1st property from 188 miles away

[Mitch Kenney]

Hello everyone!

I looked in the message boards for my answer but could not find it. My wife and I live in the bay area and are looking to buy our first apartment building (appx 8 units) in fresno. Fresno is 188 miles from us so we would need a property management company.

Does anyone feel that on this small of a building that the property management fees would eat too much into our cashflow and it would make more sense to buy something closer so we can manage it ourselves? On our first property and it being rather small does anybody feel we should manage it ourselves? We have thought about moving back to Denver to invest where it may be more feasible.

[Joel Owens]

Hey Mitch,

At your level of 8 units typical fees for property management run 8 to 10 percent of collected gross rents.

If you can buy 50 units or more typically you can get a 5% management fee for volume.

188 miles away is not going to work to run yourself.A key when buying is what is the condition of the complex as far as structure and mechanicals??

You can bet if it is older and not redone recently you will constantly get calls for repairs and problems.Also pay attention to the terms of the leases you are inheriting as that can be a major headache.

Don't focus on just the fee charged but performance and what they do for that fee.
No matter the asset the property management company will either sink your asset or take it to new heights.

I like going to www.irem.org to search.They are specifically managers and go through extra training. You don't want someone with other interests running your property.

I don't do property management because I don't like the headache either for the low payout.I stick to sales only.