REIG Linda | Managing Real Estate Investments

 

Property management is an important concern for property owners who want to succeed as good landlords in their rental properties. Property owners typically have to deal with problems like maintenance and rent collection – jobs that can easily be taken away from their hands by a trusted third-party manager. Whether you are a landlord who owns properties from afar or someone uncomfortable with the collection and maintenance aspects of the job, Linda Liberatore might just be able to help you. Linda is a real estate investor, property management expert, best-selling author, and coach who provides innovative solutions for property managers. She joins Monick Halm on the show to talk about how DIY real estate investors can get the necessary tools to help them manage their investment properties.

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Managing Your Real Estate Investments – Interview With Linda Liberatore

We sometimes interview people who help real estate investors and are a great resource for real estate investors. In this episode, I’m excited to have a woman who is both a real estate investor and provides innovative solutions for property managers. Our guest, Linda Liberatore, is a real estate investor and property manager. She has innovative solutions for property managers. She speaks at real estate investment groups and national conferences. She’s also a bestselling author. She released her second book, My Landlord Helper: Keys to Managing Your Real Estate Investments, Achieving Explosive Growth and Saving Money. It’s something we all need.

She’s a Forbes Real Estate Council member. She’s a coach for Think Realty and she’s the winner of the 2017 Property Manager of the Year award. We’re super excited to have her with us. She’s a high-energy, hard-working entrepreneur. She specializes in technology for real estate for property management. Her past experiences have allowed her the ability to learn and grow and she’s passionate about sharing this knowledge to help others. I am excited that she’s here to share her knowledge with us. Welcome, Linda.

I’m equally excited and quite frankly, honored to be on this show. I know you provide so much value to your audience and you do a great job getting out there and getting them the information they need.

The pleasure is all mine, but it’s equally pleasurable. I want to highlight and talk about your story because we are all about the stories of women. I also want to get some questions about the property management in general because you have so much experience with that. I know that’s a huge concern for a lot of the readers, how to be a successful landlord. Let’s start with your story. How did you get started in real estate investing?

I started years back. I had small children in the home and I started doing bookkeeping and technology for a real estate investor. It was two of them at the time. Ironically, it was one that had residential single families. We’re partners, but she had done it for years. She was excited about it and got me equally excited. She still is today. I did it for a gentleman that owned warehouses just outside of the O’Hare area. If you know O’Hare fields outside of Chicago, that’s our big airport. As you can imagine, the surrounding area, especially back in the day, was loaded with warehouses and manufacturing because they were so close to the airport. He owned quite a slew. The way somebody will buy single-family homes, that’s how he bought warehouses. He had quite a portfolio. I helped them with bookkeeping. He, at that point, was retired and was collecting rents. I got to see that end of it. After that, I worked with her as she grew her business. That was what got me started.

What was the first property you got?

It was, and still is, a townhouse. They have different words for different parts of the country, but they’re a joined home. That was her primary focus for her real estate investing. She liked that model. In fact, I have a few clients now that have that model too. Some with single-family and some with multifamily, but hers was always a townhouse. As with anything else that’s gone through some cycles, I don’t know if you felt the same, but here in our area when the foreclosures were rampant, that became a real stress on those associations which then became a stress on the association due. We did pretty well with that, but there certainly were a lot of people that if they weren’t losing the home itself, they were losing it because of the dues.

One of the hardest things about being a landlord is not letting your heart get in the way of cash flow. Click To Tweet

All of a sudden, the association started coming down. We were in community so luckily, we had percent. I’m guessing, because you speak to people nationwide, you’ve heard of that where they make sure X percent of it is owner occupied. Because of that, it maintained a little bit of the pot if you will for the association news to make sure that they’re stable. That even took quite a hit when everybody was getting foreclosed on. We came out okay, but I know a lot of horror stories of people involved in that type of investing.

That’s a good point to think about, with those dues that you might owe on top of mortgage and other expenses and how that affects a rental.

To share with your readers, their concept was that the maintenance bills would be more predictable. Because of that, it’s easier to budget in that association fee than to go through the ups and downs of the normal single-family investment. Let’s say roof and stuff like that. It was more of a predictable expense, but that took its own cycle when that wasn’t predicted. It’s something to think about because, as we know, real estate is a cycle. It may recreate itself, but a lot of the associations have made a lot of adjustments to prevent not having enough reserves and the unexpectedness of people losing their homes and stuff like that.

