Scott Brady, owner of Progressive Property Management, had 52 doors in 2013. Now, his company manages about 1,052 doors, and he plans to grow to 3,100 units by 2020.

We think he’ll do it.

Today, he’s joining us on The Property Management Show podcast to talk about executing the kind of growth that most property management companies only dream about.

Growing with Good Systems

Scott says that while some companies choose to grow, he has to grow. His business model has evolved to the point that he has 20 branch managers who are counting on him to deliver doors for management. That’s forced him outside of his comfort zone a little bit, but he’s committed to those branch managers, so innovating his marketing and distribution channels has become critical.

Good systems, he’s discovered, are essential. You cannot manage 200 doors without good systems. You cannot manage 400 doors with systems that are designed for 40 doors. And, the bigger you get, the bigger of a target you become for the Real Estate Board and competitors. A dedicated staff is needed to help you make sure every process is documented.

Many successful property management companies have a target market. For Scott and his company, the target is self-managing owners. That’s the biggest market available in southern California. We know that 70 percent of rental properties are self-managed. In Los Angeles, that translates to over a million self-managing property owners. By focusing on the emotional and financial pain points of that segment, Scott was able to come up with some compelling products.

His question, while building his company, was pretty simple: Why aren’t these owners hiring property management companies?

Reaching the 70 Percent: Providing Better Service

The entire property management industry has tried to tackle the astounding 70 percent statistic. A shift has begun, but that large percentage of the market still does not trust a professional property manager. Several things feed that distrust. The reputation persists that property managers:

• Are untrustworthy
• Are overpriced
• Provide terrible customer service
• Nickel and dime owners at every turn

It takes more than one person to correct that reputation. But, property managers can turn things around individually and collectively. The keys to changing the current reputation are:

• Transparency
• Value propositions
• Customer service

Pricing is pricing, but if you can offset an owner’s pain point around pricing by demonstrating your amazing value, it’s easier to make some progress. This takes the owner from fear of being screwed to trust. Trust is earned, and it resonates with owners. Slowly bring people to your website and use your programs and your value propositions to earn their trust.   

Transparency: Websites and Pricing

Transparency is the first filter for many property owners. If they don’t feel like you’re being transparent, they aren’t going to be interested in hiring you.

So, why are companies afraid of putting their pricing on their websites?

It could be that they feel as though they’re at a competitive disadvantage. They worry that owners will seek out their lower-priced competitors. It’s a better to put your price up there, and also to put up your value around that price. If property managers position themselves as people who collect rent, owners will likely look at price first. But, if you do more for your owners, price becomes less important and your value propositions take center stage.

With more and more companies being transparent with their pricing, you’re going to look more suspicious every day that you don’t put your prices out there.

Controlling the Whole Customer Experience

To position your company for growth, you need to target multiple segments of the market, and you need multiple marketing channels, and you have to create multiple revenue streams.

This will insulate you against what may or may not happen in your market and the industry.

Scott has found himself wanting to control the whole customer experience. He doesn’t want his owners going to another real estate company when they want to buy or sell. He doesn’t want them going to another plumbing company or home warranty company when they have repairs. Scott would rather keep the owners inside a world that he can control.

When he has more products and services to offer, he controls the customer experience and earns multiple revenue streams.

By controlling the whole customer experience, Scott can provide better service and create raving fans. He can be the one-stop shop for all the owners he works with and their friends. They don’t need to call other companies when they want to sell a property or make an upgrade.

You can protect the relationship you have with your owners, and not let anyone else get into that relationship.

Take his lesson. Continue to innovate if you want to grow.

The pocket listing is a good example of holding onto and expanding the relationship you have with your current clients. For Scott in southern California, pocket listings don’t make a lot of sense because it’s not a big investment market. Sales prices start at $500,000. However, he has managed to find other ways to extend his services and increase his revenues. He’s just started a realtor referral program, for example.

Leverage your portfolio and be creative. When Scott lists a property for rent, he’ll get 29 or 30 leads, and only one of those tenants will get the property. So, he’ll take all the remaining tenants and ask them why they’re renting. He puts them on a path to purchasing a home, and he has a new crop of potential clients that other property managers might have neglected to put into their sales funnels.

When investors realize you can help them make more money, you’ll find them in line at your door.

The best way to leverage your portfolio depends on your market. Find a way to make yourself the trusted source of real estate information, and create a multi-dimensional relationship. If you’re that resource in your client’s life, you won’t lose them.

There’s a Danger in Thinking Small

There are a lot of smart people in the property management business, and a lot of opportunities. Unfortunately, we sometimes think too small or too narrowly. If you market yourself as being the Condo King or advertise that you’ve been in business for 50 years – that’s great. But, you’re not really expanding your role in the lives of your clients. You aren’t giving potential customers the idea that you can make them more money.

The larger you grow, the more difficult it becomes to turn quickly and to innovate. It has to be coordinated.

Recently, Scott’s company rolled out a preferred tenant program where tenants could choose to waive their security deposit and pay a monthly fee. Some of his property managers were a little freaked out about this, and a lot of colleagues were doubtful. But, he’s willing to experiment if it means benefitting his owners. Programs that differentiate your services need to be tried. 

If You Have Something to Say, Say It: The Importance of Content Marketing

Scott was a pioneer of content marketing, and he believes that if you have something to say, you should say it. 

He uses video, website copy and other types of content in two different ways.

1. To create an emotional connection with a customer. He says his dream is to never talk to a prospect. He talks to clients after contracts are signed, but there should be enough content available to tell prospective clients everything they need to know. You can use content to tell people who you are, what you do, where you do it, and what your price is.
2. To create compelling calls to action. Effective content will tell people what you want them to do and why. It’s not compelling to say your clients love you or you’re the property management leaders in your city. Raise the bar. If you’re not improving your content and using it effectively, you’ll be left behind.

Target your market with content.

Here’s a great example. Oregon recently passed a rent control law for the entire state. If you’re a property management company in Oregon, you should have stopped everything to go write a blog and film a video about what rent control means for landlords. In Spokane, a tenant bill of rights has just been passed where landlords have to pay for a tenant’s moving costs if you serve a notice to vacate. That’s an opportunity for Spokane property managers.

Educate your clients when things like this happen in your area. Get out in front of it and be the resource.

One of the best examples of killer content marketing is Stephanie Gordon at Gordon Property Management. She talked about rent control in San Francisco when no one else did. She never paid a dollar to Google AdWords or used other paid advertising, but she’s the leading property management company in San Francisco.

Create your content and title it properly so Google picks up the information it needs. Oregon property managers should be writing blogs entitled 2019 Oregon Rent Control and how it Impacts your Investment Property. 

Rent control will be the hot topic in southern California in the next 20 years. Start getting that traffic now.

Five years ago, no one was doing video blogs, but the companies that did are cashing in now. It’s a great opportunity, especially if you concentrate on timing.

Jeff Bezos, the CEO of Amazon, said that if we’re successful this quarter, it’s because of something we did five years ago.

Everyone wants immediate gratification, but it doesn’t happen that way. Do today what will be effective in a year. Focus on the issues in your community, and start setting yourself apart as a resource.

Another Form of Content: Direct Mail

Scott also uses direct mail, which he says is a numbers game. The key is to target the right audience. Here’s how his numbers work:

• He sends out 10,000 pieces of mail in a year.
• 8,000 owners are reached.
• Only five percent of those people are looking for property management.
• That’s 400 owners in a year or 30 owners in a month.

After spending $7,500 on the direct mail campaign and winning 30 doors, that’s about $250 per door in acquisition costs.

It’s not all numbers. Successful direct mail has effective value propositions.

Scott has been doing direct mail for five or six years, and the content is targeted and useful. Sometimes, there’s a quiz. It might be about basic laws every property owner should know. If owners get two out of 10 laws correct, they will be more inclined to reach out to a property manager. Sometimes, you have to show owners what they don’t know. 

The direct mail has to be compelling and it has to connect to your other marketing channels. It needs to be consistent with your website and your social media. Everything must be integrated. 

You won’t see those 30 doors after your first mailing. But, you will see it after the sixth or seventh wave. People might hold onto your postcard for a year or more. Continuity counts, and persistence pays. 

You can hear more from Scott at PM Grow in April. This is the premier conference for property management companies focused on growth. You’ll be able to catch his 30×30 15-minute presentation, and he’ll also do a one-hour deep dive on this topic.

If you want to talk to Scott before then, check in with him at Scottbrady1963@gmail.com.

Thanks for being with us, and contact us at Fourandhalf if you have any questions.

The post Taking Owners from Fear to Trust: Controlling the Whole Customer Experience appeared first on Fourandhalf Marketing Agency for Property Managers.

On our first episode of the year, The Property Management Show wants to start by identifying what’s happening in the property management industry.

This industry has accelerated at an extreme rate. We’ve talked about it multiple times, and new things continue to happen.

For example, not only are private equity backers getting into the property management business, we’re also seeing Tier One Venture Capitalists in Silicon Valley putting money into property management. That has never happened before, and we’re expecting this trend to open some floodgates.

If you’re a property manager or you own a management company, you’re in the right spot at the right time.

This means that investing in and operationalizing your sales and marketing procedures is no longer a privilege. It’s a requirement. You have to do it to survive, grow, and thrive.

We’re all about innovation on The Property Management Show, and our guest today is in charge of the largest single-family focused property management company in the U.S. He’s Kevin Ortner, the CEO of Renters Warehouse, and we want to know how he handles his tremendous responsibilities and what he’s planning for 2019.

You Have to Love the Grind

Don’t forget the basics.

That’s Kevin’s approach to running a large company that just keeps getting bigger.

Take great care of clients and employees.

That sounds cliché and you always hear about it, but it’s true. You cannot just be about the next client, the next acquisition, the next deal.

What are you doing to fundamentally shore up your foundation?

That’s what Renters Warehouse wants to focus on – being the best they can be for their clients and employees. This takes time and resources as you’re growing. But, good leaders will execute a great strategy and try to stay in front of that growth. You need to make sure you are performing those basic things well, and then you also need a great vision of where you’re going and how you’ll stay in the lead.

That’s what it’s about. Looking down the road, forming the right strategy, and executing the pieces of the puzzle.

You have to love the grind.

If you’re running a property management company, you’re part of changing an industry. You’re helping to make it more sophisticated and you’re delivering great value to your customers.

You should be excited about that.

Renters Warehouse Acquires Own America

Renters Warehouse recently acquired Own America. This is a major shift in the industry and a vision move. It’s something you need to pay attention to.

Own America allows owners of single-family rental properties to sell those properties with tenants in place through an online marketplace to new investors.

This reduces a lot of friction and costs for both buyers and sellers, and the tenants are not disrupted.

When you sell your investment property with a traditional real estate agent who has no experience with rental properties, that agent usually wants you to move the tenants out of the home before it’s listed. They’re thinking of owner-occupant buyers, not investors.

Own America changed that – and allows buyers to buy with tenants in place. Kevin acquired the company because it fits well with what they do, and they have set up the Renters Warehouse Investors Marketplace. Clients can buy and sell single-family homes online with tenants in place. The tenants don’t move out, and both buyers and sellers are paying less commissions than with a traditional broker.

And, Renters Warehouse continues to manage those homes.

The benefits to this acquisition are numerous.

• Buyers can shop in markets they are not currently in.
• Buyers can use the online search function to explore properties in any market, whether it’s Alabama or Texas or a city on one of the coasts.
• Buyers get to acquire an investment with cash flow already in place.
• Search functions include photos, tenant history, maintenance history, and other analytics.
• Sellers have access to an engaged market of interested buyers.
• Tenants stay in place, and you don’t have to disrupt a family of good tenants who are paying rent and taking care of the property.
• Renters Warehouse doesn’t lose business when a property they manage is sold.

Renters Warehouse is the largest single-family property management company, and now they can facilitate these sales. It’s a new way to service current and future investors. 

Build It or Buy It: How to Gather the Right Tools

Here’s an interesting statistic from the National Association of Realtors.

There are over 1 million single family homes sold every year as investment properties.

That’s 20 percent of all single family homes bought and sold.

So, investors are buying a lot of properties. There’s a market for you if you want to focus on those transactions. 

You can take a piece of that market, and you don’t necessarily have to do it at the scale that Kevin is currently operating. Maybe you want to build your own business without buying a company like Own America. Do you have the tools you need to pick up maybe 10 to 15 listings per year?

The good news is, you don’t need a ton of tools. You just need a good program in place.

You need to know how to talk to your clients about it. Figure out how you will market this service and talk to investors. Let your clients know you can help them. This is possible through an email marketing campaign. If they’re interested in selling their investment property, tell them you want to talk about it. Train yourself or some people in your business to break down the numbers and examine the yield and recruit some potential buyers.

You already have a portfolio of potential sellers doing property management business with you.

Now, you need to attract buyers into your ecosystem. They are out there. They want to invest in property, but they don’t know where to go or how to start. Not a lot of agents specialize in investment properties. Put together a plan for reaching them. Establish a communication cadence and show people that you care before you ask for their business. You can create a video message to your owners and put a face to your name and make sure that you’re the company they think about when real estate needs come up.

This is an actionable thing you can do in 2019 to really start a new revenue stream.

Growing New Business and Maintaining the Current Client Base

For Renters Warehouse, acquiring Own America has increased their lead funnel. The top of the funnel is bigger and growing with owners and others who are clamoring to get in but don’t know how. Renters Warehouse provides the tools and education and technology.

The company is growing because they’re attracting new business.

Not only that, they’ve created a system where they can easily maintain the client base they currently have.

As a property manager, you know this is sometimes a challenge. It’s hard to create opportunities for a new audience while nurturing the clients you’ve already paid to acquire. 

This year’s PM Grow Summit will focus on customer experience. Renters Warehouse is doubling down on that exact premise. They are providing wider services to their current customers in order to keep them engaged with Renters Warehouse. These are satisfied and happy customers who will not only stay, but will rave about the relationship.

You can succeed by looking at what the leaders in this industry are doing, and then copying them. Stay with the trend. You don’t have to invent anything new unless you have a really amazing strategy that no one else is using. Look at what the leaders are doing – and follow.

Maintaining a high level of service is not what people want to do every day. You’re concerned with growth, and you want to focus on new products, more doors, and better technology. That’s fun, but don’t let your customer experience suffer.

We want you to hear that again: Don’t Let Your Customer Experience Suffer.

Making Your Marketing Dollars Go Further

If you can increase your lifetime customer value, you can maximize the money you spend on marketing. You’re getting an extended lifetime customer value when you provide the types of services and value that keeps your customers around.

Kevin and Renters Warehouse have always been heavy on traditional marketing. In addition to producing great content and using Google AdWords and pay-per-click, they’ve also done radio and television advertising. This year, they plan to focus on targeting the investors they want through social media.

Marketing their educational content will also be huge. They have a core belief that educating people is important and a responsibility. They don’t want to work with passive investors. They want their customers to understand what they’re doing. So, there’s a lot of content to leverage for their audience. 

Content is not expensive, remember – it just takes time. 

Fighting Against an Industry Reputation

Everyone working in property management has to combat a lingering negative industry reputation. Property managers fall somewhere between attorneys and used car salesmen on the trust spectrum. There has never been transparency, there has never been good communication, and it hasn’t been a good experience for people.

Things are shifting, however. Property managers are realizing that customer experience is important. You’re fighting the industry reputation every day. Your clients expect you to screw them over, and you’re changing that perception with every good experience you provide.   

Kevin has found that over-communicating is not necessarily bad, especially when he’s on-boarding a new client.

For Renters Warehouse, over-communication looks like a lot of automation and technology. Videos are used with letters and handbooks. Every new owner gets a handbook, but 90 percent of people don’t read handbooks. So, there are emails that go out with videos discussing all the things that owners need to know. Topics include what to expect in the first month’s statement and how the rent collection process works. 

Setting expectations is also important. Most new landlords think they will get their rent check on the first of every month because that’s when the tenant pays. So, you need to set the expectation for how rent is processed and when they can expect to see it.

Over-communicate and set expectations. This will make a great customer experience possible. 

Business Owner Tip: How to Help Your Peers Without Sacrificing Your Time

Content and education – these are the things you hear about all the time on The Property Management Show. You want to invite people to ask you questions, especially when your field of expertise is real estate investing and property management.

But, everyone is busy. So, how do you engage with people without costing your company your time? 

Kevin wants to help but if he spent an hour with every person who has a question, nothing would get done. His solution is to provide some of the content he’s already spent time creating. That’s an easy way to deliver value without having to do a lot of extra work. 

If you’re regularly creating blogs, videos, podcasts, articles, eBooks – whatever, you probably have eight or 10 things that are really great and really helpful. Direct people to those things, and then let them get lost in your other content if they keep finding things that are interesting and useful. When someone wants advice on how to do what you do, let them start there.

Self-education is also important to success and growth. Kevin’s advice is to squeeze as much juice out of what you currently have. Instead of chasing after 20 podcasts you want to listen to, stick with the five that you really love, and make sure you’re working every point that you can. Go deeper into that information and get everything out of it that you can. Then, move on to the next thing.

To learn more about Kevin and what he does, check him out on LinkedIn, which is where he spends most of his social media time.

To ask a question about this year’s PM Grow Summit (where Kevin will be speaking) – or any other questions you may have for us – contact Fourandhalf.

The post Property Management Acquisitions, Growth and Marketing: The Renters Warehouse Strategy appeared first on Fourandhalf Marketing Agency for Property Managers.

We’ve made it to the end of 2018, and on this year’s final episode of The Property Management Show, we’re setting you up to take full advantage of the opportunities available in 2019. Think about the journey we’ve traveled over the last few years.

• In 2017, we focused property managers on the idea of sales and marketing and how it can impact and grow a property management business.
• In 2018, we told you it’s time to think bigger. We started talking about revenue per customer and profitability.

What’s next for 2019?

You’re about to find out.

Today, we are joined by Jordan Muela, who is going to help Alex interview our guest, Joey Coleman. Joey holds the title of Chief Experience Composer. He’s also written an incredible book called Never Lose a Customer Again.

Introducing Joey Coleman

Joey has an eclectic background. He’s a recovering criminal defense lawyer, he’s worked in the intelligence community with the Secret Service, the CIA and the White House. He ran an ad agency for 15 years and he taught at a post-graduate level. The single thing that connects all these pursuits is that he’s a student of the human condition. He has sought to understand why humans do the things that they do, and he’s uncovered how we can persuade them to do the things we want them to do.

Currently, he’s helping companies keep their customers. He works as a consultant, workshop leader, and a keynote speaker. He encourages business owners to talk about what happens after the sale. A lot of companies focus on marketing and sales. They fill that funnel and they work hard to get owners and keep tenants, but they don’t spend a lot of time thinking about what happens after the sale.

How can you create an experience that keeps your customer coming back year after year?

That thinking process led to Joey’s First 100 Days methodology.

You should also know that Joey will deliver the keynote at the 2019 PM Grow Summit in April.

The Importance of Self-Assessment

One of the things that you’ll notice about Joey’s book is that at the end of every chapter, there’s a period to assess. You may breeze through the reading and quickly absorb the content, but you’ll need to stop and focus on some thought-provoking questions at the end of each chapter.

Here’s a self-assessment question that’s particularly appealing:

Do prospects receive a detailed and accurate preview of what the experience will be like after becoming a customer?

Stop and think about that.

This book of Joey’s is not short, and it’s meant to give you a unique perspective for approaching your customer experience. The questions allow you to process the chapter. Those speed bumps will intentionally slow you down and get you to think about how you’re applying what’s discussed to your own business.

The book shouldn’t only be something you read; it should be something you use.   

Customer Retention and the First 100 Days

Why do 20–70 percent of most customers stop doing business with a company within 100 days?

Retention is an issue for every business. Mentally, your customer will make the decision to check in or out of your relationship in those first 100 days. That’s the most important part of lifecycle. If you want someone to stay with you, how they feel on day 101 is more important than any other day in the process.

The customer journey includes eight phases. First, there’s the assessment phase. Your prospect is considering whether or not to do business with you. This is the marketing and sales part of the journey. It’s where you should be able to give your customers-to-be a preview of what it will be like to work with you. What will it feel like? Do you keep your word? Are you timely and organized?

The Emotional State of Your Prospect

As property managers, we tend to be tactical instead of emotional.

So, you may not be paying attention to tracking, identifying and working with the emotional state of your prospect.

Step into the shoes of the property owner you’re trying to reach. That owner spent a lot of money on this property. You’re suggesting that they give up some of the income they could earn by hiring you to perform services they believe they can perform themselves. They probably don’t think you could ever care for that property as well as they can.

Are you considering that emotional state when you deliver a sales pitch? Or, are you focused on the minutia of convincing them they’ll never have to answer a maintenance call or chase down late rent?

Shift your approach and start thinking emotionally. The owner is probably a little uncertain. They’re worried they’ll make the wrong choice. They’re anxious that you’ll put the wrong tenant into the property, and they dread the headaches and the expense of bouncing back from your bad decisions. They fear disaster.

How can you reach them on an emotional rather than a tactical level?

You can invite them to a property you already manage. Show the results of working with your company. Assure them that you want to visit their property and understand its nuances and needs. But, if they can see what your standard of excellence actually looks like, and they can see that you aren’t just talking about efficiency and effectiveness, you’ll have incredible results.

This shows your potential customer what it’s like to work with you. You’ll get the attention of those great owners who you’d love to have as clients. 

You can hand over brochures and direct prospects to websites and get on a call to tell them how great you are at solving their problems. But, there’s nothing exciting or emotional about those tactical things.

They want to have an emotional experience. 

Empathy and Emotion: The Winners in 2019

The American culture is one in which people are afraid to be vulnerable. Americans are taught that it’s weak. It starts happening when we are children and then it’s reinforced through schools and even in the workplace. How many times do you hear that “it’s not personal, it’s business.”

This construct results in humans who are desperate for connection. Everyone feels isolated after looking at electronic boxes every day. So, human interaction can catch you off guard. Distance feels safe. Emails and text messages provide a safe time and space barrier.

The winners in the next decade have high Emotional Intelligence (EQ). They will lead from a place of empathy. To have whatever you want, you need to be an expert in empathy. You need a high emotional quotient that allows you to empathize with owners and with tenants.

What are they feeling? What are their emotions? What’s working, and what isn’t?

This is a lot of work. But, investing in emotional intelligence pays off more than an investment in book intelligence. So lean in and get comfortable with it. To succeed in the future, you need to make this investment.

Property Management’s Problem is Its Opportunity

You’ve heard this stat before. Only about 30 or 35 percent of properties are professionally managed. The vast majority of investment real estate is self-managed.

There needs to be a great migration of those properties into the competent hands of empathetic property managers.

The 70 percent of owners who are managing on their own have a lot of emotion. They are probably anxious about how much it would cost. They might not think the property manager would understand the investment. Buying a first rental property is a big leap. It’s a huge shift, and those owners don’t want to make the wrong move. So, they manage on their own without any training or education.

Tony Robbins says that people don’t change until the pain of not changing is greater than the pain of changing. Change causes pain, but you have to shift if you want to find the catalyst necessary to make the changes that matter. 

Defining Professionalism in Property Management

There are some unique dynamics of working in a market with a wide variance of quality. The main challenge for professional property managers is that there really isn’t a consistent definition of what professional means.

Many people call themselves professional property managers, and they’re anything but professional. They’re not very good at the managing part, either. Many people have experience with unprofessional property managers. Everyone has had an experience renting a property that was “professionally managed,” and it was a nightmare. So, the outstanding property managers who are truly professional are meeting potential clients who come with baggage and preconceived notions. This is infuriating. Your customers don’t come to your door as blank slates. All of their bad experiences are there with them, and they’re expecting you to add to those bad experiences. 

Those potential customers are skeptical. They doubt what you say. And then, they run into property managers who affirm those beliefs. They come off as slick or not listening. Or, they launch a pre-canned sales pitch.

This doesn’t work.

Initial Engagement and the Depth of Discovery

You know by now that a discovery process is important. If you fail at discovery during the sales process, it’s probably because you’re doing a few things wrong.

• You’re approaching it with a script. The person you’re talking to will know it’s a script because it feels like a script. They’re falling into a template, and they can sense it.
• You’re checking off boxes as you talk and listen. Maybe you’re asking a question but not really listening to the answer. You simply move to the next question.

This is not professionalism. This is not attention to detail.

Be better at empathy.

Stop talking and start listening.

When it comes to discovery, you should have a plan of topics to cover. But, don’t have a script or a checklist. 

This Is the Future

Now you know how 2019 is going to work. If you build out the best customer experience and you have empathy, you will help the property management industry realize what it’s capable of achieving.

Marcus Sheridan moved the whole industry after his keynote at PM Grow Summit in 2017. Joey is now going to move us forward even further, and you don’t want to miss his keynote at PM Grow Summit 2019.

PM Grow is for the people who want to provide great service. If you offer low quality services and you’re okay with getting something over on your clients now and then, and you’re focused on slathering sales and marketing on top of a low quality operation – WE ARE NOT GOING TO BE ABLE TO HELP YOU.

The clients of our clients win when people raise the bar and increase the quality of their service. We want to raise outcomes for the whole industry.

You can buy Joey’s book anywhere books are sold. Consider getting the print copy so you have instant access to all those great self-assessment questions in written form. You can actually answer them right there in the book.

Visit joeycoleman.com, where you can watch videos and gain some insight on enhancing customer experience.

Finally? Put this into practice. If you have a positive customer experience somewhere, tell them and thank them. It’s easy to call out negative customer experiences, but go ahead and start shouting about the positive experiences. 

Happy New Year to our listeners – it’s a privilege to provide The Property Management Show, and a joy to learn with you.

The post Turn Any Sale into Lifelong Loyalty in 100 Days appeared first on Fourandhalf Marketing Agency for Property Managers.

Here at Fourandhalf, we love our sixth-floor office that looks out over Silicon Valley, and we find it helpful to have everyone in the same place.

But, we often wonder whether it would be possible to build a property management business that is completely virtual. The Property Management Show received an email from a listener named Nicholas who wanted to know if it would be possible to start and run a property management company without a physical office.

Can it be done virtually?

We reached out to a company that’s doing it, and our guests today are Noel Pulanco and Mike Sargent from HomeQwik. They also run yesVIRTUAL, a business providing highly trained virtual assistants to property management companies.

The Thought Process Behind Going Virtual

Leasing agents and property managers spend a lot of time in the field already. There are so many tasks that don’t even require a desk: following up on leads, taking marketing photos of properties, posting signs, leaving keys in lockboxes, and meeting with renters. All of these things happen outside of the office.

Inside the office is where most of the customer service happens. If you’re transitioning those customer service tasks to virtual assistants already, as HomeQwik had begun doing, there are very few reasons to keep a physical office. Renting office space costs a lot of money, so moving all of your current office-based staff can save money and provide flexibility to your employees.

As long as you have good software, good systems, and processes that work, you can keep your company virtual and mobile.

Pre-sale Considerations When Running a Virtual Property Management Business

Having a physical office does not provide any advantages when it comes to signing new owners.

There might be a tendency for people to hire you based on where your office is. You might attract owners who are within five miles of your office just because they know you are there. But, those are easy clients. And, it really doesn’t matter how close you are to the properties you manage when you’re not the one fixing the garbage disposal or locking the tenants out.

It’s probably rare that you meet with owners at your office. Most property owners want to meet at the property. You’ll want to see the home, walk through the property, and talk about the necessary repairs and the most advantageous marketing strategies. You don’t have to bring potential owners into an office in order to manage their homes. You can take them out for coffee or to lunch. Usually, you’re going to meet at their property.

However, your website will need a physical address. Without a physical tie-in, it’s hard to rank a website. So, you’ll want to use your home office. Tie yourself to a physical address so you don’t have problems ranking your website and getting leads and traction. Anchor your office somewhere, even if it’s not a physical office where your entire staff goes.

Post-sale Considerations When Running a Virtual Property Management Business

After you’ve landed new business, you can implement systems to manage properties and tenants.

There doesn’t need to be paperwork, for example. DocuSign allows you to get documents back and forth through email. That doesn’t require a physical office.

All of the tenant application and screening processes can also be done online. There’s no need for a tenant to walk into your office to talk about a property or an application. You can collect virtual copies of identification and have conversations over the phone. You don’t have to drive them around to see properties. If you’re not showing properties in-person already, there’s no need to feel like the process cannot happen without a physical office.

Instead of having tenants come into the office to review and sign the lease, HomeQwik will send them a video that talks about all the important points in the lease. The keys will be delivered to the lockbox, and even though they’ll talk to the tenants multiple times before they move in, the team at HomeQwik won’t have to see their tenants.

Showing a property can be done virtually with lockbox technology. This automates the process and keeps you from having to show every house. You can use virtual assistants to handle direct contact or to answer questions. You don’t need a licensed broker to answer questions about pets or move-in dates.

With the amount of help you’re getting from virtual assistants, you want to make sure they’re trained in certain processes. Work with VAs who understand the leasing process and how to submit an invoice and start a work order. A company like yesVIRTUAL trains them in these processes before sending them out to property management companies. These virtual assistants know how to enter leases and manage data. They understand the property management software and the processes involved in this work.

The technology stack that’s needed to virtually manage the move-in process is probably something similar to what most property managers have in place already:

• Have a solid and transparent website that communicates qualifications, pricing, and value propositions. It should educate potential tenants and owners.
• Adopt a showing technology like Rently, ShowMojo, or TenantTurner so you don’t need a leasing agent to show the home.
• Use tech-driven software like PropertyWare or Appfolio or Buildium that allows you to virtualize the application process for tenants so they can view the property and apply online.
• Qualify tenants using virtual assistants who can answer questions and follow processes.

Application to Lease Process: How to Do it Virtually

At HomeQwik, all of the application information is collected and uploaded into the software system. If the application is denied, an automated denial letter goes out. If you have a qualified tenant, the lease terms are discussed and the virtual assistant creates the lease and sets it up in DocuSign. After one or two conversations with the tenant, a signing date and move-in date are agreed upon. The lease goes out, the tenants pick up the keys, and then inspection tools are provided for the move-in inspection.

The team at HomeQwik moves in between 20 and 30 tenants every month, and they believe the virtual process is scalable. If they had the houses, they could do 100 or even 1,000.

Think about the virtual platforms that are already encroaching on the real estate and property management space, like Zillow. It’s important that you’re prepared and flexible if you want to compete.

Giving Up the Physical Office

Even if virtual offices work better, you’re still giving something up when you move the team out of a physical office.

You won’t be able to see and reach out and talk to your staff. You won’t have everyone in one hub. If you’ve got a big team, moving your staff to a system where you’re not around each other every day might be a challenge.

It’s also important that you’re confident in your staff. You have to know that they don’t need to be micromanaged, and that they will work and be productive.

You can use technology to hold meetings. With video, people can keep in touch with each other and see one another every week or two. You can get together for lunch or coffee. The personal touch is important, but no one will likely miss your office. There’s rarely going to be an emotional attachment to it.

And, you’ll be saving thousands of dollars a month.

Automattic is the company that made WordPress, which runs about 80 percent of the web technology people use every day. They recently said on a podcast that they’re fully virtual and they have 600 people. They have been able to maintain the culture, the heart, and the purpose of their organization even being completely virtual.

It’s important to keep your culture alive.

It’s hard to have it both ways. You might find that you either have to be 100 percent virtual or 100 percent office-based when you’re running an effective property management company. Otherwise, things can get confusing and processes could fall apart.

When you’re virtual, get together for holiday lunches. Have team-building events and stay connected.

If you’d like to hear more about what it’s like to run a completely virtual property management business, Noel and Mike would be happy to tell you more about it. Look for them at HomeQwik or yesvirtual.com.

And, if you have any questions about your property management marketing and sales processes, you can contact us at Fourandhalf.

The post How Remote Can You Go? Running a Virtual Property Management Business Without Sacrificing Service appeared first on Fourandhalf Marketing Agency for Property Managers.

On The Property Management Show, we love helping people in the industry learn from the successes and failures of property management business owners. The feedback we’ve received on our How I Did It series has been phenomenal, so we’re bringing you another episode today.

Our guests are Kristin and Shawn Johnson, and they run a successful property management business out of Farmington, New Mexico, called Independence Capital Property Management. We’re talking to this husband and wife team specifically about what may help and hurt you while you’re building your property business from 100 doors upwards.

Introducing Independence Capital – Where They Are Today

Currently, Independence Capital manages about 500 rental properties, down from their high of 615 doors. Most of that portfolio is made up of single-family homes as well as some four-unit and six-unit buildings. They have been in business for six years.

As a husband and wife team, they have learned the importance of respecting each person’s role and talents. Their business starts with a solid relationship and a good marriage. While their skill sets are similar, their passions are a lot different. Kristin has a marketing background but prefers the sales and accounting side of things. Shawn is a helicopter pilot and needs to be constantly engaged, so does a lot of marketing and creative work.

Shawn sees the growth, and Kristin operates against it. The system works, and it works well.

The Big Lesson Learned: Being Quick to Buy

Kristin and Shawn said their biggest failure was twofold. They bought a portfolio of 295 doors, and missed a bit of due diligence. Several of the properties within that portfolio turned out not to be legitimate contracts, and they faced about $70,000 in lost value.

The properties in the portfolio were legitimate at some point, but while the portfolio was being sold, those properties were listed for sale, and the clients terminated after Kristin and Shawn took over. They had a clawback clause* specific to a client with a large percentage of the portfolio, but it didn’t extend to all the properties. There are many things they would do differently today.

*(A clawback clause allows you to regain revenue for lost accounts that may leave within 12 months of acquiring a portfolio.)

The second error was to push changes too quickly. Independence Capital enjoyed a high level of client satisfaction among their existing clients. There was a lot of trust. While bringing new clients on board, Kristin and Shawn expected those new clients would be just as happy. So, they immediately introduced their own fee structure, and that didn’t go so well. They upset a lot of clients, and they had to back off and take a deep breath. This caused a 17 percent loss, which was higher than expected.

Here’s the important takeaway: Even with all the losses and the stress and the mistakes, Kristin and Shawn said they would still do it all over again. That’s how property management companies grow. They experiment.

Focus on Integration: How to Make it Work

The previous management company had neglected a lot of maintenance and even charged owners for repairs that weren’t completed. Once they took over the portfolio, Shawn and Kristin had a line out their door and had to field about 450 phone calls a day. They had hired extra staff, but this was hard to predict. 

There are a few things to remember when you’re integrating a new portfolio to grow your business:

• New clients deserve a personal phone call. This goes a long way, especially if they’re caught off guard by the purchase and they don’t realize they have a clause in their contract that says their account is assignable to someone else.
• Don’t change management agreements for at least 12 months. Keep the terms the owners know, but provide your own higher level of customer service.
• Don’t touch the tenants’ leases until renewal time. Kristin and Shawn had a zero-day grace period policy in place, and the company they bought allowed five days for rent to be paid. You want to keep your tenants happy and in place.

