32-unit Apt Complex in East Dallas - Property Management

[Carlos Encarnacion]

I am closing on a 32-unit apartment complex in about 3 weeks in East Dallas, TX but I’m having a very hard time finding a Property Management Company.

Current PM is not doing a good job so I need new management.

Can someone please help me with PM Company recommendations in this area?

[Ben Leybovich]

The reason the current manager is not doing a good job is that it's rather impossible to do a good job. Proper management infrastructure includes payroll personnel on-site, and you need at least 2, one manager and one maintenance. If you add the dollars up, this is about $120,000 anywhere in the country.

A 32-unit simply doesn't generate the collections necessary to absorb payroll. An institutional manager knows this, which is why they stick with 100+ units, and it's why they won't take this job. Hence, you are having trouble sourcing a manager.

What's left is mom and pop managers, and you are not likely going to enjoy either the process or the outcomes. 

32 units is intended for owner-operators. It's difficult to outsource management with good results. 

The most dangerous space in RE is 24-90 units. It's the no-mans-land whereby you need help but it's damn near impossible to find help, and you have to stay involved with tenant management.

Start thinking strategically and understand that you will have to stay very involved.