Limiting management of 100 door apartment complex

[Tracey B.]

I'm considering buying a multi-family property with approximately 100 doors. The NOI, based on the forecast provided by the on-site management (extrapolated from previous years), is $220K, though this is after $60K in management overhead has been subtracted. (I don't want to get into due diligence on the accuracy of the figures; please take them as true for the purposes of my query. :D)

I'm buying the property primarily for anticipated appreciation, and whilst the cash flow is nice, I have income from other sources. Far more important to me than maximum cash flow is for the property to be "as close to self-managing as possible", as I live in Australia.

What I'd really like to do is install on-site management who'll operate the landlording business, so that all the landlording becomes their problem. I was thinking I could rent them the entire premises on a NNN lease for, say, $170K pa, and they sub-let, repair, pay property taxes etc, and keep any profits they're able to make. This would mean that if they achieve the forecast figures, they'd make $110K pa profit (net income if management fees taken out is $280K), and I'd get my $170K as a NNN payment with no hassle, and only my mortgage payment to make. :groovy:

My questions are:

1) is this a common and/or legal arrangement in the USA?
2) is there a common terminology for such an arrangement?
3) in terms of risk/reward, how much do you think I could get for the NNN lease income on such a property - would my example of increasing the on-site manager's income from $60K to $110K be sufficient reward for the additional risk they take on with regard to vacancies and maintenance expenses?

Any other advice or suggestions?