Don’t HIRE a Property Manager Until You Watch This Video

So believe it or not, I’ve been in business for 10 years and never had to hire a property manager. We have been able to do that by keeping it close to home with investments inside of a 30 minute radius of our office. We’ve made a strategic decision to move forward this way and have done well with it.
That being said, we are expanding our portfolio to areas that managing ourselves is not possible. We currently have a 49 unit building under contract located 2 hours from our office. We are really excited about the deal but it puts a task on our plate for the first time - having to hire a property manager. In today’s video, I talk about an interview I had with a potential property manager for our new purchase. I share some important questions I asked and what I learned from their answers. Hope you enjoy!
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As always, please email us any real estate questions to [e-mail] and we will answer them on an upcoming episode!
Learn more about The DeRosa Group at www.DeRosaGroup... or on BiggerPockets.com - www.biggerpock...
Matt & Liz, founders of DeRosa Group, were recently second-time guests on the BiggerPockets Podcast.
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#propertymanager #realestate #propertymanagement

[@kuruptmixer]

Here are the questions: 1) How many employees do you have? 2) Is the maintenance done in-house or outsourcing? 3) If so, are you marking up the maintenance bills and if so, by how much? 4) Will I be paying a markup or will the be passed along? 5) What’s the management fee? 6) Is it negotiable? 7) What’s included for the fee? 8) What are the add-on fees are? 9) Who collects the late fee? Is it split between property manager and owner? 10) Are you using a rental software? 11) Does the software have a client login for me? View statistics, payments… 12) What are your screening terms? 3x the rent in gross income per month for example, 600 credit score, criminal background, eviction, etc. 13) How often do you do preventive maintenances? 14) What are the eviction fees? 15) How many clients do you have in collections and delinquencies? 16) How are you handing rental payments?

[@DeRosaGroup]

kuruptmixer these are great interview questions, thanks!!

[@Entertainment-eq2xb]

kuruptmixer

[@breakingthemasks]

This comment should be pinned to the top.

[@hagi2013]

Thanks , very much appreciated.

[@kimberlypayne-brown2820]

Yay! This is great! I can’t thank you enough! Please continue to share!

[@evaristourbaez9906]

Absolutely amazing amounts of gold nuggets in such a short video! Definitely going to be using your channel as a go to! Appreciate your time and effort in sharing your expertise kind sir!

[@DeRosaGroup]

Evaristo Urbaez Thanks for commenting and for your kind words! So glad that the video and our channel is so helpful! Please feel free to email questions to help me @ derosagroup.com!

[@DeRosaGroup]

You are welcome, thanks for your kind words!

[@lilpoindexter]

My PM keeps the late fee...I dont like it, but they do a great job, and in three years, i have had one guy be late...so they are doing something right, I gladly give up this fight, since overall they are on top of things.

[@sherrygorman9083]

Such VALUABLE information! ! MUCH APPRECIATED! ! KEEP UP THE GREAT JOB YOU DO!!

[@lvtbus3167]

List and some more... 1. How many employees you have? 2. How many properties you manage? 240 units to 3-4 employees ok. 3. Is maintenance in house or outsourced 4. If outsourced, do you mark up the maintenance bills and by how much, fixed, mark up or just pass bill along? 5. What's the managment fee, %percentage, is it negotiable and what does it include? First month rent, placement fee, other fees? - ask for copy of mgmt contract 6. What does it include? Rent collection, leasing for fee, collecting application, screening tenant, background check, emergency phone calls, evictions,.. 7. What are your ad on fees? 8. Late fees by when and you keep or who gets it? Shared? 9. How you manage your portfolio, what software or how you track it? Do you have client portal? 10. How do you advertise, and what is your client pool? 11. Screening terms? 3x rent of gross income, 600 credit score, criminal bkgrd, previous evictions, call verify references, past rent history 12. Preventative maintenance? Drive bys? 13. How many evictions / collections do you currently have? 14. Vacancy rate for your properties managed? 15. How do you collect rent payments? Cash. Check, check scanner, online rent payments. ACH, auto draft, online preferred? 16. Do you ask for a reserve account and how much?

