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Visit ww.forewarn.com to learn how to combat fraud, mitigate risk, and stay safe with forewarn. Perhaps one of the most potentially dangerous aspects of the real estate profession is delivering eviction notices which which property managers have to deal with all of the time. A strong rental market presents opportunities for bad actors, from scams to difficult or even violent tenants.
And I and I am joined by two experts from the show Me State of Missouri, also my home state, to hear their experiences. Stacey Johnson Cosby is a real estate professional with with Reese Nichols, a Berkshire Hathaway HomeServices company in Kansas City, Missouri. She will be the 2025 chair of the NAR Property Management Forum. And she is a member of the commercial committee. And no, you're not seeing double. She's my twin sister, welcome Stacey. Thank you.
Paul Ismay is the broker owner of Ismay Properties in Springfield, Missouri. He is a past chair of NAR’s property management form. He also helped create the single family investment management Committee. Hi. Hi, Paul. Welcome. Hi. Good to see you guys. Okay, okay. Most NAR members are involved in the sale of property, and they may not realize some of the dangers that that property managers face, especially dealing in the rental market.
Now, now, I want each of you, first of all, to summarize what exactly is property management? Can you can you start, Stacey. Oh, sure. In my case with my husband, we manage our properties. So just a small, small portfolio and it's taking care of everything from A to Z to, screening the tenants, getting them in the property, maintaining the property and following up on any request they may have and just generally and specifically managing that property that is our business. Got it?
Got it. Now, now I know you manage your own residential now, Paul. You manage some commercial properties or you manage properties for others. Can you tell us the definition of property managers for you? well yeah, sure. I do manage properties for many investors. We actually try to like Stacy. We try to be a totally turnkey operation. Well, we take care of every little detail for our investors and we watch and oversee their investment. I'm here to help them make money.
And that's kind of the bottom line, is we help their investing go forward so that they have a good nest egg for retirement. In essence. Love it. Okay, okay. Now, Stacy, I know that you wanted to talk a little bit about some of the issues, some of the dangers. Just overall that you face as a property manager. well, it's new. And so my husband and I have done this. For. Over 25 years. We're we're in a different environment, like within the last maybe three, four, five years or so.
We're there's a the the culture, the environment's changing and it's a result of tenant protection, laws, that are being put into place by activists. That's something we haven't seen before. And my fear, my concern is that that creates kind of a culture of negativity where we, as the housing providers, have been targeted as the bad guys, the greedy old, rich landlords. This is what the, perception is and that is seeping into culture.
We need to change it so that that is my concern, getting us back to recognizing that we provide a service and a product that people need housing. And we'll get into a little detail later. But the Paul I know evictions were a big, big deal for you regarding safety. Can you talk to that a little bit? Sure. Eviction is is obviously an issue that when you're managing properties, either you got one or hundreds of thousands, it's it's eventually going to happen. And I hate evictions.
Look, I make no mistake about it. It's one thing about this job that I hate evictions because you're displacing people from their home, you know, from their property. And so that in and of itself makes it a very challenging process. So sometimes, tempers kind of get flared and, and you understand, and that's where, you know, gosh, empathy really has got to come into play here.
Because when you're displacing people from a home that you want them to be in, but for a variety of reasons, when an eviction happens, you know, sometimes you you got to do it. And it's the one thing property managers have that. And really the only real thing we have that in the event of a tenant is not complying with the terms of the least. Most of the times it's because of nonpayment of rent, but not always. Sometimes it could be violations of the lease. It's the one recourse we actually have.
So now when you kind of add that in this mix, sometimes it can it can get kind of kind of dangerous to say the least. Because you're dealing with people sometimes they just don't want to give up their home. And I can't blame them. But the thing about leases is we never ask a tenant to do anything that they haven't already agreed to do. So we try to work with our tenants so much in in so many ways to try to do all kinds of things to avoid evictions.
As a matter of fact, sometimes we'll even do things like cash, keys and other things just to try to mitigate this situation to where it is less tense and quite frankly, dangerous wanted to share that what Paul thing is so.
Right. It's a tenant. But when you have someone with who has not been able to make their payment for however many months and they're going to lose their home, and then and then on the other side that you have the housing provider who has not received payment, and they may have bills that are due, and they relied on that revenue. When that happens on both sides or in a really strange, tense situation. So it is really a delicate time in the process.
And probably, like I said, one of the most dangerous because both parties are desperate for different, different reasons. Right, right. Say housing provider. And that's the new term for landlord. Right. Well, we like that better. Doesn't have any negative connotations. And it it more accurately describe what we do. We provide housing in a professional. That's that's a bit as well. okay Paul, you mentioned cash for keys. let's talk about some safe ways to, have an eviction.
And number one, one thing that I talk about is involve law enforcement. Do you agree with that, Paul? Well, the thing is, is I think cash for keys is a good, viable option. As long as, first of all, you always want to get owner approval. You want them to make sure that they're okay with it.
the reason you do this is because of the fact it usually is less expensive than hiring attorney, going to court, and having that process drawn out sometimes months before you actually gain possession of the property. Now, I do think that, anything you do, why do you do a full eviction? Whether you just try to get the tenants to move out, whether you need cash or keys, there is a danger element about it. And, like what you mentioned about cash. Well, first of all, we don't ever deal in cash.
