In this episode of the Creating Wealth podcast, Jason Hartman discussed current events in cryptocurrency, the upcoming Northeast event in May, karma in everyday life, and the social credit scoring in China.
He then spoke with Dana Dunford, CEO of Hemlane, about how her company’s software can help investors with the hybrid management model that Hartman advocates. Dunford covered the different features Hemlane offers, including a portal to screen tenants, schedule showings, advertise properties, connect with professionals to handle lease-ups and tenant turns, and more.
If you’re interested in foregoing property managers to get into self-management, the information in today’s show includes information about a useful tool for consideration.
Sometimes, Listen to Fate
Hartman begins the episode by mentioning that he just returned from Austin, TX on a house-hunting trip. He explains that discouragement happens, and that if you’re looking for properties and you lose out, you are not alone. He states that he found a house in Austin, as he would like to move every few years and try out new cities.
He notes that he found a property that he liked, but it had three offers on it, and he lost out. Believing in fate is okay sometimes, Hartman says. The saying goes, “Good things come to those who wait, but only things leftover by those who hustle.”
Sometimes, things are not meant to be, Hartman explains, and it’s okay to let go a little and not push so hard. Maybe let fate have its own way once in a while. He explains that Austin is a nice city, but that it’s kind of shabby at the same time. The roads are not good and some of the houses are not in the best condition.
Hartman mentions that today’s show should be exciting, as it is taking one more step in the direction of control. Commandment three states, “thou shalt maintain control of our investments and financial future”.
Coming up is an interview with the founder of a company with some useful offerings. Hartman mentions that these platforms are never quite the whole package, but investors do need some useful tools.
Upcoming Event
Hartman mentions that he and his team learn a lot from the clients and listeners, and he appreciates your feedback. This is a fantastic mastermind alliance.
He notes that the Northeastern event is coming up in May, and though he has not inked a hotel deal yet, he is close. The event will either be in Philadelphia or Washington DC, and there’s an option at www.jasonhartman.com to register early if you click on the “events” section. Some people have already registered.
Good News for Karma
Hartman mentions an interesting story that he read about karma. Often, he tries to hold bad actors in the business accountable, and many people wonder how bad people are able to do well in the world. In this story in the news, a cold case was solved when a rapist got into a dispute with his neighbor, peed in the neighbor’s plant, and the neighbor had a DNA test performed. The DNA in the plant matched several decades-old rape crimes. The assailant is now in jail, and justice has been served.
The Banning of Cryptocurrency Ads
Hartman states that cryptocurrency is in the news. Facebook has now banned bitcoin and cryptocurrency advertisements, and so has Google. They are not allowing any cryptocurrency ads on their networks. Twitter is moving toward banning a wide range of cryptocurrency ads as well.
Hartman wonders if these bans are due to pressure from the central banks and the Rothschild family, or if the bans are independent. It’s difficult to tell for sure. He reminds listeners not to work against the Fed. It’s important to align our interests with theirs as investors. People who are gambling with cryptocurrency are getting slammed.
China’s Social Credit Scores
The country of China is now participating in a frightening, Big Brother-type thing called social credit profiling. Chinese citizens who do bad things will have dings placed on their social credit scores. If they’re in debt or park their car or bike in the wrong place, they will receive a knock to their social credit score. With low scores, they will be prohibited from doing all kinds of things, like riding on trains or planes.
Hartman states that one would think that people would want to act decently to be a part of society, but that ship sailed decades ago. Now, there’s this system.
He points out that the Orwellian future that people have predicted has not come directly from the government, though some parts have. He mentions that the NSA is monitoring the podcast. Google, Facebook, and others are more along these lines with social credit scoring.
Control Over Investments
Hartman mentions the idea of being one step closer to more control over investments. There are ways to go about self property management that he believes are with considering. Self-management is not perfect, but it might be the right move for some people.
He reminds listeners again that they can leave feedback or ask questions of him at www.jasonhartman.com/ask as well as registering for early bird pricing for the Northeast event at www.jasonhartman.com/events.