[@DeRosaGroup]

Awesome!!

[@lvtbus3167]

Nah, you guys are awesome! Getting my first deal in Indiana this week, so need to get my ducks in a row, PM being one of those birds.

[@theageoftheawakening4806]

Outsource companies All overcharge for as much as they can. Thats the whole point in outsourcing. It costs you more in the end. But you are paying for the convenience.

[@jairogiraldo6270]

I'm looking into entering the real estate renting arena and I'm doing my home work first. This is definitely an awesome video, which by the way answered a lot of questions I had about managing real estate. Thank you so much for taking the time to share such valuable information.

[@DeRosaGroup]

You are welcome!

[@zlistcelebrityYT]

This was absolute gold.

[@DeRosaGroup]

zlistcelebrity thank you! If you think of it please send a question to [e-mail] and don't forget to subscribe to our newsletter!

[@dragonslayer015]

This is great I was thinking about investing in real estate in the future and it seems like a lot of people is suggesting hiring property managers, but didn't really go through what to look for. Definitely going to save this video as a reference.

[@risto26]

Matt still learning everything I can and absorbing all your great information you share!! Thank you !

[@DeRosaGroup]

Property Matrix LLC, Thanks for your post! Glad you like the channel!

[@zushi1JP]

Great information, thank you. I got distracted while watching your video the first time and lost track of it I’m glad I found you again because there’s so much in for your content out there that I went through before I found you again. Thanks again

[@DeRosaGroup]

You are welcome! Learn more about us at www.derosagroup.com

[@cobaltocean5822]

It depends very much WHERE your rental property is located if you will even be able to find renters with good credit and income ratio. More important than obsessing over credit scores is that the tenant has a stable work situation with a steady income flow, and obviously that the rent fits their budget. Also keep in mind your property manager may charge you extra for every day they have to spend in court when trying to evict delinquent tenants. Some areas are just more prone to have less desirable renters, so it's not a fair gage to use to determine if your property manager is good. Also I don't care what software my property manager uses, I don't have time to micro manage. As long as I see the money in my bank account every month that's good to me.

[@ianandrews7717]

My manager was a solo operator using excel spreadsheets & wasting a lot of time building reports. . I told him the size of his operation justified him using Buildium , which allows me to get my own reports easily and frees him up to spend more time on my properties . It also presents a more professional image to tenants & gives an audit trail of their maintenance requests . I need to know my tenants are paying and that they are being treated as paying customers ought to be .

[@mnspowell]

Thank you thank you thank you! I’m a new investor and bought my first long distance property and have been looking for how to choose a PM. This was extremely helpful and informative. I feel confident and now know what to look for when interviewing.

[@DeRosaGroup]

You are welcome!

[@djnaydee]

Awesome tips, thank you

[@DeRosaGroup]

You're so welcome! Check out our new content for lots of new tips!!

[@LifeChangeAdvicewithTiffany]

Wow. These points are priceless. You should sell them in a document 😊

[@DeRosaGroup]

Not a bad idea, thanks Tiffany!

[@Kacz532]

Hey Matt great video, I am currently a college student looking to do real estate once I graduate and I am very interested in property management to keep the investments passive. I've heard lots of stories about how a lot of property management companies are terrible. What's your view on this? Also as a beginner in REI, I hear a lot about people saying you need to assemble a good "team." Could you make a video about what a good team consists of? Who is in it? And how you can assemble such a team? Thanks, I love the videos!

[@DeRosaGroup]

+Kacz532 Thanks, I am so glad you liked it! I have to say, yes most people that say that they offer property management services are terrible. This is why we self-managed for so long, because we couldn't find anyone we trusted that could run our assets effectively. To really manage real estate well, it takes several angles of attack - leasing, financials, record keeping, and maintenance. Most managers can't hold down all 4 of these effectively. We will ABSOLUTELY do a video on creating a team and what it consists of. We will dedicate it to you, LOL. Stay tuned!

