Mitsie Smith and her staff managed our newly purchased Retail Shopping Center. Mitsie switched out my originally signed contract for her services during the purchasing escrow, with a new contract. I didn't understand at signing and wasn't too concerned about her verbiage stating that any new lease will carry a 5% commission. Thinking I have one vacancy, I could pay 5% when leased. Well, low and behold during the first existing tenant exercising their 5yr. lease renewal. I noticed in my monthly statement that I was charged 5% of the whole 5Yrs lease term. That comes to approximately $10,000 to $20,000 depending on the size of the space. I was floored that I'm charged for a lease renewal. Her response was to read my contract. Reading the contract closer, it stayed any new lease being a renewal or whatever. (My original contract, that had my signature on it; and I had referenced in my computer, stated that I could decide if I wanted to use her services for lease renewals) Well Mitsie did make sure to take care of her self in this switched out newly signed contract. It wasn't enough for her to just charge the 5% Management Fee. But 5% of the possible 5 year lease at the time any existing lease is renewed. All exposure is left with me the landlord. She takes her exorbitant fee for the minimal work and is done.
With all the lease renewals that year, it cost me well over $50k in her fees.
Okay, Next issue; Location, Location Location.
For her to manage the center, she has to drive 3.0hrs round trip. She will tell you how distance is not an issue, and that she manages properties on the east coast. That is ridiculous. I need a management company that is in the same town as my property, to give me and my tenants the service they need. Example; She sent Painters and service personnel to my center all driving 3.0hrs round trip. Instead of locating local service providers, that would be too much of a time investment. How ridiculous is that? She will tell you how she can negotiate with her vendors, blah blah blah. These vendor businesses need to make a profit and pay their overhead etc.
My new local management co. knows the local vendors and reduced the cost greatly.
While dealing with Mitsie Smith Property Management, I only got some income from the property. The monthly Income was approximately 1/2, due to her exorbitant fees.
When repairs or upgrades were needed at the center, she would say, don't worry, the tenants will pay for it. She thinks that these small businesses are loaded like she is. Well, when her 12 Month contract expired, I found a local management company. They were able to cut the cost of maintenance of the center by almost 50%.
The new company understands that the tenants fees need to be kept to a minimum.
If Smith commercial property management was still in charge of my center, I probably wouldn't have many tenants or any income from my investment.
My advice to anyone looking for a property management company. The contract with these companies are negotiable. Property Attorneys would charge far less to deal with lease renewals than what Mitsie charged me. My new management company charges a 4% management fee and up to 2% on new leases, no charge on lease renewals. FYI; Lease renewals are two pages, essentially containing the new Lease dates and the new monthly amounts paid during the term.
When we would have meetings with Mitsie, it was common for her to say "It's not my job to teach you" when all we are looking for is understanding what she is doing. She definitely knows what she is doing. But it's not necessarily for your benefit.
One upsetting thing is why she didn't do her job and adjust the monthly NNN payments to reflect the new Property tax. As a result 12 Months later when the tenants got the NNN reconciliation, the bill was much larger than expected, and that is NEVER good!
When an investment property is purchased, the first 5-10 years are the most difficult financially.
So learn from my experience and make the right choices to protect yourself.
I don't write negative reviews. But this experience and the financial challenges it left me with along with Mitsie's lack of assisting me now, after the fact, with information on the things she did. All this even after she charged me an additional 5% close out fee. (Essentially a 13th month charge to hand over the books to a new management company) leaves me with no other avenue other than to hopefully help others better understand. read more