That was your first investment with townhouses. Do you have other types of investments as well besides real estate?

No. I have more real estate, but there are still in that townhouse portfolio. They’re good rentals, but like they said, they’re all with this partnership and we do them to the townhomes.

Let’s talk about the other side of what you do, the property management side. Tell us a little bit about the property management business that you have and some of the innovative property management solutions that you offer.

The reality is we’re not just a straight-up property management company. What we’ve zeroed in on is the fact that we have strong technology skills. It happened naturally. It wasn’t necessarily the plan. The plan from the beginning was, I created a software when I got started, that would help people collect the rent. In addition to collecting rent, there’s the ledger, lease application and all the different fields. When I got started, I had come from a company out of New York City that was collecting money and I saw how helpful that was to have a third party collector, as opposed to people who didn’t want to give up control and give it to a property manager.

REIG Linda | Managing Real Estate Investments

Managing Real Estate Investments: It is really hard for real estate investors to find an ideal property manager because they have to give up control of their properties.

 

What I was working for wasn’t real estate, but yet I knew I was putting the thoughts together from the fact that I had worked with real estate investors and was still. I was seeing them collect money and seeing those pain and then seeing that this technology and having a third party handling the technology and the collection was beneficial. You didn’t necessarily have to give up full control like property management, but you could find somebody to help you collect the funds and professionalize it. You get to imagine when I say it was years ago, getting people to do a debit was difficult. People didn’t want to share a checking account numbers the way they do now. When we started that, that’s when our owners said to us, “We went to real estate investors, small ones that were looking to grow, and they were looking to offload some of their work without giving up control.”

I would say that that’s the biggest thing with a real estate investor. It’s hard to find a property manager that you like because of the fact that you’ve given up control and I certainly understand it. It’s probably no different than when you have to find, let’s say daycare for your child. It’s scary. You want to make sure you’re picking the right person. People feel emotional about their investment. They know that all their money is on the line and they’re very afraid to find the right property manager, especially when they’re smaller. That’s when you feel it because not a lot of full-service property managers are out there looking for their business. The property managers are looking for these big portfolios. At the time, nobody was servicing what we refer to as the do-it-yourself investor that’s trying to grow.

Your focus then is you said on the DIY investor, the smaller investor that may have 1, 2 or a couple more single-family homes and they could use some help with the collections. You’re able to help in that way, which is a great service, especially if you have properties that aren’t nearby. I go with my mentor’s statements, “Wherever you want to live, invest where the numbers make sense.” I live in Los Angeles. It’s an expensive market, so it doesn’t always make sense for me to invest here in LA. When you are investing far away from where you live, then you often need to get property management. If it’s a small property, then that can be cost-prohibitive. Do you work with people that are remote investors or are they all local?

They’re very remote. Some, not a lot. One of my first clients is out there in California too. Her investing is in the Georgia area. I was speaking to somebody out of the Texas area that wants to use us. What was good about their scenario that I would describe to people from my perspective is, they had been through it all. They did it themselves, hired an employee and had a property manager in a different state. For me, that’s an experienced landlord that can understand our value. We are a piece of the puzzle, not the whole puzzle. If you want to stay in control, we can be helpful. When we work with people out of state, that’s one of the things we would say to them. For instance if they don’t have a strong team in place, a leasing agent that’s going to show the property, a manager or something.

The woman that I spoke of in California, the example with her is she was growing a portfolio. She has boots on the ground. She already had guys that were doing remodeling for her. They were good connections to get her maintenance guys. In this last case, she was like, “I don’t want to give this to full service. I think you could be the ideal solution.” We’ve been with her for years. We can do two aspects. We’re the frontline. We get the maintenance calls as well, it’s just that we wouldn’t have our own maintenance staff to send out. That’s why it’s important to have a maintenance staff so we’ll facilitate it all. As an owner, you’re not worried about each maintenance call the same way you wouldn’t be with full-service. From my perspective, you have to give me a team of people that I can refer to.

Say I bought a property in Atlanta, then I can say, “I’d like to use you. Here is my maintenance team, the contractor you can call on, the plumber, etc.” The tenants could call you for help when the toilet is plugged up at 2:00 AM and then you would facilitate getting the right maintenance person out there. Is that how it works?

