Do I have to pay anything up front to use your services?
Limestone Agents – We generally charge between $100 and $300 to start up a single family property and $50 per door on a multi-family property. Your agent won’t make it a mystery so don’t be shy.
Bounty Hunters – You will get a tenant faster if you are willing to provide a commission to another agent outside of Limestone Investments. This ranges from $200 – $12,000 depending on the type of home. Ask your agent if you want to offer this and how much you are willing to offer. Generally, $300 for a modest single family home is sufficient. We insist on $100 bounties for multi-family properties or you will never get those filled.
What is included in that 8% management fee? What am I getting?
Believe it or not, property management isn’t about just kicking back and collecting rents. What you are really paying for is experience. Having the right vendors lined up, screening tenants and knowing what to do when things go wrong is what you are really paying for. You are paying for time spent handling your property, responding to HOA violations, tenant inquiries, your inquiries, monthly reports, year end reports and hundreds of little tasks that get showered on us every day. Then there is a LOT of overhead related to managing properties. Here are just a few things we have to pay to stay in business.
- Mortgage on our building
- Business Licenses (Las Vegas, Clark County, North Las Vegas, Henderson)
- Real Estate Licenses
- Mandatory continuing education classes (these are painful)
- GLVAR association dues
- Car Expenses (gas, insurance, maintenance)
- Photography Equipment
- Office Supplies
- You get the idea. All this little stuff ads up.
Can I stop using your services at any time?
Yes. We are confident in our services. You are welcome to leave at anytime. You don’t even need to give us a 30 day notice. We will reconcile your account the next business day and pat you on the back. Most of our competitors require one year exclusive contracts and penalties for terminating early. We use the local association’s template for property management contracts. Sadly, it’s ridiculously long so we have a sample of it with explanations you can digest or have your attorney bless it. SAMPLE CONTRACT.
What is included in the set up?
- Getting comparable rents for marketing.
- Putting a lockbox on the property.
- Getting Photos.
- Getting Video.
- Providing you expert guidance on repairs if needed.
- Creating a record in our system for tracking.
- Posting the property on our site with application links.
- Posting the property on the MLS and about 50 other sites.
- Screening hundreds of prospects.
- Going through applications.
How much do you charge to renew a lease?
$100. However, circumstances sometimes waives that fee. For example, if we have a naughty tenant who doesn’t fulfil their lease, most of our agents will waive this fee. We generally don’t recommend renewing a lease unless you are want to bump up the rent. The downside to kicking a sleeping dog is they are likely to wake up and go to another property. 50% of the tenants who get an increase in rent leave. Be careful.
Do you charge me for the period the property is vacant?
No. It’s hard for me to believe competitors actually charge an owner for a vacant property. We do have security packages for vacant properties that you may consider. Those are one time set up charges.
What is your opinion of home warranties?
We haven’t found one that is good. All of them will charge you for major repairs anyway and in the meantime, your tenants just get seriously pissed off. The only time we have found them to be worth it is if your Air Conditioner is on it’s last leg. Most warranty companies will find a way to gouge you there as well. Save your money. We still charge you $30 to for warranty issues as 95% are never resolved and the tenant ends up calling us. We end up calling you. You call them… We actually lose a tenant each year because of these. If you get a home warranty, we cannot guarantee that you will not lose your tenant in August when the AC goes out. Here is our latest rant on home warranties.
I could get fired as an owner?
Yep. Naughty owners get the boot every month for not reimbursing us for expenses in a timely manor or if they demand unrealistic rent prices. Vacant properties are a liability and we don’t want to be responsible for a property when a tweaker guts a house for copper. Owners who won’t fix a roof, an air conditioner or a pool get an opportunity to be someone else’s headache.
Do I have to pay some kind of “reserve”?
No. Unlike most of our competitors, we don’t want to hold your money for no reason. We trust that you will reimburse us in a timely fashion for smaller repairs and we will ask for 50% on large ticket items.
How do I get paid?
