7-Navigating Multifamily Property Management with Steve Stasiuk of Stonelink Property Management

Kamil Sarji, sits down with Steve Stasiuk from Stonelink Property Management to delve into the complexities of managing multifamily properties. This episode is a must-listen for multifamily home buyers and investors who are eager to understand the realities and challenges of property management.

Steve, an expert in residential and commercial property management across Rhode Island and Southeast Massachusetts, shares his invaluable insights on what it takes to be a successful landlord. From the day-to-day management of properties to handling rent collection and navigating the intricate legal landscape of tenant evictions, Steve provides a comprehensive overview that will help new landlords set realistic expectations and avoid common pitfalls.

Highlights of this episode include:

• The importance of due diligence before purchasing a multifamily property.
• Key factors to consider when choosing a property management company.
• The psychological and logistical challenges of tenant relations.
• Strategies for optimizing rental income and property performance.
• Legal steps and processes involved in evicting non-paying tenants.

Whether you're a first-time investor or a seasoned property owner, this episode offers practical advice and expert tips to help you manage your investments more effectively. Tune in to learn from one of the best in the business and gain the confidence to make informed decisions in your real estate journey.

Don't miss out on this informative conversation that sheds light on the true demands of property management and helps you prepare for the road ahead. Listen now to Episode 7 of "Just 2 Minutes"!

Whether you're a seasoned agent looking to stay ahead, a newcomer eager to learn, or a client seeking reliable real estate advice, "Just 2 Minutes" offers a wealth of information in a convenient and enjoyable format. Join us as we explore tips, tricks, and insights from industry leaders and professionals that can help you navigate the dynamic world of real estate.

