Page 238 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

My experience is that large companies usually have the knowledge
and systems in place to ensure that all of their properties are looked after

efficiently. The good ones have solid management and monitoring.
The other benefit of going with larger companies is that you can

piggyback on their insurance, and be insured under their umbrella
insurance policy. Because they have so many units under manage-
ment, their insurance premium will be among the lowest. You benefi t
from their economies of scale for this substantial operating expense.

Insider Tip

When doing your analysis of a property, always use a higher rate for
the insurance premium, and don ’ t assume you ’ ll be under someone
else ’ s umbrella policy. If for some reason you stop using that manage-
ment company and go with a smaller firm, your rates will increase. In

other words, make sure your deal numbers work at the higher rates.

How to Interview a Management Company

Let ’ s assume that you ’ ve used your network to ask about good prop-
erty managers, and you ’ ve narrowed the list to three candidates. They
all seem qualified to manage your property, but you want the one that

will be the best fit. Here are the questions you should ask each fi rm.

“ What types of properties do you specialize in and what do
you feel your strengths are? ”
Don ’ t lead them in the question; just ask it and wait.
“ How many [units or square feet] of my type of property do
you currently manage? ”
Of course, if it ’ s multi - family, it will be measured in units, and if it ’ s

retail or office space, you ’ ll refer to square feet.
“ How many [units or square feet] do you own of my type of
property? ”

Oddly enough, it may be a red flag if they own too much. You
might be hiring your competition to manage your property.

218

10/14/08 11:28:29 AM
c11.indd 218 10/14/08 11:28:29 AM
c11.indd 218