Absolutely. If you’re comfortable, I’ll call it making relationships in another state, then we can be good. If you’re saying, “No, I never want to see that state. I never want to know anybody in that state. I bought these buildings and I’m looking for a good property manager and I just want to call them,” then I would say we’re not a good solution. We hear and see it all. One of the unique things we see is a lot of best practices. We see so many different leases, and so many different states and counties. We’re up to 13 or 14 different states. We have somebody in New Jersey. We don’t ever see the homes, but they have a good team in place as well. Because of that, we get to see the different counties, how they enforce the laws on payment, the eviction process. They bring all those forms to us and we’re a back-office admin. We’re taking calls, filling out paperwork. We’re always here for them as they grow.

Listen to your intuition, but always let the numbers talk. Click To Tweet

There were two parts of what you did. In the frontline, you do the maintenance calls and then number two is about collecting payments, handling collections and that part of it.

Let’s say the second part is the collections and there are a couple of reasons people come to us. If a portion of your readers is composed of people just starting, one of the things that is hardest for them is cashflow. It is an issue. What happens, quite frankly, that we see is their heart gets in the way. We’re all human and it’s hard when somebody calls you up and says, “I lost my brother and I can’t pay the rent.” We all tend to be super empathetic to that but the reality is they can’t afford to be. Our heart is making one decision, but on the back end, we’re trying to balance the checkbook and pay for the mortgage. It just doesn’t work.

Your heart gets in the way as mine would and does. I’ll call it my own scenario, but when you enter in a third party, remember my job first and foremost to be successful, is to get to that money. I am focused more on the lease, the laws. I help them find charitable organizations. We help them find alternatives to get them paid. We can’t hang up the phone without some mutual agreement as to where this is going to go. I’ve had owners come to me and say, “I know what I was doing wrong, but I didn’t know how to get out of it.”

Once that scenario occurs, it gets worse and worse. We’ve seen more than one person on the brink of losing their property when they came to us. Think about it. We also went through those years that everybody always refers to the housing crisis, but it was an employment crisis that followed it. Everybody lost jobs. If you did have property and you were okay and weren’t upside down, which many were anyway, but let’s assume they weren’t, their tenants were all losing jobs so they couldn’t afford to pay rent. Now they were carrying that burden as long as they could. Those probably were good tenants and have been with them a long time. The reality is, no cashflow is no cashflow.

Everybody loses.

We had to work through a lot of delicate scenarios like that.

What you’re sharing reminds me of a story that a property management friend of mine was telling me. He has a property management company and he has rentals. He owns a company with his brother. After a while, he discovered that even though he was a property manager, he couldn’t manage his own property. He would manage his brother’s and his brother would manage his. He said he had this one tenant who said, “I can’t pay. My mother just passed away.” He was like, “I understand.” He sent some flowers.

REIG Linda | Managing Real Estate Investments

Managing Real Estate Investments: Don’t get too DIY. Always seek legal advice, especially if you’re just starting out as an investor.

 

After that he realized, “This is the third time in a couple years I’ve sent flowers that this guy’s mother passed away. She died three times.” He’s like, “I can’t do this myself. My heartstrings get too attached.” If it’s for his brother, it’s a lot easier to say, “Nope, sorry, you have to pay rent. Sorry for your loss. Let me know when you can pay the rent.” I can see how that’s a valuable service, especially if you can’t necessarily afford to pay for full property management to do everything, but you may just need somebody like a disinterested third party to collect payments. It’s very helpful.

It’s true and that story you told, I can’t tell how many times we hear it. For us, it’s easy because we are the third party. We are not emotional. Our job is to collect rent and enforce the lease. We have to get them resources outside of the landlord and we say that like, “I’m sorry, the landlord can’t give you a loan.” They’re like, “I don’t want a loan.” “Yeah, you do.” One of the things we say, and this goes along with the story you told, is we first off suggest family and friends. If there’s not family and friends to help you, that to me, if you are doing this yourself and you’re continuing that as your first line, if they say like, “Nobody can help me,” that should tell you something. Think about your own personal life, and I don’t mean if you’re wealthy or not wealthy. If you got in trouble, your family is there to help you because you’re not in trouble every month. I’m sure your parents or mine or whoever would not be helping them if I did this every single time. That’s usually your first warning sign when they say that. Because if there was something terrible and tragic that occurred in their life, they should have resources that are more than willing to help them not get evicted.

I find that we learn so much more from our mistakes than we do when things are going fine and smooth sailing. What was your own biggest personal mistake in your real estate investing career and what did you learn from it? What’s the biggest mistake that you see property owners making as a property manager and how can they learn from that and stop it?

