All Forum Posts by: Drew Sygit

For all those against PMC markups on Maintenance because you think they have an incentive to go with the highest costs to make more money on their markups - have any of you analyzed what you are actually debating?

EXAMPLE: $700 repair with 10% markup. Let's be bold and say the PMC goes with a higher bid of $800. So the PMC is making an extra 10% on the $100 difference. How much is that? A whole $10! Wow, how rich will that make them? Oh, and before you say they get rich doing that every time, they'd have to do it 100 times to make $1000.

Now what no one is bringing up is why would a PMC take care of maintenance WITHOUT an incentive? What would you do for free? So, what all you penny-wise and dollar-foolish investors fail to realize is that without an incentive a PMC will AVOID doing any maintenance they don't absolutely have to and you won't know the difference - until your property is inspected and you find out it has a ton of deferred maintenance! Of course, you'll then blame the PMC and slam all PMC's as incompetent when actually you got exactly what you paid for and incentivized them for.

For all you investors who think your PMC's aren't charging you a markup - how do you really know they aren't? If they're charging by the hour - there's a markup built in. If they charge by the job and you only get an invoice from the PMC or their maintenance company - there's a markup built in.

Finally, about using the cheapest contractors, there's a reason PMC's don't use the cheapest ones - it's because there's a reason they're the cheapest! 

1) They want to be paid cash - which PMC's can't do
2) They want to be paid on the spot when they are done - which PMC's can't do because of the scheduling challenges
3) They aren't licensed or insured - which a private investor can take on that risk, but a PMC cannot.
4) They don't supply warranties - which good PMC's are compelled to offer

A better solution is for a PMC get bids for the owner, the owner approves and then they negotiate a markup for the PMC's time to manage the maintenance and confirm the job is done on time to keep the tenant happy and done right.

Here's our standard list:

• For each occupied unit: current lease, move-in checklist, etc. 
• Current rent ledger or rent roll for each tenant. 
• Corresponding rental application & identification for each tenant. 
• Signed Assignment of Property Management, Leases & Rents. 
• Rental registration/license for each property.
• All notices, attorney contact information, etc. for any eviction(s) in process. 
• Clear picture of all property keys, named, so we know which lock/unit/buildingTransfer of security deposit(s).
• Notification to tenant(s) introducing us as their new management company. 
• Contact information for existing/previous property management company.

If you've ever screened a tenant, you will want to screen a PMC 10x as well:)

Actually, you can learn a lot about a contractor when you control the purchase of materials.

Instead of buying and delivering materials, just setup accounts where they can go in and buy materials on your account (only with your approval). This way, you better know the materials are just for your jobs and they aren't bulk buying seeral jobs at once and overcharging you.

Appears there are two separate issues here:

1) Approval Threshold: As others have said, having an approval threshold is common. 

2) What is not common is having to wait until the end of the month to be updated on those expenses.

Contact you PMC and ask WHY they cannot send you an invoice as soon as they receive it. High probabiity they are a small company without the resources to do so.

You have a couple of choices/options:

1) You can challenge the city assessor info, but that may change your property taxes.

2) You can ask the PMC to use the number from your appraisal and send it to them for validation. 

@Meenakshi Selvaraj you show your naivete by the way you've structured your ownership!

You should have put the property in an LLC, then you wouldn't be asking this question and you wouldn't have to work about the tenants tracking any of you down- much less the weakest of you.

@Jorge Vazquez how much is your time worth?

Even if you only spend 10 hours per month, that's 10 hours you will NEVER get back! No amount of money will buy you more time.

I delegate everything I can, and plan to delegate more.

Ultimately, each to their own:)

@Laura Kusto this is unfortunately a typical problem with turnkey providers - they put their best people on selling houses, leaving their worst people on the property management side.

@Danny Mak the most profitable deals are usually the ugliest!