Since a professional team is so important to your success as a real estate investor and, more specifically as an apartment owner, I would like to take the opportunity to discuss how to find and use these team members in a little more detail.
Just to recap, some of the essential team members that you’ll want to have in place include:
- Bird dogs
- A real estate agent or agents
- A commercial mortgage broker
- A banker (one or more)
- A title company or closing attorney
- A real estate attorney
- Private lenders
- An SEC attorney (if part of your business includes securing private funding)
- An asset protection attorney
- An accountant or CPA
- Property management companies
- Contractors
Property managers are the epitome of delegation when it comes to owning apartments. A rare few among real estate investors actually enjoy the property management side of the business but most would prefer to have someone else do it. The larger the number of units, the more important it becomes for you to seek professional property management. Among the many services they provide are:
- Tenant screening and selection
- Rent collection
- Call center for tenant questions and problems
- Marketing/advertising for new tenants
- Arrangement of property cleaning and minor maintenance
- Processing of evictions (as needed)
Would you want to have to handle all of that, especially if you owned a building with 20 or more units? Probably not. Property managers charge a percentage of the gross rents (usually 5-10%) for their services and, when done well, it is worth every penny because you can truly be a business owner, rather than owner, manager, troubleshooter, and shoulder to cry on, all at the same time.
Property managers come in a variety of shapes and sizes and who you choose will largely depend upon the type of building you own (i.e. the number of units). Smaller buildings can usually suffice with part-time managers, such as realtors who do management on the side for extra income. Just make sure they provide the full complement of services you’d come to expect, so it doesn’t end up creating more work for you later.
Larger buildings are more time and effort intensive for a property manager so I suggest one of two things: an onsite manager or a fully staffed management company An onsite manager is there to collect rents, be a resource for other tenants, arrange cleanup or repairs, and to simply keep an eye on the place. They are usually offered discounted or free rent for what they do and this can be a valuable resource when you have a good manager.
Professional management companies can do everything an onsite manager can (absent living there) but are usually also more involved in marketing and screening for new tenants. They can and should do all background checks, collections of deposits, and walkthroughs with the tenant when they move in. Ask other investors who they’ve had success with and you will be on your way to finding a good management company for your own property.
Can you see how your empire can be created without you not having to be a jack of all trades? Follow with me through this series just a little more and you’ll continue to see how your own team can help you acquire the apartments you seek and help build the fortune that is out there for the taking!