The Independence Capital Founding Story

Not everyone chooses property management as a career, but Kristin and Shawn did.

Kristen worked in real estate as a paralegal for a large investment company. Shawn was offered his dream job of flying helicopters in his hometown of Farmington, New Mexico. There was a huge need for good property management in that market, so they moved back and started their company. Their goal was to get to 150 properties. This goal was achieved in the first two years of business, thanks in part to membership in National Association of Residential Property Managers (NARPM). Then, they doubled in size the next year.

Independence Capital just opened their second office in Flagstaff, Arizona.

Why Flagstaff?

Kristin has a sister living in Flagstaff who was having a terrible time as a tenant. None of the property management companies would call her back when she wanted to see a home. From a tenant’s perspective, Flagstaff was a nightmare. So, Kristin and Shawn opened another office there since they had someone on the ground and able to help. The business is still run from Farmington, but Flagstaff is a strong rental market with high rents. 

Know Your Market and Diversify When Necessary

The Farmington economy is driven by oil and gas, and it hasn’t been strengthening like the rest of the nation.  A lot of jobs have been lost, and Farmington was ranked as one of the largest shrinking towns in the U.S. This means it made sense for them to diversify and look for other places to do business.

It’s also a good reminder to know your customer profile. Most of the clients in Farmington are accidental landlords. There are some intentional investors, but they’re not the majority. In Flagstaff, there are far more investors looking for professional management. 

The First 100 Units: A Learning Curve

• Property Management Software

While you’re growing your business to 100 units, invest in property management software, even if you don’t think you need it. If you don’t have management software yet, get one immediately. Having the software in place before you land even your first unit will allow you to grow.

• Systems are Necessary.

Figure out your systems. As you grow, those systems become harder to implement. This is the most time you’ll have; once business starts coming in, you’ll feel like you don’t have any time to work on systems. Do it right away. Envision everything you see happening from the time you earn a listing to the time the tenancy ends. This will help you develop and implement your systems.

• Join Associations

Kristin says that because of NARPM and the people they’ve met there, growth has been fast and healthy. NARPM has a good vetting process and will introduce you to vendors and experts you wouldn’t be able to find otherwise. There are great educational opportunities, and you’ll meet a lot of outgoing, friendly professionals.

The biggest mistake that was made with the first 100 properties is a mistake that many new property management companies make. They took on any and all properties. It didn’t take them long to realize that they didn’t have to manage every door that came along.

It’s okay to be selective with what you’ll manage and what you won’t.

Not all business is good business.

Screen owners, and screen properties.

You don’t want to travel for 45 minutes to get to a home you’re managing. You don’t want to take on a house with a lot of maintenance, and you don’t want to work with an owner who cannot pay the mortgage. If you tell an owner that a property will only bring in $1,000, but the owner insists on asking for $1,500, you don’t want to waste your time. 

Dropping from 615 properties to 500 properties was intentional. Kristin and Shawn work with Darren Hunter, a business coach, and they were willing to trim the fat and get rid of the junk. It wasn’t easy. You can raise your rates to weed out the clients that you don’t want to work with, but as Independence Capital found out, not all undesirable owners will leave, even when they’re told to pay more.

Eventually, Kristin and Shawn sent letters explaining that their business was going a different way, and their systems no longer supported the management of certain properties. Many owners were distressed to have to find new management. Most owners wished them well.

Pricing Property Management Services

Pricing is a mysterious thing. A lot of property managers don’t know what to do and how to price their services. It’s always a good idea to put your pricing on your website.

Independence Capital posts their pricing for Flagstaff because there’s a three-tier flat fee system in place, as well as a lease-only option. In Farmington, they have value-added services that complicate their pricing structure, and they’re working on posting them on their website. 

What is the purpose of growth?

Shawn says growth builds morale, and staying stagnant in a business devastates that morale. Kristin says that people are here to learn and grow constantly, and business owners who can drive that kind of growth will provide wealth and jobs for other people, thus contributing to the greater good.

According to an article in the Harvard Business Review: “Significant value creation cannot occur without growth. So, the failure to scale has social as well as investor and managerial costs. It effects job creation and innovation throughout society.”

Kristin and Shawn will be at PM Grow Summit to talk more about how they built their company and nurtured their growth. Get your tickets today so you can talk to them there.

To find more episodes of The Property Management Show, click here.

If you have any questions about The Property Management Show, be sure to contact us at Fourandhalf.

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The Property Management Show is based in Silicon Valley, and the beauty of our location is that we get to meet entrepreneurs driving property management innovation. Today, our guest is Daniel Shaked, the founder of Home365. This is a company that sells maintenance end-to-end through technology, specifically using artificial intelligence (A.I.) and their own network of service providers for one flat fee.

Home365 and Property Maintenance

Traditional industries can be more efficient by leveraging cutting-edge technology, and that’s where Home365 comes in. They want to connect homeowners and property managers with service professionals, and they want to do it in a way that’s more reliable and more cost-effective.

There can be pain and friction between homeowners and maintenance service providers. There’s a low level of trust, and Home365 believes they can remove that pain and provide a better experience when you need maintenance on your property. They believe maintenance is one of the biggest components of property management, and it should be handled by professionals in a predictable and transparent way.

There’s a shortage of qualified contractors, vendors, and tradespeople all over the world. It’s a global pain.

But, the question you may be asking is – how does Home365 help property managers? It may sound like the business platform actually competes with them. After all, property managers are in business to solve maintenance issues for homeowners.    

The way Daniel sees it, a property management company’s main job should be to manage more doors and to do less manual work. Instead of focusing on logistics, a growing property management company needs to focus on winning more business. Remember, only 35 percent of rental properties in the U.S. are professionally managed. There’s a lot more business to go after. Do you want to spend your time going after that business or chasing down maintenance service professionals?

Daniel believes Home365 offers a real value proposition for property managers.

Leveraging Data and Evaluating Quality in Maintenance Professionals

Daniel says that Home365 can predict what will be spent on each property by leveraging the data they collect. Using A.I. and looking at a house and its address, the company can predict what the home will need in maintenance over the next five years. That allows them to build an insurance product where property owners pay a monthly premium, and then after that – they have no expenses when repairs are needed. It creates freedom and removes obstacles.   

There’s also an element of service assessment. Home365 also uses data to assess the quality of the work and the customer service that’s provided by vendors and contractors. The good companies are rewarded with additional work. It’s tech-based and works like a credit score. You don’t necessarily do anything to impact your credit score – you pay your bills and you create a financial footprint. This technology does the same thing. Service providers do their work, answer their calls, and make their repairs. Home365 aggregates how those tradespeople are dealing with incidents. They track how they communicate and what tenants think about the work. It allows them to quickly figure out who the best vendors are.

For example, a person who is always late for meetings will never finish the tenant’s turnover on time. A person with a habit of rescheduling when he gets a better job somewhere else will not always be reliable.

If technology can be used to sort out the reliable vendors, the fair prices, and the good workmanship, property managers can win, and so can their owners and tenants. 

Algorithms are used to match the service workers to the problem. The right people are going to the right projects and there’s more time and cost efficiency. The Home365 platform can find people who did similar jobs at similar properties for similar tenants.

Tenants and homeowners are guided in the description of the maintenance that’s needed. They get something that’s like a teleprompter on top of their screen, and they can explain the problem, record video, and share pictures. This structures the best solution. The full project description is sent to the vendor who seems to be the best match. The vendor gets to see the same description of the problem. Then, all parties get access to a messaging platform. They can video conference or chat, and that often reduces the need to travel and diagnose a problem.

This all happens in real-time communication with real-time technology.

How Can Property Managers Make this Service a Revenue Center?

This can be an interesting way for property managers to offer a new product to their customers.

Every property comes with a flat-rate price for maintenance. If your owners pay this flat rate every month instead of paying for maintenance issues as they happen, you no longer have to wait for their approval before fixing something.

With a modest markup, this can provide some additional recurring revenue. Instead of marking up every maintenance invoice 10 percent, you’ll have this regular income on a monthly basis.

Many property management companies lay out a three tier pricing plan. There’s a starter plan, a traditional plan, and the third plan or the premium plan might offer this all-inclusive maintenance model.

Artificial Intelligence and the Future of Property Management

A.I. can identify patterns in data. It’s clearly different than how we used to build software and systems. Especially in property management, we’ve always had to say IF this happens, THEN that will solve it.

With A.I. the data organizes itself, and the system learns and understands things that we humans simply cannot see. Pricing and maintenance events become predictable for a property. It’s possible to know how many garage doors won’t open next year in Palo Alto or how many toilets will be clogged in Las Vegas. If you can do that, you can reduce costs and increase efficiencies. That’s how the industry is changing around technology.

We often think that maintenance issues just happen.

Things break unexpectedly.

But, statistics are everywhere, and if we’re paying attention, nothing just happens.

Building something like this is hard. There are a lot of A.I. companies where the technology doesn’t work right. If you make a wrong decision with a car, that’s life or death. Netflix can make a mistake and there’s really no downside. If Home365 prices a maintenance event in the wrong way, they are taking the cost on that. They take on the risk, and that risk is built into their pricing model. With time, they expect to reduce that risk. The technology gets smarter with time, so a more precise and predictable model will emerge.

Future Predictions: What Can Property Managers do with this?

If you’re an average property management company with 300-500 doors, what should your next move be?

According to Daniel, you should be working on winning more homes, and with less people. Leverage the technology that’s available and be smart about the data. If you measure everything and you’re data-inclined, you can make smart decisions. It might mean firing a customer.

Aggregate and leverage technology. It’s the overarching concept for winning in next few years.

What is the future of the connected home?

The younger generation is driving innovation, and even older generations are using Facetime and smart phones. We have Alexa delivering food to our doors and turning on our lights. These are meaningful services that people need and appreciate. They’re powered by technology and by sensors.

In the future, every separate element will talk to all the other elements. Your fridge, locks, security system, vacuum cleaner and music will all talk to each other. That’s a connected home, and Daniel sees Home365 fitting in. The plumber can be delivered similar to the way Whole Foods delivers your grocery order.

This is the smart home investment. Most homeowners spend $5,000 or $6,000 a year to maintain their home. A leak detector under the water heater will tell you there’s trouble before it explodes. A small vibration detector on your air conditioning unit will tell you something isn’t working right. Your maintenance people can get there before the whole system fails. Microphones can track termites. You can listen to the noises of pests and not only will you know there’s a termite problem; you’ll know exactly what kind of termites they are. That allows you to address the problem the right way.

Distribution is required, so new properties need to be built to accommodate these things. The technology is available, and companies like Home365 are working to integrate the signal and the response. 

If you’re interested in learning more about technology like this, visit Home365.co.

We’ve never asked you this – but if you enjoy The Property Management Show and you listen to it regularly, please take a few minutes and go to iTunes to give us some comments and maybe some stars.

If you have any questions, get in touch with us at Fourandhalf.

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How I Did It: Lisa Wise Discusses Property Management Growth

Today on The Property Management Show, we’re talking to Lisa Wise, who runs a boutique property management company called Nest DC. She spoke at PM Grow Summit in 2017, and she’ll speak again in 2019, so if you’re curious about the conference or you haven’t bought tickets yet, go to pmgrowsummit.com. It’s the perfect event for property management entrepreneurs who are looking to improve business outcomes.

In our How I Did It series, we’re talking to successful entrepreneurs about the mistakes they made as they were growing their businesses.

Introducing Lisa Wise and Nest DC

Nest DC is six months from turning 10 years old. The company has gone from being the new kid on the block with a novel marketing plan and way of doing business to one of the largest management companies in the city of Washington, D.C. for single-family rentals.

The company is currently looking at ways to build on their reputation and introduce new income streams while helping the community. That energy keeps the staff engaged and excited, and growth mode requires inspiration and excitement. Nest has developed a sister company called Spruced DC, which handles condo and building management for HOAs and owners. The newest brand coming from Nest is Starling DC, which handles turnover and light construction. So, even though Nest is turning 10, they always feel like they’re in start-up phase.

But, they’re not in a start-up phase because they’re earning over $3 million in revenue.

Measuring the Property Management Growth Curve

Nest DC has been on the Inc. 5000 list, which was a big win. However, Lisa points out that you reach a stage where you can’t have hockey stick growth any longer because the portfolio just gets too big. When a property management company moves from 100 to 200 properties, it’s an inspiring math equation. But, you cannot go from 800 properties to 1,600 properties in a year. It’s simply unsustainable. 

Leveling out can be good. A business that keeps growing isn’t necessarily thriving. You need healthy growth. Giant profit numbers year after year are hard to come by in a service-based business. And, the core business clients are important and need your attention.

Don’t seek growth just for the sake of growing.

For Nest DC and Lisa, growth right now means allowing the leadership team to take over more of the day to day business operations so that Lisa can be more visionary. She feels lucky that she’s built a good senior team who is willing to continue taking on new challenges.

Growth Can Mean Complementary Business Units (CBUs)

To really have a healthy and growing business, you need a profitable company. One way to increase profits and growth is to introduce CBUs. Maybe that’s a maintenance division or a sales division within a property management company. The goal, according to Lisa, is to use those additional businesses not as independent companies that are predatory and focused solely on profit, but to use those business units to improve and develop relationships.

While you’re building CBUs, it’s important not to sacrifice what you do best just to do something new.

Property management companies often make this mistake. There’s a shiny ribbon of a renovation business or a sales business, but suddenly you cannot get your lease done or your basic customer service needs met. Don’t threaten or risk your core business.

You can monetize your current relationships with customers without being predatory. People trust the relationships you have.

Here’s an example of how Nest DC made this work with their new company, Starling DC:

When a property owner comes back to occupy the home after being away, the Starling DC business can make sure the space is ready when they get back. Nest is losing a door because that property no longer needs to be professionally managed. But, they’ve made a grab for some cash flow on the way out the door.

That’s pretty smart.

In addition to starting two new brands, Nest also provides some consulting services that build additional income. They do expert witness work in court, and they consult with small condo associations who cannot afford full-time management but need help with some of the shared responsibilities like roofs and taxes.

Building long term relationships is the best way to cash flow your company, especially when you’re adding extra services and businesses. 

There’s a window of opportunity for CBUs, and a growth-minded property management company will identify that window and act.

Learning from Mistakes: Liability and Insurance

Lisa’s main mistake while growing her business was legal exposure and not being able to identify and address risk before getting into trouble. Like many entrepreneurs, she and her team pieced a lot of those systems-based regulatory risk management activities together without investing in good legal and accounting advice right away. There were several points when Lisa realized she should have had more insurance. There was a situation in 2013 when her company was hammered with a lawsuit based on lead paint exposure. Lisa acknowledged that she made a mistake and didn’t do her due diligence with a vendor.

No one was truly at risk, and it wasn’t the end of the world, but the company was at risk. Lisa had to detour from growing her business to deal with this conflict. Property management can be a risky business. The more visibility and the more resources you appear to have, the deeper people think your pockets are. So, spending money on legal advice earlier is something Lisa wishes she had done to better protect her company.   

Lesson: Don’t have a friend write your contracts. Paying legal bills doesn’t feel good, but you need that expertise and that protection.

Growing from 0 to 100 Units: Marketing and Systems

Confidence and belief in your services is the best thing to propel you from zero to 100 units. Lisa was telling everyone Nest DC was the best in the business. They built a reputation and became visible in their market. Creating an attractive brand and using every resource that was free and available started the marketing and branding that led them to growth and success.

They used social media and took advantage of every networking opportunity that was available. They went to open houses every weekend with a gift bag and introduced themselves to real estate agents. That provided free one-on-one face time with prospective clients. That’s the marketing they used to get to 100 doors. It was all about gathering clients one unit at a time.

What really got them on the map was a “Best Of…” contest in the DC City Paper.

They only had between 18 and 30 properties, but they were voted Best Property Management Company in DC. This got them a lot of visibility and an instant reputation for excellence. Since then, they’ve been in the top three every year.

Operationally, Lisa didn’t have a lot of structure in place. Whoever answered the phone was the team member who took care of the inquiry or the problem. There were five people on staff, and Lisa wasn’t earning a salary.

Next Stage Property Management Growth: From 100 to 300 Properties

Systems became incredibly important in the journey from 100 to 200 properties. At this point, you cannot simply keep keys in a box. You need to organize and track the portfolio of properties you’re managing. Nest DC began working with Appfolio, and having a property management software that was aligned with their business model was exactly what they needed.

The volume became a driving force in getting everything systemized and operationalized. Like every other property management business owner, Lisa learned that what works at 50 units doesn’t work at 200 units.

Software is only as good as the user is at using it, and the team had to make sure everyone was clear on roles and how to use their software. They had to come up with some best practices and standard operating procedures. They embraced consistency and they reduced risk. 

Employees were free to do their best work on the confines of an endless beach. Appfolio gave Lisa’s company the sandbox to build their practices around. Sometimes, they still felt like they were on that endless beach. But, they had better strategies and solutions were easier to come up with.

The marketing strategy didn’t change much, they just did more of it. They continued getting the brand out there and they kept participating in the industry. They did lot of blogging and made an effort to comment on the social media posts of other businesses. They kept doing the open house visits and they began participating in roundtables. Professional affiliations were important, and Nest DC sponsored different community events. They did everything they could to become visible in the community.

Beyond Property Management Growth: From 300 to 500 Properties

Departmentalizing became the most significant part of the transition as the company grew to over 300 units. The company had about 12 employees, and there needed to be more structure around a finance department and a leasing team. Then, they developed a maintenance team. There was more clarity around how those departments worked, and investments were made in training people.

Internal culture became important, and there was an increase in salaries because longevity was the result they wanted. Lisa wanted to invest in people who aligned with the company’s values. That element helped the growth continue.

Every year, the company takes a giant step back to fine tune what they’re doing. Internally, if there’s something an employee doesn’t like doing, the advice is to find a better way to do it. Sometimes, the things you do aren’t necessary, but they simply become the fabric of your company. Edit out whatever you can. Take advantage of innovation. Scalable growth means delivering the best services and products without killing yourself.   

Over 1,000 Properties: How do Things Change?

Leadership makes the difference when your company jumps to over 1,000 doors. There’s not necessarily a big leap in how things are done, but there needs to be a shift in who is doing what. More leadership, stronger managers, and people for staff to look up to are critical. You need to invest in a larger pool of people. A sustainable staffing model is essential. You can refine your systems and get better at what you do, but what you really need are decision makers. 

Encourage your staff members to build on their strengths and develop their leadership. Lisa doesn’t know how to lease properties or screen tenants anymore. That’s a good thing. She’s focused on property management growth and developing the next brand.

Reputation is the next thing for Nest DC to conquer. Their rating on Yelp is lower than it should be, mostly because filtered reviews are a problem. A handful of the negative reviews are minimal compared to the majority of four or five star reviews, but those are the ones that get the most attention. Building a better reputation online will be the company’s focus in 2019. They will keep working with their survey system and they’ll be more proactive about getting happy customer to share their positive experiences.

We look forward to talking more with Lisa at PM Grow, and if you have any questions about what you have heard or read – contact us at Fourandhalf.

The post How I Did It: Lisa Wise Discusses the Growth and Expansion of Nest DC appeared first on Fourandhalf Marketing Agency for Property Managers.

Mike Catalano and Steve Rozenberg joined Alex on The Property Management Show to talk about growth through acquisitions. Mike Catalano is one of the most experienced property management owners to talk about acquisitions, and Steve Rozenberg runs a tightly systemized company and is thinking about acquisitions as part of his growth strategy.

Alex and Mike spent some time talking about acquisitions in 2015.

A lot has changed since then, and a lot hasn’t.

Why Would Anyone Want to Acquire a Property Management Company?

Steve has a successful company and is growing organically. He executes well. So why would he suddenly be interested in acquiring new companies? Many people would see it as an unnecessary headache.

But, you don’t have to grow one way or the other. You can use both strategies to grow – organic marketing and new business acquisition. When you’re trying to grow your property management company, you have to look at all the avenues. Adopting a growth through acquisition strategy doesn’t mean you have to stop pursuing your organic growth.

If you’re thinking about expanding into a new city, for example, acquisitions can get the momentum moving. It provides instant doors, an immediate presence, and a lot of momentum. You don’t have to build in a new market one property at a time.

When you have a strategy of both organic marketing growth to attract new leads, you win on every level. Your organic growth is steady and your growth through acquisition is immediate.

When should you not acquire companies? When you don’t have solid systems and procedures in place, and you cannot support the growth internally. As they say in the airline industry, that will get you to the crash site quicker. Acquisitions help you capture a market share, and you have to be procedural.

Before you buy: Operations and Sales/Marketing

When you’re buying another company, you need to know that the operations are in place. From there, you’ll decide what you’re going to change and what you’re going to keep. Once you know a company is set up operationally, take a look at their sales and marketing. Before you do any new marketing, you’ll want to make sure you have the capacity to support the new business it will bring in. You don’t want to bombard the staff you’ve kept on board.

Operationally, you want a company that has a structure allowing them to stand on their own. Structural soundness is essential before you acquire. And, every single company runs differently. Sometimes, you can learn from the companies you acquire. For example, you might buy a company with value-added fees and services that you never heard of before. Then, you can incorporate those into the rest of your business.

Evaluating the brand value is a little more complicated than evaluating a company’s operational soundness. You can look at the website, reputation online, and how long they’ve been in business. If a company has been around for 25 years with a percolating website, that’s valuable. But, it’s hard to quantify brand value.

The industry is learning metrics. Understanding value per door and the cost and value of the leads that are acquired every month are valuable tools in evaluating a brand. People are tracking more in this industry than they ever have before. So, the day will come when it’s easier to put a value on each brand. Some companies know their numbers and can talk about lifetime customer value and profitability. But, not all companies can currently say what their acquisitions costs are or how much they spend per lead.

Until it becomes easier to identify brand value, don’t evaluate for current opportunity. Evaluate for future opportunity.

Did you get that? Evaluate for future opportunity, not current opportunity.

Remember, that company’s reputation might be strong and you don’t have to change the name or intrude upon their brand. If they have a company name in the area that people recognize and embrace, leave it alone. They’ve been in business for a long time, so changing their name to yours won’t help you.

What is a Property Management Company Worth?

Property management companies are worth whatever a buyer is willing to pay.

Currently, the industry standard is pretty wide, and every acquisition is different. In general terms, your company is worth between 8 and 18 times the monthly gross revenue.

When you think about your monthly gross revenue, you’re not just talking about management fees anymore. It includes any consistent income on anything – from management fees to leasing fees to late fees, pet fees, etc.  A sample size of two or three years is also required to make these calculations.

The amount that company owners are willing to sell for often depends the motivation behind the sale. 

There’s now a generation of property management company owners getting out of the business. They often have lower valuations because they made their money, they ran a good company for a while, and they’re ready to exit. The newer companies that are operationally strong often want to exit in order to make money. So, they’re going to have a higher valuation. It’s a mixed bag, always.

It’s important to be selective.

Out of an average of 10 companies that Mike looks at, he probably buys one.

If it doesn’t fit, don’t force it. You have to be careful with what you buy or you’ll run into problems. 

The Deal: How Property Management Companies are Acquired

Cold calling is one way to find companies who are interested in selling. You can also speak at events, and let people know you do this. Banks hold trust accounts and they know who wants to sell. Talk to different groups like NARPM, PM Grow and Broker/Owner. Let your colleagues know that you’re looking to buy. 

Social media works, too. Facebook groups are full of people you’re trying to reach and hoping to target. You can share some information so people know you’re an authority; maybe put out an eBook. People can read it and take a look and ask questions.

Integrating an Acquired Company with Your Own

Integrating a new company can be a challenge, especially if you have a lot of momentum and depth and you’re able to execute with your existing company. It can be difficult to bring in a new part of your business that does things differently.

But, there are many ways to make it work, and it really depends on the company you’re acquiring.

Mike’s new strategy is that he doesn’t initially change anything. The accounting is integrated because it helps the company flow smoothly. But, there’s no change to pricing, and none of the property management systems are disrupted. Things run smoothly for a while and the employees are comfortable and productive. Then, new things may be introduced. The website is integrated. Contracts are changed.

This strategy has helped Mike keep a 100 percent retention rate in his last two acquisitions, which is pretty remarkable. So, for companies that are running well on their own, there’s not any reason to force the integration right away.

If the company is not aligning or there are problems that need to be addressed right away, you can work with an immediate integration and change all the contracts. Sometimes, that’s the only way to do it. It depends on the team and the alignment between the buyer and seller.   

Don’t fix what isn’t broken.

You can buy a company and do nothing to it, and you’ll still make money. But, if you buy a company that’s underperforming, you can systemize it on the back end and make it scalable. You’ll want to look at it on a case-by-case basis.

Owners need to be notified when ownership changes, and that also depends on the seller. Letters are sent out to tenants, and then Mike works with his sellers to notify the owners. Sometimes the seller makes a phone call, sometimes they make the phone call together, and sometime Mike calls to introduce himself and does it on his own. The goal is to keep it as personal as possible.

Let the clients know there won’t be any changes. They need a familiar face, so consider keeping the owner on staff for a few hours every week. Then, that time commitment can taper off. Keeping your clients makes the profit higher for the buyer and the seller.

Work together.   

There’s a lot more to talk about when it comes to acquiring property management companies.

Contact Steve at steve@empireindustriesllc.com. He wants to acquire property management companies in Texas, the Midwest, or even in the east. Mike can be reached at mike@recproperties.net. He’s looking to stay in California, but will make an acquisition work anywhere.

Thanks for joining us, and if you have questions about The Property Management Show, contact us at Fourandhalf.

The post All About Acquisitions: Michael Catalano and Steve Rozenberg Discuss Evaluation and Integration appeared first on Fourandhalf Marketing Agency for Property Managers.

On this episode of The Property Management Show, we’re talking to a guest about fiscally responsible growth after he emailed Alex a response to the podcast about Mynd.co and Doug Brien, who received a lot of venture-backed funding to grow a property management business.

Benton Cotter remarked that it was a great interview, but thought our audience should know that it’s possible to grow a property management company quickly without raising funds.

We thought that might interest you, so he’s here with us today, talking about how he went from 450 properties two and a half years ago to 4,000 properties today, in 12 markets. He has no venture capital backing him, and he calls his strategy fiscally responsible growth.

What’s more – he wants to get to 10,000 doors in 20 markets by 2020.

Benton is the co-founder of RentVest (rentvestpm.com), and he has a lot to teach us.

Growth through Acquisitions vs. Organic Growth

Initially, a big company fell into Benton’s lap in Phoenix, bringing 850 doors with it. So, the breakdown has been about 60 percent acquisitions to 40 percent organic growth for RentVest. The key to finding people who want to sell is simple: cold calling.

Benton and his business partner, Jacob Ash, get lists of property management companies from NARPM and other sources, and they make a phone call and introduce themselves. It doesn’t take long to get an idea of whether there’s a deal to be made. If you want to grow this way, get connected. Talk about what you have to offer, and start building the relationship.

It’s a hustle. 

AdWords and Its Role in Organic Growth

Growing by 700 units organically is some pretty incredible growth, and it was done in new markets. Benton admits he doesn’t have great SEO. But, he does have a firm grasp on how AdWords works, and it’s the cornerstone of his digital marketing efforts.

AdWords delivers a benefit that others platforms cannot. It captures people who are searching and learning and visiting websites. By the time they pick up the phone to call you about your management services, the lead has really self-nurtured already. They are taking the initiative to call you. That gives you a tremendous advantage when it comes to closing business.   

The approach to AdWords is strategic and includes:

• A projected customer acquisition cost for AdWords before opening a business in a new territory.
• An understanding of the search volume in an area.
• Researching search terms and average monthly rents and competition.
• Spending $1,000 or $2,000 just testing a market. This provides a good idea of what can be done and what it will cost to attract customers.
• When you know your cost per click, you can figure out your cost per lead and your cost per customer.

All of this data helps Benton decide where his company has a chance to earn the most ROI. It’s hard to get it wrong when you have this data to work with.

With a plan to move into more markets, adopting a system that’s easy to duplicate is critical. Benchmark the data, check the data, and study how it works in each market. There are always going to be variations, but when the system is easy to duplicate, growth is inevitable.

Mailers as a Marketing Tool: How to Reach New Audiences

Mailers have not worked particularly well for Benton because they results are so different in each market. He prefers the digital marketing strategies, where the leads he receives are prepared and already in the buying funnel. 

But, if you’re growing your property management company, mailers can work.

Five or six touches are usually required. It can be expensive, but not cost-prohibitive. You get a different set of people than you’ll get through an AdWords campaign or other online marketing leads, and you’ll never overlap. Prospects aren’t going to receive your mailer and then also click on your AdWords campaign.

It’s a different clientele, and they require a trigger. But, with those five or six touches, you’re able to convert.

A Unique Sales Process: Enabling Entrepreneurs

It’s no secret that the property management industry has some catching up to do when it comes to operationalizing sales. With Benton’s explosive growth, he must have a pretty outstanding business development manager, right?

Wrong.

In emerging markets, keeping the overhead low is critical. So instead of hiring BDMs, Benton goes after really qualified employees and agents. And, their success starts with their ability to sell. 

Finding someone who is strong with sales and marketing and also knows property management can be a challenge. In their emerging markets, Benton uses 1099 employees. Their first month on the job carries one task: to grow a business.

Can they sell?

Can they be effective property managers?

Can they present a message and understand the sales content and read a client?

That one unicorn of an employee who can sell, manage maintenance, and be the overall real estate expert who can help landlords buy and sell will do very well opening up an office for Benton and his company.

This defines fiscally responsible growth. It’s keeping overhead low and finding just the right person to help you grow your market and your business. If you cannot afford a BDM, a broker, and a property manager in one place, you need to find a rock star.

Conversion often depends on those rock star employees.

Underperforming agents know where they stand. The company provides KPIs and expects the agents to measure and evaluate themselves. This creates self-awareness, especially when conversion rates are shown to everyone in the company. They know where they stand. They also have the freedom to deviate from standard procedures if it means success. These 1099 employees are treated as entrepreneurs. They need to be creative, and they need to be exposed to as much information as possible.

Establishing a Pricing Model with Potential

RentVest has a simple, flat-free pricing model of $80 per month. With a motto of just say no to business, they choose high-performing properties with high-performing tenants. They have very few $100,000 properties. They have one multi-family home that they inherited. Generally, they manage single-family homes with three bedrooms, two bathrooms, and a rent that’s between $1,600 and $2,500 per month.

With quality homes, you’re working with landlords who have the funds to buy more properties. You’re getting quality tenants with enough income to afford ancillary fees and optional services like renter’s insurance and filter programs. Provide these owners and tenants with value, and your revenue will increase.

Lease-up fees are 50 percent of one month’s rent.

Tenants pay an administration fee at move-in and a monthly administrative fee. These things are common in Arizona, but not in all markets. Those fees are justified with the cost of maintaining the tenant portal and the ease of paying rent online.

Other auxiliary services are offered. Your property management company can bundle services like cable or satellite television and utilities. You can offer real estate services. Offer your tenants a credit repair program so they can start preparing to become buyers. If they’re already in good financial shape, offer them the opportunity to become landlords themselves. This is rentvesting; when a tenant buys a home to gain some income and equity. Then, they can either move into that property or sell it and buy something else.

There are a lot of revenue options with your owners and your tenants.

Benton currently earns 85 percent of his income from property management fees, and his goal is to bring that down to 60 percent, with his complementary business units bringing in 40 percent of his income.

Scaling Locations and Managing People

When the single rock star agent at one of Benton’s location grows to over 100 doors, it’s time to hire a second agent. The original agent can maintain their portfolio and continue to earn referral business. They even had one agent hire an assistant. It’s been a work in progress.

Technology as a Means to a Customer Service End

Benton’s role is not operational, but focused on marketing and technology. He’s very hands-on and has even built some of the tech that’s being used by his company.

Technology is expensive, and part of running a fiscally responsible business is wearing multiple hats. SalesForce is the software of choice and they also use PropertyWare. Big data helps them tremendously, and they’re integrating everything they can, whether that means building an app from the ground-up or working within one of SalesForce’s modules.

Big data has helped with calculating KPIs and lead cost. Benton knows the cost of leads in every market. In Phoenix, it’s $22 to $40 per click and in Reno, it’s about $9 per click. Their average cost per click is around $18. Technology is stacked to help them earn smart money.

If you’re not tech-savvy yourself, work with someone on your team who loves experimenting with software and apps. Let it be someone’s secondary function. You don’t have to bring on an expensive software guy or IT expert. If your accountant also loves writing software or gets enthused about making a current tech system work better, they’ll spend some extra hours on it and build whatever they want. There are plenty of free platforms out there to help. Let that person experiment for a while before releasing it to the whole staff.

Remember – tweaking software is going to help you succeed as a fiscally responsible company. But, no amount of outstanding technology is going to help you if you don’t have a purpose and a vision. Software is a solution, not a purpose. As an industry, we need to get better educated on customer experience.

If you’re thinking about the customer retention game (and you should be), try this book that Jordan Muela recommended:

“Never Lose a Customer Again” by Joey Coleman.

Customer engagement has to be first. You have to know what they want. Don’t go out and build a huge tenant portal with all the bells and whistles if all they want is a way to pay rent online and request maintenance.

Alex always says there are three core principles to business success:

• Define your Purpose
• Know your Numbers
• Culture of Experimentation

Benton is an example of all three. There’s how he got to 4,000 units in 12 markets in two and a half years.

Thanks for joining us on The Property Management Show, and we look forward to seeing you at the PM Grow Summit. Contact us at Fourandhalf if you have any questions about what you learned today.

The post What Does Fiscally Responsible Growth Look Like? Twelve Markets and 4,000 Properties in 2.5 Years – How Benton Cotter Did It appeared first on Fourandhalf Marketing Agency for Property Managers.

Are you still passionate about property management? If you’re not, you may be driving away business.

Today on The Property Management Show, we talk to Steve Welty, owner of the hugely successful Good Life Property Management. There’s a lot to discuss, from how to become competitive in a new market to the importance of reputation to – barbers.

Alex can’t go back to his barber because his barber has lost passion for what he does. The barber is more interested in thinking about other things he’d rather be doing than trimming hair and beards for men.  Alex isn’t willing to work with someone who is no longer passionate about the services he’s delivering – and your clients probably feel the same way.

Passion and the Three Pillars of Success

Passion is required in your business to achieve success. You have heard about the Three Pillars of Success before, and Alex recently did a NARPM webinar about these pillars:

1. Know the purpose of your organization and what you’re driving towards.
2. Know your numbers.
3. Embrace a culture of experimentation and innovation.

Passion drives these things.

Steve understands passion, and the danger in losing it. He came to a place where he had to decide if he was going to go full steam ahead with his property management business or just find something else to do next. He decided he still had a lot to accomplish with property management, so he set a five-year goal: to get to 3,000 units with a 30 percent profit margin.

