Bulding a Team, Property Managers
Lender · Nationwide · Member since 2018 · 571 posts · 310 votes
Bulding a Team, Property Managers
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Property Manager · Indianapolis, IN · Member since 2018 · 136 posts · 71 votes
6y@Shafi Noss @Nathan Gesner gave you some really good tips. I would say that narpm.org is garnered more towards single family, at least here locally to Indianapolis. My advice would be that the bigger you go, the more qualifications your PM should have. Are they involved with the National Apartment Association, local IREM chapters? What are their reporting and accounting capabilities? What CRM do they use and what level of access will they grant you to it?
As @Tj Hines mentioned you want to be thorough when interviewing, but you want it match the complexity of the property. A 90 minute interview on a 4-plex would be redundant, but on a 100 unit reposition, I would expect it to be longer. Remember though, a good reputable PM will be interviewing you as well to ensure you match with them.
I see a lot of investors look at their PM as their "employee" and they are in charge, and these are the types of arrangements I see fail more often than not. The investor and PM have to be on the same page from the beginning and work alongside one another in achieving/exceeding investment goals. I may be a little biased, as a PM and investor, but typically they are the most vital part of your investment. HIre a good one and you will typically exceed your investment goals, hire a bad one and it could set you back.
5 Replies
- Saint Paul, MN · Member since 2016 · 31 posts · 20 votes7y
Here's a great resource on BP on how to vet a new pm : https://www.biggerpockets.com/...
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes7y
I would start by ensuring they have solid experience with the type of property I'm purchasing. If I'm investing in MF, I would want a manager with a lot of experience in that realm. If I'm investing in D-class property, I want an expert in D-class rentals. Remember: cheaper doesn't mean you'll make more money.
You can start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. Regardless of how you find them, try to interview at least three managers
1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their different staff qualifications.
2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.
3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 5% management fee but the extra fees can add up to be more than the other company that charges 10% with no add-on fees. Fees should be clearly stated, easy to understand, and justifiable. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate!
4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.
5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that it is enforced equally and fairly by their entire staff.
6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact they are complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.
7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?
This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!
The DIY Landlord Book4.7248 Reviews - Specialist · Tampa, FL · Member since 2012 · 933 posts · 492 votes7y
@Shafi Noss its a lot different than vetting a sfr PM. Numero uno is you have to make sure they are adaptable and have the right type of management experience with your business model. If you're a value add investor and your goal is to reposition then you want to hire the PM that has repositioning experience in your asset class preferably at least 5 years worth. We built out a questionnaire that I don't mind sharing with you. The interview process usually last about 60-90 minutes. It's pretty thorough, but by the end of the conversation you will def know if the PM is a good fit or not. PM me and I'll send over.
- Lender · Nationwide · Member since 2018 · 571 posts · 310 votes7y
@Nathan G., Thank you for the very detailed response! I didn't know about narpm.org, will look there, and think carefully about your advice. Just sent you a PM.
@Tj Hines Hi Tj, thanks for responding to my other post too. I am interested in this. And actually looking to buy in the Tampa market. Will PM you. - Property Manager · Indianapolis, IN · Member since 2018 · 136 posts · 71 votes6y
@Shafi Noss @Nathan Gesner gave you some really good tips. I would say that narpm.org is garnered more towards single family, at least here locally to Indianapolis. My advice would be that the bigger you go, the more qualifications your PM should have. Are they involved with the National Apartment Association, local IREM chapters? What are their reporting and accounting capabilities? What CRM do they use and what level of access will they grant you to it?
As @Tj Hines mentioned you want to be thorough when interviewing, but you want it match the complexity of the property. A 90 minute interview on a 4-plex would be redundant, but on a 100 unit reposition, I would expect it to be longer. Remember though, a good reputable PM will be interviewing you as well to ensure you match with them.
I see a lot of investors look at their PM as their "employee" and they are in charge, and these are the types of arrangements I see fail more often than not. The investor and PM have to be on the same page from the beginning and work alongside one another in achieving/exceeding investment goals. I may be a little biased, as a PM and investor, but typically they are the most vital part of your investment. HIre a good one and you will typically exceed your investment goals, hire a bad one and it could set you back.
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