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Managing Your Own Rentals with Laurence Jankelow from Avail

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When you begin to focus on “racking up rentals,” another need emerges very quickly: the need for a sound property management plan. In this episode, Jeff interviews Laurence Jankelow, co-founder of Avail, a web-based property management software platform for self-managing landlords. In this interview, Jeff and Laurence discuss how to know if and when you should manage your own rental properties, how think through your property management needs during the acquisition process, common landlord mistakes and so much more.

Episode Transcript

Laurence Jankelow 

If your goal is to have that cash come in and you think you can add tremendous value to it, that increases that cash flow every month, then maybe land lording is the right path for you. And for those people, then doing it yourself is probably the best way to go. And then as you scale that business up and you've learned the intricacies of it, then you start hiring people to help you. And then hiring can either be internally or outsource but it's still hiring. But you don't you won't you don't want to do that too soon as with any business, you don't want to scale it before it's ready. And I think there's a certain amount of learning that has to happen as a do-it-yourself landlord before you want to go and hire that property manager.

Jeff Stephens 

Welcome to Racking Up Rentals, a show about how regular people, those of us without huge war chest of capital or insider connections, can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don't just go mainstream looking at what's on the market and asking banks for loans, nor are we posting We Buy Houses signs we're just looking for “motivated sellers” to make lowball offers to you see, we are people-oriented dealmakers, we sit down directly with sellers to work out win-win deals without agents or any other obstacles, and buy properties nobody else even knows are for sale. I'm Jeff from a Thoughtful Real Estate Entrepreneur. If you're the kind of real estate investor who wants long term wealth, not get rich quick gimmicks or pictures of yourself holding fat checks on social media. This show is for you. Join me and quietly become the wealthiest person on your block. Now let's go rack up a rental portfolio.

Jeff Stephens 

Thank you for joining me for another episode of Racking Up Rentals. Show notes for today's episode are at www.thoughtfulre.com/e61. Please do us a big favor and hit the subscribe button in your podcast app right now. It really does help and make sure that not only you don't miss the next episode, but it helps send a message to other real estate entrepreneurs who are looking for this exact type of content to the platform to share it with them. Onward with today's episode.

So in today's episode, I've got an interview with Laurence Jankelow. He is one of the co-founders of Avail. And you may have heard of Avail before — it is an online property management software. And it does everything from helps you advertise your units to find and screen tenants and keep those tenants over time. And it's really a platform designed for smaller landlords without hundreds and hundreds of units. And I was excited to have Laurence on the show because when we are out there racking up rentals while we need to then manage all those rentals we've racked up. And who better to talk about the process of managing those then somebody who really quite literally has visibility into many, many hundreds, if not 1000s of landlords and their challenges and their strengths and their opportunities. And it's a really rare perspective that somebody be able to see so many different types of landlords and just be able to offer such a broad perspective. So in this conversation, you're going to find that we talk about all sorts of stuff from kind of why he even has a passion for smaller time landlords and why he believes in Do It Yourself management and when do it yourself management does make sense for somebody versus outsourcing to a property management firm. He talks about some of the things that he sees his clients experience with; their acquisitions and the effects of COVID on everything, landlord tenant law, and a whole bunch of other topics. So enjoy this episode with Laurence from Avail. And without further ado, let's jump right into it.

Jeff Stephens 

All right, thank you so much for joining me today.

Laurence Jankelow 

Yeah, it's great to be here. Very excited.

Jeff Stephens 

Yeah. So all right. I'm a big picture kind of guy. Let's start at the high level. Give us a sense for who you are and what you do.

Laurence Jankelow 

Sure, yeah, I think that's a good place. My name is Laurence Jankelow, one of the founders of Avail.co, which is an online resource and suite of tools for yourself, landlords, to manage their rental properties. So I started as a landlord myself and you know, my partner and I, who started with me, we recognized we needed these tools for ourselves, and so we quit our jobs. And that's what we did, we built these tools.

Jeff Stephens 

Nice. Alright, so this started from a place of you, being an investor and really, truly experiencing the need for something different than what you were able to find yourself.

Laurence Jankelow 

Yeah, exactly. Well, it's not eight years ago, when we were looking for stuff to help us, there was really nothing geared to a landlord who may only have one to nine units. We just were kind of left there without any resources. So we would built it ourselves.

Jeff Stephens 

Yeah, that's great. So we're gonna get into a lot of questions about property management and stuff like that. But tell us about your life as an investor. Is that still something you're actively doing now?