That goal has given his entire team purpose, and passion is a part of that.

Enthusiasm and passion fuel the purpose.

Pivot Towards Passion and Decide Where You’re Going

Entrepreneurs often take too little time zooming way out to decide what they’re doing and where they’re going. Even the most motivated business owners struggle to focus on their purpose in life and in their company. It’s an easy way to miss your purpose entirely. Don’t get caught up in the weeds of your business. If you do, your life will stand still and your batteries will die.

Think about who you surround yourself with. If you’re a micromanager and you don’t understand the basic principles of human psychology and delegation, you’re going to suffer and so is your business. Put together a brilliant executive team and feed them passion and motivation.

You can set the long term vision and show up. Your team can do the rest.

You have to build your business. You have to know where you’re taking your team. People want to be taken somewhere and if you don’t know where you’re going – fire yourself.

Steve recently had his team review him. He did a performance evaluation on himself, and he got a lot of great insights. One of his accountabilities is culture. His team said the culture had been struggling because of their workload and the fact that they hadn’t had a team outing for a while. If Steve had not asked for this review, he wouldn’t have known what he needed to do to re-ignite the passion in his team. Communication is critical.

Happiness starts with a competent leadership team you can rely on. Put people in place who are better than you in their specific disciplines.

Getting to the Goal: Operationalizing Sales and Marketing to Reach 3,000 Doors

The plan for reaching those 3,000 doors is this:

1. SEO
2. Reputation
3. Conversion

After studying great companies that have grown, Steve noticed one thing they had in common: killer SEO. Google property management or any related keyword, and those companies pop up every time. So, Steve educated himself on what that meant and how to achieve results. He hired a writer to focus on blogging. The number of website visitors went up and so did their ranking on Google. He worked with Fourandhalf to build a good marketing foundation.

With SEO comes conversion. Once you have that visitor to your website, you want to be irresistible to that potential customer. You want to understand your perfect client so you know how to appeal to that client. Great content brings you website traffic, which brings you potential conversions. This is the next phase after SEO mastery, and between the two is reputation.

Steve built his company on Yelp. He understands reputation and its importance.

Yelp is a missed opportunity for a lot of property managers, and Steve has some good advice about what he’s learned when it comes to gathering reviews:

• It’s important to have so many positive reviews and be so in the game that a few negative reviews don’t matter.
• Customer reviews are only going to become more relevant.
• Set up a culture of asking for reviews. Talk about asking for reviews in every team meeting.
• Appoint a Yelp Czar on your team. That person is responsible for increasing the number of reviews your company receives.
• Try to convert the negative reviews. They are usually tenants, and find out what you can do. Maybe it’s someone who didn’t get the apartment they applied for. Refunding their application fee can turn a one-star review into something better.
• Don’t delegate one-star review responses.
• The number of reviews you have is key – sometimes more important than your rating.

Keep an eye on reputation. Incentivize your team to get these reviews coming in, and your company will look good.

Expanding into New Markets: Landing Pages and Microsites

Good Life Property Management is working on expanding from San Diego into the Escondido market. Steve sees his company as educators, so they’re doing all the blogs and videos and setting up landlord seminars and doing Facebook ads.

What else can be done to dig into a market that’s 30 miles away?

AdWords won’t help with SEO in this case because no one is really searching for property management in Escondido. The best way to use the power of SEO and conversion is through a microsite. Steve can create a lot of content and include a lot of links from his main website, which already has a lot of authority with Google. 

If you find yourself in the same situation, consider using a microsite for a new location. A landing page might work equally as well, depending on your territory and the strength of your mother ship, or your main property management website. Check all the boxes. Put some content on there that’s more than 500 words per page. Make sure you have substance. Create a subdomain. These things will help.

Long form content creates magic, according to Steve, who has effectively done it. Writing something with 2,000 words or more allows you to do a deep dive and reaches important audiences. It also makes Google pay attention. Consider writing long articles or white papers. Short form content is always going to be necessary because you want to show consistency and quality. Long form content, however, can really help you gain significant SEO over time.

If you want to take over and play in a new area, build an engaging page on your website. From there, convert it into a microsite and then include those valuable links from your main site.

Linking higher authority sites to your new page is where it’s at.

When you’re expanding into a new, smaller market, your plan is this:

1. Build your main site and make sure that website really ranks.
2. Once it has authority, build pages and microsites that link. 

Giving What you want to Get 

Social media also has a lot of promise. Steve has effectively used Facebook Live videos to reach an audience and share his expertise. It’s like throwing up billboards in front of people who will find the content relevant. It’s inexpensive and doesn’t take much time. He recently did a Facebook Live video talking about the advantages of being a landlord. It can be intimidating if you haven’t done it before, but once you start to roll, it becomes comfortable and easy.

Steve believes in educating and sharing knowledge, and if you read Deepak Chopra’s book “Seven Spiritual Laws” you’ll get to understand the Law of Giving. Whatever you want – you have to give. So, if you want knowledge, you have to give knowledge to the world. Apply this to your business. If you want a great review on Yelp, leave great reviews for other services you use. If you want more education, educate people on the things you know.

Hear more from Steve on his Good Life Property Management podcast, and contact us at Fourandhalf if you have any questions or thoughts about what they discussed today.

The post Steve Welty Talks about How to Dominate the World (or your Property Management Market) appeared first on Fourandhalf Marketing Agency for Property Managers.

On The Property Management Show, we’re starting a new series called How I Did It, which focuses on property management success stories.

The goal is to empower property management business owners with success stories from those who have done it. We all have challenges when it comes to running our businesses, and in this series, my guests will share how they overcame those struggles. We’re going to be honest and open, and we hope it will help you build your property management company. 

The first guest in this series is Stephanie Gordon. Stephanie is a longtime customer of Fourandhalf, a good friend, and one of the most successful property management entrepreneurs I know. Her company, Gordon Property Management, is the leader in the San Francisco market, and she’s owned her business for 31 years.

We asked about the most difficult time she went through and what her biggest challenges were.

Managing People Instead of Properties: Becoming an Employer

Stephanie is open about the fact that her biggest challenge has revolved around employees and being an employer of people. Like many business owners, she started the company out of her house on her own. She did everything. Then, adding people became necessary.

Before too long, you’re no longer managing properties. You’re not managing owners or tenants. You’re managing your employees. That can be a difficult transition.

Stephanie believes she stinks at that. It’s not her personality. She wants everyone to get along and do their jobs and be friends. She avoids confrontation. But, that doesn’t work when you’re the boss of people.

She has a great team now at Gordon Property Management. But, it wasn’t always so cohesive.

The Difficult Maintenance Employee – Let’s Call Him Mark

In 2008 or 2009, Stephanie had two maintenance guys working for her. One was great and the other one, we’ll call him Mark, was difficult. They didn’t get along. But, it was more than that; it was making Stephanie unhappy. It was making her so unhappy that she dreaded going into work every day. She considered doing something else with her master’s degree; maybe teaching real estate and property management.

She acknowledges now that she waited too long to fire Mark. But, maintenance guys are hard to find in San Francisco, so she was reluctant to let him go because her company had maintenance needs to meet. Mark worked primarily on a large account; an owner who had about 50 units.

One day, Stephanie realized she didn’t like Mark. She didn’t like the account he was spending 80 percent of his time on, and something had to change. 

So, she fired her client. Then, she fired Mark.

It was the first time she ever fired a client, but after that account and the maintenance problem were gone, the whole dynamic in the office changed. Mark had been a drag on everyone, and the client had been demanding all kinds of different things that the team was struggling to provide.

Firing a client is a measure of success.

When you can fire your clients who aren’t a good fit, you know you have done something pivotal for your business.

Remember when we talked about Robert Locke on this podcast? How becoming a Big-A Agent means your owners trust you to make all decisions for their properties? This is in contrast to a little-a agent, who is always asking for approvals from their owners. Stephanie was transitioning from small-a to Big-A at this point, and losing that one account meant losing nearly 10 percent of her overall income.

But, Stephanie has learned that when she fires a client, her income dip doesn’t last long. New business is quickly brought in. You also have to remember she was so unhappy that she was willing to give up her whole business.

Stephanie’s Story: Becoming a Property Management Entrepreneur

She started managing properties owned by her family.

Her father bought and sold apartment buildings, and she grew up in the industry. She’d paint apartments in the summer and help out in the office before anything was automated. There were no computer systems. Stephanie worked as a sales agent for a while, but she wasn’t great at it and she hated cold calling.

As her mother become tired of managing properties, Stephanie’s parents were looking for someone to take over the business. Her brother wasn’t sure, but Stephanie was ready. She started with two buildings, which had 65 and 38 units.

When she got started, the property management industry was much different than it is now. It tended to be the poor stepchild of a real estate office. There was no business development. But, she began to gather referrals from the real estate agents she knew. She began adding properties and adding clients. 

The Next Level: Buying a Management Company

In 2003, Stephanie bought a management company from someone she sat next to at a property management lunch in San Francisco. The lesson here is that when you go to industry functions; sit next to someone you don’t know. There’s no telling where it could lead. 

She got a great deal. The seller lent her the money to make the purchase, and she paid it back over time. The bulk of the purchase was three buildings at the edge of San Francisco’s Tenderloin district. It’s not a great section of town, and she did wonder if she had made the right decision.

The next step was to hire her first employee, who was a part time person who did data entry and bookkeeping.   

High-Level Details of Stephanie’s Purchase:

• She paid one year’s annual gross in 2003 for each unit.
• The claw back clause allowed her to reduce the purchase price for the clients who went away after 12 months.   

Megan was the company’s second employee, and she is still with Gordon Property Management today.

The first employee, however, was another relationship that ended badly. She felt very entitled and she became difficult. Stephanie likes to hire people and start them low, but raise them quickly if they’re good. So, that first employee had been getting big raises for a couple of years. Then, she longer seemed worthy of that big 10 percent annual raise. When she didn’t get it, things got a little crazy. 

Finding Contractors is Hard: Why Stephanie Didn’t Hire the Best One She Knows

Stephanie’s husband is a licensed contractor. Could they have paired up and started a construction department at Gordon Property Management?

Stephanie says no, for two reasons:

• She did use her husband Richard to do some early jobs, and the clients didn’t love it. They thought he was overcharging, or they expected the work for free.
• Richard hated it. He’s a perfectionist who likes to work with a big budget and build beautiful things. The apartments in San Francisco managed by Gordon Property Management are older and rent controlled. Not exactly part of her husband’s creative vision. 

There are plenty of times that he gives her advice or tells her what kind of work needs to be done at a property. But, early on, they decided it was best not to work together.

The Next Step: Internet Marketing and Educational Content

Stephanie attended a CALNARPM conference in San Jose in 2011, and it was all about technology. She admits not being a tech person, and had always resisted it. But, she left that conference feeling energized and excited about technology.

She wanted a Facebook page.

As one of Fourandhalf’s first customers, she began doing some marketing. She recorded videos and blogs and went all in with the content creation. Here’s some valuable information that can help you measure results:

• In the first year that she did content marketing, she saw an uptick in business, but not huge growth.
• In the second year that she did content marketing, people were finding her on the internet.
• In the third year that she did content marketing, things really took off. The phone started ringing and it hasn’t stopped.

Intentional Dinosaurs: It’s Time to Innovate

Even though she didn’t love technology, Stephanie didn’t want to be outdated. She didn’t want to be the property manager who was still advertising rentals in the newspaper. Once she got started with Appfolio and automated all of her systems, things got a lot easier. It was painful for a little while, but well worth the effort.

NARPM helped her with innovation, too. She went to classes and attended trade shows. She met vendors who were coming up with new technology for the property management industry.

If you look at the most successful property management companies currently in operation, you’ll find that all of them do videos and blogs. They are putting out a lot of educational content. In addition to blogs and videos, they’re doing long form content like podcasts. They create books. Look at Stephanie. Look at Andrew Dougill in Tampa.

Stephanie also invests in reputation management, and she thinks it’s important to look at the responses from customers. It’s a valuable service; the good reviews are published publicly and the bad reviews are immediately addressed so customer satisfaction can improve. People don’t see the tremendous advantage to this service yet, but Stephanie has already seen the value.

She points out that as property managers, you aren’t selling shoes. You’re working with people’s homes. If you treat your tenants right and value them as customers, in the long run, it will benefit you as a landlord. Happy tenants are important because you’ll need them to be on your side one day, and there’s a big difference in managing a cooperative tenant and one who is holding a grudge for some need you didn’t meet earlier in your relationship.

PM Grow Summit is Coming…

It’s time to start preparing for next year’s PM Grow Summit. You’ll have the opportunity to meet Stephanie and people like her. The 2019 summit will be in Austin, Texas from April 17 to April 19.

We want our guests to help us pick our speakers, so contact us with your suggestions. We’ve enjoyed receiving your notes and feedback, and we’d love to hear more from you.

If you have any questions about PM Grow or this new series on the podcast, contact us at Fourandhalf.

The post How I Did It: Stephanie Gordon Shares the Challenges that Helped her Succeed appeared first on Fourandhalf Marketing Agency for Property Managers.

Thank you for joining us for another episode of The Property Management Show. Today, we’re talking to Doug Brien, who is the co-founder and CEO of Mynd.co, a property management startup. Before we talk about his innovative new property management platform, there are a few other things you need to know about Doug.

First, he’s a former NFL kicker who went to the Super Bowl with the San Francisco 49ers.

He also co-founded and led Waypoint Homes, a company managing 17,000 single-family homes in 13 different markets around the U.S. He personally has investment properties, and his entry into the property management business began with his inability to find effective and exceptional management for his own rental investments.

Today, we’re talking about Mynd.co and how he’s using the lessons he learned at Waypoint Homes to make the property management industry better.

A Property Management Startup Raised $35.6 Million

Mynd.co is a venture-backed property management company that raised $35.6 million and has 2,500 units under management.

This is significant.

There’s a lot of momentum behind Mynd. With more private equity and VC-backed money in the property management industry, acquisitions and consolidations are moving rapidly, changing the landscape of this business.

Technology and systems can scale the potential of property management businesses. This is what’s behind Mynd, and it’s not new to Doug and his team. This is what they began at Waypoint.

The goal is to create a property management company that can perform at a level high enough to attract institutional capital. There’s a tremendous opportunity to build a 21st century property management platform by using technology to systematize and measure tasks and outcomes. You can’t improve something if you don’t measure it. 

Data is the new oil – have you heard this saying yet?

People are beginning to realize that data is the most important resource in the real estate business, and especially in property management. The companies that know how to collect it and harness its power can create simpler and more profitable investments for people who want to own rental properties.

Property Management Performance Gaps: Lessons Learned

One of the major performance gaps in the property management industry is the visibility and use of data, metrics, and reporting. The things that an individual investor wants in a financial package are much different than the things an institutional investor wants. End-of-the month statements are great if you’re looking back at your performance. But, your new investor clients may want real time data. When you can create real time visibility, you can use what’s happening right now to make adjustments and corrections. You can focus on the right things.   

Vacancy is a problem for investors of every size. Data has shown that self-showings can make a big difference in lowering your vacancy rate. With smart locks that generate codes for limited periods of time, prospective tenants can see a property immediately. There’s no time to waste with scheduling and coordination. One of the biggest conversion fails is scheduling appointments with agents. With self showing technology, people can be pre-screened and given a code to let themselves into the property.

Things move faster this way. The philosophy of Mynd is to meet people where they are and create a seamless experience. A mobile-enabled experience allows people to find an ad, see the property, apply for the home, pay a deposit, and sign a lease. It’s seamless and it’s faster. You rent the property quicker and to a better quality of tenant.

These are tenants who are willing to self-serve. That shows you something about a potential resident. 

This is not forced. Mynd offers both self-showings and appointment settings with an agent. A competitor of theirs, Progress Residential, completed a helpful study that showed 90 percent of their prospects chose self-showings over personal showings, and those showings have a higher close rate.

That data is hard to ignore.   

The Depth of Opportunity for Professional Property Managers

More data that’s hard to ignore is what the Iceberg Report has published.

The report focused on single family properties and multi-family units up to fourplexes. The findings showed that there are about 22 million rentals in the U.S. Only 30 percent are professionally managed versus the 70 percent that are self-managed. In Australia, it’s the other way around.

Why are U.S. real estate investors self-managing? Who would want to do that?

This is the trend that Mynd is trying to reverse, and Doug has two suspicions on why landlords and investors are managing their own properties.

First, finding good property management is difficult. That doesn’t mean good companies aren’t out there. They are. But, there are also a lot of mediocre companies, and there are some that just aren’t good. If an investor has one bad experience with a property manager, trust is lost. That investor concludes that the asset is too important, and will manage it all alone. 

Second, there’s been a culture of DIY in America. That’s changing because it’s generational. Real estate has never been a market that was focused on customer experience. When service providers can do better and help people to feel comfortable trusting their most prized asset to a company that can provide value, those statistics may change.

Another thing to consider is that Australia is more tenant-friendly. There are rules and laws that are far more complex and prohibitive than the regulations we have in the U.S. So, it’s difficult for an individual owner to navigate those successfully. They need the help of a professional. 

Ideas to Improve the Property Management Industry

Mynd wants to make it easier to invest in small residential rentals of 50 units or less. That covers 84 percent of all rentals. This is a financial investment. If you invest in stocks or bonds, you can get real data on your phone, and you can find high caliber professionals who will manage those investments for you.

Why can’t that be possible for the property management industry, too?

Mynd is trying to make it feasible and simple. They want to create a more compelling investment platform. A majority of real estate investors own rental homes within a 60 mile radius of their own residence. But, the chances that these are the best places to invest are pretty low. If you live in Oakland or Hayward, you might be better off investing in Kansas City or Dallas or somewhere in Florida.

With innovative management technologies and their own software, Mynd can gather operating results and financial results in any market. They know where things are happening and where they’re not. That’s going to help them put together a portfolio of different properties in different markets.   

Investors should be in the markets that make sense. They should have the choices to move assets around. Doug sees a point when fractional ownership is possible, and investors can sell half of a building in order to do something else. 

Lessons Learned. How is Mynd Different from Castle?

Doug and his team are successful raising capital and meeting expectations. He is aware, however, that nothing is ever guaranteed.

It’s difficult not to think of Castle Property Management in Detroit, Michigan, which was also VC-backed and focused on technology and systems. Doug is working with Scott Lowe, who was part of the Castle team. There’s a lot to learn from the Castle experiment, and Doug said he had a lot of respect for what they did in Detroit, and how strongly they believed in what they were doing.

What they got wrong, Doug believes, is that they didn’t bring in enough subject matter experts who know the property management industry. They lacked the experience in growing a company. There are always going to be mistakes. The difference that Mynd is making is that they are constantly measuring the levels of customer satisfaction. It’s their focus. 

Growth Through Acquisitions: How to Buy and How to Sell

Mynd is growing through acquisitions, but they don’t think of it as buying companies. They think of it as partnering with companies. The strategy is called Land and Expand.

They land by finding the right entrepreneur with a portfolio that’s a good fit. They pay for the value that has been created, and they partner together to move forward. The owner or the team members might stay with the company, and they become a part of Mynd. These are local market experts who know the area and the properties. They are invited to share their goals and to build the portfolio. That’s the land piece.

The expand piece is the large digital footprint that Mynd leaves. It’s the online presence combined with the offline channels that create indirect and direct growth.

If you’re thinking you might want to sell your company in the next 12 months to a platform like Mynd, you should begin to identify its value right now.

• Everyone has a different way to value companies. One thing that’s consistent, however, is that a potential buyer will want to see your revenue. Your recurring revenue from leasing and management fees will matter. So, if you want to grow the value of your company, you need to grow your revenue.

• Next, consider what your contracts are worth. Management agreements that are a month or two old will not be as valuable as that contract that’s been in place for two or five years.

• Be careful about exceptions. If you’ve got side deals with some of your owners that are outside of your normal operating procedures, it’s going to be difficult for the company that’s acquiring you to meet those existing obligations.

• Audit all of your leases and property management agreements. Clean up your accounting.

It’s a good idea to hire a consultant to help you through this process. It will make your business clear, and you’ll find it’s a positive ROI experience for you. Buyers like Mynd will want to see clean, consistent, transparent businesses.

Get your consultant on board three to six months before you want to sell. 

Look for a person who is involved with institutional property management. For example, maybe you can reach out to someone who works in the business and would be willing to give you 10 or 15 hours of their personal time. You could pay them around $75 per hour, and at the end of the project, you have properly audited your business, and you spent very little money.

You can also send some sample contracts to a potential buyer. They won’t go through every lease, but they might tell you what kinds of trends they see, and what might be a problem for you. 

Pricing your Property Management Services

Pricing always depends on the market. Mynd is creating software that makes pricing part of task management. Property management is a series of tasks created by owners, tenants, and the property itself. Your job is to resolve those tasks. To properly price your services, you need to know what things actually cost. What does it cost to lease a unit? What does it cost to collect rent? To manage residents?

In the future, Doug expects to be able to price in a way that offers investors more flexibility and more ease. Data, again, will lead to a meaningful strategy.

Mynd is excited to do things differently. They’re starting a model for short term rentals. In the Bay area, you can earn twice as much revenue with short term rentals. Because they’re more operationally complex, new software is needed to handle the shift in services that are provided. Property managers can change 15 or 20 percent, and the investor will be on board.   

Marketing and Technology for Property Management Entrepreneurs

Maybe you’re the owner of a management company, and you’re in high growth mode and you’re managing between 600 and 800 homes. Mynd cannot take all the business that’s out there, so what is your biggest opportunity?

Doug thinks that opportunity lays in word of mouth from customers who have received excellent service from you.

Property management is a trust and credibility business. If someone finds a good property manager, they are willing to tell everyone. Your sales cycle on one referral is fast and easy when you do a great job.

There’s also a technological revolution happening right now that can help you. Property management companies who can ride that wave and leverage the opportunities it provides can earn more money. Figure out how to use the technology to drive customer service and earn referrals. You’ll thrive in the next five to 10 years.

Be obsessed with customer experience.

Property managers are always finding themselves between owners and tenants, so you’ll get negative comments from someone. When that happens, get to the bottom of the situation, resolve it, and make it right. Admit when you’re wrong, and respond online proactively.

Invest in the systems and the technologies that allow you to monitor your reputation and your ability to provide great customer experiences.

Marketing and brand management brings more lifetime value out of a new customer. Every referral is valuable, and it’s how a growth-minded property management company can strive and survive.

Property Management (and the NFL) Requires a Thick Skin

Property management is not unlike being a professional athlete. No matter how many good things you do in your career – it’s the thing you missed that will always be remembered.

Maybe you saved someone tons of money on repairs or leased a property for the highest possible rent. The only thing that person might remember is the eviction you screwed up.

Have a thick skin, and focus on what you can control.

PM Grow summit is coming! It’s going to be April 17 to April 19 this year, and we want to know who you want to hear from at this summit. Contact us at Fourandhalf today. 

Thanks for joining us.

The post Doug’s Property Management Startup Raises $35.6 Million; Do You Mynd? appeared first on Fourandhalf Marketing Agency for Property Managers.

Today on The Property Management Show, Robert Locke is joining us to talk about how to structure your business without growing pains. This probably sounds impossible, but Robert is going to help us elevate the conversation and explain some BIG IDEAS.

Why We Should Learn from Robert Locke

Robert started his property management company 35 years ago with 50 units. He is candid about having made all the mistakes possible in the first few years. But, he sold his large, very successful and immensely profitable property management company to a Fortune 500 enterprise.

That sale came with a nondisclosure agreement. He couldn’t speak or teach for a while after the acquisition. Today, he’s finally able to deliver his knowledge to the world, and we’re humbled that he chose to make his debut on The Property Management Show.

The Things You Think are Critical May Actually be a Hindrance

Robert started with five rental houses in 1980. He began selling properties to investors who said they would buy the homes if Robert promised to manage them. So, Crown Realty and Management was born.

After 10 years of steadily growing his business, it became clear that at every level of growth, it was necessary to let go of some of the things that had seemed so sacred and necessary and important to running a business.

When you go from 200 properties to 300 properties, you learn some lessons.

When you go from 500 to 600 properties, you learn some more lessons.

Most property managers build a system that works for where they are today. Whether that’s 50 properties or 500; there’s a tendency to design a structure that works for what you have right now. But then, if you double in size, it’s easy to crash and burn.

A critical mistake that will hinder your growth is holding onto the things that you think are essential to your management model. What works for you at 200 properties will not work for you at 400 properties. Many of the systems that were working perfectly will hold you back.

When Systems Hinder Growth: Some Examples

One property manager had a sales model where he gave every owner and every tenant his personal cell phone number. His pitch was that if people didn’t like the answer his staff gave them, they should call him directly.

This works when you manage 50 or even 100 properties. But, it won’t scale. It would be impossible to get bigger than 200 properties because you cannot have 400 owners with your cell phone number. Beware of building things into your model that will prevent you from going to the next level.

Another property manager in Savannah was managing 200 units. His model was to send the full rent to the owners every month and then invoice those owners for the management fee. That’s $60,000 of accounts receivable every month, and an accounting firm had to be hired to handle the invoicing and collecting.

Obviously, that’s not scalable. You cannot go from 200 to 500 properties by invoicing your owners every month. It became a hindrance, and the owner of the property management company had to give that up and begin taking the management fee from the rent that was collected. It required some conversations and some strategizing, but changing the system was absolutely necessary to grow. Now, that company has doubled in size and the wheels haven’t come off the business. 

Everyone builds things into their systems that impede growth, and those of you who have gone to the next level can spot them. You know what you had to give up once you move from 300 properties to 500 properties. But, at 300 properties, you don’t necessarily see it so clearly. 

The Mac Daddy of Slow Growth: Are you an agent or an Agent?

A lot of people who move into property management come from real estate sales, where you’re an agent (small a). They do what the owner asks them to do. The owner is in charge, and the agent executes on the owner’s directive. It makes sense in sales, but it doesn’t translate with property management.

In property management, agents think that they have to confer with an owner before approving an application. They think they need to call the owner before handling maintenance or dealing with an eviction. They think that because it’s what you do in sales. You are facilitators and scribes. You don’t make decisions and you collaborate on everything.

You have to change your thinking and become an Agent (big A).

The number one hurdle preventing property management companies from getting to the next level is the idea that you have to collaborate with your owners on every decision.

You don’t.

An Agent gets authority through the management agreement to approve and deny applicants, to handle maintenance under $500, and to file an eviction when it’s time. You can handle the wobbly deck and deal with the deadbolt that’s not working. You can replace a dead shrub, and you can do all these things without calling the owner first.

Get a spending limit and stop collaborating with owners all the time. It’s stagnating you and preventing you from going to the next level. It’s consuming your staff’s time.   

Part of the problem is that property managers often teach owners to behave this way. You have to educate your owners and earn their trust.

If you’re not familiar with Steve Crossland, listen to his podcast with Jordan Muela on The Profitable Property Manager. He is extreme about being a Big-A Agent. He insists that owners trust him to make strong decisions and to enforce them. His maintenance limit is $500, but he is very clear with his owners. If the air conditioning fails, he is going to send his tech to replace it. There’s no collecting bids and there’s no making phone calls. The tenant will not be left suffering in 105 degree heat. Not everyone is okay with that, but Steve will only work with owners who accept it.   

Owners who want to be more hands-on may not want to work with you. But, if you want to grow, you cannot co-manage. You cannot be micromanaged. You are the expert. You are the authority. Don’t waste your time collaborating with owners who don’t have the same skill and training as you.

Too many property managers are worried about losing an owner. This hinders them from raising fees or offering extra services or doing other things that will make them money. One property manager had 400 owners and he introduced a new fee that was a couple of hundred dollars per year. He lost five owners, but he made $75,000 extra that year on his remaining owners.

Don’t structure your business based on the fear that you might lose an owner.

Adopting a Formula for a Nickel-and-Dime Business

There’s an important formula that you need.

Here’s the truth: Property management is a nickel-and-dime business. You’re not chasing $5,000 checks. You’re chasing $80 dollars a month from your clients.

All nickel-and-dime businesses require volume.

To create volume, you need speed.

What does speed look like?

It’s approving applications without calling the owner. It’s handling maintenance under $500 without collaborating with the owner. Those things create speed. Processing an application and signing the lease without the owner and moving the tenant in on your own creates speed, which creates volume.

You need speed for scalability. If you have to collaborate with your owners, you defeat speed and you can’t scale.

When you’re collaborating with owners, you’re driving a motor home that’s clunky, slow, and guzzling gas.

When you let that go, you can drive a Ferrari, which is fast, racy, and efficient.

If your owners hate it, they can let you go. And that will be okay.

Educating Your Owners Starts with the Management Agreement

If you’re constantly blogging and communicating with your owners through newsletters and other methods of communication, you’re going to be able to set the expectations and earn the trust you need to follow this formula and claim your authority as the property management professional.

The process of owner education starts with the management agreement.

Build a management agreement that isn’t sluggish and slow. Have the right language that tells owners they can trust you to make good judgments.

Owners don’t know what’s going to be in a management agreement. They do not spread out three different management agreements and see how others do it. If your contract sounds logical and intelligent, they will sign it.

Growth Strategies: Remote Lockboxes and Outsourcing

If you want to grow, you need to stop meeting your tenants at the property to move them in. Once you get to a certain level, it becomes chaos and takes up too much time.

Remote move-ins are easy and efficient.

Let go of the personal move-in process and set up a system where you can send the lease via DocuSign and tenants can go onto their portal to pay the rent and the security deposit. You cannot scan them a key, but you can create a lockbox mechanism that’s controlled remotely.

If you think you have to be there when they move in, you’re not thinking about speed, and you won’t be able to grow.

Remote showings are also essential. You don’t actually need to have an agent there to show prospective tenants which room is the living room and which room is the kitchen. They can take a look around themselves and contact you with any questions.

Society today is becoming less personal. There’s a tension there, and it’s easy to worry about losing the personal relationship with prospective tenants. But, there are benefits. Think about fair housing. Remote showings will do a better job of keeping you compliant.

The personal relationship is important in the sales process. You’re showing off the home. It’s a big ticket item. With rentals, tenants don’t need you there to help them make their decision.

Some property managers really want to keep their process personal. They want to shake hands and fawn over the kids and pet the dog. This is fine if you want to stay small and have relationships. It’s just not scalable, and you won’t be able to grow past a certain point.

Outsourcing is the current catnip in the NARPM world. If you want to grow, embrace outsourcing.

Virtual assistants cost less and they get a lot of your administrative work done. They can handle phone calls and answer questions. This is critical not because it makes you more money but because it holds your costs down. It’s a critical element to becoming scalable and profitable.

Property Management Assets: Employees and Tenants

Virtual assistants allow your staff to play a more strategic role in servicing your owners and your clients. This is important because turnover – whether it’s employees or tenants – will kill your ability to grow.

You’ll make a lot more money from a tenant who is in the property for five or 10 or even 20 years. You’ll hear a lot of property managers say we work for the owner. But, if the tenant is happy, the owner is happy. 

The longer you keep tenants, the longer you keep owners. Make sure your tenants are feeling valued, and make sure your management agreement doesn’t renew with the lease, but with the tenant’s departure.

There’s much more in Robert’s course that can help property management companies grow without growing pains. If you want to dig in deeper, check out his online workshop at: https://www.trainingpropertymanagers.com/online-courses

There is a button with courses that are both on-site and online. There’s even a series you can subscribe to that’s completely free and available to everyone.

Thanks to Robert for joining us, and thanks to all of you for listening.

It’s the time of year where we start thinking about PM Grow Summit. Our speaker lineup this year is going to include public sourcing. We want to know who you want to hear. So, if you want to hear more from Robert and you’d like to hear him speak at PM Grow 2019, contact us and let us know.

The post How to Structure Your Business to Grow Without Growing Pains appeared first on Fourandhalf Marketing Agency for Property Managers.

In this episode of The Property Management Show, we’re talking about top-line growth versus bottom line performance in your property management company.

There’s a belief that’s accepted among business owners that you suffocate without profit.

However, it’s also possible that you can suffocate without healthy top-line growth. Profit may be achievable, but top-line growth is possibly more meaningful for a company, even though profit is what indicates what a company is worth and how much you’re taking home as its owner. 

Two guests are exploring this idea with us today. Jordan Muela is the co-founder and CEO of LeadSimple. He’s also the co-founder of PM Grow Summit and the co-founder of The Profit Coach. With him is Danny Craig, who digs into numbers like nobody else. He partners with Jordan at The Profit Coach. 

True or False: Growth Solves Nearly All Problems

In the discussion of top-line growth versus profit, there’s an idea that growth solves nearly all problems.

You could be operationally efficient and really good at what you do, but you have no clue how to grow your business or use sales and marketing to achieve bigger outcomes. Or, maybe you provide an average service but you’re great with sales and marketing. The company with the grasp on sales and marketing will probably out-perform that company with outstanding services but no way to sell them.   

Also, there is no point in scaling something that doesn’t work. If a business is hemorrhaging cash and losing money or underperforming even without the sales and marketing budget factored in, nothing good will necessarily come from trying to grow. 

Another thing to consider – what does your end state look like? In other words, why are you in the business? If you want to maximize your cash flow from month to month, that’s one outcome. If you want to accumulate a bunch of doors, scale up, and then sell, you have to measure whether you can feed the business enough cash to get the growth you want before you sell. That’s a different path.

Depending on your end game, you’ll know how concerned to be with scaling and profitably. Growth won’t solve all issues if you can’t at some point optimize that growth.

Growth is great. But, if you cannot get profitable, you’ve got an issue.

Remember this: When you strip out the sales and marketing expenses of an organization and that company is still consistently losing money, it’s pointless to scale. That business needs a lot of help, and top-line growth isn’t necessarily the answer.

Falling into the Black Hole: Where and How this Happens

A business can grow to the point that nothing seems to work anymore. As the organization scales, it doesn’t matter how efficient you were before. You cannot continue to deliver the same output at the point where everything seems to be breaking because you’ve reached a new level. Even with the best processes and systems, it seems that nothing is in place to support the growing machine.

This can happen to property management companies at two stages:

• First Black Hole: Between 200 and 300 doors are under management, and the owner wants to transition from being a property manager handling the day-to-day work to being a true owner who is spending time bringing in new business and strategizing for the future.
• Second Black Hole: Between 700 and 1,000 doors are under management, and processes suddenly aren’t sufficient to handle the growth. It feels like you have to rebuild everything. An owner is acting as a CFO, managing HR and leading the marketing charge. It’s too much.

Moving Past the First Black Hole

There are three major drivers when you encounter black hole number one, based on benchmarking and consulting done by Jordan and Danny.

First, profitability. Cash and profitability are closely related in property management. With the recurring revenue model, if you don’t have cash, it’s because you’re not profitable. So, you have to understand your direct labor efficiency. For every dollar spent on direct labor, how many dollars do you get in revenue?

