How would you partner with a property manager?

[Daniel Lozowy]

Hey I'm a new investor and I'm planning to purchase my first multifamily in the next year (20 units or so). I'm not looking to manage it myself, so I'd like to get a property manager on board early. I've found a couple in my area but I'm not sure about the next step. 

How do you partner with a property manager? How do you approach them? How do you find the right one?

Multifamily folks any help would be really appreciated :)!!

[Michael Ealy]

Originally posted by @Daniel Lozowy:

@Erik Hatch I get your point. But isn't the cash on cash that really matters? Or do you mean that 20 units is just too small to be efficient for syndicating?

 Daniel,

I agree with Erik. 20-units is too small to syndicate because you have a lot of upfront costs associated with syndication. For example, to pay for an attorney familiar with syndication and SEC rules, you have to pay him/her $10,000 to $20,000 to get you the PPM, subscription agreements, etc.

The legal and other costs - like if you charge investors an acquisition fee, a rehab management fee, etc - these costs will eat up a bigger portion of your cashflow and profit in a smaller deal vs. if it's spread across a bigger deal (100 units) giving your investors a lower return.

The best route is not syndication but get 1-2 investors who can put up all the cash while you do all the work. 

Having said that - that is not your question though.

Let me answer your question - how do you "partner" with a PM?

When I read your question more closely, it's not really getting a PM to partner up - it's really, how do you get a PM, right? When you say getting a PM as a partner - it implies the PM will put up some cash to buy the deal with you. They won't do that.

You can get a PM by networking at your local REIA and there are Landlords & Property Managers associations also in a lot of cities. Find one in your city and network and talk to people. Ask other landlords to refer you PMs they currently use. Based on experience, you get the best people referred to you. So ask for referrals.

Does this answer your question?