Posted Tuesday, November 14th, 2023 by Enterprise Property Management
In this episode Cassie Robinson, a seasoned investor with Enterprise Property Management, shares her 13-year success story. Despite challenges, including a property fire, Cassie highlights the exceptional care and attention provided by Enterprise Property Management. She emphasizes the importance of quality management in property investment and praises the company’s commitment to maintaining properties. Cassie also discusses her unique journey into real estate, including overcoming personal hardships and utilizing real estate for tax benefits. The interview touches on the successful sale of a property, showcasing Enterprise’s strategic approach to exit strategies.
Aaron
0:00:00 – Today on the Behind the Curtain podcast, I’d like to introduce one of our more experienced investors, Cassie Robinson. Cassie, we’re so glad to have you.
Cassie
0:00:22 – Thank you. I’m delighted to be here.
Aaron
0:00:25 – For our listeners, just so that they know who Cassie is, she’s a long-time investor with Enterprise Property Management. We’ve had a good run. How many years have we been working together, Cassie?
Cassie
0:00:35 – 13.
Aaron
0:00:36 – 13. Yeah. That’s a great number, 13 very short years.
Cassie
0:00:42 – Very.
Aaron
0:00:43 – Very short years of investment property management. The reason why I wanted to have you on the podcast today is because your story is, it’s a great one. You know, when we talk about you here at the management company office, we refer to you as one of the better, bigger successes for enterprise property management just because of the longevity of our relationship and then also, you know, we’ve had our ups and downs but our feeling is that you’ve had a very positive experience with us.
Cassie
0:01:11 – Definitely. Through the year since the early 2000s, I’ve owned property all over the United States and I’ve had property managers all over the United States. And your company, by far, is the best company I’ve ever dealt with. performing and not sending owner draws and not inspecting properties and not returning phone calls and a property manager can really hurt you as far as investing goes and so that’s one area of investing that took me quite a while to realize and learn from. So I am so delighted. I think your company, Aaron, is probably the best one in the United States. Whoa! I love that. Thank you so much. Oh, my pleasure. I mean, you return phone calls, owner draws our deposit in our account. When you say it’s going to be done, I know we’ve had our differences with the software that you’ve to the bad one, I didn’t get how to use it. And then you went back and so being able to work with you that way has just been a godsend. That’s why I’m still there. That’s why I haven’t left Tennessee. Plus the properties that I own have increased in value so much that it’s been a real treat to work with you.
Aaron
0:02:48 – Thank you so much for all of that. It’s been a pleasure to work with you as well. We’ve had a great relationship here with you. When we’ve interviewed investors in the past, I’ve often given them compliments because a lot of the investors that we work with are difficult to work with, but Cassie, you are not difficult to work with. Oh, thank you. You’re so direct and you know what it is that you need out of our professional relationship and you ask for it and you expect for us to show up.
Cassie
0:03:19 – And you do.
Aaron
0:03:19 – Thank you.
Cassie
0:03:20 – Thank you.
Aaron
0:03:21 – Well, it is a pleasure to do that. But it does highlight an interesting point that you brought up, which is that most property management companies are not in the business of quality management. They’re more in the business of kind of floating the property that they sold to an investor with very little effort, with very little insight, and very little process or design to their management style. And so the management company is just there to help salespeople sell. So the thing about enterprise property management obviously is that we were designed to be completely independent of a sales team. In other words, it’s sink or swim. Right. Yeah. Right. So we’ve very much enjoyed that and also 13 years you’ve been a guinea pig for a couple of different systems for us. So…
Cassie
0:04:12 – Well it’s all worked out and I know in the beginning didn’t your father start Enterprise Property Management?
Aaron
0:04:20 – He did. My dad started in ’94 in property management working with a couple of different Californian seminars and networks that helped investors invest in the Memphis and Tennessee area. And of course, 1994 was pre-internet.
Cassie
0:04:37 – Well, and that’s how I found you through the California seminars that I was attending. And back in those days, when I owned properties in different states, the recession hit, Recession hit and I was carrying mortgages on eight properties. And tenants were leaving because they couldn’t pay the rent. And then because they weren’t paying their rent, I couldn’t pay the mortgages. And so I told my financial advisor, who’s an expert in real estate investing, that I was just going to let those homes go into foreclosure because I could not. And there were eight of them and I could not afford to pay out of pocket the mortgages and he goes no no no no no we’re going to short sell these. So it took us two years but he helped me short sell eight of those properties and the rest of the properties that I owned I had paid cash for and I think that is a huge difference for Investors because when you pay cash for a house and not everybody can do that then the income that you receive From the tenant is you know it’s good income for survival so anyway I Remember at one seminar getting a list of foreclosed homes that you and Ryan Tucker, right? That’s correct. Yeah. We got this sheet of foreclosed homes and I thought, wow, okay. So getting back to our story, that was what got me started in investing in Memphis was going to be seminars. And then I was able to sell a business that the recession hit, we sold these homes. I had to get rid of property managers that weren’t doing their job. And that was a huge eye opener and I learned how to deal with property managers at that time. So Gordon and I, my financial advisor, we went through the whole portfolio and decided, okay, we’re going to keep these, we’re going to sell these. I think it was five or maybe it was 10 properties that I had managed to pay cash for, and so they were cash flowing. The rest were all sold because they had mortgages on them. And then I went to that seminar and I picked up a foreclosure handout that was given for Memphis and I looked at Memphis and did some research and bought my first house through you and Ryan and I don’t remember the name of the company but then Ryan said okay now you can go with Aaron and his father at Enterprise Property Management for for property manager and that was how I got to you guys.
