Jason Marcordes, Founder, Managing Broker, Property Manager of Landmark Property Management of Chicago is a full service real estate brokerage dedicated to going above and beyond for our clients.
We handle everything real estate related – including buying/selling, leasing, property management, rehabbing, construction, development, real estate investments, and receivership.
We offer services such as finding and placing a resident, coordinating maintenance, rent collection, resident renewals, managing vendor relationships, ensuring compliance with local regulations, and more…
In this episode:
Who are you and what do you do?
What does a day in the life of a property manager look like?
What are the requirements in Illinois to become a property manager?
Why should a real estate investor use a property manager?
What are the decisions someone will be faced when choosing a property manager?
How would you advise someone to choose the right property manager?
What is the most common mistake you see real estate investors make when it comes to property managers?
On the flip side, what is the most common mistake you see property managers make?
What advice would you give a real estate investor looking to buy their first rental property?
What advice would you give someone considering starting a property management company?
Fernando O. Angelucci is Founder and President of Titan Wealth Group. He also leads the firm’s finance and acquisitions departments. Fernando Angelucci and Steven Wear founded Titan Wealth Group in 2015, and under his leadership, the firm’s revenue has grown over 100% year over year. Today,
Find out more at
https://www.TheStorageStud.com
https://titanwealthgroup.com/
Listen to our Podcast:
https://thestoragestud.podbean.com/e/property-management-with-jason-marcordes-fernando-angelucci/
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Fernando Angelucci (00:02):
Hello everybody. Welcome to this episode of What's The Deal, real estate podcast that gives answers. Today we'll be covering what's the deal with property managers. The job title is somewhat self-explanatory, but there is more to know. So joining me today to open the doors on Property Management is my good friend and colleague Jason, Marcordes, hey Jason.
Jason Marcordes (00:37):
Fernando. Doing great, thanks for having me.
Fernando Angelucci (00:42):
Yeah. So thanks for coming up. Let's jump right into it. So who are you? And what do you do? Give us a little history on yourself.
Jason Marcordes (00:50):
Absolutely. Like you said, Jason Marcordes I'm with Landmark Property Management. We are a company that specializes in residential property management in the Chicago land area.
Fernando Angelucci (01:03):
Okay. how did you get into that? How'd you get into real estate?
Jason Marcordes (01:07):
Yeah, absolutely. I actually got into it by accident, went to school to be a teacher. While I was in school, I went to work for my uncle's Property Management company and I fell in love with real estate. So, that's how I got my start. I've been in Property Management for about 12 years now, worked for a couple of different companies and then just decided that you know, wanted to start my own company
Fernando Angelucci (01:32):
Now, Property Management, isn't the only real estate activity you do. What else do you do in the real estate world?
Jason Marcordes (01:39):
What else do we do? In addition to Property Management, I've done some flips, some buying holds wholesaling as well as, you know.
Fernando Angelucci (01:50):
You had some Airbnb's as well, didn't you?
Jason Marcordes (01:52):
I did, Yeah. That's tunny, had a handful of Airbnb's, so short-term rentals, that was interesting.
Fernando Angelucci (02:00):
And then you also, didn't you do some management for self storage at one point too?
Jason Marcordes (02:04):
Yeah. So that's how I got my start as commercial Property Management. So did some distressed real commercial real estate, did some self storage, did some receivership, I've done just about everything in property management, So.
Fernando Angelucci (02:21):
What is a receivership?
Jason Marcordes (02:23):
Receivership is typically when the bank is going to foreclose on a particular property, that process takes a long time. So the bank it asks the court to appoint a receiver and basically that receiver steps in and appoints a property manager to take care of that asset. So when the bank actually takes it back, whether it be a year or two later, it still has value.
Fernando Angelucci (02:55):
Okay, It's interesting what exact
Jason Marcordes (02:57):
Yeah. they do you know, they oversee the property management, the maintenance, all that stuff. And then they report back to the court throughout the proceedings, just to make sure that, that particular borrower isn't kind of running that property into the ground.
