Charlotte Property Management Weekly: The Top 3 Reasons Why Good Property Managers Matter More Now (Reason #1)

1. If this economy has taught us anything, it is cash is always king and real estate is an investment. The ONLY decision criteria for hiring a prospective property manager should be their ability to maximize the cash flow of your investments. Period.


A friend of mine works for a utility company. The were recently faced with a question on whether they should spend the money to increase their customer service grade from 74% to 77%; they had calculated almost exactly what it would cost to do so. His co-workers were fighting to spend the money. Isn’t great customer service what business is all about?


But, where was the ROI (Return on Investment)? His co-workers didn’t see that spending the money wouldn’t bring in any additional revenue (people didn’t have a choice but to use the utility company). The real question that should have been asked was:


How much will our cash flow improve if we drop our customer service level from 74% to 71%?


This is the type of property manager I want working on my properties. The answer isn’t always to:


A. Put perfect looking homes on the market (though it helps…)

B. Make costly repairs

C. Wait to get upper rental rates

D. Wait for perfect tenants

E. Evict late payers


The answer IS to make the most money on your investments. This is a result of 3 things:


A. Maximizing revenues

B. Reducing expenses (yes, this includes the holding time when properties are empty)

C. Sometimes taking on a manageable level of tenant-risk (letting some tenants be late, etc.)


Cookie-cutter approaches don’t cut it anymore (no pun intended). Just take a look at the drop in retirement portfolio values of the average American, and then look at the hedge fund manager who MADE $4B last year (yes, that’s “B”, as in billion). The stunning thing is that both were investing in the financial markets…


Good property managers maximize the amount of investment dollars paid to you. They use strategic approaches for each individual property (and, yes, the approaches are sometimes unconventional). But they never waver in having you spend less and make more. Period.


Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. For a FREE look into his new book, A Real Estate Agent’s Complete Guide to Representing Rent-To-Own (Lease Option) Tenants: Delight Clients, Fill Vacant Homes, and Earn $2,250 Upfront* (*Minimum!) go to www.RentToOwnAgentGuide.com. You can contact him directly at Brett@BDFRealty.com.

Charlotte Property Management Weekly: Former BOA CEO Ken Lewis Teaches Real Estate Investing

“I’m going to tell my clients to start buying real estate once things stabilize. It’s still too dangerous.” (Charlotte Investment Realtor)




“When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him.” (Jonathan Swift from Thoughts on Various Subjects, Moral and Diverting)



Ken Lewis is the man. You might have read and heard things in the news during the past year saying he is not the man, but they were all wrong. He’s got an unbelievable instinct for investing creatively. And he’s got the guts to execute.

If you live in Charlotte, you must heart Big Ken; it’s required. He built the entire town, kept the headquarters here as he grew Bank of America (BOA), and made sure his bank was actively involved in the community. He should be given a great deal of thanks for the Panthers, Bobcats, Four Seasons Hotel, support for countless charities, etc, etc., etc.

If you’re a large shareholder, you may feel differently. BOA’s stock got hammered the past few years from the mid-$50 range down to a couple of bucks (then rebounded to around $16/share). The dividend went from $2.56/share/year to four cents/share/year. If you were depending on BOA stock to live off of, you did not heart Ken. You were one of the people who wrote Congress telling them that you knew who the Anti-Christ was.


In the short-term, Ken was the Devil. In the long-term, I think he will be considered an investment genius of epic proportions (seriously) and someone we should try to learn from. He bought Countrywide (the largest mortgage company in the country) and Merrill Lynch (one of the largest brokerages) at huge historical discounts. When everyone was running away from these “toxic asset”-laden institutions, Ken was stepping up and taking them down. He had chops.


He wasn’t just paying cash either; he did not have enough of it to close on these deals. No matter. Ken was working the government for guarantees, cheap financing, and taxpayer assistance. He knew the government had to find a way to steady the financial system and there weren’t many institutions willing to step up and take huge risks in catastrophic economic circumstances. Sure, when economic times are great and risk is completely known, other CEO’s have no problem paying top dollar to acquire other companies (even though the large majority of acquisitions actually destroy shareholder value for the acquiring company). But when there is risk and market values plummet (creating potentially unbelievable shareholder value creation), they will not step up.


Ken did. He has an investor’s heart and instincts to locate and take down undervalued assets. Let’s discuss:


I. Locates Undervalued Assets: For an entity the size of Bank of America, there are few companies (in terms of sheer size) whose acquisition would result in any meaningful impact on their earnings. BOA is huge. In the space of a year, he saw the opportunity to add two massive companies to the BOA fold, Countrywide and Merrill Lynch. Countrywide propelled BOA to the #1 mortgage company in the world. Merrill Lynch filled a huge gap that gave BOA 16,000 stock brokers (sorry, “wealth advisors”) working on Baby Boomer’s investment portfolios. Oh yeah, did you forget about the biggest segment of the population that every financial company in the world was competing for before the economy collapsed? Ken didn’t. BOA went from Baby Boomer “player-hater” to “top 2 player” overnight.


Let’s look at using this methodology for locating real estate deals. What attractive opportunities are available in your town? Are there any good fits for you or a client’s investment portfolio? Any great commercial locations at the main intersection that you didn’t think would be available for a million years? How about beach house you always wanted? I bet the banks (or struggling sellers) that have them muddling on their books would be willing to deal now- on your terms. If you handpicked a great property or two and the market came back, how would your nest egg look in the next 3, 5, or 10 years?