Electronically – We send you money electronically from our account to yours. It takes about 5 days to process rents. Generally, all our owners are paid by the 15th of the month unless they have a rebel tenant who pays on the 15th. We are slowly getting rid of the tenants who pay weird days. Our multi family units are reconciled about the 3rd week of every month.
- Foreigners with EIN – You must have a US bank for us to pay you. US Banking procedures change every month so good luck with this.
- Foreigners without EIN – We can’t offer full service to Foreigners without an EIN. Sorry. You must either do a lease/option OR find someone willing to risk paying your taxes.
How do you collect rent and how do I get my money?
Most of our tenants pay us electronically. The ones who need to pay cash or with a money order pay at any 7-Eleven. We do not accept checks in the mail or money in person. We do not collect cash or drive around with a baseball bat.
Day 1 – Tenants make a deposit. Most tenants have a 3 day grace period. On Day 5 we will post a 5 day notice to pay or quit.
Day 4 – We have processed rents and have their money in our account.
Day 5 – We send you money via Intuit or Chase. This system costs 50 cents a transaction and is the only way we pay you.
Day 10 – Money will appear in your account.
How do you screen tenants?
Our initial screen filters out the crazies (people without a job, eviction record, people who don’t make sense). We have an online application that collects the essentials of a tenant. If a tenant is weak, then we may require higher deposits or higher rents with your permission. There are specific flags that he looks for which comes from his 20 years of experience managing tenants. Since we are on the hook to deal with them, it is in our best interest to get you a good one. Our income and reputation suffers if we get you a bad one so we are focused on getting you a good one!
- Job History – Generally, anyone who has more than 2 years job history in Las Vegas is a rock star. If they are issued a W-2 and it shows that they have more than 3 times rent, we are clapping our hands with glee.
- Rent History – Someone who has more than 2 years rent history is also a rare breed. There are ways for us to verify this of course but generally we are looking for the reasons why they are leaving and if they have a history of paying on time.
- Credit History – 80% of the tenants in Las Vegas have a credit history of less than 650. When we pull their credit, we are looking for specific types of credit hits that do not do not necessarily mean they are bad tenants. Medical delinquency is an example of something we sometimes overlook. We are looking for current trends and the type of credits dings that correspond to bad tenants. If they had superb history, they wouldn’t be interested in renting your property – they would own a home.
- Criminal History – We weigh someone’s criminal history with the type of property they are looking to rent. Someone with an old felony for example may be ok for a multi family property. This list of exceptions and rules are too lengthy and proprietary to post here.
How long does it take you to get a tenant?
80% of our units are booked before a property is vacant. The minute a tenant announces their departure, we put the property on the market. We have turnaround times as short as 6 hours. If your property is currently vacant ready AND it’s not November & December, we will have a tenant placed within 15 days IF you are priced at market.
- Price – The speed at which we get a tenant is a function of price. Generally, we place tenants within 3 weeks at market price. If you price your property too high, it will sit vacant for a long time. If you price it significantly below market, we will have a tenant for you by Friday. During the winter months, folks don’t like to move when they are expecting guests for turkey or waiting for Santa to come down the chimney. You can’t give away your property during November and December.
- Vacant Ready – Our “vacant ready” clock doesn’t start ticking until the place is ready for move in. Most rehabs take a couple days. Worst case is a week if it was really thrashed. It will take 5 weeks if the place was stripped of copper and plumbing.
Where do you advertise rentals?
Fortunately, we use 2 online software applications that “push” a property to about 50 websites. That means, once we input your property into our system and the local MLS, those 2 sites feed data to all those other sites. It’s a beautiful thing. Here are the top few….
Can I review your tenant application before the tenant is placed?
