Property Manager for Rental Arbitrage

Property Manager for Rental Arbitrage

Louisville, KY · Member since 2020 · 7 posts · 0 votes

Hey everybody, I am currently in the process of getting my first rental arbitrage unit running in Louisville, KY. I plan on completely self-managing it for a while, to really get the feel of how everything works, but the goal is to make it a scalable business. I am not really worried about finding a cleaning service, but rather finding someone that is reliable to handle the small things like a broken piece of furniture. 

I am currently attending a small college close to where that unit is, so I am currently able to handle everything like that. However, I might be looking to transfer to a college out in Phoenix. Does anybody have any tips for finding somebody that would be willing to do that kind of work for a single apartment unit? I would need that person/company to effectively act as the property manager/handyman, as they might have to accommodate to some guests requests every now and then.

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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
5y

Hey @Connor Seymour, I am with the others on this. Arbitrage in and of itself is a less than stellar idea as an investment. Adding on a PM fee to that makes it a terrible idea.

A PM will usually eat up most if not all of your profits and you are building zero equity with arbitrage. Sounds like a lose lose to me.

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  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    5y

    Oh lord. Uncle Paul and Big John how can we help this kid? I'm helping by not saying what I really think and hoping you guys come save the day.

  • Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    5y

    People ask about a property manager, and it generally gets poo pooed.

    People ask about rental arbitrage, and it too gets poo pooed.

    But this is the first post I've seen about having a property manager to handle rental arbitrage.

  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    5y

    So you don't want to buy your own properties to rent and you don't want to manage the properties you don't own?

    Wow!

  • Dave StokleyBusiness Member
    Property Manager · Cleveland, OH · Member since 2015 · 705 posts · 799 votes
    5y

    Translation: this is a really bad idea.

    I do not like the arbitrage model because there are too many risks and the margins are too thin, and I AM the management company. Even with all of my resources, experience, and economies of scale I think it's generally bad business. Tack on the 20%+ management fee and I think you're deep under water.

    On the other hand I do think it's smart to hire a management company (edit: for a property you OWN) if you're trying to be a truly passive investor. And yeah, I'm obviously biased, but I also have a bunch of clients who are making tons of money and are very happy with our relationship.

  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    5y

    Hey @Connor Seymour, I am with the others on this. Arbitrage in and of itself is a less than stellar idea as an investment. Adding on a PM fee to that makes it a terrible idea.

    A PM will usually eat up most if not all of your profits and you are building zero equity with arbitrage. Sounds like a lose lose to me.

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