All Forum Posts by: Eric Weireter

@Kyle Groseclose You can absolutely obtain your license and then do nothing with it. The amount of effort you put forth is up to you... 

Even when you work under a BIC you are the CEO of your own real estate business, the firm you associate with is just paying for your E&O insurance and giving a few tools/trainings to assist with your business. In return, you are paying them a monthly desk fee, commission splits, transaction fees and/or any combination thereof.

The key is finding a firm that fits you and allows you to hang your license with them given whatever amount of effort you want to put forth towards real estate activities. It sounds like you'd want to hang your license with an investor-friendly small firm as opposed to the big more well-known firms.

@Kyle Groseclose Just because you have to "be under a BIC" for 2 years certainly does not mean you have to leave your 9-5 immediately. While many firms would prefer you to jump in with both feet full-time, there are some firms out there that would allow you to hang your license with them and work less than full-time, whatever that means for you... 2, 10 or 20 hrs a week.

Unfortunately, Kyle, there is no way to circumvent the system. Let's see if I can provide a bit more clarity...

Upon obtaining your license you are a Provisional Broker (PB). As a PB you have to hang your license under a firm that has a designated BIC. That BIC is responsible for any real estate activities you perform (marketing, paperwork, etc.). You have 18 months (recently decreased from 3 years) to complete the Post-Licensing courses (90hrs). Once you complete the Post-Licensing course you drop the "provisional" status and become a full broker which allows you to perform real estate activities (within NCREC guidelines) without the direct supervision of a BIC, but still as an agent of the firm you hang your license with. Note, that even though you are a full broker your BIC is still responsible for verifying your paperwork is filled out correctly.

You are able to get BIC eligible status once you have hung your license for 2 years at a firm that has a designated BIC. Essentially, obtaining BIC status means you can supervise other agents and/or start your own firm.

So, in short, answering the question your original post:

1) You have to work directly under a BIC whether your are a PB or not. You are not able to skip the 90hr Post-Licensing requirement.

2) Yes, to have an independent/sole-proprieter firm, you have to be a BIC.

@Jeff Stein I have an owner that we are going through this exact issue with right now... same scenario 3 story building ~20k sf. He is getting the Submersible Power Unit replaced which includes the storage tank, oil, control valve, pump, motor & muffler for $21,389. I agree with others above that you should obtain multiple quotes. Typically you'll find that most elevator companies have technicians that are union based, so labor cost should not vary much. 

Regarding a maintenance contract, depending on the age of your elevator you may only be able to get a Oil & Grease contract as opposed to a Full-Service contract. I would advise you to make sure the contract spells out the frequency of the preventive maintenance visits. In our area, elevator companies are notorious for not doing the monthly/quarterly PMs despite what the agreement says. Also, expect to get locked into a 3-5 year contract. 

@Morgan Wells During your due diligence period you should at minimum order a PCA (Property Condition Assesment), which is similar to a home inspection in residential transactions. The PCA will provide you with the condition/useful life of various elements of the property (mechanicals, roof, parking lot, etc). The PCA report also has a recommended CapEx budget, but from experience, I would advise you that the numbers used in the PCA report for repairs are low/bottom end numbers.

A Phase 1 Environmental is another report get can get ordered that will give you some background of the site - such as if there were any gas stations nearby that may still have underground storage tanks, etc. 

Also, during due diligence, you should "interview" the existing tenant to get their thoughts on the property, pain points and see if they are interested in renewing/expanding. 

A leasing broker should be able to give you some market insight on whether your sub-market is absorbing the micro offices (200-600sq. ft.), 1,500 sq. ft tenants or 7k sq. ft. tenants. 

Property Management will probably run you 4-6% of gross receipts, though they may require a minimum amount if the building does not lease up or loses occupancy. 

A good target for OpEx is $6-7/sq. ft. for full-service leases. 

Good Luck!

@Herndon Davis Thanks for the insight! Yea, the owner already has a portfolio of 83k sq. ft. (4 buildings) that I manage for him. He has an Asset Manager that has done the underwriting, the lender has requested the estoppels, the phase 1 and PCA have been ordered. So, definitely not the owner's first rodeo... but the first time I've been asked to participate in the tenant interview portion of due diligence. 

I'll certainly jot down your ideas. Thanks!

I have an owner client (of my property management services) who is in the due diligence period for purchasing a 55k sq. ft. multi-tenant Class B property in downtown Raleigh. Next week, are the tenant interviews and I have been asked to assist. What are some questions you ask during your tenant interviews? 

I know that I will obtain the property management contract for the building if the owner proceeds with the purchase, so not only are these interviews meant to be beneficial for the owner - I hope to learn about the tenants and/or some of the issues that I would be walking into as the property manager. 

@Erik Marshall You could always do an amendment to the leases, but your tenants are going to have to agree to it. More than likely, your tenants will want something in return (such as suite updates or lower price per sq. ft. rent)

You should read thoroughly through the leases. Most commercial leases charge water/sewer back to the tenant through CAM charges. Or if you purchased a NNN building that doesn't have the units separately metered, the tenants may pay for a portion of the water/sewer (pro-rata share) through their TICAM charges.

@Clayton Hepler All the questions you've asked are state-specific and may vary minimally by each jurisdiction regarding grace period and length of time to complete the eviction process. I've come across LandLordology which is a great resource when trying to get a snapshot of a specific state. Here is the link to the Pennsylvania Rental Laws. If you follow that link you'll typically get a good overview and links to specific statutes that go into more depth.  

@Matt Brown Thanks for the reply. I want to clarify, that I am referring to managing 20k-60k sq ft. + multi-tentant office buildings, not multi-family residential properties.

In the office sector, it is the norm to be paid to manage a property while the building has high vacancy and is not stabilized. In my scenario, another group has the leasing responsibility (agreement), as it's not part of management agreement.