Laurence Jankelow 

Yeah, I'm still active. I mean, by no means, am a large real estate investor, I've got six units. So two buildings, about three flats here in Chicago, had them since I don't know it basically eight, nine years ago now. And I love them,I love spending time on them. Personally, I enjoy it, I enjoy having tenants, not every person is geared for that kind of thing. Not everyone likes to interact with people or be responsible for a safe home for others. But I should get a lot of joy out of that. So I love doing it. I'm always looking for more. So I'm really picky on the buildings I buy. So I'm always looking for a really good cash on cash return. And sometimes those of us that are patient on those, yeah.

Jeff Stephens 

And what's it like to try to find that in Chicago? Is that actually where you're shopping?

Laurence Jankelow 

Yeah, that's where I'm shopping. Chicago is really tough. So you in Chicago, like, things are really expensive. So we I look at the gross rent multiplier a lot here. If your, if your audience is familiar with that, great. If not, it's really kind of the multiple you apply to rent to kind of get a sense for the purchase price or, or how much the property is worth. And so, you know, two things come out of that. One is I'm always looking at when I buy a place, what can I do to increase the rents because then you apply Chicago's multiplier to it and increasing the value of the property. But then the other thing on that is, the higher the rent multiplier, the less cash on cash return. So there's a there's a huge trade off and balance between finding a good place that I can add value too, and then getting a cheap enough where the return is good enough. But Chicago makes that tough. But there are gems out here.

Jeff Stephens 

Yeah, yeah. That's cool. And as you may know, we're kind of off market focused in our butcher racking up rentals and the thoughtful real estate entrepreneur, is that what you have done yourself as well? Or do you look at market listed properties? or?

Laurence Jankelow 

Yeah, I do both. I'm strictly on the numbers. So it's honestly a lot easier to make those numbers work when it is off market, right? You're not paying as many middlemen, or women to help you find the property and all those things. So I like off market properties for sure. You can get them a lot cheaper. And the numbers can work. Of course, if I can get one that's listed and on market, but the numbers to work, I'm kind of ambivalent on those things.

Jeff Stephens 

Yeah. Yeah. So thinking about property management, then, as I understand it, you know, Vale is a is a platform that allows landlords to manage their own properties, right. So I guess with that, I assume that you have a belief in the idea of DIY self-management rather than outsourcing. Is that true? And can you tell us a little bit more about that?

Laurence Jankelow 

Yeah, possibly strong beliefs in that area? Well, for me, it started, what I would have used a property manager, when I first got started, I didn't know what I was doing. So it to me, I went looking for one. And it's actually really tough to find one, if you only got one unit, or for me, I had three units, then then I'm really wanting to help. It's not their core business, they really much prefer landlords who've got 10 unit building a building with 10 units, or 100 units in total, because they're trying to dollar cost average their time and all those things. So a lot of them refuse helping you if you really small. So that was part of it. And then the other part of it is like there's no way to get better at something if you don't dig in and do it yourself. So for me, I looked at that as an opportunity for me to really learn the nuts and bolts and figure out what it is to be a landlord, what the requirements are. All of that kind of learning. So. And then the other thing are just from a cost perspective. You know, it's, like I mentioned, I'm in Chicago, so it's hard to find great deals. But if you can remove any kind of middleman, the numbers work out better. So if you're willing to do it yourself and do a little bit of sweat equity in the management side of it, then the numbers can work out better, as opposed to what's traditional here is you pay a full month's rent to find a tenant and then you're basically paying the equivalent of another full month's rent for them to collect the rents for you. So you're losing, you know, 16%-20% of your total rents, by using property manager for most landlords, that's enough to what was going to be a profitable business to now not be profitable. And if that's how it's going to be, you shouldn't even be alone anymore, if it's not going to make you money. So a whole bunch of factors led me to really be a strong leader towards doing it yourself. For sure.

Jeff Stephens 

And so if you, if you suddenly like, say, next month, add 20 units, instead of six, would you still be wanting to do it? I mean, maybe you're a little bit right. You know, not the best person asked the question, since you were the owner of the technology, you know, that enables you to do this. But in your mind, is there like a threshold that says, you know, you should graduate out something outsource at a certain point or?

