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07 31st, 2009| 
Metalwork in China Restoration
Now for the techniques involving metalwork and drilling. There are three main types of drill, the hand drill or Bob drill; the hand twist drill, or the power drill.
Bob Drill. The Bob drill, which is the traditional china restorers’ tool, consists of a steel spindle with a bob of wood towards the lower end, an eye at the top, and a tapered point at the bottom. It has a cross bar of wood with a hole in the middle which lets it slide up and down the spindle. A lace is passed through the eye at the top of die spindle and fastened to each end of the cross bar.
The cross bar is held by placing three fingers on top of it and the thumb and little finger below. Make a small starter hole in the china with a broken file or a diamond and place the point of the drill, which carries a tube containing a drilling diamond, in this hole. Keeping the drill upright, press down gently on the cross bar. This moves down the spindle, unwinding the lace and turning the spindle complete with bit. The impetus of the bob, acting as a kind of flywheel, carries the rotation of the spindle a little further as the pressure is relaxed and then back again rewinding the lace onto the spindle. Keep the drill straight, don’t let it sway from side to side, and lubricate the bit with oil as the work goes on.
Hand Twist Drill. This is used much the same way, although it is for sonic people not quite such an easy tool to use. It is necessary to exert a little pressure to get the bit to bite, and the piece must therefore be firmly held.
Power Drill. Provided your drill runs at about z000 r.p.m. it call be used for drilling, especially in substantial pieces. The hole will have to be started by hand. Special bits are needed, and the drill must be mounted vertically on a bench stand. For some jobs a horizontal stand will have to be used. If the piece is properly held under the drill, and you are not too heavy handed, this method should be satisfactory.
Tack some kind of pad to the workbench under the drill to act as a shock absorber. This should not be too soft; a piece of thick lino or cork will do.
Put the drilling tube into the chuck of the drill and start the motor, checking carefully to make sure that the tube when spinning is absolutely straight and not whipping at all.
Put the piece of china on the bench under tile drill and bring the machine down, not switched on, to within an inch of the working point. The hole should already have been started with a hand drill. Get everything perfectly aligned and secure the piece to the bench as best you can. Start the drill and bring it very very gently down into the hole. The moment it bites, lift it and have a look to see if you are working straight. Then lubricate with water (or turps if you are drilling glass) and continue drilling, lubricating frequently. To drill large holes, start by drilling a small one, then enlarge the mouth of the hole for the next size drilling tube with a tungsten carbide bit. This means a lot of bit changing, so don’t forget to check for whip each time.
To keep objects steady under the drill, prop them up with large chunks of plastid ne. Small objects can temporarily be set in plaster of Paris, in a small wooden box at the right angle for drilling. If your piece of china is so big that there isn’t room to get it under the drill, it may be possible to swing the drill round so that it points out over the side of the bench, and then the china can be put on a separate table at the right height.
All drilling takes a steady hand, a straight eye and a light touch. If die drill waves about the results won’t be very good, and if too much pressure is applied there is always a risk of splitting the china. This applies especially when using a mounted power drill, as you have so much leverage and it is harder to tell by feel just how much pressure you are putting on. Practice on some useless bits and pieces, for hours, if necessary!
Dowelling. Dowelling is die joining together of two pieces by boring a hole in each, the ends of which match exactly, so that either a straight pin, or a pin angled at the join (as in a knee joint) can be cemented in to hold the two together. For most purposes half hard brass wire 132, in a A’ diameter hole, is right. The holes should be about a quarter of an inch deep. To align the holes properly, bore one side, then push the tip of a thoroughly wet indelible pencil into the hole so that it is well ringed with ink. Then bring the other, undrilled side to the join tight against the drilled piece in exactly the right position. The indelible ink will mark the undrilled piece, and you can go ahead and bore right on the mark. Countersink one or both holes with a slightly bigger bit.
Take a piece of brass wire and flatten it slightly on one side to allow air to escape from the holes as it is inserted. Push it home into one of the holes and cut the wire, allowing sufficient length to go to the bottom of the other hole. Then fit the second piece over the wire. If the wire is too long to allow the faces to come together properly, snip off a little tiny bit and try again until you do get an exact fit. Obviously, the secret of this job is to be sure your holes are accurately bored facing each other, or you will spend ages fiddling about bending the wire or enlarging holes.
When die wire fits properly, take the wire right out and Jay it on the work bench and roll a rough file backwards and forwards across it so that it is scratched and scored to make a key for the cement.
