Milwaukee Property Managers

[Tony Blessings]

I am new to this landlord business and will be closing on my first 5 unit apartment in Milwaukee. The realtor i used has a property management business and also a real estate investor. His property management company wants me to agree to carry a liability insurance acceptable to agent with limit of liability not less than $500000 with agent named as additional insurer there in. Is this the common way property management company's operate?

His property management fee is 6% BUT they also charge 10% flat fee per unit. Also he bills $29.50 per hour with 1/4 hour increments for all time spent by agents employees repairing or maintaining property for emergency out of hours basis, the hourly rate becomes 11/2 times the quoted rate. Someone smells a rat according to me or i am i being a sensitive newbie?

PS- one good thing i have liked about him is that he has checked over 10 properties which have been tenant occupied but advised me against buying such because of the area, bad tenants or property with many maintenance issues. Although these properties had excellent cash flow, i passed them.

For you  experiences folks, let me hear your views. I will be travelling to Milwaukee in 2 weeks to sign loan docs with a local bank and see this property and perhaps buy a four plex too. My goal is to buy 10 4-plex in 3 years.

[Kelly G.]

I have gone through a couple PMs in Milwaukee with my SFH. AVOID Weide Realty at all costs - this sounds alot like his arena. His incompetent management cost me about $800 in lost property when tenants moved out!

Also avoid a guy named Jon Krouse - at Structure Property Management.  He failed to monitor utility bills correctly and I'm still not sure that it all got squared away:  tenants neglected to put water bill in their name; PM neglected to ensure that they were the back-up contact; I ended up with a $600 water bill when the city finally contacted me.  

I am currently using Progressive Property Management - owned by Thomas Andrew (former partner with Jon - but I never dealt with Tom at Structure).  I've been using PPM for about 1.5 years now and have been happy.  I do have to keep on top of management issues when he emails or calls, but I'm OK with that and I want most of the decision making anyway.  

As to your Q re: liability;  PPM requires me to carry a min. $500k in liability insurance - with them named as an assured - this seems standard practice.  However  our management agreement clearly states that I will not be held liable for any thing the PM screws up! ( . .  loss, costs, damages etc etc etc due to any negligent act or omission by the PM . .   paraphrased here from all that legal mumbo-jumbo)  I have not seen ANY other PM offer this protection.  

Good luck

Kelly