Direct labor is where everyone in the company is spending 50 percent or more of their time delivering property management services to owners or tenants. You need to know how many dollars you’re generating in revenue for every dollar you’re spending on salaries and commissions. 

Second, revenue per unit. There is so much focus on growth, but sometimes it’s easy to forget whether the revenue is there. Is the top-line revenue there per unit? You can grow top-line revenue not just through acquiring more doors, but by getting your profitability per door where it needs to be. Data shows that you cannot make a profit if you’re earning less than $150 dollars per unit, excluding maintenance.

Third, controlling costs. This is an obvious requirement. You have to watch your facilities and operating expenses.

What do you do as a business owner if you find yourself in this black hole?

It starts with intention. If your intention is to be profitable, you’ll be committed to driving profit. Every small business needs that commitment.

On the labor side, it’s critical to understand the tasks of your team and what it takes to achieve them. You may be in the weeds and you may assume you know what everyone is doing. But, in the first black hole, you’re coming out of the weeds. There’s a little less oversight into what your team is actually doing. If you’re losing efficiency, it could be because they are confused about their job. Maybe there is a lack of knowledge that’s driving the inefficiency. Or, without the oversight, they’re being less efficient just because they can. Hold people accountable to specifics, not general ideas.

You probably hear people say to staff for growth.

You have to know how much time it takes for your team to manage a process. You have to embrace constraints and use them to your benefit. For some companies, it’s a salary cap. This is a form of accountability. Knowing what the constituent tasks are of your team members is also a form of accountability.

Salary caps and accountability provide visibility to management and owners. It gives you an opportunity to further investigate where you are having inefficiencies. Maybe a portion of your revenue is being driven by a particular set of people. Each team member needs a clear understanding of the tasks they absolutely have to execute. Regular accountability about these steps and processes is critical to both growth and profitability.

For example, if you have an HOA department and the revenue that department drives is only half of what you’re spending to staff that department – a change is needed. If your idea is to triple the number of HOAs you’re serving in the next 12 months, how actionable is that? This is a situation where you need to adjust your labor. Move around who is doing what. Consolidate roles.

Departmentalization is great, but if you cannot afford it, it’s just not practical for your company.

If you find yourself in black hole One, buckle down. Check your labor. Be consistent and more managerial with what you expect from people. Find a constraint of choice to help you.

Steve Crossland in Austin manages 100 units. His constraint of choice is doors. He won’t manage more than 100 doors, and he won’t spend more than half his time managing those doors. He has no employees.

What does that mean? 

It means he has to choose the best doors to manage in order to be profitable. And, he is profitable. You can be boutique and profitable. Or, you can spend a lot of time marketing your business hard because you want to get to 25,000 doors. The rules are different in each situation. 

Moving Past the Second Black Hole

One of the biggest differences between successful companies and unsuccessful companies is embracing a culture of experimentation. This is a never-ending journey. You want to be able to try different things and remold your processes when you can. With all of this opportunity, you have a real chance to achieve your goals.

How can that drive profitability?

With the recurring revenue model inherent in property management, you’re not getting huge annual contracts with up-front payments, so you have a lot of money to play with. You’re getting paid monthly. You’re collecting a paycheck. In many cases, property management companies actually thrive on real estate sales and maintenance companies.

Cash does give you flexibility, and so does clarity of mind and focus. These things come from a well-oiled machine. You cannot have freedom if you’re chasing your tail all the time. With the right efficiency on the operational side, you can step away from day to day tasks and embrace that culture of experimentation.

Growth for the sake of growth is ridiculous. But, growth with purpose leads to success that cannot always be measured by profits.

For example, look at Appfolio. Software companies are dramatically different from property management companies. But, Appfolio started by raising $18 million and then bringing in another $20 million. But, they started losing cash fast. Millions of dollars were lost in the first few years, and it seemed like the company wouldn’t survive those losses.

Suddenly in 2017, in one year, Appfolio became immensely profitable – just like that.

What happened?

They market-sized their fees. They went from $1 a unit to $1.50 a unit, and nobody batted an eye. Now, this company has grown by leaps and bounds and out-innovated a lot of others. Instead of being concerned with profitability, they wanted to do something different.

This is where you might find yourself in the second black hole. Your business might be at zero profit or even losing, but with access to capital, you can keep growing. That makes some business owners uncomfortable. If you’re wrong, and you’re scaling something that you cannot turn profitable, you have then spent the lifecycle of your business not taking owner distributions and grinding away. You’re just adding risk to your model. It worked for Appfolio, and yet many small businesses are not suited to follow that playbook.

People start property management companies because they can choose a niche and get their own piece of the real estate pie. Big corporations aren’t price-gouging them yet and cutting them out of the market. There is something inherently decentralized about the industry. With innovations, it could be centralized. Companies like Mynd.com are coming up with new ideas. They believe they have a scalable product, and investors are behind them. Mynd.com is built by industry veterans, and time will tell where it takes the industry.

The larger you scale, the more things will change for you, including your numbers. If your company is growing like crazy because of all your sales and marketing and you pull that back and your company is still profitable – you’re doing something right. But, if you pull back the profit you’re earning and your operation is still leaking cash, you’re not going to emerge from the second black hole with the revenue you need. The valuation mechanics change as you scale.

Property management entrepreneurs have the opportunity to feed their portfolios with Connected Business Units (CBUs).

When one company is bankrolled by real estate sales, or other endeavors that complement the property management business such as maintenance or construction, you shouldn’t lose money. Finding the right CBU for you could be a better way to grow than to try to add more doors and more doors and more doors…

Revenue per unit is where the money is made when you’re climbing out of your second black hole. How can you get your revenue per unit up? Maybe it’s through ancillary fees. Maybe it’s providing maintenance or other services. You want to milk each door for what it’s worth, and you want to provide value for that extra revenue.

Expand your scope of services and expand your value propositions.

If you want to see what Jordan and Danny are doing, email jordan@pmprofitcoach.com and check out The Profitable Property Manager podcast.

If you have any questions about growth through marketing, sales and better business, contact Fourandhalf.

Thanks for joining us, and we’ll see you next time.

The post Top-Line Growth and Profit in Your Property Management Business: How to Navigate the Black Holes appeared first on Fourandhalf Marketing Agency for Property Managers.

This week on The Property Management Show podcast, we’re treated to an amazing entrepreneur who has been doing property management for 36 years. We’re talking to Melissa Prandi, the owner of Prandi Property Management, and we’re picking her brain for some wisdom on running a property management business successfully.   

Founding Story: Prandi Property Management in Marin County 

Melissa started as a receptionist in the company she now owns when she was 19 years old. She got her real estate license and began doing property management. The company she worked for managed about 100 properties as a side business. The original owner was a CPA, and could see from his clients’ cash flow reports that better rental management was needed. Melissa bought the company at the age of 25, and it’s now the go-to property management company in Marin County. Prandi Property Management has over 600 doors.  

Getting Started: Approaching the First Couple of Years in Business 

Most 25-year-olds know hard work, and that’s about it. Melissa didn’t waste time getting the word out, and that’s the best way to get your new company growing. 

Let everyone know what you’re doing. Reach out to family and friends who have rentals. In the beginning stages, you need to let everyone know that you’re available to manage rental properties.  

While you’re talking about what you do, get educated. Take classes. Learn from people who have been doing this for a long time.  

Melissa took a two-day residential property management class from the one person who was teaching residential property management 30 years ago. She took that class seven times.  

Seven times. 

Why? Because she found she was learning from other students in the room just as much as she was learning from the teacher.  

NARPM is an excellent resource for classes. Get educated, and make it as much of a hustle as gathering new clients. If you want to start strong and grow your business, you have to be obsessed with educating yourself.   

Integration into the Business Community: You Have to Participate  

Join associations. Network with other business professionals. Volunteer your time.  

You can put in hours and hours of volunteer work on something as simple as a town parade, for example. People will inevitably ask you what you do. When you say you manage properties, they will perhaps have a rental property, or they’ll know someone who owns rental property. When you participate in your local community, you get to know people and their needs. These are all potential clients.  

Everyone will be sending you referrals.   

Start in your local market. Teach a college class. Conduct an investor panel. Learn about leadership. All of these things will bring you new business.  

Many people don’t realize that one of the advantages of public speaking at NARPM and elsewhere is that you get a lot of exposure in person and even online. It’s called “link juice.” So you may think that you aren’t actually gaining new business when you’re busy conducting presentations to your colleagues.  

But, you are.  

You’re promoting yourself, and Google will notice. When you’re listed in authoritative sites like NARPM, your local chamber, and business journals, your own website will begin to propagate in search results. Google gives a lot of value to these websites that include your name, bio and website.  

This is an under-appreciated value.  

Networking and presenting also establishes you as an expert in your own field. That’s going to generate referrals.  

Some of the resources for education and networking that you may be missing through NARPM and other associations include: 

• Designation courses through NARPM. 
• Property Management 101 through NARPM. 
• Speaking and leadership courses through the National Speakers Association.
• Local colleges, chambers of commerce and other professional business groups. 

How Growth Happens: Moving from 100 Units to 250 

Prandi Property Management doubled in size over about two years. The referrals kept coming in, from Melissa’s personal connections and her work on nonprofit boards and in associations. Some of the other things she did included an ad in the yellow pages and marketing postcards. She still does the postcards today. 

With the high number of referrals Melissa was receiving, you may wonder if she was paying a referral fee.  

Gift cards and personal appreciation always seemed better. The top realtors she talked to didn’t care about the money as much as they cared about their clients being well-cared for.   

Personal touches matter. Handwritten note cards and coffee dates nurtured current relationships and brought in new business.  

Another idea; visiting realtors at their open houses. Melissa would stop by, especially if that realtor had referred a client. She would bring a flower or a plant, and the relationships and referrals would grow naturally.  

Realtors have team meetings or monthly and weekly meetings. If you can get yourself in front of those meetings – not necessarily to pitch your business, but to provide information and education – you’ll notice a lot of new business rolling in. Get to know the managers at those larger real estate companies.   

This is a path for growth. 

Growing a Property Management Business as an Introvert  

This may sound easy to someone with an outgoing, Type A personality. Some people, however, are more introverted. It requires a little extra effort to feel comfortable in public settings. Leadership classes will help. Pushing yourself into situations that are outside your comfort zone will also help.  

Start small.  

You don’t have to start a public speaking career in front of thousands of people. Start just by introducing a colleague at an event. Practice by talking about something you love. Baby steps are important. It’s possible to teach yourself how to be more outgoing.  

Because, if you truly believe in what you build and you know that you’re improving peoples’ lives, you’ll overcome that nervousness. You will always run into complainers and naysayers in this business, but if your service is good and you’re coming from the right place (your heart), you’ll find that you’re able to be a little less introverted when the need arises.   

This is a useful skill to impart to your team, as well. Your team needs to be out there, talking to people. Your staff has to be comfortable talking about your business and what you do.  

Give everyone personal notecards. Keep it simple and include your company logo. Handwritten notes are unusual in business today, and they will be noticed and appreciated. Thank someone for a referral this way. Old fashioned thank you notes go a long way, and it’s a perfect tool for introverts.  

Managing Your Time and Your Team: Hiring for Growth 

Hiring people complementary to your own skill set will help you grow your business even while you’re networking and attending events and doubling the size of your portfolio. 

Melissa admits that she worked seven days a week, 10 hours a day. She also knows she’s a visionary who needs help filling in the gaps and managing the operations of her business.  

Staffing is important. Know what you need.  

When you put together a good team, you have to keep them. Turnover hurts, and having key positions filled is critical to smart growth and management. Take care of your staff.  

Two things will help with staff retention:  

1. Flexibility. Life happens. Many good employees will value flexibility over money. Give your employees the flexibility they need to have a life.
2. Respect. If you respect your employees, they’ll respect you back. And, they’ll stay. 

Be willing to hire all sorts of help. Virtual assistants can become indispensable. High school and college students in the summer can help with scanning and filing to keep you ahead of busy periods.  

Intentional Growth versus Organic Growth 

You can make a good living managing 250 properties. Why would you keep growing? 

For Melissa, the growth of Prandi was organic, and happened because of her existing relationships. Another NARPM member was preparing to go on maternity leave and didn’t know what to do with her 85 property management clients. Melissa took them over for a year and collected the management fees. After that year, the original property manager sold her the business. So, suddenly she had 85 more doors to manage.  

Responding to this type of growth and acquisition takes time and strategy. It’s not an easy process, and no one should tell you it is.  

Training made a difference.   

Melissa hired people, and the training process was to have them shadow her. They sat in her office and watched and listened. They learned quickly, especially since they could jump in and handle things as they happened.    

The full-time staff at Prandi Property Management included Melissa, her assistant Dana and one bookkeeper. With the acquisition of new business, Dana got a license and became the lead property manager. They hired an assistant to support both Melissa and Dana. Four people managed 300 properties.  

That’s pretty efficient, especially when you consider this was before the days of property management software and automation.  

You have to know when to get out of the way. Business owners do not have to have their hands in everything. Most entrepreneurs are guilty of trying to touch everything in the business. But, you don’t have to. It’s your baby and it feels personal, but you have to let that baby go out into the world and make its own way.  

Systems for Growth and Management that Have Been Retained 

Everyone adapts to growth by changing and improving their systems.  

But, if it’s not broken, don’t fix it. 

Melissa has retained a lot of the tools and processes that have been working for her over the last 30-plus years.  

Answering Phones Live

Phones are answered by a live person, Monday through Friday. Even if it’s a virtual assistant, the call is transferred right away whenever necessary. It’s critical to capture new potential clients this way.

Prospect Client Lead Sheet | Discovery 

The discovery process is done by hand at Prandi, using a prospect client lead sheet which is green (to signify money), and it’s used to interview the client. This form tracks: 

• Why they’re calling. What they need help with.
• Who referred them. How they heard about Prandi Property Management.
• What kind of information they can provide about the property.

The form has changed over the years, but it’s still used, and you need this type of discovery form. After it’s written up, staff members will load it into the property management software.  

A prospect doesn’t want to hear you typing away on a keyboard. This makes it easy to gather information.  

Discovery is your most important part of the process. No one listens anymore because no one cares. Everyone is so quick to give their sales pitch and move on. This is an amazing way to get to know someone and whether you want to manage their property.

Visiting the Prospective Property

The next form is a two sided form, and it’s yellow. This form goes out to the property.  

Matt, Melissa’s son and business development manager, will go out to visit the property and talk to the owner. A second person goes along to take care of this form. There’s a lot of detail and it captures everything about the property, from whether there’s a gas stove in the kitchen to the garage space. It includes all the details you want. From this form, someone can write an ad and do the follow up. Then, it goes into the system.  

Know Your Market and Your Properties 

Not every property manager is willing to go to the property before signing a management contract. Some managers will sign a client with the property unseen.  

This depends on your market. Marin County is unique. The rents are high, and so are the expectations.  

High-end rents mean high-end owners and high-end tenants. When you’re in that market, those properties have a high demand and there are lots of expectations.  

The rental average in Marin County is over $5,000 a month. Property managers there make a lot of money to do their job. Melissa never signs a client without seeing the property because every home is different. There are no tract homes or new developments in Marin County. Each home is unique.  

So, it depends on your location. If most of the properties you manage are like thousands of other properties and you know the neighborhoods and the schools, maybe you don’t have to see the home before you sign the client. But, with high-end rentals, the personal touch seems to be everything.  

Leave Yourself Open to Growth Opportunities   

Don’t be afraid of not managing the property.  

What does this mean? It means you can offer a lease-only service. Eventually, you can convert that client into full-service management. This is an opportunity a lot of managers don’t take advantage of, but it’s another example of organic growth.  

When you have lease-only clients, track those lease expirations. Sixty days before the lease expires, you can reach out to the client. Ask if they’d like a renewal lease drawn up or if you can do a property evaluation for them. Stay in front of those clients.  

If you have questions for the show or comments about it, please email hello@fourandhalf.com.

Thanks for being with us. 

The post Achieving Growth with Old-Fashioned Service: A Female Entrepreneurs Guide to Navigating the Property Management Industry appeared first on Fourandhalf Marketing Agency for Property Managers.

Welcome to another episode of The Property Management Show. We’re glad you’re participating and providing us with feedback, because we see a need for quality information that will help you take a bite out of the huge opportunity that’s out there.

As some of you know, 75 percent of the rental properties in the U.S. are self-managed. We want to help property managers tap into this large self-management market, which is absolutely ready to move into professional hands.

As we’ve discussed in the past, tenants have a lot of protection, and it’s harder for landlords to self-manage. There’s also a generational shift. Many of the current landlords are getting a little older, and they don’t want to deal with the day-to-day management.

We’re talking to Steve Rozenberg again. He’s a part-time pilot and a creative business owner. He does a radio show, videos, and a lot of things that no one else does. That’s what identifies his company as a success in the making, and we always get good information from Steve.

Recently, he began talking about his Owner Education Series, which is really exciting.

This may be your opportunity to go after that 75 percent of the self-management market.

Starting an Owner Education Series for Current Clients

Your current clients need to feel special.

When you can give them something that your competitors can’t, you’re guaranteed to retain them and attract a lot of new business. People want to feel like they belong to a club.

People won’t leave your company because of your prices. They leave when they feel like you don’t care. Statistics show that 68 percent of customers leave for that reason. They equate price with value, and if they cannot see the value you’re providing, you’ll lose them.

So, give your current owners a way to feel special. Starting an owner education series is a great way to do that. Many of your owners have questions about their investments, and how to continue investing. You know there’s no rule book when it comes to owning a rental property. Your clients may be interested in buying additional properties (which is great for you), but the Ferris wheel is spinning, and they don’t know how to get on. Your owner education series will help them do more.

Evaluating and Prioritizing Your Current Owners

Steve started this series as a way to add value to his current clients.

He also attaches a grade to each owner, from A to D. The client with a D grade is a bad owner of a bad property. These clients take too much time, and they will be dropped at some point.

The client with a C grade is either a bad owner with a good property or a good owner who has a bad property. These are clients you might still be able to work with, as long as you’re trying to bring them up to the B or A level. It takes work from both you and your client.

The client with a B grade is a good owner who has a good property. There are no problems or dramas with these clients. When you have an issue or their property needs maintenance, they let you get it done. The clients with an A grade are your B clients who refer people.

A-level clients are your raving fans.

As a property management company, you should always grade your clients. Once you have evaluated all the people you’re working with, you should commit to spending 80 percent of your time on those top 20 percent of clients. It’s the top tier that’s making you money.

Invite your A and B clients to your owner education series. Tell them they are valued clients, and you’d like to invite them to this event.

Then, ask them to bring a friend.

Clients who bring a friend will be invited into the VIP section, which will include a front row seat and other perks.

The friends they bring are potential clients, which is great for you.

The existing client is getting something of value and VIP treatment, which is great for them.

Owner Education Series Example: Find It, Fund It, Forget It

One owner education series that Steve and his team found particularly successful was Find It, Fund It, Forget It. Why did this work so well?

A wholesale company was present to talk about finding investment opportunities. They discussed where the good deals were uncovered, and how to quantify opportunities so investors aren’t just buying anything that’s on the market. They explained how it was done.

Then, a lender joined the event and talked about how to fund the investment purchase. This was a hard money lender who discussed how he funds deals for investors.

Finally, Steve talked about how investors could forget their rental home when a property management team like Empire Industries stepped in to leverage their property management services. 

Creating Strategic Alliances with Property Management Partners

How do you get started?

To successfully run an owner education series, you need to create strategic alliances with like-minded partners. Make sure they’re worthy of your time and event. Here are some criteria:

• They must have a database of prospects because you want their people to come.
• They have to have a reach that matches yours – a sphere of people you can influence.

This gives you the opportunity to get in front of people you wouldn’t normally get in front of.

When you create alliances with people who compliment your industry but don’t compete directly with you, you’ll have sponsors for your events.

Wholesalers, plumbers, electricians, lenders, real estate agents, title companies, and CPAs; developing relationships and creating strategic alliances with these professionals will easily grow your business and your potential.   

Turning Strategic Allies into Event Sponsors

You might start off holding one of these events in your own office, with 10 or 20 people present.

Eventually, however, you’ll grow, and you’ll need someone who can pay for food and drinks. Those professionals in your sphere of influence will be happy to sponsor your events. Give them five minutes to speak to your audience. That’s a standard sponsor activity. Maybe they’ll have a booth or a table where they can collect contact information and hand out literature.

However you set it up, the goal is to have your sponsors pay for food and drinks and if necessary, the venue. The cost to you is zero.

Make sure everything aligns. You don’t want a speaker up there saying investors don’t need a management company! The people you invite and the people who sponsor must be a cohesive group.

Something else that works well is sharing success stories.

Get one of your best owners up there – an A client – who can talk about some of the struggles he or she faced early on, and how those struggles were managed. When other owners and prospective owners hear these stories, you’ll get a lot of credibility. It’s inspiring for someone who wants to be that owner sharing a great success story.

Show your audience what can happen and how it can happen. When other owners speak, potential clients will see that they don’t have to be huge investors with 30 properties to be successful. Owning five or 10 properties while keeping a day job is completely possible.

With these events, you’re creating buzz. You’re welcoming new people into an environment and a culture that’s appealing.

And, this is at no cost to you. Put the event on Facebook so you can live stream it and promote your next one. This is an excellent way to start the conversation with new prospects and continue to strengthen the relationship you have with current clients.   

Identify Your Target Client

You need to know exactly who your target client is. It may be someone who doesn’t think property management is needed.

At Empire, Steve looks for a male between the ages of 35 and 55. He earns over $175,000 per year, and has plenty of disposable income. He also understands leverage and the value of real estate.

Once you understand who your target client is, figure out where that person hangs out.

After you’ve done that research, conduct the marketing and advertising that’s necessary to reach him. Maybe he’s on LinkedIn. Maybe he works as a doctor or a dentist, and you need to advertise on the sites and in the things they read.

Perhaps you’ll have a financial planner speak at your events. Why? Because those financial planners have a large database of people with disposable income. There are associations you can join as well, with access to your target clients. Then, you get in front of the friends of your target clients.

Steve is not going to invite the guy with no job and no money who wants to flip houses. Instead, he’s going to focus on the engineer earning $300,000, who doesn’t know real estate but is interested in learning about it.

If you don’t know who your target client is, that person is going to walk by you every day, and you won’t know it. Join forces with the companies who work with your target clients every day.

Setting Yourself Apart from Other Property Management Companies

With your event, you’re creating something.

How can you get more clients? By providing a lot of value for current owners. You’re reinforcing to them that you’re the company they want to do business with. You’re showing a point of difference from anyone else out there.

• Talk to other property management companies and find out what they do for owner education. They probably don’t know what that is, and they don’t do it.

• Decide whether you want to be transactional or have a relationship with your clients. You can help them make smart decisions or just ring the cash register. This can be a huge and important way to set yourself apart.

Be the company that helps investors make smart decisions. Many smart people are self-educating today. But, you can speed up their learning curve with something like an owner education series. Open your owners up to vendors, and have people talk about smart investments.

Sponsors will Add Depth to Your Roster of Speakers

Does having a sponsor make you uncomfortable?

It shouldn’t. It actually adds value and depth.

Maybe you have a plumber sponsoring your event. You give the plumber five minutes to speak, and that plumber is getting a lot of value. He’s in front of people he wouldn’t normally be in front of. So, if he spends $250 sponsoring your event, it will be money well-spent. He can market to the people attending.

You’re also giving value to the people there. If you’re a property investor who needs a plumber – there’s a referral. Finding a construction contractor or a quality tradesperson in today’s market is hard. Investors and property owners will appreciate the introduction.

The sponsors show you have validity. It’s more professional and provides more depth when you have vendors, financial planners, and other professionals who directly impact the people you’ve invited.

Change up your topics and sponsors so people will keep attending. Ask what topics your guests want to hear about.

Current Clients Can Add to Your Portfolio

What you may not understand is that the cheapest client acquisition is your current clients. When you can get your current clients to purchase more properties, you’re increasing your business without any acquisition costs.

Questions to ask your clients might be:

• Are you happy in your investing career?
• Are you where you hoped you’d be with your properties?
• Would you like to purchase more property without doing any extra work?

Open the conversation about additional investing.

Don’t be so focused on getting new clients that you forget to maximize the potential in your current clients. You should always be re-engaging.

Most investors know they won’t achieve their financial dreams with just one door. Maybe their initial goal was to buy 20 properties, but they got lost after buying their first three properties. Your job is to find out what went wrong. Life happens, kids grow up, and circumstances change. But, if your owner still has the money and the desire, you may need to be the one who moves that client in the direction of buying additional properties.

Introducing Prospects into Your Sales Funnel

While you’re focused on getting more out of your current clients, remember that you’re also having those A and B clients bring a friend to your event. That’s an easy consultation; a quick chat. Talk about that prospect’s concerns and goals: what has stopped him or her from investing to this point?

Talk about goals and where the prospect plans to be in 20 years. What does life look like, and what’s the strategy for getting there? Map it out. When you come up with a strategy that makes sense, you’re already providing value to someone who isn’t even a client yet.

No one else is providing this value or this education to that prospect. So, you keep them in your funnel and you re-engage after a year or two. Have the conversation whenever you can. It’s a long game.

Ongoing Success: How to Evaluate Your Owner Education Events

You’re going to come away from each event with leads and contacts. You’re also branding yourself and your company. You’re creating a sphere of influence and an environment that tells your market that you’re the company to go to. It won’t be a one-time-only event, and then you’re done. This is the first phase of a relationship that could be a six-month courting process.

You need a continual presence. You need to show up everywhere. Repetition and reputation are the keys.

Remember that everything goes back to making people feel special; to creating exclusive groups. You can have a client-only investor group on Facebook. There, they might find out about great investment opportunities before anyone else does. Give out incentives. When you post something, you can tell your clients that the first person to share that post gets a free paint job in one of their rental properties.

When you create a tribe or club mentality, you build loyalty and you separate yourself from your pack of competitors. People feel like they’re part of something, and soon your A and B clients are bragging about you.

Providing more value than anyone else is what will earn you more business.

For any questions about how Steve has successfully run these owner education events, contact him on his website empireindustriesllc.com or on Facebook. He loves providing tips and advice because he remembers how many people helped him when Empire Industries was first starting out.

If you have any questions about educating prospects and marketing your management company, contact us at Fourandhalf.

The post How Owner Education Events Will Grow Your Portfolio appeared first on Fourandhalf Marketing Agency for Property Managers.

The Property Management Show’s audience has grown to about 8,000 downloads a month, with thousands of views on YouTube. So, the intricacies of property management and how to do it right are interesting topics for everyone, especially new entrepreneurs going into the business.

The guest we have today has been described as a hardworking hustler. The topic is how to expand into new markets without having to acquire a new property management company. There are multiple episodes on acquisitions that you can go back to. Check out Michael Catalano and Andrew Propst if you want to access their methods for acquiring a management company and expanding into new markets.

Today, Brock Forkey is going to talk about a different way to expand into new markets.

Brock Forkey Bio

Brock has been a lifelong entrepreneur. In grade school, he sold a skateboard in third grade for $80 and offered pet sitting services. When he graduated high school, he went into construction, where he learned about real estate. In 1999, he purchased his first investment property, and by 2001, he owned 80 properties. Now, his property management company is based in Albany and Troy, and they are expanding into Rochester and Buffalo over the next few months. 

Managing Owners Rather Than Doors

Currently, Brock is managing about $30 million in real estate, which breaks out to 400 doors. Over the next 12 months, he hopes to get to 600 units, and over the next 24 months, 1,000 units.

Brock believes it’s better to look at the numbers in terms of owners rather than doors. If you have an owner with 74 properties under management with you, losing that owner is going to hurt a lot more than losing one unit. So, the goal for Brock’s company is to gain 180 owners over the next year, which will hopefully bring in 300 to 400 additional units.

This type of strategy allows you to diversify your management portfolio in terms of owners rather than properties.   

Shifting Strategies from Sales to Property Management

There are a lot of moving parts in property management; more so than in other businesses. Add to that the fact that people have their safety and well-being wrapped up in their properties, and it’s a pretty critical business. Brock began buying and selling real estate, and eventually found himself flipping houses by 2006. Then, the financial landscape changed. People with credit scores in the 500s could get 100 percent financing. Selling homes was profitable. Homes were sold to investors and homeowners.

By 2007, it was getting harder to sell anything.

Not everyone saw the warning signs – but Brock did, and he made the necessary adjustments to his business model.

Knowing when to pivot is an important part of achieving success in real estate and in any entrepreneurial business. It’s like Madonna. Madonna has been relevant for 30 years because she knows how and when to change.

You have to be willing to change.

Sometimes, you’ll get hit with a brick and that’s how you’ll know it’s time to change. Other times, you’ll see it before the rest of the industry sees it. People might resist where you’re going and what you’re thinking. It’s not because you’re wrong or they’re wrong – they just haven’t seen it yet.

If you’re tracking your numbers and you’re following patterns in the industry, you’ll see the shift, and you’ll be able to pivot.

Fake it till you Make It: Shifting with Momentum

Changing the business model requires preparation and confidence. When Brock moved from sales to management, he spent $3,000 on a phone system that led callers to believe his company had a number of different departments (they didn’t…yet). He sent out some direct mail with a paragraph about their company, some bullet points, and a call to action.

People called.

People called because there was a need for this type of business. Accidental landlords were just arriving on the scene, and they needed their properties managed.

Now, there’s less of a need for fancy phone systems and direct mail campaigns, and there’s better marketing through Google Ads and Pay-Per-Click. Brock says those marketing platforms have been life changing. And, he knows his numbers.

2017 Marketing Numbers:

• Marketing spend: $37,300.
• Cost per lead: $234.59.
• Cost per client: $643.10.
• Conversion rate: 41%.

This year, Brock is spending about $72,000 on marketing. It’s an aggressive growth budget.

Justifying the Marketing Spend

You may be cringing at Brock’s numbers.

But, he says it’s important to know what your clients are worth. Brock’s company earns an average of $20,000 per client. That’s the average over the last five years.

Who wouldn’t spend $234.59 to get $20,000?

Not a lot of property managers understand what a client is worth. One of Brock’s competitors on LinkedIn said they’d pay $100 for a referral of up to 10 units, and $200 for a referral to a client with 100 units.

That company clearly doesn’t understand a client’s value.

You have to know your numbers, and you have to be willing to spend the money.

This is a business.

Slowing Down the Sales Process: Closing Those Leads

You probably wouldn’t mind closing 41 percent of your leads.

Brock has learned how to sell. While interviewing other property managers to get a sense of his competition, he noticed that very few companies have an effective sales process. They’ll hand over the property management agreement as if it’s sales collateral. It’s not.

Slowing down the sales process is the best way to convert leads. When someone calls, Brock asks them questions. This is the revolutionary question that makes such a huge difference:

So, tell me a bit more about yourself and your property.

It’s hard NOT to close the sale when you ask that, and you’re willing to listen.

After hearing what he needs to hear, Brock sets up another call before that initial call is over. The second call will cover the Q&A. The prospect can ask any questions they want, and get some good answers. Pricing is on the website, and it’s a flat fee. So, that question is easy and out of the way.

Slowing the sales process down this way also gives you a chance to do some research. If you’re selective about the types of properties you manage, you’ll be able to determine whether this is a client you even want to add. Brock takes on all the properties he can. He says it can be scary, but they take on the property and then they figure it out. While he’s doing all the sales now, his plan is to hire a BDM in the Buffalo office once he gets to 50 or 100 properties in that market.

The management agreement is not a sales pitch. Repeat that to yourself if you’re currently handing it out to anyone who fills out an online form or calls your office: The management agreement is not a sales pitch.

Put in the work. Slow down the process. Talk through the discovery process and find out what the prospect really needs. Be patient and answer questions.

Establishing trust is critical. Investors are preparing to hand over their asset while they’re living in Germany or Israel or across the country. You have to get to know each other.

Your Sales Process Challenge

On your next 10 leads, try this system of slowing down the process. See what happens.

• Do your discovery and learn what you can about the prospect and their unit(s).
• Set up the next call before the first call ends.
• Send them some content that matches their pain points.
• Call back and answer their questions.
• Close the lead and sign the agreement.

Choosing Your Market: Where to Expand

How do you sell in a market where you don’t have local knowledge?

It takes work.

You might want to visit the area at least half a dozen times before you open your doors. But remember that a lot of work will be done over the phone rather than in person. You can begin gathering business before you have sales boots on the ground there. It might take longer. You’ll miss out on those face to face leads. But the number of leads you can close over the phone are likely to far outnumber the leads you’d close in person. 

Competition is what drove Brad to decide to expand into Buffalo and Rochester. He went online and searched for property management in those areas. He found an opening for a company like his.

It’s easy to learn what you need to know. If you have a good contractor in the area and some leasing people ready to go to work, you can get all the information you need about a place online or over the phone.

You Know You Need Ancillary Services

Construction services have been folded into Brock’s business, and they offer full remodels and construction work. It’s easy to pitch this an advantage. Owners are getting professionals who know their properties. The safety and liability concerns are nonexistent because there’s no third party company to worry about.

Keep in mind that the construction industry is going through its own pivot. One out of three construction jobs are vacant because it’s hard to find someone to do the work. So, construction and maintenance as part of a property management business are valuable.

Facebook Marketing for Talent

Everyone who owns a property management company is forever on the lookout for new talent and reliable team members. Brock uses Facebook, and you can too.

The process is simple. Create a landing page for the position you’re looking to fill. Maybe it’s a leasing agent or a contractor or a business development manager. Target your Facebook ad to the people who might be a good fit: Realtors and handymen. If you have good copy and good information, you’ll get some leads. It’s not dissimilar to attracting new clients.

The Future of Property Management

We’re going to start asking all our guests what they see for the future of property management.

Brock sees it continuing to grow. This industry started in 2008, because of the recession. Renter’s Warehouse and Real Property Management got involved early, and it has grown since then. It will continue to do so.

Warren Buffet said he would buy as many investment properties as he could if he knew how to manage them. All types of people are in this industry. It’s getting bigger, and it’s getting better.

If you have any questions about what we’ve discussed with Brock, please contact us at Fourandhalf.

The post How to Expand Into a New Market Without Acquisition appeared first on Fourandhalf Marketing Agency for Property Managers.

Growth has been the topic of our last few podcasts, and today we have a guest who can help provide some mutual mentorship and coaching with Alex, our host. Growing is easy, but putting a framework around growth to have a successful, profitable business with happy people is challenging.

It requires real leadership. 

Steve Rozenberg hardly needs an introduction. He has been on this show previously, and there’s a good chance you already know who he is. Steve is the co-founder of Empire Industries, he’s a commercial airline pilot, and he’s an international speaker. We’re talking about how companies can sometimes choke on growth, especially if there’s not a structure in place to support it.

