Property Managers, Red Flags?

[Bob Beach]

We have one rental in Jackson and now on our second property manager. First was Evernest, (never again). Now, a Mom and Pop style PM. I don't want to say who since I'm not 100% sure what's going on. First red flag, the PM brought up a small "safety hazard" repair. A couple 6' boards and paint for something like $500. Then, a plumbing issue. They brought in a "plumber", said the house had multiple leaks in the pipes, needed re-piping and concrete broken up to fix the second leak. Estimate is $4500. I had Roto-Rooter go get me a second estimate and they say, "there's no leak. Water pressure holds at the meter. Pipes are fine and doesn't need re-piping".  Total cost to me = Free estimate. 

Anyone investors have similar experience?

[Jacob Beg]

I had a similar issue. Unlicensed plumber says that there is a gas leak needing gas pipe replacement, would do it for 4k. A licensed master gas tech fixed the stove for $50. 

I am now seeing some junk costs, etc, while the property sits vacant. The moral hazard is that the owner’s and the manager’s interests are not always aligned. It’s not a performance based model unless you negotiate a bespoke contract, or have a larger portfolio. 

The manager could be well-intended, and getting duped by a plumber, but that’s where an experienced hand makes a difference. The single man property manager is likely short on time. He must, as we all do, maximize the return on his time and that’s where the misalignment of financial interest kicks in. 

[Glen Wiley]

Try to use handymen who come via a recommendation. Talk to realtors or others in the area who have their own reputation to protect.

I have also often used large trade specific contractors like Michael and Sons here in Richmond. They are big enough to have a big stake in maintaining a good reputation and have infrastructure that helps keep things running well and can deal with problems. They aren't the cheapest but are less likely to commit fraud like what you have described.

[Nathan Gesner]

Quote from @Bob Beach:

Why did you choose this mom-and-pop manager? Is it because they were cheaper? You thought they would have more time to focus on your property and treat it like it was their own?

Cheaper doesn't mean better. I recommend you look for a professional manager who knows what they are doing.

Good on you for checking on their work and catching this problem. It's important to supervise your manager, at least for a while, to ensure their words back up their actions.

[Michael Smythe]

@Bob Beach we've got a few local "mom & pop" sized PMC competitors that are infamous for similar behaviors. They don't seem to have any integrity challenges exaggerating and even lying to gouge their clients.

You should review your PMA to make sure it clearly spells out what they CAN and CANNOT do. 
Many investors make the mistake of assuming that a shorter PMA is better:( There's a reason purchase contracts have type so small you can barely read them, yet are 4-6+ pages.

Reality is:
1) Only if it's properly in writing, do they have to do it.
2) If it's not in writing that they can't do it - they will and charge you for it.

[Bob Beach]

@Nathan Gesner Actually, the PM came highly recommended, on this website. I did a search for PM's in Jackson and I saw this PM mention a few times in the posts. I PM'ed to posters to confirm. That's why I don't want to say who it is. "probably" just the plumber that's the issue. I PM'ed the same to posters, now 8 months later to see their experience. Only one responded, so far, so good. 

  A couple commentors mention, pay a little more, get professional opinion. That's why I had Roto-Rooter go out. Someone I will trust. We have 6 doors in TN under two PM's. They both do OK but one I'm on the phone a few times a week with them. Mainly, a couple houses are in "challenging" areas with suck tenants. Never had a major issue with them, just have to kick start them once in a while, on an empty house. 

  Our one house in Jackson, I will be more hands on and all repairs have to go through me. The PM is good about checking with me first but only 2 issues in the last 8 month. 

Thanks for all the responses and getting my "shady fee" compass back to north. 

[Peter Tverdov]

PMs are human too, sometimes they are wrong. Doesn't mean they are shady or trying to rip you off. If you feel like getting a second opinion that's your right. Sometimes a vendor the PMC has used for a while is just off. It happens. 

[Sue Gee]

I own 3 homes in Jackson for about 5-6 years now. I use John Morgan with Reality Sales and Management for 2 of the 3. Not the best when it comes to communication. He recently had most of his office staff replaced for a variety of reasons, some for shenanigans...he won't/can't elaborate.
But he has not ripped me off with repairs & is genuinely a nice guy. The month to month invoices are kind of a mess. I prefer incoming rents arrive at the same time every month. For now, I factor in the turnover at the office.
Like I said, not the best. Jackson is plagued with problems. One of their maintenance guys was murdered about 18 mo ago, while scouting a property on his way home. Parked his truck on the side of the road, was on foot when he was shot in the back by a 15 yr old gangster with a lengthy rap sheet. I wish I had bought nicer homes south of Jackson. Lastly, here's the catch...I would sell these homes but I would be lucky to get what I paid. A major downside of turnkey. They cash flow well though so it is what it is.

