Fred Richter has served an impressive 52 years in business throughout Southeastern Michigan. Find out what this veteran of property management and investing attributes as to the success of his property management career and work as a real estate investor.
How many years have you worked in real estate?
52 years. I started in 1967 as a real estate salesman in Detroit, Michigan.
How did you begin your career?
I had been the general manager of a multi-state retail company and had to dismiss an employee. After I heard that he went into real estate and was doing well, I decided to check it out and found that good sales skills could be well rewarded in real estate. I began my own real estate company in 1971 and it quickly grew to a large and successful company. During the 1981 recession, I closed it and retired for 4 years, pursuing a degree in Business Administration and Accounting. When I re-opened my company, I added property management, accounting and taxes, and a real estate school, I also started buying suburban houses as rental investments.
How has the market changed over the course of your career?
It has changed in many ways. Perhaps the leading change is the increased technology which includes more remote transactions, banking, reporting and less person to person interaction. Also, financing properties has changed significantly, tax laws have changed, many new disclosure requirements and forms, property inspections, higher prices of course, and also building, style and features changes in properties as people’s likes and dislikes have evolved.
If you could go back in time, what would you tell your 30 year-old self?
Buy all the real estate you can, hold it for rental income and growth in value, and buy in the path of population growth always. Buy medium priced properties in growing suburbs and keep them up to date and maintained over the years. Don’t let recessions scare you, know that they will pass.
What was the hardest lesson you had to learn as a property manager and property owner?
There will be problems with properties, with tenants, with the economy but that’s why everyone doesn’t do it and that’s what your job is - to handle those problems and do it well.
Today’s market seems to be flooded with information and options. How do you choose a good management company?
Lots of options. Look for a property management company with experience, with credentials and designations. Meet the owner, the manager, and the staff. Ask for references. Discuss the services- they vary a lot. Don’t just look for the biggest- look for the best service and the ability to keep your property leased, maintained, regularly inspected and producing income.
You’ve spent a lot of your career teaching, attending and teaching seminars, & earning various credentials. What do you believe is the most common mistake investors make starting out in this business?
Clearly, there are three major mistakes that I have witnessed over the years, made by buyers and investors. One is buying real estate based on emotion rather than careful thought and sound reason. The second is not making location the prime factor in buying. The third is dumping or losing properties during a recession,
Something I’m sure everyone is curious about, do you personally own any investment properties? And if so, do you manage them directly? Why or why not?
Of course I own investment properties and have for many years. I have “flipped” some houses for quick profits when opportunities arose, but have kept most for as long as 35 years, as rentals and most have paid for themselves as many as 10 or 12 times over the years considering the rental profits and eventual sale. Do I manage them directly? Myself? Absolutely not! As a company owner, my staff handled all management activities and after my retirement from active business, I chose the company I founded and created and organized, a company with dedicated staff, providing very personal and professional service, with the best of professional designations from the National Association of Residential Property Managers (NARPM), an international organization which I was one of the founders of.