Laurence Jankelow 

Oh, there's definitely at some point, yes, of course, technologies that, as you mentioned, is that an enabler that allows you to keep going for longer on your own? It's the It's that thing that gives you the ability to scale at cheaper costs, so if you don't have technology, yeah, the second you hit that, I think 20 units, 30 units, it's, it's honestly too much for one person. So you'd need to start figuring out how you then scale the management and business, you can either also sort of a property manager or you start hiring people internally to help you. And neither one of those are going to be great. Cost wise. Of course, if you can use technology, then maybe that threshold goes up to 100 units, 200 300 units. So we look at it avail as kind of that enabler that lets you do it yourself, learn the most, the easiest way to keep most of your money for as long as you possibly can. When we've got landlords, who've got 300 400 units on our platform using us. I think they're happy with what they have, and how they're managing it. So technology goes a long way.

Jeff Stephens 

Yeah, yeah, absolutely. One of the reasons that I advocate for self-management is, and I think you kind of touched on it a few minutes ago, when you said, you don't get better things, you don't really practice that, right. And I was previously kind of have the mentality that I just want to buy these properties, I want to put them in somebody else's care in somebody else's hands. And, you know, one point, I had a mentor who told me, so you know, if you really want to be a real pro, as a financial, or as a real estate entrepreneur, this is definitely competency that you will serve you well to have. And at that point, then we took, you know, took that advice and brought it kind of back in house and have been developing that competency in house, and I'll tell you, one of the things that I matters a lot to me, and I'm curious if if you, you know, see this with your clients, too, is I, I distinguish often between being an entrepreneur and an investor. And I feel like an investor is kind of a more passive mentality, generally, that's kind of a broad generalization. But as an entrepreneur, I like to have more control, you know, I like to not necessarily literally have my fingers on things. But I like to have my fingers on the pulse of what's going on with my portfolio and the people in the portfolio, tenants and things like that. So to me like that, the idea of sort of DIY self-management versus just outsourcing it to somebody else, is very appealing from that perspective.

Laurence Jankelow 

Yeah, for sure. I mean, I don't think there's any right or wrong approach for people, it depends on what your goals are when you enter the asset class for so if for someone if they have a goal of being a passive investor, honestly, I don't know that being a landlord is probably the right way to go. And we like to believe it's passive, but it's probably anything but and if your goal is to just have extra income coming in, and you don't want to put any effort, you want your money doing the work for you, maybe the reach or is better. for that person, the risk is lower right, the reward is therefore also lower. So it depends on the goals, if your goal is to have that cash come in, and you think you can add tremendous value to it, that increases that cash flow every month, and maybe land lording is the right path for you. And for those people, then doing it yourself is probably the best way to go. And then as you scale that business up, and you've learned the intricacies of it, then you start hiring people to help you. And then hiring can either be internally or outsource. But it's still hiring. But you don't you won't you don't want to do that too soon as with any business, you don't want to scale it before it's ready. And I think there's a certain amount of learning that has to happen as a do-it-yourself landlord before you want to go hire that property manager. I tend to also think about it as you know, the property managers I've looked at in the past, it's not their money. And you have to kind of get a sense for what they're looking at what it's like to be a property manager, so you know how to manage them. Because if you don't know, then they're just not going to be able to manage and control that property manager the way you need to be successful in that business. So I think there's, there's a path where you can skip do it yourself. land lording but it's not usually the wise path.

Jeff Stephens 

Yeah, yeah. So on this podcast, and in our community, we're very acquisition focused, I mean, real estate investing or real estate entrepreneurship is a vast sea of information and vast sea of like sub topics, I guess. So we're very focused on acquisition and as you know, off market and a lot of seller financing and things like that. So when people like when you see your clients who are focused on buying, and they're in buying mode, from the perspective of property management, what are some things you feel like people should be focusing on during acquisition and maybe focusing on more than they are?