Aaron
0:07:32 – And I remember that. I remember Ryan coming to me and telling me that he was working with you at the time and an interesting thing that was happening with Ryan’s company, which is at this point in history, Ryan and I work for separate companies, but we were collaborating between sales and management 13, 15, 17 years ago. And so he called me, he goes, you’re going to love working with Cassie.
Cassie
0:07:56 – Oh, dear.
Aaron
0:07:57 – Oh, yeah. And it was a fantastic transition. transition if I could actually come back to probably what is the most I don’t know amazing point of your story so far in this conversation you paid for 10 houses in cash?
Cassie
0:08:12 –
Aaron
0:08:14 – You don’t have to tell us like all the details about that but that’s remarkable.
Cassie
0:08:18 – Well okay here’s what happened in 1989 my husband suffered a cardiac arrest and went into a full-blown coma and when he came out of the coma, three weeks later he was diagnosed with a devastating brain injury which meant all kinds of medical problems like delusions and anger and no short-term memory at all. So if you walked in the front door and I introduced you to him, you’d walk out the front door and he would not remember you had been in the house. So it was very, very severe. So I turned around and sued the hospital and the doctor and we won. And so at the time, I was a paralegal in a law firm and when I brought Bill home, the doctor said, you need to quit your job and bring him home and care for him full time. So I went, Oh, okay. So I quit my job and I kept Bill at home for 13 years. And during that time, because we had sued and he had disability income and blah, blah, blah, I decided that we needed to do something that we, you know, I had to get out of the house every day. I had to get him walking or out of the house because we were in the house full time. So, I discovered a guy here in San Diego County that was doing foreclosures. So, I went to his seminar and I got a list of foreclosed properties. And we would drive around town and we’d look at these properties. And Bill would say, I’m not moving, why are we looking at houses for investment, time for investment? He goes, no, no, blah, blah, blah. But then 13 years later, I had to put him into a facility and our tax liability was huge. It was five figures. And I knew that I had to reduce our tax liability somehow. And so through all of my research, I had discovered that real estate was a great way to bring down your taxes. So then after he went into the home and I bought a house because I had the money to do that, then my tax liability was cut in half. And then the next year it was cut in half again. And then the next year I paid no federal income tax and have not paid federal income tax since then. So buying these homes and taking good care of them, agreeing with my property management company to fix whatever needed to be fixed, a new roof, new plumbing, not plumbing but a heater, sometimes windows, whatever. Agreeing to have all those items fixed and take care of your property is a great tax deduction. So that’s what happened. And then after that, I sold a company that my husband, Bill, was a great investor. He never failed at investing. And so we had a company that was a dog kennel and that had four locations. So my partner and I sold that company. Now I have more cash. And so that was how I was able to pay cash for all my property. So I know people listening to that are just going, I don’t have cash for that. But I developed this portfolio. And my intention was to hang on to it until I die and then give the portfolio to my children and have them run it and grow it because they would not need the income that the properties generate. So they could save that income and buy another property and then just go on from there. So that’s what my long range plan was. You don’t know where to go with that.
Aaron
0:12:17 – My immediate response is just is awe Cassie because I’ve always told you that to me, you’ve always feel like somebody who is I don’t like my age, and that’s the only way that I can put it like you feel young and yet you know Thank you. I Mean, it’s it’s all over your voice. You know how old I am no I don’t I don’t I choose not to think about age at all because I don’t feel my own age Wow you’ve had challenges in your life, which Did not stop you from your positive forward momentum like you. Correct. I mean my goodness I just the story of taking care of your previous husband I just blows my mind because you retained your spark you know you retained your fire for living. Your story that you just told me just now I didn’t even know that you just seem so light and electrified and what you want to do and that you are continuing to want to figure out How can I take these good investments and turn them into even better investments and see my vision? For my family for my own life with these investments as a part of that vision But it’s not like the sole focus of your daily life like one of the things that I really enjoyed About our relationship all these years is that you did trust us you had some healthy skepticism when it came to larger cost maintenance and you had some skepticism, again very healthy skepticism, when it came to hearing from me or from Ginger or Lindsey what tenants were saying or what tenants were demanding and were and are a phenomenal participant, an active participant in the and the management of the properties by telling us what you want to do and what you want to see happen. That has been just a tremendous blessing for us. When we say, Cassie, we know exactly who we’re talking about in our office. We understand what your goals are with investment and we understand your character. And it’s been a blessing for us to be able to help you play that out as we move forward. I think the thing that I love the most about what you just told me is that you did not have one single thing that you were doing even with your husband in convalescent care. You were still thinking, you were still living your life. Like that’s amazing because I know so many people in your situation who just shut everything else down. You’re truly an entrepreneur in life. That’s who you are.
