Is This a Good-Sized Property Management Company to Buy?

searcher profile

September 14, 2024

by a searcher from University of Wisconsin - Whitewater in Chicago, IL, USA

redacted


$1.5M in revenue

$350k in SDE

9 employees

No significant customer concentration


The company has a good mix of properties and stable, recurring revenue. However, I know the typical convention for search fund acquisitions is to aim for businesses with $500k+ in SDE. Given the recurring and reoccurring revenue nature of property management, I’m wondering if the smaller SDE size might pose less risk in this space compared to other industries.


Would love to hear from anyone who has experience in this sector. Does the recurring revenue model in property management justify acquiring a business on the smaller side of SDE? Any thoughts or advice would be greatly appreciated!

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Reply by an investor
from University of Missouri in Austin, TX, USA
The majority of SFR PM companies are in the sub $500k SDE range and manage less than 200 doors. If I could share anything with you from experience, it would be to make sure you know that you are buying a job (at this scale) and are ok with that. On average, I see these go for ~3x.
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Reply by a searcher
from Harvard University in St. Louis, MO, USA
Interested in the perspectives here--thanks for posing the question
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