Doorcount de Anda Capital
Access to Capital

Capital for property management companies

Capital is not one thing, and the first useful question is not how much you need but what the money is for, because the answer decides which lenders will take your call and which will not.

Money that funds the purchase of another company is underwritten differently from money that funds growth out of the business you already run, and both are underwritten differently from money that only fixes the timing between when you pay people and when your fees land. This section covers all three, for operators below the size at which advisory firms will take an engagement.

Start here

What is the money for?

One thing worth knowing before any of it

The asset you would expect to borrow against in this industry secures almost nothing.

A book of management agreements has no liquidation value and the agreements are commonly terminable on short notice, so there is nothing for a lender to take and sell if the loan goes bad.

That single fact explains why personal guarantees are close to universal here, why owners with real estate get the best terms available, why federal guarantee programs exist in this asset class at all, and why private credit will not look at most companies this size.

Taking on a partner instead of debt

Equity is the other half of the requirement and it is covered separately, because the question of what an investor costs you is different in kind from the question of what a loan costs you.
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Talk to us →
Growth capital

Growth capital for a property management company

Growth capital funds expansion out of an operation you already run, underwritten against that operation rather than against a combined business. It is a smaller and simpler part of this section than acquisition capital, and the question arrives often.

What it is usually for

Money spent now against a return that arrives later

Hiring ahead of revenue, entering a new market, migrating software, or funding a marketing program with a payback period longer than a month. In each case the money is spent now and the return arrives later, which is the definition of the problem it solves.

What a lender is underwriting

Your existing cash flow and your personal guarantee, for the same reason set out on the collateral page, which is that the book itself secures very little.

That makes growth capital in this industry closer to a cash flow loan with a guarantee than to anything asset-based, and it means the amount available is a function of your earnings rather than of your door count.

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The question worth asking first

Growth that requires outside money in a recurring-revenue business is worth examining before it is funded

Adding doors is usually the cheapest growth available to a management company and it usually does not require capital so much as sales capacity. If the plan needs a loan to work, the thing to test is whether the cost per door acquired is lower than the cost per door of buying somebody else's book.

If the need is timing rather than growth

A recurring shortfall is a pricing or collections signal rather than a financing one, and the liquidity section covers that at more length.

Liquidity options →
Where this stops

We do not lend and we do not place debt.

A capital consultation →