Buying a property managment company?

Question

I'm looking to buy a property management company, the problem is none of them in my area are listed for sale. So I wanted to call them and ask if they would like to sell it. I've never done this so i was wondering if anyone had any advice on how to approach them or if anyone has done this before could you tell me what you did. Thank you

Franklin Romine · Answer

A property management business scares the heck out of me.  A yogurt shop sounds interesting....Franklin

Sam Ivazi · Answer

I have managed a couple property's. But as of right now I manage a couple chain restaurants [not like Mcdonalds]. I looked into starting my own property management company but it would take a long of time to grow enough clients were I could take it on as a full time job. And I feel the same about franchises, you really don't need a lot of capital to buy into one but also if you did buy one they don't give you clients to start off with so might as well start your own for little money. The good thing about a franchise is that they teach you the ropes. I know Jeff that it isn't considered an REI, but I figure while I manage property's I will also have a close ear if they were going to go up for sale and start building my rental portfolio like that. Thanks to all

Dante Pirouz · Answer

Why not buy into a property management franchise? I've been looking into those options and at least the business process is turnkey. Just an idea...

Sam Ivazi · Answer

I agree with Dante Pirouz, my plan if I bought a company would be for the  employees to handle the day to day operation. Yes I would be paying money upfront but I would be buying something with an established name, client base, rules, and employees. And another reason is to leave the restaurant business to much stress.

Dante Pirouz · Answer

@John Thedford good point!! :) But if there aren't any good property managers in your area you either have to do it yourself or start a company so you can get scale to hire others to do the day to day management...that's my dilemma at the moment!

John Thedford · Answer

@Dante Pirouz

Franchise? Why not start your own? If you love working 24/7 that is the perfect business! I don't need a job, just the money:)

Brad Larsen · Answer

As a management company owner - and an Iowa boy born and raised - I would recommend starting your own company, or buying an existing company.  Find a business broker - work out the numbers for your market.  A good rule of thumb nationwide is 1.5 to max 2 times company revenue.  Also, look through the revenue with a fine tooth comb.  Commissions and maintenance could be taken out so you are just looking at the true annual contract value (ACV) of the management side only.

Do not buy into a franchise.  The capital it takes would be better served to buy an existing 100 unit management company.  If you have 25k to buy into a franchise - buy an existing management company's 100 homes and get terms.

I would also recommend you join NARPM.  Go to the events, tell folks you are looking to "PARTNER" with them.  When you say "buy" or "acquire" - it scares people away.

If interested in learning more - hit me up off line.

Good luck out there!

Sam Ivazi · Answer

I'm in the middle of taking my courses for my license. But i was wondering how should I approach it, should I call them, go in there office? And how would i start a conversation about something like that? Thanks

Sam Shueh · Answer

Needing to be a licensed broker, special E&O insurance. Suggest you contact existing company see if the owner is retiring.

Buying a property managment company?

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