Acquiring another property management company, thoughts on best method to use.

[Glen Michael]

Good afternoon all

Just for general discussion.....and I know there is a lot of information not given....

I was discussing with several colleagues at a recent investor meet up, on their thoughts on best practice/method to acquire another property management company in our geographic location.

We were approached by another management company who's owner wanted to retire and presented us with an offer.

Original discussions with the other management company(seller) had them wanting a one time payout, say $100,000. Obviously we still need to discuss and get more information to try and determine its true valuation, etc...., but we thought initially it would be best to offer a cash down amount($20,000) and then offer a percentage of revenue over a three year time frame. (50% of management fees collected: yr1, 30%: yr2, 20%: yr3) until the balance of the "acquisition" price was met.

Again I know I've left out a lot of info but this was just to hear some ideas or previous experiences.

Some generals:

Approx. 100 doors

Most are 2yr leases

Most are long term clients of the current company

Average rent of $2300

Thanks in advance and have a great weekend!