[@Navs126]

This video will blow up in no time.

[@griff7533]

I love this video. I keep coming back to it to reference! Thank you.

[@DeRosaGroup]

Awesome! Thank you!

[@thomasreto2997]

Excellent..information in all of a few minutes...so to the point...my wife and I are looking into buying a house in Hawaii. At first I looked into the short term rental market in order to get higher returns, but it looks like that market is ready to be stopped by the local government....In my mind, my only choice would be a property management co. Because of the distance. Thank you for arming me with the right questions to ask them😃🌈🤙

[@abbar1122]

Thank you so much for your time

[@randallburke7873]

A really helpful video, sir! Thank you!

[@DeRosaGroup]

Thanks, Randall! More to come!

[@breakingthemasks]

Fantastic video... I've added it to my rental playlist for rewatching. Thank you!

[@sirjohnahayfalcon]

the guy u talk of that got 95% of his collectable income as rent on over 200 properties sounds wonderful but how much of maintenace cost ate up that pretty number??? thanks for your vids

[@PORTMIAMIMIKE]

Wow🤔

[@deepatterson1835]

Damn good stuff. Priceless information.

[@DeRosaGroup]

Thanks Dee! Appreciate your comment and watching these videos!

[@carlford7789]

great video. question for you excluding the property management company that you're using in this example. on average what would you say would be a minimal acceptable collection rate.

[@DeRosaGroup]

carl fordyce our goal is 90% of rent collected on the due date with no debt increasing to more than a months rent without eviction being filed. I find that works and keeps losses caused by tenants owing more than the deposit to a minimum.

[@josephbarr5979]

Thanks. Important information

[@LTTang]

Great info. Thanks so much!!!!!!!!!!!!!

[@DeRosaGroup]

Glad it was helpful! Stay tuned for more great content coming up soon!!

[@KwameIsrael07]

I've been thinking about utilizing a property mgmt company after I get my 2 Investment properties ready for renters. This video will be my Blueprint. I love the Derosa Group. Great detailed information.

[@luvs2fish338]

Wow, great job. Short and factual and to the point. Thank you very much.

[@kimberlypayne-brown2820]

Awesome! Thank you so much for list of questions to ask. I really needed it. 😊

[@pouchy400]

How many units is acceptable for one person to manage?

[@DeRosaGroup]

Between 80 and 200 usually

[@funkydave100]

Hi matt, i have a few questions, but first this video was super informative, some great info, well worth watching. As a beginner what do u suggest, get a management company immediately even tho the net return will be less or wait until you have a few and then do it, as i feel that could possibly tie up a lot of your time, mind you looking at another way you would get to know your tenants well lol. Another question is when looking for a management company, how do you find one, just look in the yellow pages? thanks

[@DeRosaGroup]

hey David great questions! can you shoot us an email with them at [e-mail] ? I want to address them for Mentorship Monday! please include your location also. thanks!!

[@Justincredibletoys]

Thank you. BLUF and straight to the point.

[@DeRosaGroup]

Thanks! You would do well in our Insiders Community. It's direct access to Matt and his team, weekly masterminds, and an inside look at a growing real estate company focused on raising capital for apartment building deals. Join us at www.derosagroup.com/insiders

[@User-br4jp]

Very helpful information, thanks for sharing!

[@budgieyy]

Perfectly paced video. Thanks

[@DeRosaGroup]

Glad you enjoyed it!

[@Zannelaine]

love the knowledge - great guidance!

[@blin7509]

Thanks for the practical tips

[@marquislandon6234]

good info keep up the good work

[@gsftom]

Great video - I took notes!

[@DeRosaGroup]

Nice!

[@meldamilim8478]

Thanks for sharing this information

[@DeRosaGroup]

Your welcome! If you like our content check out our Insiders Group on Facebook, it's FREE!! facebook.com/groups/DerosaInsider

[@RichardBrightwell]

Awesome info! Thank you!

