Episode Transcript
[00:00:00] Speaker A: Welcome to AllView360 all things real Estate Podcast. With your hosts Daniel Gutierrez and Shannon Dempsey, we explore real estate from every angle, giving you insights, tools and confidence to make smart decisions that support your future. It's time for a new perspective on Property. Welcome to AllView360.
I'm excited for today. David's one of my favorite people, so I know it's going to be fun.
[00:00:24] Speaker B: So Dave is the general manager of trustee company Trusty Co is one of our preferred vendors, a general contractor contracting maintenance service company that we use for everything from small maintenance issues to large turnover and construction projects. And yeah, Dave is the general manager and we're bringing him on today to discuss something that I think has some huge misconceptions in the industry.
I blame HGTV and all of the fake shows. Entertaining nonetheless, but fake.
[00:00:55] Speaker A: They're real shows.
[00:00:57] Speaker B: Sure. Real shows, fake prices.
And we're bringing Dave on to talk about repairs, construction, the cost of it all, how it actually works, and really helping educate our listeners in regards to some of the best practices, what to look out for, why things are the way they are, and ultimately just how to succeed in this aspect of real estate. A little bit about Dave. Dave has extensive background and in construction, sales, rentals, very long background in property management as both a property manager and COO of a fairly large property management company and has done, I don't know, a few thousand turnovers, work orders, maintenance projects over the course of your career.
So I know I probably didn't do you justice, Dave, but tell us a little about yourself, please.
[00:01:48] Speaker C: Yeah, wow. Thanks for having me on, Daniel and Shannon. I've seen you guys seen this podcast. This is actually my first time doing a podcast, so very exciting.
Yeah, just like Daniel mentioned, I've spent the last about 15 years in property management.
Started with a small company where there was only three of us that we had to do everything so had to learn pretty quickly from there doing obviously all the maintenance stuff there went on to do operations and I was just telling a client this morning that I was even going down to like Mexico, Nicaragua and training like the remote staff down there how to be maintenance coordinators. So when it comes to property management, working with homeowners on maintenance, like I think I have most people beat in that experience realm, especially when I'm talking to other property managers, most of them want to hire me to have them do their maintenance, but they can't afford.
[00:02:39] Speaker B: Well, I think the unique thing here and why Dave is uniquely positioned for his, for his role and what he does with us at all view is he understands real estate on a level that most contractors generally don't. He understands what we need as property managers, as brokers, as agents, as investors and developers. And he takes a very owner approach to, to what we do. And it's been a huge help across the organization.
[00:03:06] Speaker A: Yeah. In general, Dave, what are you seeing with California construction costs and how has that changed over your 15 years and really in the last couple years?
[00:03:16] Speaker C: Yeah, so it pretty much gets divided right around the pandemic. As everyone knows, people are still talking about lumber cost, lumber prices. I think the biggest change that I've seen is really on the labor costs, which kind of trickle up from there. So, you know, slice it however you may. When labor rises like so does your workers comp. So your workers comp is based on the wages you're paying. You know, essentially almost 20 cents on the dollars is going towards workers comp people that are doing it correctly. You know, with that, of course, you know, your general liability, your commercial auto policies, especially in California, have jumped up 30% since 2020.
So all those overhead costs, especially for people running a legitimate business, has to get factored in somewhere and it gets passed on to the consumer. And a lot of them don't realize that. They understand, yeah, like fast food workers now get paid $20 an hour in this state. But they think, oh, you know, someone working on my home is not on that like level of skilled labor yet and they expect to still pay those, those entry level wages or what is actually skilled labor and all the overhead that goes with it.
[00:04:20] Speaker B: Yeah, the construction trades are very skilled labor. If not, you know, they probably shouldn't be doing it. But these are people who are skilled at what they do and it's their trade. I know, I think our society got away from that for a long time and then, you know, you had to go to college for everything. If not, you know, the societal norms were that you weren't going to make it. But that's why you see Handyman billing out $150 an hour these days.
[00:04:45] Speaker C: Yeah, yeah. Even at our rate of 110 an hour, that's 220something thousand dollars a year. And people think, oh, that's what the tech must make. Well, you got to understand there's also the downtime, the windshield time, driving between locations and all the overhead that goes along with it. You know, even if they go to your house a lot of times on the first visit, you know, any trade, whether it's H Vac or plumber a lot of times they don't know the full situation until they get there. So there's the time involved in going there, having to go to the parts store, maybe there's a second appointment needed. All that time adds up.
Depending on the contractor. Not all of it's actually even billed. So some may have $150 an hour, but they're only billing you for time at the house. Some may be 1 10, but they're also billing you for the time to go get the material. Some even add in the cost onto the material as well. So it all kind of evens out in the end. But there's definitely a lot of sticker shock. Dealing directly with homeowners and being a property manager, that's always like the first point of contention. Property managers, I feel that, you know, even working with ones that have been in this industry a long time, they feel that one of their greatest values they can give their customer is the cheapest price. And, you know, they're not helping our cause by helping and educating the owners as to why, you know, these costs have risen. You know, everyone has heard this, oh, you know, 20 years ago someone did that for, you know, half the cost. And they don't understand all the things that have gone into it in the last, you know, couple decades.
[00:06:07] Speaker B: Yeah. Not to mention even gas prices, because I know that kills us in every aspect of our business.
[00:06:13] Speaker A: Oh, yeah.
[00:06:14] Speaker B: And yeah, it's not 20 years ago anymore. It's kind of crazy looking at the cost of materials, not to mention labor, but just materials are so, so high.
[00:06:23] Speaker C: Yeah. And, you know, some contractors add, you know, fuel surcharges to their invoices too. So I'm just adding into the cost. And, you know, people see it, you know, the consumer sees it one way or another.
[00:06:33] Speaker B: And can we take a step back real quick and could you give us a breakdown on trusty co about the company, what it does and kind of clients you work with and what you do for them?
[00:06:42] Speaker C: Here at Trustee Co, we only work with real estate professionals. So your property managers, your real estate agents, brokerages, so, you know, there's a total separate market for dealing directly with a homeowner. And generally a homeowner off the street always said if you were to, you know, open up the phone book and pick a contractor, you're going to pay a higher rate because that contractor is looking at you as one sale. Whereas while I'm looking at a property manager customers, how can I provide the most value to what they want and also continue to Generate business.
So I don't always want to go in at the highest price, that they were to call someone to the phone book, they would get that. That higher price. I'm playing the long game here, trying to add the value of the ease of working with.
Knowing what they're actually looking for, dealing with the tenants, doing quick turnarounds and the things that are important to a property manager and keeping the cost low, which is a. It's a difficult balance. And most contractors don't do both. They're either working direct with homeowners and, you know, they're commissioned salesmen that other people in the field, or they're working with contractors such as myself that don't advertise to the homeowner because that's a whole other headache, whole other ball game for someone like me.
[00:07:48] Speaker B: Yeah. And license and insured is a huge component, too, because I know for us, when we're referring contractors or handyman, whatever, to our clients, if they don't have the proper insurance or the proper licensure, could be a liability to us. And, you know, we tend not to work with those. With those vendors. Remember, even we had a recent issue in one of our rentals in San Diego where the. What was it? The Home Depot installation?
[00:08:17] Speaker A: Lowe's.
[00:08:18] Speaker B: Yeah, Lowe's installation guy installed a dishwasher incorrectly, and it flooded our unit and the neighbor's unit. And the guy, like, he says he doesn't have insurance, is completely dodging us. We've now gone to Lowe's and the company they contract with, everyone's pointing fingers at each other and ultimately our clients and all views cut of stuck holding the bag. And it's a. It's a really bad situation. So when people say, you know, why. Why can't you just get someone at Home Depot to do this? There's a lot. A lot of reasons why we can't do that. And by Home Depot, I mean the people standing in front of Home Depot with the Lowe's situation was actually the Lowe's installation team. But, yeah, using licensed insured contractors who really know what they're doing is super important for us. I know. Shannon, for you, or even just anyone in.
