Im a total NOOB: Investing in Multi-family homes.

[Paul D.]

Hello BiggerPockets People,

       So I'm throwing my self out to the wolves and admitting that I am a total noob who has been reading book after book, non stop podcasts, and soaking in as much information as I can about investing. Im about 6 months in now with my studies and just keeping up with my due diligence and also saving up money before I finally pull the trigger. I am from northern New Jersey and planning on investing in Multi family homes. As I am reading right now a thought popped in my head and I said I'll see if I can pull some info from BP. With all this said I will ask my first ever question on BP!

I am interesting in planning with a multi family property preferably a 4-plex if I can figure out the financing part of it. Worst comes to worst I was thinking about "house hacking" anywhere from a 2 family to a 4 family home.

Is a property manager necessary for my first multi family property investment? If not, what are some suggestions of how to run the property smoothly and dealing as less with it as possible?  

Don't get the wrong idea I am not lazy, but I also don't want to play landlord. I want to keep my role as an investor. Consider that I already am running a business of mine and managing that as it it. Time is very limited to be dealing with tenants. If everything goes as plans I would eventually like for these investments to allow me to make the transition to full time real estate.

like I said I'm new and I'm trying to get my feet wet and I know this is great place to start.

Thanks in advance guys!

[Ishaan Misra]

@Paul D. thanks for sharing.

I actually have some experience in managing both SFHs and MFHs and my recommendations with regard to hiring professional property management are as follows:

If you are living in the property full-time, the main value propositions offered by professional management will be as follows: marketing, screening & placement of tenants; rent collection; maintenance.

Of these three, rent collection is the easiest for a DIY landlord. However, when it comes to the time and energy required to do an outstanding job of getting the best tenant (marketing, screening, qualification...etc), particularly handling the inbound applications and all the showings, hiring a PM may be worth the expense.

One thing to be very wary of: PMs who charge many, seemingly ridiculous fees. For example, some PMs actually charge you a monthly management fee before a tenant is even placed. This is ridiculous and provides a clear conflict of interest. Also, many PMs charge mark-ups on maintenance jobs, another clear conflict of interest. 

Ultimately, you will have to make the decision as to whether or not to hire a professional PM. Asking many questions and interviewing as many PMs as possible will give you the best breadth and depth of information to make the best, most well-informed decision.

Please feel free to PM me should you have any other questions.

All the best!

IM