[@Pilottoproperties]

I can’t seem to find a property management group in my area that doesn’t want a months rent for a new tenant then another months rent for every tenant turn over.

[@frozentundra7446]

Is that on top of Management Fees?

[@desmondhadnotsr.5106]

Thank you!!!!!!!!!

[@DeRosaGroup]

Thank you for the kind words and support for this channel!

[@kimranahmed]

good points especially around fees, turnover and collection, I find all these great deals usually small towns in c neighborhood already with long term good tenants but very hard to find a good management company. Reason is most of those 4-5 units are managed by local investors and they have some maintenance guys they worked with years so they trust. Only few PM companies and they are swamped to take new clients. In big metropolitan where there are lots of PMs and they are competitive and actually care about their rating stars I can't afford to buy a property there cause price is too high and margin super low. Any advice how to find a PM where you dont live there in that town? Seems like obvious to google search and call bunch of them but that doesn't seem to work so far for me. Any suggestion ? ofc I can stay away but how do I grow then? I am not big enough to invest in pricey cities and those are mostly buy and hold strategy anyway.I see you from the North East too . I am talking about some properties is smaller towns of NH not the big 4

[@MN-qc1nm]

Awesome video, thanks!

[@salsations1869]

Great content....thanks!

[@DeRosaGroup]

Hi Darryl! Thank you for the channel support! Check out our new videos for tips in all areas of Real Estate Investing! kzbin.info/aero/PLwMizf219eEJbmzKrSVVvjcTqFfWgfUjz

[@lindsaydawson4896]

Just found your youtube channel and really love it! We have 17 units. I am wondering if you had advice on the best property management software for our sized operation. Appfolio is just too much for us right now.

[@DeRosaGroup]

L Dawson consider buildium, the price is based on units under management. It still has plenty of features to support you.

[@breakingthemasks]

Can you talk about why a mgmt company would think it appropriate to keep all late fees? It seems to set up a perverse incentive to have the tennents be late.

[@DeRosaGroup]

breakingthemasks most managers will agree to keep half the management fee. They only get paid on rent that's collected, so if a late paying tenant turns into an eviction they loose on income too

[@TheNerdRapper]

Helpful! Thanks

[@DeRosaGroup]

Glad it was helpful!

[@bryannapena6452]

Great video! 👌🏽

[@DeRosaGroup]

Thank you 🙌

[@paulcordero7810]

Great info!

[@frozentundra7446]

Great content, thank you!

[@DeRosaGroup]

Your welcome!!

[@clanteigne87]

Great video! Great channel

[@DeRosaGroup]

Thanks! Glad you are finding the videos helpful!! Good luck investing!!

[@jakobh6257]

Great advice 👍

[@1stspeechvideo]

You’re awesome!!!

[@DeRosaGroup]

Thank you!!

[@RachelBianchi]

Lovely video!

[@DeRosaGroup]

Thank you. Glad you enjoyed it!

[@lulusp1023]

Excellent

[@DeRosaGroup]

Thank you!

[@infamoustrec2616]

wow great video lm just getting into renting property and I'm looking for a good management program do u have any suggestions?? thanks

[@DeRosaGroup]

Infamous Trec Thanks for watching!! When we got started we enjoyed Down To Earth Landlording by Donald Beck. Great book about everything you need to think about in property management. You can get the book on amazon! Good luck!!!

[@219garry]

Do you have to hold a real estate license in your state to manage other properties besides your own?

[@Ms.Tasties]

hey how are you my name is Leah Grimes from Miami Florida I'm looking to get in real estate I'm going to class for my license in the next two months I would like to work with a company before I jump out on my own I thank you for this information it's good to to know I would like to be able to ask you more things later if need be how would I get in contact with you i am looking for all the information I can I would really appreciate it

[@DeRosaGroup]

eliette grimes you are on the right track. getting your license is a good way to get educated in the business. hanging your license with a broker is a good idea also but make sure that there are some active investor agents at that company you can learn from. good luck!

