Property Managing while keeping a W-2 job

[Travis Dawson]

Hey BP,

Interesting opportunity came up for me last night and I wanted to get an outsiders prospective on it.

I was talking with a friend last night about the Duplex I am closing on later this month and touched a little bit on my future real estate goals. She brought up that she would be willing to let me manage her real estate holdings (one SFR and one Commercial building with 4 tenants) as she is starting a new business and doesn't want to deal with them right now. I told her I would consider it.

Things to note:

Idaho is basically the wild west when it comes to property management laws. I don't need a license or any kind of certificate.

Snow removal is paid for, but I would be responsible for mowing a very small lawn at the commercial property.

I work a 40 hour a week job and cannot give that up at this time.

Because she has other ventures the commercial tenants are used to not getting their needs met day of. Honestly, if I responded to their needs after the work day it would be fast than the owner has.

I don't currently have an LLC, I would need one.

Ultimately I think this would be great for me, its an extra, albeit small, income stream and the experience would help me decide if this is something I want to do going forward, Plus the added knowledge gained doing the work should help me regardless.  But I am curious about any downside I might not be thinking of.

[Andrew Johnson]

Travis Dawson What's a little unclear is if the duplex is your *first* toe you're putting into the real estate game. If you've never properly managed before I would go from zero to "a business serving others" overnight. I mean, I'm sure you could, but at the moment you may not know how much hassle your tenants (or hers) would be. You may not have a list of go-to locksmiths, handypersons (I don't know if handymen is sexist in 2017), cleaners, etc. I also don't know if she's going to pay you a standard rate or hope to get you cheap. And, for what it's worth, don't underestimate the hassle of getting bids, documenting things, providing monthly statements, etc. My initial thought was to use a SaaS property management solution but I don't know how the economics work when it's just a handful of properties. So you might end up crafting statements on QuickBooks or Excel. Again, that can be more time consuming than people think.

All of that said, if you want to do it, go for it. But if you didn't want to really do it I wouldn't look at a handful of units dropped in your lap as the reason to start. My two cents...