Im looking to hire this management company. Here are some questions I asked, and here are the answers. What do you think?
Hello, basically My sister and I own a commercial property, and we have an executor who over see's all of our decisions, as she gives good advice and we are new to the business.

Anyways, we have been looking for a new management team before we refinance the property, and the due date is coming up. Our exec networked with someone at her church and got us in touch with a lady who owns a real estate management business.

I think my team is trying to jump the gun to fast, as they want to hire her and her team immidiately. These are the questions I was able to ask, and here are her responses. Judging from her answers, does she seem like someone who is qualified for this type of job?

Here's the questions:



1.  How many support staff do you have?  5 plus me,  in the corporate office

 

2.  What are all the properties you are currently managing?  

(Erased this one as it gives personal details/location.) She was a bit vague, she isn't currently managing any commercial properties. Just apartment complexes and houses.

 

3.  Do you employ any maintenance or repair staff that you would be billing for?  yes we have our own maintenance however we would only bill you if the person works at your site exclusively. we would most likely assign a sub-contractor for your maintenance needs, but it will depend on the demand of the site.

 

4.  What is your average time on the market for leased space? Varies depending on the location and demand for the area.  Our goal is always to lease it quickly to a qualified renter

 

5.  What is the typical follow up time for true emergencies that halt the tenant's business? immediately for emergencies, as quickly as it allows for us to get a contractor or employee to respond.   Usually within 30 to 45 minutes is the general time frame

 

6.  For minor requests, what is the typical follow up time?  Our goal is to respond within 24 to 48 hours unless it is over the weekend then on Monday.

 

7.  How long have you been in the commercial real estate business? Been in the real estate management business for 44 years…. have owned my own company since 2004.   Have managed commercial buildings in the past as well as other types of assets, HOA, Commercial, Residential, have not managed Industrial buildings.

 

          - and how long have you been in the residential real estate business? total 44 years

 

8.  What are your management fees and what are all of the other ways you are compensated?  For your size building I charge a 4% monthly fee with a minimum base.  I also charge 3 % payroll fee if you have employees which I don’t expect you will have dedicated employees since I expect we will hire subcontractors.

 

9.  Will you assist us in setting up an annual operating budget for the property?  Yes we will complete a budget within the first 45 – 60 days of takeover, this is our goal so we know what you will expect ( you approve the budget)

 

10. What monthly reports do you typically send to the property owners.  A full report will be sent to you each month on the 15th of the following month.  for example April 2019 monthly report will be send out by May 15th 2019

Included will be a monthly income statement, budget variance, check summary of all checks cut, bank account copies, bank reconciliation, Trial balance, general ledger, are just some of the items.  You will also have access to the operating system with a log in to view 24/7 you property information

 

11.  Do you have any professional certifications for property management?  In the past I have held the AMO certification from IREM and am applying for it again currently, AMO requires 3 years in business so I changed the name of the company so I had to wait for the new name for three years to reapply.  Also have a real estate license, and Certified Property Mgr. designation

 

 

12.  Do you own any of your own commercial property investments?  No   just manager for clients

            -If so, do you manage them yourself?

 

13.  Where does our property stand in square footage, compared with other properties you manage? Currently I do not manage a building like your building, however searching for a few building for a client of ours to buy a commercial asset.   Just had one in escrow that could come on management if it closes


[{"id": "eh5rrsj", "text": "Tough to give feedback without knowing more about the asset and the lease type/s. The type of leases is a huge determinant for the level of work/expertise required.\n\nMulti-Tenant? Lease Type? General location or vacancy percentage in the area? \n\nHer answers aren\u2019t bad, but if they aren\u2019t experienced in commercial management, some of the leases can get complicated when it comes to expense reimbursement. ", "replies": [], "depth": 1}, {"id": "eh5ry6r", "text": "Show me your CAM reconciliation reporting ", "replies": [], "depth": 1}, {"id": "eh5smfl", "text": "If this is an industrial building feel free to PM me.  I work for a private equity fund that buys industrial buildings.  We own over $3.0BN of industrial buildings and I\u2019ll give you my honest advice.  ", "replies": [], "depth": 1}, {"id": "eh6eu7l", "text": "4% seems pretty inexpensive to me (my company charges 10% and sub out most maintenance work) but if this is a single tenant on a newer building then it\u2019s probably a good deal for both of you. If this is multi tenant older building then I would also get her subs list and find out basic charges like backed up plumbing call/HVAC service call/bad electrical breaker service call and any other unique service (pest control) that your property may need. ", "replies": [], "depth": 1}, {"id": "eh7pffb", "text": "4% seems really low. ", "replies": [], "depth": 1}, {"id": "eh7yx65", "text": "Without knowing your market and more details about your asset there\u2019s no way to fairly answer this. With that said...\n\nGet a copy of their proposed property management agreement. Are they charging you construction management fees? Are they doing the leasing? What is the commission structure? Is there any overhead allocated to the property? Is the 4% on top of PM staff salaries or included? Can they calculate escalations/CAM recs/estimates? Is the 4% based on income or receipts? \n\nI personally wouldn\u2019t hire a residential shop for a commercial property, but your property may be fairly simple. \n", "replies": [{"id": "eh8a03b", "text": "When it comes to 4% of \"gross income\" this is what that entails according to the proposal.\n\n\u201cGross Income\u201d shall include Tenant rents, furniture rental, parking, rebates, forfeited \r\nsecurity deposits applied to rental payments, late charges, judgments or awards (net of \r\nlitigation costs) collected in the enforcement of any lease, income from coin-operated \r\nmachines, proceeds from rental interruption insurance, application fees, fees referenced \r\nin Section 4.2 and other miscellaneous income collected at the Property, but shall exclude \r\nall other receipts, including but not limited to, security deposits (other than forfeited \r\ndeposits applied to rent), interest earned on property accounts, proceeds of claims on \r\naccount of insurance policies (other than rental interruption insurance), abatement of \r\ntaxes, and awards arising out of takings by eminent domain, discounts and dividends on \r\ninsurance policies and incentive and/or up front bonus payments by service providers for \r\ninstallation of services or equipment (such as cable television or laundry machines) \r\nunless such contract is negotiated by Agent.", "replies": [], "depth": 2}], "depth": 1}, {"id": "eh80xai", "text": "My red flag would be that they used to manager commercial,  but now they don\u2019t. Would like to know why. Countless perfectly acceptable reasons as to why that might be, but I\u2019d ask if it would be ok to use the prior(s) as someone you can call as a reference.", "replies": [], "depth": 1}]