Steve will share the four specific things that he and his company are doing to make growth manageable.

These 4 things are:

• Develop a leadership team.
• Put together a scorecard.
• Provide Tier 1 and Tier 2 positions.
• Develop quarterly themes.

Leading versus Managing: Growth Depends on Vision and Structure

Growth is sexy, and everyone wants it. But, someone needs to steer the ship. If everyone in the company is rowing and no one is steering, you could be going in the wrong direction. Your company needs to have a structure in place to manage the growth.

As a leader, it’s up to you to show your team members what the vision is for the company. It’s easy to lose the vision and start managing. But, if you’re managing, you’re not leading. If you have found that you’re spending most of your time managing people and systems, then suddenly you’re doing a job – you’re not leading a company.

You cannot grow that way.

You should have a compelling story of what your company is doing.

When you’re hiring new team members, make sure you’re able to talk about what your company stands for. As a property management company, you’re providing solutions. You’re solving problems for your clients, and you’re trying to be the best customer service company in your area.

Create a Leadership Team

Every company should create a leadership team comprised of leaders from different departments who have a say in the company. These are individuals who can see the company’s vision.

At Empire Industries, Steve has a five-member leadership team, and they meet for an hour and a half every Tuesday morning. The first thing they talk about is the company’s scorecard. Everyone has to contribute to the discussion of the KPIs (Key Performance Indicators). This is a 30,000-foot view. They’re not digging through the weeds; they’re simply checking to see if they’re on track or not on track.

Put Together a Scorecard

You don’t want to track any more than seven to 10 metrics. These are the things that can kill your company.

Focus on business metrics, not property management metrics. Look at the number of doors that have been gained or lost; the number of leads that are coming in; what your conversion rate is; how many doors you lost; how much money is in the bank.

Track these things weekly, and you’ll know if you’re on track to grow in a way that aligns with your vision.

Developing a Tier System 

To get the most out of your team, you need to separate tactical roles from strategic roles.

Your property managers won’t be productive if they’re handling the 100 phone calls per day that come in from owners, tenants, and vendors. Steve and his company have divided tasks and responsibilities into three tiers.

Tier 3 is upper level management.

Tier 2 is strategic property management.

Tier 1 is the tactical response team; the people answering the phones and deciding what can be handled at that level and what needs to be escalated. Steve’s Tier 1 people are in Mexico, where he has a team of 16 people working directly for Empire Industries.

This system protects the time and productivity of your best team members. Property managers feel stressed and burnt out when they’re trying to manage properties and at the same time answer the same phone calls and solve the same problems.

You don’t need a property manager to respond to a tenant who can’t log into their portal or an owner who is confused about an HOA bill.

Losing property managers means losing money. When a property manager quits, that manager actually quit three months ago – you just didn’t know it. And, when you lose a property manager, you also lose a lot of very valuable knowledge about your clients and their properties.

Hiring someone new requires a training period. You might lose clients as well. The best way to retain your best property managers is by keeping them in strategic roles so they are productive and growing with your company; not answering 100 phone calls a day. 

With a tier system in place, 80 percent of the work can be systemized. That takes a lot of pressure of your property managers, and your company can start growing the way it should.

But what about that single point of contact?

One of the challenges that you may face, whether you adopt a tier system like Steve or a squad system that you may have heard Alex talk about at Fourandhalf, is that clients speak to a lot of different people. They may get fussy with that, and ask who is really in charge of their account. 

There is a perception that people want a single point of contact.

But, the reality is – people want their problems solved.

If you have a problem with your phone, and your carrier is AT&T, do you want to talk to the same person every time you call AT&T, or do you just want your phone problem fixed?

Your phone probably rings for one of two reasons: leads or problems. If your clients understand that your experts are going to solve their problems, they won’t expect to talk to the same person all the time.

Your maintenance guy isn’t going to solve a client’s accounting issue.

A single point of contact may sound ideal, but if your company has a whole maintenance department dedicated to repairs and vendors and follow up, your clients who call with a repair issue will want to talk to that department, not their assigned property manager. Those are the experts, and if you communicate this to your clients, and set up the expectations so they know how you operate, everyone will be prepared.

Let them know how you operate. Property managers don’t have to take 100 calls a day. They don’t have to do data entry. The tier system works.

If someone at the Tier 1 level is having trouble answering a client’s question or solving the problem to their satisfaction, that person can always schedule a meeting with the property manager. Maybe an owner calls irate because of a $25 HOA bill. Instead of trying to track down the property manager right away, your Tier 1 person can look at the manager’s schedule, and offer the owner a meeting time. Then, the client gets a chance to calm down and the property manager can prepare for the meeting and do a little research ahead of time. You’re being proactive.

Back to the Leadership Team and the Scorecard

When an issue is escalated to Tier 3, and the same problem shows up in a leadership meeting two weeks in a row, it goes on the Issue List. The entire leadership team is responsible for deciding what’s acceptable and what needs to be fixed. If something is becoming a problem, get it on your scorecard and address it.

You should be measuring everything. Measure how many phone calls the front office is getting, and track why people are calling. Measure every marketing campaign.

In the leadership meetings, there’s no need to discuss the details of those marketing campaigns, but you do want to know how many opportunities are showing up, what your conversion rate is, and how long it takes to close a client. You need to know how many contracts you sign on a weekly basis.

Developing Quarterly Themes

Finally, task your leadership team to come up with a quarterly theme. This theme should reflect what you’re struggling with the most at any given time. Maybe it’s communication or maintenance. Fix it once, and fix it forever. This is no time for Band-Aids. 

If your company is struggling with maintenance and you have lots of open tickets and you can’t seem to keep your owners happy with the way maintenance is being performed, you can identify this as a quarterly theme. Focus your whole leadership team on maintenance and talk about what you can do to increase maintenance efficiencies, how to decrease customer complaints on maintenance, and how to increase turn time.

With the whole company working on the theme, the problem will quickly go away.

Your core values should require you to fix whatever problems are hindering your growth. The brain works best in 90 day increments, so choose a quarterly theme and start focusing on a new theme every 90 days. It’s a good way to decide if you’re on track or off track, and the leadership team is collaborating to help solve these issues. This is a good way to demonstrate you believe in the company’s vision and core.

Leaders ask questions, so prepare to hear from your employees on how to solve these quarterly themes.

Southwest Airlines has a slogan: Bags Fly Free. It wasn’t the CEO who came up with that; it was a maintenance technician. Don’t let your ego trick you into thinking you are the only one with good ideas for your company. 

Don’t Be Afraid to Say No

Growth is stressful and scary.

Adding to that stress is the fact that in property management, you don’t start seeing revenue that matches your growth for several months. You might be growing, but what if you can’t pay your bills? It’s time to take a loan, perhaps. Whatever you do – make sure it’s in your plan.

Sticking to the plan can be a challenge, especially when there are opportunities to do other things. Be disciplined. If it’s not in the plan, you need to say no to that particular opportunity, or you need to re-write the plan.

Mental toughness is required to say no to juicy opportunities that are not aligned with your direction and purpose. The most successful people in the world say no more than they say yes. That’s a pretty common theme in the stories of super-successful people. They protect their time.

As an entrepreneur, you will grind away until you build the business that you want. Just remember to be flexible. You have to change with the business, and you have to grow with the company. The things that get you to $5 million are not the same things that get you to $50 million. You’ll need to read different books, and network with different people. Your actions will dictate where you go.

If you want to talk to Steve about how he’s been leading his company to growth, contact him through his website at empireindustriesllc.com. You can always contact us at Fourandhalf if you have any questions or need any direction. 

The post Essential Ways to Adapt Your Property Management Business to Growth appeared first on Fourandhalf Marketing Agency for Property Managers.

Elevate Operations, Systems, and Talent on both Pre and Post Sale Sides of the Business, or Become Irrelevant

On November 9th, 2016, we gathered a group of industry leaders on this podcast live at the NARPM National Conference in Hawaii.

Our aim was to decode the future industry trends and help property management entrepreneurs develop strategic plans to take advantage of industry opportunities.

We discussed:

• Industry consolidation
• Competitive advantages of smaller independent companies
• Tasks for the CEO of a property management company
• Building a company culture
• Property management technology

Today, we’ve gathered the same group of people on The Property Management Show to update our vision for 2018 and beyond.

Guest Introductions

Andy Propst is the CEO of HomeRiver, one of the largest privately-owned property management platform companies with operations in 15 states. He’s the past national president of NARPM, an international speaker, and one of the most respected thought leaders in the property management industry. He also speaks fluent Russian and made a movie about his experience as a missionary in Russia in the late 1990s called The Saratov Approach.

Michael Monteiro is the CEO of Buildium, and has spent the last decade turning Buildium from a home-grown software solution that was created out of individual frustration to one of the largest property management software companies in the world. Over 12,500 property managers are using Buildium, and Michael is going to help decode the future of the industry.

Jordan Muela is the CEO of LeadSimple, the first and only true CRM and sales process solution for the property management space. He’s the co-founder of PM Grow Summit, which is the fastest growing annual conference for top-level property management entrepreneurs. Jordan is also the co-founder and CEO of Profit Coach, and he authored the only property management financial benchmarking study of its kind, which demystifies profitability.

Alex Osenenko, your host, is the CEO of Fourandhalf, a marketing company helping to solve growth for property management clients. Fourandhalf has grown over the last six years to 32 team members who are absolutely committed to their craft. Alex is a co-founder of PM Grow Summit and his latest venture has been the creation of the OnePartner Platform, which combines the latest conversion and SEO science into a website that drives quality leads for property managers on the front end, and a business performance dashboard on the back end, tracking actionable marketing and sales KPIs. The OnePartner team converts that data into decisions, driving a constantly improving process.

With these four leaders talking about the property management industry, there are tens of thousands of hours of experience that can help your business fine-tune its pre-sale and post-sale operations.

The Property Management Industry View for 2018: Accidental Landlords Cycle Out, Investors Cycle In

In 2016, when this group first got together, there was still a large number of reluctant and accidental landlords, and their expectations of price and value varied based on their individual experiences. Today, the market has crested to the top of the cycle parabola, and economic uncertainty keeps amateur investors and accidental landlords mostly on the sidelines. The largest pool of prospective clients to emerge are sophisticated and disciplined investors, who demand transparency and results.

Who is knocking on the door, and do those prospective owners match your perfect client profile?

The Effect of Less Inventory

One difference today is inventory. When accidental landlords were the predominant clients, there was a lot of inventory that couldn’t sell. Today, all those single family homes that used to be rental properties are now being sold. Inventory is going down, but demand for single family rentals is going up.

Single family homes are in demand among renters, but they aren’t coming onto the market fast enough. There’s a shortage in the construction industry. One out of every three construction jobs is unfilled. Fewer young people are going into construction, and the industry still hasn’t recovered from the last recession, when a lot of migrant workers went home and never returned. Without the inventory, demand will continue to outstrip supply.

Investors are buying outside their Markets

A lot of investors are buying outside of their markets, and they need professional property management. These are investors that may have managed on their own locally, but in their markets, cap rates are down in the 3 or 4 percent range. To increase ROI, they’re moving into other markets that can provide that 7 or 8 cap. Coastal investors buying property in Memphis or Kansas City will need professional management services.

There’s also a generational shift. A lot of the landlords and owners come from a generation of people who do things on their own. If your father wanted a clean car, he’d probably spend two hours on a Saturday washing his car. Today, you aren’t going to go out and wash your car. You’ll spend five minutes in an automated car wash.

This translates to property management. Younger investors and owners will not want to do the work on their own; they’ll be more willing to pay for the services of a professional.   

This is a market that demands flexibility from property management business owners. With properties selling off, you might need to focus on sales.

You might need to think differently about churn in your business.

You may need to meet ancillary needs in your local market. Flexibility and adaptability will protect you from irrelevance.

If your management company is losing doors and you’re not already doing maintenance, rehab, and construction work, now is the time to start thinking about those services. You can grow even as you lose doors. 

What do Sophisticated and Intentional Investors Require?

With the loss of the accidental landlord as your primary client, your business must meet the needs of sophisticated and intentional investors. These are people who want to do everything on their phones. These are people who will expect more from their property manager in terms of speed, service, and technology.

They want data.

They want online financials.

They want constant access to their information.

That raises the bar for what property managers need to deliver.

The property management industry in general can be slow at times. Speedy delivery of information and service to both tenants and owners has become critical. Speed is a new currency that property managers need to adapt to and offer.

Tenants and residents want a consumer grade experience because of the way they’re living. With Lyft and other apps, they’re conditioned to expect simplicity and responsiveness. If you can meet this need and double down on service, you’ll see your business growth respond.

Remember that companies outside of the property management industry are setting your customer’s expectations. As soon as you put your hands on something, you have to commit yourself to an exceptional user experience. That’s not going away; it’s a long term trend.

A full stack experience is required for all of your customers.

Consolidations and Acquisitions: Valuing Your Company and Succession Planning

Acquiring property management companies was a hot topic in 2016. Today, it’s extremely geographical.

According to Andy, many of the management companies interested in getting out of the business or joining HomeRiver are on the east and west coasts. The real estate markets there are hot, and the number of doors to be managed is dwindling. They are far more motivated than property managers in the south and the Midwest. There aren’t as many property managers there – 80 percent of the property management industry is on the coast. In the Midwest and southern markets, there’s not a lot of interest in consolidating or leaving the local market. They aren’t losing quite as many doors.

Technology impacts succession planning and consolidation. Before these tech platforms, it was harder to consolidate in disparate locations, but with modern platforms, management firms with owners that are ready to retire or exit the industry will be able to join companies like HomeRiver.

The market is still healthy. Property management companies are still being acquired, people are interested in selling and succession. This integration is good for the industry, even if there’s a bit of panic within coastal markets.

Remember that vacancy rates are lower than normal nationwide, and there’s a huge demand for rentals. The industry cannot provide housing fast enough, and in many properties, 30 or 40 applications are coming in as soon as the home is on the market.

Competitive Advantage: How Can Independent Operators Grow and Win Big?

If an independent management company doesn’t want to sell the business, but they want to grow and build their brand, how can it be done?

Alex thinks these companies win big by driving local market knowledge through deep, long-form content creation, and networking. Small blog content isn’t enough today. You need to dive a little deeper with radio shows, podcasts, and other differentiators. This is something that Duke Dodson with Dodson Property Management does really well. Check out his podcast in Richmond, Virginia. He’s talking about politicians, famous local disk jockeys, and a lot of good, local stuff. That’s one way to differentiate. 

This isn’t unique to property management. Real estate sales face the same type of shift. Brokers aren’t going away, but the nature of what brokers do is going to change. Authentic, local knowledge has a ton of value, and a small, independent operator can stand out by knowing the local market better than anyone else. 

Building deep, local relationships with people in your market can help your business. Establishing an online presence is great, but the people actually out making things happen in your market are the people you want to meet.

Get out from under your desk and tell them how well you know your market. Find a way to work together and grow your business.

The differentiating factor can be the degree to which you treat what you are doing as a fully functional business, and not just an income stream. Recurring revenue is the blessing and curse of this industry. Your future will depend on your ability to do different things like operationalize the sales and marketing function of your business.

Do you know your customer acquisition cost and your lifetime customer value? Someone in your market is doing that math. Either it’s going to be you or your competition.   

Focus on Niche Skills and Services

You also have to build something special. Do what no one else does. 

Your market needs something that isn’t currently being provided by property management companies. The first company to figure it out and offer it to clients will grow as fast as they want to.

Think about specializing in something. Maybe it’s single family homes or student housing or short term and vacation rentals. Maybe it’s high end condo rentals. Specializing can help you differentiate. People can be reluctant to do that because they don’t want to narrow the size of their market.

That market is narrowing anyway.

When you focus and get really good at something, you can differentiate yourself and grow. This transcends property management and applies to any industry.

Buildium focuses on rental management, for example. Douglas Skipworth has carved out an impressive niche in a market that works. He grew by finding properties, rehabbing them, and then selling them. Once they sell, he manages those homes. Do that 3,000 times, and you’ve got some explosive growth.

The Role of the CEO: What is in Your Job Description?

Fred Wilson said the CEO should focus on three things:

• Develop the overall vision of the company and communicate that vision to all stakeholders.
• Recruit and hire the best talent.
• Make sure there is enough cash in the bank.

But, can anyone accomplish all those things?

Setting that organizational clarity is important. Establish and communicate where you are going as a business in the next three to five years. The Table Group, which publishes some of the best books on business and leadership, says that organizational health is critical. You need clarity on key questions like:

• Why do we exist?
• What do we believe?
• How will we grow?

Answer those basic but essential questions. It’s your job as CEO.

For a lot of property management owners, being CEO is not a full time job. If you work with a small team of 10 or 20 people, you have other work to do. There’s day to day responsibilities and business development that falls on your desk, in addition to your CEO duties. Look at technology and consider systemizing everything you can. Work with partners so you can operate more like a CEO.

Operations and Systemizing your Processes and Partners

Driving the systemization of processes and partners is an essential role of any CEO. Take an internal focus, outsource what you can, and focus on transparency so you can position your company as trustworthy. If a CEO is thinking about pricing and all of your fees are posted and published, you don’t have to have that conversation with new clients.

Figure out your operations. You can delegate parts of your business to other people so you can do all the things a CEO should be doing. It’s hard to figure out where your business is going to be when you’re still posting listings and collecting rent.

Distractions come with a huge cost. CEOs need to get ahead of distractions that make you busy but not productive. Your whole day cannot be spent responding to things. Property management is one of the busiest industries in the world, and the distractions cost hundreds of thousands of dollars.

Culture as a Natural Progression of Business Growth

Culture starts with the best people aligned behind a single purpose. Procuring good people and building a team is an essential role of any leader. It starts with clarity on what’s important to your company, and how you expect people to behave.

Michael once relied on intuition when he was hiring. But as Buildium grew, assessing candidates required a scorecard with outcomes and competencies. Do the foundational work before you begin to build a team.

A lot of a company’s culture has to do with external facing customer commitments. What do you want to achieve for the customer? That can transcend any hiring process. Whatever your cultural commitments, you need proof of them – otherwise, it’s just a philosophical idea.

Good people cost money. To compete with other companies who are also hiring good people, you can outsource and systemize. If you move tactical operations to near shore or offshore, and invest the money you save there into your strategic, local talent, you’ll have a tremendous advantage.

Organizing and structuring your team into squads can also help with advancement and opportunity, creating a positive culture. Check out the podcast with Adam Hooley for more guidance on that. Remember that the best people are expensive.

It’s also expensive when you lose good people. This is similar to your customer acquisitions. You know how much it costs to acquire a customer, so you want to retain them. Retain your good employees as well. Every property manager should measure employee happiness. You can do it online with a tool like Google Forms or the Gallup Employee Index. If you don’t measure how happy your team is with your company culture, it’s hard to improve. 

Purpose, money, and fun. If you can provide those three things, you will have all the talent you need, and a culture that serves your company’s mission.

This was a different conversation than the one in 2016, and we plan to gather the group together every 12 or 18 months to take the pulse of the property management industry.

If you have any questions about what you’ve read, be sure to contact us at Fourandhalf.

The post Property Management Industry Trends 2018 appeared first on Fourandhalf Marketing Agency for Property Managers.

Over the last 48 episodes of The Property Management Show, at least 40 of them have covered sales and marketing. So, there’s a wealth of information for growing your property management business. If you missed those, go back in the archives and pull out a roadmap on structuring your sales team, organizing your marketing, and growing your business.

Today is a little different.

Many property managers want to grow their businesses, but they feel like they cannot take on any additional growth. They think it would be irresponsible to continue growing, because they are struggling to keep up with serving the customers they currently have.

That’s a good problem, and a real problem.

Today, we’re talking to Todd Ortscheid, who can systemize a business better than anyone.

Background on Todd Ortscheid

Todd is at GTL Real Estate, where he manages around 400 units with five employees on the payroll, including himself. He systemizes, outsources, and uses independent contractors whenever he can. Todd feels he can add 200 properties without adding any full time staff. The plan is to do that with more outsourcing and automation.

Releasing Less Profitable Properties

The first thing Todd did was to look at his portfolio and let go of the less profitable and labor intense owners. Most of the work was coming from the same 10 percent of owners and tenants. Those were C-class properties, which are usually owed by C-class owners and attract C-class tenants. All the company’s work was there. When Todd decided to change their processes and procedures, it was a natural point at which to get rid of the properties that weren’t working.

If you’re wondering whether it was hard to withstand the revenue hit – there wasn’t one.

At the same time that these properties were being released, Todd’s company instituted some new ancillary fees. Owners began getting charged for yearly inspections, and the rest of the new fees were coming from the tenants. The application fee went up, and other things that they hadn’t charged for previously were suddenly falling into place. That canceled out the lost revenue of those 55 properties that they shed from their portfolio. 

That’s important. The concurrent implementation of ancillary fees while culling the herd of properties can be the way to go when you don’t want your revenue affected.

Occupancy and Tenant-Related Systems

Automating the processes related to tenants and occupancy can save money and provide scalability.

Are your leasing agents bogged down with calls and emails? Instead of having them spend their time taking phone calls from prospective tenants, explore different options. Todd’s company uses Rently, and there are other platforms that use similar technology.

There’s a combination lockbox and leasing line that make it easy to outsource the showing and leasing process. When someone calls based on a sign that they see or an advertisement, the call is routed to Rently. Everything is automated. If they want to see the house, they get a code and they let themselves in to see the property. If they have questions or want to talk to someone, those calls are routed through PropertyWare. 

This is an important piece of the leasing process that property managers can get off their plates. Prospective tenants always ask the same questions. They want to know if the property has a fence or they want to know what the leasing qualifications are. When a call center takes care of answering these questions, your leasing agents can protect their time and only get involved if there’s an unusual question or a problem. 

Integrating the Application Process with the Leasing Process

After a prospective tenant views the property, they get an automatic questionnaire that they’re asked to fill out. This gives you the opportunity to collect feedback on the condition of the home, etc. The prospects are also asked to indicate whether they want to apply. If so, they get a link to the online application. This is an integrated process and a good way to improve the tenant’s experience.

You might worry that people will want to meet with someone – get through the process face to face.

But, do you really come across those people very often? Maybe renters of a different generation, but most tenants today are Millennials, and they are not interested in meeting with someone in person. They want to look at properties and fill out applications on their own time and on their own schedule, without ever speaking to a person.

For Todd, the application is hosted by PropertyWare. With this system, all of the application information becomes the leasing information. E-signatures are gathered, and after the tenant is approved, the lease goes right out to the new tenant. Todd and his team don’t interact with the tenants until they get past the approval stage. 

Once a tenant is approved, they receive an email with their security deposit information. Lower credit scores often have a contingency fee. This is the first time the tenants hear from their property managers. They pay the security deposit, and the property is taken off the market. 

Operations and Information Flow

The tenant moves in, and all of their information is stored with PropertyWare. Other software systems do the same thing. The lease is auto filled by the information collected on the tenant’s application. Everything is streamlined and efficient. There is no manual entry needed.

You can use a system like this for management agreements and independent contractor agreements, and even vendor contracts. With the click of a button, everyone can sign documents electronically, and it’s all stored. This will make it easy for you to stay organized.

There is some effort on the front end to build all this out. But, it will take hours and save you a lot of time in the long term. 

With systems like Microsoft Forms, Jot Forms, and others, you can also manage your information and paperwork. For example, if a tenant has been charged for a maintenance issue and they want to dispute that charge, they can fill out and submit a form. It saves a property manager from having a 45-minute conversation with the tenant. Instead, the tenant can state their case, and submit it. Todd’s team reviews the situation, and a decision is made. The time cost is very minimal. 

You can also use systems like these for owner surveys. A lot of information can be collected to make your operations more efficient.

SharePoint is another example of technology that can work for you and save you time. Todd uses SharePoint as his company’s intranet. All of the documents, pictures, and HR information is stored there. Staff can access videos and other information. It’s Outlook-based, and Google has similar tools.

Business Process Outsourcing

Think about your maintenance process and work order system. How much time are work orders taking from your property managers? Is everything flowing, or is this one of the reasons you don’t think you can support any more growth? 

With work orders, two big things work for Todd, and they go hand in hand. Property Meld and EZ Repair Hotline are what he’s using, and there are other companies doing the same things. This enables a call center to handle repair and maintenance requests. If you’re spending hours of every day looking through service requests, dispatching vendors, and trying to get in touch with tenants to schedule maintenance; you are wasting your time.

EZ Repair Hotline takes every tenant request, whether it’s submitted online or over the phone, and dispatches a vendor from the list that Todd has provided. Property managers don’t have to get involved unless there is a problem.

Text messages and robo-calls are also part of the process. If you’ve got tenants who are late with rent, you can schedule robo-calls to remind them to pay. For Todd, every tenant with an unpaid balance gets a text on every Friday. It also works when leases haven’t been signed or when owners owe you money. This is a valuable resource for any situation where you need to get information out without spending the time to reach out to each person individually. 

Utilizing platforms like Help Scout or Zendesk can help you share information. Think about the common questions you get. If you had a collection of articles that answered those questions, you could send them right to the tenants or the owners who ask them. Help Scout keeps all the commonly ask questions, and if there’s not an article or a response already stored, one is easily created. So, when a tenant asks if their late fee can be waived, that tenant will get an article with your late fee policy and a list of situations in which they might be waived. 

Streamlining customer emails through a platform like this can save you time while offering exceptional support. The benefit is that when there’s something that cannot be addressed by Help Scout, they email the question to you, and your entire team can see it. So, if you’re not free to answer the question, another member of your team can take it. This is better than an email or a voicemail message sitting in someone’s inbox for 12 hours.

Property Management Growth and the Future

One size no longer fits all when it comes to property management. To grow both your capacity and your client base, you need to be willing to discover new solutions.

Lately, the industry has developed so many new things. The technology is finally coming around, and you may not realize how many tools you have at your disposal.

Next for Todd is to complete the outsourcing of all his back office processes. He doesn’t want his staff spending time on anything that doesn’t require boots on the ground. He’s using virtual assistants and implementing new technology.

You can help your staff handle more properties and wow customers. Todd thinks he can grow by 12 properties a month and move into high growth mode. If you want to talk to him about how he’s managed the automation and outsourcing of the things that were taking up all his time, visit him at gtlrealestate.com. You can also find him talking about this in one of the property management Facebook groups.

As always, you can contact us at Fourandhalf if you have any questions about how to grow your property management company and increase your capacity for that growth.

The post Support My Growing Property Management Business: A Guide to Automation and Outsourcing appeared first on Fourandhalf Marketing Agency for Property Managers.

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Mike Kalis is the CEO and president of Marketplace Homes. He joined us on the Property Management Show podcast to talk about growth plans and discuss the challenges of acquiring property management companies.

Marketplace Homes – 19 Markets and 3,100 Doors

Marketplace Homes was born 11 years ago, in metro Detroit, during the collapse of the housing market. The idea was to help people get out of their existing homes and into a new home. At that point, the only way to do it successfully was to rent out the existing property.

The company grew quickly, and they appeared on the Inc. 500 list four years in a row as one of the fastest growing companies to watch. Marketplace Homes grew in 19 markets, and they presently manage 3,100 doors. They’re adding 150 to 200 doors per month.

The goal of Marketplace Homes is to give the property management industry the multiples it deserves. They want to have 30,000 homes under management and be the first public property management company on earth.

As a company, Marketplace Homes has done a lot of acquisitions, and they want to do more.

Some people become accidental property managers, just like others become accidental landlords. The market is pretty hot right now, and brokers who were making money selling homes full time are not so enamored with the property management business anymore. They’re burning out with this business, so Marketplace Homes is pursuing the portfolios of people who are ready to retire or pursue other opportunities.  

Marketplace Homes plans to get to that 30,000 homes in five years. They currently employ 85 people, so they are ready and staffed up to handle that growth.

The Reverse of Growth and Castle Property Management

With the previous podcast focused on the lessons that could be learned from the closing of Castle Property Management and Mike’s presence in the Detroit market, it was hard not to talk about what went wrong with Castle. Like Alex, Mike believes they ran out of money. He also believes that people need to come first and tech needs to come second.  

Great people will fix lousy processes and ineffective technology. However, great technology will not fix lousy people. The team at Castle was great. But, in a service-first industry, it’s very hard to focus on the tech and succeed.

The Challenges of Acquiring Property Management Companies

Acquiring property management companies comes with a number of challenges. Three of them are pretty obvious and difficult to overcome. They are:

• Financing the purchase.
• Finding companies that want to be bought.
• Integrating the companies into your own operations.

How Do Companies Like Marketplace Homes Finance Their Acquisitions?

It’s a lot like buying real estate. You pay with cash or you settle for terms. Cash can come in through investor money, operations money, or other types of income. If you’re trying to put together several deals and you have the cash flow to support it, you might explore an SBA loan. Otherwise, you can rely on outside investors, bank loans, and your own capital.

The other option is to buy a company with terms. You know that each door you acquire will generate a certain number of dollars every month. With an acquisition, you’ll take a percentage of that income and give the rest back to the owner.

It depends on what the sellers want and the buyers agree to. Some want a large check so they can go off and explore different opportunities. Others like getting a monthly payment coming in from those properties.

The key is a good partnership. The sellers have to be sure they’re going to get their payment if the deal is for terms instead of cash. To offset that risk, sellers often earn two or three times more than they would in a cash deal. Otherwise, you have to trust the buyers. If you’re worried that you won’t get paid, you probably shouldn’t do the deal.  

Deals don’t close when there’s a lack of trust. Face to face meetings can make a big difference. Meeting each other and getting an idea of what each company is about can inspire a better business relationship. Physical connections are helpful when you’re acquiring a company. So is the exit strategy. If the seller doesn’t have a clear exit strategy, there’s a good chance the deal won’t close.

So – cash, loan, or terms are the best ways to finance an acquisition. Or, some combination of all those. And, meet someone face to face when you’re buying or selling. Be honest, and talk about exit strategies.

Why Sell a Property Management Company: Fitting into Industry Shifts

Property managers who were once brokers know there’s more money to be made on the brokerage side now, and that’s a good reason for them to sell their companies. The industry has shifted. There aren’t as many accidental landlords right now. So, if you built your business off those clients, you have a shrinking portfolio.

The property management industry is in a state of suspension. Property managers do well in a down market, such as the one in 2011 and 2012. Property managers do pretty well in a hot market, too. Just look at 2015 and 2016.

Currently, the industry is in between cycles. The next couple of years will likely be quiet, especially in terms of accidental landlords. The accidental landlord client has been reduced by about 70 percent. That will continue to drop, as the investor client emerges.  

There’s also a geographical difference. In Atlanta, it’s easy for investors to put money into real estate. It makes sense. But, in New Jersey, it’s hard to get the same outcomes. Investors are priced out in markets like San Francisco. So, depending on where your company is located, the next few years will make a difference to whether you’re able to grow.

Take a look at your portfolio. Is it made up of investors who are still acquiring properties, or is it made up of accidental landlords? Investors will grow. That profit is going to happen, and hopefully those gains go towards other properties.

Property management is a counter-cyclical business. This is perhaps the biggest Bull Run for real estate in 100 years. So, if you’re choosing to be a property manager instead of a broker during this period, you had better be the very best property manager in your market. You can survive, even in a competitive market, if you’re great at what you do.

But, if you’re a mom and pop shop managing 70 homes, you may need to reflect on whether you’re the best in your market. With the market trending the way it is; if you’re not the absolute dominant person in your market right now, it might not be a mistake to sell while there’s still some value in your company. That’s the thought process of Marketplace Homes.

How Do Companies Like Marketplace Homes Find Companies to Buy?

To grow through acquisition, you need to know where to find the smaller 70 to 100 unit portfolio companies with people who are burnt out. You also need to find larger companies that are ready to transition. Sometimes, it’s as simple as picking up the phone.

An acquisitions team can provide support by reaching out and staying in touch with companies that may inquire years before they’re actually ready to sell. That’s a longer sales cycle.

Networking is a big part of the acquisitions process. It’s critical to attend events like PM Grow Summit and NARPM conferences. Be open and willing to chat honestly. It’s not too hard to get lists of property managers from organizations like NARPM. Sending out emails and engaging in constant outreach is the best way to acquire those properties.

It’s hard to think about the end or exit when you’re building a business. If you have an end goal in mind while you’re growing, that’s great. The point is to build an institution instead of a one-person business. It’s not about you and it’s not even about your company. It’s about knowing how to build something that has real value. You’re creating something that produces financial results. Marketplace Homes wants to take that thing you’ve created to the next level.   

How Do Companies Like Marketplace Homes Integrate the Businesses They Buy?

After the acquisition is found and financed, it’s time to integrate the new company into the established company. This can be tricky.

The goal is to not lose owners. Marketplace Homes has an onboarding team, where specific people from each department will be assigned to the portfolio. There’s also a Solutions Team who talk to homeowners about the partnership. Every single client that’s acquired is contacted. They introduce themselves and explain what’s going on.

The exact fee structure is kept in place. You might argue that this doesn’t make sense, and may even cost money, but it can be an important way to establish trust and maintain stability.

Otherwise, most of the processes can stay the same. Some operational things may change, such as contact information for emergency repairs. Those are the things that owners are taken through, step by step. There’s also a team that contacts tenants. Similar to the onboarding process with owners, things are explained to the tenants so they know what’s changing and what isn’t.

The branding depends on the company that’s been acquired.  

For Marketplace Homes, the general practice is to absorb all of the acquired companies under their umbrella. It makes the most sense and it keeps the business simple. The exception is when there’s a brand that carries equity. And, this may change in the future. Staying open and flexible is a good way to succeed.

It wouldn’t be a Property Management Show podcast if Alex didn’t ask his guest about their customer acquisition cost. For Mike and Marketplace Homes, it changes for every funnel and every market. Generally, it’s between $400 and $700.  

The best way to reach Mike Kalis is on marketplacehomes.com. And, if you have any questions about property management marketing, you can always contact Fourandhalf.

The post Acquiring Property Management Companies: Financing Deals, Finding Deals, and Integrating Processes appeared first on Fourandhalf Marketing Agency for Property Managers.

The Property Management Show Case Study

The latest event in the property management industry is quite significant. Castle Property Management, a VC-backed, technology-first start-up in Detroit is closing their doors. Let’s talk about what we can learn from the failure of this property management start-up as an industry and as entrepreneurs.

Our guest on the podcast today is often the smartest guy in the room. He’s the founder and president of RentWerx, which is growing by a door a day: Brad Larsen.  

The Story of Castle Property Management

Max Nussenbaum, the co-founder and CEO of Castle, spoke at last year’s PM Grow Summit. His talk was inspirational, and his message was on point.

Take a look at the start-up’s TechCrunch profile:

“Property management is one of those industries that typically lags behind the rest of the US economy in terms of technology, customer service, and transparency. Castle is trying to bring the industry up to date with its automated property management platform.”

