Property management is a necessity for every property owner.  Property management may be done by the owner or by a professional third party property management company.  California Attorney and Real Estate Broker Chris Adishian answers the question, “Is it a good idea for a property owner to to self-manage their properties?” at the South Bay Association of Realtors Commercial Attorney Panel on June 2, 2015.

Transcript

The question of “Can the owner self-manage?” I would say if you buy a new building, and it’s empty, you could go down that road. Put up “for lease” and try to save commissions, but I don’t recommend it. Get a good agent on your team. Someone who knows the neighborhood, knows the product type, knows the type of tenant you’re striving to get, and let him and her or that firm go out and present options to you.

It’s worth the money, especially if you’re not in the real estate business as the owner except for owning the property. You don’t have the databases, the networks, the marketing power, or the skillset to properly tenant your building.

What you should be doing is building your team and then reviewing the potential tenants with your team before saying yes or no.

California Attorney and Real Estate Broker Chris Adishian answers the question, “When buying a commercial property, who should be on my team?” at the South Bay Association of Realtors Commercial Attorney Panel on June 2, 2015.

Transcript

When you go into a transaction, like buying a commercial property, you want to make sure you have your team together.  You might say “that’s great, who should be on my team?”  Well, the people you want are a really good brokerage firm and/or an agent if the broker is not a selling broker actively out there in the marketplace.

You want an excellent insurance person:  there are a lot of insurance issues and a lot of different ways that run through managing and owning a commercial property.

The third person you want is an attorney – stuff will come up.  The fourth person you probably want is perhaps a property manager.

There are a lot of different roles.  Sometimes they can all overlap, sometimes they’re distinct, and there are reasons why you may want them to overlap and reasons why you may want them to be distinct.

A property manager, at their core – they run the property sort of like a CFO or a trustee for the owner.  They collect all the rents, pay all the vendors, generate financial statements, and hopefully if the property is running well, they distribute checks to the owners at the end of each month.

The leasing agent handles if there’s a vacancy.  When a property has some spaces that turn over, the agent will be called into market that space and lease it.  In that situation, you’re having those roles separated out.  Often times, property managers may want to lease it, but they’re kind of different skill sets.  We often separate those out.  If there’s a vacancy, we have the leasing agent handle it.  We’ll consult with him or her.  This person knows the market, knows how to market, has the databases – that’s not really the business we’re in.

The third piece is real estate brokerage.  Brokerage is really about buying and selling property, not so much about leasing.  And again, all those things can be blended together in a firm, but brokerage is really focused on you’re ready to sell your building, you’re ready to buy a building – we’ll help you do that.

California Attorney and Real Estate Broker Chris Adishian answers the question, “Should I hire a property management company, or self-manage the property?” at the South Bay Association of Realtors’ event, “Commercial Attorney Panel-Hot Legal Issues for Commercial Real Estate” on March 5, 2014.

Transcript:

Question: Should I hire a property management company, or self-manage the property?

Answer: “As an investor in a real estate asset, you have to, I think, fundamentally decide: “Do I want to act like an owner and have somebody else manage this for me and just give me the checks? Or do I want to have the operator experience? And do I want to go down and try to replicate the experience of Jim Thompson and get the 97 answers that he already knows in addition to the 3 I’m going to learn?” Do you want to have that experience?

And I liken it to any other type of investment, whether you’re a business owner: if you’re a dentist, do you want to be in there working on people’s teeth or do you just want to own the business and have people work there for you? And I also liken it to if you have securities investments: do you want to self-manage those or do you hire a financial advisor? And I think that’s a very very important decision at the outset in terms of how you’re going to relate to your investment in real estate.

And the other thing I would say that’s really a key to success, and it goes back to what I was saying earlier, is tenant selection. The fundamental thing about law that I learned was that the most important term in the contract isn’t in the contract; I could have saved 3 years of law school. It’s dealing with honest, fair-minded people. It doesn’t matter what the rules are. If you have a tenant who’s honest, fair-minded, and operates in good faith, and you do the same as a landlord, you’re not going to have any problems. But if you have a poor selection process and you let anybody into your buildings, well you’re going to get any sort of outcomes. And you have got to comply with the laws and not discriminate and do all those things, but if you do a good tenant selection on credit quality, you’ll solve a lot of your problems because they won’t crop up ever.”

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

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