Laurence Jankelow 

Oh, yeah, so many things. I mean, where you make your money is on the purchase, for sure. Like, that's going to dictate all the success of that property done down the road. So obviously, purchase price is important. that's a that's a given because then you look at what rent you can come who's going to come in out of that and you start to map out your expenses and you only want to buy something where at a price where you can make a return on it. I don't think enough people will do those calculations, people should be calculating out what an expected net operating income is going to be if they can get rent rolls from the current landlord and expense reports, they should get that factored in and then start shooting for a target, maybe you only want to buy properties that have 8% cash return annually or something like that set a goal, that's number one. And then from a strict operational perspective, when you're buying, you certainly want to look at who the current tenants are. You know, our tenants, the tenants that live in that building are they typically longer term are they typically shorter term, and by shorter, I don't mean like, vacation rentals, I just sometimes tenants live there for five years, sometimes tenants live there for one year, it's a lot easier, if they live there for five years. And more cost effective. So you can kind of get a sense for the average tenure, maybe the longer the better, the easier it is. Look for deferred maintenance. That's something a lot of people forget to factor in from a cost perspective. Just go and walk through the units and take a look around look for water damage. In certain spots, that in brown windows on the ceilings, where it might be underneath a bathroom from a different floor, deferred maintenance can really add up, that's probably one of the mistakes I made on my first building was just not thinking about the deferred maintenance and then of course, look for opportunities where you can add value to the property. So if there's a basement that's not being utilized, maybe you can turn it into a garden unit, there's huge value to be to get out of that if you can add washer dryers in each unit, then you can increase rents. You know, as we mentioned at the beginning of the podcast, if you increase the rents, and you figure out what that rent multiplier is for that city, that's essentially what value adding to it, and then you can do a return on return on spend or turn on income, return investment calculation based on what the value is going to go up by. So all those are important when you're looking into the building unexpected costs, future income potential, those are important.

Jeff Stephens 

Yeah, yeah, absolutely. I like to recommend that when people are looking at an income property acquisition that they look at, they create three performance. One is the literally what will it be like the day I take ownership. Number two is, you know, with a few basic things I could do for there's probably some low hanging fruit of things I could do that would be improvements, let's say then, you know, a 30-60-day pro forma, and then the longer term pro forma, which might involve, like you mentioned, you know, you know, renovating a basement or something like that, to really kind of capture the full potential, but there's sort of, there's now here's what I could do pretty easily. And then here's what I could really do in full. And looking at all three of those things separately.

Laurence Jankelow 

Which I think is a really smart idea to think about it that way. And then add in how much is it gonna cost you for this? Call it phase two, and phase three, so that just know, do you have enough cash to make your 90-day plan work? And your two-year plan work?

Jeff Stephens 

Yeah, absolutely. So one of the things I would I would guess, is challenging for a property management software company, because it's also becoming increasingly challenging for landlords is evolutions in landlord tenant law. And obviously, that varies from city to city, town to town, state to state, but and maybe this is coming from the perspective of somebody who's in a market, that's pretty progressive in terms of landlord tenant laws, but it becomes like a full-time job for us just trying to keep you know, keep up with like, what's changing and the newest regulations and of course, COVID there's a lot of very timely things that they might not stick around forever, but their measures and whatnot right now. So how does the evolution of landlord tenant law, especially in a time of, you know, kind of an unprecedented time like a pandemic and all the regulations that pop up as a result of that? How does that how are you seeing that impacting landlords all over the place? And how does it impact you guys as a technology platform with clients and 50 states?

Laurence Jankelow 

Yeah, so probably a lot to unpack there. The first one probably is I'll just talk about how the pandemics been affecting people landlords’ tenants. You know, I think part of the part of the issue here is most rental properties are owned by Do-It-Yourself landlords in the United States, so something like 8 million plus DIY landlords control on 24 million rental units, that's over half the rental market. But the stigma of landlords is that they're all huge multi, like multi-unit or 100-unit landlords, 1000-unit landlords or their corporations and that they're flush with cash and that they're greedy. There's this huge stigma and so you know, what ends up happening in a pandemic like this or is happening is a lot of there's a lot of emphasis put on like, hey, just let's, let's give the renters a break, and the landlords will just have to deal with it and eat the cost. And what ends up happening is you definitely want to give renters a break. No one's arguing for that they can't afford to pay what are you getting? Do but at the same time, most landlords can't afford it either. A lot of them are suffering the same things, they're losing their jobs. Most of them are just part time landlords, it's a hobby. They're barely making any money on those rentals. And they can't pay those mortgages without rent. And so if all of a sudden they don't get a break, then there, those places are going to go into default, or they can't maintain them the way that they need to or want to. So there is a spiraling effect that can happen. So the first thing I think everyone needs to realize is like landmines are people to tenants or people obviously, we're all in this together, there's got to be some way that we work together. And I didn't think we'd still be here now in November, worried like, okay, where do we go in the future, I thought by now maybe the pandemic would be over and we would return to some normalcy, but it hasn't. We've been in this since March, and best guess now is it's gonna be through all of next year, that will still be here. And, you know, we've seen rising cases, there's going to be more unemployment happening both land on 10 sides, I think we're in for a lot more pain than we even experienced in the first six months of this. So that first step is we got to treat each other as people, if you're giving breaks for renters, there have to be breaks for landlords to otherwise the whole thing collapses at square, we're not the rich, that everyone thinks we are, we're gonna make $100 a month on my rentals, you know, net, some of them. So we're not what can't afford to lose out $3,000 in rent, I can't pay those mortgages. So that's the first thing. I'd say like the second thing, when it comes to us specifically and avail with our technology. You know, we try to help encourage landlords and renters to do the right thing. And so when you get into a situation of changing laws, we look at it as our technology is there to help you navigate that path, and educate you on what those laws are at the right times, all of our lease agreements have state specific lease templates, some of them city specific, so we try to help you navigate those waters as the best you can. And they're updated when the laws are updated. So you don't need to hire a lawyer for that we're just there to guide you. But I think underneath all of that is if you just are operating as a landlord with this mentality of, I want to give the best quality of life to my renters the best I can afford to give, then those laws don't really prevent you from managing that business, you probably already doing the things that the laws require you to do. Where becomes a problem is if you're more of the kind of landlord that's trying to cut corners, to save money to keep more of the money in your pocket, and you're not putting the quality of life of your 10 tenants first or even second, that's when those laws are going to get you because they're there to design to protect those renters. And most of the landlords that we work with tend to be the kind of landlords who are thoughtful and caring, they recognize that there are human beings living in those rentals and it's their onus to provide a quality life. So our customers don't run into those legal issues as much.

