Your most like/dislike PM in Detroit??

Question

Hello everyone!

I am looking for a PM and would love to hear your experiences, who is your fav? who do you def not recommend?

Has anyone used F.B.P property management ?

Thanks!

Drew Sygit · Answer

***FULL DISCLOSURE: we were contacted by Helena Wu 06/28/2021 and have previewed several potenital properties for her.

Helen, here's our advice to ALL owners looking for a PMC below:

In our experience, the #1 mistake landlords make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Landlords mistakenly ASSUME all PMCs offer the exact same services and operate the exact same way, so price is the only differentiator.

So, the first question they usually ask a PMC is about fees - instead of asking about services.

This also leads them to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it.

We have a 12 page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord. Beyond the Monthly Management, Placement & Maintenance fees, all other fees in our contract are IF EVENT -> THEN fees.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

Davartay Miller · Answer

@Helena Wu

I would agree with @Drew Sygit. Oftentimes owners are focused on exactly what Drew mentioned "the first question they usually ask a PMC is about fees - instead of asking about services." I shared the following post the other day in regards:

Please do your research! Oftentimes I find that owners are not doing their research, not asking the right questions, and focusing on everything but the right thing. What does any of that mean?

First, get the numbers out of the way! Ask the property manager to show you the numbers! Looking at a sneak peek at the property management services is always a great start. Those numbers could be the following: annual vacancy rate, annual maintenance cost, percentage of residents that renew their first lease, length of resident stay, and number of properties under management.

Secondly, you want your property manager to have a team of experts and local contractors. That team of should be more than capable of conducting thorough assessments of structure, systems, and features of every house. This concept helps draw attention to functionality and consistency. Every resident should feel welcomed into a clean, presentable, and not just some house. That starts with leadership at that company you select to protect your investment.

Finally, reputation is important. Your property manager should know property management! Not all property managers are going to tell you no. That's right.... be careful and try to avoid the who doesn't care where they manage, what they manage, how they manage, etc. That's why you are wanting to be bagged by a company with a reputation built on integrity. As an investor you should expect an excellent standard of care and customer service packaged with transparency. This does not mean you are looking for the "perfect manager" but most importantly a truthful one. Look if they makes mistakes – let's not forget they are human. But what you want more than anything . . . . is the truth, transparency, and their willingness to say no to things that are not their niche! Reputation and transparency is big in this business.

Here are some property management/turn key questions you might want to ask throughout the interview process:

So ask your questions, get your data, and do your research.

Are you an investor?

Do you own in the exact neighborhoods you are managing?

How many investors do you work with?

Do you own all aspects of the operation? (or do they hire third party companies)

Do you offer rental or maintenance guarantees? If they answer yes, ask them why. Then ask them if they will put the guarantee on year three.

Do you defer maintenance?

How many properties do you manage?

Do you sell properties and if so, do you own the properties you sell?

How long have you been in the business?

What is your average vacancy rate?

What percentage of expiring leases will renew their lease each month?

What percentage of signed leases fulfill their full term?

What is the average number of days a property is vacant between residents, move-out to move-in?

What percentage of billed rent do you collect each month?

What is the cost of an average repair bill after move-out?

Do you mark up maintenance costs?

What are your management fees?

What percentage of collected rent goes to yearly maintenance on average?

What is your average number-of-months occupancy per property?

What is your average occupancy rate?

What programs do you have in place to keep residents happy?

What customer service programs do you have in place for owners?

Will you call me every month with an update on my portfolio?

How many team members are dedicated solely to providing service to your clients?

If you are an investor, What has been your biggest mistake as an investor? How do you protect your clients from making the same mistakes?

Again, these questions have a bit of turnkey flavor to them, but they work very well when interviewing management companies. Make sure you take good notes and remember how you feel talking to the companies.

Best of Luck!

Keyonte Summers · Answer

I self manage and have minimum issues with tenants. Most of my headaches come from acquisitions with tenant occupied properties until they get with the program. @Drew Sygit has a great group that I always recommend but I have a few others.

Keyonte Summers · Answer

Big brother property management , I can’t stress more than to vet any groups you consider. Your PM could easily take advantage of you and you tenants . I’ve helped countless OOS investors that had this issue with their PM in one way or another. Check reviews meet them in person a phone or email isn’t enough these days. Reach out to current/past clients all the flags will point themselves out .

Andrew West · Answer

My husband and I have been investing in Detroit and the surrounding area for many years now and we have a nice size portfolio.

We have used a lot of different property managers/realtors/crews and most are complete garbage.  No communication no reports no funds send.  Some are straight up scammers.  Had one send us photos of a “renovated house” and it turns out it wasn’t even photos of our house!

The last time we switched we did A TON of research.  We reached out to 15 – 20 managers, created spreadsheets the whole 9 yards and decided to go with Tradewinds Development Group.  The owner is active here on BP and is very knowledgeable and the communication has been rock solid for years.

I don’t want this to turn into an ad nor do I want to talk bad on an open forum about specific companies, but I can tell you we have seen some crazy stuff.  Need to be careful.  Even if you don’t go with them @scott m from Traddewinds needs to be on your shortlist.  You will not regret talking to them and will learn a thing or two.

I am happy to say more about what I like or why we ran away from other companies in a direct message if need be but I am not comfortable talking bad about places that I haven’t used in years, in particular by naming them.  Oh the complete BS we have seen is mind numbing.

Mikael Gandy · Answer

Hey Keyonte,  great post! Any tips on getting inherited tenants on board with your property management style?

Nick Bendick · Answer

I use Nelson Property Management and have been happy with them.

Your most like/dislike PM in Detroit??

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