Real Estate Investors Association of Greater Cincinnati

           I have a friend in Colorado Springs who owns a bank. Several years ago, I complimented him on his employee retention. My banker and I both understand that his most important assets walk out of his bank each night to go to their respective homes and that his job is to get them to come back each morning. His key to hiring great employees is to screen for proper job skills, attitude and moral code and then empower them to be the best that they can be.

          Jim Collins states in his book, Good to Great that all great companies put the right people on the “bus” and that great people will know where to drive the bus. He is saying that great companies hire the best people that they can find and then let these people “drive” the company where it needs to go in order to make the company soar. Great employers do not micro-manage or hire for specific tasks as much as empower great people to grow into their potential and be great at what they do.

          I believe that if landlords would take these examples and apply them to their rental business, then their success and bottom-line profit would increase dramatically. Landlords expect tenants to do a job, but many have n
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In 1978 a good friend of mine got me to joint venture with him on the purchase of my first single-family investment property in Colorado Springs. We continued to buy several other houses and a fourplex together. We hired 3 different management firms to run our small portfolio. Sadly, all three firms failed miserably, which forced me into the management business by default.

Initially, I just managed properties I owned or in which I had an ownership interest. Eventually, I expanded and took on others' properties to increase income and help cover overhead expenses.

As the business grew, I quickly became aware that the toughest part of property management was not dealing with tenants but dealing with the property owners who would eat up my time and increase my stress with questions and suggestions about their properties. It was difficult for them to understand that only one of us could manage their property.

In 1984 I stumbled onto a better way to do business.

I had a good friend with a problem house he had taken back through foreclosure. He wanted me to manage the property; however, I had very little interest in doing that. Over lunch in one day, I offered to lease his property from him for 35 years at a fixed monthly amount with the right to sub-lease the house to others.

This is an example of a master lease. I told him that if I wasn't making $1,000 per month spread on the rents by the end of the lease, then I had made
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