All Forum Posts by: Michael Smythe

@Jay Y. the pages you uploaded refer to a Schedule A, which appears to be where the fees are listed. Please share...

We're biased for Detroit, but can back it up:)

They should have started eviction when first payment missed!

Also, why should you care who makes the payment?

@Chris Wagner sounds like you may make the mistake of hiring the first PMC you interview, which is often a mistake.

Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

You are doing a complete remodel!
-adding or expanding structure isn't the definition:)

Make sure you change your insurance policy to a construction policy.

Also, make sure all your contractors are insured and get a copy.

If you hire a GC, require that they add you to their policy until they are done.

Cameras should suffice for security.

It's not normal for PMCs to price out insurance policies.

Some PMCs have a master policy for 1-4 unit properties that they can easily add a new client's properties to.

So, not a surprise they waited to the last minute to get you a quote on a commercial property.

@Jose Henriquez "investor friendly" can mean many things.

It's important to understand that +95% of agents only know how to deal with owner-occupied properties - but, they will gladly try to sell you something for a commission.

You want an agent that knows rental properties, understands cashflow, ROI, etc. Typically means they own rentals themselves.

Also, be careful with "turnkey properties". 

Are you referring to something that a seller is getting rid of because they're tired or looking to move up?

Or are you looking for something that a flipper recently renovated and tenanted and is looking to sell for top dollar?
- These often end badly due to poor repairs, badly screened tenants, etc.

@Steven Moore there's a lot of red flags with this deal.

Why hasn't the seller raised rents?

Why is the seller advocating to keep rents the same?

Why is handyman collecting rent?

All these challenges present opportunity for a buyer!

So, why can't you leverage all this to negotiate seller financing?
---They can defer capital gains and still have cashflow with no headaches.

Try negotiating 5%/$12k down so you still have funds for deferred maintenance.

After 3-5 years, you can refinance to pay seller off.

CHALLENGE: you better check everything out financially and with the properties (well inspections, etc.) to make sure seller is not dumping their problems on you.

@Fareed Fityan

Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

@Jeff Costa logically either:

1) They have it and don't want to give it to you, because they are hiding something.

2) They don't have it because they're unorganized, also a bad sign.

Proceed carefully...