[James Wise]

Quote from @Bob Beach:

We have one rental in Jackson and now on our second property manager. First was Evernest, (never again). Now, a Mom and Pop style PM. I don't want to say who since I'm not 100% sure what's going on. First red flag, the PM brought up a small "safety hazard" repair. A couple 6' boards and paint for something like $500. Then, a plumbing issue. They brought in a "plumber", said the house had multiple leaks in the pipes, needed re-piping and concrete broken up to fix the second leak. Estimate is $4500. I had Roto-Rooter go get me a second estimate and they say, "there's no leak. Water pressure holds at the meter. Pipes are fine and doesn't need re-piping".  Total cost to me = Free estimate. 

Anyone investors have similar experience?

 Being a mom & pop property management company is in itself, a red flag. Why aren't they a bigger company? To turn a profit in property management you need to have 100's of doors.

[Sue Gee]

Just because someone recommends an PM on this site, does not mean they're good. Sometimes the endorsement comes someone within the PM or a close friend or assos. I have several PM and here are some red flags I learned the hard way. I have two PM who redact the tenant's phone number. They claim this is to protect the tenant. Nonsense. Property owners don't harass their tenants. They want their tenants to be satisfied. PM's who block you from contacting a tenant usually have something to hide. Taking way your ability to contact the tenant eliminates your ability to keep the PM honest. But there is a work around for everything, including this. I find that taking care of certain repairs myself, outside the PM eliminates a lot of re-occurring maintenance issues. Like that water leak under the kitchen sink or a malfunctioning appliance. I would rather pay a reputable technician to fix it for good, or replace what needs replacing rather then get charged every few months from the PM to fix the same issue over & over. Keeps the tenant happy too. Another thing PM like to do is get the tenant to move so they can rake in the $$ for turning the property and charging you hundreds to get another tenant in there. Some PM like to make things difficult for the owners bc they want to purchase the property for themselves.
PM are the worst...most of them anyway.

[Cameron Tope]

Quote from @Nathan Gesner:

Quote from @Bob Beach:

Why did you choose this mom-and-pop manager? Is it because they were cheaper? You thought they would have more time to focus on your property and treat it like it was their own?

Cheaper doesn't mean better. I recommend you look for a professional manager who knows what they are doing.

Good on you for checking on their work and catching this problem. It's important to supervise your manager, at least for a while, to ensure their words back up their actions.

 This!

[Account Closed]

Mr Beach, I only quoted you what i was told because i tried to find someone to remedy the problem but I know you prefer to use your own people which is fine and I understand....I did also tell you that I would not charge you the $85.00 service fee for David going out to the property to check on it to see what the problem was. I have only charged for the locks being changed on the property when the previous tenant moved out because she said it took too long to get the repairs done even though I told her what your plumber said about the floor being warped and I believe he was correct because it just seemed to me like foundation issues in certain spots that couldn't be helped and I did also charge for the steps being replaced  with 2 boards which probably measured about 6 ft in.lenghth $450.00 to be replaced  and painted because that was another tenant complaint and you told me to go ahead and fix it....I told you said that when we looked at the house when the tenants moved out he also didn't see any work that needed to be done to it...the only thing i saw was the rat droppings and the garage door issue that didn't work and the limbs down in the front and back yard which i requested to be removed. I did have problems with the guy removing the limbs because he told me he would be there at 7:30 the next morning and I told him that would work but My Ford f150 truck was dead so I couldn't be there till 7:45 but once again he was calling me like I took his money and someone was trying to steal from him but my husband misheard what i told him to pay the guy and had to go back to the bank Atm but of course my husband actually went to his bank atm which was in the downtown Jackson area when he could have went to the one around the corner but he said the people were still getting the tree limbs when he came back and they received there $450.00 and my husband received the $15.00 in gas money he requested for doing this for me on his time and it was raining that day as well. I never called you a liar I just told you i would always be honest with you. 

