Going into the Property Management Business

[David Flores]

Hi Everyone,

I am an experienced real estate investor with 23 units between solely owned and partnership deals. I have a lot of experience and actually manage all these 23 units. I know multiple handymen, multiple contractors, appliance warehouses, have never missed a rent payment, etc. I have a good system. 

That being said I have the network to get into the property management field. The problem is, I am not a broker and I am not an agent. I know a lawyer who I am very friendly with that wants to sign as the broker for the business. He would get 5-10% of profit for doing so. We still have to hash that out. 

We are at preliminary phases of opening the business but my real partner and I (not the lawyer) are curious about some concerns. So Mr. Lawyer already owns and operates a real estate firm (lets call it Mr Laywers Realty). They sell homes and get rent units, typical realty. They do not have a property management side. What Mr. Lawyer wants to do is make another branch called Mr. Lawyer Property Management and have it as a branch under his company he already owns. 

Now, that is not the route me and my real partner wanted to go. We wanted a separate business stating he is only a minority partner and has no real control of the operations. He would really just be a figure head and partner. Are we able to do something like this?

Besides my question in the last sentence my other questions are as follows: Can a broker at anytime pull out of a company and take his broker license with him, thus giving us a non-legal company in the future? Can we make it so the broker does not have any voting power? And can we make it so we are the owners of the company and not Mr. Lawyer (I am assuming this answer is yes as we can set up a partnership operating agreement)?

Really need legal experts here and not opinions. Thanks BP World!!

[Joyce Tavares]

I have 30 units and no property manager.  I am the property manager and I am 73 years old...have been doing this for 50 years because I love what I do and I spend the time and money to make sure it is done right.  I make mistakes, and learn from them.  I talk to a lot of real estate friends and get their input and am constantly researching better ways to manage.  The hardest part of property management is making sure you have good, reliable tenants.  I do extra things to keep them happy and have them stay longer.  If you own the property, why would  you need a broker or realtor?  You could easily manage 23 units yourself.  The longer you do it, the better you get.  You can do this!!!

[David Flores]

@Joyce Tavares

Hi Joyce, You seem to love what you do! Thats awesome, was really asking for legal advice on starting a property management firm though. Yes,

i manage my 23 units but I want to expand out to the public, not just my units.

We have a lot of questions about legality and how much power a broker actually has if we went into a partnership with him.

My 23 units will always be managed by me.

We are looking to go public though.