Property Manager Referral Needed for SFR's in South Atlanta
Los Angeles, CA · Member since 2013 · 3 posts · 1 vote
Property Manager Referral Needed for SFR's in South Atlanta
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Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes
12yWe had a great PM in St. Louis that did a great job cheap, but went through about 8 here in the ATL before deciding they all sucked. I think some of that was a real difference in the quality of renter base, though.
I haven't used him, but I've chatted with Chris Littleton of Solutions Realty Network a few times and he seems to know his stuff and run a tight ship. He's the former head of GA REIA and current one of Altanta REIA. Probably be a good place to start, I think their home base is on the southside too. I dont have his number handy, but I imagine its easy enough to find in Google...
29 Replies
- Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes12y
There's alot of property management companies in the Atlanta area. I'm in all the REIAs and landlords are always complaining about the cost or incompetence of their current or previous property management company. Comparing fees with other areas of the country it seems Atlanta is one of the most expensive areas to turn your rental property over to a PM. Worse in my view is that the current PM contracts actually encourage bad PM behavior by rewarding putting weak renters in your property and when they leave or have to be evicted the PM gets rewarded with yet another months rent by placing another weak renter in your property. There has to be a better way??
I went to the Home Depot sponsored Andrew Cordell (Financial Momentum folks) REI expo here in Atlanta a few weekends ago and picked up a brochure for a new org with a smarter for landlord's pricing plan.
Renters Warehouse
No fee for putting a renter into your place, which in my view is the biggest problem with PM contracts. In addition to the PM using their contractors at inflated costs. I hear of charges for non-existant damage all the time. How is a remote landlord to know?
I have no relationship with these folks and haven't talked with them. I hope folks post their favorite PM for Atlanta and I hope they have reasonable or NO fee to place a new renter. A PM fee for placing a renter just incentivizes them to place folks who don't stay which drives up your PM fees. The Atlanta (etc) PM situation reminds me of the US medical system where Dr's (per the AMA) can only give you toxic pills and not solve the underlying problem, which means you're in an endless cycle of going to multiple Drs getting more and more prescriptions. IMHO PMs are no different. We need a better model for landlords who want to delegate property management and not get ripped off in a continuous cycle of getting bad tenants put into out properties, they leave, there's damage, the PM uses THEIR contractors at inflated prices, the landlord gets yet another fee for placing yet another weak renter...
I hope this breaks out into a good discussion about PM's and their contracts and who gives the landlord a lower total cost solution.
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
Another thing that I've seen quite a bit, when recently trying to find a PM:
If your properties are in a neighborhood that has lower rents, a lot PMs charge a minimum per door every month. That can make it costly, if you have smaller units for $ 400 and they want $70- 120 minimum every month. 8-10% won't be in effect until after you've reached the minimum.
Another thing some of them charge is a set-up fee of $ 100-150/door , which I don't agree with. I can't think of any other business, where the business gets a regular repeat customer and charges them for organizing their files to accommodate the new client.
- Marietta, GA · Member since 2013 · 202 posts · 118 votes12y
Curt has hit the nail on the head. It seems like property managers look at owners, especially those out of the area as money trees. Charging for a new tenant encourages bad tenant placement and churning. They make more money by getting bad tenants.
Times must be good to be a property manager. You would think they would have the best interests of the owner in mind and that their success means success for all. But the manager gets paid whether the owner makes $ or not in most situations.
- Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes12y
We had a great PM in St. Louis that did a great job cheap, but went through about 8 here in the ATL before deciding they all sucked. I think some of that was a real difference in the quality of renter base, though.
I haven't used him, but I've chatted with Chris Littleton of Solutions Realty Network a few times and he seems to know his stuff and run a tight ship. He's the former head of GA REIA and current one of Altanta REIA. Probably be a good place to start, I think their home base is on the southside too. I dont have his number handy, but I imagine its easy enough to find in Google...
- Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes12y
Originally posted by Kevin Auyong:
Curt has hit the nail on the head. It seems like property managers look at owners, especially those out of the area as money trees. Charging for a new tenant encourages bad tenant placement and churning. They make more money by getting bad tenants.
Times must be good to be a property manager. You would think they would have the best interests of the owner in mind and that their success means success for all. But the manager gets paid whether the owner makes $ or not in most situations.
BTW, I totally agree with this. If you set up a compensation plan where they can make money by churning tenants and doing lots of repairs, you gotta really watch what they do.