In the brokerage space, if you deliver a request for repairs from a bid from a guy who has it on a napkin, that's literally happened to me. I was doing a deal in Costa Mesa.
Yeah. Doing a deal in Costa Mesa. And the agent's like, oh, no, I'm gonna have this guy fix the air conditioner, the H VAC system, the Whole system. And the bid was literally written out on almost a napkin. And I'm like, yeah, I'm not accepting this. This isn't okay.
[00:09:37] Speaker A: Well, for us in the brokerage world, we will write in for the request for repairs to be completed by a licensed contractor. There's really little wiggle room there for all of the reasons that you just said.
[00:09:48] Speaker C: Yeah, it's, it's amazing still, especially, you know, property management's an old profession and people are stuck in their ways. You know, you go to enough property management offices and you realize that they're never going to change anything. And it's tough for someone like me to go in there and compete with their unlicensed handyman who's been doing the same thing and never had an issue. You know, it's one of those things where it's not an issue till it is an issue. Bigger companies that, that do things at scale like realize this and, and you know, the savvy homeowner and the savvy investor realizes as well that it's, it's really not worth, you know, that extra $40 savings here and there.
[00:10:25] Speaker A: True.
[00:10:25] Speaker B: Yeah.
[00:10:26] Speaker A: I have a question for you, Dave. How do you, I mean, you've always worked with property managers.
What do you, what different angle do you take there in the rental property management world versus dealing with a vendor on someone's private home? I'm assuming you prioritize things differently.
[00:10:42] Speaker C: Yeah, so I get a lot of leads for private homeowners and I just tell them that I can't help them. It's a totally different game. So even the contracts are different. In California, when you're dealing directly with consumer, there's different disclosures you have to give them. I'm sure you guys have seen it. It's like the three day right to cancel. There's different restrictions on payment and down payments.
So I kind of just not deal with all that. There's a time and place for that. Especially I'm doing on real estate transactions where I am working with the agent, but I'm actually working for the homeowners, the actual customer, you know, and those request repairs. When it does get to that, we do have to use a separate contract. But the whole approach is different. When I'm working with property managers, I'm not making a sale, I'm providing a service. I feel like whenever I deal directly with a homeowner, even like when we're just doing like shared projects, like a fence or right now we're doing like a paving thing in an apartment complex that buds up to another one that that owner also wants to have theirs painted or paved and painted as well. I really have to just sell them on the service.
I know they're going to get multiple bids on it. I could, I could even be a referral from someone who's used me before. But it's still that they're always going to kind of go with the price and they don't really see the value. And someone like me, where they can get someone else to do it and someone will tell them like, oh, that's I can get someone for half the cost. There's always someone that's going to be able to do it cheaper. You know, they always talk about the pyramid, the three legs. Did you want a good price, do you want quality service or do you want it to be done quickly? Pick two. And you know, it's difficult to compete on all three, especially when you're dealing with a homeowner who's goals may be completely outside of that. They're just trying to do the cheapest thing possible or get the best price, regardless of other factors.
[00:12:27] Speaker A: How often do you have to or are you challenged on costs like when you know a job would not be done properly? Are you going head to head with the homeowners if they're pushing back on certain things? Because I'm assuming you follow code and actual regulations.
[00:12:43] Speaker C: So I just had something like this come up. So it was actually a rebuild from a water leak. It was into a, like a finished garage area from a bathroom above. And I got the scope from the insurance company as, as insurance companies know, there's like 10% profit in there if you do it by the book.
So I really don't like doing these jobs. However, like, as, you know, as a vendor for our good clients, I will. But the problem was when they removed the drywall in the downstairs area, the wood was completely rotted from termite damage. The house is, you know, 70 years old and insurance isn't going to pay for that. Right. They're only going to pay for what the leak had damaged the termite would the ongoing, you know, diskeap of the property. They're not going to include that. So I had to tell the homeowner, hey, like, we actually need to reframe this area. Like the dry. You can't even hang the drywall to this. And it's going to be an added cost. They try to get the insurance through. The insurance office is not going to pay for it. They had another bid from another emergency services contractor that does insurance work? And they said that they would do it for the insurance rate. Well, I said, hey, you know, I don't feel comfortable doing it because if I'm going to do it, if I can put my name on it, I want to do it right. I don't want, doesn't help you or I both to have me come back in here in three months when the job doesn't look right.
[00:13:54] Speaker B: Difference between doing it right and then putting that lipstick on, on the pig.
[00:13:58] Speaker A: What about expenses? So what are the most expensive repairs that homeowners ignore? And then you see them become huge problems.
[00:14:08] Speaker B: Wow.
[00:14:09] Speaker C: When was the last time you guys looked under your kitchen sink?
[00:14:12] Speaker A: Looked at a bunch of others Sunday,
[00:14:16] Speaker C: even from my time doing walkthroughs and property management. This is probably more of a renter thing. Anytime you'd go and look under the sink, it's just full of stuff, right? Bags, cleaning supplies, God knows what. And you start pulling that out and then everything's wet. And I can't tell you how many times, you know, the garbage disposals have been leaking for a long time and no one's ever noticed it. Sometimes it's the, the pull down faucet is spraying into the faucet, faucet body going right into the cabinet. The angle stops them dripping, but no one seems to check it. The problem is, you know, now we're having a larger issue where it may have spread behind the cabinets and all the lower cabinets have to come out. Insurance may not cover it because it hasn't been something that's been sudden and accidental. It's on that seepage level. Yeah, I would say I'm gonna check my kitchen.
[00:15:00] Speaker B: Can we stop there?
Because that is such a big issue that no one knows or talks about.
Sudden and accidental is very different than a long ongoing leak. And this is something that has been so painful to deal with over the years. If you have that slowly slow leaking angle. Stop, faucet, dishwasher, yeah, whatever that has been leaking for a few weeks or months and just completely ruins your kitchen. Then insurance inspector will get there. They're going to look, they were like, oh, there's mold. This spread, this has been going on for a long time. This is your fault. And they will not cover any of it.
[00:15:39] Speaker A: Is everyone going to pause to go check their sinks?
[00:15:42] Speaker B: They should. We run shitty because you expect the insurance company to pay for the, for repairs like this. But no, they're going to put it back on you. And there's so much documentation in your policy that you've probably never read that says if it's not sudden and accidental, it is not going to be covered. So those long, those long drips, like game over. If your pipe bursts and it floods your hole downstairs, yeah, they're going to cover it. They won't repair the pipe, but they'll cover the flood. But if it's that long slow drip or if they see mold, that's going to indicate it's been there for a long time, game over. They're not paying for anything.
[00:16:16] Speaker A: I run into kitchen sinks and bathroom sinks often after the close of escrow because it's very common that, like a home inspector will say that they couldn't see under it if it's full of a bunch of stuff. And then when people move out, they'll hit a pipe or, you know, they're. They're just moving everything out, not paying attention. And don't turn the sink on until the new homeowner moves in. That's a fairly common call after the close of escrow. Hey, there's a leak under the sink.
[00:16:41] Speaker C: Usually the part that fails is cheap. Even the nicest garbage disposal is a few hundred dollars. But we're talking angle stops. You know, supply lines. These things are 15, 20, 30, and just such an easy preventative thing. And it just escalates, you know, over time.
[00:16:57] Speaker B: What would you recommend to people to help prevent that? What do. What should they look for?
What are some telltale signs or indicators that there are issues within those items?
