How to deal with property management company disappearing?

Question

I have a few properties in Indiana and one property near Kansas City, MO.

I've owned them for a few years now. I bought all of these through turnkey companies that do the rehab and also do property management, and I hold on to them long term.

Recently, over the past few months, the PM for my Kansas City property has been communicating less and less. They failed to fill a vacancy over the past few months, were not responding to most of my communications, and recently they went offline (their site is offline, and their email domain is also offline, emails bounce back).

I have never even seen this property in person.( I hired my own trusted inspector when I made the purchase -- which gave me the confidence to purchase) -- but now I feel a little lost in this current situation.

What are my options at this point? Find a new PM? I will have to re-read the PM agreement I have on file with them to see what my outs are. I admit I did not consider this scenario (ghosting me) when I made the purchase.

Nathan Gesner · Answer

I recommend you start by searching for a new property manager immediately. Explain the situation to them and they may be able to help you figure out a way to deal with the current property manager. Read through your property management agreement and have it available to answer any questions.

You may consider contacting the state governing board to report your property manager for failing to communicate. They will reach out to the responsible broker and that should be enough to spook them into communicating with you.

Mike Dymski · Answer

As you mentioned, read the contract and follow the termination process even if they are not responding (written cancellation, etc.). Have someone or your new PM inspect and secure the property asap, address the utilities, and ensure no busted pipes from the cold. You or your prior resident may be owed a security deposit as well.

Failing to fill a vacancy for a few months in a TK property may wipe out profits for a couple of years.

Marcus Auerbach · Answer

@James WierzbaThey are not ignoring you, they just ran with the money! My guess is the owner started to see that they are not profitable and cleared out the operating account.

Most PM's know each other, see if you can make local contact and find out what happened. I would consider legal steps - outside of the security deposit, how much do they owe you?

Caleb Heimsoth · Answer

@James Wierzba step 1 is to hire a New property manager. You have a vacant property and presumable no keys To said property.

Is there any old rent money with your old PM?

After you do step 1, I highly recommend you go see this property in person.

Ramon Vazquez · Answer

@James Wierzba I would move to the next and hopefully you have access to the lease agreement :) sorry to hear that! I'm a KC landlord if I can help in anyway.

Drew Sygit · Answer

Find a new PMC ASAP to protect your investments and then you can start chasing & holding the old one accountable.

Mike D'Arrigo · Answer

@James Wierzba Sorry to hear that. That's really strange. We have a good property manager. DM me and I will send you their contact info.

Matt M. · Answer

@James Wierzba

First step is to visit your property. You have no idea what you have, in what condition, squatters, whatever.

For me, this is reason #7643 why I’d never own a property I couldn’t get to by car within an hour.

Crystal Smith · Answer

There's only one option- Find a new PM. It really doesn't matter what your PM agreement says. Your first responsibility is to protect your asset. Once your asset is protected then go after the previous PM.

Caleb Brown · Answer

If you need a new PM I can send a few. That's frustrating, seems like they ditched and ran.

How to deal with property management company disappearing?

How to deal with property management company disappearing?

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