I'm starting to build my team and I hear how important it is to find a good PM. I'm going to purchase my first investment property. I'm in California and will be focusing in the Indy surrounding suburb area.
What tips and processes do you recommend for sourcing and vetting a property manager. My gut is telling me that I need to find a PM before I lock in on a deal. I don't have boots on the ground, so I'm looking for one that can be that honest person to be my eyes and ears (in addition to knowing the blocks well).
@Gilbert Chan you really need to get on a plane and visit Indianapolis and meet / interview your prospective team members in person. There are some really good people and others who will promise you the world over the phone or email but may not deliver. Showing up and showing them you are serious and not a tire kicker will make a difference on how things start out for you. More importantly, it'll give you some perspective on the city you want to invest in. Best of luck to you!
Any tips on vetting property managers when you're working out-of-state. Not just on the ongoing management, but possible due diligence for closing on the house.
@Gilbert Chan you really need to get on a plane and visit Indianapolis and meet / interview your prospective team members in person. There are some really good people and others who will promise you the world over the phone or email but may not deliver. Showing up and showing them you are serious and not a tire kicker will make a difference on how things start out for you. More importantly, it'll give you some perspective on the city you want to invest in. Best of luck to you!
I suggest reading all their reviews. You can usually get a good feel for their culture. It is usually obvious what companies pay for reviews. Don’t be turned off by negative reviews. What’s important is to read the PMs response. Do they appear to be making the right decision? You can gain a lot of insight in them, as long as the reviews are legitimate.
Also, check the state licensing. How long have they been licensed? Does their state licensing website show any complaints or determinations (state penalties)? If so, they are generally public record. If you can’t see them, you can request them.
And most importantly, check the civil court records in the PMs county. Do they get sued often? It is not unusual for a PM to occasionally get sued by a tenant. If they are getting sued by vendors or creditors I would want to know why. If a judgment was awarded, have they paid the debt the judge ordered? The court record will be notated if the debt is satisfied.
Screening any vendor, including a property manager, is not unlike screening tenants. You are looking for both aptitude and character. What is the likelihood the PM will be able to fulfill the contract terms and maximize your return on investment - or minimize your loss.