All Forum Posts by: Aaron Tarnow

I am looking at purchasing a property management company the exclusively manages 2nd homes.  They perform weekly home inspections for a base rate, then have add-on fees for additional services.   The seller of the company is using a 3.25x multiplier of the last two years adjusted earnings. He knows this is higher than the multiplier for a standard management company.  I asked for an explanation of the valuation, but am not satisfied with the response.  

At the current asking price the income is not enough to cover the loan.  Is there something I am missing in the calculation?  If so what would be a more realistic multiplier?   The seller is asking for 500k on about 154k of adjusted earnings. Why should this type of management company be worth more?

Lisa,

Thank you for your response.  Maybe I misunderstood my course work.  I thought a licensed real estate broker working as a property manager, under a principal broker could receive commission from a real estate sale they help facilitate.  Is this not true? I was unable to find a reference to this particular contingency in Chapter 863.

Thanks

Aaron,  

I am interested in working for, or starting a property management business in Central Oregon.  I have started working on my Brokers License.  It was suggested that I get that license so that in addition to management, I could earn commission on an occasional real estate deal.   I have just reached the section in the course where I learned that as a Licensed Broker.  I would have to work under a Principal Broker to manage property for at least three years, until I could upgrade my license.

My question is; is it worth it to work under a Principal Broker for three years and possibly have to employ one if I start my own business?  Or should I change directions and get my Management License instead, so that I can work independently, but possibly miss out on possible income? 

In Oregon a Licensee may only hold one license at a time.