Best PM For C-Class?

[Alex Fidelia]

hey All!

Newbie investor here.  I've been bitten by the real estate "bug" and love the prospects here in Indy.  It's economically diverse, affordable, there is a fair amount of inventory and selection, it's large, the evictions are shorter than many states, etc.

I am looking at properties in the 50k-80k range.  That would be considered the C range I believe? (correct me if I'm wrong pls!)

Looking for a great PM. 

I will be buying single-family. I am not interested in section 8. 

The main things I'm looking for is:

1) They make their money on volume. If they rely on any other method...such as maintenance (marking up materials, labor, etc.), turnover costs, other excessive fees, or other methods to make their money, it will not turn out well for me. I realize there will always be a mark-up, but it cannot be excessive:

-----A) Low average tenant turnover time

-----B) Low average turnover costs

-----C) Clearly documented fee structure

...........I realize that some property managers may have high management fees, as high as 12%. I am okay with that...In fact, I would prefer it! I might be willing to pay even more. A high management fee means they are likely making less on the hidden stuff (maintenance, turnover, hidden fees, etc.). That's what I worry about.

2) Has a stellar reputation

3) The average tenant stays for a long time.

- Great tenant screening

- Doesn't just look for warm bodies. The PM actively looks for tenants that want to be there long-term. Even if it takes a bit longer to find them.

- If the tenant wants to leave, the PM finds out why and fixes that problem.

4) When they get a service call from a tenant, they do over-the-phone troubleshooting before sending someone to inspect/repair the problem.

5) Always uses an unlicensed handyman when possible. Only uses licensed contractors when necessary

6) Cares about their investors and understands them. Realizes the importance of maximizing long-term profit

7) Responds quickly to the needs of tenants and investors.

8) Handles evictions smoothly and quickly

9) The manager is selective. He/she refuses to manage D-class properties

       - If the PM would manage a property in a war zone, that's a bad sign. If the PM is desparate for business, there's a reason for that.

10) Has been in business for at least 5 years

11) Experienced with C areas

If I am being unrealistic, please let me know! Hopefully this is not a "mythical" PM.

thanks

Alex Fidelia

[Jay Hinrichs]

what your describing  C class with no tenant turn over 650 to 750 dollar renters  is just an oxymoron and you will soon find that out..

NO pm can do what you describe..  the tenants in those price points don't live the way you want them to live.. 

as @Jeff Schechter  stated a PM would starve without  lease fee's mark up s etc.. 

If I was in the PM business on the low end like your describing I would have a set fee of 150 a month .. its more in line with asset management .. than it is with tenant property management..  

Keep in mind your 650 tenant to qualify needs to make 3X rent.. that's less than 2k a month.. take out the rent take out 150 to 200 for utls that lease basically 250 bucks a week to pay for their car their phone.. food cloths , most have kids the dog food etc etc.. these are folks that live pay check to pay check.. so to think your going to get stability in that renter is wishful thinking and or you simply don't know what you don't know..