Self Manage Vs Property Manager

[Alex John]

Hi everyone, first forum post but I've been on BP for about a year now. I'm investing in the Spokane, WA area and in a span of ~18 months I've purchased one single family home, one triplex, and will be closing on a duplex in a few weeks. I initially had plans to be away from the area for just under a year so I currently have a great property manager taking care of my properties but plans may change and I'll likely stay in the area. Those of you familiar with the Pacific Northwest market know finding cash flowing properties can be tough if your buying turnkeys on the MLS but I've managed to find some good deals (below). However, management fees are cutting heavily into my cashflow, which isn't terrible as the market's appreciation has been solid. My main strategy is buy and hold but will be doing some BRRRRs within the next year.

My property manager is strong in three main areas: 1) marketing 2) getting quality tenants in on the high end of market rental prices 3) has excellent knowledge of appreciating neighborhoods that attract the right tenants (they've done a great deal in helping me find the right areas and what properties to purchase). I am forming a long term partnership with my PM but I know I can manage at least some of my properties until I scale higher.

Single Family (LTR): Mortgage-$1,650, rent-$1925, management fee-$154 @ 8%

Triplex (fully furnished month to month STR): Mortgage-$2,800, rent-$4200 total, management fee-$500 @ 12%

Duplex (under contract and will be an LTR/house hack): Mortgage-$2,100, potential rent for larger unit-$1,500, management fee-$120 @ 8%.

I work full time and do some traveling for work but also have friends in the area that could cover down while I'm away short term, but I plan to find a new W2 job allowing more time and flexibility in the next 1-2 years. 

My question is how you all would weigh forming a mutually beneficial long term partnership with a trusted PM while sacrificing cash flow vs self managing more of my units to hold on to more cash flow but risk filling units with the right tenants at the right market price? 

Cheers,

Alex

[Laticia Braxton]

The single most important thing that stood out for me from your post is "...but I know I can manage at least some of my properties until I scale higher."  You absolutely can and should.  No one, not even the best PM company in your area, will ever be more invested in your properties than you are.  

Will it take a lot of patience on your part?  Yes.  Will problems arise that frustrate you and make you reconsider?  Yes.  Will you reach a hurdle, or two, or three and need to reach out to other more experienced people for assistance and/or guidance and advice? Probably, but thats's how you learn and grow.

Get started as quickly as you can and before you know it, you will look back at this post and see that you are so much more confident in your management abilities. Your management experience will also help you tremendously when interviewing property managers in the future.  You will be better able to gauge their management style and decision-making skills based upon how you successfully handled your own obstacles. 

You've got this and best of luck to you!

Laticia