Josh Cantwell: So, hey guys, welcome back to Accelerated Investor. And today, I have a great episode and a great resource for all of you guys. My guest is a gentleman named Eli Secor. He founded a website called LandlordGurus.com. And there, they provide expert advice and resources to independent landlords like him and his family and his business partner, Chris Lee. They manage their own portfolios for the better part of 20 years and they come from real estate investing families. They run it like a family office. They run it like kind of a mom-and-pop type of shop.

But what they’ve done is they’ve taken their journey and all the things that they’ve learned of being landlords for the last 20 years. And they put it on to their main website, LandlordGurus.com. Over the last 20 years, they bought, they flipped, they fixed, they’ve held, mostly held their properties long term.

And today, Eli and I are going to talk about, number one, the current status of the market and some of the challenges for landlords of trading one landlord property for another, trading something with a low-interest rate for a higher interest rate, trading something with a low-interest rate for a higher interest rate, doing a 1031 exchange. We’re also going to talk about the challenge of being profitable with your rentals, specifically how to overcome recurring maintenance tickets, and lastly, how to select your tenants so they stay long-term.

And these are some of the different topics that they write about and video about on their website at LandlordGurus.com. So, I’m excited to have Eli Secor from Landlord Gurus on our show today. Here we go.

[INTERVIEW]

Josh Cantwell: So, hey, Eli, welcome to the show. I’m excited to talk with you about your website, LandlordGurus.com. I’m excited to talk to you about some of the do’s and don’ts that you’ve seen with managing buildings. But thanks for carving out a few minutes for us today and jumping on the show with us.

Eli Secor: Absolutely, Josh. A pleasure to be here. And thanks for having me.

Josh Cantwell: Yeah, I’m on your website now. There’s all kinds of tools, landlord kits, courses, expert advice around managing properties. You guys have managed your own portfolios for over 20 years.

And so, one of the things I love to ask people because I love to have that entrepreneurial perspective when I talk to a guest and kind of learn a little bit more about what they’re up to today. So, if you look at your passion projects for the summer, as we record this, it’s around the first of June, what are you passionate for? What are you working on right now that you’re excited about, that you’re passionate for, for the rest of this year?

Eli Secor: Yeah. So, this is still in the works, but I am looking right now at a 1031 exchange that my first rental property is in Portland, Oregon, it’s a triplex. And I bought it in very rough condition, rehabbed it, and have been operating it for almost 20 years now. And it’s been a great property, but I’m looking for a couple of different things. My goals have changed a little bit, so I’m looking at 1031 exchange into a property up here in Washington where I am. Maybe something with a little bit of Vrbo or Airbnb income and a little bit of personal benefit to a place I’d like to spend. So, I’m excited about that idea, but we still got to look at. This is a weird market to be selling and buying, and so, I got to figure out.

Josh Cantwell: Yeah, when you say that, when you say it’s a weird market that you’re selling and buying in, like a lot of people are like, “What if I sell great, make a bunch of profit to a 1031 exchange?” But the challenge is you’re walking into probably an elevated price on your next purchase and higher interest rates, right? So, are those the things that you’re considering?

Eli Secor: Yeah, absolutely. And I’m trying to get a handle on how the value is in terms of where it had been, where it could be on the sale end. So, it looks pretty good right now. I mean, especially having bought the property so long ago that we have quite a bit of equity. We have to buy in the same market or at least in the same time frame. We’re going from the city, where all cities on the West Coast at least are having issues with petty crime and just kind of livability issues. So, that’s a factor and why I’m thinking about moving. And how much has my value taken a hit because of those things? Do I wait for things to turn around? And then I’m looking at buying a little bit more rural, kind of a vacation destination type area. So those are different animals. And I got to look at what the situation is on both ends.

Josh Cantwell: Yeah. And the affordability, I don’t know if it’s going to change much because we still have a major supply-demand problem, right? There’s just no supply. There’s a lot of sellers who are in the exact same situation as you. And my friend Daren Blomquist is the VP of Market Economics at Auction.com and he comes on the show once a quarter. And Daren and I talk a lot about the state of the market.

And it’s interesting, like now the last two months in a row, property values have gone up across the country and there’s nobody seeing this big crack in the market because a lot of sellers are just waiting this out because they don’t want to trade. Maybe they refied three years ago and they got a 3% interest rate. You got to sell. You get a ton of equity out of it, but at the buy at an elevated price, and now it’s a 6% mortgage, right? So, people are just sitting around waiting.