Cassie
0:14:48 – Oh, thank you. When Bill went down in 89, Stephanie was 12 and Jennifer was 15. And I realized very quickly that I had to set an example for these two girls that you didn’t quit a marriage. You didn’t lay down and just go, Oh, what am I going to do? My husband’s not there anymore. That I had to step in and show them that no matter what happens in your life, you need to carry on. That you’re still responsible for these girls. They needed, this is going to sound trite, but they needed cars, they needed a college education, they needed marriages, and all that would have been provided for them with their dad because dad, you know, dad’s kind of the boss and does all those things. But so I stepped in and I said, okay, this is what we’re going to do. And so they got their cars, they got their college education, they got their marriages. And I wasn’t going to stop just because he was damaged, because he would not have wanted that. He would have wanted me to carry on and keep things as normal as possible. So that’s what I did. And I have friends that say to me, you know, I don’t know how you did it. You know, I would have just lost everything. I would have fallen apart. And I said, geez, no, you wouldn’t. You don’t do that when you have children that are in the house and need to see how mom is functioning. And I’m not patting my own back. I’m just saying I had to step forward because my children needed to see that things didn’t fall apart. You didn’t become an alcoholic and you didn’t go into drugs just because your life was falling apart. You know, you have to stay positive. And we went on vacation, we went shopping, we did all those things. We celebrate the holidays. We still had our big family dinners. And we did all those things to keep life as normal as possible. But I wanted to get back to one thing that I was so appreciative to you, Aaron, about remember the house on Owen Street that burnt down? I think about it every day. So for your listeners, this is a crack up. Well, it’s not really a crack up, but I think it was about nine o’clock at night, my time, and my phone rings and it’s Aaron. And I think, Oh, God, what happened? And he goes, Okay, past the I’m over here at Owen Road, and the house is burnt down. And I go, what? So long story short, this house, which caught fire due to an electrical problem that was not our fault was totally destroyed by a fire that started in the attic. And come to come to find out it was underinsured through the insurance company that we were using that you had dealt with, Aaron. I don’t remember the name of that company.
Aaron
0:17:55 – At any rate, we’re not going to mention their name.
Cassie
0:17:57 – Yeah, yeah, yeah. We’re not going there. So anyway, the insurance company paid off $83,000 damage for that house. And then he said to me, well, let’s sell it. And I go, sell a burnout? Somebody’s going to buy a burnout? Which was unheard of to me. So we go to Ryan Pecker, and because he has sold several burnouts that year, and he puts it on the market at $60,000 and the first bid that we get was like, I think $9,000 and Ryan goes, no, no, no. Let’s see, that was on a Monday or Tuesday and by Sunday we had an offer of $90,000 for that house and I said sold, we’ll sell it. Oh, that turned out to be a great investment.
Aaron
0:18:48 – It took so much work to get to that laugh though, Cassie. For our listeners, like you’ve only heard Cassie be positive and uplifting and light, but the reality is that was a very challenging time for us. It was. As far as property manager and you being an investor because we had all of this comfort of 10, 11 years of things going pretty well. And then. Very well. Yeah, and then a catastrophe. For the listeners, my side of the story goes like this. We had had a freeze every other year or every three years or so. We get a really dramatic freeze. We had one this last winter at Christmas where it got down to zero degrees. That is very unusual. It’s kind of a freak weather event. It can freeze. So anyway, when it does freeze here in Memphis, we get ice not snow and if anybody’s ever been around pine trees when they’re covered in ice branches break it’s like hearing gunshots or thunder it’s just over and over again the ice weighs down pine trees and then the limbs just bust off and fall well you had a pine tree in your backyard and it froze it iced and then the limb broke and it pulled down the main service wire that goes from the transformer on the pole behind the house to the house itself and it pulled down the weather head and the electrical riser that goes into the electrical service. So anybody that’s ever done any kind of electrical work, they know what I’m talking about. But at the same time, not only was our house affected, but there were several houses on the block which were affected. Long story short, we hired our licensed electrician because we only use licensed tradespeople. We don’t. And by the way, Cassidy, that is, oh my gosh. Like, my personal conviction is to only ever hire licensed people anyway.
Cassie
0:20:33 – Right.
Aaron
0:20:34 – But man, did it, like, this was the return on that investment of being wise in that way because this man has insurance, this man, you know, has license and all of this stuff. So he went out, he put the riser back up and tested it and everything tested well. It was permitted properly, which is another thing. So we’d pulled a permit. So many people do not do permitted work these days. And they just say, oh, it’ll work, it’ll be fine. Well, I don’t believe that. I think you have to pull a permit when a permit is legally required. I don’t think we get to just skip that point. He did his job. The utility company electrified that block and it backfed your house and literally incinerated the entire attic in a matter of minutes. Right. The power was restored at 2.30 and then the house had burnt down by 4 that afternoon. I remember telling you this story probably repeatedly. So I went out there, spoke to the tenant. The tenant had renter’s insurance because she’s smart. Smart tenants buy renter’s insurance. So she had renters insurance which covered her own personal property. Nobody was home, a single mother with a daughter that she’s raising, precious, precious person as a tenant. In fact, she was a repeat tenant, so this was her second house with Enterprise. And I got there and she’s a nurse, so all of her nurses from the local children’s hospital showed up and they were helping her pick through all of her things. They were all the most amazing women. Cassie, if you’d have been there, you would have been so impressed by these women.