No. The primary reason is because we don’t want investors fishing for race. Our proprietary screening system focuses on history and not someone’s skin color. We evict just as many white people as we do latinos and blacks. If this is a problem for you, please find another company. The secondary reason we don’t allow owners to approve applications is that we find most owners don’t have the experience to see red flags and exceptions to credit. You are permitted to put restrictions on the background as long as they are not illegal. For example, a common filter is credit. If you have a certain credit minimum, we can put that in the advertising. We don’t recommend this as sometimes poor credit is related to a medical judgement.
What are your vacancy rates?
This question is impossible for us to answer simply because the data is too scattered. Limestone picks up 2-5 properties a week. Many of these are vacant because it was either poorly managed by a previous company or it was purchased through foreclosure or both. The other issue is season. You can’t give a property away in December as tenants have Santa Claus and booze on the brain. Your vacancy is a function of price. If you want over market price in October, your property will sit vacant until the spring.
How do you market your properties?
- MLS – If your bounty is $300 or more, we throw this up on the internal real estate conspiracy. We do not put properties on the MLS without a bounty. Bounties must be at least $200 to make to the MLS.
- Realtor.com – Your property automatically goes here if you are put into the MLS.
- Zillow – Your property automatically goes here if you are put into the MLS.
- Signs – Not anymore. Sorry. Rental signs are tweaker beacons. You will have 10 people squatting in your house tonight if we put one up.
- Craigslist – Sometimes. That site gets sketchier every year. If you want Craigslist postings, ask your agent and we will give you the code to paste that includes all our stuff.
- Bounties – Highly encouraged. We pay for heads and everyone knows it. Tenants and custodians get rent credits for qualified prospects.
What happens to the security / cleaning deposit?
Deposits go into a trust account that is monitored by the Nevada Real Estate Division. When a tenant moves out, a walk through is completed and any damages are paid with that deposit. Generally, we video this walk through so you can see what needs to be done if anything. The security deposit is not our money. That money is distributed between the owner and the tenant.
Can I make my property available for Section 8 Vouchers?
Yes. Only if you have lost your mind. In case you are not familiar with that program, the government provides rental vouchers to folks who have issues. In the past 20 years, I have never seen a Section 8 tenant do less than $10k worth of damage to a property with the exception of one tenant. The government’s claim they will reimburse you is a bunch of baloney. This photo album will show you a typical section 8 move out. There is probably a 95% chance your property will look like that after one year. By the way, the government also provides those tenants with free legal council to enable your tenant to destroy your property even longer. Since we don’t make any money on your $10,000 rehab, we are not motivated to help you with placing a section 8 tenant.
How do you handle HOAs?
If or when we get a love letter from the HOA, we inform the tenant and give them a deadline. We warn them that if they don’t comply, they will get a fine from the HOA. If they get another notice (2nd warning), we will fix the problem and then bill the tenant. If the tenant continues violating HOA rules, we get rid of them.
How do you handle utilities?
When your property becomes vacant AND utilities are necessary, we recommend utilities go in your name to save you money. We charge $10 to manage each utility. Properties that have a lot more going on with pools, plants and so on which require constant utilities will keep on until the new tenant arrives.
How do you handle pets?
We don’t recommend allowing pets. However, this issue is up to you. A general rule of thumb $150 per pet deposit up to 2 pets. Another recommendation is to charge “pet rent” between $50 – $150 per month. It’s totally ok if you don’t allow pets and we don’t recommend pets. The drawback of course is that you get fewer prospects and may cost you a month’s worth of income. No pets can cost you in terms of vacancy. We no longer allow dogs with properties that have pools. We have had WAY too many issues between nasty dogs and pool cleaners.
What is a “bounty hunter”?
Bounty hunters are agents who belong to other brokerages and make a living placing tenants. There are hungry agents out there who do nothing but place tenants and collect bounties. That “bounty” is up to you and will range depending on how much rent you get. A general rule of thumb is $200 for condos and $300 for houses. If you don’t want to place a bounty, no worries, your property may sit a bit longer.
What does your maintenance process look like?
