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All Forum Posts by: Richard Bateman

Richard Bateman has started 1 posts and replied 3 times.

On the bright side the fee is only 7%, but when you add in a pretty much guaranteed releasing fee each year it goes up to 11%, and the reserve (for a small duplex) is nearly $2K, which seems entirely beyond normal.

This is the same company that helped me find the property, and I haven't actually closed on it yet, so I still have some time to make changes. It's disappointing because I've been talking the company up to all of my friends, but now it looks like even though they did a great job of helping me find a property I won't be using them for any of their other services.

I'll give more details on who this is once I've finalized things and share how this turns out.  Time to learn how to pick my own property management company I guess =] At least I'm learning.

Originally posted by @Curt Davis:

I can tell you how our mgnt company operates so you have a little comparison:

first full month rent for leasing fee, 10% monthly mgnt fee, 15% for maintenance over-see, $250 lease renew fee.  

I have never heard of a mgnt company withholding funds that are considered yours into an account. What I would want to make sure if is that if its an escrow account bc if its not I would not feel comfortable. In all reality this should not be done. I have heard of some mgnt companies asking clients to have on hand with them $500 but I dont hear of this too often. 

Would you mind explaining what the 15% for maintenance oversee is? Is that 15% of any maintenance costs, or how does that work?

$250 seems a little more reasonable for lease renew; in my case it would be over twice that, which seems a bit high.

I agree with you about the fund withholding; the amount in this case would be over 10% of the yearly rent which is significant and it doesn't seem to be an escrow. Very concerned about that.

I've been working with a "turn-key" real estate company that I've been very happy with up until this point, but today they gave me the actual agreement for the asset management on-going portion and there were a couple of surprises.

First, the company wants to garnish 12% of the rent into a trust that they manage in order to build up funds to pay for maintenance items, etc; this is of course still my money, just kept by them so there isn't a problem of maintenance needed but me not able to pay it.  Second, the company wants first a leasing fee any time they replace the tenant equivalent to 100% of a months rent and then a re-leasing fee each time they renew a lease of 50% of a months rent.  This seems awfully high for something that will require at worst a few hours of work.

Is this at all typical? I don't have a binding contract with this company; I've been happy with them so far, but I'm feeling like they are doing a bait and switch by springing this on me last minute and claiming it is standard, hoping I'll be too inexperienced (and I nearly am) to know the difference.

I'm in the "we all have to start somewhere" stage of real estate investing -- this is my first property.  Any advice?