Cassie
0:22:05 – Oh, I didn’t know that.
Aaron
0:22:07 – Oh yeah, I mean, yeah. Our local children’s hospital, we have two of them. One is St. Jude and one is La Bonne. Yeah. So she was working at St. Jude at the time. And so they’re all these St. Jude nurses that work with children with debilitating disease and they were all in that house together. I felt like I was surrounded by like literally 10 angels in that home. And they just, they were all of sound mind and they were present and they took care of that tenant. And the tenant was just kept saying over and over again, Aaron, I know this is not your fault. And so we stayed there until she left, which was about an hour and a half walking around this dark, wet, burnt house. And she ended up moving out and she did an insurance claim on her own and got all of her personal property paid for that was damaged in that home. So what ended up being, what do they call it? A disaster. Right, but so it worked out for both you and her. And it was because, and I so want to point this out, you were focused on the details and you were focused on doing things properly. You hired us and we’re of the same mind, and we also had a tenant that does things properly and so it’s just proof to our listeners yes it may cost more money to hire licensed people it may cost more money to have adequate insurance and we’ll talk about the insurance thing here in a second but everybody did the right thing and so they were protected. Amazing!
Cassie
0:23:32 – Amazing! Well you know because of the way that you, your company, investigates and looks at perspective tenants. I don’t think that I’ve had a bad tenant in years. I know on Arbor Green, we have the tenant that became disabled through a fire at work. And you called me and said, you know, he can’t use his hands and we need to put a ramp from the driveway into the front door and we need to change the knobs on the doors from knobs into levers that he can just pull down and you know stuff like that and so we made all those changes and he’s still there. So I think your care for the tenants and what they’re going through, you know, reflects on the job that you do for the owners, and I’m not sure we could have kept that tenant in that house if we would not have done those disability improvements for him. But what was that, three or four years ago, maybe five years ago, and he’s still there, and we still raise the rent, and I don’t think he has any plans of moving in the near future.
Aaron
0:24:54 – No I don’t think so I think. In fact you and I had talked about how his family had also gotten involved in his care and the tenant that we’re referring to has actually recovered well I think he’s on permanent disability but his cognitive capacity is has returned to a full state and he was actually because of our investment in him, he ended up negotiating that lease with us and we extended to him the patience for him to be able to think through, you know, his plans for his life. Because like you and your story around 1990, that wasn’t his plan. He had not planned on being hurt at work. So yeah, I mean, we honestly do care about our tenants and our homeowners. So it has been a long and storied history between you and me.
Cassie
0:25:41 – Yes, and very successful. And I do have to tell your listeners that I have never been to Memphis and I’ve never walked through or seen any of my property.
Aaron
0:25:54 – That’s hilarious.
Cassie
0:25:55 – And when people know that, they go, what, you haven’t looked at them? No, I haven’t. I get updates, pictures. One thing that I do have to say, lately when you do a home inspection, tons of pictures are sent to the tenant, which I don’t remember getting in the way past, but recently we get pictures of underneath the sink, the roof, the fences, everything that’s inspected in the house, your inspector sends pictures on to your company and then the property manager sends them on to the owner. And I think that is proof that I own that house and that it is being inspected. And we either have a great house that doesn’t need anything fixed in it or we need to fix this, we need to fix that, blah, blah, blah. I do really appreciate the way that your in-house inspections go. In the past, with other property managers, I haven’t had that. And I know other investors who are out there might be listening probably will agree that the property manager will maintain and keep your property in pristine condition. And that’s what you want from your property manager as an owner. I don’t want properties to go downhill and become just the dredge of the neighborhood. And I want them well kept. And some managers that I’ve had in the past let that happen. And if you’re going to maintain your property and you want your property value to increase, because that’s why we’re in the game to have our property gain in monetary value. If you don’t take care of them, that’s not going to happen the way you expect it to happen. So half of the goodness comes from a good property manager and that’s what you guys are.
Aaron
0:27:55 – Thank you. That’s exactly what we try to do is to continue to bring value to the property and the appreciation in the value that we’ve experienced over the last three to four years or really really six to seven years at this point I’m not sure if we’re in a bull or a bear market right now when it comes to real estate I I think we’re still bullish yeah you know things are things are still looking up and there is not enough real estate in the United States to house our growing population and there just isn’t and so for people like you that had the vision to buy properties when they were at normal prices that everyday people could purchase you have experienced and realized appreciation that so many people haven’t right like for everybody that sold before 16 2016 2017 they missed out on depending on the geography you know like where you are in the United States. They missed out on anywhere from 60 to 120% value growth over six to eight years. It is unheard of. And so it’s almost like you won the Powerball or something. The timing and the longevity and the persistence that you had to maintain these properties makes it so much easier for you now because as we’re looking through your portfolio together, we’re considering selling a couple of properties over the next couple of years no rush no real need from a cash perspective for you to sell but but you’re considering what to do with that paid off increased appreciation.