Eli Secor: Yeah, yeah. It feels like we haven’t come to that point where there’s downward pressure on pricing for a long time now. And I think you’re absolutely right. It’s about insufficient supply for the demand. Seattle is currently the fastest-growing big city in the country. So, even though there are some kind of hostile landlord-tenant laws here, our properties manage to function very nicely here. And I don’t see that changing. We have to be careful about how we do things, but there’s a lot of demand. And we try to be fair, offer a good product. And I don’t see being in a bad situation any time soon.

Josh Cantwell: Yeah. So, when you look at your portfolio, you manage your own portfolio locally, you manage your own portfolio virtually. And in other cities, like you said, in Portland versus where you live, you’ve kind of created this list, and some of this is on your website, LandlordGurus.com, some of the do’s and don’ts of owning properties, being a landlord. And what I love to hear is okay, a lot of our audience is pivoting from owning, could be five units to 100 units, maybe 200 units of residential, and they want to manage that and have that kind of be taken care of for them so that they can move on to buying larger, larger, larger buildings, larger complexes.

So, when you and I were talking before the show, we talked about these really two categories we think that have the most leverage, the most ability to either really make your portfolio churn out a lot of profit or have your portfolio be overly expensive and actually lose money. You mentioned those two categories, Eli. So, let’s talk through those because I think what a lot of our audience is trying to do is really dial in. There are maybe smaller units, the residential portfolios so that they don’t have to think about it anymore and make sure now they have the freedom and the free time to scale up into larger, larger buildings.

You mentioned tenants, you mentioned maintenance. So, let’s talk about some of those do’s and don’ts. Maybe let’s talk about maintenance first, because that’s one area that I’m always looking to improve in because I’m an idiot when it comes to the cost of materials, the cost of labor, some of the different fixes that are out there. And I just went through a three-hour meeting with my team. I literally just got done with that meeting to jump on this podcast with you. And that all we did was comb through our P&Ls and comb through 19 different P&Ls, 19 different complexes, and looking at our expenses. So, what are some of the things that you think move the lever when it comes to maintenance when it comes to managing that portfolio?

Eli Secor: So, this is not easy to do. But I think the number one thing that makes a difference in my experience is to find a way to effectively triage maintenance requests. And capital improvement is entirely another question, but I primarily self-manage. For the last two years, I’ve had a property manager in Portland and my difficulty there is where I’ve got a lot of experience with not being able to figure out what might be the problem with a dishwasher or a garbage disposal or various things that are going on.

I’ve got a lot of experience in construction, so I have an advantage there. That’s one of my prime advantages. So, to find a way to upfront figure out what’s likely to be the best solution, and maybe more importantly, the best vendor to use, so if you can’t do it yourself, a good handy person, and it may even be worth pounding the pavement in the market where you’re owning, even with larger buildings, to find a resource that is really useful. You can call on, even if you have a property manager that you can kind of direct them to, they’re probably going to appreciate it because their lives are hard-funded vendors in this marketplace too.

So, somebody who can say, either over the phone, given some photos, that’s one of the things that our property management software does nicely as they allow a tenant to upload a request and some photos or video of what’s going on. If I can get my eyeballs on something, I can usually figure something out and maybe not call the appliance repair person, maybe just say get a new dishwasher in there, as an example. But if you can get somebody who’s reasonably priced and just good to work with, who can go and take a look or think about things from a maintenance perspective, you keep yourself from wasting a lot of money because just sending a vendor often, it’s a waste of money.

Josh Cantwell: Yeah. So, triaging those maintenance requests, what you’re talking about is kind of empowering your residents to submit a maintenance ticket, upload photos so you don’t have to make a run out there. You’ll get those video and photo requests or video of a leak or some sort of break and then being able to decide like, who do I want to triage this out to without you having to go, and so, really encouraging your residents to onboard the software, use the software, and submit payment, submit maintenance tickets online. It really starts with that, right?

Eli Secor: Yeah, absolutely. And my experience is that tenants are usually pretty helpful. They’re willing to send a photo. Being responsive to tenants is incredibly important because they’re willing to help you if you’re responsive. And I keep a lot of tenants because they contact me. I’m the place they go and they’re not putting their requests into the ether or into the machine that is impersonal and ineffective.