Make up some cement (see Fillers and Cements) from whichever mixture you fancy. Araldite and titanium dioxide or kaolin or whiting are as good as any because Araldite sticks so strongly. Fill one of the holes, that on the bigger piece of china and push in the dowel making sure that it goes right home as it did when you fitted it. Sonic cement will ooze up into the countersinking. Wipe it away, as the countersinking will later fill with cement from the other side of the join and this will help to hold the two pieces together. Try the second piece over the dowel just to make sure that everything still fits. Then remove it, and leave the dowel to set hard in its cement. The next day, or after baking for half an hour at zoo deg F. if epoxy resin has been used, clean the surfaces of the break with methylated spirit, and make up some more cement and fill the hole in the second piece. Provided the broken edges of the piece fit perfectly it is not necessary to put adhesive between them. Adhesive will in effect widen the join a fraction and make a line which will show. But if there arc irregularities or missing chips, then put some adhesive or even a little filler composition in to fill them out. If you decide that adhesive is necessary, put a thus layer on one side of the break only.
Push the second piece well home on to the dowel, and make sure that the fit is good. Bind the pieces together with gummed strip as described before.
Dowelling is used to join modelled or moulded or cast pieces to the whole in exactly the same way. Dowels will also support joins in hollow china, or help to join hollow pieces to solid pieces. The solid piece is bored in the same way as before, but the reverse process has to be carried out in the hollow section, a block of cement being built up to hold the dowel. When both sides are hollow and the hole is large use a heavier gauge wire or make a dowel out of a tube of brass. It is difficult to fill in a large space with cement and to set a small pin iri the middle of it. Wrap a ribbon of cement composition round and round the dowel until it is enough to fill the cavity, and push the dowel, with its cement wrapping, firmly into place. The cement may ride up the dowel if it is too much to go into the cavity, and it will not adhere if it is too little. Having cemented in one end of the dowel, leave it to set, and then swathe the protruding end in die same way, finally fitting the broken piece over the dowel and cement, until a flush join is achieved.
pitillilig. In some ways, pinning is easier than dowelling. A hole is drilled through the broken sections after they have been stuck together and a pin, prepared in the same way as a dowel, is pushed into the hole which has been filled with a fairly liquid cement mixture. The advantages of this method are that there is no difficulty in getting the holes to match up as they are drilled in one go, and that no binding is necessary as the join has already been made. The pin is sunk well into the hole so that the outer end is just below the surface. The hole is then filled in with composition and overpainted in due course (see Fig. io).
Cores. Cores are commonly used when a large missing section has to be built up, to support a piece which may sag
these two pieces
cannot easily or be liable to breakage. Wire of a suitable gauge is used according to the thickness of the china. Holes are bored each side of the aperture, only just deep enough to accept the end of the wire. A piece of wire just slightly longer than the gap is cut and roughened, and sprung into the holes. Or a piece of wire is put into each hole and joined in the middle by soldering. Several pieces of wire can be put across a gap if necessary. If the part to be replaced is curved, a teapot handle for instance, a correctly shaped core of wire is set into holes at each end of the break (see Fig. to). Shaped cores can be made as skeleton frameworks for almost any shape or size of missing piece. Sometimes a core is not fixed at each end, but is a dowel set in the edge of a gap (see Fig. io). A bent pin makes a skeleton limb on which to build up a whole piece by modelling.
All these techniques can be combined with those described under the headings of Sticking, Moulding and Modelling.
If the china is thick enough to carry drill holes, and it is intended to make a press mould out of plasticine or Paribar, a core or cores can be put across the gap to strengthen the new piece, the filler composition being carefully tooled in to cover the wires.
Cores can be a great help when modelling. It is not possible to make a model direct by putting a large lump of composition over and round the core, it will just slip about the wire. First wind a ribbon of composition round and round the wire, and leave it to set hard. Then do the modelling on this conipo base.
Overpainting. The art of overpainting mends in china so that the repair becomes indistinguishable from the original is skilled indeed ! If you cannot paint anyway, then it is going to be pretty difficult for you. The work is done with good quality water colour paint brushes, and you will need several sizes, particularly some good fine ones. Artist’s oil paints are fine because they can be mixed so easily to make absolutely any colour. Reeves Artist’s Gel makes a good medium, or clear enamel glaze if you can get it. If you want the work to dry out quickly add drying agents bought from Artist’s Colourinen. Just how glazed the final result may be depends upon the medium, but the final result can always be varnished if it is not glossy enough. For work where opaque colours are needed, polymer paints are ideal and can be mixed with their own glaze mcdiLini to get a high finish. Darwi Italian Glaze is also excellent for work on china.
Many school teachers know about the modelling compound made by Darwi, and this firm now make a most excellent range of paints for their modelling compound which can be used on china to give the effect of glazes without firing. Darwi transparent paints are available in twelve colours, and thereis a similar range in opaque paints. Both types of paint when dry should be given a coat of the special Darwi Varnish, as this gives it the ceramic lustre, and dries hard to give lasting protection. They also make metallic paints called Darwi-Or and Darwi-Al in gold and aluminium.