[@connorfrancis6022]

I’m 16 and planning out potential real estate deals. I understand many of the basic premises, but I am unsure as to how one would save up several hundred thousand dollars for their first deal. Any tips? Thanks!

[@cynho3093]

First concentrate on building up your credit score & saving up a few thousand dollars. You never save up several hundred thousand dollars for your first deal, that could take a lifetime. You start with one deal & take the cash to finance the next deal. You need to have dependable income for 24 months for most loans or at least advanced schooling & a job offer. Look for a duplex, triplex or preferably a 4plex that you can purchase with 3.5% down payment from a FHA loan - you need money for down payment, inspections, moving costs & cash reserves equaling 3 months PITI pmts. If you have a 4plex with $1000 mo payments & you have 3 rentals of $500 each, it will pay for itself & maybe after expenses provide a lil income but since you don't have to pay rent, you will save $6000 per year - get a roommate & save $9000 per year. If you bought it low & have enough equity, you could cash out the equity for the down pmt of your next deal or sell it outright. You could also buy a single family home & get roommates or live in the basement & rent out the rest of the house. You must owner occupy any of these properties for 12 months, after that you can sell it but after 2 years any gains are tax free up to $250k. Buy low, sell high or have an income producing property. There are also down payment assistance programs for first time home buyers or zero down USDA loans for non income producing homes.

[@cynho3093]

How I Bought a 18 unit Apartment Building With No Money Out of Pocket kzbin.info/www/bejne/aZWng4l9jq5krck

[@oscarferreira1]

Can you share the proposal you chose? Thanks!

[@DeRosaGroup]

Óscar Ferreira Thanks for watching and commenting. Please feel free to email us at [e-mail] with what you are looking for. We will see what we can do to help! Thanks!

[@pierrebland1607]

What software can you recommend!

[@DeRosaGroup]

Pierre Bland We used Rent Manager for many years and then last year changed to Appfolio and have been very pleased! We have also heard that Buildium is also good!! Hope this helps!!

[@KellanJames]

Solid video!

[@DeRosaGroup]

Thanks! Here are some free goodies. Just text DEROSA to 66866 for several hours of video training, articles, and other stuff you can't get anywhere else. Enjoy!

[@stanmoney8470]

If the rent is going into your account wouldn't you know if it's paid for the month? The property manager wouldn't have to tell you that?

[@DeRosaGroup]

That's a good question. You should join me on Fridays at noon Eastern and ask the question live. I can give you a detailed answer and we can chat a bit. Just join Insiders by clicking this link: facebook.com/groups/DerosaInsider Then send an email to [e-mail] to confirm.

[@Jennifr1966]

Do, outsourcing will probably charge me more? Is it rare to not get an additional fee?

[@DeRosaGroup]

Yes, it's very typical for 3rd party property managers to charge fees for lots of different ancillary activities. The other option would be to self manage. Of course if the decision being made is to self manage, it's very important to understand that there are costs associated with operating that side of the business as well (labor, licensing, etc.). Hope this helps, and if you have any more questions, consider joining our FB community linked below. Matt goes live there every Friday, and answers questions for all in attendance. facebook.com/groups/1870891109678497

[@danielsicurello869]

Do you recommend any good property management companies for Florida?

[@DeRosaGroup]

email us! [e-mail] and we will look into our connections! Keep watching the recent PM videos for some advice as well!

[@storeystories5199]

We had some problems with managers and finding quality tenants #storeystories

[@DeRosaGroup]

Thanks! To hear more about what we are up to go to www.derosagroup.com!

[@looplu]

What is a reasonable property management fee % wise ?

[@DeRosaGroup]

I ranges from 6 to 10% in most cases.

