I am looking at a 42 unit apartment complex. I have purchased many smaller multi-family properties in the past between 3-5 units, but nothing near this size for which I have outside management. Outside management will typically collect the rent and disburse it to me between the 10th and 15th of the month. I plan on using outside management for this as well. Would outside property management work the same for an apartment complex of this size as well or would we open up a bank account that we both have access to? Any other advice you have regarding the logistics of managing a property of this size would be very helpful.
@Morris Cohen Congrats on locating a 42 unit! Consider opening a separate account dedicated to dealing with the property management co only.
I think it depends on the sophistication level of the PM you hire. A sophisticated PM will handle collections, management, and expenses as it sounds like you are accustomed. A scheduled once monthly ACH for net proceeds after reserves to the owner. With a larger complex, I suggest make sure the PM will make distributions at other times also if requested.
When we have taken over buildings like this we often find that getting the tenants acclimated to a new way of doing business is the key to the management side of the transition. If the new owner has located opportunity in the business, the tenant situation is usually a big part of it. This often means making sure the tenants understand that rent is due by the 5th of the month and late fees will be enforced etc.
It won't surprise you but often turning the building around is as simple as creating systems and structure with the tenants.