The normal technique for building up colour to re- create glaze is to start by painting the whole area with a ground colour which exactly matches the ground colour of the original. This may be anything from black to white, but will probably be fairly opaque and will contain a lot of white. After this layer has dried, further layers of more transparent colour are built up over it until the decoration matches the original. To explain in detail this is done would be to embark on a course in oil painting. As a simple example, flesh colour is made up of at least five colours. White, a little grey or blue, black, yellow, and crimson. If you mix all these colours together in any proportions the result will be an opaque putty coloured paint. Applied in transparent layers very thinly, first wltite, and then the lightest touches of blue, grey and black, and then a little yellow and a final coat of transparent palest crimson, it will build tip beautiful flesh tones. The portrait painter teams all about this, and if you are going to do much of this kind of work a good book on oil painting techniques could be lielpfiil.
Perhaps I have made ovcrpainting sound too difficult—but it isn’t really, and it is great fun, and astonishingly good results follow just a little practice.
Here is a list of colours which will cover any range you want and will come in useful for other restoration jobs. You might even get interested in painting in oils, if you aren’t already. Anyone who has an oil paint box will have enough colours and will know enough about painting to go ahead without further purchases except medium. Dry powder pigments in several of the tints below are also very useful for all kinds of restoration work. It isn’t necessary to have all these colours. For small jobs just buy the ones you need and so build up a stock piecemeal. Polyurethane glaze gives a good hard clear finish if a high gloss is required.
Colours. These should be oil colours.
Titanium White Ivory Black Cobalt
Naples Yellow Yellow Ochre Burnt Sienna Burnt Umber Rose Madder Indian Red
Deep Cobalt Green Chrome Green
Artist’s oil and riot Student’s
Paynes Grey
French Ultramarine Cerulean
Winsor Lemon Raw Sienna
Raw Umber Venetian Red Cadmium Red Viridian
Permanent Green
GLASSWARE
Wash glass with liquid detergent in warm water, and brush cut glass gently with a soft brush. Dry it and polish it with a silver cloth. If badly stained cut glass is left to soak overnight in warm water and detergent with a few drops of ammonia added, the dirt will probably come off. Tile cloudy deposit left oil glass by lime in water is the devil to shift. Fill the glass with distilled or rain water, rim tap water, and leave it for a day or two and then scrub gently. If the lime still persists a little spirits of salt may shift it. Spirits of salt is a pretty good shifter of all kinds of stains, and it also makes neat little shot holes in your clothes if you spray it when
brushing!
Bad stains will usually yield to a soaking in a five per cent solution of caustic soda. Metal polish will remove stains on glass. Decanters and bottles with stains which will not yieldto brushing or which cannot be reached can be cleaned with said, preferably silver sand. Put in a small handful of sand, some detergent and a little warm water, enough to allow the sand to swirl around when the bottle is shaken. A careful swirl or two should abrade off the stain. A five per cent solution of nitric acid will clean off wine stains.
Scratches oil glass will sometimes respond to a good Polish with jeweller’s rouge. Glass is a strange substance which does in fact flow, and rubbing with rouge does actually make it flow and fill in the scratches.
Removing Stoppers. Glass stoppers sometimes get firmly stuck in old decanters and glass bottles, and brute force is the worst possible way to shift them. Make up a mixture as follows:
2 parts alcohol
I part glycerine
i part common salt
Paint this oil the stopper, particularly where it enters the bottle or decanter, and leave it for a day. A few gentle taps should then shift it. If this doesn’t work, heat the decanter over a stove, or stand it on a radiator so that the air inside will expand, and force out the stopper. This method will have to be used if a stopper has broken offshort in the neck of a bottle. Keep the piece that comes out for it may be possible to repair it.
Making Lamps out of Bottles. Large glass jars and carboys can be made into lamp stands and this job always looks best-if the jar is to be filled with solid or semi-solid matter such as pebbles, or sand—if the flex passes up through the bottle. If the jar is to be filled with liquid, obviously there are difficulties in preventing leakage through the flex-hole, and in keeping the flex totally insulated from the liquid. Outside fittings are best and safest for liquid filled jars.
Bore holes in glass jars exactly as they are bored in china. The safest way is to start by boring a A” hole with a diamond drill, lubricating constantly with turpentine. Then enlarge the hole with successively bigger drills until it measures which is big enough to take the flex. Start each bigger hole for the follow-up drills with a tungsten carbide bit, and don’t push through too fast or the
will drill
glass wi split. just let the grind gently away. A little practice on a spare milk bottle is advisable if you haven’t done the job before.
Mending Glass
Sticking. On the whole glass is stuck together in the same way as is china. There are one or two small points of differ- ence. The edges of broken glass are very smooth and some roughing up with a diamond scratcher will give the adhesive a better key. Gum strip is used to put tension across the joins as described in the section on sticking china. This is very important when mending glass as a very tight fit is essential to ensure adhesion. When the adhesive leas set, surplus which has squeezed out is removed by rubbing it down with steel wool, not glass paper as this would scratch the glass. Remaining adhesive can be lifted off with a scalpel or a razor blade.
