Managing Your Property

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Robert Peruzzi
  • New to Real Estate
  • Malvern, PA
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Property Management Recommendations

Robert Peruzzi
  • New to Real Estate
  • Malvern, PA
Posted Nov 20 2022, 10:12

Hi everyone, I am looking to start investing in multi-family in the greater Philly metro area and am looking for property manager recommendations. I live about 45 minutes away from center city and have small children, otherwise I'd try to self manage. 

Focus is cash flowing properties in depressed neighborhoods, but hopefully with potential for future turnaround. Please reach out with any recommendations or if this is what you do.

Thanks!

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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
ModeratorReplied Nov 21 2022, 05:13

Remember: cheaper doesn't mean you'll make more money.

Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Regardless of how you find them, try to interview at least three managers.

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.

4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact that a tenant is complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?

This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!

  • Property Manager Wyoming (#12599)

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Kevin M.
  • Property Manager
  • Philadelphia, PA
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Kevin M.
  • Property Manager
  • Philadelphia, PA
Replied Nov 21 2022, 05:32

@Robert Peruzzi I'm a property manager in Philadelphia. A few tips from the management side of things;

1) Make sure to ask your prospective managers if there are areas they do NOT cover in Philly. For instance- we don't cover the Kensington area or the far northeast

2) When evaluating your multi-family ask to see copies of the past or existing rental license and make sure the number of units on the license matches up to the number of units you're buying. This can be a real headache in Philly especially if it's not licensed for the amount of units

3) Careful buying around college towns in Philly right now. Especially the Temple area. We are having a particularly difficult time leasing in this over-saturated micro market


Best,

Kevin

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Drew Sygit#1 Classifieds Contributor
  • Property Manager
  • Birmingham, MI
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Drew Sygit#1 Classifieds Contributor
  • Property Manager
  • Birmingham, MI
Replied Nov 21 2022, 05:32

@Robert Peruzzi

Even if someone give you a referral, what meets their expectations, may not meet yours.

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator.

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

We have a 14-page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

Please send us any feedback via email, as we do not use the DM feature here.

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Will Fraser
  • Real Estate Broker
  • Salt Lake City, UT
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Will Fraser
  • Real Estate Broker
  • Salt Lake City, UT
Replied Nov 21 2022, 07:00

@Robert Peruzzi you've got to connect with Stiletto Property Management.  Your target investment pool is exactly what they specialize in and you'll be spurred on and managed for by an excellent team of systems-minded ninjas!

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Eric Greenberg
  • Investor
  • Philadelphia, PA
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Eric Greenberg
  • Investor
  • Philadelphia, PA
Replied Nov 26 2022, 16:58

Hi Robert,

I would be very very cautious abput targeting distressed areas in Philly. There certainly is money to be made in those areas but its not what I would tell a first time landlord who doesn't actually know the area. 

Since you live close, drive by some of the areas you have targeted and see for yourself if you truly want to be in these areas. Again you can make it work but like Kevin said above, make sure you have an amazing PM that works heavily in the area you plan to buy in. 

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Robert Peruzzi
  • New to Real Estate
  • Malvern, PA
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Robert Peruzzi
  • New to Real Estate
  • Malvern, PA
Replied Dec 1 2022, 16:44

Thanks all for your input and insights, I'll definitely be putting my due diligence into property management selection. Doesn't matter how good of a deal I can secure if my properties are mismanaged. 

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Robert Peruzzi
  • New to Real Estate
  • Malvern, PA
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Robert Peruzzi
  • New to Real Estate
  • Malvern, PA
Replied Dec 1 2022, 17:12
Quote from @Eric Greenberg:

Hi Robert,

I would be very very cautious abput targeting distressed areas in Philly. There certainly is money to be made in those areas but its not what I would tell a first time landlord who doesn't actually know the area. 

Since you live close, drive by some of the areas you have targeted and see for yourself if you truly want to be in these areas. Again you can make it work but like Kevin said above, make sure you have an amazing PM that works heavily in the area you plan to buy in. 

Thanks Eric for the word of caution. I lived in Philly for 10+ years during and right after college, spending much of my time living in or around areas that were distressed or not much further along on the redevelopment cycle. I know how rough they can be which is why I need a strong property manager. 

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Tj Hock
  • Multi-family Investor
  • West Chester, PA
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Tj Hock
  • Multi-family Investor
  • West Chester, PA
Replied Dec 27 2022, 07:40

Hi @Robert Peruzzi, I own a property management company based in West Chester, PA We manage close to 1,300 doors. I'd be happy to help however I can, even if it means what questions to ask when you are interviewing other management companies. A good property manager will help you to continuing building wealth through real estate. Just know I'm a resource for you if you'd like. Thanks much!