Is the assertion correct that technology and customer service are lagging in property management?

Perhaps.

Property management is an industry that started in the back rooms of real estate offices, and for years, property managers did not get any resources, attention, or technology. Let’s face it: the only people who went into the property management field were the ones who had failed at selling real estate.

So, technology and customer service have room for improvement, especially in the property management field. What about the third part of Castle’s statement: transparency?

What Transparency Means to Property Managers

Brad argues that many management companies are as transparent as they can be. Everything just short of the company books is online. Companies mean a lot of different things when they call themselves transparent. Being open about fees and costs is very common already. A lot of property managers are doing that. Are transparent at every level? Do your communication practices make people feel good about renting with you?

Many owners who hire a property manager can’t be reached or don’t want to be reached. They hired a property manager to take the work off their hands, and because of this, the drive to be transparent can sometimes have unintended consequences. Brad and his company constructed a unique, state-of-the-art portal that told owners everything they wanted to know. Statements and inspection reports and leases were uploaded and available. However, rather than helping owners, it seemed it was only inviting them to complain or point out mistakes. It wasn’t worth the time or the effort anymore, and he realized it was just easier to provide things to owners when they needed it.

Alex looks at transparency from the perspective of an investor looking to hire a property management company. He says he’ll want to see all the accounting and all the forecasting and all the documentation right there in front of him; neat, organized, and accessible. He also believes that while Brad works with the best of the best in the property management field, not all companies are as transparent as they could or should be.

Transparency for its own sake may not be impactful. However, implementing meaningful transparent practices has the potential to create a better user experience industry-wide. Castle may have missed an opportunity there, or perhaps they simply weren’t ready for the specifics of their market.    

Property Management as a Service Business: Castle’s Team

Property management is a service business, and there’s a bit of a modifier to that service when a company calls itself tech-first. Alex and Brad both run companies that are tech-focused.

But.

The tech should enable the service. Some technology is built and some is bought. Castle tried to combine technology with on-demand labor by hiring 18 people domestically and 30 people in the Philippines. Then, they had 15 stewards managing their homes. These were likely contract employees conducting inspections and showing properties.

That’s a lot of people to manage 400 homes. The plan was to put this in place and grow and scale to the point where that kind of team made sense.

It never happened.

The service component, it seems, was put onto an assembly line. Somewhere on that assembly line, things broke. Having control over labor costs is a definite positive, but if there’s a disconnect and customers are getting phone calls and emails from people they don’t even know, it can feel like their property isn’t being properly cared for. Things fall through the cracks.

According to Brad, it results in something like this: No one was in charge of everything, and everyone was in charge of nothing.

Brad’s company uses the portfolio model of building a team, and Alex uses the squad structure at Fourandhalf. The squad structure, if you’re not familiar with it, looks like a triangle. There’s a campaign director on top, an account manager and an assistant account manager underneath, and then a virtual assistant handling the lower level tasks. That’s the squad. And it may look like an assembly line as well, but – it’s not a line. It’s a triangle, so everything comes back to the campaign director. Nothing drops off. There’s accountability.

Bob Walters says to delight your customers with great service. You want to be your customer’s hero. How you get there is irrelevant. Castle Property Management never got there.  

Experience and Trust is Never Replaced by Tech

It’s easy to be impressed by technology. However, when you’re presenting your services to property owners and corporate investors, it can be hard to gain traction with technology. They want to know if you’re going to be able to take care of things. They want to know their investment will be protected.  

It’s fun to be around a cool, young, start-up genius who is clearly very smart. But, at the end of the day, an investor’s property is their biggest asset, and it cannot be played with. It cannot be experimented on. Investors want experience in the market and in the industry.

It’s what Brad calls the warm fuzzies.  

You might have great techniques and impressive technology, but if investors aren’t confident that you are going to protect their investments, it’s going to be hard to get new business.  

Experience is big because potential customers want to feel protected. When you’re making a presentation at your kitchen table to an owner or an investor, or you’re even talking over the phone or via Skype, you want to be able to talk about the things your company has been through and why you’re positioned to protect an asset and work with an investment.

Owners do not want adventures.   

Fee Structure Can Determine Success or Failure in Some Markets

Another quote from Castle’s TechCrunch profile reads like this:

“While most incumbent property management companies charge a percentage of rent collected, Castle just charges a flat fee of $79 per unit per month.”

On its own, that’s not a problem. Plenty of successful property management companies work within a flat fee structure.

That kind of income may not cover the cost of acquiring a customer or paying for business expenses. You need to generate enough revenue per door every month. Castle’s idea was to cut down expenses with technology, and then scale the company.

It never happened. You can’t do that with 40 employees, even if some of those employees are not full time. That’s a large chunk of the revenue that will go towards paying the staff. A $79 management fee may look attractive to customers, but it will be hard to make a profit.

Sometimes, when you’re entering a new market, you have to introduce yourself with a low management fee. You’ll get your base by charging less, and then raise your rates later on. This is a proven business model. However, Castle just couldn’t scale up and generate revenue.

What Drove the Failure at Castle?

Take a look at Castle’s capital and funding table.

• They started with a $30,000 note in June of 2014.
• They raised $272,000 in April of 2015.
• They raised another $120,000 in November of 2015.
• They raised an additional $350,000 in December of 2015.
• In April of 2016, they received a last round of funding to the tune of $2.5 million.

If you’re like Brad, your mind may shut down at the thought of raising $3.3 million and then folding. Remember, they didn’t have $3.3 million to manage their 400 properties. They had $3.3 million to bring a new property management solution to investors.  

But, it didn’t work.

There are a number of possibilities for what happened and why the money couldn’t keep them flexible and able to pivot when their initial platform seemed not to be working.

Perhaps the investors saw a lack of success and insisted they fold. Perhaps they ran out of cash. Perhaps they couldn’t secure another round of financing.

You may be shaking your head at the amount of money and the size of the failure. Remember, technology is expensive. Talented people are expensive. The team at Castle didn’t get rich off this. They weren’t paying themselves very much. A lot of that money was likely tech and development dollars.

What You Can Learn from the Castle Case Study

Tech is cool. Tech is fun. Tech is a means to solve a programmatic problem.

Did you hear that? Tech is a means to solve a programmatic problem.

If you’re not giving the service aspect the respect and attention it deserves, you will fail. Customers need to trust the company and the service. They aren’t going to work with you because they trust your technology. It helps. It solves problems. But, if you’re not spending enough attention capital on the service part of your business, you’re not going to scale.

Hiring smart people is not always the answer.

Did you hear that? Hiring smart people is not always the answer.

Hiring service-oriented people will get you to where you want to be. To really create a service company that is known for its exceptional customer service, you need to hire service people. It’s culture. Blending tech people with service people can be a challenge. It’s not a natural single unit. So, if you’re not paying attention to the service aspect, and you’re not training your people or building a structure, everything falls apart.

Why Didn’t (or Couldn’t) Castle Pivot?

Why just walk away from this?

If you flop on the first 400-property strong portfolio, why not pull back and re-assess, and then work differently?

You still have revenue coming in, and it seems pointless to quit. Castle as a fantasy may be gone forever. But, Castle as a property management company could have still existed. It could have remained in the market to serve customers. They didn’t need to disappear. This is one of the questions Alex and Brad will ask Max Nussenbaum if he decides to come onto The Property Management Show when he’s ready.

Creating a service or a product to solve a problem is always a good idea. However, Castle Property Management didn’t solve the problem. What’s still to be debated is:

• How much of that problem really exists?
• Are those problems relevant to the landlord and investor community?

One fact everyone knows: 27 percent of properties are professionally managed. The rest are self-managed. That’s a lot of opportunity.

So, maybe the timing was part of it. Maybe in two or three years, it will work. Investors are finally starting to trust the industry. NARPM hosts a massive trade show and keeps the industry buzzing.

People will always need a place to live.

If you want to find Brad’s show, visit PropertyManagementMastermind.com.

If you have any questions, contact us at Fourandhalf.

The post What We Can Learn from the Failure of Detroit’s Castle Property Management appeared first on Fourandhalf Marketing Agency for Property Managers.

A Chat with Aaron Robertson of Authority Property Management

About a year before Alex Osenenko started Fourandhalf, he met Aaron Robertson, and they were both doing different things. Alex was working for Appfolio and Aaron was running a property management company with some business partners.

Today, Alex is hosting The Property Management Show, continuing to grow Fourandhalf, and presenting The PM Grow Summit, a conference for the top level property management entrepreneurs. Aaron has started Authority Property Management, and after only 30 months is up to 435 units.  

The two are on the podcast to discuss leveraging tech experiments, marketing, and the importance of running an emotionally intelligent company.

Experimenting and Decision Making

After nearly 10 years in the property management business, Aaron realized that he didn’t need a business partner who wasn’t his wife or his bank. He likes to make decisions quickly because it’s easy to start something, fail, and then get up and try again. Usually, that process is a lot faster and more successful than taking months and even years to contemplate whether or not to adopt a particular business strategy.

Making decisions in two or three minutes makes sense to Aaron and his wife, and it’s helped their business grow.

To grow quickly, you need to implement technology that puts systems into place and automates a lot of the work. This is a huge factor in fast growth.

Those experiments cost money. But, it may be worth it to you to spend a couple of hundred dollars to try a system or a product for a month. In that time, you’ll know if you want to use it or if you want to look somewhere else.

Run tests on software. Experiment with new technology. Every management company is different and you need to adopt whatever works for you and your customers.

Automating and Saving Time: Some Examples

Aaron is willing to invest in high quality walk-through videos of his properties. A prospective tenant can look at walk through video and really get an idea of what the home looks like. His team writes beautiful, detailed descriptions that read like real estate sales ads.

There’s a cost, but it gives a property management company an edge. It also gives the property owner an edge, and it helps the prospective tenant who is looking for a home. A lot of companies talk about the importance of quality walk-though videos, but very few invest in them.  

Remember that you don’t always have to hire out for these services. Maybe you will pay for drones and camera equipment, but a staff member can go out to the property and take and edit photographs. The equipment is then worth the investment because it makes that staff member’s job easier. The result of this process is better quality for tenants and owners.

Appfolio is another amazing tool that can save a lot of time. Use software in a way that works for you and your clients. Property managers need to think past the generic things that are offered by software, and add to it when necessary. Do some integration and overlap your systems for optimal functionality.

Google Suite is a good example. You get calendars and Gmail and hangouts and messaging all on your phone as well as your computer. The efficiency and collaboration makes a difference. Put it to work for you.

The advice here is to experiment with what you already have.

Adapt your process to see what sort of efficiencies you can gain from a piece of software.

Stop Saying We’ve Always Done it This Way

Don’t be afraid to re-evaluate your systems. It’s pretty easy to do things because they’ve always been done a certain way. But, the world is changing. Ask your team if they have the tools they need to do their jobs. Your staff can provide feedback on what’s working and what isn’t.

One of Aaron’s mottos is: We Make Rentals Simple.

To live by that motto, it’s important to always re-evaluate and make sure the best programs and technology are in place.  

But…Don’t be a Squirrel

There is a squirrel mentality, and you want to avoid that, too. You can get carried away with all the vendors out there who are trying to get your attention. There’s so much tech out there, and the industry is ballooning into something much bigger and more advanced than what it was.

It’s hard not to try everything.

But, you need to be disciplined. Find out how long a company has been in business before you jump into discussions about what they have to offer.

Aaron won’t waste his time sitting through sales webinars and demonstrations. He’ll ask if he can test a product on his own for a while. If a company is willing to let him run his own demonstration and sample what they have to offer, he feels comfortable that it will be a decent project. This criteria protects him from the squirrel mentality – or the need to try everything.

Marketing a New Property Management Company

The quickest way to introduce a new company to landlords and investors is likely through the local marketplace. Aaron talked to the Chamber of Commerce, met with the Board of Realtors, and networked with brokers, lenders, and anyone who dealt with investment properties.

He wore a logo shirt.

Beyond that, you need to get tech savvy with marketing. Aaron was easily able to use social marketing, and focused on Facebook because he knew that’s where most people spend at least 30 – 50 minutes of their day. He invested in Pay-Per-Click advertising campaigns and got his company in front of the right people.

Reputation: People First, Profits Second

If you look at property management in Redding, California, you’ll see that Authority Property Management inspires trust through their online presence. They’ve got 37 5-star reviews on Yelp. They built this reputation by putting people first and profits second.

Treat tenants like people, not rent checks. A lot of property managers look down on tenants, and such attitudes create a humongous death spiral.

When you are humble and service-oriented, you have the opportunity to move someone from a customer to an apostle. Many companies prioritize how to get an extra dollar out of someone. They have a list of ancillary fees that they’re quick to charge, and they boast about having the biggest late fees in the industry. You don’t have to go about your business that way.

Instead, you can do good business with good people.

That’s what spurred their growth and created profits that they could be proud of.  

Whether it’s waiving late fees or rewarding on-time rental payments, there is a strategic advantage to treating tenants like people and investing in their well-being and their experience. Property management companies need to look at their tenants as valuable constituents.

Making people feel welcome, special, and appreciated is easy to do.

If you’re not into the feel-good stuff, understand this: Aaron and his company are making a lot of money. You can do good business and make good money.

Measuring Success: KPIs and Feeling Out the Future

Aaron measures success through profits, not number of units. His company is selective about the properties they work with. His goal is to double the company’s profits, but not necessarily by doubling their doors.

That’s the one-year plan. The four-year plan is to have the company set up so well that it can run without him while he and his wife are enjoying la dolce vita in Italy.  

There are a few key KPIs that Aaron tracks, and one of them is a bit unusual: tenant re-rents.

A re-rent describes when a tenant moves out of one of your properties, but right into another one of your properties. Maybe one of your tenants needs a larger home or a smaller home. Rather than look around at what’s on the market, they just want to know what else you have available.

That’s pure profit to a property manager because you’re saving on turnover. If you spend $385 to get a property rented, most of that is saved when you’re moving a tenant from one property to another.

The results are pretty astonishing: 70 percent of Authority Property Management tenants re-rent from them. Not a bad record.

Spending on advertising versus new client acquisition is also tracked. Right now, they spend $551 for a new client.

Next, Aaron will work on tracking annual customer value and lifetime customer value. He’s promised to return to The Property Management Show with those numbers, so make sure you stay tuned.

Thanks to Aaron Robertson, who can be reached at authoritypm.com.

If you have any questions about how to achieve this sort of growth, contact us at Fourandhalf. We can help you with property management marketing and share some ideas on sales and business development.

The post Putting People First for Property Management Business Success appeared first on Fourandhalf Marketing Agency for Property Managers.

The Property Management Show has been on the air for about two years, and each episode inspires a lot of feedback from listeners. There have been some questions along the way as well, so on this episode, host Alex Osenenko is answering some of the specific questions that listeners have submitted. Alex will use his experience and expertise to answer these questions, and you’ll notice they apply to nearly all property managers and small business owners.   

Background: Alex Osenenko

What makes Alex uniquely positioned to answer these questions?

He has spent the last 10 years in the property management industry, and the last six of those years as an entrepreneur and business owner. He has scaled Fourandhalf from being a garage business with 0 employees to a thriving company that currently employs 27 people and continues to grow. In addition to this experience, Alex has talked to thousands of property managers at different stages of their careers. He has spoken to successful business owners, business owners that have failed, and a whole section of professionals in the middle of the spectrum of success.

Alex sees the purpose of his professional life clearly: it’s to help small businesses grow. This is his passion, and the podcast serves that purpose. Here are the Questions and Answers he’s chosen for this episode.  

Question 1: Struggling with Business Structure  

Sam from Longmont, Colorado started his company about four and a half years ago with a few properties he took over from another management company. He got into the business because he was looking for something more stable than just selling real estate. Now, he’s managing 85 properties – most of which are high quality single family homes. As Sam has grown at about 30 percent for the last two years (way to go, Sam!), he’s wondering how to structure his company. When he first began, he was doing everything himself. That included maintenance, accounting, inspections, and showings. Most of you can probably relate to that.

Once he got to 40 properties, Sam knew he had to make a change. He hired two people; one to help with maintenance and one to help with showing available rentals. As he continues to grow, Sam wants to know how to adjust to increased business. His question is whether to bring in some extra showing agents or switch to a portfolio structure and bring in an administrative person.

Alex has another idea.

Answer 1: The Squad Structure

According to Alex, Sam is in the perfect position to continue scaling with a squad structure. For Sam, that means having a Property Manager Executive on top, who is responsible for speaking to clients. All client interactions should go through the Property Manager Executive. Below that, there is someone handling maintenance support, rentals and leasing support, and maybe accounting. So as a squad, that structure operates efficiently because there’s a single point of contact for your clients. According to expert Adam Hooley, you should be able to handle between 150 and 300 properties with a properly organized squad.

So, Sam’s path is pretty clear. Take the time to spend a day or even half a day reviewing and listening to the Framework of the High Performance Property Management Team with Adam Hooley. Check out that interview, listen to the podcast, and pay attention to the book that he mentions and allows you to download for free. Put the structure together and fill it in with properties. Then, when you’re ready to build that second squad – you already have the framework.  

Question 2: Turning Leads Into Business

Monty from Florida has owned stock and commodity investment firms for the last 25 years, so he’s comfortable using the phone and cold calling. It’s his favorite tool to generate leads at a low cost per acquisition. Property management is a good fit because he’s been helping investors get better returns for 25 years, and this is not much different. Recently, Monty hired one of his former commodity brokers to do cold calling for his property management business. There’s been some initial success, but so far most of the leads they have closed have been only for tenant placement accounts. Monty hopes to convert the placement-only accounts into management accounts in future.

He knows he is one of the best salesmen and closers; and he’s good at hiring and training his procedures with similar results. Monty and his team close as much as 30 percent of their inbound leads and average a minimum of 15 to 20 percent closing rate. His struggle is in getting more leads. Monty says he sees companies like Empire in Houston, that claims to have built 0 to 700 doors in four to five years, or Larsen Property Management (now RentWorks), claiming to add a door a day. He knows those are impressive numbers, and he wonders why he has a hard time generating 40 to 50 leads a month, let alone 30 doors.

Monty recently spent $15,000 on radio and internet marketing to only generate 60 leads in a month. He wants to know what the marketing budget is for companies like Empire and RentWorks, and what they spend to get those results.

Answer 2: Internal and External Ways of Increasing Growth

The companies Monty mentioned are important. Steve Rozenburg and his partner Pete are at the helm of Empire, and Brad Larsen runs Larsen Properties, which is now RentWorks. The numbers mentioned by Monty are real and true; their growth is staggering. And his question is – how can a company get the same growth rate as Empire and RentWorks?

There’s an internal and external path.

Internal Pillars for Growth: Purpose, Numbers, and Experimentation  

First, you have to establish your purpose. The purpose of an organization is not to enrich its founder. That’s the outcome, not the purpose. The purpose of a company has to be higher than that, and something people can connect to and belong to. Brad and Steve have a loud and clear purpose. Everyone knows who they are and what they’re doing. They want to lead the industry, and their teams are aligned behind that purpose. They have values, and they talk about those values all the time.

Next comes numbers. You have to understand everything about your business and its numbers. For example, Steve and Pete with Empire obsess about Key Performance Indicators (KPIs). This is what drives the decisions about which direction the company should take. Know your numbers on pre-sale and post-sale terms. Pre-sale is what happens before you bring a customer in, and post-sale is after you sign the customer. Be obsessed with KPIs.

The last piece is experimentation. Both of these companies are exceptional at experimenting. Steve and Alex have spent hours interrogating each other about marketing, growth, what can be done to grow smarter, and why things aren’t coming together as fast as they would like. Those intense conversations required deep thinking about every single aspect of growth, marketing, and scaling your company. Brad is the same way. He runs his own podcast where he interviews property managers who have ideas about better ways to do things. He thinks.

Experimentation culture starts with the owner and trickles down into the organization.

You need resources to fund experiments. Renter’s Warehouse spent 25 percent of revenue on marketing to scale up the business. They don’t spend that much anymore. But initially, they spent that to bring the business up to the level they wanted. You don’t necessarily have to spend 25 percent of your revenue. But, you have to invest into business growth. Put the money you earn back into your growth. If you are looking to grow, have a consistent and strategic budget allocated to marketing and growth. That should be around 10 percent of revenue, depending on your operations structure and how much you want to grow.

Ongoing Investments vs. One-Time Investments

So, Monty invested $15,000 on marketing and radio in November. That’s great. But what if he put $15,000 into marketing and radio every month? Generating 60 leads in one month is not so bad, especially when your close ratio is 20 percent. That means Monty earned 12 contracts in that month. Imagine that your Annual Customer Value is $2,300 or $2,400 on management fees alone. Multiply that by four years, which is the average number of years a customer will stay with you, and you’ve got a lifetime value of $115,000. If you can produce $115,000 over the lifetime of those leads after spending just $15,000 – you’re doing pretty well.

So, it makes sense to keep investing that $15,000 every month – not just one month. That’s how successful businesses operate. Look at unit economics and acquisition costs. If you can pay back your acquisition costs in six or seven months, your investment makes financial sense.

Know the math, and keep experimenting.

Yes, it’s going to be expensive and it may reduce your cash flow for a while. But, that revenue will catch up.

Continue to experiment.

Don’t expect immediate gratification.

You have to look at success from the perspective of annual and lifetime customer value. If you want a great, profitable business, you need to understand that spending $1,000 or $2,000 to acquire an account is cheap.

External Pillars of Growth: Content, Reputation, and Conversion

When you need more leads, you need more content to attract those leads. Both companies that Monty mentioned have well over 150 or 200 or 300 blogs that are basically explainer videos. Those blogs are talking to prospects about managing a property. They are a platform for sharing expertise. That content brings thousands of visitors to their websites.

Next, reputation is critical. Steve and Brad are obsessed with reputation. They check their reviews and they figured out a way to get positive reviews. Find a way for your happy clients to speak on your behalf. You need to commit to a culture of positive reputation. That includes rewarding employees and asking your customers for reviews.

Finally, your external source for more leads is conversion, which happens through your website. Brad and Steve don’t have cookie cutter websites. You need a site that converts visitors into clients. Design a site that can effectively communicate your value propositions and then resonate with visitors.

The companies Monty mentioned are on top of their respective searches because of their internal and external foundation.

Question 3: True or False – SEO Won’t Save You

Matthew from Raleigh asks – when someone says SEO won’t save you, to what extent is that true, and in what way is it missing an opportunity?

Answer 3: No, SEO Won’t Save You. But it Will Help You (If You Do Some Other Things Too)

The last answer focused on internal and external frameworks. Those things are necessary to answer this question too, and it’s worth repeating.

You have to have the framework internally. And externally, you need content and conversion. SEO is plugging keywords and restructuring your website so it responds to the right keyword searches. It’s a back-end website structure that engineers a way for Google to understand what your website is all about. Then, your site is found for particular search terms.

For that purpose, SEO is an enabler. But – if you don’t have a company that’s aligned, and you don’t know your numbers or track your KPIs, SEO won’t matter. If you don’t understand what it costs to acquire a customer and you don’t know where your leads are coming from or what it’s costing you, and you refuse to experiment – then it is true: SEO won’t save you. Your customers will come in and out through a revolving door that never stops swinging.

You need your purpose and a team that cares. Then, you need content, reputation, and conversion. If you are authentically answering questions, and you have a great reputation with a website that converts, then SEO will enable your strategy.

But, on its own without those core principles employed in any business, you have a leaky bucket that SEO cannot fix.  SEO makes an impact when everything else is working for you.

Question 4: Relationship Between Marketing and Business Growth

John from Minnesota asks – why should I spend money on marketing if I’m not growing?

Answer 4: Investing in Growth is NOT Optional

If you’re not growing, it’s probably because you’re not marketing. Or, it’s because your team is not aligned or because you don’t have a purpose that’s clear and communicated. If you’re not growing, you’re probably not looking at your numbers every six months.

Growth happens to companies that are programmatically going after their purpose. It happens to companies that are structured correctly internally and externally, and are well-positioned. So if you’re not growing, find a way to put budget towards acquisitions rather than whatever activities you are currently investing in. Your money’s going somewhere. Are you spending it all on payroll or software? You pay yourself a salary, and then where does the rest go? Which part of your revenue is dedicated to growth? If you say none – then there will be no growth.

Running a business is difficult, painful, and lonely. You have no one to complain to, and you have to make decisions and solve problems. You have to be unpopular sometimes to save the organization and the company and the critical customers. It’s a lot easier to do things the way they’ve always been done. That’s the definition of an easy life as an entrepreneur. If things worked one way 20 years ago, you think they should still work that way now. But, that’s not true in most cases.

Everyone wants to grow, and the urgency to grow requires an investment. Whoever you hire to help you, you need to put in the resources and the work.

Find a partner and invest time in this. It’s important to understand that anything growth-related requires an effort. It requires experimentation and investment. Successful property management companies figured that out, and they’re not stopping. They aren’t just setting it and forgetting it or leaving their system to run on autopilot. They experiment continuously.

Listen to Brad Larsen’s podcast if you get the chance – it’s called The Property Management Mastermind. You’ll gain some exceptional knowledge out of that.

Today’s Takeaways:

• Understand your purpose and align the team behind it.
• Know your numbers.
• Be a culture of experimentation.
• Make tons of content.
• Be obsessed about reputation.
• Create a website that converts. Make it unique and explosive.

That’s the winning formula.

Contact us at Fourandhalf if you have any questions about property management growth, and we’ll start planning another Q&A show in the near future. So, send us your questions, and thanks for listening.

The post Avenues to Property Management Growth: Q & A with Alex Osenenko appeared first on Fourandhalf Marketing Agency for Property Managers.

Hiring someone to help you with your property management business isn’t as simple as it sounds.

If you’re a business owner and you know you need to hire someone because you cannot continue to wear 16 different hats while trying to run and grow your business, the biggest challenges are immediate:

You don’t have the time to hire someone, and you may not be able to afford to hire someone.

But the need is there. How do you get out of that spiral?

Kathleen Richards knows how to help. She has joined the podcast before, and she’s full of exceptional advice and experience. She ran a property management company for a long time, and she’s spent the last few years building a coaching business for property managers who feel stuck. She’s discussing how to balance your team without putting your business or your budget at risk.

Process Before People: Preparing to Accept Help

If you’re wondering who to hire, where to hire, and how to pay them, you’re not alone. It’s normal for entrepreneurs to start out doing everything themselves and then realize they need help.

Before bringing those helpers on board, look at your processes. You need to have systems in place. Because if your systems aren’t working, perhaps you just need better systems, and not additional people.

Hiring the right person is crucial, so you need to know your processes and your strengths and weaknesses. Where are you the most pressed for time? You may need a business development manager (BDM) to take over sales or an assistant to help with administrative tasks. Maybe you are overwhelmed by maintenance tasks and you really need someone to handle that part of your business. It may seem like you have sixteen jobs to fill at once, and in the moment it may be tempting to abbreviate the hiring process for quick relief. But, you need to be intentional about which part of the work you’re going to hand off.

Think about what you’re good at. If you are a stellar sales person, don’t hire a BDM. Instead, get rid of the things you struggle to handle. If it’s maintenance, hire an assistant or someone to deal with maintenance calls, work orders, scheduling, tenant contacts and billing. Think about where you need help.

Instead of screaming fire in a panic, identify which room has the biggest blaze, and hire someone to put that fire out.  

Paying for People: How to Hire Affordably

When you’re still growing your property management business, you might worry that you can’t afford to hire anyone. There are a number of ways to address this challenge.

Some people hire interns or students. This might work, but remember you get what you pay for. So, it might be better for you to pay a skilled person who can really make a difference in your workload. You need someone who can step in and take things off your plate on Day One. If you are busy, you probably don’t have time to train. An entry level person or an intern will need a lot of attention and supervision. Think about this before you choose this option.

Hiring a virtual assistant is another option. Kathleen hired a virtual assistant to take over her leasing process. You can also try a virtual assistant to manage maintenance scheduling and follow up. This is a huge cost savings. You don’t have to pay taxes because you’re not hiring an employee. So much of what you do in your business is in the cloud. You don’t always need a physical person in your office.

Hiring part time workers can also benefit you and save you money. If you do want someone physically present in your office or conducting showings, start with a part time person. You can advertise the job as part time to full time. Don’t hire someone who can’t grow into the position.

Let the experts help you, too. NARPM has a lot of quality vendors who can help you with the things that take up a lot of your time but may not be in your area of expertise. For example, you can find someone to help with your marketing, your website, and lockboxes so you don’t have to show the properties yourself. Put your NARPM membership to work for you, and utilize the vendors who can support you.

Test Your Budget: Put Money Aside

Kathleen suggests putting aside the salary you think you’d have to pay an employee.

If you’re not sure you can afford someone, spend a few months pretending to pay that future employee. Set aside the amount you’d be paying if you hired someone. If you truly can’t afford it, you’ll know after a couple of months. But, if you can easily put the money aside for six months and you have built up a bit of savings, you do have the money to hire someone.

For business owners who plan ahead, this might seem silly.

If you plan ahead and you know what each new customer is worth to your company and what you have to spend to acquire that customer, you know that the cost of bringing on new staff members is part of the growth process. But, not all property management company owners have business degrees. Maybe you started off managing a handful of properties for friends and family members and your business started growing before you could plan for it.

It’s not too late to start planning.

Payroll can be 50 percent of your revenue when you’re running a property management company. This is a service business, and you need to be prepared for growth and for what you’ll need to do to manage that growth. There will be payroll taxes and benefits and other salary considerations. Decide what you need and what you don’t need. Maybe you don’t even need a physical office.

Look around at the people you already know. Realtors can do showings and manage move-in and move-out processes for you at an hourly rate. You don’t need a full time employee for these tasks. There must be someone smart and capable you know who can be counted on to take some of the load off your shoulders as a business owner.

Try to think outside the box for ways you can get the support you need.

Hiring Right: Use a DISC Assessment

You’re desperate to get someone hired. But, it’s better to fire fast and hire slow.

Kathleen believes in hiring with a DISC model. DISC is a behavioral assessment tool that’s based on:

D: Dominance

I: Inducement

S: Submission

C: Compliance

Personality types are important when you’re hiring. Breaking down a potential employee’s personality type into these four areas can help you hire the right person. If you’re looking for a bookkeeper, you want someone really strong in the C- Compliance area. That’s someone who will follow the rules, pay attention to detail, and balance the books. People with strong I and D traits will be great sales people. Property managers will have strong S and C traits. They are calm, steady, and good with administrative tasks. They’re organized.

You need a well-rounded team. Most people, when hiring others, hire people just like themselves. That’s a critical mistake. Instead, you want to balance out your team. Know your own skill sets and then build the team around what you already have. DISC will help you determine this and hire the right people.

It’s easy to administer. You can find free versions of the assessment online, and it’s as easy as emailing it out to your candidates. If they’re interested in the position, they’ll be willing to take the assessment and return it to you. From there, you can talk about job descriptions and duties and day to day work.

What do YOU Think about Virtual Assistants?

Kathleen mentioned virtual assistants as a good way to hire some help while balancing your budget.

But, Alex has found that to effectively work with a virtual assistant, someone needs to coach them, give them feedback, and provide supervision. It doesn’t necessarily require micromanagement, but it’s a person who needs to be managed like any team member you were bringing on staff. Making a virtual assistant your first hire might not work for everyone.

Kathleen finds huge savings with the virtual assistant model. It provides access to highly educated people who don’t call in sick and are happy to have the work. She loves the support they provide and while she enjoys providing work to local people in her community, hiring four people for the price of one is a savings that many small businesses cannot pass up.

What do you think? Do you have experience using virtual assistants? Would you agree with the Property Management Coach that they make good hires? Comment below!

Planning – Visualize Your Outcome

Kathleen has provided a lot of great information on how to strategize your hiring process. If you take away one major outcome from this podcast, let it be this: PLAN. Once you can see the outcome you want, you can build around that outcome. This is essential.

Looking at your numbers and thinking about your business plan can be uncomfortable and scary. It can even hurt. But, you have to face the numbers and the reality as a business owner. Sit down for a full day every quarter and do some planning. It doesn’t have to be complicated. Just think about what the next 12 months should look like.

Talk to professionals like Kathleen who can help you look at your growth and your plans from a different perspective. This will help you eliminate some of your mistakes before you make them.

Just spend some time planning. Put a pen to paper. As a solo entrepreneur, it can be easy to forget to stop and look at what you’ve already accomplished. Do this. It is motivating to see how far you’ve come. Then figure out what to do next.

A Note from our Sponsor: PM Grow Summit 2018

PM Grow Summit is close to being sold out, and you don’t want to miss it. We’ve got diverse speakers from the property management industry who have come together to educate property managers like you. You’ll also get the opportunity to network, and often that’s just as important as the education. Take a look at pmgrowsummit.com and book your tickets online right now. It’s a deep dive into making your company better. A lot of smart people are speaking. Check it out. Make a decision, and soon. You don’t want to go another year without this essential information you need to grow your business.

Thanks to Kathleen Richards, the Property Management Coach. You can find her at thepropertymanagementcoach.com.

Contact us at Fourandhalf with any other questions or thoughts, and we’ll talk to you soon.

The post How to Hire the Best Team to Grow Your Property Management Business appeared first on Fourandhalf Marketing Agency for Property Managers.

Here Are Your Keys to the Rent Estate Revolution.

Kevin Ortner runs the largest property management company in the country.

He has some things to say about where the industry is going and how property managers can move it in the right direction while growing their own businesses and increasing their own potential. On the Property Management Show, he shared some insight and dropped some numbers that might surprise you.

About Kevin Ortner

Kevin was a pilot, and moved to Arizona for a new job opportunity, but lost that job because the company went under. He had some rental properties and became the first franchisee of the now-famous Renters Warehouse. Today, he runs the company.  

Kevin is the author of Rent Estate, a book that discusses the movement of owning rental property as a way to earn income and financial independence. It talks about important market trends. People who aren’t property owners yet are capitalizing on it just as much as people who already own and operate rental homes.  

Why Kevin Wrote Rent Estate and Why it Matters

Kevin wrote the book for marketing purposes. He wanted to use this content to start conversations about real estate investing as a tool for retirement and to attract new clients. It was a way to position Renters Warehouse as a thought leader in the property management space.

In addition to his marketing and content goals, Kevin is passionate about the fact that owning long term residential real estate will create wealth, security, and legacy. Retirement is different today than it was decades ago. No one is going to give you a pension and a gold watch. Your 401K was supposed to replace the security of a pension, but it’s not quite working out the way it was intended.

So, rental investing is a great tool. It’s not always exciting or sexy. It’s not as fast-paced as flipping homes. But it is consistent and reliable. You can count on it. That’s the message Rent Estate is sharing.