Wine glasses so often break across the stem, and such breaks can be mended with Araldite, but won’t be particularly strong because glass tends to break again near the point of the first break even if the join itself holds firm. Stainless steel bands are sometimes put round stein-breaks, but this is an expert job and the band must be very accurately made so that it can be sprung over the stein and glued tight round the join.
Dowelling. Dowel glass as you dowel china. This is a better method of mending a wine glass stem. The dowel will show, but inside the stein the Aralditc/titan dioxide cement looks rather like frosting and is not unsightly. Glass is more fragile and shatters more easily than china, so take just that much more care when drilling.
Glass that has been mended with epoxy resin can be heated to speed up setting, but remember that glass breaks if exposed to sudden changes of temperature. Therefore it must be put into a cold oven and the heat brought up gradually to about i 5o deg. F. Then switch off the heat and without opening the oven door leave it to cool right off again. The draught caused by opening the door would crack the glass. After an hour the oven should be cool enough and the adhesive set. Only white clear glass may be heated; coloured glass cannot be stoved and the adhesive will have to be left to harden in its own sweet time.
Moulded Repairs. Glass can be repaired with liquid acrylic resin, of which there are several makes on the market. Technovit 4004A dries to a clear glass-like material. It can be polished and it can be coloured. Acrulite and Tensol Acrylic are two other very good materials for this work.
Make plasticise moulds as described in the china section, but always use white plasticise as acrylic will take up colour from coloured plasticise. No parting agent is needed unless the makers of the acrylic so state. Technovit is made up by adding hardening liquid to a powder, and it is then poured direct into the mould, care being taken that there are no air bubbles present or the effect will not be clear. Warm the glass a little before pouring the filler as acrylic gives off heat as it hardens and might crack cold glass.
Acrylics can be bought ready coloured, or can be tinted with powder pigments and made opaque so that it looks like china, rather than glass, so it is quite useful for repairing china of a self colour which requires no further overpainting. Jasperware may be repaired satisfactorily with acrylic.
Surplus acrylic is cleaned from the edges of the join immediately, while it is still liquid. It can be abraded and rubbed away after hardening but this dulls it and there is the danger of scratching the surrounding glass. Acrylic can be polished with silicone carbide spaced grit cloth or paper, grades 150, 24o and 320.
Sometimes you may need a large lump of pseudo glass for a restoration. Acrylic can be poured into a mould, but this means that a model must first be made, and then a mould as described in the sectionon casting and pressing china parts. It is much easier, really, to make the lumps out of Perspex as this material is worked in exactly the same way as wood, and turned on a lathe. The tools—saws, files, drills etc. are lubricated while working with ordinary soap, and the Perspex will have to be polished when all shaping has been done.
Pieces of chandeliers can be replaced with Perspex, and new pedestals made for glass ornaments (see under Perspex).
here are three things that make a company great: their employees, their systems, and their structure. All three of those things have to be polished and excellent in order for any company to be successful. You cannot have one without the other. If you have the best employees in the world, they will do no good if sound systems aren’t in place for them to operate in. A great manager cannot be successful if they don’t have accounting support. Conversely, systems only work if a company has employees that are trained and can utilize those systems to create value. A company’s structure allows for seamless interaction between an employee and the company’s system. Structure allows an employee to know their role and to focus on being successful.
Employees
TRAINING
When you are evaluating which company you will hire to manage your property it can be easy to forget that you aren’t hiring just a company. You are hiring the people within that company. That was the mistake the owners of the West Phoenix property made. They hired a company that had a good reputation, but did not look past the macro to the micro. An interview with the person that was going to be actually on the ground, managing their investment, might have caused them to think twice. I would go so far as to say that the individual a company uses to manage your property is more important than the company itself. After all, you will be dealing primarily with the manager, not the company.
One sign that a company has good employees is the level of education they provide. All of my employees have monthly, ongoing training. I invest in my employees, knowing that the investment will foster growth in both my business and in my employees.
Take a close look at a prospective company’s training systems. A good company will have a training program that focuses on creating top-notch property management employees. For instance, Equity Residential, one of the nation’s largest management companies, has its own “university.” Through Equity University, the company ensures that all its employees attend and graduate from an intensive and standardized training program.
Other companies will utilize corporate trainers. I bring in a corporate trainer every month to work with my managers. She specializes in developing management skill sets in a fun and interactive way.
You might assume that all companies take the time to train and educate their employees. Unfortunately, that is often not the case. Too often companies leave it in the hands of their employees to train themselves. Beware of a company that doesn’t standardize and require training.
JOB SATISFACTION
Take a look at the management company’s employee retention. A good company attracts and retains good employees, If there is a lot of turnover in a company, you can bet there is something going on internally—and it probably won’t be good for your investment. Good companies know the value of their employees and strive to keep them happy and therefore with the company. I learned the value of this lesson firsthand.