Fernando Angelucci (03:15):
Right. Great, So I know when you first started the Property Management Company, it was all you. But just like our companies, you have started implementing traction and building up your company, delegating and then elevating. So I have a, kind of a two-part question for you here when you first started off, what did a day in the life of a property manager look like originally? And then once you implemented traction started hiring and delegating, what does your days look like now?
Jason Marcordes (03:47):
That's a fantastic question. Two totally different answers, a day in a life of a property manager as like a solo property manager. It's usually number one your weeks or seven days a week. and you work way too much. You're doing pretty much everything or Jack of all trades. You're doing the accounting, the advertising, the rent collection, tenant communication, any type of legal work as far as evictions. You're doing a little bit of everything and it obviously depends on the time of the month and the season. Most of our rentals happen in the summer. Obviously the rent collection happens toward the beginning of the month, but as like you said, we did implement EOS. It has been a complete game changer. So as you start to grow, as you start to delegate, you can kind of divvy up those responsibilities and delegate. So right now for my company, I'm primarily the sales guy. So I talked to all the potential clients and then I also am the COO. So I basically make sure that everything's kind of running in the, running smooth and headed in the right direction.
Fernando Angelucci (05:00):
So you look over the departmental heads make sure they're getting their stuff done, and the reporting back to you.
Jason Marcordes (05:04):
Yep, absolutely.
Fernando Angelucci (05:04):
You're kind of in charge of big relationships, bringing new clients in big vendors things like that nature, right?
Jason Marcordes (05:14):
Yeah, that's right. And it's a small company, so we, I basically, I hold a couple of seats the two biggest is like the visionary and the integrator. And I'm kind of, I got a foot in each. so as we grow, I will step out of that integrator role and just be the visionary for the company.
Fernando Angelucci (05:36):
So speaking of your trajectory through Property Management, I know it certain times in your life, you had a lot of doors under management on a more of a commercial scale. And then now you kind of, when you went back and started your own company, you started with a few doors and then started leveling up again. So tell me, where were you at your peak as far as the amount of doors you were managing and then where are you now and where do you see yourself going over the next 12 to 24 months?
Jason Marcordes (06:05):
Yeah when I was working for other companies, I was kinda in the corporate world and I had about 2000 doors underneath me. I had a full team of course different departments, all that good stuff. With my own company, we've been, I want to say three 25ish, maybe 350 at one point, we had a big fund out of California, that we ended up parting ways with. So we're actually smaller now, but again, just part of the journey realizing that, quantity or top-line thinking is not always the best.
Fernando Angelucci (06:42):
Right. I know we've had some conversations offline about firing clients, the ones that the 20% that take up 80% of your time and how keeping those types of people around is a counter-intuitive when you're trying to grow a large company. So that kind of brings me to my next question, which is you know, in Illinois, which, where we're located right now, no Joe Blow off the street can just become a property manager. Right? So what are the requirements? What are the training required to get that designation to become a property manager in Illinois?
Jason Marcordes (07:18):
That's correct, Yeah. So in other States it may not be necessarily the same, but in Illinois, if you're going to manage other people's property, you do need to go and get your broker's license. There are some activities in Property Management that you don't actually needed to do, but should be very limited. So as a rule of thumb, if anybody's looking for a property manager, they're gonna want to make sure that they are licensed they're a licensed broker in Illinois.
Fernando Angelucci (07:46):
Okay. That makes sense. When, so the way that we met was because I had a couple of properties that were in rougher parts of town, or I need somebody with expertise. Even though I am a broker myself, I know you had the expertise, so you took over those properties and did really well with those. We actually just sold off the, I think the last couple that we had at a pretty significant profit. So that was great. And thank you very much for helping me out with that. I always, I really loved working with you because, I was able to trust you. I just gave you a spending limit. And then I said, I don't want to hear from you, Jason, just get it done, which worked out really well for me. I think it worked out well for you too. I don't think I was too much of an overbearing client, right?
Jason Marcordes (08:30):
No, it was perfect. And honestly, that's how we prefer it to be. And about 90% of our clients are out of state or out of country. So we try to do that. We have a spending threshold, and we just, you know, we don't call you every time the sink starts to leak or, you know, some small repair like that.
