How Property Management Can Surprisingly Save You Money

 

In this episode of the Not Your Average Investor Show, we speak with Jeff, a JWB client who lives in Maryland. Jeff shares his story about what happens when you develop a long-term relationship with a rental property management company that serves as a strategic partner that helps you achieve passive income cash flow.

Jeff describes himself as a busy guy looking to make his money work hard while being a conservative investor. That’s a big reason why he set a goal to qualify for the JWB Elite program and receive a discount on property management fees equal to $1,700/year! Jeff shares with us how he discovered JWB, how he talked his wife into investing in the JAX market, and why he went all-in to purchase ten rental properties within three years.

How Did He Discover JWB?

Jeff has been working in IT for 20 years in the Washington DC community. He first thought about investing in beach properties near his home to have passive income cash flow coming in. A friend told Jeff about JWB, and he confessed it appeared “a little too promising” when he heard about the value, the rental property management team, and the passive income potential. 

He works hard every day in IT, and he wanted to learn how to get his money to work as hard as he does. “How do I get those high annual returns?” he asked. Jeff did a lot of research about the Jacksonville market, calculating the Return On Investment, home price appreciation, the closing process, cash flow, and more. 

The Challenge of Real Estate Investing? Convincing His Wife!

The hardest part of getting on board was selling the concept of rental property management in Florida and the potential for passive income cash flow to his wife. She works in the government and is fiscally conservative. 

She was concerned about JWB as a property investment company, how investing in Florida real estate would affect their savings account and the home price appreciation. She was worried about hurricanes and floods and wanted to add extra flood insurance just in case something terrible happened. Jeff shared his research with her and talked her into starting a conversation with the JWB team.

Over several phone conversations, the JWB team explained the entire closing process from beginning to end. The whole team impressed Jeff and his wife with their metrics, transparency, and patience as they decided to invest in rental properties. 

Together, Jeff and his wife bought a refurbished property and got good returns, plus two new construction rental properties in 2018. Then, they invested in more new construction when they saw that repairs were minimal, and now they own ten passive income cash flow properties with JWB as the property management company.

What Was It about This Opportunity That Made Them Choose JWB?

A lot of people are like Jeff. They hear about JWB and want to do their research. After speaking at length with JWB about the turnkey rental properties, how the rental property management works, the opportunities that lie within Downtown Jacksonville, and the fast-moving housing inventory, they decided to invest in Jacksonville estate. He and his wife flew to JAX, had lunch with the team, and got a tour of the area. 

After visiting Jacksonville and meeting everyone who would walk them through the closing process, they realized something critical. Retirement account investing in the JAX market is better than in the Washington DC region. The price points in DC are too high to see significant returns. The price points in JAX are very attractive. 

In Jacksonville, Florida, single-family homes are very appealing. The rents are reasonable, the houses are large enough for growing families, and “working with the JWB team was another reward.” He continued, “If I could buy three a year to reach 15 properties to get to where I can sit back, retire, and travel, we can sell a home, take the cash, and live a comfortable lifestyle.”

How Were They Able to Invest in Income-producing Rentals?

Jeff and his wife took some stocks and bonus money and invested those into the JWB turnkey rental properties. The original plan was to purchase three single-family home rental properties per year, and he’s ahead of schedule. What motivated them to buy rentals so quickly? 

With interest rates being so low, it made the investment super easy. Jeff sold his stocks and put the money into those properties because the rates were as low as 2.0 and 2.5 percent.

Those low-interest rates were “making me want to jump in much faster. We wanted to buy new properties and asked about the [new construction] pipeline. The interest rates accelerated our process.”

What Are the Benefits of Owning Ten Properties Through JWB?

Jeff didn’t know that JWB’s 10% management fee would go down after they accumulated five properties. Once he reached that goal, he got to a new, lower level of a 9% management fee. That 1% of savings adds up! “Once we got to 10 properties, we got down to an 8% management fee,” he said. 

Here’s the wow factor: That two percent savings paid the mortgage on one of his smaller properties, which equals one free month’s rent. “Two percent in savings help us save about $3311 per month!” That’s fantastic news, and that is why investors who own ten or more properties with JWB qualify to join the JWB Elite Program!

Don’t miss the benefits of owning properties!

What Is the JWB Elite Program?

JWB likes to be in alignment with our investors’ goals. When you get to 10 properties, that means the rental property management fees drop 2% per month, per property in savings. It becomes a win-win situation. 

JWB wants to reduce management fees as much as possible to help Jeff reinvest his returns. His wife was impressed with the savings, too! It boosted their cash flow, which allows them to invest in more income-producing rentals.

How Did Jeff Decide That This Interest Rate Moment Was Such a Crucial Moment?

The metrics and visuals he uses in the IT industry help him with his investment decisions. When Jeff saw that JWB acted proactively and conservatively with the income stream projections, he felt comfortable moving forward on this decision. For example, a 3.5% interest is good, but 2.5% interest is excellent and creates more ROI.

The first properties Jeff and his wife purchased were at a 5.25% or 5.5% interest rate. Those were reasonable rates back then in 2018! The following properties were 4.25%, then 4%, then 3.13%, then 3% flat. His interest rates kept going down, and he took radical action to build his portfolio as quickly as he could. 

