Starting a Property Management Business: Company Structure



hi this is Alex with four and a half and today I have a very special guest and before introduce Keith we're going to talk about starting up a property management company with the right structure so how to structure your business and to position yourself for success so first of all Keith maybe you can introduce yourself and kind of let people know they experienced in your background my name is Keith Becker I've been in business with Dedes rentals for 20 years however when I started I became part of an that it was self was already 20 years old so it was itself established but a completely different construction than it is now gotcha so what what do you say the two main different ways to structure a property management company the the real known opportunities are either departmental or portfolio and the difference in terms of how those two are defined and described is what individuals what the responsibilities of individual employees actually would be can you elaborate on let's say the Department of vs portfolio a little bit more well if you'll if you'll allow me when I when I started 20 years ago um we had less than half of the number of properties that we've got um and it was a very different type of structure there was the broker a bookkeeper one person who was the all-purpose tenant interaction person and then there was that person who did maintenance we had a front office person now that issue of the one person who did maintenance they didn't actually do the work they were the administrator and that's where the departmental a concept comes into play because in a departmental structure you have for example one person who is responsible for all maintenance on all properties you've got another person who is responsible for all tenants and directions you have an accounting department that's responsible for all receivables and payables so theoretically if you have one property they could have three different people that they are discussing and conversing with if an owner calls it and says hey listen I've got a couple of questions they could find themselves talking to three different people that's the departmental structure gotcha so yeah its Department the individual departments responsible for different elements of the business related to the clients what does portfolio look like pure folio in portfolio is more of a professional if you will structure meaning that I have my staff members who the property managers themselves are individually responsible for all aspects associated with any one given property on the the receivables making sure the rent is paid on time the repairs that might be necessary security deposit refund accounting leasing um marketing the property getting everything ready ready they are responsible for all aspects of that one individual property so if the tenant calls in they've got one point of contact if the owner calls in they've got one point of contact from from an outward facing approach outward facing meaning the customers that we work with the customers being the tenants the customers being the owners on portfolio management is in some instances a much more efficient approach for the user experience of our customers gotcha now a million-dollar dollar question which is more profitable at the end of the day there are something which is more profitable there's a narva member who refuses to grow beyond what he can himself manage he has no employees he has no portfolio or department he manages it all himself and he is extraordinarily profitable um I it one is not more profitable than the other um when you are first starting up it is sometimes more practical and it's easier to hire within a departmental structure because if you are is its you and you say okay I'm going to grow then you hire a part-time administrative assistant you grow even further then you hire somebody to do maintenance administration for example and you hire them for specific um you know specific roles if you start into the property that the portfolio structure those people who are doing things that would require a license must have the proper in California to be re must have the proper licensure and that becomes one of the things that you have to build into your expectations as you grow larger the good thing about the good ring and when we were departmental for many years and we transferred it to portfolio and what we have found with portfolio is that we have the better opportunity to expand exponentially with a portfolio structure much more so than we would have parked departmentally got a very very very good Keith very good info one last question um if if and this just came to my mind and this is an idea if I want to start a property management company um what to stop me from putting together a good marketing plan and then hiring a 1099 property manager slash portfolio managers to expedite growth putting the business growth responsibility on their shoulders dealing with leads give them a territory and see them kind of prosper and build their own portfolio within your company um the you want to be careful about 1099 because you basically are in that type of a structure all you're doing is demanding results um if you have any type of accountability that might fall under the description of them being an employee even if you classify them as an independent contractor there's still your employee so if you were to decide to do that it is entirely possible that you could arm build something like that and just roll with it but you want to be very careful about how you identify whether someone is a 1099 employee or a w-2 gotcha well I'll have a an attorney present for some of these blogs we can maybe jump into this a little bit because I think that's a good topic as well but Keith I thank you very much for your time and your knowledge thank you for sharing and I hope to everyone this is useful and you know come across four-and-half blog again for more useful stuff see you swings out

7 Comments

  • КАК ДЕЛАТЬ ОТ 5000 РУБ В ДЕНЬ ? ЖМИ СЮДА

    April 14, 2019

    Показываю, как легко делать пару раз в день до 85 дол. на свою банковскую карту. Изучите вuдео на моём канале

    Reply
  • Darcicus Tan

    April 14, 2019

    U should focus on how to build up the network

    Reply
  • Patrick Bateman

    April 14, 2019

    how much money does it take ?

    Reply
  • Tom Curry

    April 14, 2019

    If I may.  You, the property manager are responsible for everything that happens or does not happen regardless of the size of the property.  Yes, so and so are supposed to handle this and that but you have to personally follow up daily to insure things are being done correctly.  Planning, Organization, Direction and CONTROL are the 4 steps to management.

    Reply
  • Jesse Stephenson

    April 14, 2019

    doesnt portfolio style put more stress on a single individual?

    Reply
  • Kitty Jackson

    April 14, 2019

    It was nice watching it.

    Reply
  • David Morris

    April 14, 2019

    I like the enthusiasm in your post.  I agree with some of your points, it is not usually practical to hire people when you do not have work lined up for them.

    Reply

Leave a Reply