Property Managers - Franchise or Independent?

Question

Hi all,

I'm in the market to acquire a property management company/portfolio and was wondering if anyone could speak to the reality of going the franchise route.

I've spoken with PMI and their offering looks solid but I'm really wondering if it's worth the royalty fee. I'm happy to pay for systems to save time and guidance but the fee seems ambitious and I don't love the idea of forking over large percentage of profits to be told what I can and can't do with the company.

Does anyone here own a property management franchise (any) that would be willing to speak to their experience and if they think it was worth it, or not?

I'm hoping to find an existing independent PM or franchise to acquire in the next 18 months in the Denver area.

Would also love to speak over phone/zoom if anyone is willing.

Thanks in advance!

-Drew Carpenter

Nathan Gesner · Answer

I'm independent, but I have some friends that went with a franchise. We all started without any experience in real estate. They were able to get moving much faster because they had access to a great website, forms, letters, and even policies and procedures. However, I would argue that I learned better (through personal experience) and ended up with a better business and more freedom.

I recommend striking out on your own. Join a group like NARPM where you can take classes and network with other professionals. You can also save a lot of time by spending money on products produced by others. For example, I broke down and bought a forms package for $1,000 that saved me so much time and improved my company, particularly as I brought on employees. I paid for a coaching program that helped me improve my fee structure and nearly doubled my annual income.

Going it on your own has benefits, but look for help in the most important areas.

Drew Carpetner · Answer

Thank you all for the input guys. Very helpful.

I've decided to look for an existing firm to and forgo go the franchise route. While the support sounds nice, I can buy quite a bit of consultation and legal help for $60K, and that doesn't even figure the royalty.

Nothing against the franchises, I spoke with PMI and was impressed with their business model, I just don't like the idea of paying fees to be restricted operationally.

Hope I can return the favor to ya'll sometime soon.

Cheers,

Drew

Michael Smythe · Answer

The only values we could see in franchising:

Legal assistance

Marketing

Adam Bartomeo · Answer

I would suggest going independently but partnering with an established company. Franchises work great when their exact model fits, round hole round peg. But, there is very little flexibility and the rules are rigorous. Its better to partner with someone who will stand shoulder to shoulder with you.

Property Managers - Franchise or Independent?

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