Making Wise Real Estate Investments & Finding Expert Property Management

Making Wise Real Estate Investments & Finding Expert Property Management

Joe Viramontez joins us to talk about his real estate investment experiences, his bad property management experiences, and he shares how he sought expert property management and hired Enterprise Property Management, Inc. for the past 10 years. Joe also shares stories about his entrepreneurship outside of the real estate industry. 

 

[**Excerpt**]

Aaron Ivey: Joe Viramontez! I want to thank you for joining us on the Behind the Curtain podcast. You have been with Enterprise now for how many years? Do you know?

 

Joe Viramontez: Oh, it's been at least 10 years.

 

Aaron Ivey: Yeah, good grief.

 

Joe Viramontez: Yeah, probably maybe 8 to 10 years.

 

Aaron Ivey: Yeah. That's insane. I remember when you called me and I’ve forgotten who was managing your properties at that time, but it was really interesting to receive your call, because it's not every day that an investor calls you on the phone and says, hey, I've got about eight properties, and I'd like to transfer all of them to your management company.

 

Joe Viramontez: So back in 2008, during the housing crunch, that's when we purchased all our homes in Memphis, and everybody asked me why Memphis. It was because we knew somebody over there - a property manager that was getting bank-owned homes and, you know the story back in 2008, bank-owned homes, you're able to buy them much cheaper to get in and start your investment portfolio if you will. So that's what we did. I went from one property manager to another property manager, and then finally to Enterprise. The first two property managers started off great, but they did not deliver on what they said they were going to deliver, and ultimately I found out that there was some shady happenings occurring behind the scenes. 

 

So we left one, I won't mention names, and then we went to another one, but it just did not feel as though they were really taking care of me and my properties or keeping us informed. Then I went on the internet and looked through Yelp and found Enterprise Property Management. You guys had 5-stars, you had nothing but great reviews, and Yelp’s a pretty reliable source, and that's when I reached out to you guys, and it's been fantastic ever since. 

 

Aaron Ivey: Well, that's awesome. So, let me just ask a couple of questions and then we'll get back into the Enterprise experience. Joe has been amazing. We've had nothing but an excellent interaction. Joe, you could teach a crash course to investors on how to own and operate real estate from 2,000 miles away. I wish that you could do that and for our real estate investors to have an opportunity to learn from you. So that's kind of what we're going to try to do today; just talk about what your experiences were like owning real estate here in Memphis, Tennessee, what you would do differently, and what you really enjoyed.

 

Joe Viramontez: So I'm a retired fire captain from the Santa Clara County Fire Department and, you know, I retired, oh, 10 years ago now. 

 

What happened was I've always been kind of an entrepreneurial guy. And while I've been working in the fire service, you know, I always had little side businesses - something just to augment the money coming in from my family - and what happened was my friend, an old-time friend that I grew up with, he knew somebody that was a property manager in Memphis. So when he was telling me about the homes he was buying I thought wow that's great, and they were bank-owned homes, so you could get them at a discount. We started buying homes - literally buying a house how every month back in 2008 - and we were in a position where during that time you're able to buy a house for let's say $100k and I was using my HELOC (home equity line of credit) so I could pay cash for the house and then I would turn around go to the bank and get a cash-out refinance loan. I was able to get back almost all my money less $4,000  per house, so essentially I only had $4,000 out of pocket for that house, because I was able to get a 30-year fixed loan for the house and could take that money again to go buy another house, and do the same thing go back to the bank get a 30-year fixed loan. I would only be up $4,000 on each home and essentially we bought our 10 homes for $40,000. I had all of the homes on a 30-year fixed loan, so I was rock solid on our loans. 

 

I had a friend that got 15-year loans and he got underwater real quick because he ran through a rough patch during like 2009/2010, and because he had a 15-year loan, which he could have refinanced, he was bleeding every month. So we were right with our 30-year loans and then it was just a matter of having our homes maintained but, as I found out, not all management companies are the same. You really have to do your due diligence and find the best one.

 

Aaron Ivey: That's fantastic. We always try to keep the trend positive on the podcast, but I'd like for you to kind of go in the other direction and tell us some of the challenges that you had with the old property manager. What kind of things did you experience? 

Joe Viramontez: As an absentee landlord, let's say and you live 2,000 miles away, you’ve got to be able to sleep at night. Any investors out there, if it requires a plane ticket to fly to get to your rentals, are you going to be able to sleep comfortably? If you can sleep at night, then I would say go ahead and do it. If you can't do that, some investors have to see their property and they have to be able to drive to it. I've known guys in the fire service where they would buy a house in Sacramento because they wanted to be able to drive to it.

 

All the numbers for us would work for Memphis, and I could sleep at night knowing that I had homes out there. I didn't worry about it but, as far as the property managers go, our first one everything started out great and, then as we started to work with them, we started to find out that the people that were doing repairs on the homes were actually relatives of the property manager. I don't ordinarily care about that. I mean, I understand they have family members they want to be in on the business. I'm good with that, but myself and some of the other California investors would talk a lot amongst ourselves as far as how things are going and we started to see things popping up that didn't make sense. We started to see repairs being made that were a lot more than they probably should have been, for instance. 

 

I want to give a shout-out to you guys for your monthly reports every month. They are fantastic and it shows me exactly what we're spending. Money coming in, money going out. So with the first property manager, it was all just a bit vague, and when we started to ask questions about what's going on, how come this is inconsistent, we started to kind of probe a little bit more. They got an attitude with us and from that point on I was out, because if the property managers are getting an attitude, something's going wrong. If they were on the up and up they can easily answer the questions. Yeah, it's one of those things when someone's temper’s starting to get riled up, something is going that they're trying to cover something. So after, I don't know, it was probably a couple of years, we realized that this is not good.

 

Then I had to go on the internet to start searching for another property manager. Well, I found one that I really liked, and they were fantastic, but their staff was on a shoestring. They had one person that would actually go out and do inspections, and you would only get an inspection on your house, maybe once every year or two years. Wow, and that's the other thing I like about Enterprise is that you guys do your quarterly inspections. Granted when I get that paperwork in I know I'm gonna be spending money but, that's the other thing as an investor, you just have to know you're gonna be spending money. You gotta spend money to make money or to have an investment that you can make money on down the road.

 

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