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54 While the property owner typically will live in the main unit, with the tenant in another, other owners will have two ADUs on one property and will live somewhere else. ADUs cannot be bought or sold separately from the main property. SCALING AN SFR BUSINESS Butler offered the following tips for scaling an SFR business: » Make sure that every deal supports itself. » Keep your finger on the pulse of the business. Know your cash flow; check it monthly. » To limit "playing whack-a-mole" when working with multiple properties, use a property management system. However, scaling may be overrated, Herriage countered. He said it is more important to get good at owning one property, then two, then three. Otherwise, focusing on scaling will only expose the owner's inefficiencies. "Make sure you have a solid team in place," Raghavaraju added. Butler also stressed the value of education—not college courses, but real estate industry education. "I've probably spent $250,000 on education during the course of my career learning from experts. You need to do your homework" While Butler admits there are some poor seminars, they can also prove to be valuable because an investor learns tactics not to pursue. He also found a broker's license to be valuable. Danny Kattan, Founder and CEO of Sell2Rent, said a broker can help an investor scale an SFR business, but it's also essential to know what your leverage options are. "You need to be organized with your borrowing," Kattan said. "You have to realize that it will take time." "Set goals," Butler added. "If you shoot for the moon and miss, you still land among the stars." Butler's goal when he started his business was to make 20 offers a week, even though he had a full-time job. He eventually grew his business to the point where he could forgo the job. He advised those in the business today not to forgo other employment until their rental income is 1.5 times the amount they are making on a job. PROPERTY MANAGEMENT CHALLENGES A property manager will simplify an SFR business, said Dani Beit-Or, CEO of Simply Do It. Any property manager needs to be thoroughly vetted, however, said Jay Tenenbaum, Co-Founder and VP of Capital Development at Scottsdale Real Estate Investments. When the company purchased a portfolio of properties in Evansville, Indiana, it also inherited the legacy property manager, who presented several problems. ere was improper accounting, a portfolio property that was kept off the market, and other issues. A new property manager has cleared up those problems. If using a property manager, it's best to use someone who is local, Tenenbaum said. "A national firm is going to use someone local anyway." Beit-Or said he uses a comprehensive list of 60 questions to vet a property manager, weighing not only the responses themselves but also the type of response. A good, local property manager will also help an owner stay on top of tax laws, which are different from county to county and from city to city, Raghavaraju said. "e number-one problem is local government," said Mike Butler, Founder and President of Vista Properties. "ey assume anyone is a landlord has plenty of money. If you have any Section 8 properties, they are very pro-tenant." Butler recommends owners get involved in property owners' groups, local boards of Realtors, etc. In order to protect their rights. TRANSFORMATIVE TECHNOLOGY Various technologies enable an owner to handle the intricacies of single-family rentals without the need to get involved in all the details. "e technology that is available today is mind-blowing," Hemani said. "People can make their payments online and print out a voucher from the screen; if they need a repair, they can log right in and request a work order; if they want to see a property, they can go to the lock box, key in a code, and have "People value good, quality housing now more than ever." —Tim Herriage, real estate investment entrepreneur Cover Story By: Phil Britt

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