Building an empire takes a team
The primary reason property management is profitable for us is because many of our clients continue to add to their portfolios over time. They continue to buy because they are confident in our ability to successfully look after their investments as if they were our own. While property management is a very low margin business, selling houses and earning the resulting sales commissions is very profitable for us.
We are experts at identifying suitable rental properties for our clients. This is due to our unique experience in the market. Since I got my real estate sales license in 2001, I have actively worked and pursued foreclosed property listings. This work resulted in my team listing well over 1500 distressed properties during the five years after the crash. Many of these properties made several of our property management clients a lot of money. That is something I am very proud of.
Why Property Management?
A little-known fact outside the real estate industry, is that HUD, Fannie Mae and Freddie Mac disposed of tens of thousands of homes using what are called ‘pool sales’. These government and quasi-government entities were still sitting on inventory years after the crash that would have taken another decade to dispose of one house at a time. This would have potentially delayed the housing recovery. The solution was to group these properties into pools, and sell them to various large investment funds at very attractive prices.
Many of these investment funds immediately got into the property management business and rented them out. They sold off the properties that were uninhabitable as soon as they could while still complying with HUD (Housing and Urban Development) Guidelines. Now that the market has improved we are seeing these funds list and sell these appreciated assets and begin to harvest their profits. We are now seeing listings come in from dozens of investment groups we have never heard of before that in the past would have been listings that came to us from Fannie Mae or HUD.
As I write this we are at historically low inventory levels across the board, and at almost all price points. I believe that while the economy and the jobs situation has improved for many these last few years, it certainly has not improved for all. Consequently, people are either unable to qualify for a mortgage, or if they do qualify, they are unwilling to commit. This is why rental housing is, and will continue to be, such a prudent investment.
This could be you…
There remain opportunities all over the country for real estate investors, even if they are harder to identify than they were a few short years ago. As for me and my team, we will continue to invest and expand our business in Ohio in a big way. However, I am very excited about Florida these days. Specifically, we are focusing on Brevard County, also known as The Space Coast. We will be devoting a substantial amount of time and resources here over the next few years. I see a big future in Florida for myself and for my investor clients.
An experienced real estate professional can work with you to expand your portfolio by helping to identify and evaluate potentially great new investments for you. More importantly they can help you navigate the complexities of a foreclosed property purchase and get you to the closing table. My hope is that this information will help you profitably expand your portfolio. And remember, we are always here to help.
For more information about The ROOST Landlord Advantage™ property management system, click here.
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