the time I graduated in 2000, you could have went anywhere in the country. The job market was that good. Huge shortages. But I graduated, moved here, started working for Kroeger locally. I worked with them up until about 2008. I was a floater for about three years, PSE for about three years, and then staff pharmacist for about two. 2008 rolls around, the economy kind of takes a hit a little bit, Kroeger starts to tighten their belt, went to work for Walmart for another 10 years or so. Everything was great, loved working for Walmart for a long time. But the least year and a half there, you could kind of hear the winds of change happening on conference calls, everything kind of went from Easton Love, you know, 1960s, to you know, war protests and cutting hours and you’re over budget, cut back, cut back, cut back. And at that point, I had kind of like dabbled a little bit in investing. We had a couple rentals at that point. But 2017 rolls around, it really kind of kicked it into high gear, redid my home equity line, bought I think 10 units that year, sold two units in Las Vegas and then used that money in a 1031 exchange to buy six units in Cleveland. I think that involved a couple units before the 1031. But used the 1031 to go from one unit to six units there in Cleveland. And 2018 rolls around, just more and more bizarre corporate pharmacy stuff and kind of just had the opportunity to go part-time at the little local hospital — well, I say little. It’s huge, the University of Virginia Health System. So I worked there in the outpatient pharmacy three days a week. We kind of have a hybridized situation, you know, we deal with a lot of outpatient patients but we do transitioning care and there’s some satellite pharmacies, dealing with like the Cancer Center pharmacy and there’s a bookstore pharmacy for the students and the Student Health pharmacy for students who are sick while they’re at school. And I’ve been there about two and a half years now, still love it, pretty easygoing. I’m not in charge of anything. I have one key on my key ring.
Nate Hedrick: Nice.
Aaron Howell: It was a great transition in the grand scheme of things.
Nate Hedrick: That’s great.
David Bright: Well that sounds like you’re real busy, then. You’ve got this kind of growing real estate portfolio, at three days a week, you’re still busy in the pharmacy. It seems like you’ve got a lot of stuff going on. So one of the things that we often hear from pharmacists is I don’t want to worry about having rental properties because I can’t imagine the 2 a.m. toilets and all those kind of nightmarish scenarios that could go on. So with all these busy real estate and busy pharmacy, how are you managing all that?
Aaron Howell: Well, you know, I had the same questions that most pharmacists would have. You know, how do I manage this? And early on, we had a property manager when we first went to Las Vegas. I’m living in Virginia on the East Coast, Vegas is probably 4.5-5 hour flight. I couldn’t get there to change an air filter or unclog a toilet, so we had to have managers from the early going. So that’s just the way I learned. You’ve got to have boots on the ground. You have a good realtor, you have a property manager. Generally the property managers too, they will outsource maintenance or repairs when you have a unit turn over, so I just learned early on, probably go with a property manager. I’ve managed myself a unit before, and I got very fortunate and had a great tenant. She ended up buying the townhouse that I had. But I keep thinking back over time, like of all the things that could have went wrong with me managing it personally. So you know, let the professionals do what they do. It’s amazing what they’ll do on a monthly basis for 8% of the gross rent or 9% or 10%.
Nate Hedrick: That’s actually a really good segue there. Can you tell us a little bit more about for those that maybe have never worked with a property manager before or don’t even have a property yet, that they’re terrified of that management point, like what does a property manager typically do for you? And then again, it sounds like the cost typically is between 8-10%. Is that some of what you’re seeing?
Aaron Howell: Yeah. We have a property manager in Pittsburgh now. They do nine. The property manager in Cleveland is eight. Here locally is eight. But generally what they do, they’ll find tenants. So if you purchased a house today that was vacant, they’re going to handle the finding of the tenant, they’re going to run the credit check, kind of a background check on the tenant. They’ll collect rent on a monthly basis. They’ll do books, you know, whether it be through an app Folio or some of the other software programs. They’ll deposit money into your account at a given point during the month. They’ll handle maintenance requests. When the unit turns over, generally they’ll take in, clean the unit up or make it ready for the next tenant to come in. They just handle — they make your job of being a landlord a lot easier in the grand scheme of things. They just handle all the liability too. And that’s the big thing I worry about, you know, back in the day, like if something went wrong, who’s on the hook for it?