So, yeah, that’s the first is to ask them about what’s going on, tell me about what cycle you’re running on the dishwasher or on appliances. There’s lots of other things. But tell me about what’s going on, take some pictures, send them to me. And then even if I can’t figure it out, maybe I send it on to the handy person. And if I can get not to harp on it, but if I can find a handy person who can deal with– they can deal with most of the repairs in a rental and they’re always going to be less expensive than a plumber or somebody who only does such and such a service and is going to charge 150 bucks just to get there. So, yeah, anyway, trying to narrow down what’s going on so you don’t go overboard and spend a bunch of extra money.

Josh Cantwell: Yeah, absolutely. So, telecommunication is huge, giving them some way to submit photos and some commentary on what the problem is, cut down, and then using a handyman versus a specialist is probably all different ways to maintain those tenants keep a higher occupancy, also cut down on the time and effort that you have to put into it.

Eli Secor: Oh, for sure. That’s what I am all about is to do a good job managing my rentals without keeping myself up at night or spending my entire life doing it. I got other things I’m interested in doing. But let me back up just a sec, Josh. I do advocate having a rooter, a plumber, and an electrician with who you have an established relationship as well because a lot of those things, you don’t want to take your risk, your chances on. You can damage your property, you can put tenants out of their units if you’re not careful. Flooding and fires are not good things. So, if it calls for a professional, definitely use them. But if you’re talking about unclogging a sink trapper, removing garbage disposal, which I do as a matter, of course, a handy person can do that type of thing.

Josh Cantwell: Yeah, absolutely. How about the other one you mentioned about tenants, selecting the right tenants? So, we see this all the time in our apartment portfolio. We have certain requirements. They have to have like no felonies, no evictions. They have to have income. That’s at least three times the rent, a stable job and reasonable credit over 600, right? So, all these types of things, but people still get evicted, people still move out, people still break leases all the time. And we have a pretty substantial portfolio. So, we’re dealing with move-outs and evictions all the time.

But the good news is, is that if we turn a unit and it’s a full turn, it’s in really good condition, somebody moves out, then it’s just a make-ready. We could basically repaint the unit. Sometimes, it doesn’t need to be painted. We can just touch it up. We do a final clean and we release it right away, right? So, having good tenants is huge. What kind of things do you recommend for screening tenants or bringing tenants in that kind of helps you keep people long term?

Eli Secor: Yeah, you nailed a lot of it right there. So, being careful in selection is imperative. It impacts every aspect of the profitability and just the process of managing your property to get good tenants. So, first and foremost, I would say make sure to screen your tenants. An amazing number of people, I think, just don’t do it. And for that matter, they don’t really use strong lease documents. I mean, there’s being kind of a hobby landlord, but you still have to be careful.

So, the process that I use is to advertise carefully, have a descriptive kind of personal but targeted set of sales points. What’s the neighborhood like? What are the amenities that you’ve got here? In my case, I say, it is a family-run building. People do like that. And take good photos so that gets you as many leads as you can. Syndicate your advertisement across as many sites as you can use. We write about Avail and TenantCloud and TurboTenant, all kinds of property management softwares.

And one beauty is that they syndicate your advertisement across Zillow, PadMapper, and Zumper and just get it out there and deal with everybody as they come through in the same way. Always ask them prescreening questions. For me, it’s do you smoke in any form? Do you have pets? Do you make the income threshold? I use two and a half, and then I say after significant debts, or you can use a debt-to-income ratio. And when do you want to move? Because that often, I get down the road with somebody and then they’ll say, “Well, I want to move in August.” So, that narrows people down because they know kind of some things that you’re looking for. And sometimes they don’t take the trouble even to respond and that narrows things down.

Josh Cantwell: So, marketing to me is huge. Being on all the websites is huge. I’m surprised by how many people are just reliant on Apartments.com or Facebook Marketplace. Those are the only two things that they do. And people are finding units on all those other different websites that you mentioned. It’s important to kind of syndicate those listings out and update them regularly.

But Facebook Marketplace is a very powerful place to find residents. We find hundreds and hundreds of residents per year for our portfolio of Facebook marketplace for free. But the residents don’t want to be surprised, they don’t want to be surprised by seeing one set of photos online, and then they show up and see something different, right? That’ll get you some bad reviews and some bad reputations if you do that. So, the photos online have to match that unit for sure.