[00:17:06] Speaker C: Obviously, first thing, just visual check. Is the cabinet deck wet? Do you see any signs of moisture? Are there drips? You'll see. A lot of times there'll be rust stains if you have a white cabinet deck, because that'll be coming, you know, indicate something's leaking from above it. Anything that in there that's wet too. So as I'm pulling things out, I'm seeing if they're wet because the cabinet deck may be dry because there's so much stuff on top of it. But, you know, there could be cleaning supplies, and it's hard to tell. Is this supposed to be wet? Is it not supposed to be wet? You know, I usually recommend for people and a plumber would probably agree with this, you know. You know, change your angle stops and supply lines at least every 10 years. Every time you're changing the fixtures, change them all out. They're very inexpensive. You're going to touch them anyways. It doesn't really add on to the cost or the time or the labor to do it. It's just A very good preventative things. There's two different kinds of angle stops. There's the quarter turn and then you have, I think it's like a press fit. One that looks like a egg shaped oval. Those have a plastic fitting it that's caused. That fails a lot, especially if you're turning on and off.
[00:18:03] Speaker A: Nobody does their angle stops.
[00:18:05] Speaker C: Yeah, nobody does. No one knows what an angle stop is. I think when I first got this, I thought an angle stop was like a trap door. Somehow wrap my head around what that was. I'm like, oh, it's just the valve.
That makes sense. But yeah, definitely. Just look at it. You know, if it looks old, crusty or wet, replace it.
[00:18:24] Speaker A: And am I correct in thinking, because I hear these called out on every house in every inspection.
It's one of those things that when you need it, if it's old and fails, you're screwed.
[00:18:34] Speaker C: Oh yeah. You gotta imagine too, like this is pressurized water.
So I've had instances where, you know, tenants hook up their own RO system, which is an absolute disaster waiting to happen, and they go to bed for the night. Now that's like leaving the garden hose on under the sink. And that's coming out at, you know, 65 psi. That's a lot of water. You wake up and that kitchen's flooded.
[00:18:57] Speaker A: What about the systems that people are putting in that shuts your water off the second it detects a leak. Do you have that, Daniel? The moen.
[00:19:03] Speaker B: The moen Smart valve.
[00:19:04] Speaker A: Yeah.
[00:19:05] Speaker B: So I have that across a few of my properties.
One of which I installed after the third massive flood from different components in the building. I had those little water detector pods and I put one right next to the water here. This is a commercial building I have.
And I put one right next to the water heater, though the water parted around this little device like it was Moses. Like it was like probably 7 to 10,000 gallons of water flooded this building. But not the device literally parted around the device and the water was flowing fast.
So that was kind of the last straw before. Well, at the first few, the moment smart valve wasn't even available. But now it is. Highly recommend it, especially for homes like vacation homes where you're not often. Or super expensive homes where, you know, replacing the hardwood floor is going to be, you know, a few hundred thousand dollars on its own. They're between a thousand to fifteen hundred to buy and then about a thousand to install. You need like, you need electricity and a Internet connection. But yeah, highly, highly recommend it.
[00:20:14] Speaker A: And it shuts all the water off the second it detects a leak anywhere.
[00:20:18] Speaker B: A leak. Abnormal usage. Like you go take a shower in the middle of the night and you'll get a notification on your phone, hey, is this you? If you don't say yes, it'll just shut the water off to your house.
[00:20:29] Speaker A: Yeah. What else, Dave? Because sink is. That's gold. What else is there that people do not pay attention to? And then you see it be a big problem again.
[00:20:37] Speaker C: A big thing, especially in the rental market, is I feel like no one knows how to use a shower curtain on properties. And if there's a shower curtain 50, 50 times out of 100, the baseboard and the wall next to the shower is going to be damaged. I don't know what it is. People sometimes use a shower curtain that's meant for round tub on a straight tub and vice versa. Or, you know, they let kids splash in it and they think that the water just dries up on its own, but that's a bigger issue. Like that turns into mold and then the tenants start having, you know, respiratory issues or they start claiming things or like that. Yeah, it's an issue, especially if it's on the second floor. You know, it develops over time, but they'll be like, hey, there's like this a stain on the ceiling. And you know, you're going up to that bathroom and right on the sides of the tub, it's all calcified and the baseboards all swollen. You can kind of see the, the, the drywall to start peeling.
But yeah, that's another big one. I think tenants are less careful when it comes to stuff like that. Even on like these like frameless shower doors now too. You see that as well because they're meant to not actually touch on the tile. But people think that that means that they're still like somehow completely waterproof and are just very nonchalant about water getting in and out of the shower.
[00:21:52] Speaker A: Splashy. Yeah.
[00:21:54] Speaker C: I mean, I don't know who's taking a bath in there, how they're doing it.
Most of my water gets contained like a pool size around my body, but I don't know what they're doing in there.
[00:22:04] Speaker A: You should ask them.
Any other tips on maintenance or what people are doing that are not doing? That could lead to a high cost project later.
[00:22:16] Speaker C: Yeah, I think just planning for maintenance. Even my parents are guilty of this. We were just talking and they needed a new roof. So I think I'm selling their house.
And it's like, I don't want to replace the river. I'll just sell the house. It's like, okay. But yeah, property manager. That was a hard thing for me to talk to owners about needing a new roof. Now. Not every homeowner has to replace their roof in their lifetime. It's not, you know, luckily we live in Southern California and we have it pretty good. But people are shocked when they have to get a new roof. Yeah, budget for this. It's like the roof should last, if it's a good roof, 25 years at the most. 20 years, you start to get, like, deterioration. You're going to start developing leaks. I would start planning, pocketing money or at least, you know, have the expectation, hey, when I get around that 20 years, I'm probably gonna need a new
[00:22:59] Speaker A: roof or even roof maintenance leading up to the point that you get a new roof. I don't think people pay attention until it's tough, too.
[00:23:06] Speaker C: Like a lot of roofers, when you call them out there, they don't want to do spot repairs because it's hard for them to warranty it. It's hard to tell exactly where the water came from. Even if you go into an attic and you see on the sheathing where the stain is, that water leak may be, you know, six feet away. And the only way to really do it is you can have to start peeling back layers. And it gets more and more expensive the more that you do that. So it's even hard to estimate. Auto contractors will put, hey, we're going to do it at this cost of $3,000 or whatever it is for the spot repair. But if we have to go and start removing more to try and find this, it's going to be built at this dollar amount, the set agreed upon price, and we're actually not going to stop. And I would always tell clients, hey, like, I would just assume that this is going to dump, right? It may be 50% more, but just assume it's going to double because once they start peeling back, they're going to find tons of stuff. Always the stuff that you can't see. And, you know, obviously, the. The more sneakier contractor, the less one that you can trust. Trustworthy one is going to be a little more because you're not going to go on the roof and verify it yourself. Most people won't. So you got to kind of take their word for it that this actually needs to be done. And you're not going to tell them no when you have half the roof already taken apart.
[00:24:12] Speaker B: How about H Vacs and water heaters? Because those are two fairly common mechanical issues that owners, investors, really everyone deals with. Especially on the request for repairs. I don't think I've ever seen a request for repairs unless the home is brand new. Where the inspector said, oh, this water heater is at the end of its life and it's like five years old.
[00:24:32] Speaker C: Changing your H vac filter, I don't even know how many times people don't know, they didn't know it was a thing.
That is probably the number one cause for failure. You get ice over the condenser, it it you're pulling more ambers cuz it's working hard. It's like trying to breathe through a straw, right? Like you run a sprint, you're trying to breathe through a straw. It's almost impossible to do.