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Chapters

• 0:45 Just 2 Minutes Questions
• 2:46 Interview Questions

Transcript

0:00

All right. Welcome everybody. I'm Kamil Sargi, the broker. I'll go to a realty and show just two minutes. I have Steve here. All right. Want to introduce yourself? Yep. Steve Stasek with Stonelink property management. We provide residential and commercial property management throughout Rhode Island and Southeast Massachusetts. All right. So this is Steve's first time with just two minutes. It's me asking you random questions for two minutes and then just going to answer them and let me get two minutes. After that, we can talk about the industry. Today's topic. We're going to talk about landlords and tenants, new landlords, fresh, brand new. So with that said, my time right here, you could see that. Yo, I got it. Yeah. I liked the two minute drip. Okay, cool. All right. And, um, have you ever touched a kangaroo? Uh, no, no, I don't think I have. I've seen them. Okay. I've never touched one. Would you ever have one as a pet? Oh, no. No, okay. How much do you think a Lamborghini 19, 2019 Lamborghini Huracan performance would cost? 175. Am I wrong? It's like 230. Um. If you were to do, um, if you were to do any job in the world for one day, what would it be? It can't be your own. Yeah. And it can't be a car or a job. Okay, um. Um, all right, what is your favorite exercise? Oh, uh, surfing. I'm gonna go with surfing. I mean, like, if you had to weight Exercise is driving right past the gym. Oh my gosh, oh my gosh. Okay, have you ever, uh, crushed a can? Yes, absolutely. Would you like to do it? Never, no. Not in anger. Just fun. Just fun, okay. Um, have you ever, uh, I've been angry and like threw a can, blew it up. Uh, I know, but I've done it for sport or for the entertainment value of it. So back to the favorite exercise. If you were, if you'd like, if you went to the gym and you had to pick a machine. Which, uh, the, the pull downs, the big shoulder exercises, those, you know, as a swimmer, then there's always work. Electro. So that's probably it, but the overhead pull down, like the shoulder and things. I like those. I know, I know it's a machine. It's not free weights. All right. Um, shoot. That's good. So what'd you think? I like it. I like the two minutes. I like that. That's fun. Have you a kangaroo? I was like, the question asked. Whoa. Okay. We're going this route. I like it. I would love to. I'd pet a kangaroo or like, I, I, you know, um, Sorry for the construction in the background. No, no, no, no, I don't care. Life is happening around us. Hey, I'm in property management. The construction is the least of my worries. Oh, uh, No, the, I've never, No, I've never touched a kangaroo. I've seen them, they look pretty. They can be really nasty. And I don't think they're that smart, which is a dangerous combination. Big body, small brain, strong, you know, they're, uh, yeah, I have an Australian friend and they do a lot of damage to cars because I think small brain also puts them in front of cars a lot. So as far as like marsupials in general, kangaroos are probably on the lower end of my list. Wombats. Now that's a marsupial. All right. So today's topic, we're going to talk about brand new, fresh. Exciting person buying their first multifamily, see the dream they want to be landlord. What's that like? Uh, I mean, you see successes with it, something that's really exciting and we see with investors, it's a smart investment. It's a good, it's a great investment tool. I mean, any, you know, and you don't have to the bigger pockets websites or the websites that things at any certified financial planner. You that diversifying your assets is a good idea. Investments property is a great one to do it. It's a great hedge against things in the economy. So when people finally make that leap, and so we see it, you know, uh, new buyers and would partner with them early on, even before they buy it to help make the right choice, because you stop. The way, anything that you do. And so it's not without its challenges. And I think a lot of buyers go in really excited, which they should be, but then once they get in there, then it, things can turn a little. Yeah, absolutely. Yeah. Yeah. I've seen so many, when I get a client that they're like, I want to buy a multifamily. And I'm like, okay, you don't know. Only multifamily is. It's not like you're sitting there collecting the rent and putting that in your bank. You're actually have to do a job. And it's not just the job dealing with booze and dealing with the psychological aspect of working with tenants. Well, and it's not just tenants. I mean, there's more than just the tenant component, but the tenant component is probably one of the more difficult ones that we see people struggling with. But there's, I mean, the other components are anything that goes with the tenants, the maintenance aspect, the, uh, tenant relations, rent collection, and then all of the legal wickets that you have to navigate as far as, you know, what happens if they don't pay rent? How do you pursue that if you have to evict somebody because they're non compliant with your lease? All of those little components that go in there are very nuanced. And so you see a lot, you know, new investors struggle with that simply because they don't have the experience in it. And what's unfortunate is that those, that inexperience translates directly to being costly. So let's go through the whole life cycle. Like, let's say I get a new client, uh, and, um, they're like, okay. I probably don't want to be, I don't want to own, manage a property. I want to hire someone like Steve to, to manage a property for me. So we're going to go through this whole, we're