We specialize in revitalizing multi family properties and nearly all our muliti family properties that we manage came from competitors. There are few management companies who can dial these in and here are a few trade secrets.
We always first start with getting estimates & videos of units that are vacant so we can start rehabs. We start with the one that needs the least amount of work. We then get that one occupied and then start on another one. If your property is completely vacant, it will take about 6 months before you are 100% occupied and making a profit. If you cannot afford to have zero income for 6 months, you are better off selling it to one of our investors. It takes time to integrate good tenants, find a good custodian and fight off all the zombies attacking your property.
The number one problem we face with new owners unrealistic rents for that area. It usually starts with their agent who will blew smoke up their butt and told them they would make a zillion dollars. If you have unlrealistic expectations about what the rents are, you will get fire us about 3 months from now so we prefer not to suffer with you. Totally vacant properties are $200 per door to start up as they are major work to get up and running properly.
- We don't make any money if your units are vacant.
- The speed at which units get rented is a function of price.
- If you are just $100 over market on the rent price, your unit will never get rented. Ever.
- Zombie attacks will cost you huge while you are waiting for that tenant to pay over market.
We will not manage your property if you are rental income expectations are unrealistic. You will need to learn that lesson with someone else.
We will designate a tenant to be your custodian and/or we will go find one. This tenant gets a discount on rent (usually $50) for keeping the grounds clean. As an incentive to you, we charge less than $50 for that unit. A custodian is key to a multi building success. They are our eyes and ears for the property. Here are their responsibilities:
- If they are handy, we will employ them for basic repairs and pay them as a vendor.
- They will post rental signs for vacant units and manage keys only for vacant units.
- They will make certain gates are locked (if there are any).
- They collect applications for prospective tenants.
Here are the things they are not allowed to do:
- Collect rents.
- Manage leases or approve applications.
- Do their own lockouts.
- Do repairs beyond their skill.
Unfortunately, good custodians are hard to come by and it sometimes takes anywhere from a month to a year to find one. If we take over a property with existing tenants, we will attempt to use an existing tenant as a custodian first. HOWEVER, if they cannot do basic functions, we will continue advertising for one.
We usually reconcile your account between the 3rd and 4th week of the month. Most of competitors reconcile at the end of the month. The reason why there is a delay is because we rarely get all the rents at the beginning of the month. There are some tenants who pay on the 15th and/or we have some stragglers. By waiting on a straggler, you will get that straggler's rent. If we reconcile before a straggler pays rent, that rent will fall into th next month.
We are ok with your preferred handyman as long as they conform to our procedures. Your handyman will be our "first call" but if they are busy or don't return our call, we will move on to the next vendor. These people rarely last with us because handymen in general usually fade off into the sunset. We have a constant process of replacing handymen so don't be surprised if we stop using yours after 6 months.
These are essentially worthless on a multi family building. The only thing these are good for are is water heaters and air conditioners. Even then, the warranties will often find a way to stick you with a new one anyway. We will charge you $20 to hold your tenant's hand to deal with your warranty company. That doesn't even cover our cost to handle your pissed off tenant who doesn't get air conditioning for a month. You will probably lose a tenant with a home warranty so brace yourself for it.
In summary, managing multi family properties takes considerable skill to manage. Most of the properties we manage came from other companies who threw their hands up and cried "Uncle." The number one problem we encounter is impatient investors. They believe the property they just purchased will start printing money the month after they give it to us.
If you don't have patience, we will not be able to salvage a property that was driven into the ground by someone else.