Investor · Mission Hills, KS · Member since 2015 · 59 posts · 11 votes
Howdy BP fellows! I just got my California General Contractor license, my mid term goal is to start a property management company, does being a general contractor helps in any way starting the business (other than ability to pull permit and build / fix things). I read somewhere that I need a broker license to start a PM business, does it mean I need to be an agent for 2 years, pass broker exam and then look into it? Since this is something I am looking for in next 2-4 years I do have time if I need to go that route but wondering if anyone know if contractor lic can be substituted for broker.
Thanks for reading and let’s make it an amazing day for our loved ones.
Real Estate Professional · Hoboken, NJ · Member since 2017 · 46 posts · 26 votes
8y
I think it’s good either way with your skill set.
Pick a easy property with minimal to no headaches, collect 10% each month
Pick a difficult property with many repairs arising, collect 10% and do the repairs as the GC
Investor · San Francisco, CA · Member since 2016 · 338 posts · 444 votes
8y
@Brad S., I believe you can get away with a salesperson realtor's license as long as you have somewhere to hang it so you're technically working under a broker. A contractor license cannot substitute.
As far as the business model, I've often thought that the profit margins are pretty thin as a property manager. I manage all my apartment myself, so this is just from doing all the work of a property manager and thinking about whether it would be worth it for 5%-10% of gross. You definitely need a high volume of rentals. I think many brokers use property management as a way to get additional income that will help during downturns, and to also take advantage of a pipeline of clients from sales.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
8y
The Woman Millionaire Next Door (1990's?) listed PM as one of the top fields of women millionaires...but I don't recall if they made their money owning re. I think the mist profitable PMs accept only the better properties. And once you are managing a few of your own, adding someone elses would seem to be an efficient business model. I think the numbers sound great. My PM would make $600 a month off my 4 houses and I very rarely get a call. Last call was a leak in the yard where the pvc supply line met the copper. Squirrels chewed a hole in a facia board was another. and ants were getting in the house and hunter ceiling fan remote worked only intermittently were reported when we were there with the ac guy doing a checkup....so probably wouldn't have been reported. This year thusfar. Solid property, solid lease, solid screening = solid business.
Real Estate Consultant · Joppa, MD · Member since 2015 · 218 posts · 178 votes
8y
It is a lot of work for a small percentage of income so you need volume to make a decent profit. The key to success is that you also need to be selective when agreeing to manage property. There are some that just won't be worth the headache and those you need to reject (respectfully). I lam very upfront with my investors and I believe although they may be disappointed, they appreciate my honesty. If I feel like it won't be worth the constant grief, if I won't feel safe going the property doing inspections, if the house has too many issues that the investor has no intention to fix, I'm passing every time.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
8y
Keith Weigand Hmm. If you have 10 clients at $3000/location at 10%, wouldn’t that equate to 36k a year? Now 10 properties is part time work. If you’re good, you could go small apartments say 10 doors at minimum $1700/door. 11 locations at 4,700/mo for part time work, why isn’t it not worth it?
Rental Property Investor · Cleveland, TN · Member since 2015 · 176 posts · 58 votes
8y
@Manolo D. It may be worth it to some, depends on your goal. Are you an investor or trying to start a PM company. You only discussed income in your post but no mention of the work involved. All I’m saying is that there is a lot of work in PM. If you want to start a pm company, it could be profitable.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
8y
Keith Weigand I’m saying that 10% IS worth it and it IS NOT a lot of work. If it is, no PM company will be standing.
I’ve looked into making a PM company, I could easily build one, but fixing something and dealing with emotions is not what i want to do, building something is.
Involved In Real Estate · San Diego, CA · Member since 2010 · 15 posts · 5 votes
8y
You can't only look at the percentage made on gross rents as the sole income. What about the auxiliary services that property managers offer. The opportunities are endless.
Real Estate Professional · Hoboken, NJ · Member since 2017 · 46 posts · 26 votes
8y
I think it’s good either way with your skill set.
Pick a easy property with minimal to no headaches, collect 10% each month
Pick a difficult property with many repairs arising, collect 10% and do the repairs as the GC