going to take you guys through this whole journey of a new buyer, you know, from start to finish. So I'm out there showing them homes and they're looking at different properties. Would you guys, once they like a property, would you guys come in and also look with them during the whole, the home inspection or the key to it? First and foremost is that I already like the, the buyer they've engaged with a buyer agent and the only, we want to make sure they're buying a house and not regretting working with an agent that got them into a situation. Right. And if you get them the right house. If they succeed at it, they're going to come back to you to buy more, uh, which is, which is a great relationship for everybody. And we want to be a part of that as well. So their success lends to them buying more properties and then we get to manage them, which is fantastic. That's the, that's the success for us. Um, so we want to do the same thing that you were doing, but from a different angle, which is advise our clients or our to be clients on sound decision. That meet their objectives and their capabilities, understanding what kind of cost might come in, you know, yeah, do you know better than anybody that inexpensive house probably has things that need to be done to it? There might be electrical work. There might be a new roof or something like that. Would you guys do that? Like go in when we're looking at homes now, we're not home inspectors. I either walk around with the inspector or what stage, like. When we're looking at homes, they come in and look with us or what, when, before they're even really at the property, I have clock that come to me and we'll throw an MLS listing over and I can do a 15 minute look at the property itself. I'll take a look at the property. I'll take a look at the, uh, the condition of the property, at least pictures. There are little things that you can actually pick up from Google Maps. How many meters are on there? Is it illegal? X number of units. Is it, you know, how does the roof look? How is the place kept up even from that first 15 minute online review? We start to shape an idea of what the property is. I've seen that report and it's pretty impressive what you guys do. How much do you charge people to? We don't, uh, it's free. Well, we know we're not. Yeah, we're not home inspectors. Okay. Uh, there's plenty of great. We're not saying this house has this problem. Has it? You're saying this is the income potential. These are the things. Exactly. Exactly. Like, okay, or your rents, what the market states that rents could be, you know, and it's a window because obviously there's nuance when you get into the unit and things. Would you say out of these four homes that we saw, this one is the best option for you? Especially for the price and everything. Sure. Yeah, and and at the end of the day looking at the number But then that's that's the first step. The second step is let's go take a look at the property itself Now I would always encourage somebody to get a home inspection Okay A home inspector is going to look behind the metal panel on the furnace in the basement and make sure that it works I have a pretty good idea because Over the years, Stonelink's replaced quite a few furnaces and hot water tanks and understanding what plumbing is. If I see PVC, I get really excited. There's a, I've talked about that on a video in the past. I love PVC, right? Because that means that the cast iron's already been replaced. But then we also look at other things that are factors of it. It's not just the physical plant of the building. We look at the tenancy. You know, what are the hallways look like? We look at what, how are they keeping their cars? That's a big one. Do you also, while you're looking at the place and looking at each unit, do you kind of like assess the situation with the A little bit. Yeah. I mean, there's Who understand certain behaviors. I mean, we have 1, 700 some odd doors under management. We've got a pretty good idea of what a condition means as far as tenant behavior goes. So when we do tour a property, it gives us at least an idea of what that tenancy might look like because the tenant is the asset. They're the ones that are going to lead to your success. You want to make sure you have the right assets in place. The tenants, the tenant is the asset. A hundred percent. And the reason why the tenant is the asset is, is because your property doesn't make money if you're not collecting rent. And so that's why we value our tenants. That's why we spend the time that we do with tenants. That's the way that we make sure that the tenant served as a tenant should be because they're going to lead to our client's success. A happy tenant is a tenant that pays rent and stays. And while looking at that, we're coming up with that report. You say, all right, the market rents on these two units versus the other two are lower when we come in short. We, so you have like a plan already. There's, there's, there's a number of strategies that we take. One is the most important thing for us to do is to understand our client and what their goals and their objective and what their limitations are. If you have four units that are. All underperforming as far as rents are concerned, but you have three really good tenants that pay on time, that are, that are respectful, that do the things that you want. You don't necessarily want to raise all the way up to market. You don't want to scare your tenancy out. If that's your financial goal, if your financial goal is to take a C class property and turn it into an A class property, that requires a different strategy other than maybe the new investor that comes along and needs that income to begin the process to normalize the building. Our