Jeff Stephens 

Yeah, yeah. No, that's a great perspective. And I think you bring up such an important point, which I think is just kind of the generally the idea of, of goodwill. And that goodwill is something that you plant, and then you foster it and you water and stuff all the time. Right. And, and that I think when people look at something like landlord tenant law and think just generally like, Oh, that's a very contentious topic, it can be, but I think in my own experience, it is definitely much less. So if you have been for a long time cultivating just positive relationships, you know, doing basically doing what you said, you're going to do when you said you're going to do it, delivering your end of the bargain. And so that's been my experience so far as I have not really experienced too many people who are tenants, I mean, who are looking at the technicalities, a lot and then trying to leverage those technicalities, to their advantage if people seem to have been, you know, so far, nine months in or whatever we are being very reasonable. And I think that that is actually a reflection of, of kind of the idea of goodwill, you mentioned there.

Laurence Jankelow 

Yeah, where you see it historically is on like around security deposits, right. Landlords will try to carve away the security deposits to eat into it from the tenants and keep a lot of that money. And then a slew of laws came out around Well, how do you protect those security deposits? How do you make sure that it's being used for the right things and so now, landlords are required to provide receipts are to the tenant when they keep the screen positive provide required to provide certain amount of notice? If you're already doing the right thing, there's, there's no change in how you're doing things. But if you were trying to, if you if you were going in and fixing something that cost you $5 in charge of tenant $500 and yeah, you were doing the wrong thing. So you're gonna get caught by that?

Jeff Stephens 

Besides sort of the idea of of showing goodwill and just doing the right thing, Kind of as you look at all of your clients, if you were to sort them out between, okay, these landlords are doing okay or thriving in COVID times, these ones are hurting worse. Are there any other kind of, you know, clear observations, you can say like, though these people are faring better because of X, Y, or Z?

Laurence Jankelow 

Yeah, I'm not sure on like the landlord side, I feel like a lot of them are doing fine. Tenants wants to pay their rent, like they're doing their best they want to pay, it's not like the tenants are holding the money. And they, if they don't have it, they don't have it. If they do have it, they pay. And I think we've been lucky in a way, because a lot of the stimulus that's come out has afforded tenants to pay rent, it's gotten them through some unemployment issues that may now be resurfacing. So you'd hope that maybe more stimulus would come about. But when tenants have been able to pay, they've been able to pay, we've seen that then spread across the United States, everywhere we've got in 200,000, landlords and 400,000 renters on our system. So we have a significant amount of data that just shows tenants ultimately want to pay where it's the biggest impacted. Maybe it's a wealth gap issue here, but the bottom 20% of rent, so you know, the average rent United States, something like 11 $100. So it's the $500 rentals that tend to do worse, um, then the other 11 $100 average. And I think that's a factor of kind of how the United States is divided, maybe a little bit there. And so if there's opportunity to fix things, that's probably the area to, for people to focus more on. And I don't know what those solutions are, I wish I did a bit. That's probably where people need to look and start thinking about things.

