Property manager inactive with squatter and non-communicative

4 Replies

Hi all,

Long-time listener, new to forums.  In short, I'm not sure whether I have a bad property manager.

Background:

I acquired two duplexes (4 doors) north of Conway AR, 3/5/18 from a bankruptcy court. As these were my first properties in this location, I settled on a property manager who takes care of approx 400 doors. My due diligence may not have been the best (I called 4, she was the first I talked to and seemed to fit my needs like a glove). I did not check references, but she had good answers to screening questions I got from David Greene's long distance investing book. 3 of the 4 units were occupied. She used her contractor to re-shingle at a great price ($3k per roof), and renovated the empty unit (which was uninhabitable due to poor kitchen cabinets, no appliances, horrible paint, all new windows, entry doors) at a mediocre-high price ($12k for 1100 sq ft 3 bed/1 bath). When I came out to visit the property in May, I met the contractor and the property manager. She seemed on top of renovations, and was confident that things would be up and running. As of May, only one renter was paying (did not know this during purchase - bankruptcy court said owner would provide leases but they did not). Since May, she has got back rent from one of the non-paying tenants so now 2/4 are producing income. My issue is that one is still not. She has served them with a 3 day notice to quit over a month ago, and has no further movement. She (or her staff) when I call them weekly, tell me that the person they contract with to handle these issues has had no luck talking to an adult. When they first made contact in March, and adult answered, but now only a small child answers the door. The property manager has become non-communicative about this (and other issues). I leave messages, emails, and rarely get any response. I hate to be a pest, but also understand that the squeaky wheel gets the grease. I also find it unacceptable to have a no movement on a squatter issue for 3.5 months. I am concerned that this manger is in a situation that is above her core competency.

About me: I've been dabbling in real estate since 2011, but started buying properties seriously in 2016. I have about 20 doors right now, and have never had these issues with any other property managers. She does a lot of things really well and every time (if I'm lucky) I get to talk to her, she alleviates my concerns, but I have a nagging feeling that nothing is getting done about this. During my last call to her assistant, I asked to speak with her personnel who handles evictions, and was told that they would get back to me if they want to let me have that contact info.

If anyone has any thoughts on whether I'm correct in questioning whether she is the right fit or whether I'm being paranoid, I'd love to hear it.

Thanks

John

If they are not getting back to you that might be a red flag.  Communication is critical even if it's just a confirmation they received your message and are working to provide an update.  3.5 months is a long time.  Perhaps they don't know how to proceed with an eviction or don't have much experience with them.  If they outsource that task to another company or individual then it is out of their control but they should still be communicating since "the person they contract with to handle these" is still a reflection on their company.  I would review your property management contract and see if it has any more details about what they offer/do regarding evicitions and if they breached it you may want to start calling around for a new one.  I don't understand the no communication, that is the most worrisome part in my opinion.

Thanks Eddie, I reviewed my contract and it looks pretty generic. No specific mention of subcontractors. Looks like she wants 10% of rent for the remainder of the year after a 60 day notice. I guess I should start looking. As you mentioned, it is odd that they wouldn't take the 10 seconds to drop a line saying they acknowledge your message. Thanks.

She may be shutting you down because you are a nag.

Send one email spelling out exactly what you expect and set a deadline for the response.

Dear PM,

I've attempted to contact you multiple times to ensure we are progressing with the non-paying tenant. I'm not getting a response and am worried you are avoiding me. I trust you are handling this but I need some assurance as it is negatively impacting my budget. I would appreciate you, or someone on your staff, providing me an update every XX days by email so I can help track the progress. If I have not received an update from you by July 1st, I will (file a complaint with your Broker, report this to the state real estate commission, etc.)

Call the office and speak with someone to verify receipt and then see if they update you.

Didn’t read all of this but if I can’t get a hold of a PM over the course of a couple weeks, I find a new one.

Sounds like you need to find a new Pm. Call it tuition to real estate and move on