Eli Secor: Videos are great. I’m just starting to implement that. And different platforms allow you to do different things in terms of getting videos up on the listings. But at least you can put a link to a YouTube tour as well. And doing all these steps ahead of time, getting people to know what they’re looking at, setting expectations, some of the things that you mentioned about the criteria. In Seattle, we’re required to tell everybody what the criteria for acceptance is. But it’s good practice too. Here’s the income ratio. We need to be able to contact prior references. That’s something I feel really strongly about as well, is you get a feel for how your prospective tenants have dealt with other people. And even if you don’t get anything real concrete, you get a feel for it when you’ve contacted people that they’ve dealt with.

So, yeah, and all these initial steps kind of narrow down so that you’re only spending your time and these people are only spending their time where it’s really going to be a fit. And they’ve seen what they’re going to get. They know what you’re looking for and you show it, either video or in person and it saves a lot of time.

Josh Cantwell: Oh, yeah. Yeah, I say marketing is sales in print or in video, right? There’s a tremendous amount that people can see from their homes. I think this is one of the good things about COVID is that people got used to sharing videos, sharing marketing, looking at TikTok, looking at YouTube, looking at videos, getting things online because they wanted the interaction to be minimal, right? The face-to-face interaction is minimal.

People were still moving in and out of apartments all the time during COVID. I mean, sometimes they were actually being taken out of body bags. That actually happened to us many times. But other times, it was they actually were moving in and moving out and you wanted to keep the contact to an absolute minimum.

And so, today, now people are used to that. They’re used to that kind of interaction. So, TikTok videos, YouTube videos, kind of sizzle reels, pictures, you can sell a unit pretty fast that way. So, when somebody does show up, they’re already predisposed, predisposition, then kind of ready to lease the unit. It’s like they just want to show up one time to check the box that the unit is real so they can actually schedule the move, right? You can do so much of the stuff online, especially if you’re doing it virtually. So, amazing, amazing stuff, Eli.

So, tell us a little bit more about LandlordGurus.com. You guys have this site together. There’s a lot of content on it from landlord courses to the ultimate landlord toolkit, expert advice around the best online rental payment services, how to advertise your property the right way, how to screen tenants, a lot of stuff on this website. So, if people go, what are they going to find?

Eli Secor: Yeah, so LandlordGurus.com is a partnership between a long-time friend of mine, Chris, and myself, and we have another partner who does technology for us. And Chris and I are in a very similar situation. We have kind of small portfolios of family-owned property. And we just ended up asking each other about how we were dealing with different situations on the ground, the reality. So, we decided we put together LandlordGurus.com to share our experience, to research things that we thought we could do better, to find tools. A lot of what we do is to write about property management software products, which do a full range of services up to some of them incorporate options to have maintenance dispatch and even lease up services, sometimes virtual touring.

But what it does is different from a traditional property management service is it gives you visibility into what’s going on. You can pick and choose what you want to do and you can see what’s going on. So, anyway, we write about these types of services. We write about topical subjects like pets and rentals. Can you make more money? Are you putting pets in rentals? Here are the rules about service and emotional support animals. We write about maintenance. So, we really just try to add value to talk to the audience of independent landlords and help them do their job more profitably and more easily. And we just continue to try to address the subjects that come up and provide good insight.

Josh Cantwell: Yeah, I love it. I mean, wealth building happens by buying real estate and waiting, waiting and waiting and waiting until your loan is paid down and the property appreciates. But along the way, there’s inevitably some things that pop up. So, thanks for putting this website together. This is fantastic stuff, Eli.

My audience, go to LandlordGurus.com to grab some of their landlord tool kits and read some of their different articles. You can opt-in on their website to be notified of new articles and tips and advice from Chris and from his team and from Eli. So, listen, Eli, thanks for carving out a few minutes for us on Accelerated Investor today.

Eli Secor: My pleasure, Josh. Thanks for having me.

[CLOSING]

Josh Cantwell: So, hey, guys, there you have it. Hope you enjoyed that episode. Check out LandlordGurus.com. If you enjoyed this episode, don’t forget to subscribe, like, rate, review. And we’ll see you on the next episode of Accelerated Investor.