process is to standardize our SOP, is standardize, optimize, perform. So, We standardize a property by getting all of the tenants on the page that were the new landlord, work with the, the, the client to understand their goals and how they want to achieve them. Then we optimize the property. We look at the best strategy to help them achieve that goal. How do you get across that finish line of market rent? Well, it's not a sprint. It's a marathon sometimes. And so the way to do it, take a measured approach that doesn't affect your bottom line all at once, but helps you get there where you need to. Because it's going to cost money to get from C to B, even. It's certain. It's going to cost money and time. Exactly. And sometimes, and sometimes at the end of the day, Makes sense to do wholesale changes. And we advise our clients, you know, after the purchase of the property, we advise our clients on how to optimize their performance of their property. I always say, we're not going to build the Taj Mahal, but we're going to take a C class property and make it a C plus a B minus or a B. Because those little changes that you make will have real returns on your, on your ROI. You're not going to believe, I've looked at so many multifamilies homes, so many clients, and a lot of times, especially the new ones, they go in and they're like, change the cabinets. You don't have to do all that. It's already, it's already bringing the income, but having someone like you on their side helps. Okay. You want to do that, but right now let's focus building up capital and money. And then, and then the changes that you want to do. One of the things that I find people do is they can get emotional and what you just described as a perfect example. When a client is looking at their investment property from their house. And I say that somebody says, well, what do you think about granite countertops? And I asked, how's that going to look from your house? And they're saying, well, I'm not going to see it because I'm going to be at my house. And it's like, exactly. Is that the smart move to do that? A 3, 000 countertop so that you can make 50 more dollars a month. You're going to take 60 months to reclaim your granite countertop. Visually seeing is makes total sense. And so what we do is, is that we, we act as a great bridge for our clients to remove that emotion from decision making at times by making the suggestions that we know through our experience and through our personal experience in the, in the marketplace, doing it, we know what is a good return on investment. And that's called optimization. You know, some people just need that to be explained a little bit because. You know, if they're a new buyer, they don't know that. And we do because we've been doing it for as long as we have. Awesome. So you recommended property out of the bunch that they wanted. I went in, nice appealing offer. They get the house. How, at what point do you start coming in? The best time for us to come in, the close. Uh, Because there's a new owner and then there becomes a new sheriff in town, so to speak. Okay, time out. About that, I want to talk about what if the buyer wants to be hidden? Like, doesn't want anybody to know that they're Even better. Okay, let me talk about In fact, in fact, that's why you have a property manager. A property manager gives the owner the anonymity. They don't even know how to contact the owner. And we use a, our, our term is one throat to choke. All communicat Should be bottlenecked towards one source, and that's us. Now, there's a bunch of different ways that they can communicate with us. Phone, email, text, a bunch of different ways that our, our, our residents can, can reach out to us. But never do we want them to reach to the client because that's what the client's paying us to do and it allows us to manage it. Now, if it involves bringing the client into it, we act as that bubble between the tenant and the client and then we can further advise them on, on how to manage the problem. As far as they need a degree, contract, are you guys signing with the tenant or? The owner is signing with the tenant, it all depends on how they want to be, if they want to be hidden, it depends on how they want to be, if they want to be hidden. Oh yeah, yeah, no, no, no. In the standard, when we, when we standardize a property, the leases will come over or stop a letters or sometimes neither of those things. So, we, we begin the normalization process by engaging with the tenants, uh, reaching out to them, informing them, educating them that we are now the, the, the place where they're gonna pay rent, where they're gonna submit work requests, where they, if they have questions. They are going to know us to be their point of contact. Part of that approach also means looking at whatever the legal documents are that might or might not exist. What is the previous lease look like? Should we get them on a stone link lease? That's based on our experience and, and all of the legal things that we can encounter when we do that and make it so that is the best possible scenario for us to do our job of managing the property. Have you ever had a situation where the owner is, uh, They're living in the first floor and then, uh, second floor. Well, sure. Yeah. I mean, so what happened, like the, the second floor tenant doesn't know what. The owner can also call to get this. Oh, 100%. Yeah. Yeah. Absolutely. Open lines of communication, uh, we have found are the strongest point that we have in our services. Whether it be to our residents, and again, remember, tenants are the asset, so. We want to keep that relationship strong, but more so with our owners. We want to be available for our clients because we're, we don't even consider