I'm going from going from duplexes to 24 units and I don't want to F*** it up.

[Jeremy Altdorfer]

I have 8 units so far, all duplexes and SF in Toledo & Cleveland, Ohio. My family member wants to invest in a 24 unit apartment with me so I'm trying to run the numbers.

My question:

What reasonable terms can I get from my PM once I get a large apartment complex? OR should I be happy with what I'm already being charged and not renegotiate.

Right now I pay 100% of first months rent for new leases

$68 per unit month for management

$150 for lease renewal

$500 in reserve per unit for emergency repairs (this will add up on a multifamily not sure how I feel about that)

$75 in person service

12.5% for renovation projects and repairs

20% upcharge on evictions last one was ($560 total)

Thanks in advance for your help it means a lot!

P.S. There is not a specific property in mind at this time, since I am just running the numbers, but if you are interested in a partnership shoot me a message.

[Engelo Rumora]

Quote from @Jeremy Altdorfer:

I have 8 units so far, all duplexes and SF in Toledo & Cleveland, Ohio. My family member wants to invest in a 24 unit apartment with me so I'm trying to run the numbers.

My question:

What reasonable terms can I get from my PM once I get a large apartment complex? OR should I be happy with what I'm already being charged and not renegotiate.

Right now I pay 100% of first months rent for new leases

$68 per unit month for management

$150 for lease renewal

$500 in reserve per unit for emergency repairs (this will add up on a multifamily not sure how I feel about that)

$75 in person service

12.5% for renovation projects and repairs

20% upcharge on evictions last one was ($560 total)

Thanks in advance for your help it means a lot!

P.S. There is not a specific property in mind at this time, since I am just running the numbers, but if you are interested in a partnership shoot me a message.

Hey mate,

Those PM fee's seem solid and transparent.

Same as the reserve.

If someone wanted us to manage a 24 unit, I'd ask for $5,000 in reserves as we as a PM aren't a bank. 

Back in the day we carried a balance of $100,000+ that was owed to us and that is now down to only $10,000 or so and we only cover out of pocket if it's an emergency.

The PM must have sufficient reserves to do the necessary maintenance work and shouldn't be chasing landlords for money.

Just my opinion...

Also, a PM's number 1 profit center is maintenance up charge.

Landlords don't have much insight and PM's nickel and dime to death on those.

If you are suspicious, ask for a receipt so they aren't making up non existent maintenance.

Let them make their money tho and calculate that into your expense pro-forma.

Otherwise, manage yourself and deal with the $#%^@ that comes with it lol.

Multifamily in Ohio, you can get for $25,000 - $35,000 a unit.

Drop another $5,000 - $10,000 into the turns and rents should be North of $800pm.

Decent area's also.

Personally, I wouldn't get out of bed unless I'm making the above numbers.

Wishing you much success