I am currently building a team in a new city (Milwaukee) other than where I have invested in so far (Grand Rapids). I have been connecting with deal finders and property managers initially, naturally progressing to lenders and contractors next.
I have come across a property manager that I like, and this PM also is an agent. So far I have liked having a separate deal finder and property manager, so that I can have the opinion of multiple people before purchasing a deal.
In your experience, is it better to keep these roles separate? I like having input from multiple people (my agent and PM, possibly contractor), but I also like that the PM would get the commission from the sale, and possibly have more incentive to keep an eye out for off-market deals for me etc. The PM would also only point me to deals that he/she would feel comfortable managing (though this would presumably be taken care of by having the PM walk through any deal my agent sends me, which is what my current protocol is).
Interested in your thoughts! Thank you in advance for your responses.
The pros of working with the PM:
- You already have a working relationship. You both may know what each other's strengths and weakness are and if he has a good network and can bring qualified leads, why not use it.
- He may already know what you are looking for and keep an eye out. You can encourage him to look for off-market deals and tell him that he will still be compensated.
- One way to look at it, I want my acquisition funnel to be as large as possible to bring in as many qualified leads as possible.
You can engage another PM company to manage the new properties and this will give you a backup/bench player and keep your checks and balances.
Having said all that, in my experience, the PMs I have worked with have not been able to find or bring me to good deals. It was just not in their wheelhouse and you can tell fairly quickly if they are showing you MLS listings at retail pricing.
Thanks, Milton. That was essentially what I was thinking as well, but wanted to get some more input from other folks.
There are a decent amount of positives, but I am just not sure a PM will have the resources to find the deals I need.
In many states, Property Management companies are required to be licensed brokerages. This brokerage may engage in property management as its primary business but still house agents who exclusively do transactional deals.
Is your property manager just a licensed individual, or are you working with a company? I think it may be worth while to ask your PM to find you some deals, especially if you are working with a PM company as opposed to an individual; in this case, the agent who finds your deal might not be the same agent who communicates with you on the property management side, but generally, agents who work for a PM company are more knowledgeable about what rents and what doesn't.
Hope this helps!