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Growing Pains for our business

Growing Pains for our business

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We started a property management company the summer of 2008 and we have been growing since then; we work for about 60 owners with 1 to 83 units. We have been determined to not have debt or borrow any money but every  month we are broke for a couple of weeks and the more we grow the more money we advance to our owners. Sometimes it is for a couple of days sometimes for a couple of months. We always get our money back. The problem is that we can not accumulate the capital to accommodate our lows the end of the month. What are others doing I do not want to get a line of credit but we want to grow our company. Please give me some suggestions on how others do this.



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David Medendorp

David Medendorp

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  2. #4263
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The owners should be advancing the Management Company funds for payables. Mortgage/Insurance/Management fee etc.

Why are you the Management Company fronting $ for the owner?

  Christina Collings
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  2. #4264
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I agree with Christina, sounds like a problem with your management agreement or the expectations your owners have. May not be easy to change an existing contract, but you can certainly rejigger it for future fee-management business.

  Christopher Higgins
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  2. #4265
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Thanks for the feed back . Most the time we get the money back in 30 days . But I think as time moves on we would like to ACH the owners account, Most of the time its 1 or 2 month rent. The reason we do it is to expedite getting vacancies fill and getting more rent for the owners.

--

  David Medendorp
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  2. #4266
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What are your fees and revenue drivers? Maybe it's time to reassess your fee structure and take a really good look across the board. Can you offer new services or expand on current offerings? Now that you've built up a stable base of clients and properties, you can probably be more aggressive with your pricing and client selection as well as reviewing your current portfolio. Maybe some properties are low margin but demand a significant amount of your resources? Maybe you're pulling out more capital than you should be for your own wages? Just a few initial thoughts. I also started our management firm in 2008 and would be happy to trade ideas and lessons learned.

  Justin Bajema
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