Your energy bill starts to run all these other indicators but it leads to so many issues. It's like having your air conditioner run on full speed, sprinting the entire time. And people are wondering why it doesn't last as long. It's such an easy 15 thing, you know, even if you're running on just on heat, change it twice a year. It's such a cheap and easy preventative item. You know, home warranties love air conditioners, right? You guys know a lot of times it's not included in the standard plan. It's this big upgrade because they know most people don't take care of it and they're going to get you because they're going to pay just a portion of it. You get to pay a ton out of pocket that you're not aware of. Don't get me started on warranties but
[00:25:30] Speaker A: oh no, I know that's a whole other episode.
[00:25:33] Speaker C: Common failure because people fail to maintain these things and they know it's gonna break. And it's one of those things that when it breaks like you're gonna fix it, right? Like you can have let's say a something that a door that sticks a little bit, right? You gotta push a little hard on that door and you're gonna live with it. When it's 100 degrees and your air conditioner goes out, you're fixing that.
[00:25:51] Speaker B: And H Vacs are really, really expensive right now.
[00:25:55] Speaker C: Yeah, that's another thing that's really gone up in price. Even if it's, you know, made in America, the components are still, you know, affected by these new tariffs. The supplies definitely leveled off as far as availability's gone, but it's still not before like 2019 levels. I think the manufacturers don't want to over manufacture. I was dealing on a commercial job on this and it's like a 12 week lead time for a package unit, which is crazy. Like, imagine telling your tenant that a commercial building that's paying tens of thousands of dollars a month in rent, that, hey, I can't fix the air conditioning, your CEO's office for eight to 10 weeks and now you have a problem.
[00:26:33] Speaker A: Yeah, a big problem. What about repair requests during real estate transactions? I mean, I can tell you like, I can almost predict what's going to pop up in every inspection. And it's usually the angle stops are number one. It's usually kind of what you've already mentioned. H Vac. If it's not new or within the last, you know, 10 years, it's at the end of its life. Water heater is always at the end of its life. Roof, if it's over 25 years old, it's at the end of its life. Even if all of these things are functioning and the owners had no issues with them, it's just they always get called out. Right now in the current market, because it's a buyer's market, we're having buyers ask for crazy amounts of credit and price reductions for all of these things that are totally fine and working and not current issues.
But from your perspective, what, what items would you address or how would you go about a $40,000 request for repair when there's really only three safety issues that are minor?
[00:27:31] Speaker C: Yeah. So if we're talking and representing the buyer, I'm looking for the major things, right. The structural things. If it's on a raised foundation, if there's lots of settling and foundation issues, definitely bring in a qualified person to look at that because that can get expensive quickly and that's going to lead to other issues. We're currently working on a job where like, oh, the flooring soft. Well, yeah, because the peers are shot and the, the snap walls coming down like it's, it's a big thing.
You know, as far as a negotiating tool, I'll kind of lean back on you guys for that because some things are necessary, some things are a headache. If you have a good contract and get these things and you know you can get them done at a good cost, I would stay away from those and do the larger ticket items. The things that like, may cost a lot of money, you're not really sure what they cost and really try and negotiate on those versus the things that, you know, you could either do yourself or get done at a fair price. So you're not haggling over the wrong things.
[00:28:25] Speaker B: Another one we haven't talked about that's coming up more and more often, both on the purchase and sale and on lease or on insurance renewals is the electrical panels. Oh, that's. Yeah, that's a major, major Life safety
[00:28:39] Speaker A: and insurance companies are asking for photos of the electrical panels.
[00:28:43] Speaker B: Yeah, absolutely.
[00:28:46] Speaker C: Polybutylene piping. Polybutylenes I'm thinking of. That was like the largest class action lawsuit in history for a long time. Re. Piping a house is a big project.
If you're going to use as a rental, forget about it. Don't do it while tenants are in there. But yeah, that may be something worth doing because those are prone to failure. They do cause a lot of leaks. Someone may have trouble insuring it. Some insurance companies don't want to do a house that has that piping Quest is what I think was the name brand on it. So you can run into issues with that as far as like insurability and long term costs on it.
[00:29:20] Speaker B: How about the electrical panels?
[00:29:22] Speaker C: Electrical panels? Yeah. So we're talking about like the Zinsco panels and I think was part of it too. Like that was white labeled by them. Is your house going to burn down because of it? Probably not. But those panels definitely have some shortcomings to it. I think it was part of the, the grade of the wiring that they were using and the connections on it. Now those panels that were made, they're 50 years old now. 50, 60 years old are not designed to pull the same amperage that a lot of the modern appliances are. You price it all the time. Tenants like, hey, the power keeps going off because I'm running my microwave in the refrigerator at the same time. Like this seems so normal. You know, 50, 60 years ago, people weren't doing that. So when people are adding three ways onto their, their outlets and they're running multiple things all the time, then yeah, this is definitely a strain on it. That becomes more of a hazard. It's generally an easier fix to the sub panels.
Have a licensed electrician do it. You're looking probably under $2,000 to do it. The bigger panel is a bigger thing. Depending on where you live, getting the permits, getting the utility provider involved as well.
That's a great thing to do when you're not living there. Right? Make the, make the seller do that. I don't want to go without power for a couple of days and have them rip open my walls and the stucco to do this. Like, no, you guys handle that. And Usually I found that most people do go through that. People claim it's a life safety thing. And yeah, that's definitely one I would do without. Before I moved into the house, you
[00:30:47] Speaker A: know what I just ran into? We ended up not making an offer on the property. But it had like a basement, half basement room. Right. So it was built into a hill. So the toll. The downstairs was completely underground level. And it was a house that was built in the 70s. You could smell the moisture. You could see at the bottom the mold starting. Then if you went in the backyard, you could see that the retaining wall had moved an inch. So that whole house over I don't know how many years has slid down. Which. Okay. To be expected. Right. Something along those lines. But we had two contractors ballpark bid it and they kind of alluded to what you're saying, Dave. They, they ballparked it around $200,000 because you have to excavate all the way down. And then it was. But it could go anywhere up to four. Like, you know, it's just. It could double. And it was such an unknown number. And nobody could. You didn't know until you dug all the way to the bottom of that house.
[00:31:40] Speaker C: Yeah. The contractor's not an engineer. So the contractor should be doing what the engineer tells them to do. And the engineer is always going to err on the side of caution. They're going to over engineer everything. That's where you're going to get approval for. And that could be way overkill for what the situation is. But now you're stuck doing what they are dictating you do.
[00:31:58] Speaker B: Yeah, I mean sometimes the engineering is needed. I would prefer if my house didn't slide down. So we were managing a big mansion in Laguna Beach a while back and this was like an 11,000 store square foot home. Ocean views, infinity pool. That was going down like Bluebird Canyon. Gorgeous.
And the infinity pool is like falling into the canyon. And I remember getting bids for that. And most people are like, I don't want anything to do with this. But we finally found someone and it was like it was hundreds of thousands of dollars to fix this. Mind you, the home was like millions and millions. I think it just sold for like $30 million. But there are certain reasons why they did. They fixed the pool. Yeah. But there's reasons why the engineering is
[00:32:45] Speaker A: the way it is and different nowadays. What about. So you do a lot of turnovers and property turns. What would you say the average.
Like what should a landlord expect to pay on a normal wear and Tear type property turnover.
[00:33:01] Speaker C: For talking about let's say like a two bedroom, two bath apartment. I would say the average turnover cost is about 3,000, 3,500. That's going to cover paintings, some small repairs. You probably need to update the life safety stuff. The smoke alarms, co detectors, a few minor plumbing repairs and cleaning. Obviously that goes up the larger the house is or the longer the tenants have been there. Obviously the longer they've been there, the more wear and tear some items are going to have. And you may want to just do it as preventative as well. Like you probably wouldn't change angle stops between every tenancy if they're only living there a year. But if someone's lived there for eight or nine years and it hasn't been done before they moved in, like now would be a great time to do it.
