What’s a newbie to do?

Question

Hello all,I am under contract on my first property and because it happened so quickly, I have been unsuccessful in securing a PM. The issue is every PM I have interviewed in the local market has stated they do not manage within that zip code. The property is currently being managed professionally by a PM company but they have been unresponsive and dragged their feet with providing information my agent and I have requested ; I was totally on board with interviewing them and possibly keeping them as the PM but this has thrown up a red flag. I live abroad and am new to real estate so a PM is a must. Any advice for this newbie?

Aja Sellers · Answer

Thank you all for your input! It was clear as day why these PMs didn’t want to manage the property but I felt my agent was gaslighting me into believing it’s because I am out of state investor…whatever that has to do with anything. Either way! I have backed out of the deal and have several lists from the PMs I spoke with, with zip codes they do service. Again, thank you everyone!

David Peschio · Answer

Hey, totally understand where you're coming from, and honestly, I think you’re making the right call. If every PM you’ve talked to is hesitant or flat-out refusing because of the zip code, that’s a big red flag. When even the referrals are turning it down, it usually means there are deeper issues at play—whether it’s crime rates, tenant turnover, or just really tough management conditions. It’s better to walk away now than get stuck with a property that’s more headache than it's worth. Backing out might be the smartest move here.

Chris John · Answer

@Aja Sellers

I would strongly consider pulling out of this deal.  Pro formas are great, but often inaccurate.  Especially if you have trouble getting reliably paying tenants that treat your property well.

I'm assuming that you've reached out to professionals that know the game and know their market.  If their experience, contacts, and knowledge tells them that the neighborhood is a no-go zone, I'd strongly consider that it's for a good reason and that a newbie might even have less luck with it than they would.  Even if you can find someone to agree to do it, it will probably end up being a more difficult deal than you're imagining.  It doesn't take much for one bad tenant to erase years of profit if they're in the mood.

I'd consider interviewing some of those property managers that turned you down to see which neighborhoods they think are good and worth investing in and go from there.  Obviously I have no idea, but I feel like the flags on this couldn't be redder.

Best wishes and good luck either way!

Cole Bossert · Answer

Don’t settle for an unresponsive PM—especially if you’re remote. Keep calling around, even outside your target zip code. Some PMs will expand for the right property. Also ask local agents, investors, or title companies for referrals. Worst case, consider short-term self-management using a service like Hemlane or RentRedi while you keep searching.

Peter Mckernan · Answer

I would fire the current PM company and find a new one, even if you have to be scrappy and do the PM stuff until you get a good one. I believe that if you have to track down a company to take your money or business, they should not be the company to use.

Jeremy H. · Answer

There's a reason the PM companies in that area won't manage in that Zip Code - that should tell you all you need to know about that deal honestly. They have been doing this much longer than you - and it's not one PM turning it down - it's multiple.

Location, location, location. It cannot be preached enough. You can change everything about a house other than the location.

Strongly consider pulling out of this deal unless you would manage yourself or are ok dealing with a bad PM that is willing to manage that area.

Secondly - instead of getting frustrated at the PM for not wanting to manage that area. Turn this into a positive working relationship and ask them where THEY DO like to manage. Where do they like to manage, why? What are the good schools in the area? What area has the most new construction? What areas seem to be getting better - what areas seem to be getting worse?

That's how you use a partnership to your advantage...

Heath Sizick · Answer

Aja, why are they turning you down? What is holding them back? And there a plenty of folks in here from the Midwest - you may be able to find a realtor, investor, & maybe even a PM here in your town that can assist.

Heath Sizick · Answer

I agree with Cole. Don't settle for mediocrity. Where are you located? I would keep looking. Where are you located? Depending on location, there could be a newer company that is eager to build their company.

Cole Bossert · Answer

Good question to ask yourself here—how strong are the numbers on the deal? If the cash flow, equity, or appreciation potential is excellent, it might be worth pushing through and finding a creative management solution. But if the deal’s borderline and self-managing isn’t realistic for you right now, backing out might be the smarter move. Would help to know your projected cash flow, rent, and purchase price.

What’s a newbie to do?

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