Looking to start a property management company

8 Replies

Hi All,

So I am an aspiring real estate entrepreneur, currently working in Fortune 500 Corporate Finance and have been leaning toward starting a PM company.  The reason for my interest is that my ultimate goal is to acquire and manage a large number of rental properties, and i figure that managing some third party investments could be a good source of cash flow to supplement rental income.

My question is - What types of licensing is required to operate a PM company in Louisiana?  I understand that every state has different laws but if anyone has any general information on how long it would take to obtain proper licensing to start my PM company it would be very helpful.  I currently do not have any real estate licensing but do have about a year of real estate experience (interning at a brokerage in college).  I believe i would have to obtain a brokers license which would take a few years.

Is there any way around this?  is it possible to just use an existing broker as your principal broker and still operate your own company?  I am just curious as to what the timing would be if I started obtaining a salesperson license now.  

Any insight would help!  I am extremely green in the industry and am very early in the learning process.

Thanks

Welcome to BP @Brian Winders !

You need a realtor's (salesperson) license to manage properties for others in LA.  Your license has to be with a broker for 4 years before you can become a broker and do things on your own.  As a salesperson, your license always has to be under a broker. 

There are very different expectations from different brokers.  That's why you'll see/hear folks refer to "investor friendly brokers." That's basically a broker who will allow you to have your license with them, and not treat you like an employee tasked with answering phones (phone duty) or listing/sales production quotas.

As far as starting out as a PM, you may want to work with a PM company part-time rather than trying to start there on your own.  It takes volume to achieve viability in the PM business.  You could learn a lot from working with an established PM, whether it's managing a large number of SFRs or multifamily properties.  There's a lot to know.

Thanks @Robert Leonard!  So I assume I would just be able have my license with whatever PM company was employing me, since the owner of that company is required to be a broker?  Sorry if these questions are elementary, but again I am very green to the industry.  

Do you think it would be possible to obtain my salesperson license then work part-time for a PM company to satisfy the required 4 year holding period, while maintaining my current full-time employment?  Is this something that people typically do who are trying to obtain their brokers license?  

Originally posted by @Robert Leonard :

Thanks!

So I assume I would just be able have my license with whatever PM company was employing me, since the owner of that company is required to be a broker? Sorry if these questions are elementary, but again I am very green to the industry.

Do you think it would be possible to obtain my salesperson license then work part-time for a PM company to satisfy the required 4 year holding period, while maintaining my current full-time employment? Is this something that people typically do who are trying to obtain their brokers license?

You need to keep in mind that "holding" the license will require 2-3,000/year to maintain association, MLS, continuing education requirements and other expenses on an annual basis.

Specifically what PM companies expect is much like any broker, it's specific to each company and their policies.  There are a few brokers that do only PM, but most are like a division of a larger brokerage that performs the full spectrum of real estate brokerage services.

There's a lot of flexibility in how people practice as real estate professionals.  That's what many people find appealing about it.  What any given broker will expect or allow is really a question you have to pose to any one you consider working with.  The answers are probably different for each one you talk to. 

Don't get discouraged if you start off with a few "NO"s because you get those a lot in this business.  You have to figure out who you want to work with or how you need to approach who your are dealing with to get to YES.  This point applies to almost all aspects of the RE business!

I'm wondering if Property management would be the best play for you if your ultimate goal is to bring in income to supplement rental income. If you need to have your real estate license in your state in order to manage properties it may make more sense to work as an agent part time. I've found a great niche in working with Investors in my area and its also on a part time basis. 

I have my RE license and we do property management, I can tell I make more money per hour with my RE license than I do with property management. I guess its just depends on the income stream, one is steady month after month the other is transactional based.

@Robert Leonard do you know much about NC laws governing property managers? I have a client who inquired about starting up a PM firm in NC and upon further research, it wasn't clear what level of licensure they will need to hold, though it was clear they need a license. I'm wondering if it's a standard practice for the owner of a PM firm to be a "broker-in-charge" or what level of licensure they usually maintain.

I emailed the NC Real Estate Commission so hopefully they will get back to me soon.

Sorry, @Brandon Hall I have no knowledge of what's required to be a PM in NC.  The NC RE commission is probably your best source for the right answer to that question.

@Brandon Hall

Anyone can own a PM company in NC, but you have to have a broker in charge to manage the company.  As a new licensee, you can work at a PM company to start the the clock ticking on the experience requirement to become a BIC yourself.

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