[00:33:41] Speaker A: How often are you seeing appliance issues?
[00:33:44] Speaker C: Usually on a tenant occupied one, they're going to let the landlord know. It's rare that you go into a place and the appliances aren't working because if you're renting you're generally want those things to be working and included in the rent. So I don't usually run into many of those.
The things I do see are damage to the machines and it gets really expensive. A common one is going to be like the boot around the washing machine on those front loading ones. People don't leave the front ajar and it gets all moldy in there. Well, they think that you can just clean that and it's really difficult too. You gotta pull the whole thing apart. The boots are two, three hundred dollars a piece. The latches on these machines, both dryers and washers. We just had one where the baffles, the things that look like paddles inside the drum had broken off. People probably drying their shoes or something heavy and it broke them all. Well, you know, that was $400 to fix all that. You know, tenants will live with things, you know, because as long as it's working.
So we don't really run into a lot of those things. The appliances that tenants like add on are a big issue. Bidets apparently after pandemic are all the rage.
[00:34:52] Speaker A: They really are. They're an issue in real estate transactions too because it's a fixture.
But then people want to take their bidets and people want to keep other people's bidets.
[00:35:00] Speaker B: And bidets and refrigerator water lines are the number one, two biggest causes of floods in a home.
[00:35:09] Speaker A: Bidets cause a lot of floods.
[00:35:11] Speaker B: Yeah. We were managing a home in Beverly Hills like 20, 25 million dollar home, Beverly Hills, three story or two stories up, one story down. And the family that was renting it installed bidets. But the, like the Middle Eastern bidets, not the automatic, whatever, more European or Asian style bidets.
[00:35:30] Speaker A: Do you have a bidet?
[00:35:31] Speaker B: There's difference. I do have a bidet in my house. Anyway, they installed those. The cleaning crew that they hired didn't know how to use it and flooded from the second floor to the first floor to the basement.
And it was, it was hundreds of thousands of dollars in damage for this little bidet that the cleaning crew that, that they hired didn't know how to use.
[00:35:51] Speaker A: They were clean though. Extra clean.
[00:35:53] Speaker B: Yeah.
[00:35:53] Speaker A: Extra fresh.
[00:35:55] Speaker C: The problem is too, you know, I think they really gained popularity during the pandemic, I feel.
[00:36:00] Speaker A: Yeah.
[00:36:00] Speaker B: Why?
[00:36:01] Speaker C: Because we, these things are made cheaply. So you know, plumbing fixtures that you,
[00:36:04] Speaker B: which one you buy at your hardware
[00:36:06] Speaker C: store, they're gonna have like UL and ANSI rated connectors on it. So like the supply line, these things are just cheap and they, they burst. They're not. Especially if you aren't checking your water pressure. These things are not meant to last a long time and tenants don't know how to install them properly.
They sometimes leak over time and they're not seeing it because it's behind the tank and it's like they have their cleaning supplies in front of it and they don't really notice that it's been leaking.
But when it's burst, it's again, it's another pressurized leak. And if you're not home, that could get ugly quickly.
[00:36:35] Speaker A: Is that something that falls on the tenant because they installed the bidet?
[00:36:40] Speaker C: If they installed it incorrectly and it was due to their negligence, yes. If the bidet itself fails, it's difficult to say the tenant was negligent unless you have it something maybe in your lease that they were not to do it. But you know, the same thing with like an appliance, whether it's a GE or a Chinese made bidet, there's like a subrogation where they could potentially go after the manufacturer if they find that it's faulty. Again, it's very difficult. Insurance doesn't usually want to do it, deal with it, so they get it covered or not. But it's difficult to blame the tenant for something like that. Homeowners wanted to do that all the time for everything. Hey, there was a sewage backup. Any other type of leak that involved insurance, the tenants wanted to blame the tenants. And the trend's like, well, you Know if you feel you need to, you can sue them. But we're here to cover the property. There was damage under the property by a covered loss. Whether the tenants negligence did it or not. It's very difficult for us and it's not worth us to investigate before we go over bidets.
[00:37:36] Speaker B: So there's the two different ones. There's the ones that, it's like the whole built in toilet attachment.
So the attachments I think are sketch like those things are, they make. They look so cheap. But the built in ones, the ones that are like the full units, those are nice. And what I'm trying to google is, and I'm completely blanking on the name, but I went to a friend's house and I used a restroom.
[00:38:02] Speaker A: Yeah.
[00:38:02] Speaker B: I'm like this is a nice toilet. I'm like, very nice. You could tell the quality when you sat down. Really?
I googled it and it was like a $20,000 toilet. This house probably had 10 of them.
[00:38:11] Speaker C: How did it feel?
[00:38:12] Speaker A: How did you notice?
[00:38:14] Speaker B: Because like you just notice. I, you just notice the quality anyway.
No, some of these, some of these bidet toilets are like 15, 20, $25,000. They have a new line that's even more expensive.
But they are awesome. The one I have is not it's. But it is, it's a built in. It's wonderful. Highly recommend it for those who haven't tried it. But those are better.
[00:38:39] Speaker A: So comment on your comment below on your opinion.
[00:38:42] Speaker C: How about your search stuff like insurance claims or something.
[00:38:45] Speaker A: This whole time I was meaning like the, the attachments. That's what buyers and sellers will argue over, bidet attachments.
[00:38:52] Speaker B: Honestly, why would anyone argue over a toilet seat? I'm like, I'll buy a new one.
[00:38:56] Speaker A: I know. And then buyers want to keep them and I'm like, just get your own booty cleaner.
[00:39:00] Speaker B: Yeah.
[00:39:00] Speaker A: Like why do you want theirs?
[00:39:02] Speaker B: But yeah, maybe it's a. Oh, we won't go into that.
[00:39:05] Speaker C: Another awesome thing that will come up a lot too are water softeners.
[00:39:10] Speaker A: Yeah.
[00:39:11] Speaker C: And plumbers will tell you that a water softener is like bad for your water heater or just because of the way the anodes are supposed to work inside of it. I don't know how true that is. Water softeners, again, it's one of those things where it's really like a specialty trade to work on those things if you don't understand how to use it. And a rental property, the tenants aren't going to fill it up with sodium properly.
It regenerates you know, every so often and people hear the running water and they just don't think any of it. So when it's running water that's leaking, like, oh, I thought it was just regenerating again. That's supposed to do that. Even I don't really understand how they work and how to service them. But that's another item. Like when I see those and I'm like, do you guys use this? Like, let's just bypass this. Don't use it. Don't turn it on, Dave.
[00:39:55] Speaker A: Just ignore it.
[00:39:56] Speaker B: They really say, but they save pipes and they, they make everything. Well, you don't get all that hard water residue throughout your house. I have one in my house. I would never live in a home that doesn't have one. If it didn't, I would inst it.
[00:40:08] Speaker A: Never. You'll never catch them without a bidet. You'll never catch them without a water softener. Yeah.
[00:40:13] Speaker B: Facts.
[00:40:14] Speaker A: Could you imagine, could you imagine the
[00:40:16] Speaker B: hard water coming out of a bidet? No way.
[00:40:18] Speaker A: No. Yeah. I need my water soft. I need my toilet seat. Cushy. Yeah. $20,000. Okay, what about remodeling and how often are you suggesting owners do full renovations on things? I know from my perspective, pre listing appointments involve a lot of discussion around should I do this, should I do that? We pay attention to roi.
How are you handling that? How often are things getting remodeled?
[00:40:42] Speaker C: Yeah. So you guys have done this a long time. Kitchen and bathrooms are usually the biggest ticket items.
I always say try and keep it simple. You want to appeal to the most people. Don't go too customized. Especially even like in the bathrooms too. Like what you think is luxurious and high end to someone else may seem outdated.