Cassie
0:29:25 – That’s another thing I need to bring up for your listeners I wanted to sell a house in Memphis and they all appreciated they’re all cash flowing. They’re all in really good locations. And one thing I wanted to emphasize is that when I buy a house in Memphis, I not only look at the property, I look at the street. I go on Zillow and there’s a part on Zillow you can click on street view and you can look up and down the street where this house is located. And if the street is run down, you know, cars are parked on the lawn, the other houses in the neighborhood are run down and don’t have a curbside appeal, I don’t buy in that area. So all of my houses, I think, are in pretty good neighborhoods. I wanted to sell a house and I didn’t know which one to sell because they had all done so well. So when I talked to you and your wife, Alyssa, and got your input as to which one to sell, that was really helpful. The tenant left and we did a rehab on the property so it would be in selling condition and then Alyssa listed it and it sold in a week. And so that was just so helpful to me as an investor knowing that you cared and you evaluated the property and you said, okay, let’s sell this one. So we did and it worked out really well.
Aaron
0:31:02 – I think what you just pointed out is that a good property management company is going to help coordinate an exit strategy for an investor.
Cassie
0:31:11 – Right.
Aaron
0:31:12 – And so you’ve got, how many houses do you own in Memphis now?
Cassie
0:31:15 – Eight.
Aaron
0:31:16 – Eight, so there are eight different exit strategies potentially for you to take. We’re a little unusual in property management because we think a lot at Enterprise, which is not a common thing that other property managers do. They just come in and do the daily grind and they have their processes and they’re not very insightful or intuitive. And one of the things that I’m very, very proud of about enterprise property management is that every single person at enterprise is intuitive and insightful and thoughtful and empathetic. And so when investors say, I don’t like that, something happens, they say, I don’t like that. Man, my team wants to improve upon that immediately. Nobody on our staff is gonna say, well, that’s just the way it is. They’re really gonna wanna turn that lemon water into lemonade. They want to make things a success. And so with Laurelcrest, like when you said, Aaron, I’m thinking about selling a house, we immediately strategized which one to sell based on the lease termination date or the lease expiration date. We knew that Laurelcrest would be a great sale anyway because of all of the houses that you own, it’s probably maybe even the nicest one. And so the layout is great. I’m pretty sure that the people that are buying it, I think they’re closing today, right? I think that’s what you said. And I think that we’re selling it to an owner-occupant, if I’m not mistaken. Yeah, you are. So that is so cool. Like for our listeners, I definitely want you to know that in Memphis, real estate has been very difficult for owner-occupants to acquire because of rates and because of cost, and that tide is beginning to turn. So now a part of your future exit strategy, and I honestly believe it’s gonna be like this for the rest of your ownership of these properties, I think you’re going to be selling to families and not to investors, which is cool because families pay more for real estate than investors do. So where you are in the curve of your investment experience is that another miraculous amazing way that you’re benefiting from real estate investment is that you want to sell to families. None of us could have been able to time when the market would turn back to owner-occupants, but it absolutely has. And to the point where, I know that you’re acquiring properties as well, we are looking at higher cost for buying in right now for investors. The most recent one that you purchased with Alyssa, do you feel like you got a fair deal on that purchase?
Cassie
0:33:52 – Oh my gosh. After the house burned down on Owen, I turned around and took that money and bought another house. And I paid $89,000 for that house two years ago, a year ago, recently. And I went on Zillow and it has doubled in value.
Aaron
0:34:11 – Incredible. In two years?
Cassie
0:34:13 – In two years. And so, yes, we’ve got a great deal. And my financial advisor, Gordon, has said, get out, you’ve got to diversify. You know, you can’t have all your eggs in one basket in Memphis. And I said, Gordon, where am I going to go? You know, we’ve been all over the United States, we’ve had all these properties that had really bad property managers, and I got rid of those houses because the property managers and I bought in Memphis, they got rid of more and he laughed and he goes, Okay, you’re right. Oh no, and then he said, well, you could buy in Portland. And I said, what, and pay $500,000 for a rental in Portland? No. Oh, it’s just been real funny. Anyway, I’m very happy and pleased with my properties that I own in Memphis and I won’t buy anywhere else in the United States now.
Aaron
0:35:12 – So Cassie, what I’d like to do is I’d like to round out our conversation with just two questions. There’s so many questions that I could ask you But I feel like since we’ve established so much of a history for our listeners these two questions are really really great ending questions for today and the first one is What have you learned during your investment journey that you wish you had known all along?
Cassie
0:35:34 – That would be how property managers function. And I wish I would have known all the questions that you need to ask a property manager before you hire them. Because a property manager can manage an apartment building that houses 30 apartments. So that’s 30 doors. That’s not one property. And then how much do you charge for property management? When I first got into this, they would say 6%, which I thought, oh, wow, that’s great. But when you pay 6%, you are not getting a quality property manager that cares about your property. And then the next thing would be, what kind of software are you using? When do you make your owner draws? So I think one of the very first things that I had to learn the hard way was all about property management. Because they’ll make or break you.
