Starting out by buying Property Management accounts... Good Idea?

3 Replies

Hello everyone,

I've saved up $80k from my job and have been looking for a smart way to get into real estate. My goal is to buy investment properties to rent out, yet in this sellers market where it's hard to find deals that make sense, I want to invest that money in buying property management accounts (perhaps 40-50 accounts).

I have a friend who is a broker, I am studying to get my agents license, and he said he could help me get my property management company going.

I figure it could be a way to create an income stream, learn more about the business, be in touch with owners who might need to sell fast, and if I could get 50 accounts, it would be bringing in enough money where I could hire someone to deal with most of the tenants, and still make a good profit. This would free up my time for other business ventures.

Can anyone offer any advice on this situation? My broker friend has run his own property management firm before and also wants to get into it, and it sounds like a very smart thing to do- he is encouraging me to do it and makes it sound like a promising income stream. Just hoping to get some insight from others, looking to invest my life savings into this.

Many thanks!

-Eric

I would recommend managing a few of your own assets before jumping into managing others.

Seems risky to me.

Where is your guarantee that you wont pay for these accounts then the owners dislike the new service & just go with another company?

Wow, I would not count the idea that taking on 40-50 management account would "free up time for other business ventures". I would think management is pretty time intensive, even if you have expertise and great systems in place. It's not what I do though, so I'd be interested to hear what property managers have to say.

Originally posted by @James Wise:

I would recommend managing a few of your own assets before jumping into managing others.

Seems risky to me.

Where is your guarantee that you wont pay for these accounts then the owners dislike the new service & just go with another company?

 Thanks James,

Managing my own assets would be ideal, I have yet to find a smart investment in San Diego however. 

The broker I would be working with told me there is typically a 10% turnover rate. He's been doing it for 10 years or so and has systems set up in place, I would be learning from him and in turn paying him broker fees. Once a system is set up in place I would start advertising to absentee owners to fill in the 10% turnover rate, and grow from there.

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