them clients, we consider them partners because we're partnering with them in their investment. And that means open lines of communication. So yes, they have a property manager that's going to pick up the phone Monday through Friday, nine to five. If there's an emergency and they have to get in touch with us in an emergency situation, that's 24 seven. And there's a phone number that they can call, which puts them into the pipeline of activity. Which will get us exactly what we need, you know, for information to manage a problem. Okay. So, uh, the owner can call and get things repaired. How's that work as far as. This repairs sounds a motorcycle outside. I know it's, it's not working. It's fine. A rev. It's not working. It sounds like a nice motorcycle though. Like a European one. You know, one of the high revving, you know, ninja, uh, Ducati. Oh, okay. I don't know anything about, oh, that was one of the questions. I'm going to ask it. Oh, what's that? Would you drive a Harley? I would stay away from a motorcycle in general. I've done a little bit of dirt biking. Things go wrong quickly. Yeah. That's why I stay away from two wheeled motorized vehicles. I know my limitations, but no, if it was Ducati, I think I would do a Ducati. Those things are, uh, those things are nice. And if my brother in law is watching this, he'd be proud. As far as maintenance and repair, how can the owner control the throw because they need to come up on, they need to have a budget. Okay. They need to know, am I going to be spending a ton of money or working with property management company? What's, how's that look? That look. So that's, that's a great question because it's tricky and it's delicate given every single owner situation and where they want to be involved in things. Um, You know, it's always a good idea to have a buffer, okay, if somebody stops paying rent and you're relying on rent every month to cover your mortgage, that's a dangerous position to be in because You're going to be struggling. It might lead to emotional decisions. It's a bad thing. Same thing on, uh, on maintenance. It's always good to have a buffer or have a reserve set up at some point or another. And the way that, uh, a lot of people find success in that is of the income that you bring in a little bit goes towards vacancy. A little bit goes towards a rainy day fund. The kinds of costs that Are inevitable. You should be prepared for. Oh, you guys take care of lawn. All that. No, everything. Yep. Imagine this. This is the best way that I put this is, is that if you have a 401k, your money gets put into an investment, maybe not a 401k call it a mutual fund because there's no tax deferment on this. It's a little bit different. Your mutual fund, your money, you, you, you entrust somebody to manage your money for you. Okay. If there's a dip. Or if there's a significant dip in the market, your financial planner will call, contact you and explain to you what's going on. Don't sell! Don't sell, well, but they'll, they'll, exactly, they'll call you and they will explain that there's a problem, but with that problem comes their solution, right? We do the same thing for our clients, is, is that if something warrants reaching out to the client to letting them know that something big has gone on in their property, and that number's 300, okay, if it's a maintenance issue that's below 300, we're just going to go ahead and do it, and the reason why is because What's considered a maintenance issue? Your leaky toilet. Okay, so, uh, say a toilet is leaking and we go there and we realize that the reason why it's leaking is because maybe the fitting is just loose. And then we can tighten that up. It's a one hour visit. That's how that's billed. We do time and materials on our visits. And we tighten up the bolt or whatever it is because, however, the tenant wasn't able to figure out how to do that. Then we, we're going to just go ahead and do that. One, it's going to mitigate the damages that could arise from a leak. Two, we're not going to go to the tenant or to the owner and bother them with something that's as small as a, as a leak like that. Um, and we're going to make the tenant happy by solving for the problem. Um, if it's over 300, that's where we're going to contact the owner. But again, we're going to contact the owner, not just with the problem to say, Hey, you got a leaky toilet or, you know, the toilet needs to be replaced. We're going to contact them and say, Hey, this is the problem. Here's the proof. Here's the pictures. Here's what we found. And here's the solution. Okay. So we, when it comes to equating it to being an investment. You can manage your own stocks, you can get on E Trade, you can do whatever, you can do all your own research, you can ride the lightning of, of hot moments and then the, the struggles of the low moments and try to manage the emotion that comes with that, with, with doing E Trade, which I've done, which it, it's, it's a high and a low, or you can trust a professional to do it and have the confidence and know that somebody is professionally managing, um, your asset, be it a financial asset or a property asset. And that's what we do. So now we're at the part where, you know, taking care of issues that come up. Now you're at the part where one of the tenants, uh, hasn't, is not paying rent, needs to be evicted. What's your process with that? The, unfortunately, eviction, I always say this, eviction is the worst thing, all right? And the reason why is, is because it's a, there's a reason for it and it's a problem. And if it's non payment of rent or if the, the, the tenant is, you know, damaging the property or, or whatever the case may be. So, we're not trying to do evictions, but we're also cognizant that