Too dark.
[00:41:05] Speaker A: People get wild with the tile.
[00:41:06] Speaker C: Yeah, you can get really wild with the tile. Spend all this money and not get it back. Yeah, I mean, swimming pools would be the same thing. But as far as doing like remodels, keep it simple. Kitchen, bathrooms, new flooring, new paint. Obviously needs to present well, the standard stuff. I don't recommend going through and doing new all windows and doors. Those are great too. That's an expensive add on. If you live in an hoa, that's a whole other process.
But you know, when you're showing a home and if I was someone going to view a home, when I walk in, I want to feel like inviting, clean, modern. I can picture myself living there. And that's kind of what I pitch to the customers. Like, you know, imagine you're seeing this house for the first Time. Show it to your friends. Do they all agree that this is a nice house? If some of them like, no, this is too wild for me, who was a kooky person that lived here before.
[00:41:55] Speaker A: Hand painted fish all over the.
[00:41:58] Speaker C: Yeah, I'm like, I've gone in places with like, elephant in mosaics on the tile in the kitchen. And I was like, I would probably recommend that on the backsplash. Like, what are you. Like, are you mine? Like, that's a.
[00:42:09] Speaker A: It crushes my soul when you see one time. But now when you see a house that has costly upgrades that are very specific, some would say hideous, it crushes me because they're thinking, you know, they dumped a bunch of money in this house and it's. It looks wonderful and high quality and this and that. And I'm like, it's not only is it not gonna sell for anywhere near what you paid for it, people are seeing it as a project now.
Sucks.
[00:42:36] Speaker C: For someone who's on Facebook Marketplace looking for used cars. Even though I'm not in the market, I see that all the time. You'll see, like, a nice BMW that's been distastefully modified for like, double the price. Like, that is hideous.
[00:42:50] Speaker A: Can we rewind?
Someone that's on Facebook Marketplace looking at used cars but you're not in the market, that's just like a pastime pops up.
[00:42:58] Speaker C: Maybe I am. I don't know. I just like to see what's out there.
[00:43:01] Speaker A: Casually browsing Facebook Marketplace, I like that.
[00:43:04] Speaker B: And Dave, you're someone who's done a lot of turnovers for us and a lot of renovations.
Your feedback on that is great. And that's how we approach the clients too, is, hey, what are we going to get you? How are we going to generate you value? Whether it's on a rental or on a sale?
What can we do to actually generate value?
Either sell the home or rent the home faster. Rent it for more if it's a rental. We're also looking at longevity a lot. What are the items that we could put into the home that are going to last a long time? You know, not putting carpet in, putting the, like a vinyl plank or laminate tile, quartz countertops. Like, hopefully no one's doing Formica anymore. And your team has done a really good job of getting things done really well and really quickly because that also kills deals, too. We've had the ones where the contractors are. They take all summer to do it, and by the time they're done, we're out of the sales market. And we're in a bad position.
[00:43:56] Speaker C: Yeah. There are some things, too, I'd even recommend to clients, especially when we're talking about apartments. It's, hey, is your goal to rent this quickly and get about the same rate as before, or are you really trying to take this off the market and try and step up, you know, another few hundred a month in rent on this $30,000 investment? And sometimes it doesn't pencil out.
I'm working with a client right now who actually wants all these units. Hasn't been remodeled in many years. So as people are moving out, you know, she already has that budget in mind that she wants to spend 30, $40,000 on these, and so she's okay with that now. Not if that's not every client. Right. That's like the unicorn. Some are like, hey, just put it back to how it was and let's just get it back out there. So, you know, some clients aren't interested in maximizing the value. Some of these people see this as just this passive income that's out of sight, out of mind. So knowing your client and what they want, like, it's almost insulting to go to that client and be like, hey, do you want to spend $50,000? And they'll look at you like you're crazy.
[00:44:53] Speaker A: I see it. They usually. I mean, I come to the table when someone's ready to sell, and that's usually when I see when it was a rental. Then they'll dump a bunch of money into it to get it sold, but not to get it ready for another tenant.
[00:45:04] Speaker C: That has always been weird to me, too. It's like the homeowner will be very frugal on preventative maintenance, updates, upgrades, walls of rental for the last 10 years. But it comes time to sell, and all of a sudden they have all this money that they want to put in property that they've never lived in or never going to live in. And then, you know, I think that's a, that, you know, kudos to the agent on that. That's.
[00:45:25] Speaker A: That's all new appliances, all new paint. Yeah, everything. I mean, it's night and day, though. You get, from my perspective, I give numbers of, if you do A, B, and C, you'll get this number, and if you don't, you'll get this number. And usually the return's significantly higher when they do that.
[00:45:39] Speaker C: Yeah.
[00:45:40] Speaker B: But in general, having that turnkey home, because once your home becomes a project, I think a lot of buyers are interested, are instantly not interested, and the price drops significantly.
[00:45:51] Speaker A: Let's Talk about. Because, Dave, you have a really good reputation, specifically with the property management world. What do you prioritize or why do you think that is? Tell us why. You're awesome.
[00:46:03] Speaker C: My strategy is to just be as helpful as possible. Add a ton of value. I remember when I was a property manager, there were vendors. I can call them, like, hey, I just need this done. Can you do it? And being there for them, knowing that, like, they need to do it because they have a tenant, they have an owner, they have a, you know, they're even own, you know, supervisor that they have to answer to and helping them out and that it's like the. Those small tickets, like, these are the base hits, right? And by doing that, when it comes time to do the larger product projects, they're thinking of me. They're, you know, letting me work with them on price, helping them try and negotiate something within the budget. Whereas if you don't do those little things and some contractors won't, they'll be like, no, it's, oh, I only do this thing. And I'm completely inflexible. Even just answering my phone. Like, I tell people, like, hey, if I don't answer the phone, like, I will call you back.
[00:46:50] Speaker A: Yeah. I say I'm sleeping.
[00:46:51] Speaker C: It's a rare thing. It's like, imagine, like, how often you call people. Like, I only call someone when I need to talk to them. Right? Like, there's so many other methods of communication these days. I know someone's called me, like, they need something. They need something that only I can help them with. And that's the urgency that I put behind it. And just being dependable, like, I try and be proactive on the communication. I had a property manager the other day. I did a walkthrough of a house, and he was like, hey, the homeowner was asking about the outdoor furniture cushions. And I was like, I didn't really look at those, to be honest with you. Like, I had the punch list that you gave me that I was going to do my proposal on, but he needed something else done there. So I went there yesterday, actually, and I went there and I took pictures of all the cushions, and I sent them as, hey, tell your owner, your client that you went by there and here's the cushions. They look great. And that's just like that added service that makes them look good. And they're like, that's not something I needed to do.
[00:47:46] Speaker A: No, but the relationships with the vendors.
[00:47:49] Speaker C: You know, one of my things I always say is owners love photos. And owners hate surprises. You know, this is a home that he already mentioned the owners want to move back into in a couple years. So, like, now I'm thinking in mind, like, hey, I want to make sure there's no surprises. And they have the photos. If there is a surprise, they know about it.
[00:48:03] Speaker A: Are you. Do you have any construction horror stories or, like, major lessons learned over the years that you always refer back to
[00:48:12] Speaker C: when you're doing demo? Expect the unexpected. Whether you're turning off roof, you're demoing a kitchen, you're pulling out a shower, things are always worse than what you can see.
And whether you want to pad your bid a little bit for that, writing into the contract, you know how the scope can change. But just preparing the client for that, whether that's a homeowner, the property manager say, hey, I'm going to go ahead and demo this bathroom. There's some signs I'm already seeing in this bathroom. There could be a mold issue when I take this out, just so you know, hey, that roof is actually pretty old. I see signs on it. Not that I'm a roofer. I see signs on there that aware neglect.