Nate Hedrick: Sure.
Aaron Howell: Generally that property manager is, they have a set pattern of what they do. And everything’s by the book, by the state laws for tenant and landlords.
Nate Hedrick: Gotcha. And you know, I think for whatever reason, I tend toward the worst case scenarios sometimes, like what is the worst thing that’s going to happen? And so for me a lot of times, that’s evictions. So do you have your property managers handle those as well?
Aaron Howell: They do handle those. Lots of times, they’ll be kind of far down in the proceeding before I even really realize what’s going on. You know, I’ll kind of look over the monthly reports and things like that and I’ll see that John Doe in Unit A hasn’t paid rent and, you know, I’ll ask about that, “Hey, what about John Doe in Unit A?” And they’ll be like, “Oh yeah, we gave him a five-day pay or quit, and we still haven’t heard from him. And we’ve already been to court to schedule a date.” So they’ll handle that. Every time there’s an eviction, it’s just not conducive. But they’ll handle of that, generally.
Nate Hedrick: Yeah, no doubt.
David Bright: No, and it sounds like in what you’re describing too with different states, there’s all kinds of legal things just like how law is different in different states for pharmacy. You have to know the nuance of the law where you have your properties, especially for someone like you that has properties in multiple states. That sounds just invaluable. So I’m imagining that in different states, you’ve had different property managers because there’s probably not one that’s covered all those different territories. So in searching out for those property managers, how do you find a good property manager? What separates a great property manager from a terrible property manager? And how do you find that?
Aaron Howell: You know, sometimes it’s trial and error. Before I go into a market, I’ll kind of do some research as far as finding a property manager. The ones we use in Pittsburgh, they were referred by the broker. When we bought the apartment buildings there, the broker was like, “Hey, you know these guys are really good.” I initially had emailed them and didn’t hear anything back and I was kind of getting a little worried. I was like, we’re closing in like two weeks. I need to get this property manager lined up. So I kind of went on Bigger Pockets at some point and was just like, “Hey, Pittsburgh property managers,” and there wasn’t a lot of feedback. You know, there was a couple people like, “I know a guy I think, but I’m not for sure.” But the original guy who I had emailed finally got back to us, I think it was some junk mail or spam folder issue or something like that. That’s kind of how I’ll go into a market. And I wouldn’t say I wouldn’t rule out a certain market. But if you don’t have a good property manager in the market you’re looking in, I almost would almost pass on the market. The property manager is going to make or break your experience as a landlord, you know, as creating income. The property manager will absolutely make or break the situation. Big thing with a property manager too is communication. If you email them, generally the property managers I have, I’ll get an email back that same day, which is great. And then on the back side of that too, what are your tenants, what kind of experience are they having? Are they — when they call on a maintenance request, is somebody showing up to fix something? Example: Yesterday morning, there was a service request at one of my units in Cleveland. The tenant reported like, “Hey, there’s a lot of water standing in the basement. I shut the water off for the unit.” You know, it sounded stereotypical hot water heater died. And about 3:30-4 o’clock, I got an email, you know, “Hey, we need to replace the hot water heater.” OK. So I just emailed them back, was like, you know, “Sure.” It’s a painful email. I don’t want to email them back and say, “Yeah, go ahead and spend $1,000 on a hot water heater.” But you have to have a hot water heater for a tenant.
Nate Hedrick: Exactly.
Aaron Howell: It’s a nonstarter. So you know, that communication is key both ways versus the property manager and you as the landlord and then as the tenant with the property manager. And you know, a big thing too with that good communication with the tenant, I think if they feel like they’re getting good service in the property manager, they’re more likely to stay and renew. You know, I’ve had property managers before where the tenant comes, they stay a year, and the service is so bad they receive, they move out. I would have approved a new hot water heater within an hour, but the property manager was so slow to react, it just left a bad taste in their mouth with the tenant. So that’s a big thing.
Nate Hedrick: And that can really hurt you too because one of the costs we didn’t cover was the tenant placement cost, right? So there’s a cost for that as well. And so turnover hurts you even worse, right?
