Hey BPers
Let me start by saying, I didn't actually kill him, just possibly killed my mentorship.
I'm looking for some advice and guidance in regards to my mentor/ PM.
I got interested in a market that a few family members and co-workers have property in. I have spent a considerable amount of time learning the market and settled on an area that I felt was a good. We purchased a basic, clean, solid property and secured a PM that came recommended by a large RE company.
I hit it off pretty quickly with the PM. Jobs in common, similar beliefs in preventative property maintenance, etc. We decided to have him do a few basic upgrades. Carpet, paint, switch plates, blinds, etc. The communication was pretty good. Face time while choosing paint colors, carpet, progress. It was all dreamy. I told him that we were looking for off-market deals. He told me that he was also an investor with a few local properties and had a close friend/mentor that also had approx 100 local properties.
Everything was good until he told me he had found a property in a "great neighborhood" that he had been watching. I felt his easy going attitude change to more of a high pressure approach and that I needed to buy this deal! He also said his friend/ mentor had 25-30 properties in the neighborhood.
He had seen someone move out of it several weeks earlier and then the FOR RENT sign went up in the yard. He called the owner, he told him it was renting at $900/mo. He immediately offered $85k, the owner was interested, but countered a couple days later at $91k. I was told that he would buy it if I didn't. I told him we were interested, but we hadn't been able to get inside yet. He didn't think we needed to really to see the inside and that the estimate of $10-12k in repairs was all I needed to know and should move forward with the purchase. He thought we could get $1100/mo. (A leasing agent I contacted said it would go for about $850/mo) The comps showed a sale in the last 6 months of a like property selling at $109k. He said ARV would be $120k..
My agent scheduled a showing and the inside indeed needed updating, but it also showed a 30 yr old furnace, 10-15 yr old water heater and A/C, indication of roof leaks, tile work needed, etc. After he and my agent walked through he called me. Naturally I had questions and he immediately said "I sense you're getting cold feet", made a couple comments about my agent not being progressive and aggressive enough and that the leasing agent is wrong on the rental price. I felt the repair costs could be an additional $10-15k outside his estimate. I decided against the purchase. He immediately stated that he was going to purchase it, but he normally only gave $50kish for these types of properties. I was confused.. Further he said that he would continue to manage our properties, but he would not be looking for or bringing us any more "deals" and made a few more comments about the problem of "new investors"..
I guess I just ended the conversation with a big question mark. Did I offend him because I didn't trust his advice on this ONE property? Did I paint him into a corner with his offer to the owner and now he's committed to buy it? Was he hoping to make money on the repairs that we were likely to have him complete? Will this damage the relationship we have in regards to our other property?
I really like this guy. He's funny and has what appears to be a solid, common sense approach to PM. I just wasn't comfortable with this ONE recommendation.
We're still looking for at least two more properties. So, I guess now I'm on the hunt for another mentor in the KC area.
I'd really appreciate you feedback!