And I would just be. Or just this house has termite damage. I can see elsewhere. Like, I can already tell that when they start tearing this off, you're going to be looking at additional costs to fix this beyond what they're going to be quoting you. So just really preparing the client and just using that experience to kind of lay that foundation so they're not shocked. And coming from a place of expertise and experience, hey, like, this is normal. I was expecting this to happen when we were doing this project.
[00:49:17] Speaker A: What's one that was crazy, I think
[00:49:20] Speaker C: finding things that people didn't know were there, like, voids in the house. Like, this is a closet. Like, you didn't know that this didn't go into the other room. And there's this. This void here. And people are shocked about those things. Like, how long have you been living here? How long have you owned this house?
You know, dealing with neighbors is always a fun thing. They are looky loos.
So you park your truck outside, they always come over, over, and it's. They're always the, you know, wannabe home inspector. And they. They criticize everything that you're doing.
And, you know, they've let themselves into the home. It's the wildest thing.
[00:49:55] Speaker A: I wonder. I. I feel like neighbors, when they know a home's a rental, like, I'll come across, they feel like it's their Responsibility to check on the rental for their friend that used to be their neighbor or vet the contractor that's there and report back. Like, they just become so involved in a way that nobody asked them to be involved.
[00:50:14] Speaker C: Yeah. Squatters, another big one. When houses are going, undergoing long turnovers, getting squatters. I mean, no real construction. Horror stories.
[00:50:25] Speaker A: Every day is a horror story for you.
[00:50:27] Speaker C: Yeah, I mean, just property management in general is full of horror stories. But yeah, I mean, people that don't use the house as a primary residence is always sometimes a recipe for disaster. Where people use it as a second home or a vacation home or it's a rental part of the year.
There's always surprises when the home's left unattended for a long time. People hire a property manager and they expect that they're going to go by every few weeks. Like that's usually not the case. Yeah, you know, there's valet and. And other services for that. But we're a little fortunate in Southern California, especially if you live in a colder climate. Like, you have to deal with pipes, freezing, snow buildup. Just homes that are left unattended. You know, insurance companies don't cover a lot of these things. When the home's uninhabited for 30 days or more. Not been checked on, you know, just not using things.
[00:51:15] Speaker A: I'm dealing with them.
[00:51:16] Speaker B: Homes don't like being vacant. They don't like homes when they're not used.
[00:51:20] Speaker A: Attic rodent activity. Just the pests will take over. Yeah, I have sellers. If you're. If we're listing your house and you're not, you're moving out of state, you're not going to be there. You need to get a pest control company on a regular basis until we have it occupied again or you're going to have a $10,000 attic issue.
[00:51:38] Speaker B: One of the things I always say is generally go to the furthest or the highest bathroom, turn on the water, flush all the toilets, run the what? You want to run the shower, make sure water's going through your home, going through the drains, water's flowing out. You got to keep things running.
[00:51:53] Speaker A: You taught me that years ago. So I still to this day, I'll. On vacant listings, run in flush toilets. Us do all of that run around.
[00:52:01] Speaker C: I used to always tell my clients when I did management, too, I said, hey, things that you never thought would break are gonna break. You're gonna wonder how that broke, and I may not have the answer for you too, but things break and people don't live the same way that everyone else does. People use things differently. People way more than other people. People have more people in the house than you may have had. Like, there's things that are gonna break that you usually be completely dumbfounded.
[00:52:23] Speaker A: They're gonna live in it differently. How often do your friends call you? Like I call my nurse cousin all the time when there's a medical thing. Are friends calling you all the time when something breaks in their house?
[00:52:33] Speaker C: I'm a. I'm pretty handy too, so sadly they don't. And I'm also a really nice guy. So when they call me, I don't know if they're expecting this, but I'm gonna go over there and fix it. I will go down there myself and do it. So I don't know if they're asking me for advice on it. They wanted me to do it, but I'm going showing up either way.
[00:52:52] Speaker A: Oh my gosh, I'm gonna start calling you and you're gonna answer, yeah, like better, because you'll know I need something.
[00:52:58] Speaker C: I'll drive to San Diego. Like, don't touch it. I'll be right.
[00:53:01] Speaker A: I'll be right there.
Are you down for some rapid fire questions?
[00:53:06] Speaker C: Sure.
[00:53:07] Speaker A: Daniel, do you want to wrap anything up before I pelt him with some questions?
[00:53:11] Speaker B: Number one thing that you recommend to clients and number one thing that you recommend to. To all buyers and sellers as clients and to the property manager clients who you work with.
[00:53:25] Speaker C: Yeah, so property managers who I love working with. My goal is to empower them, whether that's through communication, giving them all the information they need, giving them a good price that they can present to their client. Like they got to look good for their client. Like they're the end user. So if they bring my bid and it has my name on it, Trustee, and it's 10 times more than the next guy that doesn't make them look good and makes me look worse. Or if it is, I know it's going to be higher because I see things that other people probably didn't see. I'm going to call the manager. Hey, I'm going to explain this to you so you can relay this to your client. Hey, I see xyz, that's probably not. Wasn't in your original scope, but here's why my price is higher. Like I would call the other contractor and just confirm that these things are also on his. On his bid or top of mind and really bring that to your client. So you can tell your client, hey, this one's more. But this is what I know about the house and Then they look really good giving them the update before they ask for it. So a lot of property managers use some sort of like maintenance portal. Keeping that thing so up to date, like, keeps their job so easy. They don't have to chase me down.
I've worked at management companies where they would have a dedicated person whose job all day was to call vendors. When is this scheduled? Have you called the tenant? What's the deal? Where's the invoice? And it's just such a headache. Some of these vendors, like, yeah, they do good work at a low price, but we can't get a hold of them. Where's the invoice? I'm trying to charge the tenants back for this. My owner is trying to do their end of year financials. This doesn't add up.
So all those pain points that I've had to deal with personally as a manager, I try to alleviate those through our surface and just be in front of it. And people do things, especially in property management, without really thinking about why they're doing it. So why am I having to call this vendor and follow up with them? Why do I need him to know when he scheduled it? Why doesn't he just do that himself? And when I go in and do these things for them, they're like, why doesn't everyone do that? Like, this makes it so much easier.
And it really helps because it's difficult to do those things. It's not easy. Like, it's more work on my end and on my team's end, but at the end it really pays off and it really makes their job easier, which leads to more business for me.
[00:55:30] Speaker A: When it makes sense that you have the property manager background and now you're GC with a construction company or a GM with a construction company, because you're able to do who you. You're who you would have wished you could have hired.
[00:55:41] Speaker C: Yeah. Imagine before the ChatGPT area, I used to have to call my contractors and be like, hey, explain this to me. Like I'm six years old. Because I don't understand it. You know how proposals can be very cryptic sometimes? What is this really? What am I paying for here? Like, what is this a tune up? Like, what is. What's in the tune up? Like, why is it a thousand dollars? Explain these things to me.
So, you know, again, back to the empowering thing. That's how I try and do this. Like, hey, yeah, you can use ChatGPT, but let me save you that step, right? Like, that's just more effort on your End. Let me just put this all in plain English for you. Include photos, maybe even options. Hey, do it this way, do it this way. Here's the different outcomes. There are different prices. If I was a homeowner, property manager, what's the next question I would ask? Let me make sure I put that in the bid. Everyone's always going to ask, like, how much is it? What are you going to do? And when can you start?
So I put that, hey, if you approve this today, I can start on Wednesday. Right. The other way that everyone's aligned. People think that like you can do things the same day and it's. Maybe some people that are sitting around can do that. But generally one to two business days is pretty acceptable. But you know, if I were to get a bid and I'd tell you, oh, I can't start for two weeks, like, that's a surprise and that's unexpected. So I want to get out in front of those things.
