All Forum Posts by: Ian Stewart

Looking for property managers in the Greater Philadelphia area (Montgomery, Chester, Bucks) who specialize in A/B class properties on the smaller end (12 units or less). For properties in Philly I have used JG Real Estate who has done a great job but now looking to purchase multi family in suburban Philadelphia and they do not manage outside the city limits. Thanks!

I don't have a personal recommendation, but maybe this guide will help you screen when you do find someone:

Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Regardless of how you find them, try to interview at least three managers.

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.

4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact that a tenant is complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?

This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!

Thanks Nathan, much appreciated!

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Philadelphia, Pennsylvania

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Philadelphia, Pennsylvania

@Nate Sanow Thank you! Looking to now start investing in small multi-family properties (5+ and scale up from there).

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$250k -$$75k on high end. I refinanced this in 2016 to do exactly that and on the other properties I have as well. I should have cash out refinanced again during 2021 (even though that was before some of the recent run up in price occurred). Now I am looking to get into some multifamily properties and will either cash out refi to fund but would rather raise the cash from investors. If you have any other ideas always open to hearing!

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Investment Info:

Townhouse buy & hold investment in Philadelphia.

Purchase price: $175,000
Cash invested: $22,000

Purchased this at fair market value as a primary residence with plan to eventually rent. Total mortgage payment was below market rent and neighborhood appreciates steadily along with rents over time.

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Investment Info:

Single-family residence buy & hold investment in Philadelphia.

Purchase price: $150,000
Cash invested: $10,000

Minor rehab to rent. Negotiated a $150k sale price with a payment of $20k at closing from seller for renovations. Net sale price as a result was $130k.

1 Vote

Hi Khari - current rent is $1,700. My property management fee is $100/month insurance is a little less than $90/month taxes are about $140/month. So about $16,450 annually (very minimal operating expenses outside of these listed and last year none. Tenants have not turned over in a few years. When they do this adds some cost (one month's rent) but typically the unit is rented out without more than 2 weeks being vacant because rental demand is very good. After debt my cashflow is about $8,340 annually.

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Investment Info:

Townhouse buy & hold investment.

Purchase price: $175,000
Cash invested: $22,000

Purchased this at fair market value as a primary residence with plan to eventually rent. Total mortgage payment was below market rent and neighborhood appreciates steadily along with rents over time.

What made you interested in investing in this type of deal?

Current rents were below market. Additionally, purchasing this as a primary residence to eventually rent out made the deal possible because rents appreciated from time I purchased until time I rented increasing NOI.

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

Fixed 30 Yr Mortgage

How did you add value to the deal?

Minor cosmetic updates.

What was the outcome?

Profitable buy and hold.

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Investment Info:

Single-family residence fix & flip investment.

Purchase price: $120,000
Cash invested: $40,000
Sale price: $200,000

Purchased property at foreclosure auction. House had some piping and electrical missing and minor cosmetic repairs that were needed. After fixing up, rented the property for a couple of years and ended up selling to the owner occupied tenant for an $80k profit (not counting rental income over 2 years.

Initial Investment: $40k
Purchase Price: $120k
NOI: $16,800 Annually
Cashflow: $8,400 Annually
Sale Price (2 Yrs Later): $200k

What made you interested in investing in this type of deal?

Neighborhood was appreciating rapidly and was purchased under market value because it was purchased at auction. After running the numbers figured the rents would be close to double the loan costs.

How did you find this deal and how did you negotiate it?

MLS

How did you finance this deal?

FHA 203k Loan (home renovation)

Lessons learned? Challenges?

How to manage contractors.
How to screen tenants (eventually handed off to property manager)

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Investment Info:

Single-family residence buy & hold investment.

Purchase price: $150,000
Cash invested: $10,000

Purchased this property as a minor fixer upper to rent and hold.

How did you find this deal and how did you negotiate it?

MLS. Negotiated price down through the inspection process by obtaining market quotes for rehab costs. Saved by doing much of the work myself.

How did you finance this deal?

FHA Loan

How did you add value to the deal?

Rehab.

What was the outcome?

Property Cash Flows great! Learned some tough lessons by not fixing things right the first time along the way.

1 Vote

All Forum Posts by: Ian Stewart

Ian Stewart has started 6 posts and replied 11 times.

Post: Properties Managers in Greater Philadelphia

Post: Properties Managers in Greater Philadelphia

Post: Profitable Buy and Hold

Post: Manayunk Rehab - Buy and Hold.

Post: Buy and Hold - Manyunk 2

Post: Buy and Hold - Manayunk

Post: Manayunk Rehab - Buy and Hold.

Post: Profitable Buy and Hold

Post: Auction Purchase to Buy/Hold

Post: Manayunk Rehab - Buy and Hold.