In June, I flew to Atlanta and toured a few of my rental units. This was the second visit I’ve made to these properties in four years.
During that visit, I met with my property manager and a few of my tenants, and I had lunch with my contractor. He and I met at a suburban Atlanta strip mall.
We ordered a basket of spicy chicken wings and fries, then took out a water-logged spiral notebook and planned a $20,000 renovation.
Here’s what the early brainstormed edition of those plans looked like:
This renovation should bring the rent from its current $850 – $950 per month (the bottom of the reasonable rent range for the neighborhood) up to around $1,500 per month (nearly doubling the rent! Whoa!)
This is a mostly cosmetic remodel, also known as a “remove and replace” job, in which the location of all the major components (plumbing, electrical, appliance locations) stay the same. The surface-level finishes (flooring, countertops, appliance devices) get swapped out for a cosmetic upgrade.
We did need to rip out the floors and subfloors (it was time), which means this happened:
We replaced the popcorn ceiling with a flat ceiling and added roughly six inches of ceiling height in the living room by installing a tray ceiling.
Check it out —
Here’s the thing, though —
The only time I spent in Atlanta (where this rental property is located) took place during a two-day visit in June.
Since then, between June and September, I’ve traveled to Colorado Springs, San Diego, Mexico City, Vancouver BC, Croatia, Slovenia, Washington DC, and Japan. (Travel pics on Instagram). And when I’m not traveling, I’m at home in Las Vegas.
I haven’t set foot inside that property since we sketched out these plans. I’ve managed this project by text message from North America, Europe and Asia.
How?
Here’s an example of what this looks like at the day-to-day level.
I woke up one morning to find a text message — no written text, just a photo — that looked like this:
I asked my contractor to send me a photo of the kitchen cabinets and countertops, so I could see how the flooring options would match with the rest of the house. He did, and this conversation ensued:
And just like that, I picked a flooring option in less than 5 minutes from 2,000 miles away.
Then he asked about the type of tile I want to install in the bathroom. Here’s how that conversation went:
Simple enough. 😎
Here’s the thing, though.
I realize this sounds weird + interesting + whatever-else-you-might-be-thinking. How could I possibly manage a property renovation by text while traveling to a combination of five countries and three states plus D.C.?
But compare it to this:
At the same time that this project was going on, I was also coordinating with my developer about the redesign of the course website.
Our rental property investing course, Your First Rental Property, lives on a platform that we custom built. We wanted to optimize the course for student success, and we didn’t think that those plug-and-play teaching platforms were good enough. So we built our own.
As I traveled, through a combination of email and Slack messages, I coordinated with the developer on this project, as well.
And I made countless design decisions on this project, as well.
For example:
We morphed this:
into this:
… which, as you can imagine, involved dozens of decisions on everything from layout to color to the thickness of the course progress bar at the top of the page.
(And I’m not even going to mention all the Easter eggs we scattered throughout the course. You’ll see.)
But I’m betting that story doesn’t sound as strange.
We know that entrepreneurs work with a remote team on online projects.
We’re used to hearing those stories.
And we know that all types of companies spanning an enormous range of industries and sizes, ranging from major Fortune 500 corporations to one-person solopreneur startups, often manage projects with a remote workforce.
That’s normal.
But for some reason, working with a remote team on the management of a physical property — like a single-family home or a duplex — is an idea that scares or intimidates many people.
Hmmm.
I’m hoping to change that.
I’m hoping to show people the best practices of hiring and managing a remote team, applied to the world of real estate investing.
These skills are transferable. They apply regardless of whether you’re running an online business, managing a rental property, or both.
Managing a rental property is a hybrid between making an investment and running a small business. Strength in one field translates to strength in the other.
If you lose sight of the fact that a rental property is a business — if you forget to treat it like a business, and instead treat it like a speculative foray or a casual hobby — problems arise.
But if you put systems in place to manage your business efficiently, well …
… then you could spend your summer traveling across five countries, and at the end, your rental property looks like this:
And it lists for nearly double the rent.
Win-win.
Enrollment for Your First Rental Property opens on November 30th, 2020.
For now, if you want more details on the course, you can click here. If you know you’re interested, join our VIP list for the latest email updates. You’ll be the first to know about everything related to the course!
See you in class!
– Paula
P.S. Don’t forget to → read this ← for all the details about the course. Enjoy!
Lisa Morhaim
Where can you find reasonable priced and trustworthy contractors?
Richard
Like this post. I do something similar with my rentals. I can’t believe you didn’t change the colour of the kitchen units though. That brown and style is so late 80’s/early 90’s. Cheap fix on this is either paint then with kitchen unit paint – Grey/white tones always look fresh or keep the carcasses and change our the doors.
You could still do this now, even if everything else is done. It’s not that messy or time consuming.
#justsaying 😉
Paula
I have an entire module in the course that teaches that, but the short answer is: get referrals from other investors, PMs, agents, etc., and also get referrals from contractors in other specialty fields.
Paula
P.S. To clarity — that comment w/ the short answer is directed @Lisa re: her question “where do you find contractors”
Bob
Get out there n talk to people. Blood sweat n tears BABY.
georgehpuck
Paula,
Long time reader of your blog and listener to your podcast. The real estate posts are my favorite.
Did you replace the floor joists in that bathroom? Those joists are all notched out and that’s really unsafe if they weren’t replaced.
