Download - © 2010, 2011 Crown Investor Institute, LLC 1 Please turn your phone back ON when class is over
© 2010, 2011 Crown Investor Institute, LLC 1
Please turn your phone back
ONwhen
class is over.
© 2010, 2011 Crown Investor Institute, LLC 2
Unlocking the Hidden Profits in Property
Management
Instructor
Robert M. Locke, RMP, MPM
With a Rent Recovery® Business
© 2010, 2011 Crown Investor Institute, LLC 3
Course Objectives
• Examine the Opportunities with a Post Move-Out Recovery Business
• Establish Success Criteria for this Process
• Evaluate Steps to Creating a Successful Rent Recovery® Business
© 2010, 2011 Crown Investor Institute, LLC
Best Kept Secret of Property Management
There’s
_____ ____________
in
property management
the way
m___________ m_________________
do it.
© 2010, 2011 Crown Investor Institute, LLC 5
Stop Thinking You’re a PM
Business
Business
Real Estate
Real EstateProperty Manager
© 2010, 2011 Crown Investor Institute, LLC 6
Stop Thinking You’re a PM
© 2010, 2011 Crown Investor Institute, LLC
New Business to Consider
Collecting outstanding balances
left behind when tenants move out of your property.
© 2010, 2011 Crown Investor Institute, LLC 8
A Question to Get Us Started
What does your company do with
unpaid balances after move-out?
Ask Your Neighbor
• Unpaid Rent
• Late Fees
• NSF Checks
• Unpaid Utilities
• Damages
• Missing Keys and Garage Remotes
• Trash Out
© 2010, 2011 Crown Investor Institute, LLC 9
Should You Chase Them?
• Do They Really Owe the Money?• Should They Be Allowed to Just Walk
Away?• Is it Your Job to
Enforce?• Does Your Owner /
Client Deserve Some Options From You?
© 2010, 2011 Crown Investor Institute, LLC 10
Excuses I Used To Avoid This
• “Collections” Carries a Negative Image• You Can’t Get Blood Out of Rock• Someone Might Get Mad At Me• I Don’t Know the Processes• I’m Afraid of Courts / Lawyers• I don’t have Time for Another Business• There’s No Serious Money Chasing
Tenants After Move Out• Stop Relying on Your Experience
© 2010, 2011 Crown Investor Institute, LLC 11
Cash Recovered to Date
© 2010, 2011 Crown Investor Institute, LLC 12
Your Property Management Model Makes a Difference
• Managing Low Rents
• Managing Low Credit Scores
• Loose Qualifying Guidelines
• Sloppy Management Processes
• Managing Transient Areas
• No Charges Built Into Your Lease
Make Pursuing Them Worthwhile
© 2010, 2011 Crown Investor Institute, LLC 13
Get Agreement With the Owner
• Remember Your Agency Duties• Not Every Owner Wants to Chase • Lay Out Your Rent Recovery Steps• Outline the Risks• Get Owner’s Instructions
in Writing (DL)
• Don’t Exceed Your Authority• Remember: Some Agency Duties Extend
Beyond Your Separation with the Owner.
© 2010, 2011 Crown Investor Institute, LLC 14
Start With a Series of Letters
• Start Soft and Friendly (DL)
• Start Using Stronger Language• Explain Potential Consequences for
Ignoring Your Notices– Mark their Credit– File in Court– Judgments– Garnishments
• Give Timelines to Solve
© 2010, 2011 Crown Investor Institute, LLC 15
Offer Settlement Options
• Offer Payment Plans (code for Promissory Notes)
• Converting a C________ to an A_____________
• Offer to Settle for a Cash Payment
© 2010, 2011 Crown Investor Institute, LLC 16
Mark Their Credit
• Join a Credit Reporting Service
• Get Your Tenant Screening Provider to Help You
• Use a Traditional Debt Collection Company
© 2010, 2011 Crown Investor Institute, LLC 17
File in Court
• Same as Eviction Court• You Don’t Need a Lawyer• Tenants are Afraid
of Court Too• Drive to Settlements
© 2010, 2011 Crown Investor Institute, LLC 18
Process Your Judgments
• Recorded on Their Credit• Perfect Your Judgments
– Attach to Their Income– Attach Bank Accounts– Attach Real Estate– Attach Car Titles
© 2010, 2011 Crown Investor Institute, LLC 19
Fair Debt Collections Act
• It’s Shorter/Smaller than Your Landlord Tenant Act
• Drives Courtesy• View it as Your Armor
and Not Your Enemy• Pays a Lot Better Than
Property Management
© 2010, 2011 Crown Investor Institute, LLC 20
Who is Going to Teach You?
• County Clerk’s Office• Judges• Your Attorney• The Tenant’s Attorney• You’ll Learn From Your
Mistakes• Don’t be Afraid• It’s a Long-Term Residual Business
© 2010, 2011 Crown Investor Institute, LLC 21
Some Real Experiences
• Receiving $11,000 Check With No Name
• Cosigner Pays $27,000 after Second Letter
• Tenant Signs Note for $7,500 at $50 a Month and Pays Off After 6 Months
• Filed an I-9 and 6 Years Later Received $9,750 from a Closing Attorney
• Tenant Hires an Attorney / Prepaid Legal
© 2010, 2011 Crown Investor Institute, LLC 22
Ethics: Who Gets The Money?
• Give It All to the Owner?• You Keep It All?• He Who Pays the
Expenses and Takes the Risks Should Get the Money
• Get Owner’s Permission / Release
© 2010, 2011 Crown Investor Institute, LLC 23
Ethics: Who Gets The Money?
• Chase Your Money but Not Theirs
• Offer Splits on What You Receive
• You Get to Apply Collected Funds to Whatever the Tenant Owes
© 2010, 2011 Crown Investor Institute, LLC 24
What is Holding You Back?
• “Collections” Carries a Negative Image• You Can’t Get Blood Out of Rock• Someone Might Get Mad At Me• I Don’t Know the Processes• I’m Afraid of Courts / Lawyers• I don’t have Time for Another Business• There’s No Serious Money Chasing
Tenants After Move Out
© 2010, 2011 Crown Investor Institute, LLC 25
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