Aaron Howell: Yeah. Yeah, absolutely. You’ll place the tenant and generally, lots of property managers will charge half the first month’s rent or a full first month’s rent whereas if the tenant renews, it might be only like a $500 for the renewal. But when you have a tenant move out, you’ve also got to go into the unit and make ready for the next tenant, depending on how rough they were on the unit. So you have that, you have the vacancy period, and then you have the placement of the tenant. So you know, it can be $2,000-3,000 for that vacancy, worst case — or hopefully worst case. It’s been worse. But.
Nate Hedrick: Yeah. Yeah, yeah, that turnover can really make or break a year sometimes because now you’re talking about losing that income for a month or longer and also the excess costs of doing that turnover eating into your cash flow. So definitely. And before you started — before we started recording, before we were talking over email, and you said that you had made a big transition in the past year. And I’m particularly interested in this because it happened in your Cleveland, and obviously that’s my market here, Cleveland, Ohio. So can you tell us a little bit about that story and what changed, what went wrong, and what you did to shift to a different property manager and kind of the outcome of all that.
Aaron Howell: I think the property manager I had originally started with in Cleveland, they had just grown so much in volume of units they were handling, they just never accordingly grew staff-wise. So tenants would say, “Hey, May 1, I’m moving out. I’m moving to Utah for a job.” And the property managers I had here who are excellent local to me, they’ll go in like the 29th of June and go through and say, “OK, we need to paint. We need to have a cleaner come in because the new tenants are coming in May 5.” They will have sourced the tenant for May 5 to move in already when they know that the unit is going to be vacant on May 1. So over time, that gap between May 1 and May 5 got larger and larger and larger. And the tenant would let the property manager know like, “Hey, I’m moving out.” And it would be like the 15 of the month of May that I got the OK, we need to do this to fix it up. And then on June 3, I would get OK, the unit’s been fixed, we’re ready to market it. And then you know, another six weeks would go by and on July 20, the new tenant would move in. So I have that vacancy period of May, June and then half of July. That got to be more and more and more troublesome. And you know, like I had mentioned before too, the communication for the tenants with the property manager was very poor. So when that period ran out with the lease, they were gone. Even if they weren’t moving to Utah for a job, they were just moving somewhere else in town with a better property manager where they felt maybe there was a better property manager. So that was a big problem. And it got to be worse and worse and worse and worse and worse. And I noticed that some of my vacant units that were supposed to be fixed weren’t even being advertised on the property manager’s website as available for rent. And so worse comes to worst, I had to fire them and move to another property manager. But again, you know, I was kind of sourcing the whole time on Bigger Pockets or through Google searches, property managers in Cleveland. And I had a friend on Bigger Pockets who was like, yeah, same thing happened to me. This is the company I use now. So I made that transition, kind of gave the company notice that we’re switching over. The new company and the old company communicated with each other. There was about a six weeks period where there was a little bit of lag because the old property manager had collected rents and they had transferred security deposits over. So there was a little bit of like about a six-week lag where there was just no money coming in whatsoever. I was kind of getting a little antsy. But finally, they made the deposits.
Nate Hedrick: I can imagine, especially on multiple units.
Aaron Howell: Yeah. Yeah, it was just — I think it was kind of like sour grapes. And they were just trying to make things tougher. You’re breaking up with us? OK, we’re going to make your life hard. But it all worked out in the end. And the new guys, you know, the first couple months, they were very communicative. But I noticed there were a lot of maintenance requests. I was a little like, man, these guys are maintenance requesting me to death. But what they were doing is they were fixing all the stuff that the old company never would fix for the tenants.
David Bright: Oh, yeah.
Aaron Howell: So the year 2020 because of decreased vacancy, decreased turnover, I made about a $30,000 difference and didn’t add any units.
Nate Hedrick: Wow.
Aaron Howell: Didn’t renovate anything. It’s just that the increase in receptiveness with the new property manager, with the tenants, versus the old one, there was that difference in income. And like I said, I didn’t buy any more units. It was just the vacancy was almost nonexistent because the tenants were getting treated better with the new guys versus the old guys and they just chose to stay. And that was even during COVID.
