Hello, this is Shuo. So you will see some syndicators manage properties themselves to save the costs, which is usually 4-7% of the total collected rents. However, today let’s chat about the benefits of hiring a property manager.
So first, usually 80 units and above, depending on the location, the property can afford a full time, on-site PM and maintenance technician who would be able to take care of the leasing, tenancy issue, the admin, and property service in a timely and professional manner.
Second, we can leverage a professional PM’s knowledge of the local markets and also the rents’ projection.
And third, he allows the GP to find deals in the most favorable markets, not necessarily in their neighborhood, to manage remotely and to scale.
Also, one thing to note, if the PM fees is budgeted into the system, the non-performing third party PMs can be easily replaced to ensure the investment outcome.
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Patrick Grimes is a design engineer and CEO and Founder of Invest on Main Street, LLC. His real estate holdings include general partner ownership of a multifamily and single-family real estate portfolio valued over $146M, including 1,950+ units across the southeastern United States and Texas.
He has been active in real estate investment since 2007, including purchasing land and distressed assets, renovating them, and stabilizing them for long-term cash flow. To scale his real estate portfolio, Patrick moved from single-family to multifamily investing and founded Invest on Main Street, a private equity firm specializing in multifamily value-add projects in emerging markets.