This article was posted on Sunday, Dec 01, 2019

Joe and his sister, Madison, flew in from Alaska to inspect their investment properties.  They were meeting with their property manager to review their investment portfolio.

They inherited a portfolio of investment property from their parents and had been happily receiving monthly checks for the past five years.  Lately, the monthly checks had been getting smaller and Madison suggested to her brother, “Maybe we need to go down and check on our investments.

The portfolio was a mix of industrial and apartment properties spread throughout the Portland, Oregon metro area.  Their parents had started out small and over 40 years had amassed a large $35 million collection of both large and small properties.  They still owned the first house their parents bought as a rental and the last investment, a 100,000 square foot industrial park.


The plane touched down hard on the asphalt.  The pilot must have served in the navy before becoming a commercial airline pilot, as it seemed like he was trying to land on the deck of an aircraft carrier.   Madison mumbled, “I am glad we survived that.” Joe grunted, “Me too.”

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They got off the plane, collected their luggage, found the rental car and drove directly to the property manager’s office.

At the office, Victoria, the Vice President of Operations, greeted them.  First order of business was to review the trailing 12-month financial statements and compare the actual financials to the budgets that had been drafted the previous year.

As they poured through the documents, Joe said, “It would be easier to understand the numbers if we had the actual bills to review and could see vendor comments, rather than just reviewing the reports.”  Victoria obliged and got the files of actual bills for Joe and Madison to review.

One hour and a lunch later, Madison threw in the towel. “Please, Joe, can we look at the properties now?!?” Joe looked at Victoria and agreed, it was time to go on the road.

Road Trip

They hopped into the rental car and stopped at the original investment house. The tenants were taking good care of this property and nothing was obviously amiss.  The roof had been replaced the previous year and it was a quality job, with the exception that the gutters had not been reinstalled. Victoria said she would investigate it.

Next, they drove to a close by 10-plex.  This building had a flat roof. Joe asked Victoria to call one of her roving maintenance technicians so he could inspect the roof.  While waiting, they toured all the units.  Much to Victoria’s chagrin, some units had deficiencies.  In one of the apartments, the carpeting was totally destroyed, in another unit the shower was dripping, and a handle was missing on the tub. The tenant had jerry-rigged a set of pliers so they could take a shower.

The next unit had cockroaches jumping at them from behind the water heater. Not all the units had problems and after they were done with the 10-plex, Joe and Madison took Victoria aside and asked her when the last time was one of her staff had inspected the property.   She looked at her notes, “Two years ago.”  “No wonder we have problems renting units,” Joe commented.  Then he and Madison asked Victoria to make the necessary repairs.

“Let’s go look at the commercial properties,” Madison suggested.  The first stop was a six-tenant retail center. The landscaping was overgrown, the parking lot needed seal coating and striping, not to say anything about the two large potholes and the sidewalk that needed to be “hot water” power washed to get rid of all of the chewing gum stuck to the surface.  Joe said to Victoria, “I am not impressed.”

They drove to the 100,000 square foot industrial building.  It needed a paint job and when Joe got on the roof it was obvious that it had not been cleaned or the HVAC units serviced in three years.  They met the tenant at the property. He complained that the offices were very hot and if the cooling could not be fixed, they were going to move out.

“No wonder our checks are shrinking,” Joe said to Madison and Victoria as they got back into the car. “Nothing is repaired at the properties.” Victoria piped up, “We are operating according to the budget that you approved.”  “Clearly, we should have visited sooner,” quipped Madison back at Victoria.


Upon returning to the management office, Joe and Madison asked for use of a conference room to plan their next move.  A half an hour later, Victoria joined them.  They had made a few decisions.  First, if they had visited sooner, things would not have deteriorated to this point.  Next, they told Victoria that they wanted to see repair bids within the next 30 days, to repair all the problems discovered during their inspection.   They planned on being back in three months to make sure progress had been made at all of the properties.  They also changed their guidelines to the property manager prioritizing that the properties would be well maintained before they received their client draws. Finally, communication was improved to meet monthly via video conference, so they could make quick and accurate judgments between property visits.

Joe and Madison made it clear to Victoria that things needed to improve and that they would be taking a more active role in the day-to-day management of the properties. Victoria was relieved because it had been difficult to operate the properties according to the approved budgets without input from the owners.

On the ride back to the airport, both Joe and Madison knew they had blown it big time – visiting more often and nurturing their properties had to be a priority.  It was important to be able to pass this gift on to their children.  They agreed, if they wanted to increase their cash flow, taking better care of their inheritance was the best place to start.

Clifford A. Hockley is President of Bluestone & Hockley Real Estate Services, greater Portland’s full service real estate brokerage and property management company..  He is a Certified Property Manager and has achieved his Certified Commercial Investment Member designation (CCIM). Bluestone & Hockley Real Estate Services is an Accredited Management Organization (AMO) by the Institute of Real Estate Management (IREM).  Cliff is also the author of Successful Real Estate Investing – a book on how to invest wisely, avoid costly mistakes and make money.