Commercial Property Mgmt Co Bus Structure - Fees

[Shane H.]

I received some good news that brings a smile to my face a bit ago and potentially provides a great opportunity to grow my business this year as well as help supplement my income and could accelerate my the path to becoming fully self employed.

Multi Story multi tenant office building in our cities DT area.  Place was turned into office condos during the bubble, and when it burst the place turned into a mess as each floor has went through the foreclosure process and most out of state non performing investors have been weeded/flushed out.  Think theres only 2-3 "problem children" left.  New ownership is turning it around and has very good momentum along with the rest of our cities core.  I actually had wanted to invest in a foreclosed floor in 2011 or 2012 but it didnt work out and have kept in contact with some of the ownership in place during that time and more recently the new ownership in the picture.

I've had brief discussions about expanding my property management reach and working in their building and may finally have this opportunity as they have reached out to me.

I'm very familiar with the ownership in place and in fact had provided them with what I thought was a turn around plan to maximize their investment and a marketing plan for the building as they were in the process of working a couple of their issues out.

I believe when this building was full a few years ago the mgmt company at that time was pulling in somewhere around $39k in annual mgmt fees with stable ownership.  

When I was looking at the condo as an investment I felt the mgmt fee charged was very high for the level of service they were providing so naturally would not look to charge that much in fees.

What I'd like to bring to the table is money management, a part time presence, rent collection, payment to owners, and delegation of maintenance requests.  A potential partner in this could be a RE atty who I'm friends/acquaintances with and has expressed interest in starting a property mgmt division in his business as well, however he lacks some of what I bring to the table, (financial reporting, prpty mgmt software experience, marketing etc) so think we'd be a good fit as obviously his full time presence and the legal side would be a huge plus.  They would work/office in the building for their practice and have helped with prior evictions for non performing owners/tenants before.

For anyone here who utilizes a property mgmt company for their commercial properties, what fees have you typically been charged and what level of service/responsibilities did you pass on to the mgmt company?  (On older financial statements I was seeing a charge of $300 per mo for each floor -- each floor is appx 5800 st ft)

The bldg ownership has found a maintenance person who is on call and handles the day to day maintenance items so I would not have to worry about bringing my own source for that at the moment.

Supposed to schedule a meeting next week to sit down and discuss.  Would appreciate any feedback or positive words of encouragement.

Any suggestions on business structure for the LLC - I presently have a single member LLC set up for the management of my own property and that of others.