David Bright: That’s an incredible difference. I mean, yeah. I mean, during a tough year, that is an incredible, incredible difference. Do you feel like — is there something that you missed the first time around? Like I think you got that second recommendation that was a more personal recommendation from somebody else in the area that was using that person. Was there something that you thought, man, if only I had done this the first time around, I probably wouldn’t have ended up with that person? Or do you think it was just that that first property manager kind of started off great and then fell off the wagon over time?
Aaron Howell: There were times when they were pretty good. And I think they just outgrew their ability to do their job well. And they went from 300 units to 1,000 units, and they still had the same four people working. Instead of going with four, you should have 12 or 16. That was one thing that in my mind, I think that where they lagged, they just never did scale properly. You know, there were times that they were fine. The first year, year and a half, they were great. We’ve got one tenant in one unit, the first unit I ever bought up there in Cleveland, it’s in Parma, the guy’s still there. This is like five years later. He’s still in the same unit.
Nate Hedrick: That’s great.
Aaron Howell: Yeah.
David Bright: I think that’s really important to think about those ways that you’re keeping an eye on the manager so that you’re noticing those kind of things because you clearly are able to recite some of these metrics of those turn times and some of that. And I think that that’s really crucial that as much as a property manager can take a lot of that off your plate, it’s also not just set it and forget it. You’re still paying attention. You also mention in there approving repairs and things like that. So I’d love if you could talk for a minute about how you manage those managers and what kind of leeway you give them to just like if you have a price point or something where below this, just handle it, above this, call me. Or like how do you set up that way that you manage the property manager?
Aaron Howell: With these guys, I haven’t really set any price points as far as like if it’s below this, just go ahead and fix it, you don’t have to ask me. So pretty much everything comes through to me at this point. And probably the first six weeks, two months or so I was kind of a little like, whoa, what do you want to fix this for? It should have already been fixed. But they were like, no, no, here’s some pictures. It hasn’t been fixed. So generally, they’ll email me kind of an estimate. They’ll — initially, they’ll say, “Hey, this happened,” and later on, they’ll email me and say, “Here’s an estimate. Here’s what it’s going to entail? Do you approve it?” And generally, I’ll approve it because you know, it’s going to have to get done at some point. And you know, I’ve got 13 units up there in Cleveland. And you know, I might spend $1,000 on a new hot water heater tomorrow, but for the month, that’s not a deal killer for the whole month. Side note too — last year, I had moving trucks hit two of my houses in the same year.
Nate Hedrick: Oh my gosh.
Aaron Howell: Yeah. One lady had rented a UHaul, and she actually got the extra insurance that nobody ever buys, but she bought it. And so she backed into a side of the house and like ripped part of the front porch off or something. But it was only like $1,400 to fix everything. I had another house that — we don’t even know what kind of truck it was, but it was just — it had to be a big truck. It hits the house, and that had to go through insurance to get part of the repairs. But some of the material was so old that they couldn’t find it. It wasn’t made anymore. So they had to completely just get new stuff. And there’s also depreciation too. You know, if you’ve used whatever for 25 years, the insurance doesn’t pay you for replacement costs. They only pay you what the value of it is now. It’s education.
Nate Hedrick: Yeah. David, didn’t you have somebody hit one of your houses too?
David Bright: Oh yeah. I’m going through the same thing right now. Yeah, I know exactly what you’re talking about. Same kind of thing: truck v. porch.
Nate Hedrick: We were just talking about that. I can’t believe all these people are driving their trucks into porches. What’s going on? Is that like an Ohio thing?
David Bright: I don’t know. What I love in there though is you mentioned pictures because for some of those things, like a picture is really helpful to know like what kind of repair, especially when you can take it several different ways with the repair. Like I had one come in recently where it was a fence issue. And so we could kind of like put it back together or we could replace the fence or we could replace this big area of fence. And so when it’s a multiple-choice question like that, it’s nice to have pictures to tell that story and what kind of approach you want to do. I know I’ve got it set up where if it’s something like there’s not really a choice, like a hot water heater, I’ve got it set up where I just found out about it with an email on Monday. Like oh by the way, we replaced the hot water heater over the weekend. And I’m like, oh, cool. Because I admire that you take those phone calls. I don’t like having to take those phone calls, so I’ve got it set up a little differently. But I think that I love your tip about the pictures. I think that’s super helpful.
