I have a question for people with experience in muti-family real estate. In the past year i have acquired two 4-plexes and have really enjoyed the multifamily investments and i would eventually like to buy a small apartment building between 10 and 20 units. How do yall go about managing buildings this size? I have always managed all my own properties but this would be alot to handle alone on top of my other properties with all the leasing, phone calls, repairs etc. Something this size is not big enough to have a full time manager either. There is always the option to hire a property management company but i have only heard negative feedback from people doing that. What have yall done and what do you recommend for managing properties this size?
@Michael Sura if you plan to self manage it will be the same thing but, on a larger scale. The issue you will have is the maintenance requests will go through the roof. You may not have enough in the budget to pay for a full time maintenance guy and a PM company can actually save you money by handling building management and keeping full time employees off of your payroll.
There are some complications with bigger buildings like massive, complex boiler systems and elevators on occasion but, the analysis and operations are similar.
@Michael Sura as Matthew stated above, there are many simularities.
Besides maintenance, the other challenge you may have is scaling your operations. You may want to create Standard Operating Procedures so you can outsource less important functions like bookkeeping.
@Michael Sura network with other investors who have property in the area and find out who they use as PM.
There are at least a handful in any given market, you just need to dig deeper. When you analyze a deal, you should always factor in PM fees as well.