- Marietta, GA · Member since 2013 · 202 posts · 118 votes12y
So Darrell, who did you settle on in Atlanta or are you just managing them myself?
My own rentals here I think I manage way better than any property manager and for a lot less. I rented out 3 homes and a duplex. In the last 2 years I spent maybe 9 days for all of them for service calls and rental viewings and the like. Maybe I just got lucky or like you say maybe quality of renter base? My renters are all lower middle class or a bit lower at best. Vacancy was about 2% average on all of them.
Somehow I just can't see paying someone 10% of rents, a full month rent for finding a tenant, and adding a surcharge for repairs when so little time is involved. Obviously other properties might need a lot more attention and work. When people say to allow 50% off of the rent rolls, I wonder if I am just lucky as my percentage is much lower.
- Marietta, GA · Member since 2013 · 202 posts · 118 votes12y
Originally posted by Darrell Shepherd:
Originally posted by Kevin Auyong:
Curt has hit the nail on the head. It seems like property managers look at owners, especially those out of the area as money trees. Charging for a new tenant encourages bad tenant placement and churning. They make more money by getting bad tenants.
Times must be good to be a property manager. You would think they would have the best interests of the owner in mind and that their success means success for all. But the manager gets paid whether the owner makes $ or not in most situations.BTW, I totally agree with this. If you set up a compensation plan where they can make money by churning tenants and doing lots of repairs, you gotta really watch what they do.
I don't think we set it up, it's what the property managers all demand. I'd rather pay a slightly higher % and nothing for when it's empty. Then it is in the manger's best interest to keep them rented.
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
CL, mentioned above - he knows his stuff, but make sure that you never, ever disagree with him and never, ever let him know that there could be something that he doesn't know. Always agree with him........just saying.
- Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes12y
I hope someone calls / tries out http://renterswarehouse.com/ or other PMs that don't charge anything to load a new tenant!?! Atlanta landlords need to rise up and rebel !!! LOL but not really laughing at the egregious situation here with PMs charging out the nose.
I've had the same low effort (and no PM) with our 13 rentals in Atlanta area as Kevin above. 99% of our results where by design though. I wonder if a spread sheet would show that cheap property in the long run performs worse than more expensive property that is located in good school districts that you rehab nicer to attract and keep low effort renters?? That you don't have to repair as often or use any PM on. What's the break even year for our strategy (more expensive house in a top high school) vs cheap houses in bad school districts with PM?
Our model: Norcross High School district an 8 out of 10 Great schools: $45k (2012) + $15k rehab = $60k at $1000/mo rent, zero turn over or damage or PM = 9 x $1000 = $9/$60k = 15% cap rate. Yes I'm leaving off CAPEX but these 1985 houses after our rehab don't need much even after 5 yrs and Gwinnett county has cheap prop taxes.
Cheap house with PM: I20 area called Decatur; $20k for a 3/2 + $10k dust up rehab = $30k all in (circa 2012 to keep comparison with my house in Norcross). 1 turn over / yr with total repaint, wall board fix and replace a missing stove) Dekalb count taxes are high vs Gwinnett. Rent is $750, cash flow = $750 x 8 (Dekalb county has high taxes use 8 months instead of 9) - $300 used stove - $300 repaint job = $6150. Less PM: 10% of 5400 = $540, less first months rent $750 = $4110 / $30k = 13.7% cap rate. Higher than I would have guessed. I think CAPEX of these $20k houses will eat into this cap rate in a major way. Some experts here say instead of 8 months of rent you need to use only 6 months of rent for annual cash flow, to account for all the structural repairs: new roof, new sewer pipe, many plumbing heating electrical problems these older cheap houses have.
I don't see where the business model of cheap houses out performs more expensive houses in best high school districts in the first place let alone a break even year vs better school district houses. Now that the Hedge funds have ruined the renter pool in these cheap areas I view the cheap rental zips as toxic. Just check craigslist for the cheap zips in Atlanta. I did last week I was shocked!. Every house has new vinyle windows and $700-$800 rent and there's only about 4 different phone numbers for the 30 houses I looked at. The renter pool has been trained to shop for new rehabs at rock bottom price. What kind of rental business model competes on price yet has to do a top fix job? One that you'll have problems making consistent money with in my opinion.
