What Do You Look For When Buying Into A Property Mgmt. Company?

[John Arendsen]

I have an opportunity to invest and participate in the management of an existing property management company in SoCal. The reason being the present owner wants a part time working partner in order to relieve him of some of the day do day hands on responsibilities. Presently they manage several millions of dollars of SFR's, Multi Family and commercial/retail properties which garner them an appreciable NOI and ROI.

My commitment and participation as a 70 year old RE broker, general and manufactured home contractor, manufactured home dealer, developer, property manager and investor would be two days a week of in office management responsibilities i.e. managing, the on staff office personnel which consists of a receptionist with clerical responsibilities, a full time accountant and a property maintenance manager whose responsibilities include working and scheduling the 4 full time maintenance employees and several non employee licensed contractors responsible for larger ongoing structural  property maintenance.

The buy in is a substantial mid six figure amount which is represents a good chunk of my investment portfolio. However, the annual ROI is between 10 & 12% per year. It all looks very good on the surface and I'm tempted to do it.

But my wife and I travel quite a bit, which I told the principle who assured me that it wouldn't impact my travel or family schedule and that everything could be handled by effective scheduling.

So on the surface all looks great. But I'm just looking for a little outside thoughts and opinions from experienced property managers. Your feedback would be greatly appreciated.