Aaron
0:36:43 – That is absolutely true. I don’t know if I’ve said it here, but we had an investor come in on Monday of last week from New Zealand and he had eight properties similar to yours and he was with another management company and he had not seen his properties in 10 years. He bought them 10 years ago and they did the rehab and everything and he lives across the Pacific Ocean so like when is this guy ever gonna make it to Memphis to see his houses? So he called me literally a year ago and he said hey Aaron you know I’m really interested in coming over there are some things that are happening with my property management that I believe are not honest and transparent, and I just don’t feel like I’m being well cared for there in Memphis, and so I’d like to hire you. So he and I chatted for a year, well, a little less than a year, maybe 10 months, and then he said, hey, I’m coming over with my family to the States, and I want to meet you, and I’d like for you to take over property management. So it took a while, I guess a point to our listeners, if you’re dissatisfied with your property management company the transition from the bad one to the hopefully what is the better one, it doesn’t have to be overnight. Like Cassie is living proof that a good strategy and a thoughtful, well-timed transition is so incredibly important. So take your time with that transition. If your property management company is the worst, obviously get rid of them immediately. If they’re stealing your money, get rid of them immediately.
Cassie
0:38:08 – Oh, that’s another thing. I have property managers come to find out that we’re stealing money.
Aaron
0:38:13 – It is so common. I’ve got two other investors that came right on the heels of this John guy. Last week we actually picked up, I’m not even kidding, let me do the numbers real quick, 24 properties.
Cassie
0:38:24 – Wow.
Aaron
0:38:25 – From three investors who were being just neglected by their property management companies and stolen from. So this John guy says, can you set up inspections? I went to every single one of his eight properties with him. He had his statements with him. He’s also a contractor in New Zealand, so he knows what to look for. And he would walk through these properties. We met all of his very sweet tenants, and he was just dismayed and he apologized to them for the way that their previous property management company had neglected the houses and neglected them and done a poor job. And then we created a strategy to hit the most important maintenance aspects of his properties that directly affected the tenants’ enjoyment first because he’s an investor with a heart. And so he said, I care for these people. It’s my responsibility. These are my houses. So this is a reflection on me.
Cassie
0:39:16 – Right, he’s absolutely right.
Aaron
0:39:19 – Yeah, and he hired us to improve the experience, and that’s what Enterprise is known for. We don’t have to sell you a property in order to care for it as if we did sell it to you, if that makes any sense?
Cassie
0:39:31 – Oh, absolutely.
Aaron
0:39:33 – We’re invested in our investors, we don’t need a commission to be invested in you. You know, like we, we care for each property, whether it’s the streets that you described or very nice suburban homes that are half a million to a million dollars in value. We care for everything in a uniform manner and we treat people with the respect that each individual person deserves. And so anyway, I, you know, thank you for noticing that and for praising that. Um, that is absolutely what we care about the most.
Cassie
0:40:00 – Let me just say one thing for those who are listening. I don’t deal with Aaron on a daily basis. I deal with Ginger and she’s my property manager for my property. And she is spot on, gives me good advice. For instance, we had a fence that looked pretty dilapidated and we didn’t know if we were going to replace it or not. And I said, well, Ginger, what do you think? What should we do here? And she said, well, let me get the contractor out there and see what he has to say and blah, blah, blah. Turns out we needed to replace the fence and we went ahead and did it. But her advice to me is invaluable. And I really respect her judgment. When I have a question, she’s right there. She returns my phone calls or she picks up the phone. I know during COVID, she was working at home and I talked to her a lot during that time. And so I think Ginger is one of the best assets that you have because I work with her constantly. Anyway, go ahead. What’s your next question?
Aaron
0:41:04 – Well, it’s absolutely true. You know, for our listeners, we will eventually have Ginger on the podcast with us. She has not, you know, come up to the studio to record yet but but we have had Lindsay on and Lindsay talked about onboarding the interviews with our team I would agree with you I think are crucial to be able to get to know the heart of people who not only show up 40 hours a week but they are there they’re responding in the morning before coming into work they’re responding on the weekends if they have a quick second and so I’m so grateful to Ginger, to Lindsey, to Melinda, to Josiah, all these people that work with Enterprise and make us who we are. Alex and Jody, I have to complete the list or otherwise I’ll feel like I’ve left somebody out.
Cassie
0:41:47 – They’re great, they’re wonderful. You have a great staff, a really great staff. And I’m impressed by the way that all of them respond to emails, phone calls, because I have a property manager now that I’m looking at that I need to get rid of so You’re fantastic!
Aaron
0:42:07 – I have a little bit of a question off of what you just said because we were curious as to what other parts of the country that you own real estate?
Cassie
0:42:13 – In the past. I’ve owned in Florida in Chattanooga in Utah I had several houses in Texas, but those are all gone now. Oh, I do have two properties in Boise, Idaho.
Aaron
0:42:32 – That’s a beautiful place. I’m sure you visited there.
Cassie
0:42:34 – No, well, yes, but not as an investor, as a skier.
Aaron
0:42:39 – Right, Coeur d’Alene, I guess, or? Yeah. Yeah.
Cassie
0:42:43 – Then I had a house in Cleveland, which I just sold. So Cleveland’s gone.
