Property Troubles – Cash Calls

May 16th, 2011 · 3 Comments · Property Management, Rental Property

Colorful Houses in Alexandria
Creative Commons License photo credit: matturick

I’ve got an interesting project on my hands coming up. Imagine being a landlord who owns hundreds of properties… then imagine how rich you would have to be if those properties didn’t cash flow.

Cash Calls

A cash call is when your manager calls you and asks you for money. Sometimes it’s for something reasonable that will make you money or a building element that is worn out, like a boiler or a building envelope.

A landlord can quickly end up in a terrifying situation when every single month becomes a cash call. Welcome to landlord hell when you have to feed your property money every single month for ongoing operations. I’ve worked in high vacancy buildings before and cash calls start to happen every single month.

The Project

My new project is to turn a series of cash calls to cash flow. I know it can be done, because when the owner self managed, the property did turn a profit. It’s like going to the moon, we know it can be done because someone did it.

Offense

Vacancy cannot be tolerated. Reducing vacancy to turn over suites is the goal.

Defense

There’s no room for luxuries in a well managed building. When you’re bleeding red ink it’s time to cut expenses to the bone.

Score!

There are two ways this can end. You can succeed or you’ll be fired. Real Estate is not a kind business, as a property manager you’d better know what your job is. Some managers think that producing lots of nice pretty reports is their job. They are wrong. Other managers think that if the to cover their ass effectively they’ll be ok. Also wrong.

Your property manager’s job is to make you money.  If you’re not making money something is horribly wrong. I’ll keep you posted on the progress.

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