All Forum Posts by: Jesse Chunn

@Fred Heller

Thanks Fred. That is very logical and generally what I assumed, but the affirmation makes all the difference in terms of how I approach a conversation with a PM and how I project NOI when doing analysis. Much appreciated.

I have a separate line item for "payroll" to cover onsite management, and within that number the lost rent is encapsulated.

Very helpful conversation. To clarify, I am asking the question because I will be talking to and evaluating property management companies. As part of that process, I am asking them for advice on my analysis, which includes property management cost assumptions. I don't want to give them the idea that I am willing to pay 10% if they would do it for 7%.

The reason I assumed it might be different by class of property is because, as others have mentioned, a class C property tends to attract less stable tenants and is presumably susceptible to the problems of older properties and shady neighborhoods, meaning more management effort. If I were a property manager it would make a difference to me.

Thanks for the replies. This is very helpful. Still interested if anyone has any more to add!

This has probably been asked many times before, but I was not able to find it, so...

When analyzing a larger multi-family (50+ units), what percentage should be plugged in for a third party property management firm, assuming that you don't intend to manage any part of it yourself (other than managing the deal)?

Also, does the number change depending on class A, B, or C?

@Darryl Dahlen

Thanks. PM Sent. If anyone knows of others please keep 'em coming.

I am looking for a great property management company in Fort Worth TX that has a track record of managing large (50+ unit) apartment complexes and can bring their rehab contractor relationships to the table. I would REALLY appreciate some recommendations asap.

@Troy Fisher

Quick correction to your phone call math. One call every 2 minutes is 30 calls per hour, not 120. 325 hrs x 30 calls is still a lot of calls... 9,750... but 75% less than initially calculated.

People do bandit signs, for better or for worse. I am also interested to see how it goes. It would be a huge value to the BP community to get a detailed report back on the results produced. For those that have said they have never seen statistics, this would be a case study for the ages.

That said, I personally would avoid it where it is illegal, and I would certainly also plan for and factor in removal where ever I did do it (and re-use the signs if they survive and it produces results).

Looking forward to seeing how it turns out. Hear that? That is the sound of me following this thread.

This is infuriating. The government has become the enemy of citizens and business. Any time something that makes sense and works well starts to catch on, the government is there to regulate and tax it into oblivion.

@Shefali R.

As tenants they have rights and you as the landlord have obligations. So I mean they waive any claims against you as a landlord and any rights to "squat" while you try to get rid of them when the three months is up. And as for what they are "willing" to pay, as far as I am concerned that is irrelevant. It is a question of what you are willing to rent for. You have a right to charge whatever rent you want, and it is only fair and equitable that you, while doing them a favor, get fair market value at a minimum, unless you decide to do it out of the kindness of your heart. You are in essence paying an additional $2400 for the property ($2400 is what you lose compared to market rates over 3 months). Of course, I am a negotiator in the business world outside of real estate, negotiating with the Walmarts and Targets of the world (the toughest negotiators on the planet) where I am up against heartless opponents, so I may be a little more hard nosed than most other people, AND I might lose your deal. You are there and you know how badly you want the deal and have a feel for what they will tolerate, so trust your gut. I did really like your comment that you don't want to have "deal fever". That alone tells me you have your head on straight. Every time something changes you have to reassess your positon and make sure the deal is still good.