Fernando Angelucci (08:51):
Yeah. So that brings me to my next question, which is, you know, why should a real estate investor consider getting a property manager or maybe look at that question a different way who should consider being, getting a property manager and who should not?
Jason Marcordes (09:07):
That is a great question. I guess it depends on your investing philosophy, kind of where you're at in life. If you have the time and you have the temperament, then by all means, you know, you can manage the property yourself, if you are, let's just say you're a working professional, accountant, attorney, whatever, software engineer and you are picking up your first property. But you have a full-time job, then I highly suggest getting a property manager. So it just depends on you and your availability and kind of, I guess your experience as well, dealing with tenants or rentals,
Fernando Angelucci (09:48):
Let's touch on some of those. So the first one you mentioned is time requirements. Let's just use, let's say not your super beginner investor, but let's say somebody like me when I originally came to you a couple of years ago, and I had something like, I think nine doors in Illinois, total, let's actually, let's reduce it down. Let's say somebody with three doors, three single family homes, what type of time is required for managing, let's say three single family homes in a let's call it a C maybe C plus area.
Jason Marcordes (10:25):
That's gonna, that's a tough question to answer. And it's going to depend on a lot of different variables. I mean, that's one of the reasons you hire a property manager is just because, you know, from an ROI standpoint, it makes sense. So although it's more expensive than doing it yourself, when you factor in your time, it's going to be a lot more expensive. So us as property managers, you know, we can leverage our team, we can leverage our experience, our software, so we can do what you're going to have to do in a fraction of that time.
Fernando Angelucci (10:58):
And then you also touched on temperament. So what do you mean by that? Can you expand upon it?
Jason Marcordes (11:04):
Yeah, I mean, you know, at the end of the day it's a people business, you know, we, as property managers have to talk to our clients, which are the owners. We also have to talk to the tenants you know, and the tenants you know, sometimes they run into issues and you have to be ready to deal with that. You have to have empathy. You need to, you know, understand where they're coming from and what's happening. And at the end of the day, you need to take care of business and, and take care of your tenants.
Fernando Angelucci (11:38):
Yeah. What, how does that time or temperament requirement change based off of the asset grade or class? Like, for example, I know you manage a lot of properties on the Northside of Chicago and really nice neighborhoods, very high rents. But then you also manage some properties and more working class neighborhoods, lower rents, lower purchase prices. Give me kind of the dichotomy here between the two types of assets.
Jason Marcordes (12:03):
Yeah, it's tough to make, it's not a hundred percent, but we definitely do see the lower the rent. It's usually the higher, the I guess higher the amount of hours that you have to put into the property on a monthly basis. So you know, that may be for a couple reasons, if the property is not renting for a lot, it may not be the nicest property. So you're going to have a lot more repairs, a lot more things to take care of. And then, you know, we also see, you know, correlation between credit scores. If you're not paying your bills, if in your credit is not great. Then there's a higher likelihood of us having to chase that rent, work out payment plans, do stuff like that.
Fernando Angelucci (12:57):
So with the credit score, and I guess this is kind of a broader question, what type of screening requirements do you prefer to have for tenants? And I know that some investors will actually overlay their own requirements, either stricter or less strict on top of what you require, but let's say it's your own property that you're managing? What are you usually looking for from a tenant?
Jason Marcordes (13:22):
It depends on the property. Every property is going to be different because every property is in a particular area. It's going to demand a different tenant and different criteria. So kind of like you were saying Northside versus Southside, you know, we see different credit scores. You know, it's tough in some of these neighborhoods to get a 700 credit score, but on in other neighborhoods, that's actually fairly common. So that's on a, on a per property basis. I mean, if you're talking real estate that I own, I want to see 650 plus three times the rent amount in income. No evictions, no collections.
Fernando Angelucci (14:06):
Okay. And when you say three times income versus rent, is that gross income?
Jason Marcordes (14:13):
Ideally it's a net.Yeah
Fernando Angelucci (14:14):
Net.
Jason Marcordes (14:14):
Yeah.
Fernando Angelucci (14:16):
Okay. So I remember when I was going through the process of finding property managers, I actually called and interviewed close to 25 property managers. I remember when I first called you.