Tenants call our 24×7 maintenance number which is converted to a text to all our maintenance supervisors. A specialist is dispatched based on the complexity of the problem. If more than a couple of trades are involved, we will send a general contractor. Generally, we charge $26 for each service call but don’t mark up the vendor. If the problem is really complex and involves managing more than a couple of vendors, a major event could go up to 10% of the overall invoice (usually a major rehab). A garbage disposal for example would be the cost of the plumber + $26.
This page goes into our maintenance process in detail.
What happens when a tenant is late?
We spank them. The first offense gets a warning, the second offense gets a fine and a 5 day notice. Every fine afterward gets stiffer and stiffer. They either correct their behavior OR you continue to get more money. Some of our investors love late paying tenants as they can generate another 5% of income from their property. Most investors love free money.
At what point do you evict a tenant for not paying?
A rule of thumb is 50% behind. For example, if the tenant only paid $500 rent when they were supposed to pay $1000, we start eviction proceedings. Tenants will usually come to Jesus at this point. 95% either pay or leave. This rule also applies to fines. If a tenant has accumulated more than 50% in late fees, we will start the eviction process.
How do you handle evictions?
90% of our problem children leave gracefully. We have specific procedures for evictions. This page explains the eviction process in detail. We evict about 1 tenant every 3 months and we don’t mess around. Back in 2017 we managed about 30 multi family buildings and we did about 3 evictions a week. We don’t miss those days.
What do my eviction costs look like?
If the tenant doesn’t pay us these costs, you will. 80% of the time we get this from the tenant unless they are locked out. If we get a “fighter” the worst case will be about $600 at the end of the day. A “fighter” is one who goes the whole battle kicking and screaming. We never lose and “fighters” end up on the sidewalk within 6 weeks.
5 Day Notices – $35 – This fee gets tacked onto a tenant’s rent. Once they get to the $300 point we start the eviction process. 95% our tenants come to Jesus on these notices. They either leave gracefully or pay.
Court Appearances – $200 – If you get a fighter and the broker has to suit up for court, this is his cost to represent you.
Lock Outs – $100 – In the rare event a “lock out” is required. This includes the constable, lock change and a video of the property.
Who handles tenant service calls? This page goes into our maintenance process in detail.
- Non-Urgent Calls Under $400 – It is cheaper, faster and better just to fix the problem. We will notify you via email about the problem with approximate costs. The vendor will then just bill us and we bill you. Examples of non-urgent calls are things like broken windows, dripping faucets, irrigation leaks… things that are not immediately jeopardizing your property or the health of the tenant.
- Non-Urgent Calls Over $400 – We will contact you to discuss your options and/or provide multiple bids. Examples of non-urgent calls over $400 would be things like roof replacement, pool equipment failure… things that are not immediately jeopardizing your property or the health of the tenant.
- Urgent Calls Over $400 – If we can’t reach you immediately, we make a decision for you. Broken pipes, AC failure (during the summer), leaking roof… things that are immediately jeopardizing your property and/or the health of the tenant.
Will there be a problem with my first tenant after I purchased a property?
YES. There is ALWAYS something an inspector missed or a tenant may have left a skeleton in the closet. We will discover something wrong after the tenant has lived there a couple of days. It is usually nothing major but it happens. Brace yourself mentally for a few repairs. They are not perfect and cannot find every little detail during your inspection or walk through.
What is included in that management fee? Why do I have to pay extra for maintenance, notices and those other minor issues?
Fantastic question. We keep our management fee low at 8% because those other little fees are seldom required. We discovered long ago that charging a higher rate of 10% and making everything all inclusive made us un competitive. Here is just a short list of our expenses we pay to manage your property.
- Mortgage (we don’t pay rent, we own our own building)
- Accounting (it requires about 120 skilled labor hours a week to keep track of income and expenses)
- Software (the online property management software is awesome)
- Insurance (just in case things burn down or we get sued)
- Gasoline (we drive all over the place meeting tenants, inspecting properties etc)
- Utilities (water, electricity…)
- Dues (we pay monthly to belong to the local real estate conspiracy)
- Office Supplies (paper, toner, postage…)
- Licenses (business and real estate licenses)
- Education (not only is required by law but we are constantly learning through seminars)
What happens if I purchase a home warranty?
