One of the higher risk decisions an out of state investor needs to make is “what property management company to hire” in the local market where the investment is located? This sometimes carries more risk than the decision on the actual property being purchased.
Since the real estate crash in 2008, out-of-state investments in cash flowing(turnkey) properties has become a popular investment tool for many Americans and investors around the world. GC Realty & Development, LLC has always worked with investors in different areas of the world who own real estate in the Chicago area. From 2015 to present, however, we have experienced a wave of new owners that are struggling with their current property manager.
In the fall of 2014, we started receiving a high-call volume from out-of-state landlords. The struggles they described were frightening. As investors, we had empathy for their negative experiences and understood their lack of control to change it from the other side of the country or in some cases the world. These investors shared issues, such as extended periods of vacancies, vandalism to properties, poor tenant selection, multiple repairs to the same issue without ever solving the problem, city violations, and everything in between that you can imagine. At first, we avoided these troubling situations and simply advised these owners on what steps to take to salvage their properties. At first, we were reluctant to inherit other property manager’s issues, but we knew there was a huge client base that needed our help.
In 2015 we made a business decision to help our fellow investors. We quickly established a “waiting list” to make sure we didn't take on more than we could handle. The last thing we wanted was to promise services we couldn’t deliver. There was a need in the marketplace here in Chicago, and we knew these owners would benefit from our services. Our goal was to stabilize the properties and reduce owners’ stress, improving their quality of life.
As we began working with more and more of these struggling landlords, we refined our processes. Over the first six months, refining our processes made it easier for us to anticipate potential issues and educate the owners on what the stabilization period would exactly look like and how long that will take. Many owners don’t realize the severity of the problems. We often uncover many more issues after we begin investigating the properties. Then we are able to discuss worse case scenarios up-front, so both GC and the investor are on the same page.
We have now been able to take over and stabilize hundreds of properties for owners. After the property is stabilized, we discuss with the owners their options, with one option being keeping the investment -- original intention was to generate cash flow or discuss an exit strategy by selling. Sometimes an investor simply bought the wrong property, and we will advise them to sell it outside of our network. In the end we want to create profitability again and piece of mind for owners.
***A GOOD PROPERTY MANAGER AND AVERAGE INVESTMENT IS OFTEN BETTER THAN AN OUTSTANDING INVESTMENT AND AN AVERAGE PROPERTY MANAGER***