3 Reasons Why LeBron James Is Like A Superstar Tenant

 

“LeBron James Picks Heat; Cavs Owner Erupts”

(ESPN headline on 7/9/10 after “The Decision”)

 

When LeBron James, the best player in the NBA, chose to leave the Cleveland Cavaliers and sign with the Miami Heat in the off season before the 2010 season, it had big consequences for the rest of the league.  No one knew this more than Dan Gilbert, the owner of the Cavaliers.   His team, which had been one of the best teams in the league with James, was now left decimated and would wind up becoming one of the worst.

Gilbert was so upset that James left he couldn’t hide his disgust, disappointment, and anger in his letter to Cavalier fans.  "This was announced with a several day, narcissistic, self-promotional build-up culminating with a national TV special of his 'decision' unlike anything ever 'witnessed' in the history of sports and probably the history of entertainment.  Clearly, this is bitterly disappointing to all of us.  The good news is that the ownership team and the rest of the hard-working, loyal, and driven staff over here at your hometown Cavaliers have not betrayed you nor NEVER will betray you."

Gilbert’s reaction after losing his team’s superstar was raw, genuine, and understandable.

 

Good tenants are property managers’ superstars.  To be a successful property management company, superstar tenants need to stay put!

 

LeBron James is like a superstar tenant because he:

 

1.  Makes (property) management look good.  (Pays on time, takes care of repairs on their own, and get along with people in their community- no headaches)

 

2.  Brings more fans to the game to make the team more money.  (Happy owners bring referrals to the property manager)

 

3.  Makes winning look easy.  (“There never seems to be any issues and we’ve used this company for years!”)

 

4.  BONUS +1: Needs to be retained!

 

I can feel for Dan Gilbert.  As a property manager, I feel uneasy and disappointed when a good tenant leaves us to rent with another property management company too.  We are only as strong as the tenants on our team.  I want to make sure they know they are appreciated and that we want to keep them forever.

 

For organizations to be strong, they need superstars (like LeBron), be it in the NBA or a property management company in Charlotte, NC.  We should “erupt” too if someone poaches one of ours!   

 

Brett Furniss is President & Owner of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords, managing single-family homes, Uptown condos, and town homes in the Charlotte-Metro Area.   BDF Realty’s services include property management, home fix-ups, and home sales, including Rent-To-Sell (“When You Need a New Solution to Sell Your Home”).  His newest book is 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!) which is available on-line now. 

“Will You Buy My Rental Homes Now?” Big Buyers Say, “Yes, But…”

The media is abuzz with news of springtime in the housing market!  Headlines trumpet:

 

Sales And Average Home Prices Are On The Rise Again!

 

Bidding Wars Are Back! 

 

Good times appear to be back in real estate land and you will soon see your local Realtors rolling around in the hottest and newest automobiles again (we don’t use the lowly term “cars”- that’s recession terminology).  Real estate school enrollment is up and the housing market is sizzling.  

 

And you’ve been holding on to your rental properties tightly, making the repairs, paying down the loan, and living the ups and downs of your tenants’ employment statuses for the past 6 years.  It’s been tough, but now it is time to get rewarded, right?  Based on news reports, it is time to sell your rental homes and make some dough.

 

Or is it?  As always, that depends.

 

The homes that are in bidding wars where buyers are making above asking price offers are typically in high-price, highly desirable areas, which are not where most rental homes are (it’s OK- those homes are tough to get to cash-flow on a long-term basis anyway).  But what about the average rental homes that we hold in our portfolios?  Can we sell them now?

 

One type of buyer that is very active in the market now says, “Yes, but not for the price you want.  But not so off the mark that you won’t consider our offer.”

 

This type of buyer is the big institutional investors (Big Buyers) who are invading the local real estate markets armed with tons of cash.  They employ some real estate agencies to find affordable homes for sale, send lowball offers (typical haircut of 30% from what I’ve seen), and snap up the ones that accept. 

 

I view this positively.  Besides the obvious disadvantage of below asking price offers, they bring a lot of advantages.  They pay all cash (it’s so nice when financing snags doesn’t crush deals in the last minute), close quickly, don’t ask for closing costs, and don’t ask a lot of questions.  They are really easy to work with; the deals happen rapidly and easily.  The only real question is if the price is acceptable to both parties.

 

So how does this work in practice?  Here are 3 examples on 2 houses we listed for sale (some details have been changed slightly):

 

House #1: On market for $89K

 

First big buyer (BB #1) offers $55K

We counter at $94K

BB #1 doesn’t dignify our counter offer with a response

 

BB #2 offer on house #1: $70K

The same day we receive word we have another offer coming in

We inform the BB #2 of the other offer and ask if they would like to submit their best and final offer

BB #2 responds that $70K is their final and best offer

We let them know the other offer was accepted and theirs was declined

 

House #2: On market for $105K

BB #3 offers $85K

We counter at $104K

BB#3 comes up to $90K

We counter at $100K

They come in at $95K final offer

Offer accepted at $95K

 

The BB’s are looking to accumulate properties and are not looking to nit-pick on repairs.  Sure, if something is majorly flawed, they will ask you to fix it and/or cancel their offer.  But the small repair requests that are typically negotiated by owner-occupants aren’t asked for; the BB’s just fix it up themselves.  As stated previously, when the price is agreed upon upfront, the deals typically fall into place easily.

 

To sell or not to sell?  That is the question.  But, for average rental homes, be thankful it is now an option!

 

Brett Furniss is President & Owner of BDF Realty (Charlotte Residential Property Management), the trusted real estate advisor for Charlotte landlords, managing single-family homes, condos, and town homes in the Charlotte-Metro Area.   BDF Realty’s services include property management, home fix-ups, and home sales, including Rent-To-Sell (“When You Need a New Solution to Sell Your Home”).  His newest book is 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!) which is available on-line now.