All Forum Posts by: Dom Palladino

I am a manager for a property management company here in New Jersey and it is set up a little different than other management companies I've seen. The entire firm is separated into 3 distinct departments, marketing, maintenance, and collections.

The property manager/real estate agent is in charge of getting the listing from the owner, negotiating the lease and making sure all legalities are taken care of. The company requires a commission of 1 months rent for finding and placing a qualified tenant and then negotiate a management fee of about 8%-10% depending on a few factors. These fees are pretty standard throughout my region.

The company is also a licensed general contractor and employs 2 full time maintenance people. These people are in charge of fixing minor things throughout the portfolio but the main job is to coordinate and manage sub contractors that we send out to some of the larger jobs. The property manager does not field calls for maintenance issues, these calls go directly to the maintenance manager. It is great to not have to worry about a tenant calling about a broken heater while your trying to show another property to a prospective tenant.

The collections department is obviously in charge of collecting rent and late fees as well as coordinating evictions. We offer our tenants the ability to pay rent online through PropertyWare software, most of them opt for this. But for those that don't the collections department would physically cash the checks for the owners.

We only have 6 property managers and have close to 350 properties throughout Southern New Jersey. No managers are overwhelmed with their portfolio because assignments are broken down specifically and tenants and owners are clear on who to call for certain situations.

I never would have thought of setting a business up like this if I had not started working here. I'd advise this type of organization to anyone thinking of setting up a management company.

I agree with all of the above responses. I actually had similar thoughts when I was starting my RE career about starting my own PM company with no experience. I did countless research, wrote out a 20 page business plan, secured a broker to run the business through, just never pulled the trigger and I am very thankful that I didn't. I've been working for a management company for a while now and have learned so much about the business and logistics of running the business that I never would have learned if I just jumped into it with no experience. It also takes a little while to actually start making any kind of profit, so you would have to be ok with hemorrhaging money for the first 6 months or so of business. Monthly management fees are hard to sustain the business unless you can produce serious volume, and even then your expenses increase almost as the same rate as the revenue.

Are you a licensed broker? That is the main requirement in most states to even open a legit office. You can either become a broker or hire a broker of record who you'll have to compensate pretty well because in reality they will bear most of the legal risk for the company.

Dom

Hey guys,

Fairly new to the site as well. Have a couple rentals and completed 1 wholesale deal, so definitely still in the fledgling stages. But just wanted to jump in the convo because I'm from New Jersey too. I live just outside of Cherry Hill, so have the opportunity to do alot of prospecting in Philly in addition to South and Central Jersey. Also see some opportunities in Delaware, although haven't pulled the trigger on any of them as of yet. Prices are definitely substantially lower down here as opposed to North Jersey.

I would absolutely be interested in finding a way to meet up and get some kind of Jersey network going. I have more contacts in PA then I do NJ at this point, so need to work on this.

Well just wanted to introduce myself.

-Dom

So I am in the process of getting a property under contract that is zoned as partially commercial. A small insurance agency was run out of the property, on the first floor. The property is in a completely residential area, and has all of the characteristics of a 3 bed 1 bath house, however, the living room and dining room are office space. The current owner said that the property is partially zoned commercial.

Is there a process I would need to follow to change this to a 100% residential property? Does the current status even make a difference when wholesaling? Do I possibly need to market to only people that are interested in running a business out of the property?

This is in New Jersey, if that makes any difference.

Any help would be appreciated.

Thanks,

Dom

Paralysis by analysis. Waiting until everything is absolutely perfect before starting your first deal. I can only speak for myself by I learn tenfold more by actually partaking in the task as opposed to reading or listening about how it should be done. You're going to make mistakes, better to get them out of the way asap.

I am interested in creating a small property management company. I currently have my New Jersey Real Estate Sales License, but not my brokers. NJ law states that to own this type of company one must obtain a brokers license, this is not currently possible due to the fact that I will never become a full time sales person for the mandated 3 consecutive years. I am an accountant by trade.

Now after doing some prelim research it seems that as long as my license is hanging with a broker I can perform all duties of a property manager. All of my tenant advertising/leases/tenant placement will have to be funneled through my brokerage office and obviously they would receive their regular commission cut.

Now it doesn’t seem that there are any laws restricting all other duties of a PM. You don’t need any licensing to pick up the phone and call contractors or do bookkeeping for the owners.

My questions are that if you were a property owner, would this somewhat different way of conducting business perturb you from allowing me to manage your property? Will there be any legal ramifications on my broker if an eviction attempt goes awry and to court? Has anyone ever heard of a property management company being run this way?

I have played devils advocate for a while over this and I feel there could be some issues, but nothing that seems too insurmountable.

Any feedback is appreciated.

Dom

Are there any alternatives to performing a double escrow close on a wholesale transaction?

I am a newer wholesaler in NJ and I am trying to get all my ducks in a row before/if I get my first deal in the near future. I have been making phone calls and doing some research online and it doesn't seem as though any title companies in my area perform this service.