Jeff Stephens 

Yeah, yeah, that makes sense. To me. I guess, I'm not surprised to hear that. And, in fact, I would go so far as, say, encouraged to hear that. When I, when I first got started, my mentality was like, just simply if numbers work, I, you know, I will say, yes, there was no element of pride of ownership or anything like that in my thinking. And then I had, you know, somebody with a lot more experience sort of encouraged me to have more of a focus on quality. And so we kind of started upgrading within our portfolio. And I really believe that having quality properties that are well maintained in good locations where there's high demand like that, that academically made sense to me when I started doing that, but I feel like we're really experiencing the benefit of that now. Because I just think we've got quality tenants and quality properties, they appreciate the property, they appreciate us. You know, it's just, it's just a well, a well-run thing overall, which seems to be serving as well, at this point. Rather than just having a bunch of really random stuff that could run the gamut from, you know, a market to C or D markets or whatever scattered all over the place, I'm really glad we've got kind of a focus on quality like that.

Laurence Jankelow 

Yeah, I mean, I think quality is important you get, there's a sense of like, people want to save landlords want to save money, so maybe they don't maintain as much as they could or should. In the long run. I think that costs them more, because I call it probably someone else coined this, but now I'm using it, I call it ding theory. So it's like, if you see a car with a lot of things on it, people who park next to it probably are going to dig it up more. And I think that same thing applies to rentals, if you don't pay it every few years, if you don't touch up stuff and maintain stuff, then when a tenant living there, what unconsciously create more wear and tear than they otherwise would. And if you keep it really nice and well maintained, they walk in there, and they're like, wow, this is a beautiful place, and they're gonna keep it more likely keep it beautiful, then if not, you can prevent a lot of wear and tear just simply by helping them see how beautiful the places. So proper maintenance, I think in the long term saves a ton of money.

Jeff Stephens 

Yeah, yeah, that's cool. So like I said, before, we're really acquisition oriented here. In your role with Avail, do you get to see much visibility into your clients? acquisition efforts? Are they mostly they've got some kind of buttoned up and now that's when you guys come into the picture? If you do get some visibility into that, are you seeing much in the way of off market and seller financing?

Laurence Jankelow 

Yeah, not today. We don't do a whole lot in that space. So when landlords sign up with us, they've already got a property or they're very soon going to have one they've got like a closing date already in there. They're exploring how they're going to manage it. So we don't get terribly involved. But because we've got so many landlords, they're often always asking us, I've got this property to sell. Do you know if any other avail landlords are buying so for years, we've been talking about creating like a 1031 exchange program just within the Avail network, which I think could be very fruitful for them? We just have not had any time outside of just growing the business as it is to invest in that kind of feature enhancements. So it's something that's on our radar. And so they would like to explore it just happened today.

Jeff Stephens 

Yeah, yeah. You know, we, we like to, we'd like to set up a dynamic when we're buying where we're a regular person and we're talking to regular people without, of course, intermediaries like realtors and stuff, but just to regular people who are as a result or on a level playing field, nobody has a power advantage, which is to regular people sitting down talk. And as I was thinking about, you know, our conversation here in advance, I thought, you know, it's a veiled type customer who are probably pretty much exactly like the kind of folks I like to buy properties from, I think, frankly, most of the people I buy properties from don't necessarily have any particular technology solution, but they are the, you know, one four- or five-unit owner landlord DIY, like to get their hands dirty personal relationships with their tenants and things like that. And that got me thinking about selling. So I wanted to ask you, what, what do you think are some of the top mistakes that landlords make, as they're preparing to sell their own properties, like things they might do that sort of leave money on the table, or don't give them the best is the best possible outcome on the sale?

