Does a 1.5 percent asset management fee on gross revenue cover what running the asset costs

Vacancy spikes are exactly when the workload doubles, Columbus C-class especially.

The 1.5% figure is already optimistic for a lot of markets. On a 22 unit in a market like Indianapolis right now, sponsors are charging closer to 2 to 2.5% of gross just to break even on actual touch time, and that is with a PM handling the day to day. Flat fee structures in smaller syndicates tend to land around $175 to $225 per unit per month, so roughly $3,850 to $4,950 on your deal, which actually brackets what you are spending rather than leaving that $2,300 gap. The LP pushback tends to arrive when the flat fee escalates automatically with CPI. That clause kills term sheets faster than the number itself.

What's your actual hours per month logged, not estimated?

What's your current property manager cost if you weren't self-managing?

A flat fee with a vacancy floor is the structure an LP should want to see before putting a dollar in.

The math you're doing is right but the framing is still operator-math, not sponsor-math, and that distinction cost me real money on my first deal. I was running a 34-unit in Cincinnati, took 1.5% of gross, and when we hit 82% occupancy for five months during a turn cycle the fee dropped to something like $1,640 on a building that needed more of me that quarter than any other. I had absorb about $9,000 in uncompensated time across that stretch because I refused to charge the asset outside the agreed structure. What I learned is that the fee has to be expressed as a floor plus a percentage, not a percentage alone. We now do $85 per unit per month as a hard floor, gross revenue percentage kicks in above that, whichever is higher. On a 22-unit that floor is $1,870 which still doesn't cover your $4,200, so I'd push the per-unit number closer to $110-$120 for something you're operating yourself with no third-party PM layer underneath you.

The LP pushback is real but it's manageable if you show the underwriting honestly. When I presented the floor structure to my LP group the question was whether the floor compresses returns in year one, which it does slightly. I showed them a five-year model where the floor mattered in years one and two and the percentage took over in three through five as rents grew, and the blended cost to the deal was actually lower than a straight 2% of gross over the hold. Nobody fought it after that. The ones who did push back were people who'd seen lazy fee structures before where the sponsor was hiding comp inside the promote, and showing the math clean separated me from that. Your $2,300 gap is also a signal that your gross revenue base might just be too