Before getting into the interview, Hartman presents a quote of the day.
“Come to the edge,” he said.
“We can’t, we’re afraid!” they responded.
“Come to the edge,” he said.
“We can’t, we will fall!” they responded.
“Come to the edge,” he said.
And so they came.
And he pushed them.
And they flew.”
Long-Distance and Self Property Management Help
Dana Dunford, CEO of Hemlane joins the podcast to explain her product designed to help with self property management. She is joining out of San Francisco to describe what Hemlane is.
She states that it is a property management platform where investors can be as hands-on or hands-off with their properties as they’d like. It works with remote owners and their investments. She explains that investors might have properties in several different places, and if they’d like to manage from a distance, Hemlane can assist with finding work from local agents and property managers when needed. It’s good for those who want something in the middle of full-service and total self-management.
Hartman explains that he was pleasantly amazed that he could go about self property management for his properties. He notes that he had a property he’d never seen in San Antonio, and it was rented by a tenant he’d never met. His property manager got out of the business, and Hartman states that he never got around to hiring another manager. Around the first of the month, the tenant sent him a check with a note, and he went ahead self-managing by default. He mentions that it has worked out well.
In the past, he had local properties and managed them with the old-style of local investing, but there is a whole country of opportunities available. He explains that he never hired managers when all of his properties were local. He notes that truly self-managing is hard, and that he often needs an agent or property manager to perform ala carte services, like lease-ups or tenant turns.
He mentions that many industries are unbundling their services. The traditional approach has been to hire a property manager and allow them to take care of everything. Rent collection is often the easiest part of self-managing, but when it comes to lease-ups, local help might be needed.
Hemlane: A Brief Overlook
Dunford explains that most of her clients are like Hartman, knowing the management portion that they’re able to do on their own. Sometimes the investor needs help on lease-ups, or once a year they’ll need to have a manager inspect the property. With the leasing, no matter how many times you hear that you can have a robot show the property or place a lockbox on the door, Dunford states that she recommends working with local agents at this point. She notices as a real estate investor, transparency is important.
She states that Hemlane has a full leasing platform that advertises properties on over forty renting websites, responds to inquiries, sets up showings, and connects investors with local real estate professionals to make sure everything needed is done. These professionals will show properties, then transfer management back to the investor. Hemlane is a one-stop place to get everything done and it takes a good deal of the burden off the investor.
Hartman explains that he loves this idea and that it’s exactly what the market needs. While an investor can self-manage without help, there might be better services available to them. He states that his skepticism is the price, as one can hire a property manager for not much more than what the standard client is paying for Hemlane services.
He notes that in this platform, the property manager’s fee is not what it seems. He has learned that for some property managers, their fee is X amount, but they will find ways to nickel and dime the owner. He mentions that maybe this is the key, and with Hemlane, the price might truly be as it seems.
Generating More Revenue and Net Income
Dunford explains that what owners will find with Hemlane is that they’ll generate more revenue, and their net income will increase. She states that her platform does not have property managers collecting late fees. Instead, a letter is sent to the tenant to remind them that they’re responsible for the fee. There are also no transaction fees or upcharges. The $30 to get started is to view one property, and it can reduce as you add more properties to the system.
She states that on average, her clients are paying 3% of rents for this holistic product that includes the handling of maintenance calls and initiation of service professionals. With the time spent on that, Dunford explains that the client saves a lot of money. What they end up realizing is that it’s more hands-off, but more transparency and decision-making on their part.
Hartman states that for many years he has said that there is a conflict of interest in many aspects of life. There is an inherent conflict of interest in the way a property manager has to relate to a whole job. Yes, they technically represent the owner but may very well become predatory on the tenant because they’re allowed to keep the late fees. Tenants might become dissatisfied with the property manager, and it’s important to remember that the tenant is the customer.
