Multi family properties require a tremendous amount of skill.
If you just purchased one, you are in for the ride of your life. If you have already owned one and your current property management company drove it into the ground, the worst is not over.
Why you don’t want to purchase these:
- Older & require more maintenance.
- Most licensed trades can’t work on them.
- Many tenants are desperate and / or have substance abuse issues.
- Most are in dangerous neighborhoods.
- Profit margins are thin.
If you did purchase one, we can’t help you unless you are ready to put it on the market.
Before taking you on, we would need to see what kind of nightmare you purchased. We will be able to give you an estimate on startup and management fees after we see it.
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 income. 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 unrealistic expectations, 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.
- 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 your 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. We generally pay them about $50 per month to police the grounds and snitch on your tenants. 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 get it, you don’t know us and you trust your guy who is fair and does a good job. HOWEVER, the reason why these never work is because these handymen circumvent us and go directly to the owner. Repairs get done without our knowledge and we have no idea what that loose cannon is running around doing. We no longer use owner’s preferred handyman. The last one wrapped us up in a $60,000 lawsuit. The $200/month we get from your property isn’t worth the exposure to “your favorite” guy. We are not going to change our business policies for your one building.
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. Every year we end up in a lawsuit because of these damn home warranties. Consequently, we will not manage a multi family building with a home warranty.
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.