Starting a property management franchise versus signing on with brokerage

[S. Aaron Scholl]

I own 7 doors as an unlicensed RE investor in California. I'm interested in getting into property management. I'm considering starting a franchise with Property Management Inc (PMI), but there's a $60k buy-in, fees for their tech-stack, plus 7% of revenue. It seems like that would eat into my margins a lot.

On the other hand, I could get licensed and hang my hat at a property management brokerage and learn there. 

Which route would you prefer and why? 

[Greg Weik]

The answer here really depends on you. 

I never worked for another PMC before I started Real Estate Solutions.  I paid close attention to what the other companies did and innovated in the space to be more efficient and profitable than them. 

In the Denver market, we take PMI's lunch money on a regular basis.

There's a lot of money to be made in PM, and I do not believe most of the franchises available offer anything proprietary and worth paying for (certainly not that IFF and their royalty percentage.) 

When it comes to PM, your number 1 goal in the beginning is going to be adding doors.  

To be clear, clients do NOT hire brand recognition. This is the big myth of PM Franchises. That a landlord will hire PMI or Renter's Warehouse because they've heard of them. This almost never happens.

What you need: -Get your RE license. -Spend enough to build a great website.  -Systems for marketing to new clients/CRM. -PM Software (Propertyware or Appfolio). -Templates for email and text.  

If you're efficiency and logistics/systems-driven, you will pick it up quickly and continuously improve. 

Another anecdote: I was going down the road of selling franchises, but decided instead to continue my expansion in Colorado while buying other PMCs for sale. I've seen a shocking number of PMI franchises for sale, which tells me quite a bit.