All Forum Posts by: Engelo Rumora

For #5, the apartment industry has painting contractors that paint units (including SW paint) for low prices and they knock a unit out in an hour or two. My prior PM used one of these companies and we were paying $300 per unit, $10 per ceiling, and some standard amount per wall repair greater than 1". They don't do SFR and my prior PM almost exclusively managed 20-50 unit communities.

@Engelo Rumora it's easy to tell them to get lost, but what's making them want these things?

They've obviously been burned in the past.

They also really don't value PMCs and probably think they are way smarter than us.

But, why haven't they started their own PMC yet?
- Funny story, did business with a "turnkey" company here in Metro Detroit. They referred us all their business, but didn't like our TakeOver Evaluation Videos that showed too many renovation issues. Everything we did was fine. When we wouldn't stop giving our mutual clients those videos they stopped using us and started their own PMC. They didn't even last 18 months before selling it to someone getting started in the PMC biz (who got screwed on the purchase). 

I've learned the hard way that potential customers don't like to hear the word, "NO"! None of us like ultimatums or, "take it or leave it" offers either.

It's better to offer them 2-3 options where you "win" no matter which they choose.

Another great technique is to ask them an open-ended question(s) that gets them to see the challenge from your point of view.

So, let's apply these to their requests:

1) This is more common than you'd think. Have had several owners ask for it over the years. Have given it serious consideration. With Propertyware (our PMC software) you can limit what they see to just their portfolio and even limit access to accounting, applications, etc. What's stopped us from doing it is they would be able to see our internal notes & conlogs - which they could then use against us to tell us how to run our business and further micro-manage us.

Every prospective owner that's requested this from us, I've been able to ask enough questions to identify the info they really want and then provide custom reports that cover it. Of course, some have been adament about the access and inflexible, so we pass.

2) I'd really like to do this someday and keep hoping a company offers something affordable for PMCs to use. Off the top of my head I can name 20+ tasks I know the costs of. So, don't assume and just ask them for their list of maintenance items to see how big & detailed it is, to assess if it's even feasible.  Worse-case, I'd ask them how much they want to pay me to develop this list for them - which would include an annual fee to update it.

3) We've always done this, so no bid deal to us. Can tell you though, that owners start getting greedy and want you to cut what they contractually agreed to. They always think everythings so easy and PMCs charge too much!

4) This conflicts with #2, so ask them what they hope to accomplish. I'd tell them they do not get access to our maintenance staff or contractors as we've had clients in the past try to steal them. Instead offer to review any nonemergency bid over $x with them.

5) Knee-jerk reaction is to laugh at this. I'd ask them open-ended questions to get them to detail exactly what the $300 covers. Guessing it's really just a bit of wall cleaning and touchups. Ask them for pics & invoices to prove what they've gotten for $300.

6) This is really short-sighted of them! If they're going down this path, what they really should be measuring is collected rents. Otherwise, you can just throw any applicant in their properties. 

Had someone with around 50 doors ask for something similar several years back. They balked when I asked them for proof of their portfolio's past performance - which led me to believe they were aiming too high. 

I'd ask them where they got their 90% number from. Doubt they have any local market data to support. At best they might be using national data, but that's not useful unless it separates Class A, B, C & D properties. 

Also ask them who gets to set rent amounts and the reno standards of their properties. If they want to control these, how are you supposed to adapt to market realities?

Approached the right way, you may have a chance of modifying their requests to be more reasonable and ones you can work with. If you do business with them, just be careful of how much access they have to your staff as if it doesn't work out, they could try to steal them to start their own PMC.

Buzz me if you want to brainstorm more about it.

Engelo my PM Brokerage is not in my name tag here but last checked we are #2 SFR PMc in U.S.A.. Dozens of branch/market offices throughout US of which I am out of national HQ. We have a client right now that I can not name, but if lookup the top 5 organizations in residential housing, there on that list, an absolute TITAN, and no we do NOT do anything like this even for them.... Nor anybody, this list is not viable nor realistic.

1) In AppFolio they want admin level access to their account.

NO, full-stop. Nobody and I mean NOBODY get's admin access into any of our systems. If Jesus came back and got into rentals NO, N-O-B-O-D-Y get's admin access into our system. 

2) They want a standardized list for maintenance items so they know in advance what repairs would cost.

Being a PMc I'd invite them to acquire any of the readily available construction estimating tools/software out there such as RSMeans, but would not take on such a task as building and maintaining such a database, honestly for any $, it's simply not what we do. 

3) They want a copy of all invoices from contractors to us so they can verify we are not marking up more than promised.

A-ok. 

4) They want to be able to talk to our contractors before work is done (each time) so they can talk contractors down in price themselves.

I'd be fine with this as long as they sign a waiver that they own any/all negative impacts that result from such including extended vacancy periods, vendor refusals of service necessitating there own self-search to secure amicable vendor etc etc.. 

5) They mentioned that they pay around $300 for full paint in a 2-bedroom unit.... we do not have a contractor that will touch a full paint on a 2 bedroom for $300

LMAO! And what corner of the Ozark's is this in? In most markets that's closer to "A" room paint with trip charges. Again, happy to coordinate with YOUR contractors for services but no, no assurance of any price because we are a PMc not a remodeling firm nor a painting contractor, right. 

