Why I enjoy the TV show "Curb Appeal".

This neighborhood was more appealing to me than the home, nice home though.

When I started with the firm in 1978, our inventory of investment properties was made up of single family homes typically 15 to 20 years old.   They had been investment homes for many years.  These homes were located in older neighborhoods, built in the 1950s and 60's.  These neighborhoods did not have a Home Owner's Association, nobody was monitoring the exterior condition of these homes.  As a result I could drive through one of these neighborhoods and point out the rental homes (both ours and someone else’s).  They were typically characterized by deteriorating paint (especially on the wood trim), dead landscaping, cars parked on yards, and roofs missing shingles.  Luckily there was never more than two or three on a block.

The commonly held belief within the industry was that the greatest return (either cash on cash or appreciation relative to the initial investment) was to do only what was needed to attract the next tenant.  Most of the homes in our management were in neighborhoods that had many other investment homes, competition for tenants was stiff. 

I decided on a different approach.  My goal was to improve the quality of the homes that we were offering for rent.  Interior paint, clean carpeting, sparkling kitchens and bathrooms, and green yards were the basics on my list of improvements.  But I found that the majority of the homes we managed frequently required more help.  I realized that I needed to make more improvements if I was to have any meaningful difference in my program; exterior painting, a green yard with freshly planted trees and bushes, and new roofs became fairly common.  My biggest challenge was convincing my clients (including my family) that my program would work.  We lost a few investors with this approach because it wasn't cheap.   Before long I was knee deep in what felt more like construction and less like real estate.  My wife liked to tease me, she called me the "King of Counter Tops" because I was spending a lot of money on Formica.  She also gave me grief because every home that I had painted was yellow with white trim and large house numbers.  Luckily I didn't have any two homes next door to each other.

I found quickly that when I elevated a vacant home to a higher level, the number of applicants and strength of their application improved greatly.  We were now attracting a new kind tenant, those who would care for their new homes, also indicating that they were hoping for a longer lease.  In reality, the tenant moving into these lovely homes more closely paralleled the attitude of their new neighbors, the owner occupants.

I also had an ulterior motive with my new program.  Run down rental homes were impacting their neighborhoods.  Because these home were in a sad state of repair, it seemed that the surrounding neighbors immediately on either side or across the street did not appear to be as well cared for as the other homes nearby.  It was obvious that the motivation for a neighboring owner occupant to maintain their home had been diminished.

I noticed that within months of a full clean up and rehab of these derelict rental homes, the surrounding homes also looked better.  More than once I was approached by a neighbor thanking me for the work that we were doing.  No longer could our rental homes be identified as you drove by - although my wife started pointing out every yellow home, assuming it was in our portfolio of managed properties.  These homes were now in the same condition as the rest of the neighborhood.  This eventually was a win/win for everyone.  The tenant moved into a much nicer home, the investment owner had a tenant who would care for the home and probably stay in the home longer, and perhaps the most important result of all, it appeared that the homes in the neighborhood increased in value.

What I learned from my initial experiment was:

•     Better homes attract solid tenants who are more stable.
•     Investment home owners have a moral responsibility to maintain their home on the same level as the balance of the homes in the neighborhood.

I now enjoy HGTV's show "Curb Appeal" almost as much as I enjoy playing Monopoly.  FYI - if you haven't viewed an episode of Curb Appeal, you should, this show demonstrates the value to a neighborhood when an ugly looking home has been restored to its original glory.

Growing Up Quickly

I bought this home at a Trustee Sale, it had been foreclosed

I was very lucky to find a career that I have enjoyed from the first day on the job.  Most people search their entire life looking for a job that is rewarding and profitable.  I was very fortunate that my dad's profession happened to be a direction that I would follow for that last 35 years.  Every day I wake up excited wondering what will be thrown at me to solve and how I can help someone with their housing needs.

I have been a property manager in the Phoenix area for the past 35 years.  I manage real estate, single family homes.  Providing housing for families is very rewarding.  It is equally satisfying helping investors receive a strong return on their investment.  For me, the two issues meld into one equation.  Great research, great service, great outcomes.

After graduating from ASU I eventually started working in my dad's office.  I was no longer painting homes and mowing lawns.  My new assignment was answering phones, listening to problems and concerns, and walking through homes after the tenants had been evicted.  Wow, that was a huge wake-up call - tremendous clarity of my new career.  Managing rental homes requires a serious ability to multitask; there is a lot of moving parts between a home and its occupants.  Retrospectively I realize to do this job well you need an analytical mind with a twisted sense of humor.

It was tough finding a balance between the needs of tenants and financial responsibility of supervising 45 rental homes.  I look back and I laugh at the outcomes of my early attempts in problem solving.  The only thing I did well was to develop procedures that allowed everyone to understand the process and forced the program to treat everyone equally.  What was interesting was how many issues fell between the cracks, the number of times the process failed.  It became very obviously that no two families had the same issues and expectations.  In those early years, I scrambled a lot.  The biggest lesson I learned - "why real estate investors hire a property manager, because it is no fun kicking anybody out of their home".

How I Got Started

I bought my first investment home in June 1979.  I come from a long line of real estate professionals, so it was not surprising that I turned 25 and that same month bought my first rental home.  It also didn't hurt that my favorite board game growing up was Monopoly - although I always seemed to be the guy owning the railroads.  Buying a piece of property, even in a game, has always been very intriguing.

This was the 30th home my wife and I purchased, it is in Eagle Preserve in North Phoenix.

When I was nine or ten my dad took me to one of his rental homes and we worked together removing wallpaper.  As we worked, he explained the value of owning rental homes.  He owned a real estate brokerage with about 15 agents selling family homes in the Phoenix area.  He also owned about 30 rental homes.  I found out as I got older that he thought owning rental homes was a more secure income stream than owning a real estate company.  That Saturday afternoon, working with my dad, a very small spark was ignited in me - it was almost like having Monopoly come alive, no longer just a game.

I continued working with my dad, or at times guys that worked for my dad, preparing rental homes for new tenants.  On my 16th birthday my dad dropped me off with paint, paint supplies, and a radio at another rental home.  I spent the day making that home look fresh and clean.  My friends all thought I was in some trouble  They couldn't imagine why I would want to spend the day pushing a paint roller or holding a brush.  That was a great day.  I felt happy or excited or just satisfied - I was creating a nice place for another family to live and my dad could make money in rent - it seemed perfect.

It makes sense that when I went to college I would end up with a bachelor's degree in Real Estate from Arizona State's College of Business (it wasn't a straight line - I was an economics major for the first four years).  Sixteen of us graduated that semester, I was the only one who wanted to work in residential real estate, the other 15 all went to work for corporations that owned large amounts of real estate.  I saw myself working, just as my dad (and I found out later, my grandfather), helping families find the homes of their dreams.  It was the best decision I could have made.