Jason Marcordes (14:30):
Not surprised me.
Fernando Angelucci (14:31):
Yeah. When I first called you. I think I asked you, I told you upfront. I was like, Hey, Jason, I think I'm going to need an hour of your time today. I'm surprised he didn't hang up the phone on me. There was a lot of people that did hang up the phone on me when I told them that. So I appreciate you sticking with me. With that being said, what are some of the decisions an investor would be faced when choosing a Property Manager? What are the types of questions they should be asking?
Jason Marcordes (14:57):
So there's a, there's a ton. I mean, we can dive into this. Do you, you know, do you want a big company or a small company? you know, what are the pros and cons of each that's something that you have to decide? I mean, I we are a smaller company. I prefer smaller companies, but you know, at some point it seems like it's really tough for property managers to scale and to, to keep the same level of customer service. So I see that in some Property Management companies around a thousand units some less or some more that are really good understand, you know, how to scale and how to still provide a quality service. So do you want the big or small company? Do you want to be hands-off or hands-on as a landlord?
Jason Marcordes (15:46):
And then the biggest one, in my opinion, is are you shopping on quality or are you shopping on price? Are you just looking for the cheapest company out there, or you looking for the highest quality company may not be the cheapest, but in the long run, if they give you the highest quality, they may be able to save you some substantial money over the long-term. If they can just prevent, you know, one busted pipe, over the long haul, or just rent your unit one month quicker than the cheaper property management company, it really could save you thousands over, you know, over the term of the agreement.
Fernando Angelucci (16:27):
Yeah. And that's one of the things that I always tell new buy and hold investors is, you know, what really kills your profit is vacancy and turnover. So let's use an example of a $2,000 a month rental, if all of a sudden that rental goes vacant and it takes three months for you to re-rent it, let's say it's in the middle of winter and a harsh like polar vortex, you know, and you have to do say $4,000 in turnover, costs, paint and carpet, and maybe a couple of repairs. And that's 10 grand potential that you just lost on an investment that you're, you know, you're bringing in 2000 bucks a month that could meet close to two to three years worth of profit that you've lost because of those vacancies and those turnover costs. So I definitely hear what you're saying. I know I've, I've gone through the gambit before we found you. I had a, one of those low fee property managers, and it ended up costing me probably close to $25,000 over the long run until we finally switched over to you so that I completely understand and agree with what you're saying, as far as you get what you pay for. Do you want high quality, or do you want just to nickel and dime on fees and end up losing money in the long run? Right. Penny wise, pound foolish, I believe. Is that the phrase? So I, man, you're hitting home with that.
Jason Marcordes (17:53):
Yeah. And I mean, it's the same, like with any other important profession, like, are you going to choose the cheapest doctor? You know, if you have to have surgery or dentist or attorney, like you want the best representation, this is a rental property. I mean, for most people, it's a huge chunk of their investment portfolio. You know, a lot of people, this is their retirement.
Fernando Angelucci (18:16):
Right.
Jason Marcordes (18:16):
So do you want to trust that with anybody the guy who's willing to do it for next to nothing? Or do you want a reputable company to, you know, to look after that for you?
Fernando Angelucci (18:27):
Yeah. Speaking of, you know, reputable companies and what you're looking for, I know you've dealt with tons of investors. You've also dealt with tons of property managers. I see all the time when we talk, you know, offline, how you're getting clients from other property managers that were not doing their job well. So this is kind of a two-part question. Number one, what is the most common mistakes that you see real estate investors make when they choose property managers? And then the second part is what are the most common mistakes you see when someone is finally actually chose a property manager and starts that relationship that day to day or that month to month communication?
Jason Marcordes (19:07):
Okay. So the first part what are the mistakes you see when selecting a property manager, that is going to be a lack of due diligence. So they're not doing the due diligence they need to, they're not Googling it. They're not reading the reviews. They're not looking at BiggerPockets, they're not asking the right questions. So I'm huge on that, I even tell the people that are calling us, I say, Hey, you know, go look at our reviews, read them go on BiggerPockets, ask around you know, that's important. Don't just go with the first person you come across. On the the second question once you start that relationship, the, one of the, you know, the biggest mistakes that Property Management companies make. I see a couple, you know, number one, lack of communication and transparency.
