All Forum Posts by: Michelle Cohen

 Hi Michelle, sorry to hear about your struggles with your current PM team. As a local property manager, investor, broker, I know this business is challenging, but it does not justify the level of service you're receiving.

It sounds like you're dealing with a team that either does not have enough systems in place to properly manage at scale, or they're overwhelmed with their current volume leading to a terrible service. Having built a management operation, been there done that, I can tell you change does not come quick, it will take a long time for the operation to iron itself out. You're better off making a switch to a new PM.

To have a successful switch, it's important to go into meetings with new PMs with the mindset of vetting them first, then giving them your problems / challenges to see how they can solve them. A lot of times a PM sales team will immediately come up with a solution for you current pain point, but doesn't exactly have a system or solution to fix it. This gets missed by investors.

I also noticed you're in talks with Josh on my team about potentially moving over to our firm. Just as I suggested above, and certainly Josh would know this, but try to ask him (or anyone you interview) about how exactly the team can solve your problem. What systems are ALREADY in place to fix your (leasing and communication noted above) challenges. Not what systems they will put in place soon or what method they will attempt to use to resolve your problem.

Shameless plug, we're a member of NARPM and limit our individual team members to 45-50 units max so they can keep up with the service quality. You don't get one or two receptionists to respond to all 3-400 owners like in some cases. But I highly recommend whomever you speak with, you ask about the team size, each team member's unit count and bandwidth. This is something professional PM companies track, and is a significant factor in the capacity / quality of service portion of the operation.

I understand your frustration. A good PM is proactive in communication. They don't hide things, they don't make excuses, and they don't avoid their clients. It sucks to say this, but you should consider a hard discussion with clear expectations or starting the search for a new PM.

Remember: cheaper doesn't mean you'll make more money.

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!

@Michelle Cohen, first off congrats on the first property and sorry to hear about the struggles on the PM front so far. Good news, this isn't unique to you and your husband and NO not all PMs are the same. I recently went through this with an 8 unit I own, so here are my notes:

1. Sounds like you've done A LOT of legwork to stay in contact but have you established clear parameters with the PM. When I was initially struggling, I got a call with my PM (sounds like this might be a challenge in itself) and set up a cadence for when I'd expect responses i.e 5-7 business days, by "X date", etc. Then if they don't return by then, you have every right to pester/escalate. 

2. Build tracking for % of gross income that these "nit picky" maintenance expenses are taking up and also break it down by unit. I had this same problem, called my PM out for it, and ultimately didn't see improvement, which I'll get to. It's tedious to hand hold and micro-manage but having all of your data locked in, makes your point irrefutable.

3. Start interviewing some other PMs. Now that you've learned what bad looks like, go in with a list of questions for what you don't like, expectations other PMs have, communication they uphold and how they provide quality/cost-effective service. 

4. Sounds like you might be at this point, but eventually I found a new PM, walked the property with them. I had interviewed 5 other companies and brought two onsite for a walk and to really "interview" them live at the property. 

5. Fire and rehire. Make sure you double-check your contract with current PM, usually its a 30 - 60 day period for notice to them and then have everything aligned to start with a new company and have a smooth handover. 

If they're saying they're showing and its all positives but without return on even an application, let alone a new lease, then they're probably lying. It can be painful but you can definitely find a better PM, they exist! Also, ask this BP community for a solid recommendation in your area, I bet some folks in here have them for you!

I'm trying to get a down payment of roughly $20,000-$30,000 to buy a seller finance property mostly because I want to see if it's possible. Does anyone know of any banks or individuals that offer slightly higher interest rate loans for small amounts like that? 

Depending on local laws there should have been a 3-5-7 day notice to pay or quit regardless of promises to pay. And then eviction should have been started. All this should have occurred without your input. This is their job. 

Make sue you have a PM with at least 4-500 units under management, not a realtor doing it on the side. They should have a process/system in place that automatically takes care of late rents. As far as the hard to rent unit. They also should have known market rent and where to advertise it to get traction. This is their job. 

I’d see tenant number 1 and vacancy 3 as reason to worry.  You hire a pm to handle these types of situations and if they haven’t taken action on a non paying tenant in a month or at least laid out a game plan I’d be very worried.  You are north of me but mid February rentals really ramp up as people are wanting to move and they have their tax refunds to afford the first month and deposit.  I’d call today and if they don’t have a good response to tenant 1 they would need to delist the vacancy because they are fired.  

Talk to your PM.  You need to get started on the eviction for unit 1.  For unit 2, if they were under a lease and left early, then they will have to pay a penalty for breaking the lease.  With unit 3, as the PM where it is listed and if any similar units have been rented in the area recently (ie is it just your unit or it is slow).