this is a business and you have to run it like a business. So, if it's a non payment for rent, because that's the most common one really, is on the first of the month rent is due. On the fifth of the month, that is when the rent is officially late. Uh, at that point, that's when we start to engage with the tenant. Excuse us, you know, but you haven't paid rent. What's your plan? You are going to be, there is going to be a late fee because it kicks off a lot of other activity that goes on in this. A lot of emailing, a lot of texting, calls, you know, we're not badgering, but at the same time, we're trying to figure out what's going on and give the tenant the opportunity to communicate with us to solve for this. In Rhode Island, on the 16th, is when you can issue a five day demand. On the 16th we're going to issue a five day demand. If we haven't seen rent at that point, yeah, plain and simple because there is a set of laws that you have to follow and it's through our experience that we've determined that if you, every day that you pause. Is likely going to be another day that you're going to wait for restitution or at least a solution to the problem. You guys work with attorneys to, okay, we have everything lined up, ready to do an eviction. Oh, it's ready. To do an eviction. Sure. Well, with, with the number of doors that we have, cause we're, you know, right around 1700 doors under management. It's like a turnkey. Uh, well, we, yeah, there's a, there's a process and we've scaled our operations to be able to address these kinds of things. So, on the 5th, how many people haven't paid rent? That kicks off that level of activity. On the 16th, how many people haven't paid rent? They are all going to get the 5 day demand letters. Because the landlord will be like, be like, oh, you know, I'm sorry. Get, uh, this and that. And then next thing you know, you're on the 20th day. You missed the deadline to do things. And they're like, attorney's like, oh my gosh. You got to get, you got to get, so, okay, it's cool. So you have all the covered. Now let's say the seller committed a crime. They don't want to, they haven't caught yet. Committed a crime. They want to sell the property. You guys help with. Now I'm getting rid of the crime or getting rid of, yeah, we're not digging a hole for somebody, right? Yeah. No, but you would help them find a, uh, you know, are you talking to prepare the paperwork for an agent to be able to easily, well, if one of our clients is selling a property, what, that's interesting because that's never really happened. We, you know, we, we, we select our, our clients, our partners, very, yeah. You know, we, we do a lot of due diligence. But this one was bad. Okay. He committed a crime. Well. You need to get out of here. If there was, if there was, if, if somebody had to, gosh, I've never, I mean, we've never. They want to leave the country. They need to leave the country. They're just like, okay, I, uh, I need to leave. Uh, um, and that, well, in, in that case, uh, I mean, we would facilitate anything that we would need to do for the sale, because we do that naturally. We have clients that buy and sell assets on a regular basis. So, there's a process that we do to do that. Um, like for instance, uh, um, you know, if we had to prepare paperwork so that a selling agent Could present that to somebody else and act in conjunction and do that. Oh, we do that unnaturally. Um, if it's because of a crime, we that's a different story. They didn't get caught. You don't even know they committed a crime. If to, to, to, to simplify it, I would say this is, is if ours, if our client came to us and said, like I said, is, is that there's, we have clients that are selling properties and buying properties, it's just. 1031 exchanges and all of that. We facilitate the process of sales and purchases for our clients because we are managing their properties and we are partners with them to help them achieve, to achieve their success. We don't like it when they sell their properties, we would love to manage them as much as possible, but when they do that, we're, we're partners with them all through the process. So if they need to sell the property, yes, we'll, you know, we will coordinate people there to open doors, we'll walk through the property, we'll answer questions. We'll, uh, provide paperwork and spreadsheets and anything that our client requests of us. We're going to make sure that it works out well. The real estate agents love us. I mean, we, we, we make it a lot easier than other buying, selling in the middle of sure. It has to look like heroes, right? Exactly. Yeah. Um, so yeah, Steve, thank you very much for, yeah, I hope that this, uh, this, this was informative. Absolutely. Next time you come in. Bye. Or next time we do this interview, we'll talk about the crimes that happened at those. We had the crime, oh yeah, it's well. So we won't talk about them now, but you know, stay tuned for next time, Steve. Well, I, I need to know names next time then so that we don't sign them on. It's just, no, we, it's, yeah, you don't want, you don't want to work with frivolous. I, I can tell you more about it. Oh, no, no, no, not the seller. Seller didn't commit crime. You don't even know they committed a crime. Oh, no, no, no. Until they leave the country. Then you're like, Oh, that's why they left the country. Got it. Got it. The next, next episode, we'll talk about, uh, I'll say that I've seen a lot of things in property management, but I haven't seen that. I haven't, I haven't seen that yet. It's, it's, it's, it's true. I've seen, I've seen tenant based stuff, but never, never, never the, never the client. Awesome. All right. Thank you very much. This is awesome. One of the, yeah, two minute.