Jason Marcordes (20:10):
So, you know, we hear all the time from potential clients. You know, the reason they're coming to us is they, you know, they emailed their property manager, you know, three times over the last two weeks and they still haven't heard back, lack of transparency that they don't know what's going on at the property. They can't get answers. The second thing is just the inability to take care of maintenance items. A lot of times when we take over the property, tenants will say, Hey, I've been trying to get this done for two, three, four weeks, and you know, they, the Property Management company just never responded to it never took care of business. And then the last thing see quite often is, just the inability to rent units and bring down that vacancy. You know, we've talked to, clients, that are coming from Property Management companies that tried to rent their unit for two, three, four, five, sometimes six months, and no activity. And then you pull up, you know, you pull up the listing and there's like one picture or no pictures, you know, it looks like crap, you know, there's no description, stuff like that.
Fernando Angelucci (21:20):
Uh-huh. Yeah. That makes a lot of sense. When, you know, half of the work is finding the property manager, but then the other half is actually buying the right property. So what advice would you give to a real estate investor looking to buy their first rental property?
Jason Marcordes (21:38):
So my, you know, I got a ton of advice, I love to advise new investors. First thing is get your finances right. So pay off your debt, credit card debt, automobile debt, whatever it is, pay it off, start saving some money. Once you get your finances right, you know, develop your game plan. What do you want to do? Do you want to do flips? Do you want to do buy and hold? Do you want to do short-term rentals? So figure out the game plan. Doesn't have to be anything extravagant. Write little one-page business plan, write out your goals. And then the next thing is build the team. You're going to need a good broker, good property manager, good contractor, good attorney you know, people like that.
Fernando Angelucci (22:23):
A good wholesaler.
Jason Marcordes (22:24):
A great wholesaler, absolutely, that's one of the most important. So build that team, and then the last thing is really execute like you, I mean, we've all been on BP. We've all, you know, we've all listened to podcasts like everybody and their brother wants to be a real estate investor and you could research it for years. I mean, you can never run out of stuff, content to take in, but at the end of the day, you gotta pull the trigger sometime. And for me, you know, I am on the Jesus, I'm drawing a blank. I'm on the.
Fernando Angelucci (22:57):
Analysis paralysis side?
Jason Marcordes (23:00):
The House Hacker Bandwagon.
Fernando Angelucci (23:02):
Okay.
Jason Marcordes (23:02):
I love it. I mean, it just makes sense. If you can buy a property for three and a half percent down, a fixed rate, 30 year mortgage like that is that's money. So for your first deal to minimize your risk, you might as well do you know, do the house hack.
Fernando Angelucci (23:20):
And you've done a few house hacks now. Right? Tell us about those.
Jason Marcordes (23:24):
Yeah. I mean, like I said, it's a no brainer. I mean, especially if you're a broker. That's like another hack in itself. So if you hear if you're a broker, you get a two and a half percent commission for buying that property. So you go FHA, you have to put three and a half percent down, you get your two and a half a percent commission. You're down 1%. You know, from there you can, you know, you could do different things. You can ask for a closing credit, you can ask for a higher, tax probation. You can actually get paid to purchase that property.
Fernando Angelucci (24:03):
And you've done this now, I think what two or three times, right? I mean, you're on your, the multi-family that you own now is this your third house hack?
Jason Marcordes (24:12):
So as far as house hack, this is my second.
Fernando Angelucci (24:15):
Second. Okay.
Jason Marcordes (24:16):
Yeah.
Fernando Angelucci (24:17):
Yeah. Tell us a little bit about the deal that you're in right now. I believe it's what a four or five flat something like. that?
Jason Marcordes (24:23):
Yeah, it's a four flat. So with the house hack it's gotta be one to four, you know, anything five pluses is a commercial, so different loan product. But yeah, I mean, I did this one exactly like you're talking about, or we're talking about, I guess, you know, three and a half percent down, I got a two and a half percent commission. I got a 3% closing credit and I jacked up the tax probations, my lender, actually, he, you know, we had issues with the loan because we couldn't, we were actually getting paid to buy the property. And with FHA, they don't really appreciate that. So we actually had to take some of that extra money and pay down our mortgage, rate or interest rates. So, you know, I locked in a 2.99 when it was, you know, that was a hell of a deal. Now, you know, when you didn't think rates could go much lower, they did lower them. So you're seeing that pretty regularly, but man, 30 year fixed rate at 2.99, like it's incredible.