Aaron
0:42:51 – Cleveland is interesting because it is, I don’t know if you knew this or not, but Cleveland and Memphis are known as sister cities.
Cassie
0:42:57 – Oh, no, I didn’t know that.
Aaron
0:43:00 – It’s something that if you live in Cleveland, you know that Memphis is your sister city, and if you live in Memphis, then you know that Cleveland is the sister city. So, we’re very similar demographically, we’re very similar. Memphis is a little larger than Cleveland, but that might change. Cleveland has done a phenomenal job of developing their city center and their downtown. Memphis has done the same thing. You could just go ahead and call us, even though we’re a southern city, you can go ahead and call us Midwestern Cities with Midwestern values and a lot of investment opportunities and value-add opportunities, which eventually I want to talk to you about. My last question for you is, what are your future real estate investment goals, just overall, but specifically for Memphis, and how do you plan on accomplishing them?
Cassie
0:43:44 – Well, that’s an interesting question because last year when we met with our CPA, he asked me, when are you going to retire from this portfolio? When are you going to sell it? We need a strategy to exit because of capital gains and all of that. And I looked at him and I said, well, probably when I can no longer handle it. And by that I mean, every month, I have to put all of my statement information that comes from enterprise into QuickBooks so that he can read them properly and blah, blah, blah. So I don’t know what my strategy will be. In the past, I have thought to hang on to it and give it to my daughters, but now I’m 74 years old. So I’m not sure how long to keep it, where I’m going to go, if I’m going to buy more property. I honestly, Erin, at this point, I don’t know. I wish I had an answer, but things are going so well with the portfolio and the properties have increased so nicely. And I don’t need to sell because I need the money. So I don’t know. I think that’s something that my husband and I will need to really think about. We’re both retired. We love to travel. As long as enterprise property management is performing the way they are and I can handle the portfolio the way I do, I don’t think I’m ready to let go of it yet.
Aaron
0:45:26 – In a later episode, we’re going to be talking about what investors are buying right now, which is very different from what you own because what you own, as you’ve illustrated several times, really is too expensive for investors to purchase. There’s no room.
Cassie
0:45:43 – I agree.
Aaron
0:45:43 – Yeah, which by the way, is a total sign of success. You were smart, you were conscientious about where you were purchasing, and Cassie, you did something that investment strategists say not to do, and I love it. I do the same thing. It’s not a very shrewd thing to want to identify with your properties that you own and to want to identify with the Residents of those properties that they say not to do that But you do that you care so much and we care and so we we make a great team in that way Exactly. The thing that I wanted to say back to you is You’re not in a rush to be busy. You’re not trying to busy yourself with your investments. I think one of the best things that that you’ve done in real estate is you’ve said this works I’m gonna let it ride, this doesn’t work I’m gonna handle it. I wrote down all the states Florida, Tennessee, and Chattanooga, Utah, Texas, Idaho, like you handled those situations because they weren’t working for you and you didn’t get nervous about it. Maybe at the time it was stressful, but if I know you, you just said, nope, we’re done.
Cassie
0:46:53 – That’s exactly what I said. I’m not gonna put up with this crap anymore. So out you go.
Aaron
0:47:01 – Right, and so you didn’t feel the need to exert a lot of effort and energy and control in situations which weren’t going to improve. And so I, again, am honored that it’s been such a success here because you don’t feel the need to change much. You’re letting it ride. These are working for you, we’re not a problem. And you, my gosh, I mean, you mentioning your age, like I looked over to Richard, our producer, and I was just like, how is this possible? Just because your energy is just so bigger, I think, and that’s a great lesson to our listeners as well. Our age doesn’t define us. I mean, we can do.
Cassie
0:47:40 – Oh, thank you.
Aaron
0:47:41 – Oh, of course. Anything in our life that we want to do, yeah.
Cassie
0:47:45 – I don’t think, well, I know, I know, that I would not have had the success in Memphis that I have had if it wasn’t for you and for Ryan. Ryan provided me the foreclosure sheet information, I think on a daily basis. And when I was choosing these houses, they were all in foreclosure. So I bought them at really, really, really good prices. Some of them less than $50,000. And then handing me off to you to manage the property that couldn’t have been a better segue. I’m so fortunate to have found Ryan and very, very fortunate to have you managing these properties. I just can’t say enough about your company. It’s just, you want me to do an ad for your company?
Aaron
0:48:36 – I think you’re doing it. I think you’re doing it.
Cassie
0:48:40 – I know several people who have failed in real estate investment and will not touch it, will not go back to it. And I just tell them, then you’re not in the right spot. You don’t have the right property manager and your failure is due half to your property manager. And so that’s why it’s so important to question them. And this is everything that I’ve learned the hard way, but you know, that’s what we do sometimes, right? Learn the hard way.
Aaron
0:49:09 – Yeah, you’re right. And you’ve had, you had a house burned down, which most investors will never, ever experience. Most homeowners will never experience.
Cassie
0:49:20 – Exactly.
Aaron
0:49:21 – Yeah, and yet you were able to once again say, okay, you know what, I’ve laid great groundwork, I’ve prepared for this, even though I never thought it would come, and now as disaster has struck, I’m able to not only survive it, but to glide above it, and the timing of that, I do want to say this too, it was nearly perfect because the fact that you could sell a burnout for $90,000 was amazing.