The Purpose of It All

Before Kevin’s book was published, the term “rent estate” was just something that Kevin and his team threw around internally. The term refers to buying and keeping property, differentiating this strategy of long term, reliable wealth building from the concept of “real estate” – which is buying and selling. They have now trademarked the term. Kevin’s book, of the same name, demonstrates the power of rent estate and what it can do for people.

Kevin’s purpose in writing Rent Estate is to help other people create wealth through real estate. The book provides the reader with both the educational background needed to begin this journey and actionable steps for making it happen. The first part is the macro view of what’s happening and why real estate is becoming that vehicle for wealth creation. Then, the second part is a micro approach to how it’s done.

22 Million Rentals and 70% of Them are Self-Managed. Why?

Kevin wrote the literal book on rent estate, so it is no surprise that he has done his research. Renters Warehouse was a sponsor of The Iceberg Report, an insightful study into single family homes and properties up to four units. According to that report, there are 22 million rentals in the U.S that fit that property category. Only around 30 percent of those are professionally managed. That means a staggering 14.5 million properties are currently being self-managed.

If you’re wondering what keeps landlords from turning their homes over to professional management companies, Kevin has 3 answers for you:

1. Generational Slant

A lot of landlords now are in their fifties or even older. This generation is so used to the concept of “DIY”. They are very happy to learn how to do things by themselves in order to save a few bucks. It’s no surprise why they prefer to manage their own rentals as well.

That’s a big contrast to the younger generation that is very comfortable with outsourcing things.

Kevin thinks that over the next 10 or 20 years, rental properties will change hands between one generation to another. This generational shift will eventually put more properties into the hands of professional managers.

2. Communicating Value

People don’t understand the value that property managers bring. They understand the dollars they’ll pay, but not the services they’ll receive.

This boils down to educating owners and helping them realize that the time savings and expertise they get from hiring property managers are worth the cost.

3. Industry Reputation

This is the biggest one of the three. The industry as a whole has a trust barrier to get over.

Property managers used to sit on the sidelines while real estate professionals took the stage. In the early days, the industry had too many fly-by-night operators who had no training, no resources, and no technology. This led to poor service and it bred distrust from customers.

No one took it seriously as a profession until the real estate sales market collapsed in 2007, and property managers were the only real estate professionals able to make money.

Since then, there has been a big improvement on education, resources, and technology for property managers. Despite this, it has been a slow crawl towards a better reputation for the industry.

As a property manager in this day and age, it is your responsibility to be trustworthy, transparent, and educated. Show property owners and landlords that there are professional players in this field who demand and deliver excellence. That’s the only way to bridge the trust gap.

Speaking of trust, you may have noticed a big change in this realm over the last five years. Online reviews are shaking up the service industry and giving consumers the power to ruin a brand with a few simple clicks. People will trust an online review more than they’ll trust a referral from a friend. People are doing their own research and looking at review sites.

Reputation is More Important than Image

It is difficult to maintain a good online reputation as a property manager. Homeowners want one thing and tenants want another. Don’t let that challenge scare you. Managing your reputation is an important way to grow a business. We talked about industry reputation – yours needs to be that company on the front lines communicating trust and professionalism to online prospects.

There are so many conversion metrics, and the biggest is reputation. Consumers will look you up, and if you aren’t getting enough praise online, it won’t matter how well-presented your landing page is. No one will care how appetizing your special offer is. Reputation is key.

So when the tide comes in and the next generation of owners brings a growing demand for qualified property managers with stellar reputation, you want to be in front of it.

Prediction: 5 Million More Rentals in the Hands of Professionals in 5 Years

Alex, The Property Management Show host, made a bold prediction:

Over the next 5 years, more than 5 million rentals will come into the hands of professional property managers.

So, he predicts that the market share for professionally managed properties will jump from 35 percent to 55 percent. The generational shift will work itself out and the changes in the economy will really begin to matter. People from the younger generation don’t want to buy homes; they want to rent and have the freedom of mobility. That overall growth will be worth about 11 billion dollars annually for the lucky management companies who can grab those new contracts.

Too bold?

Kevin wasn’t ready to make a specific prediction of his own, but he acknowledged the large movement towards professional management. New rental properties will constantly be available. The trends are turning in favor of property managers, and the potential for that kind of growth is definitely there.  

Let’s Make This Interesting…

Alex, so confident in his prediction, promised to pay for Kevin’s dinner if he’s wrong. But if he’s right – Kevin agreed to pony up for a meal. And, Kevin says that’s one meal he won’t mind paying for. He’d love to see that kind of opportunity for property managers in five years. Everyone wins.

So if the property management industry is on an upward trend, what can property managers do to make sure they get a piece of the action?

Creative Marketing and Drive for Growth

A lot of resources went into Rent Estate as a marketing tool. But, Kevin didn’t stop there. He believes not enough property management companies are spending what they need to spend on marketing and advertising.

Referrals are great, but if you want to grow, you need to be prepared to pay for business.

Did you catch that?

Referrals are great, but if you want to grow, you need to be prepared to pay for business.

Kevin did everything from Pay-Per-Click to SEO. Lately, his team has really benefited from content marketing. They put up great, evergreen content that continues to build value and can be endlessly repurposed to serve their marketing needs many times over. This includes educational blog posts and videos that rank for long tail searches, alongside paid advertisements.

You have to invest if you want to grow. You have to be creative and stand out. Referrals and relationships are great and important. But they are not as efficient. They are not going to help you grow rapidly. A lot of property managers have trouble getting over their hurdles, whether it’s 500 doors or 1,000. Marketing investment is key.  

A Shocking Statistic: Spend 25 Percent on Marketing

Renters Warehouse has an average lifetime customer value of five years, and Kevin uses this as a foundation for making key decisions. When it comes to marketing, he believes in spending big to win big.

If you want to grow your business and make more money, put 25 percent of your topline revenue into marketing.

If you want to maintain your current level of business, put 10 percent of your topline revenue into marketing.

That sounds aggressive, but Kevin doesn’t dial it down. Renters Warehouse used to spend 30 percent of their topline revenue to spur business growth. They don’t need to spend that much now, but they didn’t hesitate to invest that much in the beginning.

That’s how you become the largest property management company in the United States.

Growth through Acquisition

Renters Warehouse also buys companies. They look for smaller businesses that can introduce them into new markets. Revenue per door matters, and so does the quality of the portfolio. Many of the businesses don’t have a lot of cash flow when Renters Warehouse buys the contracts.

They pay top dollar for companies that have a fee structure already aligned with what Renters Warehouse does. Every company is a little different, but there are industry standards that need to be met. Tenant placement fees are usually more varied than the management fees.

Other criteria are reviewed, such as where the portfolios are located and the quality of the assets. The goal is to build a good book of business. Kevin wants to see a track record of keeping clients on board and a similar fee structure.

At Renters Warehouse, the management fees are lower than most but the tenant placement fee is a full month’s rent. Sometimes this causes friction, but not a lot of attrition. They honor contracts when they buy them, and slowly integrate their own pricing model.

The Beauty of a Simple Pricing Model

Most Renters Warehouse management fees are $89 or $99 per month, depending on location. The flat fee structure was a way to stand out and turn the industry upside down.

It’s getting better, but a decade ago, people would pay a management fee and then be nickeled and dimed to death. Renters Warehouse wanted to be simple, no-fuss, and transparent. The goal was to get big and grow volume. That helped them create efficiencies through technology and scale. They aren’t worried about leaving money on the table. The flat fee works for them, and they’re sticking with it.

Apart from their simple pricing model, Kevin also shared another key to their success — tenants.

Tenants Are Your Business Partners  

Get to know your tenants. They are your business partners.

If this sounds crazy, Kevin wants to emphasize that to have a good business, you need to keep your clients around longer and have a property that’s easier to operate. So (and this shouldn’t be controversial), treat your tenants like people. Treating them like a transaction creates a negative experience. Reward your tenants for loyalty and on-time rental payments. Don’t make them a rental payment and nothing else.

Renters Warehouse is a big company that manages more than 20,000 homes across the country. But, they have a live leasing agent show every property. You won’t find any lockboxes on their homes. It’s part of getting to know the tenants. They live the methodology of Rent Estate. The human experience is a luxury, and if you’re going to charge a full month’s rent for tenant placement services, you need to be there to connect with the tenants.

Mistreating tenants can also hurt you when they become landlords. Tenants aren’t tenants forever. They will buy into the Rent Estate revolution, and when they do – you want them to hire you.

Marketing Tip of the Day:

Mine your tenant database and set up your business by getting tenants to love you and buy investment property with you.

Advice to Growing Property Management Entrepreneurs: Just Start

Everyone goes to the same seminars and learning events, but a lot of the people you see there have not closed a deal yet. If you want to know how to get started, it’s simple – just start. It won’t be perfect and it won’t go according to plan. But, you’ll learn along the way.

The nice thing about a decision is you can always change your mind.

Make it happen.

Focus on your people and your tenants. Everyone is watching investors and homeowners and that’s good. But, remember your tenants. They will help you grow and they will make you more successful.

Renters Warehouse will be at the PM Grow Summit, and hopefully you’ll be there, too. In the meantime, give Rent Estate a read. If you have any questions about Kevin and his work, please contact us at Fourandhalf. We’d be happy to tell you more about this interview and how to develop a marketing budget that’s designed for growth.

 

A Note from Our Sponsor – The PM Grow Summit

There was no graduate-level growth conference for entrepreneurial property managers, so we decided to create one. With Jordan Muela of Lead Simple, we have put together a conference that’s a must for property managers who want to grow and contribute to growth within the whole industry. Last year, more than half the people attending managed 500 properties or more. These are the professionals you want to be around with. When you attend our conference, all you need to worry about is learning. We’ll take care of everything else from dinner to drinks to entertainment.

Get your tickets now. Don’t wait. When you’re checking out, type in ALEX as a coupon and you’ll save $100.

PM Grow Summit 2018 will be from January 31st to February 2nd. Visit https://pmgrowsummit.com/ for more information or to get your tickets. See you there!

The post How to Build the Largest Property Management Business in the Country appeared first on Fourandhalf Marketing Agency for Property Managers.

Disclaimer: This blog was originally published in 2017, and not all of the information regarding Jock McNeill, PM Grow Summit, Alliance Property Management, and Rent Napa Valley is current. However, the advice given is still applicable today and we updated the blog with even more relevant information in June 2023.

Jock McNeill was a guest speaker at the 2017 PM Grow Summit, where he gave a thought-provoking talk about Growth Through Acquisitions. He’ll be back with Michael Catalano at the 2018 PM Grow Summit to discuss the 5 Principles of Success in Growing Through Acquisitions.

While we were chatting about his presentation, he said in an alarmingly off-hand manner: “By the way, after learning at the last PM Grow Summit how a Business Development Manager (BDM) can help grow a business, I decided to try it and now we’ve doubled our growth.”

DOUBLED OUR GROWTH. As if it was no big deal.

Jock owns Alliance Property Management and Rent Napa Valley in Northern California, and he is joining The Property Management Show to discuss his past sales process, and what happened when he changed his course of action.

Jock McNeill’s Background

Jock is the co-owner and broker of Alliance Property Management, Rent Napa Valley, and also True Real Estate Partners. He has been doing property management since 1999, and his role has shifted from doing everything himself to currently having a staff of 12 or 14 people full-time, and a handful of part-timers. He has three offices in the North Bay area of California. 

Jock runs a tight ship, and he has a staff of people who have been with him for a long time. It’s hard to keep good people motivated, but he has found success by treating his team well and providing opportunities for them.

His property management sales process has changed significantly over the last five years.

The Alliance Property Management Sales Process Before 2014

Before 2014, their sales process was pretty old fashioned. When new or prospective clients called, Jock would take the call as the broker and co-owner. He set up the appointment to check out the property, and he went there to meet the property owners and evaluate the home. He’d sign them up, bring them into the Alliance Property Management portfolio, and hand the client off to a property manager.

He tracked everything in a spiral notebook.

Jock did his own follow up and knew he was missing opportunities. The sales funnel had leaks, but he was still able to close two or three new properties a month. He had to speak to five or six property owners in order to close those two or three, but that’s not a bad success rate. Jock’s leads were warm, and mostly referrals. His company was well-known in the community, so while he was closing enough new business to make up for the natural loss of current clients, he knew he could be doing better.

going digital

Revamping the Sales Process and Going Digital: 2014 – 2017

In 2014, at the Atlanta NARPM conference, Jock made a commitment to sign up with LeadSimple and Fourandhalf to begin managing leads and investing in marketing. This created a good foundation for his company’s sales funnel. He started tracking leads. He began following up. His close ratio went up due to the new processes he had in place.

If you’re wondering what made him realize he was ready for marketing, it’s simple: Numbers.

Jock said it was easy to do the math and see that if they invested a little in a sales and marketing infrastructure, they’d earn it back pretty quickly. They began to do more advertising, invested in marketing, and learned that the more volume they put in the funnel, the more efficiently they were able to use their efforts and resources. When you’re putting more money into that sales funnel, the leaks get more expensive.

Jock knew to plug the leaks.

With these new processes, the four property managers in the Santa Rosa office began taking new business calls when Jock wasn’t available. He didn’t want to miss those calls, and the LeadSimple system of call routing was put into place so that someone would always respond to a call from a potential new client. This increased business, and Alliance doubled what they closed every month. That meant five or six new doors were being signed every month.

This also worked well because when property managers were talking to new clients, they’d be the ones who ultimately took on the management of that home.

Sometimes, accounts are won simply based on chemistry. If you don’t like the person you’re talking to, you’re not going to work with them. If you can talk to one another with ease and it seems like you’re on the same page, your working relationship is already off to a good start.

Exponential Property Management Business Growth After The PM Grow Summit 2017

A few months before the PM Grow Summit in February of 2017, Jock began evaluating his business plan and thinking again about going a different route. He was thinking about hiring a sales and marketing person because there was a sense that with the new business responsibilities, property managers weren’t able to spend enough time managing properties. 

Business Development Managers and Company Culture

At the Summit, there was a lot of talk about Business Development Managers (BDM). Several speakers discussed what they do, how they contribute to the organization, and what their responsibilities are.

This is information you have to be exposed to in order to use it. There’s not a book you can read or a blog you can follow. You have to talk to people who have experienced what a good BDM can do for a company. The exposure to this expertise solidified a lot of ideas for Jock, and that sales and marketing role began to take form.

Shifting Cultures in the Workplace: Finding the Right Property Management BDM

One of Jock’s property managers was waiting for him when he returned from PM Grow earlier this year. He wanted a different role in the company, and he had some ideas on how to talk to new potential clients about their property management services and what to do to bring in more business. This was a property manager Jock and the team knew and respected. He was an asset to the team, so they decided to give him a shot in the BDM position. 

Making the Most Out of Your Property Management Business Development Manager

Putting together the job description was tough. Jock knew he wanted the BDM (Michael) to bring in new potential clients for his property management company and not miss any inquiries. It evolved into the additional role of helping to get the new properties to market. That takes a lot of time, and as new clients were coming on board, property managers were feeling swamped.

So, Michael, the BDM, began taking pictures of the homes, and preparing the listings. Then, it was handed off to a property manager for marketing, showing, and leasing. Michael is also responsible for networking events and other outbound marketing initiatives.

Better Business, Better Numbers

Remember, Jock is a numbers guy.

In the first three months of having Michael in the BDM role, 30 new units were closed. That breaks down to about 10 a month. In the second three months, they’re on track to close about 15 new units per month.

It’s working.

Quality Control and a Strange Way to Lease Homes

It’s important that the property management Business Development Manager understand what kind of homes the company wants to bring in. At Alliance Property Management, they’re looking for specific locations and properties in good condition.Landlords and owners are screened. It’s easy to tell what kind of client you’re getting when you recommend work that needs to be done before the property goes on the market, and there’s pushback. If an owner is comfortable renting out a home with 20-year-old carpet, that’s not going to bode well for the future of your relationship.

Some BDMs will be involved with lease renewals. That’s a non-issue for Jock’s company because they don’t do leases.

That’s right – no leases.

Alliance Property Management writes month to month contracts. If a tenant becomes a problem or doesn’t pay rent, you can terminate the contract the very next month. You can get them out of your property without cause. This is brilliant because with a lease, you have to prove the breach. That takes time, and everyone knows California is a tenant-friendly state. So, while you give up the guarantee of a long term renter, you’re achieving the peace of mind that you can eliminate the problems that come with a non-performing tenant right away. The market right now is strong enough that vacancies are not a concern. Turnover can be easily managed.

Alliance Property Management Business Growth Goals for Jock

Jock is comfortable with this growth. He believes in smart growth over rapid growth.

Why? So that he doesn’t kill his employees.

He’s got a great team working with him, and he doesn’t want anyone burning out. It also impacts the level of service he can provide his property owners. Everyone needs to feel supported, appreciated, and capable. Bringing in 10 new units a month means 120 new units a year. That’s 12 percent growth, which is pretty exceptional and extremely sustainable.

In terms of tracking results, Jock is not a micro-manager. He gives his BDM the goals and objectives, and lets him work towards them with his own methods. They talk a lot, and share information constantly. Everything is loaded into LeadSimple, from phone calls to meetings to networking events.

Favorite Topics: Customer Acquisition Costs (CAC) and Annual Contract Value

Spending around $100,000 a year on both salary and marketing, Jock’s customer acquisition cost is $833. Each of the new units his BDM brings in has a contract value of $2,000. Do the math, and you’ll see that Jock is paying back his acquisition costs in about four months.

That’s a recipe for success.

When you can pay back your customer acquisition cost within six months, you’re working with a phenomenal opportunity.

How Do You Grow Your Property Management Company?

You may be wondering how you can implement what Jock’s doing in your own business. Whether you’re looking to start a property management company or you’re already well established as a property manager in your area, here are a few ways to help grow your business. It all starts with your property management business plan.

Evaluate Your Property Management Business Plan Often

Jock is always thinking ahead and planning new ways to grow his property management business. You should too.

When you start a property management business, it’s easy to just set practices and then never return to them. It’s easy to become overwhelmed as tasks start piling up and forget to think about ways to improve your business.

That’s why it’s important to have a business plan, a living document that outlines all of your numbers, your reasons for how you’re running your business and your goals for the future of your property management company.

Take a look at your own property management business plan and see if there are any areas that are holding you back. If there’s an area in your business that is preventing you from growing, change it. Talk to other property managers and see how they solve the issues you’re facing.

Invest in Sales and Marketing Infrastructure

Having a solid marketing strategy will get your property management company in front of more property owners. This can be as simple as using a property management software such as Leadsimple to manage your leads and fix leaks in your sales funnel. Making sure to follow up with all property owners in your pipeline insures that you will close more clients.

How much you’re able to invest in marketing depends entirely on your personal numbers but whether you invest in paid advertising, content marketing, or just a software solution such as Leadsimple, getting more eyes on your business will get you more doors. As your business grows, you’ll be able to invest more.

Hire a Good BDM

Often times, property managers want to do everything themselves. But having a competent team to help answer phones and do property inspections when you’re not there is one of the best ways to get more doors and clients.

This is one of the strategies property management companies often wait too long to implement. Hiring a property management business development manager doubles the amount of time that you’re able to put into your business, which means you’ll be able to onboard more property owners and have more leases signed (if that’s how you’re running things).

Emphasis on the “Good”

You won’t truly get time back if you’re spending all your time micromanaging your employees. Hire people you trust to run and grow your business and then let them. A good BDM should allow you the freedom to do other things in your business be someone to bounce ideas off of. Goals and objectives can be outlined in a business plan to keep everyone on the same page.

Be Comfortable Thinking Outside the Box

Having no leases might not work for your property management company. But there are many unique ways you can solve problems in your property management business plan by thinking outside the box. There’s no reason to follow the status quo if it’s not working for you. As long as you’re following local laws, there’s no limit to the creative solutions you can come up with for your property management business plan.

Having a property management business plan is just the first step. We may not be able to guarantee that you’re able to double your growth the way Jock did – but we’re confident that if you follow these steps as they make sense for your own company that you’ll find success and business growth.

Jock is always learning and implementing, which we think is important in this industry. If you have any questions about what he’s done or how you can grow your property management business yourself – contact Fourandhalf – Digital Marketing for Property Managers.

 

The post How To Double Your Property Management Business Growth in Less Than a Year appeared first on Fourandhalf Marketing Agency for Property Managers.

This episode is a little different because it was recorded via Facebook Live and was co-hosted by Jordan Muela from The Profitable Property Management Show. We asked six keynote speakers to give us a sneak peek of their talks for the PM Grow Summit, which will open its doors in January of 2018. In this podcast, our speakers shared topics they plan to cover, talked about the relevance of those topics, and mentioned key takeaways that make us want to learn more.

Don’t have a ticket to the PM Grow Summit yet?

Take advantage of this special discount code. Type in PODCASTVIP and you’ll get $300 off the price. But don’t think about it for too long – there are only have 10 tickets at this price for listeners, so scoop yours up.

Who should attend the PM Grow Summit?

If you’re not sure you should attend, remember this: it’s the only opportunity to be around the best and the brightest thinkers and leaders in the property management field and beyond. This is for the property manager who is truly committed to growth. If you want to be more entrepreneurial, and if you want to get out of a rut in your day-to-day operations, this is the conference for you.

It’s about leveling up. It’s about being around the right people and not being satisfied with a baseline education. If you hunger for a strategy to grow your business, and you want to meet your challenges head-on, this summit has the people who can show you how to do it.  

Let’s meet the heavy hitters.

Marcus Sheridan – The Sales Lion

Marcus Sheridan’s book, They Ask You Answer provides a path for changing the way you market your services to potential customers. He’s going to talk about the digital consumer, who is smarter than consumers have ever been. He’ll explain how content marketing will help you reach that consumer, demonstrating how the buyer has changed, and what you need to do about it.

Marcus will focus his talk at the PM Grow Summit on the visual experience. By 2019, you can expect 80 percent of online content to be video-based. If you don’t have video content, you’ll be left behind by this marketplace. So, you’ll learn from Marcus how to integrate video into your sales process. You’ll get tips, tricks, and hacks on how to put a video culture to work for you without blowing your budget.

If you decide to spend the time doing what Marcus suggests, you’ll earn huge results. You’ll learn how to get over your imperfections when it comes to video. The people who are making progress are not perfectionists. Things are changing rapidly in the digital space, and wasting time trying to get it perfect will hold you back.

In addition to his talk, you’ll get some pretty intense workshop help from Marcus at the PM Grow Summit. He’s going to talk about best practices behind the camera and in front of the camera. You’ll learn about the substance that makes you trustworthy and believable.

Here’s a simple tip you can start using right now: Smile three seconds before you start filming.

Not only does this smile impact your body, it lights up your cheekbones and gives your eye a twinkle. Start talking when you’re coming off that smile. You’ll look alive, excited, and you’ll instantly connect with your viewer.

Jason Goldberg – Prison Break

Jason Goldberg is a TED speaker and a coach. He wrote Prison Break, and his topic at the PM Grow Summit will be: Why What You’ve Learned Today Won’t Work for You.

That sounds provocative, and it is. Jason will share his experience of going to amazing conferences and seeing a tremendous wealth of information being shared by industry leaders. Inevitably, people are motivated. They have action plans and intention. But then, they go back to work and give up on all the great stuff they learned at the conference. There’s no doing. Even worse – there’s no being.

Jason’s talk will help you move past the barriers that make implementing what you learn so problematic. Your mind is either a liability or an asset.  Your job is to be passionate about profound and impactful service. You could do this to make money, but you’ll only get so far. If your wealth creation is a byproduct of your profound service in the world, you stand to earn a lot more business and a lot more money.

The takeaway tip from Jason’s preview is this: get rid of your ego. It’s not about you. When you’re in your head, wishing for things or worrying that your sales pitch isn’t going to sound right, you’re making your own barriers. You don’t have to be impressive or the best. The people you serve simply need you to be effective. Get rid of customer service and create client astonishment. It’s not about you. It’s about delivering value to people.

Jason believes that apathy is the antithesis of mastery. Stop thinking about outcomes first. Instead, be present and care about what you’re doing and what kind of service you’re delivering. If you can internalize that need to astonish your clients, everything else will fall into place.

According to Jason, you can show up to the PM Grow Summit as one of three people.

• The Observer. You’ll sit and watch and shake your head yes or no and feel smart.
• The Participant. You’re a little higher up the ladder of self leadership, but not at the level you can be.
• The Seeker. This is who you want to be. You won’t leave the summit until you get everything you came for and more. You’re taking radical personal responsibility, and you’re committed to applying what you learn to your business.

Victor Antonio – Finding the Why in How People Buy

As a sales trainer, speaker, and author, Victor Antonio is the best person to tackle the subject of buyer resistance. In his talk, he’ll explain the way to close more deals by understanding the mindset of buyers. Aggressive sales pitches result in pushback. But, if you know how to match the way you sell to the way that people buy, you can be more successful.

If you don’t like to pressure people or do a hard sell, you’re going to love Victor’s PM Grow Summit talk.

Victor’s going to remind you that you’re in the marketing business first. Everything else is second. If no one knows who you are, they’ll miss your message. He’s going to help you understand sales and how it’s more than pushing a product or a service. The Bureau of Labor Statistics found in 2012 that 1 in 9 people worked in sales. But those other eight people, who are not in sales, spend 40 percent of their time influencing and persuading other people. What does that sound like? Sales.

Sales is about helping people make decisions. When you’re selling in a B2B environment, as many property managers are, you’re encountering people who want three things, which make up a value trinity. These three things are:

• Increase in revenue
• Decrease in costs
• Market expansion

If you can show buyers how to do these things with your product or service, they’re going to listen to you. Buyers today are confused by the number of options they have. They want someone they trust to guide them towards the right decision and to meet those three parts of the value trinity.   

Victor’s takeaway tip ahead of the summit is to cut the fluff out of your video and stop with the stories and the big setups. All you have to do is set up the problem, provide a solution, and explain how to implement that solution. It’s all buyers want. They don’t need a video that’s more than two minutes.   

One thing you’ll love about Victor’s talk is his segment on objection blocking. Let’s say a prospect tells you your price is too high. That’s never the real objection. If you don’t close that deal, it has nothing to do with price. You simply didn’t know how to position your value. Get past that, and close more deals.   

Andrew Propst – Growing by a Door a Day

Prepare yourself for this one. Andrew, who has been a property management leader for years, will talk about how you can grow your business quickly through new development. With the construction of new multi-family and single family communities, you can grow your business and cultivate a new revenue channel.

Since 2011, Andrew has grown his management company in Boise by 3,200 new units. He has expanded into Kansas City, Memphis, and parts of Arkansas. He’ll talk to the PM Grow Summit about the challenge of dwindling inventory. Many of the properties you once managed are now going onto the sales market, which has regained some strength. If you can’t find new doors to manage – you can build them yourself.   

Relationships are necessary to facilitate this process. You’ll need to work with builders and developers and lenders and investors. Andrew will tell you how to get traction. He’ll talk about how to find the land, how to find a builder, and how to put together a package that’s easy for lenders and investors to understand. This is a complete lease-up strategy for new development.

If you’re interested in putting 5,000 new units into the ground (units that will be managed by you), you’ll want to pay attention to Andrew’s talk at the PM Grow Summit. He’ll source the whole process for you, from digging the dirt to stabilizing the property. The next boom in the property management industry is new development.

The takeaway tip for this: it’s not as unapproachable as it sounds. Property management is a relationship business, and if you can develop those relationships and put good information in front of the people you’re working with, you’ll be successful. Anything is possible.  

John Jantsch – Duct Tape Marketing

John Jantsch has built an empire helping small business distill marketing into real techniques that foster growth. He’s going to talk about the 7 must-have elements in every website today. He’s been marketing for over 25 years – before there were websites. A company’s site has moved from just being a place where people can find your business to being the place that guides a buyer’s journey.

People visit your website because they have a problem. They’re looking for you to solve it, and your website has to do that. You’ll learn how you can offer unique solutions, and you’ll get a helpful checklist that ensures your website is performing the way potential clients need it to.   

John’s takeaway tip is to focus on problems. No one really cares about what you sell. They want their problems solved. If you start from that framework and identify the problems, you can focus everything you do on solving that problem. Your entire marketing strategy has to embrace the solution to your client’s problem. If your messaging can connect at that level, prospects will listen to you.

Referral marketing has been a specialty of John’s. His one piece of advice if you want to take your referral marketing to the next level is this:

Be more referable.

No one will refer you if they’re not having a great experience. Solve their problems.

Additionally, don’t wait until you’ve solved the problem to ask for a referral. Ask during the sales process. If you are so confident that what you do will work for your prospective client, you have set an expectation of service. Give them an opportunity to refer you and help other people. With that kind of expectation before someone even becomes a client, it will be difficult for them not to take a chance on you.

Brad Larsen – Rebranding Your Business

Brad will talk about a lot of things, and if you don’t already listen to his Property Management MasterMind podcast, you should. He’s uniquely qualified to talk about rebranding at next year’s PM Grow Summit. Why? Because he managed to rebrand his company with a very short turnaround time. AND – it didn’t really affect his Google ranking at all.

Brad rebranded from Larsen Properties to RentWerx. He wanted to build something that was more than just his name. He wanted a brand that wasn’t about him. With his name off the door, Brad has found a new freedom. He’s still the owner of the company, but not everything points in his direction. Picking a neutral name means he gets to build a company that’s bigger than him.

If you’re nervous about the time and expense that can come with a rebranding strategy, Brad will tell you how to flip the switch. He used a two-page plan written on a notepad, and turned everything around in a matter of days. The website was updated, the business cards were printed, and the videos were all rebranded.  It felt seamless because it was seamless. There was minimal disruption to his business operations and NO disruption to his clients.

He even stayed highly ranked. So, at the PM Grow Summit, Brad will share his story and tell you how to do it while retaining your Google ranking throughout the process. You don’t have to worry about people not finding you, and you don’t have to spend a ton of money on ads. Planning is critical. If your content is already good and Google has already paid attention, you can do this and do it well.  

You’ll love the level of optimism that Brad has about his brand going forward.

These are the six speakers you don’t want to miss at the PM Grow Summit — a two-day event designed to grow your property management business through world-class sales, marketing and technology tactics and strategy.

Get your ticket by going to pmgrowsummit.com, and remember you can save $300 by using the PODCASTVIP code.

See you in San Diego, and thanks for joining us on The Property Management Show.

The post Who’s Who at the PM Grow Summit 2018 – A Facebook Live Podcast and Preview appeared first on Fourandhalf Marketing Agency for Property Managers.

Technology is huge. With emails, Facebook, Skype, and other platforms, it’s easy to lose the art of face to face communication and interpersonal communication. People can hide behind digital technology. That means communication and relationships are more important than ever. If you can master how to communicate correctly and develop relationships, your destination is only limited by your imagination.

Introduction to Warren Tate

Warren is a trainer and a coach and has worked as an estate manager for one of Australia’s largest property management companies. He is also the best-selling author of “I GET YOU: How Communication can Change Your Destination.” He worked in the real estate industry for over 20 years, and as a franchise manager doubled the size of a boutique management business. He loves helping people, which is why he decided to focus on training and coaching.

Warren doesn’t deliver anything that isn’t proven in science, so he does a lot of research. All of his work is backed up by the latest data in biology and psychology. In today’s interview, you’ll learn the four different personality types that will help you better connect with clients, how to diffuse difficult situations with clients, and telling more engaging stories.

Personality Types: How to Identify and Communicate with Eagles, Peacocks, Owls, and Doves

There are hundreds of personality tests you can take and if you take them all, you’ll start to feel psychotic. What you really need is a basic understanding of yourself and the people you deal with. If you don’t understand your personality type and their personality type, you could be on opposite ends of the communication spectrum without even knowing it. That can cause clashes and misunderstandings.

As a property manager, the best way to identify personality types is by asking a simple question:

Can you describe your home to me, and what do you love most about it?

Personalities can be introverted or extroverted. Extroverts are The Controller, or the Eagle; and The Colorful, or the Peacock. Introverted personality types are The Compliant, or the Owl; and The Comforter, or the Dove. Let’s break those down.

The Controller |The Eagle

The Controller or Eagle is your smart, sharp person who wants results. They are usually quick talking and they are often managers. They want results and outcomes. They want the facts, and then they will make decisions and move on. These personalities talk fast and make decisions fast. They will know if you’re not telling the truth, and they will lose patience if you don’t get to the point fast enough. You might write a detailed email about maintenance and the response will be a clipped, short response of yes or go ahead. You might worry there’s something wrong, but that’s just their communication style. They made a decision, and they’re moving on. You can tell someone is an Eagle by the way they are short and sharp. They won’t waffle. They’ll tell you how it is, and that might seem rude or blunt. But, it’s how they work.

If you find yourself having to communicate a conflict or a difficult situation to these people, it’s best that you simply provide the facts. State the problem, the resolution, and your plan for follow up. Then, ask if they agree with you or if they’re comfortable with your plan. Be short and sharp, like they are. Don’t provide extra details and don’t share a long story about the tenant not paying rent because a dog died or someone’s Aunt Sally got sick. They don’t want to hear the sob story. They want to hear the facts and your solution.

When you ask the Eagle to describe the property, he or she will give you a short, specific answer: it’s a townhome with four bedrooms and three stories and city views.

The Colorful |The Peacock

The next extrovert is The Colorful or Peacock. These personalities love to talk. They will tell you about their weekend and the movie they saw and the friends they went out with. They will talk until they run out of things to say. It’s obvious that they’re social and they love to name-drop. They are good, fun people. They are the ones organizing social events, and they know where the parties are. They need to communicate with a lot of description and detail. They love everything about themselves, and the best way to communicate is to let them speak. Don’t cut them short. Compliment them. If you’re meeting with them face to face, they probably put a lot of effort into their appearance or their property. Acknowledge and validate that. These people want to stand out.

If you have to deliver bad news to a Peacock, you approach it with feeling from their side of the issue. Maybe a tenant has damaged a garden, so you can spend some time talking about how you understand the importance of the garden to the landlord, and how she worked so hard on it and the plants look so beautiful. Then, you’d explain that the tenant has not maintained it to her standards, but has agreed to hire a gardener to come every two weeks to keep it looking great. It’s a long-winded answer, but Peacocks love that. Offer to send them pictures of the improved garden. They are very visual and they will relate to what you’re saying.

The Compliant |The Owl

The Owl loves statistics. When you ask an Owl about his or her property, you’ll hear exact measurements and perfect details. You’ll know it was purchased on January 20, 1988, and that the living area is 4.2 square meters. They love talking with precision and figures and actual facts. They do not want any ambiguity. If you say maybe to them, they will discount you and move on. These personalities need and expect accuracy. If you have a potential client named John and he is an Owl, ask him if he spells his name with or without the H. He will immediately appreciate that.    