I’m going to start with my biggest mistake. I can be too much with the heart myself. On the other end, although I will agree with that story your friend said, that’s why it was good to be in a partnership and remove myself. As good as I am at collecting for other people and I would say our company is super good, and that’s why we get phenomenal in all this. When it is one-on-one, I have made some poor judgment calls. When you say the biggest mistake, it’s letting that person in. It’s on the screening hand and it’s a particular story that I can remember. I had all those feelings that this is a mistake, but they kept showing why it wasn’t a mistake. I let my heart get in the way of the data right in front of me and I’m a pretty data person and yet I have that heart. That mistake was a big learning experience. This goes years back when I first started investing and even though I had a partner, that’s even worse. Two of us got fooled and yet we had all those warning signs. When you feel the warning signs, there’s a reason for those warning signs and I have learned that now. That’s the biggest mistake.

I love what you said and I want to highlight two things. One is that you’re data-driven and so the data wasn’t there and that it didn’t feel right. Your intuition was telling you, “This isn’t good as well.” You ignored your intuition. Personally, in my life, the biggest mistakes I made have been when my intuition has been telling me something and I’ve ignored it. It sounds like that was also what was happening there. It didn’t feel right, but you still went ahead because they had a good story.

The line goes far enough back that I’d say we always still make common mistakes. The one thing I would want your readers to take away from that is they still have to go to the data first always. It’s still scary to me when I hear investors go, “I didn’t run the credit because I felt good about her. I had that good feeling.” Pay attention to the example I gave. There was data and there was intuition. Don’t just go with the intuition. That doesn’t work. The fact that my intuition was right in line with that data, I don’t know how I got smooth-talked into it. That was a chance we should never have taken. Luckily, it wasn’t as costly as it could have been, but it certainly was costly to us.

Thank you for sharing that and that’s a good point too. Let the numbers talk as well. The follow-up question was, what’s the biggest mistake property owners make that you see? It might be the same thing but is there a different one that you see property owners do?

Don’t let your emotions get the best of you. Treat your business like a business. Click To Tweet

I’ll try to go with a different one. This is such a buzzword. You have to treat your business like a business and that’s the cut. What happens in that case is no one describes what that means. I can’t treat it like Amazon because I’m not as big as Amazon. That term gets thrown around, but nobody defines it because there are plenty of businesses that go out of business. Just like giving that one word to say, “Treat it like a business,” I think that what I see the mistakes is they don’t like to treat it professionally. It’s like what we said, “Use the data and the technology.” Remove yourself from the emotion because this is homes and people. All businesses are based on people that come in to shop with you or whatever, whether you own a little grocery store or coffee shop. At the end of the day, you can’t have so much emotion for the people that come in that you start giving away the coffee for free. It’s the same analogy.

You would almost say, “That’s absurd. Who’s going to do that?” yet that’s the professionalism we see sometimes. If you have a lease that says it’s $200 for the maintenance fee, then you have to enforce that. One of the things we share with them is that behavior is setting a tone. I know you want to be nice, so then be nice by giving a gift card or something outside of the lease, but stick to your lease terms. If those are the terms of your lease, that’s your business model. I guess to piggyback that, the other mistake I hear a lot is when they talk about, “Did you run this pass the wire?” When they’re just getting started in business and they don’t want to get a lawyer for the first legal document, which is the lease. If you’re the painter that’s your paintbrush.

You have to have the right materials and don’t get started without it. Even if it’s LegalZoom. I’m not saying you have to find a Madison Avenue lawyer. I realize that budgets are tight when you’re starting, but don’t get started without some legal advice. Specifically, from real estate investment types of attorneys. Get involved with REIA. Get involved somewhere so that you have a good foundational document because that’s going to be the one piece you’re going to have to lean on. I say that sometimes the biggest mistake we see and again that’s when we see them lose investment homes and stuff because they didn’t tie up that first piece right with the right lease. People add a lot of stuff for behavioral things. You wouldn’t believe how much stuff you should put in there to protect yourself.

This has been so good, but such wonderful advice. It’s super helpful to not be too DIY. Sometimes you have to rely on professionals, especially when it comes to legal matters. Just do it and do it right. One of my mentors says, “If you work with the best, they’re not going to take your money. They’re going to make you money in the end.” Penny-wise, pound-foolish. That’s good advice and then treating your business like a business. Before we do our trinity, what’s the best way for people to reach you and find out more about what you do?

