Page 241 - Trump University Commercial Real Estate 101

Use a Time Multiplier

Watch out for this one. If they subcontract, you ’ ll likely pay
much more for repairs and maintenance than if they have their own
staff.
On the other hand, if they have their own staff, you must make
sure they are not in the maintenance business . Sometimes property
management companies make more from their maintenance depart-
ment than from their management fees! This happens because they
either overbill you for repairs, or they do more repairs than necessary.
They might even bill you for repairs that were never done.
You will only discover some of these practices by asking your net-
work or by experiencing them yourself. When you do hire a company,
make sure they know that you are watching maintenance closely. They
should stay within the operating budget, adhering to normal standards
of maintenance and repair for your type of property.
“ What property management software do you use? ”
Many good property software packages exist to automate manage-
ment activities. You should ask whether their system allows you to see
your property numbers real - time. You won ’ t have editing access to
these numbers, but all you need is viewing access.
“ How do you screen tenants? ”
This is a very important question. When you lease to businesses,
the tenants are only as good as their credit history, given that leases
range from 3 to 20 years. The manager should be scrutinizing each
tenant ’ s credit history and business model. Is that business a good fi t
for your location? Will the business provide a quality, in - demand serv-
ice for that market?
With multi - family properties, both credit score and income are
important. Each property class has different criteria that tenants must
meet to be approved. An A property will require substantially higher
credit scores and income to qualify compared with a C property.
“ Can you give me three references? ”
Always ask for references and actually call them. You ’ ll be amazed
at how many people give you references that are not entirely positive.

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