II. Takes Them Down: Ken used stock, cash, government guarantees, government grants, etc. to get the companies he wanted. He had the government over a barrel and used this to his advantage.


So, on the same token, how can you actually acquire the real estate you want? Like everyone, you say you don’t have much money to invest. How about you get creative like Ken? Do you think if the world economy wasn’t on the brink of disaster he could have gotten the price, terms, cooperation, and financial assistance he did to close these deals?

These are not normal times and you can use this to your advantage as well; the sellers will try to help you as much as they can! Maybe it’s time to start asking about and using:


1. Seller financing- let the seller act as the bank and get a good price and terms from them

2. Government financing- there are more state and government programs available than you know. The $8K tax credit is merely the tip of the iceberg.

3. Sandwich lease options: lock into a low price today (buy an option), pay a reduced rent to the owner, and then rent it out to someone else at a higher rate. As a great man once said, “Control is more important than ownership.”

Ken won’t be vindicated in the next year or two, just like making these deals now won’t turn you into Mr. Burns overnight. There is always short-term pain (heck, Ken got fired) required for long-term gain. Ask any athlete.

Or in two or three years, ask Ken. His BOA stock will be funding his retirement very nicely.

What do you think? Is it time to invest in real estate creatively?


Brett Furniss is the President & Owner of BDF Realty (“Charlotte’s Most Innovative Property Management & Investment Company”), and Rent-To-Sell Realty (“When You Need a New Solution to Sell Your Home”) which specialize in rent-to-own (lease options) and rent-to-sell homes. You can contact him directly at Brett@BDFRealty.com. For a FREE subscription to “Charlotte Property Management Weekly” via RSS, click here. Or by e-mail, click here.

Charlotte Property Management Weekly: “(Real Estate) Investing with the Stars”

“What do I look like to you? A moron? Don’t answer that… But seriously, my real estate investment properties are illiquid and have declined in value. You still say I should double down?” (Charlotte Real Estate Investor)

“Buy straw hats in the winter…” (Russell Sage, Wall Street Financier)

Buying (and selling) at the right time is the heart of many popular Wall Street mantras on how to become wealthy:

1. Buy low, sell high
2 Buy when you see blood in the streets
3 Buy when everyone else is selling. And vice-versa.

Of course, dummy! Everyone knows that. That’s not the hard part; the hard part is to know when that low time to buy is. If we only knew that, then this life would be so much easier. But is it really that difficult?

The people who have made great wealth in this country are like poker players. Poker is a game of waiting and then seizing the right opportunities when they present themselves. And when the opportunities come, good poker players bet heavily on them. It’s not complete luck; they know that certain hands have greater odds of winning.

Let’s look at 2 examples of billionaires “playing poker”:

1. Michael Bloomberg (Billionaire and current Mayor of New York City): After 9/11, the stock market tanked as investor fears abounded. I remember seeing the front page of the New York Post in the fall of 2001 where Mike urged his constituents to buy stocks after the Dow dropped below 7,000; he certainly was! He basically said that people ask him for investment advice all the time (because he’s a billionaire) and that was the best advice he could give them.

2. Warren Buffet (needs no introduction): Buffett experts will tell you that if took away Warren’s 20 biggest investment deals, his overall returns would be flat! He started his investment company in 1956; that’s a big deal every 3 years on average. That shows he does not have supernatural ability to pick stocks right all the time; rather he took really big bets (and was right) on a few great opportunities.

So how do you identify a great opportunity to invest in? Bloomberg will tell you that when the stock market is heavily discounted due to temporary events, you buy. The American stock market will recover, it always does. Buffett will tell you that if you see a good company’s stock trading at a steep discount, you buy. Good companies work through tough times and reward shareholders.

Can you think of anything else that is heavily discounted due to temporary events? Yes, this is when we get to the topic of real estate- good guess! The temporary events are the mortgage meltdown, banks not lending, and the rising unemployment rate. A lot of people need to sell and are ready to let great real estate go at bargain basement prices.

As Will Rogers famously said, “Buy land, they ain’t making any more of it.” So, if the stock market always will come back, it makes sense that real estate should rebound even more convincingly. Companies can always issue more stock, but great pieces of real estate can’t be replicated. And at these prices during the holidays, Wal-Mart has got nothing on the Multiple Listing Service this year!

So are you urging your clients to buy investment real estate? Are you buying any yourself? Buffett waits years so he can cherry pick an opportunity like this. Do you really think that the real estate market will continue to stay down?

It’s time to “Invest in Real Estate with the Stars” instead of waiting to buy it from the “Stars” when they sell!

Brett Furniss is the President & Owner of BDF Realty, “Charlotte’s Most Innovative Property Management & Investment Company” (www.BDFRealty.com and www.RentToSell.com). You can follow his Twitter thoughts on the Charlotte real estate market by clicking on http://twitter.com/bdfrealty. He is the author of the FREE E-Manual entitled “How to Rent-To-Sell Your Own Home” (http://www.renttosell.com/RTS-Book.html) which details how to get the most potential buyers to your home in this challenging real estate market.