Advice on building my real estate dream team!

[Aramazt Tanashian]

Hi there, my name is Aram, I'm a financial advisor and a newbie real estate investor! I'm currently moving my investing activity to a different area and working on building my power team in that area. 

I've come across this real estate "consulting" company. Initially I had thought that this company only does property management, but as it turns out they help the investor from A to Z, when it comes to finding appropriate agents, lenders, contractors, handymen, managing rehabs, management, providing advice on the best investment strategy, etc. 

I've interviewed the owner of the company and he is a real estate investor himself and clearly knows what he's doing. 

From an initial impression, this makes the process of long-term investing much more convenient, and the only fee (apart from regular agent/lender commissions) is the property management fee!

My struggle is the prospect of potentially giving up control, having the choices of team memebrs made by this company for example.

Obviously, at the point where I see the potential members of the team to not be suitable anymore, I can definitely look for others, but i'm still finding it to be uncomfortable.

What do you guys think of potentially partnering with this type of company, and what would you do if you were in my shoes?

Thanks!

Aram

[Matthew Morrow]

Quote from @Aramazt Tanashian:

Hi there, my name is Aram, I'm a financial advisor and a newbie real estate investor! I'm currently moving my investing activity to a different area and working on building my power team in that area. 

I've come across this real estate "consulting" company. Initially I had thought that this company only does property management, but as it turns out they help the investor from A to Z, when it comes to finding appropriate agents, lenders, contractors, handymen, managing rehabs, management, providing advice on the best investment strategy, etc. 

I've interviewed the owner of the company and he is a real estate investor himself and clearly knows what he's doing. 

From an initial impression, this makes the process of long-term investing much more convenient, and the only fee (apart from regular agent/lender commissions) is the property management fee!

My struggle is the prospect of potentially giving up control, having the choices of team memebrs made by this company for example.

Obviously, at the point where I see the potential members of the team to not be suitable anymore, I can definitely look for others, but i'm still finding it to be uncomfortable.

What do you guys think of potentially partnering with this type of company, and what would you do if you were in my shoes?

Thanks!

Aram

 Hi Aram,

Partnering with a consulting company that offers comprehensive support can be a great way to streamline your investing process, especially as a newbie. However, I understand your concern about giving up control. It’s important to ensure that you feel comfortable with the team members they provide. You might consider starting with a trial period to assess their services and see if they align with your goals. If you feel any team members aren’t a good fit, you can always seek alternatives. Trust your instincts, and best of luck with your investing journey!

[Aramazt Tanashian]

Thank you Matthew!

[Michael Smythe]

@Aramazt Tanashian I'd be cautious as no expert works for free.

So, either this person talks a good game, but doesn't know what they are doing, OR they are hiding how they'll make money finding you a property & rehabbing it for them to manage.

EXAMPLE: contracting companies make 20-40% markups, so why would this consulting company not charge to handle rehabbing a property for you?

STOP being so naive!

[Nathan Gesner]

Quote from @Aramazt Tanashian:

It makes my Spidey senses tingle. 

Most PM companies have thin margins, meaning they don't produce a lot of profit. How is this PM able to handle all the PM work and everything else he offers without charging additional fees to produce a profit? It doesn't pass the smell test.

It could be completely legit, but I would definitely dig deep into his contracts, talk to other clients, and really vet him before moving forward.

[Aramazt Tanashian]

@Nathan Gesner @Michael Smythe To clarify, the commissions for the agents and lenders provided through them, along with the labour for the contractors are still being paid to the individuals involved, just like it would be should I go ahead and find them myself. 

For the management of the renovations, I've come to realize that this is a service provided by many property management companies regularly, included with the regular management charge, so nothing very special there. 

It's the factor of losing part of the control over the team that is most concerning to me.

[Drew Sygit]

@Aramazt Tanashian so, we're still not on the same page!

Your statement, 

"For the management of the renovations, I've come to realize that this is a service provided by many property management companies regularly, included with the regular management charge, so nothing very special there."

Is what Nathan and I have issues with.

Neither of us handle renovations as part of our regular management fee - and I don't know of any PMC that does. 

IT IS AN EXTRA CHARGE. 

If they are NOT disclosing it, they are hiding it!

You are being VERY NAIVE if you seriously think someone is going to manage a $10k+ project and spend HOURS chasing contractors, checking on permits, verifying work is done properly before payment and trying to keep everyone on schedule - for no additional charge.

Best of luck, just don't blame anyone but yourself when you find out the truth the hard way.