One of the things that we have is you could go to my email. That’s [email protected]. We also have this YouTube channel that we’re super proud of. We have over 500 daily videos or years’ worth of newsletter. We do a daily video with tips for landlords and they’re now organized by month so we have a theme for the month. You can scroll through the site that’s at YouTube.com/securepayone and that is chock full of information. We’ve got newsletters on there that are all video ones because it’s YouTube. We have them in writing like blogs and stuff as well, but people seem to love the videos because they’re short and sweet. They get a nugget of information each day.

What is your trinity? What is one thing you’re celebrating right now? What do you want to brag?

I’m going to brag a little bit about our technology. One of the things that we do that’s so unique and we’re now realizing is we work with all the main software, plus some of the smaller ones. For instance, Buildium, Propertyware, AppFolio, repmgr. It has given us a level of expertise. We didn’t go in for that reason. My background was teaching and training on technology for businesses. It wasn’t intentional. We were meeting the needs of our clients and because of that, we’re offering people the ability to help them set up their technology and we’re realizing there are so many people. It’s something now that we look in the rearview mirror, it’s like, “We do have some expertise here.”

REIG Linda | Managing Real Estate Investments

My Landlord Helper—The Keys to Managing Your Real Estate Investments and Achieving and Saving Money

What’s one thing you’re grateful for?

That’s going to have to be the team here and my own family. I don’t know about you, and I’m not sure everybody can relate to this, but when you start a business, it’s tough on your family. It’s hard on them. It’s still very long hours and it is definitely a baby that needs lots of attention. I appreciate what they’ve done for me to support me through this. The team I have here, that was a real growth and learning experience for me. Anybody that has teams know how difficult that could be and I have been blessed these past years. I definitely count that as a gratitude.

Last but not least, what’s one thing you desire?

What I have found in the rearview mirror, I feel like I do need to get more involved with young people. It was happening naturally, but now it needs to be even more of a focus. When they get out of college or even while they’re in college, sharpening their skills, I’ve been doing a lot of research and stuff on the technology of AI and the impact it’s going to have. It’s been around, it’s a buzzword, but it’s back to those data points. Our next set of young people graduating and stuff, there are going to be so many changes for them that they need to get in touch with what that is. You don’t have to be a computer scientist to embrace that and realize all the value that they can bring to their workplace by having a better core understanding of what is data points. Also, how they impact the business. I’ve been working with a high school in the city and I challenged them and their families. Not everybody goes to the best colleges, so I’m going to try to work with them to come up with something that would help them to at least stir some interest and some passion. I think there needs to be some alternative. My desire in a nutshell is to help young students.

So shall your desire be or so much better than you can imagine.

Thank you.

Thank you for this wonderful interview and so much amazing information. You can reach Linda at L[email protected] or check out her YouTube channel. You can reach me at RealEstateInvestorGoddesses.com. You can join our vibrant Real Estate Investor Goddesses community. We have women from all over the country and the world that are part of our group and you can also find out about our Wealth Builder Program. If you’re wanting to invest in real estate, this is a three-month program to give you the exact steps you need in order to get your first investment property and to do so in a way that is divinely feminine. Join us next time for another incredible real estate investing goddess interview.

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About Linda Liberatore

REIG Linda | Managing Real Estate InvestmentsAre you a busy real estate investor looking to expand your portfolio? Linda Liberatore is the founder and CEO of Secure Pay One, a company dedicated to one thing: landlord empowerment. Skilled in asking the right questions to identify a client’s weak spots and pressure points within the highly specialized “active landlord” or “DIY (do-it-yourself) landlord” niche.

Linda’s extensive background in software design, rental management logistics, and real estate-specific technology enable her to identify and resolve client’s requests. Her dedication to supporting not just her local community but also the nationwide community of mom-and-pop rental property owners or teams actively managing properties.

Whether you are having trouble collecting payments, struggling to keep maintenance costs low as you grow, or simply need to upgrade to the correct software for your portfolio and investment strategy, Linda not only helps you plan the most effective, efficient, and profitable route to productive management and growth, she enables her clients to create dynamic, tech-savvy solutions. She can help you with the daily complications of rental ownership that can drain profits and destroy the bottom line.

Offering our clients a reliable and knowledgeable source for current information, proposed regulations and trending software platforms.

Email: [email protected]

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