Account Closed as a parent with grown children (one of whom works for me) I can't help but think that your dad doesn't have a grasp of how dire your financial situation is.

The piney woods of East TX have some pocekts that are in dire straits.

The overuse of the former and the lack of the latter is what has pushed us into, what the mass media calls the dire straits that this country is in.Remember, this stuff comes and goes.1970's : Poor fiscal policy and management leads to extraordinary interest rates.1980's : Localized job losses lead to heavy housing price drops in certain regions.1990's : Extensive stock market speculation leads to heavy market correction.2000's : Heavy housing speculation follows heavy stock speculation to heavy housing correction.It will always be doom and gloom if you read it that way.Care to guess what the next speculation fad will be?

To get strait to the point, I purchased property from the state of Alabama for back taxes. 

However a close friend of mine just bought a multi million dollar commercial office property (his first) and so direly needs MF to diversify his risks.

Boy, not every reason is so dire. 

If you want a "Property Manager" who strictly collects rent, answers phones, and calls contractors - then your strait commission model is fine.A property management firm that offers additional services (in house engineering/maintenance, construction, leasing, accounting, financial reporting services, etc.) in addition to the basic property management functions mentioned above will more than likely have a fee structure that includes additional fees that are above and beyond the base "management fee".To the OP - Are you surprised to see the fee in general, or do you feel it's an unreasonable/unjustifiable fee period?

If you can have a plan to improve upon those costs - putting utilities in the hands of tenants; replacing the existing heating system with a newer more efficient solution or making improvement to the building envelope (windows, insulation, etc) and pull them down below 60%, you have a good long term cash cow here.Now:  If I were modelling this building for purchase, I would take a much more dire set of assumptions (20% vacancy, 15% maintenance & CAPEx, 10% PM) and assume I need to spend 30K right out of the gate to fix things.  

The property is right on a main highway that goes strait into the city, but has a very run down neighborhood behind it.

I would never evict a tenant without notice unless it was dire.