[00:56:54] Speaker A: Okay, you ready for rapid fire?
[00:56:56] Speaker C: Yeah.
[00:56:56] Speaker A: Most overrated home upgrade, swimming pool. Ooh, I like that.
Most underrated home maintenance item, water pressure. Ooh, we didn't even talk about water pressure. One thing every homeowner should inspect every
[00:57:12] Speaker C: year, underneath their kitchen sink.
[00:57:14] Speaker A: Biggest waste of money spent on homes.
[00:57:16] Speaker C: Duct cleaning.
[00:57:19] Speaker A: That's a good one too. Favorite item, remodeled to make a difference.
[00:57:24] Speaker C: Kitchen.
[00:57:25] Speaker A: Kitchen. What repair gets ignored the most?
[00:57:28] Speaker C: I would just say overall, roofs are the most neglected. You don't. It's not something you look at every day.
[00:57:33] Speaker A: No. You don't pay attention till it's leaking.
[00:57:34] Speaker C: You don't pay attention till it leaks.
[00:57:36] Speaker A: And then one advice, one piece of advice that you would give a first time landlord getting ready to rent their house.
[00:57:43] Speaker C: Expect the unexpected. Things are gonna break. You're gonna spend more repairs than you ever did when you live there. The things that you lived with other people aren't, aren't okay with that. You gotta imagine like, especially things like doors and just opening windows. Like, oh, it's a little difficult. Like, imagine if an 80 year old lady moved in here. Can she, can she open that window? Like, it has to be like universal for use and ease of use and functionality.
[00:58:07] Speaker B: Yes.
[00:58:08] Speaker A: I love it. Okay. My biggest takeaway is people need to maintain their homes and homes that they're not living in. It's not out of sight, out of mind. That home is still there. You're renting it out. It's still having all the problems, if not more.
[00:58:20] Speaker C: Yeah. People ask, like, what should they budget?
And it's really difficult. Like, you know, Some people say, you know, 1% of the home's value if it's a newer home, 2 to 3 if it's a little bit older. A good property manager doesn't really do so much as like plan maintenance more so. Or sorry, a good property manager will plan out the maintenance. But as far as the budgeting, like maintenance isn't on a, on a set timeline. Right. There's end of life roofs and appliances and major fixtures like your H vac system and water heater. And really just kind of budgeting on those based on those life lifetimes, the major things is going to be the biggest way to track it.
[00:58:56] Speaker B: Another thing I want to put into that, and this is an issue we deal with frequently, it's not just about the cheapest price. Like we have some clients who will literally shop for days just to find the cheapest price to save a few dollars. But at the end of the day, the tenant's pissed off. They're not wanting to renew. They're angry at everybo.
Sometimes you're having to credit rent because the home was technically uninhabitable and the client's saving 20 bucks on a water heater. But the tenant hasn't had hot water in a week.
So things like that have a trusted vendor. I remember one time we had a client who had an apartment building who found the cheapest possible plumber to do a re pipe. The guy went and took out all of the drain pipes and disappeared, never came back. And then afterward we went back to the owner's location. Yeah, I'm like, now we have to hire remediation or environmental company to come and clean up all the brown water.
It's a biohazard and now we have to pay an actual contractor to come fix it. It cost them like two or three times more than the original bid.
That was a great bid from the beginning. So being cheap will cost you more money.
[01:00:03] Speaker A: You get what you pay for.
[01:00:04] Speaker C: Especially first time landlords don't get the concept that they're running a business now and they have a customer, a tenant who's not going to wait weeks for certain repairs and go without certain services or areas of the home. Can I do a quick rant on my number one pet peeve, both as a manager?
Touch up painting. When I see touch up painting, I die on the inside. Touch up painting, that's like what you do when you do a big remodel and then at the very end they go in and touch up where your tradesmen dinged up the walls. That's Touch up painting, you have fresh paint that, the matching paint. That's touch up painting. When someone's lived in the house for a couple of years, the paint on the wall, even if it was new, has faded. Touching up paint. Like you've seen like when you go down like that LA freeway and there's graffiti and someone's touched up the paint. It's body everywhere and it never looks good. And you know, again, this, this is my brand. Like I want you to feel comfortable. My work, so many times in the past I've done touch up painting and people go in there like what is this? Like it's terrible painting. Like I don't even bid it anymore. I tell people, no, I don't do it. You know, because what happens is you're going to be upset. Right. I'm going to have to go back anyways and do what I really wanted to do the first time. The home's going to sit. So this is a rental or a sale property. People are going to see that and be like, you don't care about the home. Spend the extra couple hundred dollars. We're talking about a $3,000. A hundred dollars a day that it sits. Like you would have made that back on the few extra $100 you would have spent painting corner to corner. And it looks so much better.
[01:01:37] Speaker B: And also too, if you have the tenant who is okay with the dirty home, the touch of paint, everything else, what they're going to do to the home where they live, there's going to be so much I've never thought of
[01:01:47] Speaker A: that I've never thought of the tenant that's okay with a beat up home. What that's going to look like they're
[01:01:53] Speaker B: going to beat it up so. So much worse than, than what it originally was. Absolutely.
[01:01:58] Speaker A: You want someone with high standards.
[01:02:00] Speaker B: Yeah. The touch up paint, like Home Depot does not paint match. And there's multiple things. The paint phase, the sheen fades, it pick dirt. Paint matching is a total scam.
[01:02:10] Speaker C: The nap on the roller could be different. Just so many different things. It just. Yeah, that's my biggest pet peeve.
[01:02:16] Speaker A: Touch up paint.
[01:02:17] Speaker C: I, I'm guilty of it. When I was a, when I was a property man, I'm like, just touch the pan. Because I thought that like I was providing so much value to the client by just coming in so cheap.
[01:02:26] Speaker A: Yeah.
[01:02:26] Speaker C: Hey, we actually don't need to paint owner. It's only $600 versus 3,000 to repaint the whole thing. Little did I know that the feedback I would get from the showings is like, are you gonna paint that wall like we did the tenant do this and then they're having to go back anyways or you're losing that money. It's just, you know, nowadays what I tell property managers, you know, to relate to the owners, it's like, hey, the house needs painting and let the painter decide what areas can be touched up now. Cause some areas can be right. If especially like bathrooms that are already like a semi gloss, like those are usually a lot easier to match. Rather than like a large main wall that gets a ton of light and there's of lot A, there's tons of marks on it. You're not going to do that. That LA freeway graffiti pattern up and that's what it looks like to me. And yeah, I just, I cringe when I hear those words or I see it on a work order or just, you know, just touch up painting. I got nightmares about it.
[01:03:18] Speaker A: This is good to know. Okay, we are shockingly over an hour.
Are there any other main points you want to get across?
I feel like this was super valuable.
[01:03:29] Speaker C: Want to talk about home warranties and that scam?
[01:03:31] Speaker A: I know. I feel like we need to do a whole episode on home warranties.
[01:03:35] Speaker B: Some are good also for the listeners. Full disclosure. I do have ownership and trustee, so full disclosure there and just want to
[01:03:42] Speaker A: be transparent and I do not. Full disclosure there.
Okay. Dave, you've been awesome.
[01:03:48] Speaker C: This was. This is a lot of fun, guys.
[01:03:50] Speaker A: That's a wrap on this episode of all of you 360 all things real estate. If you're found this helpful, don't forget to subscribe, leave a review and share it with someone navigating their own real estate journey. Connect with us anytime on Instagram @AllView360 and on LinkedIn @AllView Real Estate. Until next time, stay curious and keep your perspective. 360.