Aaron Howell: Yeah, I always do those emails, and I’m like, oh God, what do they want now? What’s happened now? No news is good news usually.
Nate Hedrick: How many more trucks have hit my house this week?
Aaron Howell: Yeah.
David Bright: The other question I have on that is even within one market, I heard at one point a tip of having multiple property managers, even in the same market, so if you ever do have something where like Manager A goes from really, really good to not so good over time, then you’ve already got someone in place that can help to take that. Have you done that before? Or what are your thoughts on having multiple managers in one market?
Aaron Howell: I have not personally done that, just for simplicity’s sake. I’ve got stuff in multiple cities. I try to keep things as streamlined as possible. Doing taxes for me, it’s like a month-long journey.
David Bright: I bet.
Aaron Howell: From like about the 15th of January to about the 15th of February, it’s just gathering. So as simple as I can be helps in the long, grand scheme of things. No, I do have friends though — I’ve got a friend who has about 10 units in Cleveland. He lives about an hour or two from here. He has I want to say maybe he has three property managers up there now. And I think he’s transitioned from one that he doesn’t like as well to a newer one for some of his units. And I think he’s kind of slowly going to move into the Property Manager C or Property Manager B from A. But for me, just to keep things simple as keep me sane, I’ve just got one currently.
Nate Hedrick: I think some of those tips you’ve given and some of the insight you’ve given on that is going to help a lot of our listeners. I think when we talk to a lot of our audience, those that have never bought a property or maybe they’re on their very first one and thinking about what’s this look like when I grow, understanding that property management side is so important. So I really appreciate all the insight you’ve given on that. I think I’d encourage our audience that it sounds like getting your information from multiple sources is part of that recommendation. So head on over to the YFP Facebook page, the YFP Real Estate Investing Facebook page, and if you’ve got somebody that’s in your market already with a PM, ask them about them. You know, that personal recommendation is probably well worth it. So I’d encourage our audience to do that. You know, I do want to — before we get to our final infusion questions here, Aaron, I want to make sure I ask — I noticed in your email, you mentioned something about you’re looking at mobile home parks potentially next. So can you give us, our audience, a little flavor of what you’re looking at doing next? You know, what’s coming down the road for you?
Aaron Howell: Yeah. I’ve been working with a couple friends and trying to put together a group possibly to purchase a mobile home park. There’s some aspects of the mobile home parks we kind of find attractive. Like I mentioned a hot water heater yesterday or today, with the mobile home units, the owner of the mobile home is going to be the one replacing the hot water tank when it bursts. And essentially, we’re just charging rent for you to place your mobile home on our property and our pad. So there’s some attractive aspects to that. But at this point, we’re kind of in the beginning stages, gathering investors, kind of gathering ideas to go to the lawyer to draw up an LLC. We’re just baby steps. It’s been a little slow, but we’re not in any hurry, really, in the grand scheme of things. You know, the whole process for me is an education too. I’ve been in multifamily, single family for years. So I’ve been absorbing as many podcasts as I can about mobile home park investing, and that’s been — you know, over the years, I’ve kind of transitioned — you know, initially I was listening to Bigger Pockets, and I haven’t listened to a Bigger Pockets episode probably in a year.
Nate Hedrick: Oh, wow.
Aaron Howell: Yeah, somewhere in the middle — and I’m on the Bigger Pockets website quite often — but somewhere in the middle, I kind of focused more on multifamily podcasts. And I don’t listen to those as much anymore. And you know, these days, I’m listening to more of mobile home park investing podcasts and then just kind of like a 1,000-foot view kind of financial podcasts more so like Robert Kiyosaki or there’s the Chris Miles Money Show. Just where I am at in the whole investing process, I’ve over the years kind of just changed a little bit in what I read or what I listen to.
Nate Hedrick: Yeah, makes sense. That’s great. Well, I do want to jump to our final infusion questions. These are three questions we ask every guest. So we want to get your take on it. So I’ll jump in here, and then we’ll let David come in too. So what’s one tangible strategy that you could use to make sure your investing works hand-in-hand with your career as a pharmacist. And obviously you have some experience here. So what’s one tangible strategy you use that lets that work together with your pharmacy career?
