Property Manager Loyalty?

19 Replies

What do you do when you have a good potential deal from a property manager  other than the one you currently work with and you pursue the deal and purchase? Should you keep management with company who got you lead or flip it over to your current prop. mgr?should you have multiple proptery managers in the same metro area managing different properties? Will they sour to you or not do business with you if you buy property from thei client and then flip the property management over to your current management company? you think they will be mad and not work with you again? 

how would you handle leads from a property manager?

their client*

I can see your problem.

I would say unless you know of problems from the company, I would keep it with them.

As it has been said before you never know when you will need a new property manager company. Having 2 or 3 companies who work for you isn't a bad idea. 

That way if problems to arise, and you think it would be a good idea to shift your portfolio to a different company, it could be an easier transition.

I fired one property manager about 8 months ago and split my properties into two management companies.   At first I did it so that I didn't have to move some many properties if things went bad again.   I actually learned what each property manager was best at.  I now will use one management company for lower end properties and the other for my "C+" and "B" properties.   

Bottom line, I was learned from working with different managers. 

Did you pay a finders fee to the property manager?  I agree with not putting all eggs in one basket.  Keeps the PMs on their toes if they know you have another option.

Happy Investing,

Char

Do you like your PM? If so, I would move all properties to a single PM. You become a bigger customer and get more attention. If you don't like your current PM, why leave any properties at all there? I have only one PM for all my properties and it really simplifies management, accounting etc.

@Andrew Lackey

If the second PM was your insider to be able to buy a great property, then I wouldn't bite the hand that feeds you by turning around and firing him. I would just ask him if he would like to continue managing the property, and if so, keep him unless he proves to be a bad manager.

Originally posted by @Peter Grosso :

I fired one property manager about 8 months ago and split my properties into two management companies.   At first I did it so that I didn't have to move some many properties if things went bad again.   I actually learned what each property manager was best at.  I now will use one management company for lower end properties and the other for my "C+" and "B" properties.   

Bottom line, I was learned from working with different managers. 

i like having two managers for different classes of propterties 

thank you Peter

@Dawn Brenengen i like your response. "don't bite the hand that feeds you." thank you 

@John Van Uytven, @Char Prado ,  and @Anish Tolia for your opinions as well. It is really helpful getting some options from everyone. If this deal goes through i will spread out the property management to different providers

Hmm, super interesting topic! @Andrew Lackey, did you end up choosing a solution? I'm curious to know if you've ever considered asking for a guaranteed wholesale net income from both to see which PM could offer more. 

@Monika Haebich I am not sure what you mean by "guaranteed wholesale net income." I would be working with a PM that does not give me leads, and then have a prospective PM that i cold called, sending me leads for potential deals. Can you please elaborate on what you mean?

THANKS!

Andrew, sure! So rather have you pay a commission or fee to one of the PMs for turnkey service, you would be asking the two managers to compete to offer and pay you a guaranteed amount based on what you planned to net. Essentially, the managers would be paying you for the right to manage the property and buy out your weeks, and I'd give my business to whichever manager could offer more. 

My business currently works with 300+ managers who make offers using this model, so I'd be curious to see what you think! 

Unless the current property manager turns you off for one reason or another, I like to stay with the seller's PM for at least a few months to see how we work together.  You might find the seller found a great PM so you don't want to throw away the potential relationship without checking it out.  And if they gave me the lead, I'd definitely stay for awhile unless the relationship turns sour.  

I cant imagine a property management company guaranteeing rent to an owner?  That sounds like a high risk business model just asking to fail. 

My opinion is that you should use the PM that brought you the deal as your buyers agent. Let him/her earn the commission on the deal, which is only fair. 

Originally posted by @Andrew Lackey :

What do you do when you have a good potential deal from a property manager  other than the one you currently work with and you pursue the deal and purchase? Should you keep management with company who got you lead or flip it over to your current prop. mgr?should you have multiple proptery managers in the same metro area managing different properties? Will they sour to you or not do business with you if you buy property from thei client and then flip the property management over to your current management company? you think they will be mad and not work with you again? 

how would you handle leads from a property manager?

 If you take the deal, I suggest hiring the PM. Otherwise, you'll quickly lose trust and your reputation will be negatively impacted. And your reputation is the most important thing you have as a real estate investor.  If you don't want to hire him, don't do the deal.

I'm a property manager/broker, so this is something that hits close to home for me.

I ask my clients to let me know if they're looking to acquire more property so I can send them anything that I come across that's a match, whether it's a pubic/mls deal or something private/inhouse.

 That said, If another management company found them a great deal I didn't know about I'd be happy for them. I'd  recommend they stick with that management company for that property, as long as they're comfortable with them. As others said, no need to burn that source of business, they'll probably have more properties in the future to send.   

@Curt Davis I agree, way too risky for me. I'm thinking maybe it's more focused on vacation rentals, since Monika mentioned "buy out your weeks". @Monika Haebich Does your business handle vacation/short term rentals, or do you have managers that handle traditional monthly/yearly leases? It's an interesting concept, the first model I've seen structured that way too.

@Curt Davis, it is riskier for management companies, but when the market share for vacation management companies has gone from 100% to 40%, a lot of companies are going to need to take risks to stay in business. The managers we work with have actually told us that they're making 40% more profit with our model while retaining more control over how they're managing their properties. 

@Tim Booz, we work primarily with vacation/short-term rentals (hence the company name), but we do work with traditional monthly/yearly leases as well. 

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