I will not do it. It's way, way too dangerous. So what we do when we do cash for keys is what we actually do is we make the tenants and tell them as long as they do their part and they are completely out of the property by this day, we will meet them on that day. And we will give them a check at that time with the amount that we've agreed upon if they move out. I've had some really good successes with this kind of method. It's not perfect.
It doesn't always work, but it is an alternative to having to go to court. But even with that, you still need to be careful, because you still, when you go to meet with a tenant, that you're displacing it can be contentious, make no mistake about it. That's why it's important to get law enforcement officials involved. To help serve the eviction notice or to post the eviction notice in order to be safe. Now we talk about emotions being high on both sides.
So that is the housing provider or the property manager as well as the tenants. They see share our story where your husband went to a property and there were high emotions because the tenants didn't really want to leave. But we were going to sell one of our properties and we were the other agent was doing an inspection. And so you had the agent, you had the inspector, and my husband was there, of course, to let him in and make sure everything was okay.
And the tenants girlfriend, who wasn't even on the lease actually did not really, really want to move to begin with. So, so she was a little, unhappy about that. But she also on that day did not want to let them into the property. that's an example of someone, you know, you know, just being so emotionally charged. But the smart thing that they did was to leave the premises. And the next time we arranged the inspection, make sure she was not there, okay? Okay. Great story.
And the lesson learned there is, first of all, don't go alone. And I hate to say it, but if you are a male housing provider or a male property manager and the tenant is female, it wouldn't hurt to have someone accompany you. Just to be on the safe side. Now, you also mentioned, a culture, a different kind of culture. And I know this came out during the pandemic, where there were a lot of, there was a lot of talk about tenants rights as well as housing providers, not having their voices heard.
Stacy, can you talk a little bit about the adversarial relationship between the housing providers and the whole culture as a whole? Sure, sure. And let me say this. It does not have to be and should not be adversarial. We need our renters as much as they need us. And so we're two sides of one point and realize that, however, the activists were always have to have an angle, and the angle that they have is to to pit one against the other.
And they do that in many other different ways with race, with, with money, you know, owning versus renting the haves and the have nots. And so in this particular case, the landlord, as they referred to us, were the bad guys, were the greedy profiteers, the gentrifiers. And when you hear that language all the time, then it starts getting into people's psyche and they start reflecting what they see. And that comes through also.
And unfortunately for us in law and legislation, because if you hear that, then the politician wants to fix it and they try to fix it legislatively, which backfires because it then harms those, those of us who create the housing that are there, our community needs and in the process of those tenant protection laws. So supposedly protecting my clients from me. But what they do is they violate my private property rights.
And it's just, it's sweeping our country and it's not being addressed enough. So I'm glad to be able to talk about it a little bit, because that is just a safety issue, because it it creates an enemy and makes me the bad guy instead of one that should be sitting at the table, as we do talking about creating housing options because we need more.
There are some tenant groups, I think, that are really trying just to have better housing, but the extreme that you're talking about is really hurting us and hurting hurting themselves, really. we can't have this conversation without talking about rent collection. Now, the way you collect the rent, even 20, 18 years ago, it's totally different than how it is now. Can you both briefly just tell us how you collect rent nowadays? They say. Sure, sure, but I don't. My husband does.
And so one of the things that he does is he likes going to our properties, that he has a personal relationship with every single one of our tenants. We have, I think maybe 9 or 10 of them. So at the point, at one point he had 23 and he was almost every month in touch with the tenants. One way or the other.
And one of the things he does with some of them, we've some of them have gone to online platforms, payment platforms, but there are a couple of longstanding, tenants where he goes in person to collect the rent. I know Paul didn't like that. I don't like it. And I've told them that with these particular tenants, that's how they feel comfortable paying. But for the most part, they are using an online payment platform I think that works very well for where we run our small business.
Okay. Okay. Paul. What what say you about rent collection? So first of all, I am one that for I was just raised this way that if someone gives you cash or they want to give you cash, you always take cash. I that was just ingrained in me. Until one day I was here at the office, and we were still taking cash at that time because people could come into our office and pay rent.
And I remember, seeing a news story that day before about, this convenience store that got robbed and the guys walked away with around $200. And I'm sitting there taking cash from my office, driving to the bank, and we have tens of thousands of dollars in cash. I'm going, this is just stupid. We put a hard stop on it because it's just not safe. It's just not safe for me, for me or any of our staff members to start doing that. So we don't accept cash whatsoever in our office anymore.
We do give our tenants online payments so they can pay online. We do also allow them to mail in a money order. That's fine. Or personal check. That's okay. But I absolutely don't do it So we literally just told the tenants, here's your options. But we gave them several options to do that. And it really hasn't been a problem. So, bottom line, No cash. Used for every, hard line or even an electronic payment. We can't have a conversation without talking about scams.