Cassie
0:49:45 – Wasn’t that amazing?
Aaron
0:49:46 – It’s incredible.
Cassie
0:49:47 – That was just absolutely incredible. One thing, can we talk about insurance for one minute?
Aaron
0:49:53 – Yes, go ahead.
Cassie
0:49:54 – So I have an umbrella policy that my insurance lady here in San Diego has provided for me for my property. So I have that umbrella. And I think that that is very, very important for investors to have an umbrella that includes all of your property, including your personal residence. So that being said, after this burnout, we discovered that the property was underinsured. I learned a lot about insurance because I just took it for granted that insurance would be up to specifications, right? So I got rid of that insurance company after they paid me off and went back to State Farm in Memphis. And the woman that I was dealing with said, now we also offer you an umbrella policy on these investment properties for $200 a year on all the properties. And I said, yeah, I’ll take it. So now I have two umbrellas. I’m not sure how they’re going to work if something happens, but I am well insured. And I didn’t realize that State Farm, which gave me great prices, policy premium prices back there, and covered the properties and gave me an umbrella. So I think it’s very important that investors get umbrellas on their property, just in case, you just never know.
Aaron
0:51:21 – Another time, I’ll probably talk to our listeners about what happened, how you came, we’re not gonna talk about it today because we’re gonna end on a positive note, but how you came to be underinsured with that property. It was crazy that it happened, but one of the things that you did that I was so impressed by is temporarily, and for everybody who’s listening, Cassie is obviously an incredibly positive person, and temporarily, Cassie became aggressive, but still respectful, but aggressive, and you partnered with me, and you asked me some very difficult questions. I’m sure they were difficult to ask, but you said, Aaron, you know, we’ve been together for 10, 11 years and this has happened, I need your insight on what happened, like how did we get here? And man, we muscled through it. Like it took us two to three weeks of really asking some hard questions, putting it to your former insurance company, which we won’t mention, but, and you got on the phone with them as well. And so it’s just proof that in investment real estate, there are times where even if you trust your property manager, you’re still the one responsible. And I think that that was, again, this is something I think about just about every week, how poignant it was that you were surprised by being underinsured. And then speaking to your insurance company, your agent there in California, she aided you in giving you a solution that we couldn’t provide, right? Like you had to step outside of us to make sure that your houses were cared for in a way that we couldn’t do because you’re in charge of insurance and we’re not. And so it was one of those crazy flukes that ended up working out in your favor. But as a cautionary note to all of our investors, what Cassie and I want you to know is you’re in charge of your insurance. It’s the investor’s responsibility to, I think at the very least, give an annual review to the amount of coverage that you have on your properties so that you can know that you’ve done your due diligence, you’ve got a good rate, you’ve got good coverage, and then you can revisit it again the next year.
Cassie
0:53:28 – Well you know that’s true Aaron, and I never realized that even with our own primary care residents here until that fire, the house in Memphis, it never even occurred to me to look at the insurance premium and make sure we were well covered. I just assumed that that would happen. I just assumed that your insurance would take care of you and have you properly covered, but no, that’s not the case. That was a lesson well learned.
Aaron
0:53:56 – It was, and it was a difficult lesson. So you did not throw in the towel, you didn’t give up on enterprise, even though this was a very difficult situation and you were transparent with your frustrations and your bewilderment over how we got into that situation. So I wanna say thank you to you for that. Thank you for trusting our teamwork to be able to provide a solution. And then also how inventive it was that we got a specialist with Ryan on the burnout to…
Cassie
0:54:27 – No kidding.
Aaron
0:54:28 – I mean, I don’t know anybody else in the city that would have said, oh no, I want to represent that house. Only Ryan could have taken a mostly burned structure and sold it for more than you got paid by your insurance company. Cassie…
Cassie
0:54:45 – I know. Wasn’t that amazing?
Aaron
0:54:49 – I’m still shocked.
Cassie
0:54:51 – Yeah, me too. Good job.
Aaron
0:54:54 – Good job, Ryan. We appreciate you. Good job.
Cassie
0:54:56 – Yeah. Good job.
Aaron
0:54:57 – Well, thank you for the time that you’ve spent with us. It’s been just a pleasure and invaluable. I really appreciate it.
Cassie
0:55:04 – Oh, this has been fun. Thank you so much for asking me to do this. I hope I provided a little bit of information for your listeners.
Aaron
0:55:12 – You painted a beautiful picture, and I believe an honest picture of our working relationship over the years and I really appreciate you as a friend of the company. You know, Enterprise has been around for 23 years. You’ve been a part of us for more than half of our existence and we consider you to be an absolute success story with us. So thank you so much for being that for us.
Cassie
0:55:33 – Well and you’re the best property manager I’ve ever had, and Ginger too. Okay. Well, have a good day. Thank you for including me. This has been a lot of fun.
Aaron
0:55:49 – Well, thank you so much and thank you for your kind words and your transparency with everything and we’re looking forward to many more years of success until you call it quits and when that happens we’ll be with you at that stage too.
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