Your tenant calls us first because not all events will be covered by a home warranty. Under most circumstances, your tenant will be paying the deductible. The home warranty company inevitably makes some excuse as to why the problem isn’t covered and the owner ends paying anyway. We get 2 cases a year where they actually make the problem much worse. Nearly all our serious drama is related to home warranty companies who make ridiculous promises to owners. We lose about 2 tenants a year because of these home warranties.
What areas to you cover?
Pretty much the entire Las Vegas Metro area:
- Las Vegas
- North Las Vegas
- Boulder City
This property map is a snapshot of our portfolio as of January 2019.
Our portfolio as of January 2019 is about 450 doors. 90% of that is “Single Family” . We eliminated about 200 “Multi Family” doors in 2017 and our hair stopped falling out. We manage a handful of commercial properties consisting of mixed use and office.
We are not afraid of any neighborhood. We can handle anything from the rough areas near downtown to bling bling in Summerlin. Our screening processes are different for the rough neighborhoods and that’s proprietary information…
Do you pay my taxes, HOA fees or anything that may put a lien on my property?
It is not recommended. Here is why you should pay HOA assessments:
- We charge $10 to pay recurring bills. Since that’s a process you can probably automate, you can save yourself $10/month.
- It’s not a good idea to give any property management company the responsibility of paying a bill that can put a lien on your property. Taxes is another bill for example that you would not want to give someone else.
- By keeping in the loop of your HOA, it gives you another set of eyes on us and the tenant. Most HOAs do not have a “multiple distribution” system which means if you transferred that responsibility to us, you would never keep posted on what’s going on in/around your condo.
How do we get started? What is the process?
- You will complete our handy online checklist that goes through the basics of what’s included with your property: insurance information, HOA information etc. That checklist takes an average owner about 15 minutes. It’s easy – just do it.
- We will need access. We can either pick up the keys, you can drop them off or we can meet you at the property. We like to see condition before we make recommendations on price. If your property is dirty, needs repairs and has weird issues, you won’t be getting market rent.
- We will give you a recommendation on price. There are a lot of downsides to listing a property over market. The number one mistake owner make is asking more than market. It costs them money in the long run. HOWEVER, if owners want us to list a property for a zillion dollars, we will do it.
- You will sign a property management agreement that spells out compensation terms. Remember, you can fire us at any time. The only purpose of that contract is to confirm who is paying what and when. We have a sample contract with explanations you can digest or have your attorney bless it. SAMPLE CONTRACT.
- An advertisement will be created on our website for you to bless. We are not perfect so we want to make sure everything is accurate before we go blasting your property all over the world.
- Your property will be posted to about 50 websites. Potential clients then ask us to view the property or ask questions. We “pre filter” those and then meet with the potential tenants.
- We “Pre Filter” about 80 tenant prospects a day. 90% of those prospects don’t qualify for a cupcake so we let those go. The other 10% are filtered a bit more and shown the property.
- Background checks are completed on about 6 applications a day. We review credit, rent and income history. We verify that stuff and snoop around using our proprietary tools and processes. It costs us money and our reputation if we screw up so there is a lot of effort spent here.
- A lease is generated. We keep our leases simple and to the point. We have never lost an eviction case in court and the language is simple to understand. SAMPLE LEASE.
- Tenants receive a link to their “Tenant Portal”. Tenants can pay rent or request maintenance. The greatest feature about this portal is tenants can check balances 24×7 and can set up an automatic payment method for free.
- You get paid on or before the 15th of the month. You will have an owner portal that enables you to pull up all your statements, balances, vendor invoices, repair photos and important information about your account. That money is deposited into your bank electronically.
- You will receive a year end report and a 1099. That report is comprehensive so all you need to do is forward that to your bookkeeper or CPA.