Partnering With Property Manager?

[Snehann Kapnadak]

Hi Everyone,

How do you approach partnering with a property management team to do deals together? I'd like to give them a lot of the equity so that they're incentivized to keep the property up in exchange for financial help with the downpayment and for a lower management fee. At first, it would be for smaller commercial properties, but if the relationship grows well and we make a good team, I'd love to scale up with them.

Ideally it's a win-win for all:

For the PM:

• They get a large chunk of equity
• They get more business.
• They get access to my investors' capital for potentially future deals
• In a way, they eat what they kill

For me:

• I look favorable to the lender with an experienced PM team as a partner
• I'll get a deal under my belt
• I'll be able to get help with the downpayment, reducing the burden on my investors and myself

For my investors

• Sure, they lose out on some equity, but they'll get a (slightly) higher return due to the lower monthly management fee
• They'll sleep easy knowing that the PM has skin in the game and is experienced

To be clear, I'm playing the long game, so I'm more than willing to do say, a 55/30/15 split with the PM/Investors/Myself and with a 3-5% monthly management fee. I don't need to hit a home run.

I've heard that @JoeFairless talks about partnering with a PM company in his new book, but I haven't had the chance to read it yet. Thoughts? What am I overlooking? How does one approach a PM with this strategy? Thanks in advance!