[Sean O'Keefe]

Following! Very interested to hear this feedback. 

[Sue Gee]

Bob Beach, who are you using as your PM in Jackson Miss? if you don't mind me asking

[Bob Beach]

Quote from @Account Closed:

Mr Beach, I only quoted you what i was told because i tried to find someone to remedy the problem but I know you prefer to use your own people which is fine and I understand....I did also tell you that I would not charge you the $85.00 service fee for David going out to the property to check on it to see what the problem was. I have only charged for the locks being changed on the property when the previous tenant moved out because she said it took too long to get the repairs done even though I told her what your plumber said about the floor being warped and I believe he was correct because it just seemed to me like foundation issues in certain spots that couldn't be helped and I did also charge for the steps being replaced  with 2 boards which probably measured about 6 ft in.lenghth $450.00 to be replaced  and painted because that was another tenant complaint and you told me to go ahead and fix it....I told you said that when we looked at the house when the tenants moved out he also didn't see any work that needed to be done to it...the only thing i saw was the rat droppings and the garage door issue that didn't work and the limbs down in the front and back yard which i requested to be removed. I did have problems with the guy removing the limbs because he told me he would be there at 7:30 the next morning and I told him that would work but My Ford f150 truck was dead so I couldn't be there till 7:45 but once again he was calling me like I took his money and someone was trying to steal from him but my husband misheard what i told him to pay the guy and had to go back to the bank Atm but of course my husband actually went to his bank atm which was in the downtown Jackson area when he could have went to the one around the corner but he said the people were still getting the tree limbs when he came back and they received there $450.00 and my husband received the $15.00 in gas money he requested for doing this for me on his time and it was raining that day as well. I never called you a liar I just told you i would always be honest with you. 

Everyone is here to share their experiences. What I am posting is my experience and my opinion based on my experience. Everyone can come to their own conclusion then make their own decisions. I could be the only one that has had a string of bad luck with their investment property. In regard to the $85 fee (which will be cancelled, not sure why). Here is the back story that was "not" told. The tenant complained that the A/C was not cool enough in one room. Katrina said she would send out her husband and said, "...my husband is a certified tech". Her words. But, he would charge an $85 service fee. She said he went out on Sunday morning and added... "My husband already took care of it". I asked, "So everything is good with the A/C now? answer, "Yes". I also asked, what was the problem with the A/C and what was the solution. I asked this 2 times with no responses and asked a third time. The answer this time was "...he took the trash bag off the return vent", and that the outside unit didn't look big enough. Didn't have a photo, unit size or age of the system. Then she added, "I'm an honest person...". Never said she was dishonest just asked, "What was done?" I asked for photos and details on the unit, she said they would go out again to see everything and I never got a follow up. This is just "my" experience on one event. People can come to their own conclusion. The Tree cutting issue was discussed in more detail on another post intitled "Unlicensed Property Management Company in Jackson Mississippi". I encourage people to check it out. Again, I've read a few good comments about this PM so maybe I am the exception. Maybe I'm the only investor that has issues with the rental. You can come to your own conclusion.
BTW - simple question: Is it OK for a PM to share personal information about an investor with another investor?

[Bob Beach]

Quote from @Sean O'Keefe:

Following! Very interested to hear this feedback. 

 Another person posted on a topic: "Unlicensed Property Management Company in Jackson Mississippi". There's more on this topic over there. 

[Bob Beach]

Quote from @Sue Gee:

Bob Beach, who are you using as your PM in Jackson Miss? if you don't mind me asking

I started with Evernest but currently with Dove Realty, (Katrina Hawkins).  

[Bob Beach]

Quote from @Cameron Tope:

Quote from @Nathan Gesner:

Quote from @Bob Beach:

Why did you choose this mom-and-pop manager? Is it because they were cheaper? You thought they would have more time to focus on your property and treat it like it was their own?

Cheaper doesn't mean better. I recommend you look for a professional manager who knows what they are doing.

Good on you for checking on their work and catching this problem. It's important to supervise your manager, at least for a while, to ensure their words back up their actions.

 This! 

 I've used the brick and mortar PM's (Evernest) with mixed luck. I saw a few people on BP that were using the "mom n pop" and recommended her. Just trying to find an honest service for an honest dollar. 