He mentions that a lot of people forget this and treat their tenants like big babies. The tenant is the person who pays the rent, so it’s important to keep a good relationship with them, and a lot of property managers do not have the incentive to keep the relationship in good standing.
Transparency Upfront
Dunford agrees and states that this is why transparency upfront isn’t only important for the owners, but for the tenants. Having the tenant aware of what’s expected in terms of lease agreements and late fees upfront makes the situation more satisfying for both parties.
She also mentions that there is the ability to pay for only the Hemlane software to handle maintenance calls. The tenant is the customer, so there has to be a way to answer maintenance calls quickly. Hemlane also tracks maintenance and has alerts for completed work. If the tenant is satisfied, they will stay longer in a property.
When asked about how the pricing works, Dunford explains that the prices start at $30 per month to use the software, and there is only a $3 per month charge for each additional unit. This provides everything: the leasing software, showing schedules, follow-ups, lease documents, inspections, everything on the software side is included.
If you’d like Hemlane to handle the day to day and maintenance needs, they have an upgraded package for $40 per property per month. This package connects with local agents and managers. The savings is in the leasing, Dunford says. Because the software performs so much of the leasing, there are property managers who will charge per showing or at only 25% of one month’s rent to perform all of the property showings.
At the end of the day, the software is collecting applications and the owner is preparing the lease. Because these services are unbundled, you’re saving money. She notes that Hemlane does not price set, so you can either choose a cheaper or more expensive property manager. They determine their own prices.
The Different Hemlane Packages
In an effort to clarify the pricing, Hartman asks if the prices quoted are in annual billings, and if the $30 per month is billed annually, what is the $3 extra?
Dunford explains that the price is $3 per unit per month, and an owner needs to have a minimum of $30 in services, because Hemlane provides unlimited support and onboarding. If an owner only has three properties, they would only pay $30 per month because they’re covered on the basic platform. $30 covers up to ten properties when an owner pays annually. The next step involves having the call center, taking phone calls, managing maintenance, and providing access to managers and agents.
This is the $40 per property per month plan. It’s cheap when you consider leasing costs, Dunford says. Alternatively, if an owner wants to access agents or property managers on their own, they’re likely paying one month’s rent. If they’re getting $1,200 on a property, they might be paying a manager 50% to 100% of that for leasing costs.
Tenant Turns and Lease-Ups
Dunford states that a full lease-up with a property manager, they would tell you their price and that’s what you’d pay as an owner. With Hemlane, the property manager does the showings, inspections, and anything you need done ala carte. They can cut their fees in half because, thanks to Hemlane’s software, they’re doing less work. In the grand scheme of things, you’re saving money because the software is performing many of the needed tasks.
A full lease-up with a prop man is they will tell you the price they want. You’d be paying all that. In the case of Hemlane, they do the showings, inspections, anything you need ala carte. They can cut their fees in half because they’re doing less work. Hemlane covers a lot of it. In the grand scheme of things, you’re saving money because the software is doing most of the work.
She also states that because every manager and agent understands how Hemlane works, they’re going to put their customers into two different sections. There are people who want full-service work and don’t want to have to hear about the property unless needed. That market is always going to be around.
The property managers want to offer services to open opportunities for self-managers. Dunford states that her philosophy has never been trying to cut prices to compete with full-service work. Hemlane incentivizes the self-managers to work with property managers when needed.
Hartman explains that what he tells people now is to hire a real estate agent or property manager and have their duties outlined as meeting the tenants, explaining the process, conducting walkthroughs when the tenant leaves, sending photos of the property to the owner, finding and screening a tenant, helping pick one out, performing walkthroughs with the new tenant, drawing up a lease, and handling maintenance.
Geographical Limitations
Dunford mentions that there are geographical limitations to Hemlane at this time, as they’ve only got property managers and real estate agents networked in certain cities. She notes that if there aren’t any available in the city that an owner needs, they can always bring in their own professionals.
In closing, she states that it’s great to be on the show and she hopes to help real estate investors add to their success.