6) They want tiered PM Fees based on occupancy.... for example (their example): at 90% they would pay 8% PM fees, at 70% occupancy they would pay 2% PM Fees, and at 50% occupancy we would part ways.

Sure, I'd be happy to do this WITH an addendum that for any vacancy do to there actions or inactions those units be accounted as leased for calculations. 

To be honest Engelo if I had anyone reach out with this I'd laugh at them, literally. This is so abusive and extortionist in nature, and so disconnected from any sense of reality I'd really have to question the general intelligence of the persons presenting such. 

Some make think my statement arrogant but it's experienced, and I think you get me Engelo. Anyone who's been in this business for a time, they know how crazy some of these requests are. Come on, admin access, really! How many laws does that violate for starters on assorted privacy. 

If they wanted there own separate stand alone appfolio, so it's segregated data to them, ok solved data privacy but why not internalize PM's than? 

The whole thing wreaks to high hell in my opinion. Either it's a setup for failure, and they know it, so no go. OR it's a setup for failure and there too clueless to know which is arguably even worse because every little everything your going to be dealing with morons every step of the way, arrogant ignorant's.... 

If anything I'd offer them a limited service offering. Offer to do TP's for there own self-managing but all that they want, no way, it's crazy.     

Let the start-up PM's who get all in aww over a portfolio run themself bankrupt trying to service Mein Fueler, because you know that's what's going to happen. 

You create tight rules not conditions, these guys lack experience or if they have the experience they are too micro-managing just by reading the OP.

I don't work with people like this. On scale, you need to let go and have underlying contractual rules that bail you out in the event of fraud, incompetence, poor work, time issues, etc. Not this every micro detail gets haggled. That's going to eat time, and that's too devastating.

Quote from @Engelo Rumora:

Quote from @James Wise:

Quote from @James Hamling:

Quote from @Engelo Rumora:

Quote from @James Wise:

Quote from @Nathan Gesner:

Quote from @Engelo Rumora:

I don't think he likes me that much though haha 

Not sure why I would have anything against you? 

You can't run a business if you tailor your processes to each owner, no matter how big they are. Creating customized procedures is going to result in more work, more mistakes, and more frustration than it's worth. 

I also agree with the others that these owners sound like cheap-skate micro-managers. I wouldn't spend more than two sentences rejecting them.

 2 sentences isn't necessary. Only need 2 words bro.

How bout dat?

Hawk Tuah mate haha

And now is when you reply with declining services but happy to offer a cash offer on portfolio to turn there self-managing misery into cold hard CA$H.... $57k per unit, done, let's get this signed..... 

 I have a hunch $57k per unit would be overpaying. Closer to $25k/unit would be my guess.

Solid area for sure but… 

IMO I wouldn’t buy multifamily unless I’m buying for $25,000 - $30,000 a door.

I’d rather stay sleeping in bed haha

@Ryan Pyle is the Godfather of Toledo multifamily investing and a top bloke 👍

Mate, I know you manage multifamily 

Happy to make intro if interested 

I know you are more patient and reasonable than me and maybe can talk some sense into people haha

I’m too hot headed as you know and am just looking to get my first ever misdemeanor hahaha 🙏

Woah woah woah...... So these are NOT SFR's????? Just MFH..... So wtf is so special about 180 units then? That could be achieved in 1 property.

Yeah, no, MFH, MAO $30k per door. Given there actions fair chance even that is over paying. But that's a fair starting point.

How many properties is this portfolio? Because if just a few, it get's even weirder why they wouldn't just have on-staff PM and maint. mgr.. 

They do not value a property management company's time and resources. They should hire their own W2 employees and manage themselves. I wouldn't even entertain something like this personally. 

Quote from @James Hamling:

Quote from @Engelo Rumora:

Quote from @James Wise:

Quote from @Nathan Gesner:

Quote from @Engelo Rumora:

I don't think he likes me that much though haha 

Not sure why I would have anything against you? 

You can't run a business if you tailor your processes to each owner, no matter how big they are. Creating customized procedures is going to result in more work, more mistakes, and more frustration than it's worth. 

I also agree with the others that these owners sound like cheap-skate micro-managers. I wouldn't spend more than two sentences rejecting them.

 2 sentences isn't necessary. Only need 2 words bro.

How bout dat?

Hawk Tuah mate haha

And now is when you reply with declining services but happy to offer a cash offer on portfolio to turn there self-managing misery into cold hard CA$H.... $57k per unit, done, let's get this signed..... 

 I have a hunch $57k per unit would be overpaying. Closer to $25k/unit would be my guess.

 2 sentences isn't necessary. Only need 2 words bro.

 Engelo, when are you posting their info? If you ended up taking these clients on, they'd have no hesitation to drag your company and tell other investors you don't know what you are doing after one of their units sat empty for 6 months, because the only ones who's show up for the money they are paying are drug addicts. and as we all know (or should know) drug addicts don't do good work.

I'm guessing you may be hesitant to post their info because they are the "customer" and you are the "business" but that's total crap. This is a business to business transaction. These wankers apparently have 179 units or whatever it was. This is not some random accidental homeowner who wants to be a landlord and doesn't understand the PM industry. These dongs are professional grifters and should be treated as such.