You can't watch the news without seeing them. And the the injection of generative AI into the to the real estate world has been dangerous with deep fakes as well as phishing emails. So we have seen the fake apartments and the short term rentals. So talk to us how the deep fake concerns as well as, any other scam impacts the way that you do business? Stacy well, well, I'll tell you from one of your safety classes, I learned to do this. All of our addresses of our properties.
We have a Google alert set up. And so and the benefit of that, as you know, is that if our property shows up in an ad somewhere, Facebook, Craigslist or anywhere else that we're going, I'm going to get a alert and say, hey, wait a minute, what's my puppy doing here? Right? Right. And understanding that that's how criminals hijack listings, official listings. They take the images and they take over, and then they're ready people to come to them and to wire money, the deposit and down payment.
So by doing that, setting up a Google alert, you will get notified immediately and hopefully be able to stop. It all has, the deep fakes, and all of this new generative AI has it impact you any scams that you've seen? I personally just had one. It's been earlier this year where we had a vacant property. In this vacant property, we always check on our properties no less than once a week. Sometimes twice a week. It depends on the on the unit.
One of my, staff members went over and checked on the unit, and when he got there, there were people in the unit. But I don't mean they were squatting. I mean, they were living in the unit. They had moved in three days prior. And come to find out, they came to the door. The TV's on the wall, the sofa's in there, and he's going, whoa, whoa, whoa, hey, what's going on here? And they go, well, yeah, we we rented this property. And he goes, really? Do you have a lease?
And they said, as a matter of fact, we do. Wow, wow. And they held up the lease. Got it. Sure enough. I mean, they've just gotten this sophisticated is what's happened. These people responded to a Facebook ad and they thought it looked really good. Now, the guy never showed him the property but said, you wire me money, which they did, and we'll give you a lease. And he did it for couldn't believe it. So they actually had a lease. Now obviously it wasn't valid because it wasn't from the owner.
That shows that property managers need to have training on how to deal with scams. Not just regular safety training, but how to deal with these scams and frauds. And here's where, property managers as well as real estate professionals can show your value and understand these scams. And we have buyer consultations as well as working with your clients overall and your your tenants or prospective tenants. Have the conversations about the scams and frauds.
Warn them, let them know what's out there because you stand directly between them. And speaking of education, the National Association of Realtors, as well as the Institute for Real Estate Managers, has a designation. It's a Certified Property Manager designation. CPM. So that's another resource for education. Okay. We're going to wrap up and wrapping up, I need both of you to give me one actionable safety tip for your fellow property managers that they need to start implementing going forward.
Now, Look, I'm going to tell you, get a dog. Now, that's going to sound silly to some of you, but, look, I have two dogs, that come to work with me almost every day. I've got a golden retriever and a yellow lab. And what happens if I know I'm going around a number of vacant properties? I literally will take my dogs with me. I'll open the door and they go in first. Now, as silly as that may sound, they just run and sniff and go everywhere.
But when you think about it, having an animal run in like that, obviously a well trained run, you know, that actually aids some things, but you still got to be careful. Stacy, have two tips. Two tips? So one of them. So is when when we have a vacancy instead of, you know, showing it one at a time. We do kind of an open house. We may go over to the puppy for an hour. Well, we are, you know, anyone that's interested in looking at the property instead of being a one on one?
We're we're both there at the open house, and they come in and they look at it as a group. And so we tell people, if you want to look at it, we'll be there from 1 to 2:00 on Saturday afternoon. And it not only saves time, but it's a safe environment because there are multiple people there in the open house has been advertised and so so someone who may have that attendance say safety wise, you know, physical safety wise might, might think twice.
And then the second tip that I have is to say that we have to watch our language rhetoric matters. And in this day and time that the tenant groups and the activist groups, you know, talking about people being evicted or removed from their properties, it's really heart tugging. And then like, we'll talk earlier, it hurts both sides.
It hurts the housing provider, that business person as well as it hurts the person you know may have to be removed from the property during eviction because because it's always the last resort. But the way we talk about these things, it matters.
And you've heard Paul and I, we talk kind of softly and diplomatically about the topic, we talk to elected officials and our legislators, we need to explain the situation to them because they don't realize, you know, that most of the objections of nonpayment, and that is always a last resort. And usually when we get to that point, we've tried multiple times to work out a payment plan with them.
We never want to have to remove someone from the property because it's it cost us time and money to do that. And when they pictures, we never for the most part my husband I the other people may be look, you know, you don't get that money back. We're out thousands of dollars. So we just really want to kind of cut it off softly and get them on about their way. So rhetoric matters and we need to be careful how we talk.
We need to make sure our elected officials know there's another side to the story. It's not there were the bad guys putting them out because we want them homeless. And so we have to reeducate people in a lot of different ways. And then we need to try to find ways to help people get the rent, you know, rental assistance or helping them find, you know, better jobs or situations. And so, just the language matters. Wow, what a great conversation.
I want to thank both of you for your insights and your useful safety tips. Before we go, I want to remind our listeners that if you're considering a career in property management, please check with your broker and your state licensing authority to make sure you understand the requirements. Until the next time, stay safe. Thank you for joining us on Drive With NAR The Safety Series. New episodes drop every month at
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