Laurence Jankelow 

Sure, I mean, this list might, could be endless. So I mean, I think this is true for landlords not just true for selling but landlords who are also listing for a rental for a vacancy, there's a bunch of overlap there. So one is showcasing the property in its best light, I think a lot of landlords who do it themselves may not do the proper marketing on it, they don't take the right photos, they don't create the right amount of buzz or get the right amount of leads. They don't let the buyers walk through the units the way they need to. Maybe they don't get the tenants who currently live there to clean up a little bit. They don't incentivize them the right way to do that. There's, there's a whole bunch in that area, I'd say also educating themselves on what a fair price and how to negotiate, there's a lot that gets left there. You know, obviously, like, it's tough to find the right comparable to benchmark yourself at, I think what ends up happening for Do-It-Yourself owner selling it themselves is the way they benchmark what they want to sell it for is what they paid for it. And so they'll take what they paid for it, maybe they say, hey, look, I'll add 5%, or some arbitrary increase to it just to pay off their mortgage and get some money for the next place. Not doing a full diligence on what they could get for it. So a lot of times, I'll leave a ton of money on the table there. If they live in the property, they may not have put themselves in the lease, in which case, then it's really hard to justify what they're really what their real rent is, um, you know, we talked about on this podcast already a couple times the gross rent multiplier as a proxy for value. And if you're not at least, and that's rent that's not contributing, or at least proven rent, that's not contributing to the total value. Sometimes they aren't charging market rents or tenants. And so if you can charge market rents, then that buyer is going to do when they run the numbers, then they'll be able to offer more. So I could go on for days, there's all there's a lot in there that they could start to think about when they're selling.

Jeff Stephens 

Yeah. Do you find I mean, maybe just anecdotally, most of your clients who are selling properties, is it because they just say, Hey, I think I think I've had enough of this, are they saying I'm trying I'm trading up into something bigger? I'm just taking some chips off the table and taking my appreciation of my proceeds and moving on do something different? Or what are some of the motivators and drivers do you think?

Laurence Jankelow 

Yeah, a lot of our landlords will end up on like their long-term buying hold. So if they're, what they'll end up doing is they'll buy they'll try the burn method, basically. So they'll try to refinance and answer their portfolio. I think that's the first route. The second round is if, if they were more like an accidental landlord, so 2006 created a lot of excellent landlords is probably gonna be a lot of accidental landlords created today, too. So those are people who lived somewhere. And then they had a live event they needed to move out or something like that couldn't afford to sell, they're underwater, or there were no buyers available. And so they turned to red tape. And so those people will sell when they realize hey, I can make my money back. And I don't really want to put all this work in and so they'll typically sell and they may be a little more emotionally biased. And so that's probably the largest reason why someone might sell there is oftentimes they want to upgrade. So they might want to go from a three unit building to a nicer three unit building, or maybe a six or 10 unit building. And then of course, you just need the down payment money to do that. So there's a lot of that that happens as well, that most of our landlords tend to be buying old on how to use the refinance method to add more properties.

Jeff Stephens 

Yeah, that's that. That's what resonates most with me and I think probably a lot of our listeners here as well. Okay, so you know, I really think I've never really thought too much about the idea of accidental landlords. I mean, I guess I bought properties from people who have been, who become accidental landlords through an inheritance or, you know, some other kind of a situation. But if you are an accidental landlord, and you're scrambling around saying, I don't think I can manage this completely by myself, and you start to look around for software, some type of support, like, what would be like three things that you think would be that people should be focused on, as they kind of look at the menu of options that may be out there? For you know, whether it's tech technology type of help or platform, you know, if you go in Facebook groups and stuff, you see people are always asking a new landlord, they're always asking, like, what's the best way for me to collect my rent? What's the best way for, you know, managing repair requests and maintenance orders and things like that? So if you could advise somebody and say, Hey, here, whatever, whatever path you choose for this, here's three things you should really keep in mind as you are selecting something.

