Calling all smart investors!!!

[Andrew Acuna]

What are the first five steps to staring a property management company if you already have an investment business? Curious to see how others have gone about this.

[Dave Van Horn]

Speaking from experience...

1.) Get a broker's license (not a Realtor License) or hire a broker. This will enable you to list properties legally for others. In this business, the money tends to be in the residual income from managing monthly rentals and leasing. There's also auxiliary things a broker can charge for like going to court or handling inspections.

2.) Rental Agent(s) - this is the person out showing the units, someone who is licensed, knowledgeable, reliable, etc.

3.) Robust bookkeeping/reporting system - this requires a Bookkeeper and probably some Admins. Property management software will assist in your bookkeeping, accounting, and the overall back office.

4.) Maintenance Crew - and not only that, but one that can handle emergencies. Along with that I'd suggest implementing a quality phone system to take emergency calls from tenants.

5.) And let's not forget, probably the most important thing that almost goes without saying: the book of business. This is critical and when I say "book of business" I don't only mean customers you already have but also a means to acquire/maintain customers as well as differentiate yourself from the competition. When I was a property manager, I catered to investors that I had built personal relationships over the years as an investor myself. I also started a REI networking meeting in multiple cities which fed into my property management company. But that's not the only path. My current manager actually started out by buying a book of business from a retiring property management company, which can also be a viable strategy to gain clients.

Can't fit everything into this list of 5 of course but you may also want to consider a sales division because this will enable you to sell properties for clients who went liquidate some or all of their portfolio. You can also shop deals to your list of investors (then if they buy it, they could hire you to manage it). Also having auxiliary services you offer can be a big big plus, like if you own your own clean out company, for example. When I was a property manager, I had a construction business, so I would also gain business from my other businesses, if that makes sense. Actually, I would say the one of the most valuable things about property management, if not THE most valuable thing, is that it's a great platform to gain multiple streams of income.

Best of luck,

Dave