All Forum Posts by: Keivan Darius

Thank you @Cameron Tope, However do you know if it’s possible for the PM to use the investors account vs their own account and then distribute the money to the investor once a month ?

Hi bp, I'm in the process of replacing our PM for our 30 Units Apartment complex.  Our current PM is making the Transition very difficult by holding the money in their account. There are 2 issues I'm hoping to resolve after we switch to the new PM: 

1) Having full control over the money being deposited by our Tenants 

2) Avoid any data manipulation in the PM software so we always know exactly how much was deposited by the tenant. 

In order to achieve that I have to ask the New PM to connect their appfolio software to our account vs opening up a new account (which we won't have direct access to). I want to first make sure it's possible before asking them to do that. Our current PM opened a new account with their name, had all money be deposited to that account and after paying themselves and the bills they disturbed the rest of the Money to us. This became a big problem, 1) we found out that during an audit that the money reported in their software doesn't match what was deposited by the tenants, so they were manipulating the data before we saw it in the software. 2) Now that we are switching to a new PM it has been struggle to get our Money out of their account.  Any suggestion would greatly be appreciated. We are still finalizing the negotiation with the new PM, so once we agreed on the logistic I want to ask them to not open a new account and connect their app-folio to our account so we would have control over the money.

Thanks a lot for the feedback very appreciated 

@Matt Clark

May I ask how much you pay for lease fee and lease renewal fee?

@Danny Randazzo

At the money I’m paying 10%, my current PM charged us $2000 setup fee. But no lease or lease renewal fee. But they are very bad on handling maintenance issues. They have no tools or someone they can send for emergency.

The new PM started as a maintenance company and added Property management for about 5 years now, they are both offsite. However what got my attention the most is 75% lease fee and 25% renewal fee. I wasn’t sure if that is normal in C class area (poor but not dangerous)

@Michael Albaum

Thank you for the price point, do you pay 50% if they renew the lease as well?

I'm in the process of hiring a new PM company for our 30 unit complex. Their fee structure seems to be a bit high considering they charge 10% of monthly rental income. I wanted to run it by BP family to see what you have been paying or how your agreements are setup with your PM

Hi Matt, There are meany reports like these ones. However I like these 3. They come once a year. You can also get Quarterly update report of a selected market from M&M. That is if you are going with MF type assets. Also if you want I can share my Spreadsheet to show you how you can extract the needed info out of these reports to be able to come up with a number to let you decided which is the best market you want to go into. Feel Free to send me a PM with your email address so I can email you my file. You should be able to google these reports.

• a.Marcus Millichap 2018-U.S.-Multifamily-Investment-Forecast
• b.IRR Viewpoint Report 2018
• c.Milken-best-performing-cities-report-2017

I review 3 to 4 market reports once a year (similar to this) to figure out where to invest in.  I invest passively in commercial MF only with sponsors that I built relationship with for at least a year before investing with them. I actively invest in states that I have lived in (Indiana and GA) and know the area very well. Using this method I have not lost money for about 10 years. I hope this helps. 

@Aundrea Newbern GA is almost getting close to it's second phase of the hypersupply cycle. Based on that both strategy should work. The price for your property more than likely will keep going up for the next 3 years + you should be able to increase rent by 3% per year. I suggest taking $50k to $60K (refi) out and investing it passively in a 40 to 100+ unit apartment complex. In some other states that are not in Hypersupply cycle you can get 10% or more AVG COC with potential 20% IRR. However I sold all my SNF investments and now doing both passive and active investment in larger MF. The returns are much higher and it's much easier to manage. For my passive investments I do 0 work, I'll just get my (9.x%-11.x%) coc every quarter.