Laurence Jankelow 

Yeah, well, I think understanding the path is important, right? I think sometimes they may not realize, hey, maybe they should sell, you know, a, that's always your first path. And even if you're underwater, that may still be your best path, you've still got to run those numbers. And so selling is always an option. It's just you may not, you may have to come to the table with money to unload the property. But depending on the nature of it, and what you can get for rent, that may be the cheapest route. Depending on when you bought and why you bought. If that's ruled out, then you got you know, the renting is the other option, essentially, and in that you've got two paths, you can make it a long-term rental, or you can make it short term rentals, make it vacation properties. And maybe that the vacation properties are a good path. If you're okay, taking a lot a little bit more risk, putting a little more effort in there, the rewards gonna be a little higher, you're probably more prone to that, depending on if your property's in a large city or more vacations, but then that'll be a little easier. But you can still do that anywhere. Of course, I like long term rentals, I tend to gear people towards that I think it's one better for society. But also, it's a good combination of risk and return for a landlord or for an owner rather. And in that case, if you're going to go down that path of like, okay, I couldn't sell it. I don't really want to put in all this effort for short term rentals. What should I be thinking about as I become a long-term real estate investor? Certainly, some sort of community, as you mentioned, is super important. So people flock to Bigger Pockets a lot to ask questions as first timers, we have our own community as well that people can go to and ask questions, I think that's a really good place to start is just asking questions, go into Google, reading as many things as you can to get educated on what to do. I think if you're a first timer, one of the problems is you don't know what you don't know. So you've just got a, you got to get out and started with your first search, right? What should I do as a new landlord and then see where that spirals you? Then the second thing you want to do is figure out a process? How am I going to manage this? What's my process for finding tenants? Where am I going to find them? Do I have a process for screening them? Do I do, I want to create policies around this. Think of it as a business. Because you're going to have revenue, you're gonna have expenses, you want to create processes for yourself to make it easier as you go and add to them, keep it in a document somewhere. And as you go, you add more. There's a lot to do there. You want to start thinking about like, Okay, what do I do about rents? Do I? How do I want to collect it? Do I want checks? Do I want cash? Do I want people paying credit cards? I want it and what kind of landlord? Am I going to be? Am I going to charge late fees? how strict do I want to be, and I've got recommendations on all of those. But the individual has to decide on those processes themselves. And then of course, the last piece of it is, your processes are certainly enhanced or made more fluent or fluid, get which one we want to go with there by technology. And although this is self-serving for what we do at avail, but you definitely want to leverage some sort of technology, even if it's Google's G Suite, right, and you get Google Voice with Google Docs and you want something now, I'm biased towards avail like the kind of technology we offer helps landlords operate their business. So if you're confused as to what process you want to do, our technology forces you into a process it takes you to the exact right price places you need to find tenants, you'll create a list of with us we syndicated across the web. So you'll find tenants we hook in to TransUnion to give you the credit reports, background checks that you need to make decisions. We help guide you as to what those right decisions are. We give you the least templates so you don't have to go figure that out. You sign it digitally, your tenant sign it digitally. It's stored online, on the cloud for you. So you can access it, you're tense can access it, we let your tenants pay rent via credit card or from bank accounts, bank accounts. And when I tend to spend maintenance online, all that technology enables a fluid process for you. So they you'd want to find some technology that matches the process you want to do.

Jeff Stephens 

Yeah, thank you. That's a really great, a great outline. I love the focus on process because if you're making it up from scratch, every time a new situation arises, yeah, you're gonna, you're gonna make yourself. Make yourself crazy.

Laurence Jankelow 

Usually a lot of decision fatigue.

Jeff Stephens 

Yeah, yeah, exactly, exactly. Well, when you're out there racking up rentals, I guess at some point, you're really gonna have to figure out what to do with all those rentals you've racked up. So I really appreciate you sharing your perspective on property management and everything related to that. If people want to find out more about you connect with you or avail itself what's the best way to do that?

Laurence Jankelow 

Sure, pretty easy. They can come right to the website to find out more about Avail. So that's Avail.co, A-V-A-I-L dot C-O. And I love connecting with people to see if they're looking for advice or want to connect with me one on one, they can reach me at my email, which is Laurence@Avail.co. I have happy to connect with people. I love people reaching out to me. So comr to the website, come email me. Let's start conversation.

Jeff Stephens 

Fantastic. All right. Thank you so much for being here on the show. I really appreciate it, Lawrence. No,

Laurence Jankelow 

Thank you for having me. This is great. I love I love chatting about what we do and rentals is great.

Jeff Stephens 

Yeah, talking shop. Alright, thanks so much.

Well, I hope you enjoyed that interview. You know, it's really not every day that you get to talk to somebody who just has visibility into so many landlords lives and experiences in businesses. And I got a lot out of that, and I hope you did as well.

So that is it for today's episode of Racking Up Rentals. So show notes again, as a reminder can be found at www.thoughtfulre.com/e61, please do us a big favor by hitting that subscribe button in your podcast app. And if you'd be ever so kind as to just take a second to rate and review the show on Apple podcasts. That would be fantastic. Did you know also that we have a Facebook group for thoughtful real estate entrepreneurs as well? It's true we do. It's called Rental Portfolio Wealth Builders. And we would love to have you join us over there. If you just type group.thoughtfulre.com into your browser. It will redirect you right to that group within Facebook and you can hit the Join button. If you liked this episode, please take a screenshot of it on your phone. Just post that screenshot to Instagram and tag us, we are @thoughtfulrealesate. So I will see you in the next episode.

Until then. This is Jeff from the Thoughtful Real Estate Entrepreneur signing off. Thanks for listening to racking up rentals where we build long term wealth by being a win-win deal makers. Remember solve the person to unlock the deal and solve the financing to unlock the profits.

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