109: Profitable Property Management with Jim Murray
Meet Jim Murray, a twisted individual crazy enough to actually enjoy property management. No, it’s true.
His journey starts back in 2012 when he purchased his first House Hack, a four-unit property in Rhode Island. At the time, he was working full time for Fidelity Investments and was self-managing his property. Since then, he has jumped around to do some wholesaling, some flipping, to where he is today—a full time property manager and real estate investor.
The unfulfilment with Corporate America had been building for some time since Jim made his first investment and one bad review too many, he did what most folks could only dream of and started his own company.
So what makes Jim crazy enough to do the one thing most investors dread as it pertains to real estate? Simple, he says. He’s a systems-oriented guy who enjoys helping people succeed.
Up to date, Jim manages over 600 rental units, owns and operates Lyon Property Management, and hosts The Cash Flow Kings Podcast. Going forward, he plans to continue to scale up his personal portfolio, transition more into the multi-family realm, and help more people grow their wealth.
Our takeaways from our conversation with Jim: 1) Systems is the name of the game. Invest in technology that increases profitability. By having the right systems & processes in place, you attract and get to serve the right clients. And fortunately for us, business technology has never been easier to acquire and implement. So whether you self-manage or manage other people’s units, there’s technology out there that exists to help you out. (Find suggestion list down below.) However, understand this: Technology is meant to enhance, not replace. If you fail to develop & implement the proper processes first, investing in technology will do you or your business no good, and will probably only run you and your business dry of cash flow.
2) Fire bad clients. When starting out, you’ll be tempted to accept any and all business that comes your way. And that’s not really your fault. You won’t know what separates a good client from a bad one. But once you build your business to a respectable size, that’s when it’s time to visit our good friend, Pareto (80/20 Rule). Scale your respectable business into a sustainable one. Get rid of problem clients and double down your efforts on the good ones. Good clients (tenants, customers, etc.) are worth keeping around if you want to operate a sustainable business. But more importantly, bad clients are worth getting rid of in order to keep the good ones around.
3) Set expectations and practice accountability. This is the culture that Jim cultivates within his own company that has allowed him to make a business and career in taking over distressed properties. From the very beginning, let tenants (or clients) know what you are all about and what you will do for them. You must make your tenants know it is a privilege to rent from you, and at the same time, you must treat it as such—a privilege. That means holding yourself, your tenants, and all other parties up to the standard that you set. And when the bar is not met, someone needs to be held accountable for their actions. In doing this, you will weed out bad tenants and keep the good ones happy.
4) Image influences perception. As Jim explains in his story, when talking to contractors while wearing scrappy jeans and work boots as opposed to a suit and tie, he was quoted for a lower price for the same work being done. And it’s understandable as this is a natural human bias. So why not use this bias to your advantage? Here’s the point: It’s not always best to look like you’re made of money. While this goes without saying to look appropriate, hygienic, and professional, you don’t always need to look super polished. Rather, fit the profession you’re playing. While there are times that call for formal attire, wearing so in casual settings tends to make others perceive you as willing to pay more for something or are just flat out bougie.
If Jim could go back and talk to his 16 year old self, he’d tell him, “Buy more real estate in 2009.” In other words, take advantage of the real estate cycles and buy real estate sooner!
An unexpected benefit of real estate investing, Jim said, was the opportunity to live with time, location, and financial freedom.
A piece of advice Jim would tell his friends looking to get started in real estate would be to “Listen to other people.” Use the free content and information available to you online, whether it be other real estate & business podcasts, websites like BiggerPockets, or the thousands of educational real estate videos on YouTube.
Jim recommends using zInspector to help you create and store tenant condition statements. This comes in handy during any tenant-related litigation, as well as have as an additional layer of legal protection for your business.
For high-end scaled operations: AppFolio; Buildium; Rent Manager.
For low-end (DIY-level) scaled operations: Cozy; Avail; Zillow Rental Manager.
For rental unit showings: Tenant Turner; Show Mojo; Rently.
Jim recommends reading The Wealthy Gardener: Lessons on Prosperity Between Father and Son by John Soforic to help you grasp important financial concepts found in many of the popular financial/business books around.
The Pumpkin Plan: A Simple Strategy to Grow a Remarkable Business in Any Field by Mike Michalowicz.
The Richest Man in Babylon by George Samuel Clason.
If you’d like to get in touch with Jim, follow him on Instagram @thecashflowkings
Thank you to everyone that has reached out to us to connect them with our trusted real estate agents in their area! And congratulations to those who have even closed deals using our referrals! For those that didn’t know, we can help connect you with real estate investor friendly agents in your area to help you get started investing in real estate. We recently made some changes to our website that we believe will better suit you in your real estate investing needs. For more information, visit www.millennial-realestate.com and head over to the “Start Investing” Tab. Best wishes and see you in the next one!