Management options for 32 unit apartment

[Tom Lafferty]

I've been looking for a 60+ unit apartment complex that would afford 3rd party management in the DFW area for several months without much luck. I've recently had a 32 unit deal basically fall in my lap and I've decided to move on it. It is a solid deal if self-managed, but the returns just aren't where I (and my investors) would like them to be with a PM company involved. I also like the idea of truly learning the business from the bottom up before moving onto bigger properties where I'd be using a PM co. The Ken McElroy podcast reinforced my thinking when Ken said he puts his new people at a property to learn the basics.
I'm looking for input from those of you who have owned/operated similar properties, and how you did it. I know many other owners of these smaller properties and have discussed resident managers, part-time professional staff, partnering with owners of nearby properties and sharing staff, etc. Our budget includes payroll for a PT maintenance person and PT mngr.
All of these have pros and cons, but this is a huge step for me, and I guess I'm just looking for reassurance that others out there are successfully doing this. I've got a great deal of support locally from experienced people, but BP was much to valuable a resource to ignore...

[Joel Owens]

Tom the number of units is not only key but also the rent per unit mix door.

You could have 50 units 1 bed getting 400 a month rent. The extra bookkeeping and turnover involved would make it hard for one handyman onsite to keep up.

Conversely you could have 40 2 beds at 800 a month and much more income with less turnover and might be able to afford a full time handyman. The problem with a low number of units is that the handyman needs more income in most cases that I have seen than a small property can provide. This makes them do multiple jobs for other people and your stuff on the side. The result is your property doesn't maintain itself like it should and repairs take a long time and tenants get disgruntled.

A full time repair person onsite knows layouts for turnover like the backs of their hand. They can spot and repair issues faster for existing tenants knowing parts brands and sizes and where to get them etc. Some buildings are older and you really have to improvise to fix things as those parts are special order or no longer made etc. so you have to wing a lot of stuff unless you want to replace the whole thing which costs a ton of money.

I owned 20 units before and had a manager but was over there 3 to 4 times a week handling things to do with repair issues etc. I will never do this again and will buy a much larger property where I can automate everything and the cost is built in. The tenant base makeup will also dictate how hard you will work for your money and management collecting rents. Professionals tend to hold down salary jobs with more stable income. Lower income tenants come with a host of issues and problems and takes special managing to keep them on top of paying the rent. Their income isn't as stable as typically they might be working 2 jobs and the 2nd job fluctuates in hours and pay putting pressure on consistently paying the rent every month.

I hope this helps because like others I have been in the trenches myself at midnight working on vacant units getting ready to re-rent. The experience is over rated in my opinion.............. : )