Very bad! click this craigslist search link
Craigslist Decatur mid range rent
Click all the links from the top. Amazing!! granite, new windows, tile back splash, wood floors all for $700 to $800. We changed our business model as the Hedges and foreign investors changed the core county landscape 2 years ago. There's no way to compete with infinite budget Funds who can over fix a house and let it sit vacant months out of each year.
- Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes12y
Originally posted by Kevin Auyong:
So Darrell, who did you settle on in Atlanta or are you just managing them myself?
My own rentals here I think I manage way better than any property manager and for a lot less. I rented out 3 homes and a duplex. In the last 2 years I spent maybe 9 days for all of them for service calls and rental viewings and the like. Maybe I just got lucky or like you say maybe quality of renter base? My renters are all lower middle class or a bit lower at best. Vacancy was about 2% average on all of them.
Somehow I just can't see paying someone 10% of rents, a full month rent for finding a tenant, and adding a surcharge for repairs when so little time is involved. Obviously other properties might need a lot more attention and work. When people say to allow 50% off of the rent rolls, I wonder if I am just lucky as my percentage is much lower.
I self managed for a bit, but hated it so sold them off, unfortunately when the market tanked. Took a pretty good beating on them. I haven't owned rentals in a while. Got a duplex in St. Louis, but its a flip play that has some cash flow until it sells. I was buying way too high here too, so was essentially paying for my rental negative cash flow with flips (I was at 75-80%, not 50). I'm mostly rehabs these days, so you can take my advice for what its worth. Had probably 100 units at my peak, that was a mix of straight rentals, some small multis and several I sold on L/O's. Killed it in St. Louis with rentals, lost a bundle here in Atlanta. Some of that was timing, but some was difference in markets, and probably a lot was lack of experience. I was a terrible landlord. I'm too soft hearted on their sob stories...plus I was running pretty hard back then so all the little calls were annoying when I was working big flip.
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
are you sure that rental warehouse doesn't charge to put new tenants in? While it doesn't specify on their website, they also say that there are 'no upfront frees', yet they charge $ 99 per unit set-up fee (so, those are clearly upfront fees)
They also charge flat fee of $ 79/SFH and $ 69/duplex door. So, it would only be economical in higher paying neighborhoods. (Definitely wouldn't work for my duplexes, that get $ 400/door or my houses that get average $ 600/door).
With them charging those above fees, I can't imagine them not charging for tenants, when that is such a common fee and they're not trying to be cheap for the other fees
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
I just called them and they want a standard 1st months rent, like everyone else.
- Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes12y
LOL grrrrr!!! Their flyer at the Home Depot / financial momentum Expo here in Atlanta where I saw them said no 1st months rents rent.
- Los Angeles, CA · Member since 2013 · 3 posts · 1 vote12y
Great, thanks for the helpful feedback everyone. I agree with a lot of the comments here, property management can really make or break an investment and there's a lot of fraud that goes on in that industry. However, those that are honest and do a great job really do deserve their fees.
So far from the comments I've gathered these three companies. It sounds like a couple of folks here are familiar with Chris Littleton at Solutions Realty Network, does anyone here have any properties actively being managed by his company, or know of any landlords that have properties with him? Thanks for the support so far!
http://atlanta.renterswarehouse.com/
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
I have no property managed by Chris Littleton and don't know anyone who has. His company is probably large enough that an owner wouldn't have to deal with him directly.
I personally stopped going to the weekly Dealmakers meetings at GA REIA and left GA REIA completely because of him. Personality wise, not because he did anything wrong.
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes12y
Originally posted by Curt Smith:
@Michaela G.
LOL grrrrr!!! Their flyer at the Home Depot / financial momentum Expo here in Atlanta where I saw them said no 1st months rents rent.
Maybe they offered a special to get their business going? Maybe it was just for those who signed up that day at the expo
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes12y
Property management there is just not much money in it. Many landlords think PM's are blood sucking leeches bleeding them dry................ : )
I looked at the model about 7 or 8 years ago as I was analyzing all kinds of real estate niches. The ones I talked to you have to manage hundreds of units and undergo heavy scrutiny by the real estate commission with record keeping to eek out a decent profit.
Many of these agencies do it because THEY HAVE TO and not because they want to do it. If it's not something they enjoy but just to collect a check they won't be working extra hard on your behalf in many cases. Some struggling brokers and agents do this because they need the monthly check to feed their family and keep the lights on.