One thing you do that I like is over time you reinvest into your properties. You do a lot better job of staying on budget and not over rehabbing. We do the rehab but always seem to over rehab.
It seems like once a year or so you a small modestly priced rehab on one of your properties to increase rents, and to get the best tenants.
I also think when the downturn occurs, having nicer properties and modest/low leverage will make it easier to ride out the next recession.
AJ Wilson
I live in South Africa, I own rental properties in Spokane Washington near where my elderly mother lives. I just bought another house in Dec 2018 that needed a redo after bad tenants, met the renovation team, made a budget, discussed the reno and communicated via text while they fixed it. Reno team is a husband and wife, she mostly picked the tiles and colours for me. Living overseas, I don’t know the market, she does. Tenant is happy, place looks great. Found a tenant using Zillow, a family member showed the house for me and we found a tenant. I own other properties there that I also upgrade and rent out,one is managed by a company though, but I find that mostly it is best that I do more management of the the houses myself. I find that the management company has some benefits but doesn’t screen tenants well or have the same idea about tenants. I want a good paying tenant who stays, they seem to be looking for upmarket tenants but they move every year or two. I prefer honest, lower middle class tenants who stay!
steve poling
i enjoyed this post and it got me thinking about some fix up projects of my own. (We’ve been landlords in the Grand Rapids, MI since 1984 and she’s done most of the management.) I showed it to my wife. her response was that $20k is low for hiring this out. So, I showed it to a friend who owns rental property in Florida. He said, “all the work cannot be done for $20k.”
What was the final budget for this project? were you able to keep it down to $20k or was a budget for a just portion of the work shown?
Paula
@Steve — That’s just the early brainstormed edition of the renovation plans, as I said in the article. We adjusted the final renovation plans to fit the budget.
donutsnbeer
How you do the remodel depends on the area…People in Mississippi could give a crap about white subway tile with charcoal grout but people in LA go apeshit for that look (about 4 years ago). I have 3 rental units in LA, and I gear my remodels to what kind of tenants I want…
I nearly doubled my rental with this type of approach.
Do you want a bunch of Baltic Ave’s or one Park Place? And would you reno your Baltic Ave like you’re Park Place? No.
I should have started a real estate rental blog.
Keep up that passive income machine Paula!
Subodh patel
Thanks for the informative article, I am thinking of doing a side business but always get stuck in other work and my 9 to 5 job. your post really inspire me that i can do this alongside the job i have right now. once again thanks and keep inspiring.
Allison
Wow, very impressive! Your blog really inspires me. I just wanted to share a saving tip for anyone looking for a deal on transportation. I was complaining about how much money I’ve been spending on Uber’s, and a friend recommended saferides.org; it’s a non-profit and very affordable. You can book rides in advance and it’s great for large groups. Just in case anyone else is tired of draining their funds with ride-sharing apps!
Frugal Alien
Love the post. That contractor must be having great time working with you.
Juggling multiple project all at once whilst dealing with some very personal things, such as you did requires some unbelievable amount of mental stamina. I don’t know how you do it. . . .
Paula
Awww. Thank you 🙂
It’s nice to have work to take my mind off other things …
Charles Harris
Paula, you got a lot done! Your course transformation looks pretty cool too…although the last version looked awesome as well. I’m interested in how you manage a remote team. I’m here in California and I’m planning to diversify my portfolio by investing in properties in other states. Open to your thoughts. Keep up the great work!
Alessandro
Paula, How on earth do you manage it?! Most people I know would simply crumble under the pressure or would simply stop all together!
You are a role model to young girls everywhere, and something I aspire to be like one day myself!
Paula
❤️ 💜
Thank you so much. 🙂
Matt C
Really enjoyed this. I’m not sure that I’d be cut out for managing something like this while away, I’d probably have heart palpitations for the duration of my trip, but I admire your fortitude.
Anthony @ dividendyieldlive.com
I’m shattered, feel like I worked through the fit out with you. Nice insight into the in’s and out’s of refitting property. Real multi task stuff.
karolinaa
I delighted in this post and it made me consider some fix-up activities of my own. (We’ve been proprietors in the Grand Rapids, MI since 1994 and she’s done the vast majority of the administration.) I demonstrated it to my better half. her reaction was that $20k is low for employing this out. Along these lines, I demonstrated it to a companion who possesses investment property in Florida.
Gropo
Where’s the final accounting?
Larry Miller
I’m not sure I’m ready to manage from that far away but you got it right. I get too involved in the whole process when I am there and try to “help”. Thanks for showing how it can be done. It will help my mindset on the next project.
Larry M
You’ve shown (at least) two key elements here, and they both apply to local and remote projects. First is that you need to have good people who will get the job done whether you are there watching them or not. I’ve found this is not the cheapest guy in town, but it’s not always the most expensive either. Then, I appreciate that you make your decisions and move on. When you have good people, you may not keep them if you agonize over every detail and keep them dawdling while you make up your mind. Thank you for reinforcing what I already know, but don’t always remember.
Dale
Great post and very inspiring. If you are going to be an entrepreneur you need to learn how to juggle. We invest in tax lien property in Atlanta. The market has been good the last couple of years.
Emmie
I agree, handling an online business and rental business, at the start it’s about the details.. Great read. Thank you.
Jessica Watson
Huge fan of Paula, Time spent well! I’m always onto such informative blogs. It was so detailed and well researched. Thanks for such an awesome read. Keep up the great job.