Can I start a Management Company owning and managing my own properties?

Question

Hello,

I am relocating to CA. I have been doing property management since 05 and I want to start my own property management company. I would like to know do I have to be licensed in Ca to start my own management company, managing my own properties? I am getting mixed information about this. I want to buy apartment buildings 4 - 10 unit buildings to start off and manage them myself by starting my own company (LLC) and hiring staff to assist me. Anyone with information or knowledge on this is appreciated! Thank you,

Chrystal England · Answer

In California you do not need to be licensed to manage your own properties, but I strongly recommend purchasing a landlord law book as the laws can be tricky here and they can vary widely by county and city. Also I recommend locating a local property manager to assist you on an as needed pay as you go basis for helping with move-in paperwork, and to be on call for those times when you are not available or out of state on vacation, etc. especially if you will have an apartment building which tends to be a lot more work due to typical more transient tenants.

Marcia Maynard · Answer

We have owned and managed our own properties for almost 20 years... great way to learn about property management without putting the investment of others at risk :-) In Washington State you can also manage your own properties without any special training or licensing. But going into it with eyes open, connecting yourself with the right network of people, availing yourself of great resources and being able to learn on a fast track is key.Establishing your business structure is also important. From what I understand, LLCs in California can be quite costly as compared to other states. So I would suggest you define what you really need and then find out from the locals what is the best business structure for achieving your goals. Good luck!Also, @Vanessa Bunch and @Chrystal England welcome to BP to both of you! Please introduce yourself in the new member introductions forum. Looking forward to hearing from you more as you participate in the forums and explore the BP site!http://www.biggerpockets.com/forums/55-new-member-...

Chrystal England · Answer

In California you do not need to be licensed to manage your own properties, but I strongly recommend purchasing a landlord law book as the laws can be tricky here and they can vary widely by county and city. Also I recommend locating a local property manager to assist you on an as needed pay as you go basis for helping with move-in paperwork, and to be on call for those times when you are not available or out of state on vacation, etc. especially if you will have an apartment building which tends to be a lot more work due to typical more transient tenants. Go ahead and contact me directly by email at englandrealty1@gmail.com and I can either assist you in the San Francisco Bay Area or refer you to someone if in other parts of Cali.

Vanessa Bunch · Answer

Thank you, Chrystal England, how can I look into purchasing properties is that through a Sales agent or Broker? I have been on loopnet but do not how to go about inquiring, do you have sites you can recommend?

Vanessa Bunch · Answer

Thank you, for that @Ugochukwu Opara I have been informed of those options, but I have also been told I do not have to be licensed if I want to buy a property and manage it myself, or I can hire a Broker to do my business under. I want more information on those options although I do plan to become licensed in the near future.

Ugochukwu Opara · Answer

Hi @Vanessa Bunch This all depends on what the laws are in Cali.Currently I am licensed in PA and here is how things work for me. Hopefully this helps you have an idea of what you might have to do:There are two ways to really do property management in PA assuming you are a licensed agent,1. You work with a brokerage that does property management and they take a portion of your proceeds (usually 10%). This is good because a lot of the back end stuff is taken care of for you and all you have to do is generate the business and form an allegiance with 2-4 contractors. 2. You start your own brokerage and you offer property management as a service. In PA, you will need 3 years of being a licensed agent, amongst other requirements. This method goes along with you starting your LLC, hiring staff, etc. You are responsible for setting everything up from top to bottom and you must seek your own E&O insurance policy that covers you property management activities. With your experience, I think the latter it more in alignment with what you are trying to do. However, keep in mind that you always use option one and still start a team (hire help) and manage your own property that you purchase.Let me know if you need me to elaborate on anything. Again this is just for PA, it really all depends on what the laws are in Cali. Cheers!