If you remember two words out of this whole topic to me it would be ALIGNED INTERESTS. Make it where you the landlord and the PM either both win or lose. You both make money or both feel the pain of no results. Why not put in your lease that if a tenant turns before twelve months from signing there is no lease up fee or have a cap on lease up fees charged per year. It's easier and lazier to kick tenants out for a PM and release and hit you will repair bills then it is for them to deal with tenant drama daily and get them performing again.
To the landlords that say they have no problems then why are you not wanting to do the PM?? PM work is just a very low use of your time income wise. I do not know what is harder to find a good contractor or a PM ! lol
If people saw after expenses what these PM companies made I think the perception might be different. I think getting a PM company to deal with a rough area for rents of 500 month at 50 a month is unrealistic from what I have seen. The property managers tell me those types of areas require heavy management. If they have to go to a property multiple times the gas and time alone will eat up any extra percent they are getting paid. I think the main point is people can't be saying it both ways. It's so easy to manage but I don't want to do it myself so take this cheap fee................. : )
The key I have seen is to ask if they do PM full time?? In my opinion ones who do it on the side with little houses do not have the systems and processes in place to adequately manage.Plus as soon as they get a regular sale going on a house for a big check they do not care about that 50 a month to manage your asset anymore. Not all are like this but I see a strong correlation.
- Specialist · Las Vegas, NV · Member since 2013 · 639 posts · 176 votes12y
ATL is a very difficult place to get started on anything, especially building a rehab network. The people here tend to speak out of both sides of their mouths simultaneously.
However, it is a great place to do business and the opportunities are here for risk versus reward.
@Joel Owens says it all in his post about PMs.
I came across Chris Littleton's company when I was trying to rent a house last month. If I had a dog, I wouldn't let them take it for a walk!
I had a friend here who had a similar problem with PMs and I advised her to set up the tenancies herself and then hire a part timer to manage (max 5 units per) them from there. Plan seems to be working well - she's happy with it now.
- Marietta, GA · Member since 2013 · 202 posts · 118 votes12y
Joel $50 a month is not a lot like you say. But let's add the surcharge of sending out repair people to those homes and suddenly it's not $50 anymore. Don't forget there might well be a kick back to the manager for the service call from the vendor. Then let's add the one month's rent to find a new tenanant and if the area is problematic this can happen once a year or maybe more. This can easily add up to an average $150 a month for each unit. I know this because I had a few managers that did this kind of stuff.
Sending out a repair guy to fix a leaky toilet 4 times in 6 months? Come on, it's replace the valve once and call it done.
For just mananging a few units yes it is probably a money loser. But I beleive when you get a lot of units it becomes quite profitable.
- Los Angeles, CA · Member since 2013 · 3 posts · 1 vote12y
I have to agree with Joel here. I believe if the Management agreement is set up properly to align the interests of the landlord and the PM, and an ethical company is selected for job, the landlord should have their investments running well. I plan to implement certain controls to take the risk of fraud out of the picture. For example, contacting tenants directly and following up on their repairs every once in a while and conversating with them could bring to light bogus charges. Or sending out quarterly surveys to all tenants with gift card incentives for them to complete the surveys would be a direct independent way to find out how the PM is doing and what kind of experience tenants are having. Having the lease up commissions at a higher amount for 24 month leases versus 12 month leases would be another way to encourage longer lease terms and lower turnover.
- Investor · Yokosuka, Japan · Member since 2014 · 631 posts · 184 votes12y
Hello BP,
I’m here with yet another question, hoping that the GA investors can chime in and help.
I followed Paul Timmins advice and contacted several NARPAM member companies hoping to establish a relationship with a good PM to add to my team.
I have received good responses from one of the companies I contacted and want to ask if anyone here has had any experience with them. Davis Group Inc. in Decatur, Georgia.
If not experience, can you help me with ideas to vet this company? I’ve already asked for references of investor clients I can speak with and will be having a phone conversation with their representative on Friday evening. Any help you can send my way before then will be greatly appreciated.
Thanks!
-Pyrrha
- Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes12y
The past president of GaREIA owns a big management Co that manages all over including way South of Atlanta. They have their own repair/painting etc all services under one roof.
SRN
Chris Littleton
- Investor · Yokosuka, Japan · Member since 2014 · 631 posts · 184 votes12y
So, aside from Silas Frazier Realty recommended by @Naga A. , are there no other positive experiences with PMs in the Greater Atlanta area? I've been hoping someone here sees the thread and chimes in to point out their great PM operator. No such luck? Is everyone self managing?
Thanks,
Pyrrha
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