1. Commercial Wholesale Training 1 Ed and Bob Diamond Module VIII

2. Commercial Wholesale Training 2 Agenda for Today Module VIII – Managing The Building(s)

3. Commercial Wholesale Training 3 Chapter One – Professional Property Managers The Property Manager can make or break your building - they are in a “high leverage” position and can lose money or steal money from you Select them very carefully! Get a good one and you can “manage the manager” and have a life outside the building

4. Commercial Wholesale Training 4 Rental Properties are NOT Passive Property Management is not a passive activity - to manage requires you to be detail oriented, tough, and to be present to: –Pick up and deposit rents and leases –Supervise maintenance and repairs –Check on the building –Deal with emergencies You must have a manager if you don’t want to do the above items

5. Commercial Wholesale Training 5 Selecting A Manager Interview at least five - 90% are not good Get references and check them Call their office as a tenant and see how they are Check on line for their reputation - “Yelp” and other similar sites and Google them Check if they have been sued in the local court system’s on line docket system

6. Commercial Wholesale Training 6 Selecting A Manager Find an investor who is satisfied with their manager for referrals Check what reports the manager intends to give you Demand on line access to your bank account Demand they deposit your rents in a separate account

7. Commercial Wholesale Training 7 Selecting A Manager Interview questions are in the book Select a manager with experience in your type of building Check their knowledge on local vacancy and rental rates and neighborhood knowledge If you cannot find a suitable manager do not buy the building There are more details in the book on the contracts, reports etc.

8. Commercial Wholesale Training 8 Chapter 2 - The Art of Managing You need weekly reports on all activity from your manager If the manager uses Yardi, Rent Manager, Propertyware or Tenant Pro it will have the reports you need programmed in 90% of Managers are poor - expect to fire a few and for it to cost you some money Fire early and Often if they are not satisfactory!

9. Commercial Wholesale Training 9 Chapter 2 - Manage Your Manager Check up on the manager with a physical inspection of the property (surprise inspection) Check up with monthly planned visits Survey your residents via email with survey monkey and monitor the customer service email with a google email forwarded address or property website

10. Commercial Wholesale Training 10 Chapter 2 - It is Critical to Manage the Manager A poor manager can cause a property to fail or under-perform Under-performance means you will not make money Improving performance is a way to make a lot of money because the building value goes up when the performance goes up

11. Commercial Wholesale Training 11 Chapter 2 - Poor Management Creates Opportunity Poor management frustrates owners and they want to get out. Creates a buying opportunity This is also why you need to see actual numbers from the seller’s tax return (accountant certified) and NOT “Pro- forma” numbers

12. Commercial Wholesale Training 12 Chapter 3 - Ways to Control Poor Management Watch the money - managers will spend it unwisely and poor management will show up in less cash then should be there Make sure you set aside funds for adequate maintenance and repairs Plan for replacement of roofs and other expensive items by setting aside money Major refits every five to seven years

13. Commercial Wholesale Training 13 Getting to Closing Next Class is Getting to Closing and Managing the Transition to Ownership