Name: Leonardo Wilborn
Title: General Manager
Company: L.V. & L.B. Wilborn
Real Estate Management
Los Angeles
10 Things An Independent Rental Owner Learned From CAPS and CAM Classes
1. The Importance of Education. I own 41 units in California and Arkansas. I decided to fly to Detroit in 2009 to earn a CAPS designation to expand my multifamily housing knowledge. As a life-long learner, I received both CAM and California Real Estate Broker designations in 1997 and 1998.
2. Leasing Application Components. The application provides the foundation for your relationship with the prospective resident. If you’re not using an NAA-affiliated application, make sure your application includes the applicant’s current and previous addresses, Social Security number, driver’s license number, automobile information, credit references, current and previous employment information, and space for their signature, date, unit address, and rental and security deposit amount.
3. Running Credit Reports and Background Checks. This will provide information the applicant forgot to write down or didn’t want to mention. Two things automatically disqualify prospective residents: a past eviction from a rental unit and unsatisfied civil judgments, especially if they involve another owner or management company.
4. Collecting Processing Fees for Credit Checks. You can determine whether or not a prospective renter is serious by asking them to put their money where their application is. Running multiple credit checks can become expensive. Let the applicants cover the cost.
5.Serving Notices. Serving the right notice for the right purpose—to motivate a desirable action—can do wonders in opening up the dialogue with a resident and may help you find a permanent solution to the problem before you lose a resident.
6. Value of Maintenance Inspections. Regular safety checks will help determine if a piece of machinery is working properly or nearing the end of its useful life. Managers can then establish a schedule for routine inspections and capital improvements that ultimately save them money.
7. Property Evaluation. The familiar saying, “location, location, location,” does not fully reveal investment property value. A solid market analysis, a thorough property inspection and a complete review of the operational and financial aspects of the property play a major role in determining the value of real estate.
8. Leadership. There is a difference between being a leader and being a manager, and if you don’t know what it is, you won’t know if someone is working in a position that under-utilizes their talents.
9. Risk Management. Prior to taking the CAPS course, I simply paid the premium my insurance agent said was due on my rental properties. I have since implemented a risk management program to cut costs, and I proactively evaluate each property to check for conditions that create undue exposure to loss for management companies.
10. Nuts and Bolts Matter. The CAPS course on analyzing properties may not turn you into Donald Trump, but it will prevent you from becoming a casualty of poor investment planning. Most real estate brokers selling investment properties are looking for one thing—a commission. Learning how to look beyond the printed offering sheet into the day-to-day basics of a property’s financial health can help you come out a winner.
If you would like to be considered for a future End Points column, please contact Jeff Lee at 703/797-0647 or jeffreylee@naahq.org.