At one point we converted one of my properties in Las Vegas from apartments to condominiums. When the property was almost sold out we contracted a home owners association to manage the property. An HOA is a little different from a multifamily management company in that they only manage the common area of the buildings since the units themselves are owned by individuals. HOA companies need to be well versed in legal and financial systems that are quite a bit different from other management types.
My company doesn’t perform HOA management, so we hired a company to do it for us. It was a disaster. I knew we were in for trouble when the manager quit a week after we hired the company. Then the new manager quit a couple months later. Both managers quit because of internal structure issues. They were frustrated with the company, which made them frustrated with their jobs, which made them leave.
Owners on the property started to grumble about the lack of maintenance. If you think it would be bad to deal with one angry owner, try 340 of them. HOA meetings turned into three-hour-long complaint Pests, as one owner after another came forward. Over the course of time this company was under our employment, we had five property managers come and go. Finally we said enough is enough, and fired them.
Systems
Earlier in the book we went into detail about sound property management systems and how to implement them. If you aren’t planning on managing your own property, then you had better be sure that the company you hire is firing on all cylinders when it comes to property management systems.
POLICIES AND PROCEDURES
One of the best ways to get a feel for a company’s level of professionalism is to take a look at a company’s documented policies and procedures. In my company, every manager on-site has a copy of a standardized policy and procedure manual. They are expected to know it by heart, educate their staff about it, and enforce the policies contained within it.
ACCOUNTING
Though a manual is good for detailing on-site operational systems, it is important to determine what kind of systems a company has in place for accounting as well. If a company doesn’t have an excellent, autonomously functioning accounting department, you can bet for sure that the employees on-site will not be able to do their job effectively.
I thank my lucky stars that when I first started in the property management business my company had excellent corporate accounting and support systems in place. Having those taken care of allowed me to focus on managing my properties without worrying about the accounting details. I collected the rent and paid the bills, while accounting produced reports for me that enabled me to make informed and effective decisions. I wouldn’t have survived without them.
Structures
The structure of a company determines its ability to operate successfully. I can think of nothing more important when it comes to a company’s structure than depth. You should be leery of a company that cannot absorb the loss of an employee in any of its departments.
Accounting is the most apt example for this. As an owner, the single most important correspondence you will receive from a property management company will be your monthly and annual financials—the report card. By now you know how important financials are. They tell the story of whether your property is succeeding or not, whether your investment is growing your wealth.
Financials are produced by the accounting staff at a property management company and should be sent to the owner by the 15th of the following month at the latest. When I first started in the property management business my company consisted of myself and an office manager that knew how to do accounting. Most property management companies that you will come across are small like mine was. Generally they will have two to five employees. In the early days, if my accountant were to leave at the end of the month, there would be no way that I would be able to get the financials out to my clients. I would have had no way to absorb the loss of my accountant.
In larger companies, however, the loss of a key employee is not nearly as crippling. The same accountant that I had in the early days of my company is still with me. She is now my regional accounting manager. She has been with me for over fifteen years, and is a major part of the growth of my business. God forbid she ever left, but if she did, my company would still function smoothly. She manages competent people who could step up and help, and my CFO could oversee the process. Financials would still be sent to my clients on the appointed day, and as far as my company’s operations are concerned, they would never know the difference. In a large company, even the loss of a key person can be absorbed and business will function as normal. That is not the case with smaller companies.
Don’t get me wrong, I’m not saying, “Don’t hire a small property management company.” Obviously, if people had followed that line of thinking I would never have gotten off the ground myself, and you wouldn’t be reading this book. For the record, there are a lot of quality small property management companies out there, and one of them may fit the management needs of your investment property perfectly. While depth will be an issue with these companies, that doesn’t mean that the benefits of a small company won’t outweigh the disadvantages.
For example, if you own a single-family investment property as my in-laws do, a large property management company won’t be your best bet since they are most likely managing large multi-unit buildings. In some cases they wouldn’t even consider taking on a single-family house. Such is the case with my company. The reason is that it would be too easy not to give your investment property the attention it deserves. It would often get put on the back burner. If I had an issue with a multi-unit account that brings in $5,000 per month in management fees and an issue with a single-family house account that brings in $ 100 per month, which property do you think I’d focus on? In the case of a single-family property, a smaller management company would be much more inclined to give your property the attention it would need to be successful. I can’t stress this enough: You should always hire a property management company based on what fits the needs of your property.
Finally, one last thing to take a look at when evaluating a property management company is the stability of its portfolio. Do they have properties that they have been managing for years, or is their portfolio a revolving door? You can bet that a management company whose portfolio is always shifting is probably not offering a satisfactory level of service.
You should have a pretty good understanding of the amount of work and effort that is involved in managing a property and whether it is for you. We’ve discussed the qualities you must have or develop—most importantly, assertiveness. You have analyzed your working situation and determined whether managing your own property is a reasonable and cost-effective use of your time.
