Last week, I had a great conversation with Todd Breen, one of my cofounders at the National Property Management Network. This week, I’m bringing you a conversation with another of the cofounders, Dave Holt. One of the benefits of doing this is that I know these guys well and can personally vouch for their expertise in their niches.

In addition to his role at the National Property Management Network, Dave is the owner of a property management company in Minneapolis, Minnesota. He’s been involved in the property management industry for around 20 years and is a past NARPM president

In this episode, Dave will talk in great detail about investments. He shares his tips and strategies for how he does his own investments, and shares the techniques he uses to find and buy investment properties. He also explains that when you manage single-family homes, you have some unique advantages when it comes to investing in them.

I hope you enjoy and learn a lot from this episode, which we recorded on location in Las Vegas at the NARPM Broker/Owner Conference.

Show Notes

[02:39] - Dave’s claim to fame and niche of expertise is investing for property managers. He touches on the benefits of being a property manager when you get involved in investing.

[03:34] - Dave shares how long he’s been working in the industry, and he and Brad discuss the cycles of real estate. Dave then talks about investing and property management in relation to recessions.

[05:27] - We hear a bit about where Dave tends to pick up his properties.

[07:01] - Brad talks about the “where” of getting leads. He discusses off-market chasing, explaining what the term means. Dave then talks about where he gets his leads.

[10:00] - Dave and Brad walk us through a scenario in which an owner wants to cut and run.

[10:53] - Brad and Dave talk specific numbers to illustrate what they’ve been discussing. They reveal that 15% off the potential list price is a more realistic number for what the seller might actually receive, and therefore is a fair offer for the property. Dave also clarifies what the MAO (maximum allowable offer) is.

[18:01] - Another factor to take into account is profit, Dave explains. He suggests not using appreciation in your formula.

[20:12] - The key to this formula is that there needs to be no lien on the property that will overshadow the calculations, Brad explains. Dave then gives an example of a time when he bought an underwater property.

[24:10] - How much did Dave make on flipping the house he just described?

[24:53] - Dave presents another scenario, this time one that doesn’t involve flipping. Buying and holding is a great strategy for property managers, he explains.

[27:10] - We learn how Dave explains to sellers that he needs to take over their mortgage payments. He then talks about some ways to do this, and he and Dave discuss due-on-sale clauses.

[29:28] - Brad talks us through some of the things he’s done with taking over loans. Dave then shares his method.

[31:55] - Brad explains that he’s using a series LLC for his properties, and shares the reasons he chose to go this route. Dave responds by talking about risk mitigation and exploring other options.

[35:11] - The important part of these strategies is the separation between personal and business finances, Dave explains. He and Brad then discuss owner financing deals.

[39:38] - Dave takes us through a few other examples and options. In the process, he talks about master leasing, and recommends looking up David Tilney to learn more about it.

[42:13] - Brad brings up depreciation, and he and Dave spend a moment discussing its importance.

[44:57] - What recommendations would Dave give someone on where to start? Some recommendations are Lou Brown (in Atlanta) and the BiggerPockets site and podcast.

[47:05] - Dave gives his final advice to property managers about how to start investing.

 

Links and Resources:

National Property Management Network

NARPM

NARPM Broker/Owner Conference.

Series LLC

David Tilney

Lou Brown

BiggerPockets