My BEEF With Evolve Property Management

What’s up guys, in today’s video, we’re going to do a bit of a public service announcement talking about my beef with evolve and why you as an investor should absolutely not be using them except for a few rare rare scenarios.And when I say you shouldn’t use evolve, I mean that you should not use them for property management, and you absolutely should not use them to get your numbers and to run analysis on a property. I’ve spoken to a few people lately, a few short term rental investors who were looking to get our help, because they had used evolve, and they were either about to make a huge mistake, or for some of them, they actually had made a mistake, they had already purchased a property they hadn’t managed by evolved. And because of that, they were losing about $30,000 per year. So I want to help you guys to avoid making this exact same mistake. And so let’s dive into it. Let’s talk about it. First off, I just want to fill you guys in on what exactly Evolve is Evolve is a short term rental property management company, they manage 1000s of listings all over the world. And so they’re one of the biggest ones out there. They CASA is another really, really large property management company. And so they manage all these short term rental properties all over the world, they’ve got 1000s of listings, and with my background in actually running a property management company specializing in short term rentals, and now investing in properties for short term rental as an insights to share about this. So first off, let’s talk about using evolve for running your numbers for actually analyzing properties, because one of the things that evolve will do is they’ll actually help investors help investors to purchase properties. They do that by giving you recommendations, giving you estimates for how much they think the property will bring in, etc. And now the way that they make money is largely from charging a property management fee, which is a percentage of the revenue that property brings in. And that really introduces the first really, really big conflict of interest that I have a really big problem with as an investor. Whenever you’re investing your own hard earned money, you really have to ask yourself, the people that I’m trusting that I’m getting advice from, what is in it for them, how do they make money? How do they get incentivized, and it’s not to say that you that no one should make money, I myself make money from helping investors to invest successfully. But it’s really, really important to me in the way that we structure our pricing, when we help investors that there’s no conflict of interest there with evolve, set up the way they are, let’s just take a look. If you’re an investor, and let’s say you have 200 or $300,000, you’re looking to invest, what is evolved going to try to get you to do well Evolve is going to make a whole lot more money in management fees. If they help you to get a property that’s going to bring in more revenue. Now more revenue doesn’t actually necessarily mean a higher return on your investment. Typically, if you just go and buy a larger property, you’re gonna get higher revenue, if you spend all that two or $300,000 on a down payment and buy some million dollar property, you’re gonna get more overall revenue for that million dollar property than for a half million dollar property. But you might actually get a far worse return on your investment, meaning that after paying for the mortgage taxes, interest, cleaning, all that stuff, you might actually not really make a good ROI at all on that larger property, it really depends on the property itself. And so it’s unfortunate, but Evolv has an incentive, given the way they make their money, they have an incentive to get you as an investor to buy the property, if it’s going to make the most revenue, not the property, that’s going to get the best ROI. So unfortunately, they just don’t have your best interest at heart, they have their own best interest start, they’re going to do what they need to do to make a profit, because that’s what companies do. And that’s all well and good. But if the way that they make that profit is by having you make unsound investment decisions, that’s where I have a big beef with evolve. Now, the other big challenge is that they’re going out here, and they’re actually sharing with investors numbers on how they think the property will perform. But they don’t actually have a stake in the property performing that, well, they don’t guarantee those numbers. And it doesn’t really matter to them, frankly, if the property actually hits those numbers. And the big challenge here is that they also don’t give that investor any insight or any background information or any education that would help them to be able to fact check that number. So basically, all you’re getting from Evolve is just their estimate, but you don’t know how they arrived at that estimate for how well a given property will perform. And you don’t know any of the actual numbers behind it, you can’t actually stress test that number. They also don’t give you a worst case scenario analysis. So you don’t know how well or how poorly the property couldn’t do. So you can’t really mitigate your downside at all. Now, as an investor, you should I this is just my opinion as my own investing philosophy is that I believe as an investor, I want to have control over my invest, I don’t want to just hand it over to someone else, because I view that as a lot more risky, a lot more like gambling than it is investing and so if you really as an investor want to have control of your investment, then you need to do a couple of things.