If you decide that managing your own property is not for you, you now know the attributes you should look for when hiring a property management company. You’re now equipped with the tools to scrutinize another property and compare management companies’ systems. In this chapter, I will show another invaluable method for researching potential property management companies,
In that section, I showed you my own personal method of researching, which I group into three easy-to-define and easily understood categories:
Level 1 Research
Level 2 Research
Level 3 Research
Preliminary research that you can do from your own home. This would include Internet and publication research.
If Level I research leads you to like what you see, Level 2 research will be needed. This is the stage where you meet face-to-face with people in the know. Level 2 research is invaluable in verifying the information you gathered in Level 1. Level 3 research involves utilizing the experts you have already assembled on your team. Call them and run your information past them. They will give you valuable insights. This will allow you to remain objective and keep perspective.
Our intent in Portland was to purchase an apartment building and operate it through third-party management. Knowing my goal for my company to be the best property management company in the Southwest informed my decision to hire a company to manage the property in Portland.
If I spent so much time and energy in researching the property itself, why wouldn’t I spend the same amount of energy in researching who I would choose to manage my valuable asset? That is exactly what I did, and I used the three levels of research in my investigations.
Level 1 Research Finding the Players
Level I research is the preliminary stage of your process. By now you have profiled your property and determined its needs. You are ready to begin searching for property management companies that will be the best fit.
When I was first looking for a property management company for our Portland property, I started with the Internet. I love the Internet. I can’t imagine how I functioned without it. At the tip of my fingers is access to incredible amounts of useful information that would have taken weeks to assemble a few years ago.
I started my online search with the local apartment association, the Rental Housing Association of Greater Portland (RHAGP). Just by going to their Web site I was able to access the contact information of over fifteen local property management companies. I printed out the page listing them and put it in my file.
Also on the RHAGP Web site I was able to read through the local newsletter and get a feel for the players in the local property management market. I printed out back copies of the newsletter and put those in my file too, to read on the plane. I used those for my Level 2 research in order to help me narrow down my list of whom to meet when I visited the city.
Not wanting to be limited to just local property management companies, I also visited the Web sites of some regional and national companies, such as Equity and HSC. Through browsing their Web sites, I was able to determine that each one of these companies had branch offices in Portland staffed with account representatives that I could meet with. I was also able to get a general history of each company, an idea of its business philosophy, and a listing of the properties that it managed in the Portland area. I took down the contact information and addresses of these apartments so that I could tour them while I was in Portland and contact their owners.
Contacting a property owner is an invaluable tool in your search for a property management company. It’s a safe bet that someone who is entrusting the value of their investment to a property management company will shoot straight with you when you ask them about the performance of that company In this case, one of the owners informed me that he was looking to make a change and was not happy with a company’s performance. I was able to confirm this feeling with a few different owners and used that valuable information to scratch that company off my list. Remember the old saying, “You have not because you ask not”? When it comes to real estate, asking an expert a simple question can save you millions of dollars.
Now that I had a good handle on the players involved in the Portland rental market, it was time to focus my list and decide who I wanted to meet when I traveled to the city for my Level 2 research. Again, I accomplished most of this from the comfortable confines of my office chair through the magic of the Internet and my phone.
The local property management companies that I had found online all either had a Web site or a phone number. By calling or browsing their Web sites I was able to determine which companies may be a good fit for my property and which would not. Once I had my list of companies that I was interested in, I called each of them and set up an appointment with one of their account representatives, letting them know I would like to meet them at their office.
Level 2 Research—Meeting the Players
The first thing I did when I arrived in Portland was … grab one of the famed local beers. Level 2 research is a blast. You get to travel to awesome cities and meet incredible people, and it can all be written off as a business expense. To me there is nothing more exhilarating than being able to travel to a new area, meet new people who will help me achieve my business goals, and either confirm or realign my thinking about a certain market,
As I mentioned, I had set up appointments to meet with property management companies before I even left for Portland. I had three companies in mind to manage the property and planned on spending a day with each in order to observe and to really sink my teeth into their operations. I had very clear objectives in mind and very specific things that I wanted to observe.
THE OFFICE VISIT
When looking to hire a company you should always visit its offices. This isn’t about cosmetics. Who cares if it has green carpet and you prefer gray. Visiting an office is all about observing the way in which the business operates. It is also an opportunity to review some documentation that will be vital in your decision-making process.
Keep your eyes open, and observe the office staff. Does it seem organized or chaotic? Is there an air of professionalism, and are the employees dressed neatly? Check to make sure there is a clean and efficient filing system. One company I visited had files stacked on tables. Needless to say I was not impressed. If a company can’t keep their paperwork in order, they definitely won’t be able to keep your investment in order. All of these small visual clues will give you insight as to how the company will manage your property.
Ask to use a conference room and sit yourself down with the employee manual and the property policies and procedures, Read them thoroughly and ask any questions that you might have about what, and what might not, be included in the material. Don’t be afraid to ask the tough questions. This is not a time to be timid. This company may be managing your valuable asset and you should investigate and learn as much about it as possible.
