My property manager

Couple of month ago, one of my properties is damaged by the evicted tenant and my property manager was working hard on evicting the tenant, contacting the power company to inspect the rehab cost and attorney to get the tenant evicted etc.

After checking with the damage with insurance company, I got much less than the total repair cost that property manager proposed when he assessed the property so I started to shop around the repair vendors that offers the cheapest cost. Then, property manager's attitude suddenly changed so I asked the reasons why and the reasons why he was upset is that I started to shop around the vendors.

My understanding for him to get his compensation is via
1) Certain persentage of rent collected (I won't disclose how much percentage)
2) Half of the 1st rent when rented.

If there is no economic benefit as a result of him doing this repair job, there is no reasons to be upset but it seems that he is actually taking some compensation from this repair so that's why he was upset when I started to shop around.

Now, he is saying that if I choose another vendor, I need to change the property management company (Which I have many choices so there is no problem).

I understand that he worked so hard to evict the tenants, contacting and meeting the insurance company and meeting utility company etc since I have many communication with him to make sure that job got done (It's been 2 month or so).

What you would do in this situation? In order to see his intention, I sent email basically asking if he is skimming on the top as a result of this transaction (Very professional and caring way so he won't be upset). But, I am inclining toward the replacing to the new property manager.

Any suggestion or experiences are appreciated.

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

Moderator Pro

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Jan 12, 10:55 PM

I think he's getting a cut of the repair costs. Get a new PM.

Jon Holdman, Flying Phoenix LLC

Steve L.

SFR Investor · Rancho Cucamonga, California

890 posts
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Jan 12, 11:18 PM

Takeshi - I am sure he is skimming. Property management really isn't a high paying or a glamorous job. So this doesn't shock me.

I would just get a new PM and move on. He is probably not going to admit that he is getting a piece of the profits.

Takeshi Yashima

Real Estate Investor · Monterey Park, California

29 posts
4 awards
50 influence

Jan 12, 11:24 PM

Thanks both for the advise.

Yes you right Steve. There is absolutely no reasons for him to be upset if there is no money involved in this transaction. So, that's why I purposely send the email if he skimming some money on the top (Again, very nice and caring way).

I will wait a bit longer for his response but I will most likely get new PM and move on. Thanks!!!

Michael Siekerka

Real Estate Investor · Louisville, Kentucky

160 posts
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Jan 13, 06:25 AM

It sounds like you're uncertain about firing him because he worked so hard to evict the tenants and deal with the power company and attorneys etc.

This is like patting a McDonald's clerk on the back because he deals with the customers even though he's taking money out of the register.

The bottom line is HE is the one that got a crappy tenant into the building and HE is the one that should have to deal with it. He shouldn't get any special treatment or compensation because his bad decision ended up costing you a lot of money in repairs.

Get rid of the guy and find somebody who isn't trying to scam you.

Nathan Emmert

Multi-family Investor · South Jordan, Utah

786 posts
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Jan 13, 06:41 AM

I agree with Michael.

He's a Property Manager, evictions are part of his job description. If he never had to do that sort of work, why is he collecting a fee at all?

Going back to you contacting people... that's also part of his job. Seems to me he should be thrilled you're doing it, you're saving him work. He gets a certain amount of money every month no matter how many hours he puts in, you just cut down his work time without touching his income... that should be great news!

Can him and move on. If he is that much cheaper than others and you like them, simply document in writing the mark up on repairs so it's all above water.