[@tonyj8947]

The management company doesn't mark-up for outsourced repairs? The PM will answer the call from the tenant/building, verify the problem, call the repairperson, verify if the repair was done all for free....Give me their number please.

[@DeRosaGroup]

If you have the right company, they will pass along third party bills at cost. That's usually the case for smaller jobs like clearing a drain, landscaping, etc. This is only the case if they have in house labor from what I've seen. With in house labor, they will try and do 95% of the work with their team, which is billed at a marked up in house labor rate. They make a healthy profit on the labor usually so they are willing to pass along bills for the small stuff from third parties. That has been our experience anyway.

[@theageoftheawakening4806]

600 credit score?

[@wevibe4811]

Good stuff

[@DeRosaGroup]

Thanks! Have you read Matt's Book Raising Private Capital yet? If not go to www.biggerpockets.com/privatemoneybook to pick it up and also get a bunch of bonuses including an Ebook on buying apartment buildings!

[@ldg313]

While interviewing a prospective property manager for my condo. He said the first months rent from the tenant would be his commission. Is that normal?

[@DeRosaGroup]

It can be, I would try and negotiate that to one half a months rent

[@theageoftheawakening4806]

My property manager pockets all fines, we make no money as a company

[@darkroastlefty2803]

starts at 1:28

[@theageoftheawakening4806]

Thats a lot of evictions. Wtf kinda people are they letting in?

[@Skypropertiesinc]

This is a great video! Check out our "Ask Kari" videos for tips and all sorts of info on being a property manager.

[@ShivaShaktification]

anything that benefits property manager financially , they WILL do, its all about perverse incentives, like him pocketing the late fee, then encouraging tenants to pay late down the line , slippery slope

[@DeRosaGroup]

It can be a slippery slope, which is why you have to keep them under close watch!

[@stanmoney8470]

Should you find a property manager before you find a property? So you'd be Ready once you've found one.

[@DeRosaGroup]

That's a good question. You should join me on Fridays at noon Eastern and ask the question live. I can give you a detailed answer and we can chat a bit. Just join Insiders by clicking this link: facebook.com/groups/DerosaInsider Then send an email to [e-mail] to confirm.

[@uberminx7935]

Why is this video in RL tutorials?

[@DeRosaGroup]

Thanks! Not sure if this video is what you were looking for but we hope you do find your answers here on our channel! Have you read Matt's Book Raising Private Capital yet? If not go to www.biggerpockets.com/privatemoneybook to pick it up and also get a bunch of bonuses including an Ebook on buying apartment buildings!

[@WillBockovenCRE]

👍

[@DeRosaGroup]

Thanks! You would do well in our Insiders Community. It's direct access to Matt and his team, weekly masterminds, and an inside look at a growing real estate company focused on raising capital for apartment building deals. Join us at www.derosagroup.com/insiders

[@theageoftheawakening4806]

Dont hire a property manager whos related to board members

[@EGELIN1976]

👍🏽

[@theageoftheawakening4806]

Dont hire a property manager whos related to all the other staff

[@tw2800]

If you've never hired a property manager and you've always managed your own properties then you're really not an authority on how to screen property managers....please get some real world experience before trying to pass yourself off as an authority CLICKBAIT!!!

[@DeRosaGroup]

Thank you for watching! We actually use 3rd party property management on all 1,800+ units in our portfolio. These are property managers that we interviewed, properly vetted, and continually monitor the performance of. Our video speaks to the experiences we've had going through that process, and we hope some find it useful!

[@OneCheezyPizza]

its so tempting to be the first dislike

[@jeremiahbuck2450]

Good !!!

[@DeRosaGroup]

Thanks!

[@reginaldhelms5159]

Great video. You packed a lot of very useful nuggets into a short video without being long winded. Keep up the good work sir!

[@AssadHamid]

Very good information. Thanks

[@DeRosaGroup]

Glad it was helpful!

[@darnelllewis5984]

Great video. Thank you

[@DeRosaGroup]

Glad you liked it!

[@mj9496]

Great tips!