Meet with the manager and asset manager that will be assigned to your property should you hire the company. Remember what I said earlier, even more than the company itself, you will be hiring the people that will be physically working on your property. Ask them about their certifications and their experience in the industry, and ask to see proof and a list of references.
Inquire into the education systems that the company has in place and determine whether they are current in their involvement with the local trade association. Have them explain their philosophy when it comes to training. Oftentimes, when employees take training or an educational course they will receive a certificate of completion. Ask to see those certificates for the people who would be working on your property. You would be surprised, but a lot of times a company will say they are actively training their employees even when they aren’t. Don’t just take a company’s word. Trust but verify
Of course you’ll want to review the company’s accounting systems. These should be spotless. Don’t get involved with a company that doesn’t have a solid accounting staff. Determine what software the company is s using. An added benefit of hiring a management company is that they should have sophisticated financial software in order to provide you the owner with a high level of financial service. If they are running reports only through a rudimentary Excel spreadsheet you might want to think twice.
Talk with the accounting manager. Ask them what types of reports you will see on a monthly and annual basis, and get a feeling for their experience level and education, as well as that of their staff.
Find out what kind of financial services the company provides. Do they pay your mortgage for you? Do they handle the insurance and tax impounds? The more sophisticated the accounting systems the more likely you will be able to enjoy your investment hands-free, and that will allow you to follow Clubhouse
Staff
• On larger properties there will be a clubhouse that generally contains common areas for residents to use and houses the staff offices.
• Ask yourself what kind of first impression you get by walking into the clubhouse. Is it clean and free of clutter?
• Is it clear where the rental offices are, or do you have to hunt around hoping to find someone? Nothing is worse than a potential resident who has been touring apartments all day becoming frustrated because they can’t find a leasing agent.
• Observe whether there is rental material out for potential residents to review such items as floor plans, brochures, and rental pricing.
• When you walk into a rental office, someone should approach you immediately.
• Observe the staff, taking note of their appearance and demeanor. A good company will have employees who are professionally dressed, energetic, and give the impression that they are genuinely excited to show you the property.
• If you have a chance, observe the way in which the staff interacts with residents when they come into the office. A good way to do this is by shopping a property on the first of the month. Everyone will be coming in to pay rent.
• Ask lots of questions. Make sure the employees are well versed in not only the property but also the company’s policies and procedures. Unless they are newly hired, if a leasing agent can’t even tell the rent on the property floor plans without referring to a cheat sheet, or tell you how many units the property has, that may be a troubling sign, Collateral/ • On larger properties there will generally be
Marketing Materials marketing materials such as brochures, flyers, and business cards.
• Make sure these material are professional-looking, and not poor copies that appear in-house, Collateral is a huge factor in making a solid first impression. Never forget that people are not just renting an apartment, but a lifestyle.
• The marketing materials should be placed in an open and readily accessible place.
• Verify the accuracy of the marketing materials. Nothing makes a worse impression than having a leasing agent tell you that a rental amount or lease special is different from what is printed. Not updating printed materials is a serious sign of laziness.
Tours/Models • The most important factor for a prospective resident in determining whether to rent or not will be the model walk or touring of units.
• Make sure that the person who will be touring you gets all your information and fills out a guest card.
• Ask to see the models or the units for rent and Observe the sales presentation.
• Observe the condition of the models or units. Are they clean and stylish? Do they get you excited about living at the community, or are they forgettable?
• Is the person touring you commanding the tour, or do they seem uncomfortable?
• Again, ask lots of questions. Don’t interrogate them, but do pay attention to whether the employee remains attentive to your questions or whether they seem to be getting impatient.
• After the tour, the leasing agent should have immediately tried to get you to lease. The hard close.
Office
• While you don’t need to apply for an apartment, you should show interest and sit down with the leasing agent.
• Observe the condition of their offices. Are there files stacked everywhere, cups of half-finished coffee, and papers littering the desk? Do they have to make a space for you? Any signs of disorganization are bad.
Once you have visited the property management offices, talked to the staff, received advice from other owners, reviewed the policies and procedures, and shopped or visited sample properties, you will have a pretty good idea of who will be a good fit to manage your property. Now you should grab one more of the local brews or visit one more local attraction and head back home to begin the third level of research.
Level 3 Research —Picking Your Player
You can think of picking your management company like the NBA draft.
NBA players are valuable commodities. Think about all the work and preparation that goes into scouting an NBA player. Some teams follow a basketball player from the time they are in high school all the way through college—if they go to college. In some rare cases, players are scouted from junior high and on.
Teams will send scouts all over the country, paying them high salaries, keeping them in fancy hotels, and feeding them steak dinners. All this is done so that they can determine which player the team will eventually draft in order to pay even higher salaries, provide stays at even fancier hotels, and pony up on even steak-ier dinners. NBA teams will spend a lot of money in research just to try to pick the one player that will take them to the next level.
