I'm brand new to real estate investing. I am a partner in a business that has a very strong monthly cash flow and I'm looking to use that cash to acquire multi unit rentals. The main issue I have is my lack of experience. I'm not a handy man what so ever and I do not want to get dragged into the day to day of being a landlord.
I realize where my strengths and weaknesses are and that is why I am planning to utilize a property management company.
My question is, are my expectations unrealistic of being a mostly hands off real estate investor? Can a property management company handle 99% while I continue to manage my daily business and hunt for more deals? Also are there any resources I can turn to if other people like me? Would love to have a mentor whose been in the same situation!
Thanks much in advance!!!
People hire management companies to handle the tenants, collections and repairs. If you dont want to do those things then yes you get a management company. Even in my own local market I use one bc I dont have the time or desire to deal with it.
Thank you Curt. From your experience, with your management company handling it does it seem to be fairly hands off/ passive at that point?
I am an out of state owner with property in NC and FL while I am living in LA. I've had 3 managers in FL. I have great success with my current property managers. I am completely hands off and my involvement is receiving the monthly deposit and giving my input on any expense $300 or greater.
Remember that the property manager works for you. They are applying for a job in your company. Interview several managers that range from the small companies managing 50 properties to the major company managing 1,000 properties.
I've found more success with the smaller companies that are hungry for the business and treat my property like it is their own. The larger companies were very impersonal and made me feel like just another line number on their spread sheet.
Hope that was of some use,
Thank you for the advice Eric!
Loren, from what I have seen and heard i would suggest it really depends on the company. Many folks on BP have gone through multiple companies and were not happy with the management they provided. I would say a good GENERAL rule is that the more professional (higher price and bigger company usually) the less involvement you will have to have.
If you hire a guy down the street who managers 6 other units on the side while being a full time RE agent you may have to be more involved. Hiring a professional management company, while more expensive per month will likely provide you less of a headache, but you will pay for that convenience.
It all comes down to how much cashflow on these properties do you want to sacrifice to be 99% hands off?
As passive as you are.
@Loren Thomas , I use a pm on most of my properties. As long as you vet them thoroughly, provide your expectations up front, and hold them to them, then they are passive. Bottom line is you are their client, and if they do not provide the service that you want in its entirety, than move on!
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