Fernando Angelucci (25:25):
Right. Well, that's good. So kind of switching gears here now this is teacher competition, but what advice would you give someone considering maybe starting their own Property Management Company?
Jason Marcordes (25:46):
Don't do it? No. what advice would I give people that are starting their own company? Number one, be very selective of your clients, or the properties you're taking on. You know.
Fernando Angelucci (26:01):
What do you mean by that?
Jason Marcordes (26:02):
Well, what I did, which is very common in any industry, you know, when you first start your business, any business is good business. Property Management is not like a singular transaction. It's really a relationship. So, you are going to be married to that person, whether it be, you know, six months, a year, 10 years, whatever. So you want to make sure that you vet that person and that is somebody you feel comfortable with, you know, working with over the long haul for the next couple of years, same thing with properties. You want to make sure that you feel comfortable going in that neighborhood, dealing with that property. It's not like a problem property, always going to be you're always going to get maintenance calls or you can't rent it to, you know, a qualified tenant. So.
Fernando Angelucci (26:49):
Uh-huh.
Jason Marcordes (26:49):
That's my number one thing is like, be selective. It's your company, you have to design it the way you see, you know, your goals, kind of fitting that issue. So the other thing is, you know, charge what you're worth again. Ua common thing for new businesses is to give discounts, with Property Management, it's not a single transaction. So you make that discount on the front end, you're going to be dealing with that for a long time, going forward. And Property Management is not high margin business, although every one of our clients apparently thinks that way, but it's, it's not, it's not a high margin business, so it's easy to break even, or even lose money if you start giving out discounts. So.
Fernando Angelucci (27:38):
Yeah.
Jason Marcordes (27:38):
You know, if you're a high quality property manager, you should charge like it.
Fernando Angelucci (27:45):
I like that, charge what you're worth, I mean.
Jason Marcordes (27:47):
Yeah.
Fernando Angelucci (27:47):
In the last few companies that we started in the very beginning, we were kind of hit with that as well, charging them a little bit less, just trying to gain the business. And just like you said, what you find out is not all business is good business.
Jason Marcordes (28:00):
Yep.
Fernando Angelucci (28:00):
Especially once it becomes a longer-term relationship. You want somebody to, you know, really appreciate what you do and see the value. You know, we always talk about leading with value and coming from an abundance mindset perspective. And it, once you start doing those things, it takes a while to kind of unwind the damage that you did from, you know, giving out discounts and taking losses on certain things, just because you thought that the top line growth was worth it at the sacrifice of the bottom line. So totally makes a lot of sense.
Jason Marcordes (28:39):
Absolutely. I had a major shift last year from top line and bottom line thinking. And man, it has had an incredible change in our business at really in my life, my level of stress. I mean I highly suggest you know, getting into that mindset.
Fernando Angelucci (28:58):
Well, so how can people reach you? And is there anything that they should know before they try and contact you?
Jason Marcordes (29:06):
Not really. I'm an open book, so I love to help people. You know, if you have any questions, need help with anything, need a referral. I have tons of referrals, lenders, contractors, whatever you need. You know, feel free to shoot me a text and we can set up a time to talk.
Fernando Angelucci (29:23):
What's your what's your website address?
Jason Marcordes (29:27):
You can go to www.ChicagosPropertyManagement.com, that's Chicago with an S. www.ChicagosPropertyManagement.com. You could also reach out there, there's a contact us form.
Fernando Angelucci (29:37):
Cool. Well, Jason, I really appreciate you coming on. It's always good to see you, my friend.
Jason Marcordes (29:42):
Yeah, it's been a pleasure. Thanks for having me.
Fernando Angelucci (29:44):
Talk to you soon.
Jason Marcordes (29:46):
All right. Take care.
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