Aaron Howell: I was kind of thinking about that before the podcast. I think maybe kind of keeping a division of labor. You know, when I’m a pharmacist, I’m trying to be a pharmacist. There’s been times when I’ll get that email from the property manager because a hot water heater is broken, and I’m like, I’m not opening that here at work. We’re busy, and I’m going to wait until I get home to open that. Poor tenant’s probably without a hot water heater for a couple hours until I get home, but I just don’t want that on my mind while I’m at work. So trying to keep that separated has been — it’s been helpful. You know, I’m not saying I’m a perfect angel at work. I will look at an email or whatever, but trying just to keep work and business separate is probably a good strategy for me.
David Bright: Yeah, second question: What’s one resource that has been helpful to you in your real estate journey? I know you mentioned a couple here, but if you could narrow that down, especially for someone getting started. A book, podcast, person, author, website, whatever that would be.
Aaron Howell: For me, the biggest thing has been podcasts. And you know, over the years, like I was saying, I’ve transitioned which ones I listen to most. I have probably about a 25-minute drive to park at work, and UVA Hospital — and Walmart, I would drive 30 minutes to Walmart — but UVA, you have to park in a parking lot like at the stadium, whether it be the football or basketball stadium, and they have a transit system where you have to ride a bus into the hospital because there’s not much parking other than patient parking. So I generally have like 30-35 minutes a morning and 30-35 minutes in the evening to listen to stuff. So you know, I’ve got about an hour each day where I can just cram as many podcasts as I can get, depending on what phase I’m in with the whole investing situation.
Nate Hedrick: That’s the thing I’m missing with my COVID life, work from home life. I feel like I miss my podcasts on my regular drive in. So I’m looking forward to things, like regular group meetings and stuff again, so I can get back to the office and get back to podcasts. Alright, our third and final question here: What is one piece of advice that you would give to a pharmacist that is contemplating a start in real estate investing, so somebody brand new?
Aaron Howell: Just keep it simple. Just do it. You know, there’s going to be a first rental property. You’re not going to do it perfectly. You’re going to make mistakes just like I have. But if you don’t do it, there’s never going to be a first rental property. You have to get out there. And it’s not like if you don’t do it perfectly, the bank takes your house and you lose everything. You’re going to still have a tangible piece of real estate that somebody else is going to want to buy if say, you buy it and you have the worst tenants in the history of tenants and you just get burned out and you’re like, this is not for me. It’s not like you can’t get your money back or you can’t get some money back. You could just resell it. And you know, with today’s market, you can probably sell it for more than you paid for it. But just getting into the game, get off the bench, get into the game and get started.
Nate Hedrick: I think that’s great advice. And you’re spot on. I think once I realized that I’m buying something that has value, and even if it goes terribly, it still has a bunch of that value. Again, even if the market drops as bad as it did in 2008 and I lose 25-30% of value, right, I’m not bankrupt all of a sudden. I’m just at a loss, and we’ll figure it out. So yeah, I think that’s a really good piece of advice just to jump in and do it. That’s awesome. Well Aaron, before we let you get out of here, where can people find you if they’ve got questions or want to reach out to you.
Aaron Howell: Probably the easiest way — and a lot of people think, well, he’s on a podcast, he’s too busy to respond to my email. I respond to everybody’s email that’s ever sent me an email from a podcast. But you can always reach me at [email protected]. I’m on Bigger Pockets also, LinkedIn, Facebook. So find me somewhere. Like I said, I’m not too busy to email you back. And I love helping people. Obviously I’m a pharmacist but you know, I would love to help somebody get off the bench and get into the game with real estate too.
Nate Hedrick: We appreciate that, Aaron. That’s awesome. And we’ll make sure to put your contact info in the show notes. So if anybody’s got a question for Aaron, they can reach out and sounds like he’ll get back to you. Well Aaron, again, thank you so much for your time this evening. I think what you’ve been talking about has been extremely valuable. I think that our audience is going to get a lot out of the idea of leveraging a property manager and maybe some of the better ways to do that. So just thank you for your time.
Aaron Howell: You’re welcome. Thank you guys for having me.
Nate Hedrick: Absolutely.
David Bright: Thanks so much.
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