Page 239 - Trump University Commercial Real Estate 101

Use a Time Multiplier

“ What are all of the addresses that you currently manage? ”
Don ’ t let them cherry - pick only a few good addresses for you. Take
a ride by ones that you randomly pick from the list when you ’ re in the
area. It will give you an idea of how they manage their properties.
Be aware that if you go by a property and the outside looks ratty, it
could be due to a number of different causes. Perhaps the manager is
doing a poor job, or maybe the owner is not releasing money to have it
managed well. If it is the latter, good management companies eventu-

ally fire owners who do not give them an opportunity to manage the
property correctly.
“ What special training do you provide for your managers? ”
Continued education is an essential part of a good management
company.
“ Will you provide written management plans? ”
They should provide documents in the form of a marketing plan,
company resume, and operational projections, or pro formas, so that
you can send these to the bank with your loan package.
“ What will be your fee? ”
This is an area where you don ’ t want to skimp. Find out what the
going management fee is for properties like yours in that area and pay
it. You shouldn ’ t pay much more than the average amount, but you
don ’ t want to pay less, either. They will only do what they ’ re getting
paid for. If they feel underpaid, they will not perform the way you
expect.
Management fees are generally a percentage of collected revenues.
Do not sign up for a minimum fee. Some management companies try
to pull this and it is not in your best interest. In effect, it doesn ’ t matter
how much rent they collect, because you ’ ll be willing to pay them a
minimum amount. Forget that.
“ What is included in that fee? ”
Get an itemized list of what is included. For instance, are any sala-
ries included, or advertising? Sometimes nothing is included, and the
fee is for their experience in the market. That could be acceptable,
depending on what the other management companies are like.

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