Hiring A Professional Property Management Company Was Not An Option
I had to hire a professional property management company.
Why? Because it said so right in the supplemental terms of the mortgage documents I was signing. It really didn't matter to me, however, as I had already decided that I would be employing a property manager to help run my first commercial real estate investment.
It makes perfect sense really. When mortgage companies are lending millions of dollars towards the purchase of a business (which is what a commercial property really is) they want to ensure that their capital is as secure as possible. Therefore, they are very reluctant to hand over the management of that business to someone who is not considered a professional. So, if you have never managed a large apartment building or other commercial property before, they are going to want to see that there is someone involved who actually knows what they are doing and has a track record. This will likely be a certified property manager.
|Of course, this doesn't mean that you are off the hook in terms of knowing how to properly run the property. Remember, it is still your business, and ultimately the success or failure of that business falls to you. Therefore, you must educate yourself when it comes to managing your property. To get you started I recommend two resources:|
1. The Basic Property Management eBook
2. Find And Keep Great Tenants
The important point here is this. When you are running the numbers on a potential apartment building deal, don't assume that you can simply manage the building yourself and save yourself the professional property management expense. Besides, if the numbers don't work when you include a management expense then it probably is not a deal you want to consider anyway.
So until you have some hands on landlording experience don't assume that a mortgage company is going to let you gain experience while risking their capital.
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