Me vs. my Property Manager

[John Boland]

I have come to the fork in the road with my property manager....and I need perspective.

To give the background my wife and I relocated and turned our home into a rental, a common move. We then rented to the first applicants willing to pay, a common mistake. After the first year they began to slip on payments and instead of evicting we tried to be nice and give them a chance... 3 months later of no rent and we faced a crisis.

In comes the property manager. He was referred to us by a coworker and we knew we needed a pro. We met and right away noticed his bull dog tendencies, the type you want arguing on your behalf. Perfect for a couple like us.

He had the eviction process rolling and even got the former tenants to settle. And finally when we got back into our house we saw the destruction left behind. Rotting food, burnt counters, destroyed toilets... my wife and I were in our mid 20s and this was our first home so we were a bit emotional. Right away he knew what needed to be done, who to call, how to get this house to rent worthy status again.

After the 4 months of missing rent and the time it will take to make repairs we were looking at paycheck to paycheck. We were able to take a loan from family to help pay for the repairs but it was still short of what was needed. The PM knowing we were in a tight spot offered to find financing for the rest of the repairs.

Now to the present. He has had the property rented out consistently without a single month of vacancy for the past two years. Haven’t had any issues or maintenance concerns, and what we were renting for 1750 he is renting for 2300. Everything is running smooth... kinda. He says the debt was paid off and he would like to use that same monthly debt payment to create a savings for us for future cap ex. Now up until this point it was my wife doing all the dealings with the property and the PM

In the past 3 months I’ve had a change of heart to rental properties. I was against it but after reading Rich Dad Poor Dad I say give me all the properties I can buy. I knew that first I had to better understand the properties I already had ... and to question him about this idea of a savings to be managed by him.

Time to manage the manager! So I contacted the PM and created a spreadsheet stating what numbers I wanted to see, bank information, essentially a monthly statement. I feel he has been a great PM outside of paperwork to this point and I figured I’d show exactly what I want. He had oral surgery done so I gave some leeway to complete the task. Today I finally asked for any progress to which he answered “I’ll get to it this week”....

I have sent him an email stating new expectations moving forward, refusing to do it in a text or phone call, and that any concerns shall be emailed to me. He of course texted and called, which I did not respond to. He finally sent an email late saying he cannot complete the paperwork this week(which he has had a month to do), that I should call him if I have any concerns, that he will perform any emergency action but does not consider the requested paperwork as such.

Am I delusional or is this absolutely no way to conduct business? Any guidance would be amazing cause it’s 4 am and I’ve been up for 2 hours stewing over this.

[Joe Martella]

Let's put the breaks on here.  So you and your wife are still new to rental game - outside of the bad experience you had with the tenant you put in place, you have not managed the repairs or rental beyond that.  You tried managing the property and that wasn't successful.  You found this PM.  He cleaned everything up, got you financing to fix the property and even got you an additional $550 a month (6,600 yr) cashflow (I assume it would have to be cashflow since you were paying the bills at $1,750 a month and he rented it for $2,300).  Based on what I was reading, he was paying all the bills associated with the property.  You and your wife have been hands off.  Some PMs don't deal with paying off the mortgage or any other financing.  They just collect the rent, take their cut and send the rest to you.  You then pay the mortgage and other bills you have.  

Now the PM is telling you that you need a capex fund.  I don't disagree with him on that.  It seems like your PM is trying to set you up for success.  It is my opinion that you and your wife should have been managing the bills for the property all along.  

Let's look at it from the PM's perspective.  He has taken over the property, paying the bills and sending you the leftover.  Neither you or your wife cared.  Now he gets a spreadsheet from you with a demand of 1 month completion when you had no interest before?  Perhaps he has a large portfolio and doesn't have time for your spreadsheet?  Maybe you aren't paying him enough to do all of that work for you?  Does he have a portal that you can look at?

From your side of the story, it seems like he has been taking care of you.  I don't allow anyone to manage my money.  They can manage my property, but not my money.  I would say that you and your wife should be building your own capex account as you see fit, not the PM.  I would keep him managing the property and manage my own bills and money.  If your wife was dealing with him successfully, I would let her continue to deal with him.  "If it ain't broke, don't fix it."  If you don't like the guy because of a "tasking" there are worse PMs out there, believe me.  I had a PM leave my tenants with froze pipes and no hot water for 2 days before calling me.