[V.G Jason]

Quote from @Bob Beach:

@Nathan Gesner Actually, the PM came highly recommended, on this website. I did a search for PM's in Jackson and I saw this PM mention a few times in the posts. I PM'ed to posters to confirm. That's why I don't want to say who it is. "probably" just the plumber that's the issue. I PM'ed the same to posters, now 8 months later to see their experience. Only one responded, so far, so good. 

  A couple commentors mention, pay a little more, get professional opinion. That's why I had Roto-Rooter go out. Someone I will trust. We have 6 doors in TN under two PM's. They both do OK but one I'm on the phone a few times a week with them. Mainly, a couple houses are in "challenging" areas with suck tenants. Never had a major issue with them, just have to kick start them once in a while, on an empty house. 

  Our one house in Jackson, I will be more hands on and all repairs have to go through me. The PM is good about checking with me first but only 2 issues in the last 8 month. 

Thanks for all the responses and getting my "shady fee" compass back to north. 

No crouching tiger, hidden dragons here. Mostly scammers here. Unfortunate this happened to you.

[Sean O'Keefe]

Quote from @Bob Beach:

Quote from @Sean O'Keefe:

Following! Very interested to hear this feedback. 

 Another person posted on a topic: "Unlicensed Property Management Company in Jackson Mississippi". There's more on this topic over there. 

Thanks for sharing - I want to look into this. 

[Adam Gott]

Red flags for me based on experience with my current PM:

1.  They own a few of the businesses that do work for them.  This can be good but as far as getting things done in a timely manner but in my experience it can also be bad as I feel that I am constantly being stuck with bills for shoddy service/rework.

2.  Property manager also own lots of their own properties/apartment complexes.  This can lead to individual properties falling to the back of the list.

As long as PMs disclose the above when you sign up with them it's a good start...

[Adam Bartomeo]

You are assuming that Roto-Rooter is right because they said nothing needs to be done and that's what you wanted to hear. BUT, what if they are wrong and the other company is right?

I'm not sure how you can justify that your property manager is the bad guy here...

[Cameron Tope]

Quote from @Bob Beach:

Quote from @Cameron Tope:

Quote from @Nathan Gesner:

Quote from @Bob Beach:

Why did you choose this mom-and-pop manager? Is it because they were cheaper? You thought they would have more time to focus on your property and treat it like it was their own?

Cheaper doesn't mean better. I recommend you look for a professional manager who knows what they are doing.

Good on you for checking on their work and catching this problem. It's important to supervise your manager, at least for a while, to ensure their words back up their actions.

 This! 

 I've used the brick and mortar PM's (Evernest) with mixed luck. I saw a few people on BP that were using the "mom n pop" and recommended her. Just trying to find an honest service for an honest dollar. 

 Definitely not easy! Unfortunately everyone thinks they can manage property...

[Ian Walsh]

Good management companies will have departments, processes and strong talented people running it.  

[Bob Beach]

Quote from @Adam Bartomeo:

You are assuming that Roto-Rooter is right because they said nothing needs to be done and that's what you wanted to hear. BUT, what if they are wrong and the other company is right?

I'm not sure how you can justify that your property manager is the bad guy here...

 After the dust settled. I found out Roto-Rooter was half right. The house did not need re-piping but there was a leak they did not find. The PM's two guys were half right. There was a leak, but no re-piping was needed and the floor warping did not have to be re-done. My guy was the only one that was 100% right. He said, fixing the leak and the floors would settle down. And that is what he did, and the floors flattened out. 

Maybe the PM is not the bad guy but hires bad guys. 

[James Wise]

Quote from @Bob Beach:

Quote from @Adam Bartomeo:

You are assuming that Roto-Rooter is right because they said nothing needs to be done and that's what you wanted to hear. BUT, what if they are wrong and the other company is right?

I'm not sure how you can justify that your property manager is the bad guy here...

 After the dust settled. I found out Roto-Rooter was half right. The house did not need re-piping but there was a leak they did not find. The PM's two guys were half right. There was a leak, but no re-piping was needed and the floor warping did not have to be re-done. My guy was the only one that was 100% right. He said, fixing the leak and the floors would settle down. And that is what he did, and the floors flattened out. 

Maybe the PM is not the bad guy but hires bad guys. 

 Thing about the trades is you can have 6 tradesman look at an issue and you'll get 6 different answers. With everyone of them telling you the other guys are idiots.