All Forum Posts by: Victoria E.

@Victoria E.

Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

@Garreton Smith

I’m no expert in this space but my wife’s family does property management and they have rent stabilized units. As far as I know whatever the rent is for that unit will remain the same and small increases of 1% or so a year are common. So for example a typical unit in NYC that might rent for $3000 a month, could be rent stabilized at $800-$1000 (whatever it’s currently at) and the landlord cannot raise the rents above whatever the small % increase is. There are people who live in rent stabilized units for 40-50 years and have a current rent of $600-$700 when the average rent may be $3000. The only time you can somewhat increase the rent is with a tenant moving out (or dying of old age) and you doing a major renovation. Even then the rent only goes up a certain percentage of the renovation costs. Again I’m no expert I just know that rent stabilized is rough for owners of properties, do your own research on them and 1 unit in a building should not make or break the deal unless your really squeezing numbers. Good luck

Hi all,

Recently got involved managing a rent stabilized property. Looks like previous registrations were entered incorrectly and preferential rents were listed as legal rents. I see DHCR allows for amendments for previous years but curious if anyone's been successful doing so and how far back can one go? 

Thanks,

Harry

Hi, Victoria E., it’s common to ask for a down payment of 10-20% of the sale price. 

1. In your case: For a $200K house, a 10% down payment would be $20,000, and a 20% down payment would be $40,000.

2. Check current mortgage rates as a reference. As of now, mortgage rates vary but are generally around 6-7% for a 30-year fixed-rate loan. Rates for seller financing are typically higher than conventional mortgage rates to compensate for the increased risk. A good range might be 7-9%.

3. As for fees, you should consider origination, processing and late payment fees. 

4. Loan servicing companies charge for managing the loan, collecting payments, and handling escrow. Fees can range from $15 to $50 per month, or a small percentage of each payment. You can pass these fees on to the buyer, include them in the monthly payment, or pay them yourself. If the fees are passed to the buyer, ensure this is clearly stated in the terms.

5. The closing costs to consider are the recording, legal, title search, insurance, appraisal, and escrow fees.

6. Some terms you may find helpful:

Repayment Schedule: Clearly outline the payment schedule (monthly, quarterly, etc.).
Balloon Payment: If applicable, specify the amount and due date of any balloon payment.
Prepayment Penalty: State if there’s a penalty for paying off the loan early.
Default Terms: Clearly define what constitutes a default and the consequences, such as foreclosure procedures.
Insurance Requirements: Ensure the buyer maintains property insurance.
Maintenance Responsibilities: Clarify that the buyer is responsible for property maintenance and repairs.

I hope this helps you out, have a great day!