As a result of their quick decision to move forward in purchasing homes while interest rates are low, Jeff and his wife will impact millions of dollars in their portfolio if they hold onto those properties for a long time! Talking with JWB about their long-term strategy and looking at the metrics, Jeff felt comfortable making these purchases.

Is He Concerned about Rising Interest Rates?

Interest rates are going up, yes, but the rents are going up as well. The Jacksonville real estate market will continue to grow with all of these major companies moving into the area.

When Jeff compared real estate investments via websites and Google maps, he knew that Jacksonville, Florida provided a fantastic opportunity for growth. He is glad he decided to move forward. The JWB purchase process for investors is as simple as possible. 

Jeff told the audience, “Pull the trigger now because resources are becoming more scarce, and the interest rates are still low.” The JWB team will walk you through a systematic process from start to finish, so you get all of your questions answered. He added, “You do business with people you know and trust, and JWB builds that long-term relationship.”

Why Does Jeff Prefer to Invest in New Construction Versus Renovated Rentals?

Jeff wanted something new because it’s appealing. The lovely molding on the floor, the latest appliances, and the clean and fresh look all appeal to renters.

The new construction motivates renters to move into those homes quickly. Plus, the houses have new appliances, are under warranty, and have a lower failure rate. He figures in the first 4-5 years, the maintenance costs for new construction will eventually go up. But he expects that the first few years of owning new construction brings a higher ROI.

Refurbished homes have a little higher maintenance costs, but the ROI is still good. If the numbers work, the numbers work, depending on your long-term strategy. Jeff’s strategy is ranch-style homes because there are fewer steps, lower maintenance costs, and has 3-4 bedrooms, 2-car garages, etc. Planning for repairs and missed rents are part of the equation for profitability. 

Whether a property is newly constructed, a renovated property, or a townhome, you can expect 7% – 9% returns from a JWB rental property. We are not guaranteeing these numbers, but we have seen that this is the average over the past 15 years.

Jeff and his wife have been very fortunate through COVID when it comes to maintaining positive cash flow. There have been zero missed rents, and he loves working with his dedicated JWB rental property manager. On Sunday evenings, Jeff compares his stats vs. the JWB stats to see how the rentals perform and if everything is on track.

How Should You Approach the Conversation of Real Estate Investing with a Spouse?

Jeff and his wife traveled to JAX to see the neighborhoods, meet the JWB team, and get a clear picture of what Jacksonville is like in person. After many conversations, plus a terrific lunch with the entire JWB team, his wife was ready to move forward. After all, when you have a happy wife, you have a happy life!

Jeff said what he did was based on his wife’s personality. She is fiscally conservative and does not want to lose money. Jeff showed the metrics, the spreadsheets, the interest rates, and so on to convince his wife that JWB was a safe property management company to invest their money in. Jeff explained, “My friends did the same for me.” 

It could take time to walk your spouse through the multiple steps to acquire the first rental property. He’s all about transparency and honesty. He needs to be trustworthy to keep his wife happy and create a long-term relationship with the JWB team. When in doubt, get both spouses on the call with the JWB team to address all questions and issues.

If there are decision-makers who are not on the phone call, the JWB team goes out of our way to include everyone in the decision-making process. If there are multiple decision-makers, we try to have as much transparency as possible and create a supportive environment where all decision-makers feel safe.

Do you invest in real estate with your spouse?

How Should You Approach the Conversation with Other Investors Who Are Nervous about Real Estate in Jacksonville?

Now, Jeff and his wife get on the phone with uncertain investors and send them to JWB for a discussion. People sometimes believe that Jeff is a paid actor or a paid client, but he’s not. Jeff and his wife have genuinely had a great experience with JWB. 

It’s only been a 3-year journey, going on four years, and he knows JWB is full of people who want what is best for their clients. Every investor should want love, support, and a long-term relationship with their property management company. Where else are you going to have these types of relationships besides JWB?

Want to Join the JWB Elite Program?

If you are thinking about investing with JWB, tune into our Not Your Average Investor show on Tuesdays and our Property Of The Week on Thursdays to feel more comfortable about our approach. Join our Facebook community to see our shows live stream at JWB Rental Property Investing.

You can also go to www.jwbinventory.com to see what properties are currently available. We encourage you to contact the JWB team for a consultation to find out how our property management team can be of service in providing passive income cash flow. We will walk you through the numbers to show you what your Return On Investment will be. Our metrics will show you all the information and factors related to your property valuation.

Lastly, if you currently own five or more rental properties in Jacksonville and you would like us to manage those properties for you, we will be happy to discuss your situation. If you can join our JWB Elite Program and save one to two percent on rental property management fees, that could bring significant savings and increased ROI. Contact us today for a consultation at https://www.jwbrealestatecapital.com/.

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Go to www.jwbpassiveguide.com

Now that you’ve gotten an update on the current real estate market, you may have questions about how rental property can support you and your family. Schedule some time to chat with our team of experts about how we can build and implement your plan for acquiring rental properties, click here to set up a strategy session call.

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To Your Success,

Gregg Cohen

By Gregg Cohen

I am a co-founder at JWB Real Estate Capital, and I love to talk about investing in rental properties! You’ll often find me here contributing to our blog and in our Facebook group connecting with the community & sharing insights.

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