All Forum Posts by: Peter F.

Ah! Sorry. For some reason not all the content loaded and I was just seeing 1 picture. Thank you @John Arendsen for your detailed reply! Very interesting! I appreciate your advice.

Im sorry @John Arendsen , I dont follow. What does the picture show?

@Curt Smith Thank you! I will take a look.

-Peter

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Hi @Brandon Stewart,

You actually did better than me. 

My split ended up being:

55% - Me

45% - Firm

Split of all commission that I bring in. Additionally there is a $35 desk fee which covers the internet, office etc...

Also every month I have to pay my own E&O insurance which is about $25.

I wish you good luck in your new business!

-Peter

I heard back from the firm. They are offering me 50% commission on all money that I bring in. I am drafting a response back. Even though the first year there is not that much money to be made I would like the percentage to be higher.

My counter will be 90 / 10 and hopefully we can come to an agreement.

Thank you.

@Craig Garrow Thank you. I really appreciate it.

@Craig Garrow - That sounds like the ideal setup and a great relationship. Definitely a lot of trust involved. Thanks for letting me know that this type of arrangement works. 

@Martin Z. - Absolutely alot of liability. I think the increase in E&O insurance for adding property management services is a key factor.

Example Split Structures:

1) Split 50/50 the monthly management fee. Split 80% to property manager & 20% to firm for new tenant lease fee

2) Flat monthly fee paid to firm - the rest the property manager keeps

3) 70-90% of all fees to property manager depending on how much work & setup the property manager is doing.

Advice Received:

1) Have agreement looked over by lawyer.

2) Decide upfront to revisit agreement after 1 year.

3) Define what help I would be providing to other agents in the office or the office as a whole. I.e. Will I be asked to answer phones? Answer questions about social media?

4) Define clear referral fee structure from other agents.

5) Develop a plan for a long term partnership. Avoid leaving after I have my education and experience requirements to be my own broker and start my own firm. What relationship will make me want to stay with the firm for the foreseeable future?

Firm Provides:

>Broker In Charge Requirement: I am a provisional broker/agent for 2 years.

>E&O Insurance

>Escrow & Deposit Management

>Bookkeeping Services

>Branding (Franchise name)

>Inhouse referrals from Agents

>Office Space & Office Tools

I will Provide: The entire property management division. Setup, marketing, sales & management.

Their Goal: Develop steady income for the firm to combat dips in sales.

My Goal: Develop my own business. At least $4,000 / month income for myself.

Current Thoughts:

I cannot do 50/50 split. If I want $4,000 per month for myself paying $4,000 per month for the privilege of running my business doesn't make sense. 75% of ongoing management fees is the lowest I would aim for. I would like to keep all new tenant signing fees.

Thank you for your feedback so far. I will keep you guys updated.

-Peter

Hello BiggerPockets!

I have learned so much from the forums and apologize upfront for not being a greater contributor. 

Would you mind sharing any advice or experience that you have with paying Property Managers a commission for their work?

I have an opportunity to start from scratch a property management division for a smaller established firm.

My payment would be 100% commission for property management services. 

In my area property managers usually receive 1 month rent for signing a new tenant and an ongoing 10% commission for each month the unit is rented.

What do you think is fair for splitting this with the firm?

Thank you very much! Any help that you can provide would be much appreciated.

-Peter