Why all the fuss? The NBA is a billion-dollar business, and the stakes are high when they get to the draft table and it’s their turn to pick a player. You may think that the player salaries are out of control, and you might be right. The fact of the matter is that the players make the owners insane amounts of money—if they play well. All the money a team invests in researching players comes back many times over if they make the right pick. Unfortunately, the odds aren’t that great.
Thankfully the odds are much better when you are picking a property management company, but the stakes are just as high. If you don’t do your research correctly or neglect to do it at all, then the results could be staggering. Remember the property in West Phoenix that my company took over because of our business relationship with the owner? That property was just 100 units, yet it cost them millions of dollars. They didn’t draft the right player, and the property failed because of it.
When hiring a third-party property management company I cannot stress enough how imperative it is that you make a wise, well-informed decision. That is why it is vitally important that you consult your team. Don’t just go by your observations. You need another set of eyes. That is just a sound business principle. Even in writing this book, I had a dozen close friends read the drafts and give me their honest opinions. If I had just finished a first draft and said, “This is as good as it can be,” I wouldn’t have felt good about the final draft.
Level 3 research is the time when you will be able to run your findings by your team of experts. Talk to your property management expert and show them your thought process on the companies that you will be picking. They may have some valuable insights that you might have missed. Have a lawyer review contracts. They will be able to help you avoid any hidden traps. Call and talk to industry players in the market where your property is located. They will have a good knowledge of the local companies and will be able to confirm or modify your findings. just by doing this, I guarantee you will be able to remove some companies from your list, and feel just that much more confident that you can make the right choice for the new player on your investment team.
And thank goodness that the cost for your research is a minor fraction of the cost an NBA team spends in their scouting. The biggest costs are the plane ticket and the hotel. These are a small investment for how many returns a solid property management company will afford. I love the process of researching, and I think you will too.
The Management Contract
Once you have completed your three levels of research and settled on the management company for your property, you will come to the hiring stage. This will involve negotiating the management contract.
First off, you should always have an attorney review any contract that you are going to sign. An attorney will be able to tell straightaway whether a company is trying to fleece you with hidden clauses or trick fee structures.
That said, there a few things that you should definitely keep an eye out for when evaluating a property management agreement.
FEE STRUCTURE
Be sure never to sign an agreement with just a flat fee structure. If a management company is not willing to put a stake in the financial success of your property, chances are they simply aren’t worth the paper their contract is written on. A company that charges a percentage fee of the income collected will be motivated to collect as much income as possible. That will mean more money in their pocket—and yours. That’s what I like to call a symbiotic relationship.
Also, it’s important to remember that the percentages will vary depending on the market your property is located in. If all the property management companies in a market are charging around 6 percent for a 100-unit building, it will do you no good to try to negotiate the fee down to 4 percent. It is your responsibility to know the market your property is in and determine what a fair percentage is.
ACCOUNTING SYSTEMS
Be sure the contract is clear on when rent will be collected, when it will be deposited, and where. It is important to make sure that your money will not be commingled with any other property’s money in the management portfolio.
Determine if the agreement is clear that you will have financial control over the property, and that you can set the guidelines on spending habits for the property. Most likely according to the approved budget, there should also be clear expectations for when and how the management company will report to you on a monthly and annual basis with financials. Dates should be clear as to when all financial reports are due, and it should be no later than the 15th of each month for the previous month’s operations. Be clear on the fees that should be collected and the dates on which they should be collected.
RESPONSIBILITIES
The management agreement should spell out clearly the responsibilities of the management company, and should have legal language for you as the owner if those responsibilities are not met. Remember the importance of getting everything in writing. Don’t settle for generalizations. It will be much better for both you and the company you are hiring if the expectations are detailed in the management agreement.
EXPIRATION
Finally, it is important to have a clear timeline set in the management agreement. Don’t sign multiyear agreements that lock you into a contract with penalties for early cancellation. The term of the agreement should be comfortable for you and match the needs of your property Make sure to note whether the management agreement has an automatic renewal clause. These are not necessarily bad in themselves, but you as the owner should remember the date so that you can review the performance of the company throughout the year before the contract renewal goes into effect.
Owner and Management Company: A Symbiotic Relationship
In the end, remember that you are responsible for your property and how it operates. A good management company will go a long way in taking the burden off you, but don’t think you can disappear from the picture and blame the management company if something goes wrong.
Part of the beauty of having a professional management company run your property for you is that you don’t have to sweat the details. Rather, you can focus on the few things that interest you such as financial review Make sure to meet frequently with your management team, and have them give you property updates so that you can address any concerns about the way in which your property is being managed.
If you follow these steps and do your homework, you will be able to enjoy the symbiotic relationship of owner and management company. Your investment will grow in value, and you will become freer to follow your passions while your wealth multiplies. I can’t think of anything better than that.