Number one, you need to be able to actually understand the analysis that you’re running so that you know what the factors are that influence that price and what’s going to actually end up happening if your property for
forms less well than you expect it to, you know, more poorly than you expect it to. Now, that’s something we want to be able to avoid. And in order to avoid that, we need to know what’s going to cause it so that we can avoid it. But the other thing is, as an investor, I think one of the most important things that you can do is to analyze the downside risk potential of an investment, you want to make sure that the worst case scenario is still going to be something you can stomach, it’s not all about the upside. And unfortunately, if you’re working with evolve, you can’t do either those things, you can’t actually understand why the numbers are going to be what they are. So you don’t have any idea how you can control or influence those numbers. And you also don’t know what the worst case scenario is going to be. So you can’t actually mitigate your downside at all. So now you’re kind of driving blind without any real view of risk. And that, to me is a recipe for disaster. I’ve seen way too many people go out and buy properties on the advice of their realtor or a property management company like evolve, who doesn’t have a stake in the property doesn’t actually have a stake in the investment. And they’ve gotten really, really burned. I’ve seen people buy multimillion dollar properties on empty promises from people that really just didn’t know any better that the property could bring in 500 $600,000 a year when the property in reality, from looking at the data can only bring in $200,000 a year max, so you can really, really get led astray. So that’s my thoughts on trusting them. As an investor to give you projections, I would just not recommend it at all, we’ve got other videos on this channel here that are completely free. They walk through how to run analysis, we’ve got training for it, it’s linked in description down below, it’s completely free, check that out and actually access the data yourself so that you can understand it yourself. Yes, it’s going to take a bit more time. But that time is going to pay off massively. As an investor finding great deals is one of the highest ROI things that you can do with your time. So you really want to take your time to do it properly. Now let’s talk about using evolved as a property management company. Now, I think I have some pretty unique insight into this given that I actually run and ran a property management company. Now my property management company only manages my own properties. So there’s no conflict of interest there. I’m not trying to get your business, I don’t manage anyone’s properties right now other than my own. But in the past, I did actually run a property management company managing over 3035 properties for other people, whether they were investors, second property owners, what have you. And so I think I have some really unique insights to share here, as it relates to evolve a much larger property management company. So really what I’ve seen consistently time and time again, having spoken now with hundreds, if not 1000s, of Airbnb, and short term rental hosts all over the world, is that consistently, when people are using evolve for property management, their numbers are falling short, they’re just underperforming what the property really could be doing. And I break that down into a few different reasons that really in reality are symptoms of one singular cause, that one singular cause is that Vic Casa evolve these really, really large property management companies, they have 1000s of properties. So your one or two properties that you might give to them are a fraction of 1% of their business, just think about that you just don’t matter as one investor to these companies, because you’re a fraction of a percent of their overall business. And if you’re a fraction of a percent of their overall business, it really doesn’t matter to them, if they’re leaving a couple 100 Or a couple $1,000 per month on the table in revenue, because that is going to be only a couple of 100. Even if they’re leaving, let’s say $10,000 a month on the table for you across a couple of properties, that’s still $1,000 a month, or $2,000 a month in management fees for them. That’s such a tiny microscopic portion of their overall revenue, this huge, multi multi million dollar company, that it just doesn’t matter to them, they’re not going to deploy their company resources, in order to spend more time and effort on your listing to optimize the photos more optimize the listing to make sure that those vacancies get filled to dial in your pricing strategy. Because those extra dollars they can make you are going to only equate to a percentage of that for them. And that is only going to be a fraction of 1% of the overall revenue for their business. So it just doesn’t matter. That is why I personally recommend that most people go and work with small to medium sized property management companies that have somewhere in the neighborhood of five to 50 properties under management, those tend to be the property management companies that are going to care the most about your individual property or properties, because it actually is a much bigger, substantial part of their overall business. So it actually matters to them that your property performs well when it comes to evolve, or because of these really, really large property management companies. My recommendation is that if you’re a really, really large real estate investor, meaning in my books that’s anywhere from 50 or more properties that you have that you want to have managed by one company as a short term rental properties. Sure, there are very few property management companies that you’re going to be able to work with that will be able to take on that volume of properties all at once. So if you have let’s say even if you have 30 properties that you want to have

and over to a property management company, no small or medium sized property management company is going to be able to take over all 30 of those properties all at once that will be asking them to double their business overnight, it’s just not going to happen. And so it’s going to be a lot more hassle and headache for you to go and farm those 30 properties or 50 properties out to a bunch of different property management companies. So I can understand that, under that circumstance, you might go to a big huge company like Valerie casa, that can easily take all those on all at once they’ve got the resources and the manpower to do it. And so sure, you’re going to miss out on a bunch of revenue from working with the volume of a casa, but you are going to be a more significant portion of their overall business. So they’re more likely to treat your properties with a higher level of priority. And you’re also going to benefit from the simplicity of having all those properties managed by one property management company, not having to worry about interacting with and finding and communicating with a whole bunch of different property management companies. So if you’re a large property investor who has 3040 50 properties that you want to put on short term rental, hand them over to a property management company, then great, I would actually in that scenario recommend going with a smaller of a casa. But if you’re a smaller investor that has anywhere from one to 10 to 20, or getting up towards 30 properties, then you’re going to be much, much better off going with a small to medium size property management company that we can help you find as well, you have to find the right property management company that not only are they going to care about your property, but that also has the skill set and the resources and the tools to be able to make that property perform really well. So if you want help finding one of those property management companies, again, just get in touch, let us know we would love to help you find that. But that’s really where you’re going to get much better numbers, much better performance and have a whole lot less headache. So again, this is a bit of a PSA video, I’ve seen this happen to too many people and I hate seeing investors get burned with short term rentals. So let me know what you think if you work with Evolver because I’d love to hear from you as well in the comment section down below. If you have your property managed by them or if you’ve been using them if this video shed some light onto that for you then just let me know in the comment section down below. If you liked this video if you appreciate if it helped you avoid a mistake then make sure you hit the like button give this video a thumbs up it helps me get these videos in front of more people. So it really do appreciate it. Last but not least, if you’re new to the channel or you haven’t yet hit the subscribe button make sure you do right below the video hit the subscribe button there so you can stay up to date we post two new videos every single week on this channel about all things Airbnb investing in property management, so let me know in the comment section down below what you think. Hit the subscribe button hit the like button. I’ll see you in the next video.