Communicating with an Owl or a Compliant means doing your research and being prepared. If you think your Owl client is asking too much rent, don’t just tell them they need to lower the rent. You need to back that up with math and statistics. If you are having trouble getting a tenant into that property, show the owner that your average days on market is 12 days but you’re now at 14 days. Explain that statistically, this shows you that the property is overpriced for the marketplace. Maybe present data on 20 other properties in the marketplace that are $20 less per week. Then, you can suggest matching that price. Provide facts and give numbers. Owls will relate to that because of their statistical mindset and need for precise numbers. 

Owls will read everything in your agreements and contracts. So, make sure you know them. Be able to quote your lease agreements and any acts. Show them you have done the research and you have the knowledge to match theirs. If you’re unsure of anything, they will lose confidence in you.  

The Comforter |The Dove

The Dove is an introvert who takes a lot of time to build trust. They are often soft-spoken. They are the last to speak in any situation because they’re listening and observing. They are taking in information, understanding everyone’s point of view, and acting as peacemakers. Doves will try to come up with solutions. These personalities want to trust you before they commit to anything. If you’re trying to get a Dove as a client, listen to them and build trust. Until they trust you, they won’t do anything with you. But once they have your trust, they are your client for life. They will love you forever until you break their trust. And, Doves won’t come back if they do lose you.

You can identify a Dove by the way they speak. They speak slower, and they are deliberate in their words and how they choose their words. They may pause and think a lot, and it takes a while to get them to speak openly. Be clever with your questions and keep them open ended. Use words like feelings and comfortable and peace of mind. Tell your Dove client that it’s best to get the right tenant in place so they have the peace of mind that their asset will grow. Don’t try to get a decision immediately from a Dove, because they won’t do it.  

If a Dove hires you and you let them down, you need to be extremely apologetic. Show that you understand the impact on the client, and express your wish to change things. Instead of an email, send a handwritten card or letter. This will make them feel honored that you took the time and effort for them. It’s powerful with Doves.   

Communicating with Personality Types on an Enterprise Level

There’s a spectrum, and no one is 100 percent one style. There’s usually a mix of at least two of these personality types, but one will always dominate. The ideal way to use this information is to put a person’s personality type into your property management CRM system. This way, you know who you’re talking to, and you’re notified. That’s the Ritz Carlton brand of service. At the Ritz, they know who you are. They know you and your preferences. This has to be part of your culture of service, where you are consistently delivering.

When you’re managing 150 different properties, you’re coming across lots of personality styles among your landlords and tenants. You want to understand the person you’re talking to before every conversation. Whether you’re in a networking environment or you’re meeting someone for the first time or talking on the phone to a tenant or a landlord, you need to try and get who they are and what their view of the world is. Then, your connection will be quick. If you’re on the go and not thinking about this, you’ll get a lot of disconnect.

This is a simple thought pattern, but it does take some time to develop. Once you’re attuned to it, you can work through it easily and change how you communicate immediately.

Using The Echo Effect to Connect With Your Clients

The easiest way to prove that this type of communication matters is with the echo effect. Have you ever spoken to someone from another country who has a strong accent? You might have noticed that you’re suddenly talking to them slowly, and you might even start to mimic their accent. That’s a subconscious way that you’re trying to adapt. Humans do that automatically. Your brain kicks in and your cognitive subconscious takes over. Tribes were built this way. It’s very primitive, and it happens on a subconscious level. You probably don’t notice it until about 7 seconds in. You should concentrate on doing this with everyone you speak to.

Bring it down to a word level. If someone says that a property is beautiful, and you call it fantastic, there’s a very basic disconnect. But, if you mimic what they said and call the property beautiful as well, a connection is formed without either of you knowing how or why. Mimic, or echo, your words. When you ask someone for a description of the property, echo it back to them. That repetition provides an instant connection and they don’t know why.   

This comes from our primitive brain, and it hasn’t changed. Technology has taken over, and people are forgetting how to have a conversation. But, if you can mimic your words, your tonality, and your body language, you’re going to be amazed at the transformation. If someone is speaking to you in a monotone, speak back that way. That’s an instant connection. Match and mirror everything.   

Communicating Through Difficult Situations

Property management is full of conflict and difficult situations. Most people will tell you to stay calm, but that might not be the best way to handle an escalation. When someone is angry, the last thing they want to do is be told to calm down. That’s adding fuel to the fire. You need to match their outrage, their voice level, and their tonality. Get to their level and echo it back to them. That connects you quickly. It can feel confrontational and uncomfortable, but it works. Raise your voice. Get the pace right, and always ask what the person wants you to do.  

Repeat everything back, and communicate at the angry person’s level to show that you’re listening to them and understanding. This is very powerful. The vital step is to ask – is that all? This is the most important part of the process when it comes to navigating conflict. It will tell you whether the situation is resolved.

So, when you’re dealing with a hot situation in your property management business, remember to:

• Match the tonality and intensity of the person you’re talking to.
• Dig around and understand the problem in multiple ways.
• Repeat what the person says to show you understand.
• End with, is that all?

Storytelling to Overcome Objections for Property Managers

Multiple stories are happening every day in real estate, but many people fail to use them. The biggest key in telling a story is telling it with dialogue and not narration. When you tell a story, don’t fall into the trap of narrating what happened and what you did. With dialogue, you can set a scene and let your characters speak. Use dialogue. Say, I understand what you are going through because my clients Bill and Mary recently went through it, and this is what they told me…. You can use dialogue from prior conversations to show how a problem was resolved. This brings it to life.

Make sure that you tell these stories to overcome an objection. If someone is deflecting or not agreeing with you, tell them the story. I understand you want this much rent, but Bill and Mary were in exactly the same situation, and this is what Mary said once we lowered the rent and quickly found the right tenant… Go into the story and carry out the message. Remember that you are not the hero of the story. Your clients are the heroes. You can say, I’ll always remember Mary saying that she was glad we were managing her property instead of their previous management company. You’re not giving yourself the credit; Mary is giving you the credit.  

Be authentic. You hear this all the time. People know who you are and what you’re about. They’ve Googled you. Now, you have to be you. Everyone else is taken.

You can buy his book on Amazon.

A Note about Our Sponsor:

PM Grow Summit

The PM Grow Summit is the only conference in the U.S. that is laser-focused on growth strategies for property management companies. We bring world-class speakers and thought leaders from around the globe. It’s the best place to network with other successful property management entrepreneurs, and we have 5 reasons to attend in 2018:

1. Education. We have doubled our speaker budget, and we buy top talent.
2. Comfort. Our venue is a top tier San Diego luxury hotel with an exceptional rate.
3. Depth. The information is at the next level. Some speakers are teaching workshops on sales and video marketing.
4. All inclusive. We’ll take care of food and drinks and entertainment. We’ll also provide videos, slides, and study materials for later. You’ll get all the content so you can spend time re-watching talks with your teams once you get back to the office.
5. Surround Yourself with Success. You’ll meet the top professionals in our industry.

We’re providing a discount code for this conference that’s taking place January 31 – February 2, 2018. Take $100 off by registering at pmgrowsummit.com, and typing in the code ALEX.

If you are looking to find ways to grow your property management business, reach out to us and we’ll set you up with a marketing plan that fits your business at Fourandhalf.com.

The post Property Management & Communication: Science-Backed Ways to Talk with Clients appeared first on Fourandhalf Marketing Agency for Property Managers.

Establishing great relationships with the right owners will elevate your property management business to a more successful, more profitable level. Identifying and understanding who those owners are can help you be more selective in the business you bring in, and will give you an opportunity to control the customer journey and the professional relationship you have with those clients. Marc Cunningham, a successful property management entrepreneur, has developed specific criteria for who he works with and how he works with them.  

Marc Cunningham: Property Manager, Consultant, Educator

Marc was raised on property management. His father started Grace Property Management in 1978, and he spent summers working in the office and learning the business of real estate and property management. Marc studied finance and real estate at Colorado State University, and after working for other property management companies, he returned to Denver and Grace Property Management.

Twenty years ago, there were three people in the office. Today, there are 18 team members managing nearly 700 doors. Mark believes in following the opportunity, which means the company does both sales and management for residential and commercial properties. Ancillary businesses, he says, provide a full customer experience and increase revenue. He thinks property management can be a base on which to build a better business.

Qualifying the Right Clients and Working with the Right Owners

To build a better business, you need to build relationships with the right clients. You don’t work with every tenant who applies for a property you manage; you qualify them first, and maybe half of them are turned away. You need to qualify your owners, too. In fact, your standards for owners probably need to be even higher than they are for tenants. If a tenant goes crazy, you don’t have to renew the lease and the problem goes away. With an owner, however, an issue can get messy and even become litigious. For the success and the sanity of your business, create a system that helps you determine whether an owner will be a good fit for your company.

This isn’t about liking someone or not liking someone. If your business model is geared towards hands-off owners because you want to be left alone to do your job, you need to be selective in the clients you accept. You won’t have a successful relationship or work well with an owner who wants to be involved in everything or provide approval for every move you make. If you decide the hands-off owner is right for your company, you limit your business to people who want you to do what you do and only call them if their property is burning to the ground.

This isn’t as easy as saying yes or no to each potential client you meet. The challenge grows as your property management business grows. When you do more marketing, you attract a wider range of individuals. You’ll need to tighten your filters and ask interview questions that will tell you if prospective owners are going to fit your business model.  

Interviewing Potential Clients: The Process

Listening is more important than selling when it comes to the owner interview.

When an owner calls to start the conversation, don’t rush into your sales pitch. Be skeptical. Take your time determining whether this owner will be a good fit. An internal questionnaire can help you. Marc has his property managers trained to answer four key questions after an owner interview:

• Is the owner financially stable? Working with a client who is desperate to rent out a property within two weeks in order to make the mortgage payment is not going to work.
• Is the owner emotional? Emotionally unstable clients will take a lot of time and energy, and they can be difficult to work with.
• Does the owner have reasonable expectations? This is a big one. They have to understand what you can provide.
• Can this owner and this transaction be controlled? If you cannot answer yes to that, you need to decline that business. You need a situation you can control.  

Those are the assessment questions at the end of an interview. To start the process, you need to listen. Ask them to describe their property and what they need. It’s amazing what you’ll glean from staying quiet and letting them speak. You’ll be able to gather a lot of information, and you’ll provide an opportunity for the owner to sell themselves to you. That’s the best way to start.

After the owners talk for a while, it’s a good idea to ask some questions so you can be sure your goals are aligned. Talk about long and short term goals. If they want to sell in six months and you have a sales division as well as a property management division, this is a good client for you. If they want to acquire 10 more properties in the next 3 years, it’s probably someone you want to work with. Talk about the goals for the property you’ll manage and the portfolio each owner has.  

If the first question an owner asks is about your fees, you probably don’t want to work with them. You should be proud of the fact that you’re not the cheapest property management company in town. The owners you want to work with will appreciate that you’re a premium company providing services that don’t come cheap. This is an industry in which you get what you pay for.

Transitioning from Taking ALL Clients to Selecting GOOD Clients

When you’re on top and your lead flow is robust, you are in the privileged position of picking the owners with whom you want to work. Not all property managers are there yet. When you’re just starting your company and struggling to grow your business, your goal is to get doors. You need to have income and build momentum. At that stage, you will have to take questionable owners. You cannot start your business by turning away half the owners you talk to.

Start your property management business by attracting people aggressively and not by turning them away. You may need to come down on your prices. As you grow and establish your business, take some chances and trust your work. If you do a good job and provide high quality management to your owners, it will not be long before you can begin raising your rates and letting the less desirable owners drop away from your company. The owners you want to work with won’t leave you over modest increases in fees. If you’re doing a good job, they won’t go find someone else. Then at the end of each year, identify your bottom 20 percent of owners. They may be on the bottom because they’re difficult to work with or they have dilapidated properties in bad areas. Let those owners go. You can afford to do that because you’re bumping up your fees and because your reputation is attracting new owners who better fit the profile of what you want.

. . . Don’t Miss Out on Your Tickets for PM Grow Summit 2018! . . . Remember Your Mission and Your Purpose

Customer service is important, and your philosophy needs to be pretty simple: to do a good job. Marc’s mission at Grace Property Management & Real Estate is to improve the lives of real estate investors and residents through property management. It might not be on signs or posted around the office, but it’s something they talk about every month. They remember that they aren’t in the real estate business. They’re in the business of improving people’s lives.

When a tenant calls without hot water and you can get that fixed in less than a day, you have improved someone’s life. When you collect rent and pass it onto an owner who is retired and counts on that income, you have improved a life. Even mundane things like lease renewals can mean that a child gets to stay in the same school for another year. These things are important, and if serving people in this capacity doesn’t make you happy, you’re probably in the wrong business.

You have an opportunity to be impactful.   

Marc’s Philosophy for Property Management Customer Service

Here’s a customer service philosophy that might be counter-intuitive:

Don’t answer your phone on the first ring.

So much of the property management industry is about speed. This is important; you need to get back to people quickly when there’s a problem, and be responsive to the needs of your customers. However, you need to be realistic, and more importantly, you need to train your customers to be realistic.

Property managers are professionals. Property managers need to think of themselves as doctors and lawyers. If you called your attorney right now, would he pick up the phone? No. He’d return your call at the end of the day or maybe even the following day. Your doctor isn’t going to answer her cell phone when you have a non-emergency question. The mentality of property managers is that the only way to create a positive relationship with an owner is by answering the phone on the first ring or responding to questions over weekends. Expectations need to be established, and you don’t want a client to expect that you’ll answer your phone at 6:00 on a Sunday morning. It’s unrealistic. Clients who expect that are not the clients you want to work with.

You can be the best around and still be the one who is in charge of the relationship with your owners. Control the situation, control the work, and control the relationships. This starts with the first conversation. Set yourself up as the alpha from the beginning.

The property management industry has the potential to evolve into something that operates at a higher level professionally. The challenge is that there are so many new people to this business. Many of them have come from real estate, where there’s a completely different mindset. They have been trained to jump on the phone every time it rings. Without establishing the control that’s necessary, burn-out can easily happen.

Using Videos as a Customer Service Tool

Not answering on the first ring doesn’t mean you should be non-responsive. Automated outreach can be valuable. You can’t follow up with every lead, but you can send them an introductory video that explains who you are and how you work. You can begin to create a relationship, and by sharing your process and your philosophy, people will either be turned off or they’ll be ready to talk to you. Videos provide a tremendous competitive advantage because people want to know who they are working with.

Your videos do not have to be perfect. People tend to avoid them because they don’t like how they look or how they sound or they’re insecure about their clothes or their hair. Don’t worry about that. People aren’t looking for a Hollywood production; they want real life. If you stutter a little, that’s okay. Start with something and then keep improving upon it.

The Structure of a Successful Business

Before you put together a portfolio of the right owners, you have to have the right team in place. Marc’s company is composed of 18 people, and it works as a hybrid. Property managers are always the point of contact for owners, and they are responsible for maintenance coordination, turnover, owner leads, and relationships. They do not have to worry about leasing or accounting; there are specific people who fill those roles. There’s also a resident services coordinator who is the first point of contact if there’s a problem with a tenant. There’s a consistency in what team members are responsible for, and everyone knows what they aren’t responsible for doing.

As a business owner, your team needs balance. You may have one property manager who is comfortable with a portfolio of only 40 or 50 properties. That’s fine if you also have a property manager who is in growth mode and feels like the sky’s the limit. Just like with choosing owners, you have to hire people who fit your property management business model.  

Marc can provide some insight and coaching on a number of topics relevant to property managers, from systems to pricing to growth. To learn more about him, visit propertymanagementsystem.org. Also, Marc is offering generous discount for our listeners: 10% off any of his products when you use the promo code “Alex.”

If you have any questions about this podcast, or you’d like to talk to Alex and his team about property management marketing, contact Fourandhalf.

Want more content? Check out our recommended articles!:

• Better Work/Life Balance with Ground Floor PM
• Empathy’s Impact on Growth for Nest-DC
• 10 Mistakes to Avoid When Running a Property Management Business with Larsen Properties

The post Property Management Client Roadmap: How to Choose the Right Owner with Marc Cunningham appeared first on Fourandhalf Marketing Agency for Property Managers.

Growth Opportunities: The Iceberg Report

Right now in the United States, there are about 22 million single family rental homes and multi-family rental properties that have up to four units. Out of these, 14.3 million, or 65 percent, are self-managed by the investor or landlord. This offers a vast opportunity to the 32,000 small or mid-sized property management companies.

There are a lot of social and economic factors that keep rentals in high demand. Over the next five years, about 8 million single family rentals will come into the professional management market. The opportunity is clear, and to take advantage of these opportunities, it’s important and necessary to establish trust between property managers and landlords and investors. This is one of the divides that’s keeping property managers from growing and acquiring new business. To effectively win all the new business that’s available in local management markets, property management companies need to demonstrate their value and give landlords and investors who have been managing on their own a reason to trust that their properties are better off with professional management.

Tony LeBlanc and the Need to Establish Balance

Any problem in an organization can be traced to the top. If the leadership is off balance, the team will never reach its potential. The CEO’s mood or the director’s attitude affects the team. Tony LeBlanc is a successful property management entrepreneur, and he made the choice to balance himself and his team to achieve better results. The business is growing and thriving because of his efforts. He spoke to Alex about the need to balance personal and professional goals, and why it matters to property management executives.

Tony is from New Brunswick, Canada. He owns and operates a property management company, Ground Floor Property Management, with three locations, and he’s been in business for eight years. He was born into the field; as a child he lived in a building where his mother was the resident property manager. Tony worked in the technology field after college and began investing in real estate. Then, he got back to property management and built a company that went from 0 units to 1,000 units in two years.

Advice for Fast Growth: Call Everyone

This type of fast growth came from calling everyone he knew. Tony called all the Realtor friends he worked with previously and used his relationships and connections to quickly establish himself. There was a snowball effect from picking up the phone and letting people know he was in business. Property management is a people business and a relationship business. It’s hard to earn new business sitting in the office. Go out and meet every Realtor in town and anyone associated with the rental business. Connect and create relationships to increase the amount of business you’re doing.

Fourandhalf note: We were at the recent Inman Connect San Francisco 2017 – Real Estate Conference, where high-powered real estate agents meet to stay ahead of the industry. Of the real estate agents we spoke to, the majority of them did not have a relationship with any of the property management companies in their community. It is important for property management owners to be aggressive in conveying their value propositions to people like real estate agents, where there is a great opportunity for a mutual partnership.

Sponsor for Today’s Podcast – NARPM Balance and Confidence – Define Your Property Management Purpose

What does it mean when Tony says the property management industry is off balance? When you study this industry, you see a lot of the same trends. It’s chaotic and stressful and busy. There’s a lot of negativity associated with the work, and that negativity often comes from the property managers themselves. There is a lot going on at once in a property manager’s day. Everyone knows it’s stressful. But, if you’re in a position of weakness – either you’re having issues at home, or your health isn’t where you want it to be, or you’re not connected to yourself spiritually – you won’t be clear about where your business is going, and the stress and the chaos that comes with an average day will be magnified.

You need a purpose to what you’re doing, and if you don’t have that purpose, the daily grind is going to be much harder to endure.

Every day that you come into the office, you need to know where you’re going and why you’re doing what you do. Not only do you need to know that – your staff and your team need to know that as well. Everybody needs to be aligned with what all this is for.

Tony has a two-year roadmap that he shared with his team and a list of goals and opportunities that he wants to achieve. But, the statistic that resonated with them more than anything else is this:

Last year, Tony’s team housed almost 2,000 families.

That’s the purpose that will balance and motivate a team; knowing that 2,000 families have relied on them. Well-balanced and empathetic property managers will understand that people are counting on them to take care of their homes, their futures, their safety, and the place that their children grow up. You cannot take the real–life part of this job for granted. Property management includes a lot of pushing paper and conducting move-in inspections and taking calls, but the purpose is to provide an exceptional experience for everyone you come across. You’re protecting an owner’s investment and helping tenants feel comfortable in their homes.

Building a Trust Bridge Between Tenants and Owners

This may remind you of the podcast conversation with Lisa Wise, who advised leading with empathy. A lot of property management entrepreneurs think of tenants as a necessary evil. They mentally set up an adversarial relationship with these pesky entities who are only good for paying rent. If you change your thinking, you change the way you provide property management, and you change the experience for everyone who works with you.

Property management shouldn’t be a tenant-versus-owner dichotomy. Your business cannot be all about the owner, because if you cannot keep good tenants in place, it doesn’t matter how many new owners you start working with. You won’t have tenants to fill their properties. Taking care of tenants is just as important as taking care of owners.   

This is part of the trust bridge that the property management industry needs. Policies and systems are critical, but empathy is absolutely necessary. There are a lot of different ways to say no. You can say no and still be helpful. If something doesn’t work between you and a tenant, leave them with an out and be sure to end the relationship on a positive note. If you live in a small community, word spreads fast through other tenants and property managers. Leading with empathy will build you a better business.

Routines and Rituals: How to Start Balancing Personal and Professional Goals

Personal lives always bleed into office lives, and balancing the two takes some work. At home, Tony has a protocol in place, which starts with waking up at 5:00 in the morning and taking care of himself and his personal priorities. He works out, drinks a smoothie, and takes the time to write appreciative notes to his children and his girlfriend. Then, he meditates and journals and reviews study material that’s relevant to his business and his professional goals. All of this is done in what he calls his morning power hour. His day is moving on a positive note before his children are even awake.

At the office, the day begins with a morning huddle with his staff. Everyone gets together to review the previous day. This puts everyone on the same page and ensures the whole team is aware of any new notices, new maintenance emergencies, and new applications. Then, each team member has the opportunity to define their number one priority for the day. It might be collecting rent or making deposits. The leasing agent might have a good lead. Everyone is calibrated and ready to start the day.  

Jim Kwik, a renowned mental coach, talks about the need for routine, and how a healthy brain needs one ingrained. Most people don’t have this, and it sounds intimidating when you hear about the discipline that someone like Tony possesses. Don’t be intimidated – just be willing to start somewhere.   

Pick one or two things that are weakest for you and where you get the most value. Start there, and if you can build a routine with just those one or two things, they will become intuitive and instinctual, and part of your everyday life. Then, you can start incorporating more things into the routine and it will be manageable. So, if you’re thinking your health is where you’re weakest and you value being able to live a longer, healthier life – make a visit to the gym a part of that morning routine. If you can’t get a whole workout in, give yourself the opportunity to sweat hard for 10 minutes. This is a matter of taking an assessment of yourself and being real. Find that weakness and start with something simple.

Healthy Leader/Healthy Staff: Centering Your Team

Tony admits that sometimes his own routine is a bit over the top, and a little aggressive for most people. He doesn’t expect his team to be just like him, but he does tone it down a bit and offer tips and advice that everyone can apply to their lives. Office discussions will include fitness and nutrition and relationships. Many people have kids, and he recognizes the importance of having real conversations. There’s nothing superficial about the growth and balance that he wants to achieve. Tony is willing to ask deep questions, and he creates an environment where his team feels safe answering those questions.  

The team huddle sets the tone for the day and centers everyone. From that, other things are put into place to protect that sense of balance and healthy behavior.  

For example, the office hours are 8:30 to 4:30, but the doors don’t open to the public until 9:30. That gives the staff an hour to catch up and prepare. On Friday afternoons, the office closes at 1:00 for training sessions or catching up and preparing for the week ahead. Focusing and planning for the next week is a big component of the business. Those Friday afternoons are critical because everyone can decompress and wrap up from the week.  

Using Gamification in the Pursuit of Balance and Success

Gamification can help with motivation and accountability. Something as simple as awarding yourself points for the things you accomplish can provide a way to track your progress and feel good about what you accomplish. Tony calls his morning routine the Core Four. There are four major areas he’s touching, and he wants to do two things in each of those areas. So, he can earn up to four points per day. His goal is to reach those 28 points per week. Every Sunday night, he reviews his week and determines what happened if he didn’t reach that goal and what he has to do to correct the course for the following week.

The same thing applies to his professional routine, which he calls the Key Four. Every Sunday night or Monday morning, he plans four major tasks that he needs to accomplish that week. Maybe his 90-day goal is to increase revenue by a certain amount. He breaks out his benchmarks and his targets and he establishes those four tasks every week that will get him closer to that revenue goal. Making it a game is a tactic that’s fun and simple and accountable.

Consulting, Coaching, and Personal Development

It’s easy to dismiss personal development and coaching as schemes designed to separate successful people from their money. However, the right coach or the right book or the right community of like-minded people can change your life and alter your path. For Tony, it was realizing his software job was setting his life off balance after he read The Monk Who Sold His Ferrari by Robin Sharma. That is when he became more interested in personal development.

This is a world where it’s hard to figure things out on your own. Having a community or a coach who can challenge you to think differently and expect more from yourself makes an enormous difference in your balance and your ability to achieve success. Most people out there, professional athletes included, need a coach. You need someone to push you through these things.

As a property manager, do yourself a favor and give yourself a break. You need to bestow permission upon yourself to live a great and balanced life. Property management doesn’t always feel like one of the best industries out there, but it is. Property managers are doing work that matters. It’s becoming more mainstream, and to get to the next level, property managers need to be professionals. Be accountable with yourself and others, and find your balance.

If you have any questions about what Tony and Alex have talked about today, please contact Fourandhalf.  

The post How Property Management Leaders Can Achieve Better Work-Life Balance appeared first on Fourandhalf Marketing Agency for Property Managers.

According to the Iceberg Report, right now in the United States, there are about 22 million single family rental homes and multi-family rental properties up to fourplexes. Out of these, 14.3 million, or 65 percent, are self-managed by the investor or property owner. This gives a vast opportunity to the 32,000 property management companies competing for the business. By contrast, in Australia, about 70 percent of similar properties are professionally managed.

If the United States follows the Australian model, there should be about 8 million single family rentals coming into the professional management market over the next few years. Property managers can double their business by default. But – there will be a lot of consolidation in those 32,000 management companies, and the best companies will get most of the business.

One of the biggest problems in the property management industry is the lack of trust between landlords, investors and professional property managers. A large portion of that potential market doesn’t see the value in professional property management and there needs to be a bridge – one that places a focus on customer experience.

One way to bridge this divide, improving the customer experience, is to implement a high performing team framework. A framework that results in an engaged team with a true career path, a team motivated to work with clients at a level that is otherwise impossible to achieve. To date, the real estate business industry has been ignoring fundamental concepts like this when it comes to developing motivated, engaged employees and getting better results in both customer service and employee and owner retention – with the profitability that comes along with it.

The customer experience needs to be improved for both property owners and tenants, and the best way you can do this is to empower your team. Happy employees make happy customers who make happy shareholders. Our guest today, Adam Hooley, has been in real estate all his life and has worked in many corporate environments. Along the way, he picked up some good habits concerning how to manage teams and has brought those tools to bear, helping property management companies change the way they do things. Adam recently spoke about the framework of a high performing team, and he has a lot to share.

Property Management Structure: 3 Ways Companies are Currently Organized

Two main business “frameworks” currently exist in property management company structures: the portfolio framework, and the task framework.

The portfolio framework is one property manager taking care of all aspects of a portfolio of properties from start to finish. That one manager is responsible for leasing, property inspections, maintenance requests, inspections, and contact with tenants and owners. The portfolio system can be more efficient, but if one property manager leaves, you lose a lot of knowledge and information about the portfolio that was managed. That’s a huge drawback, especially if there isn’t a clear path to advancement for experienced employees, causing them to leave you.

The task (or departmental) framework is putting individual staff members in charge of specific areas for all of the properties the business manages. There will be different people in charge of leasing, inspections, maintenance, owner and tenant contact, etc. This large number of possible contacts can create confused owners, confused staff, and a loss of efficiency. Again, neither of these frameworks provide accountability or career paths for excellent performers.

In the U.S., there’s a third system, which is a hybrid of the two. In the hybrid system, there is one property manager in charge of a portfolio, who has significant support from other property managers and others who handle maintenance, inspection, late notices, and other tasks. The hybrid system is probably the best system if you had to choose out of the three frameworks – but we’re going to give you a better option.

Why It’s Time to Rethink Your Property Management Company Structure

We understand it’s a lot of work to restructure a team and rethink their job descriptions. But, this alternate departmental structure solves a few key problems. For one, it provides a holistic view of your business for employees and prevents people from working in isolated parts of the property management business structure, without seeing the overall picture. For another, recruiting, retention, and turnover are issues all property management companies face. One of the ways to fix this is by providing an upward career path, which this framework includes.

You’ll find that when these issues improve, customer satisfaction and experience improves. This provides a higher dollar value for each customer, as you’ll keep them longer. This also means you can spend more money to acquire customers. You’ll get a more sustainable staff, eliminate the costs of the hiring process and training, and achieve more engaged clients because there’s a consistency in service.

Introducing the New Property Management Structure: The Squad System

The new framework is a squad system; it’s still a team structure, but the important difference is that there’s a hierarchy. Staff at the entry level roles are called property associates. Above this is the property manager role, which is someone who does most of the day to day management. At the top of the squad, there’s a property manager executive. Everyone works closely together and everyone has a role in each task. For example, the property associate may run and analyze reports to see which tenants are late with rent. The property manager will handle serving notice to the tenants. Then, the property manager executive will deal with any escalation, such as evictions or terminations. A hierarchy is in place and the organizational chart is clear.

The property manager executive also takes on a leadership and mentor role. It’s a way to feed knowledge down into the squad so junior members of the squad develop along their career path. The property manager executive also takes on the accountability role. They make sure their team is on the same page, working efficiently, and has the tools to do their job.

If someone from a squad leaves, you still have two people in the squad, so the portfolio knowledge doesn’t get lost. You can move the associate up to the manager role if the manager leaves. This protects your culture and keeps everything glued together. It attempts to solve the problems of the old system.

Roles in the Squad System

• Property Associate. This is the junior role. It’s designed to let a person learn and progress. This is an entry level role that can be nurtured and trained. The employee relieves some of the pressure on the property manager, but the key here is the learning. With a clear career path, the company can get the associates to embrace their culture. It’s not just an assistant role. It’s about growing to benefit the whole company.

• Property Manager. Most agencies understand the concept of what a property manager does. Their core function is to manage the portfolio. So, the person in this role will be skilled in all property management tasks. They are the workhorses of the squad, and the foundation. They do a great job. 

• Executive. This is the senior role who will be someone good at managing the escalated parts of property management. The executive takes care of conflicts like overdue repairs, late rent payments, and managing the owners.

So in the squad structure, the property manager and the executive handle the owner relationship and the property manager handles the tenant relationship.

The brilliance of this framework is that it keeps everything efficient. If the property manager leaves for six weeks, there doesn’t have to be panic. This is what the squad is designed for. Everything will stay up to date and operational because the associate and executive are handling it. When the property manager comes back, not one phone call was missed and not one email was ignored. Property managers can come back to a clean desk. This is where it excels.

Key Performance Indicators and How to Measure Success for Your Property Management Business

There are three things to keep track of so you can measure the impact this structure has on your business. These are:

• Customer facing measurements, so you can make sure you’re delivering on what you promise.
• Team measurements so you know if your team members are doing what they’re responsible for.
• Financial goals.

Net Promoter Score, is really important. It measures what your customer is getting from you. You’ve encountered it before; it’s the classic “one question” survey: “On a scale of 1 to 10, how likely are you to recommend our service?”

A lot of companies are good at measuring what they deliver. But, you have to measure what the customer is getting and whether it matches what you promise. You’re measuring customer service. You can use any survey you like but we find that you need a benchmark so you can learn and grow from those measurements. NPS offers a benchmark.

Key Performance Indicators, or KPIs need to be numerous. A good property management company will have at least 10 core KPIs. They should measure everything from lease expirations to defaults to inspections and overdue invoices. These measure how your business is operating. You can identify quickly where things are going well and not going well. If a team member is veering off track, you have the KPIs to show you the problem. Maybe it’s a personal problem causing neglected work, or maybe there are improvements that can easily be made.

Champions are important. If you find a team member who is really good at something, that’s the person who trains new team members in that area. Maybe your measurements show that someone is really good at rent collection. You’ll recognize that and put that team member to work improving another team member’s ability to collect rent effectively. Instead of firing a staff member who isn’t performing, you can identify where the problems start, and improve those areas. In those cases, you can engage your staff and give them support.

Team KPIs are as important as individual KPIs. It makes sure the business structure and team is efficient. This is a good way to move from a reactive business where things are chaotic to an efficient business where you have more time to do team lunches and build your culture.

The property manager executive is responsible for compiling numbers and tracking KPIs. This is helpful to the business owner because the owner cannot be involved in everything.

Reputation tracking can be an easy and efficient alternative to NPS. It’s a simple and accurate way to measure impact on customer experience. You just measure your reviews. If you do reputation surveys, you can find your average pretty easily. Take your benchmark, restructure, and see what the impact is. You can validate customer reaction.

How to Implement the Squad Structure

A lot of people may grab this and run with it, but you don’t have to start over. You don’t want to fire your team and start with new people. Instead, bring your existing team on board and decide who you can move around. Talk about who is performing better than expected. Take advantage of the climate and leverage off that. You always have those property managers who just want to do property management, but you may have a leasing consultant who has always wanted to do more. Dynamic things are happening in every business. Channel that. Instead of uprooting everything, leverage off the current assets of the business.

Plan this out in advance. Restructuring means opportunities, and some of your team members will want to be involved. Others may not. If you want a high performing team, you want the team you have to be on board with you. If they aren’t, let them go somewhere else. Plan ahead, engage the team, and you’ll see progress over a period of time.

If you’re a smaller business just starting out, you can build these into your business immediately. The property manager is the role to focus on. It’s the core role to build into the property management company structure first. The right person in that role will grow your business. Then, look for the associate and start protecting the property manager role so someone is in place if your property manager leaves. As your business grows, create the executive role and move everyone up. The manager becomes the executive and the associate becomes the manager. Then, you can recruit for a new associate. The culture evolves into what the team creates.

There are different ways to do this depending on local market and the size of your business. It can take some time, but it may be natural to the company and can be done quickly.

Most of what Adam talks about comes from a book called Building Blocks, published by Ben White. It is 450-pages of high quality, engaging content on building out a great property management team. If you have any questions about what you’ve learned today or ready to get started in marketing your property management business to receive more owner contracts, talk to us at Fourandhalf.

If you liked this article, you may like these as well: 

• How to Restructure Your Property Management Department and Satisfy the Savvy Client
• Empathy’s Impact on Growing Nest-DC
• What if Property Management Companies Recruited Like Tech Startups?

The Property Management Show is brought to you by Fourandhalf. We help property managers strategize and implement marketing plans that bring in owner leads. Get a free marketing assessment to find out how to start getting better clients into your portfolio.

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The post The Framework of a High-Performance Property Management Team with Adam Hooley of Apmasphere appeared first on Fourandhalf Marketing Agency for Property Managers.

Our guest today is Kasey McDonald, who trains Business Development Managers (BDMs) in Australia and here in the United States. She is a consultant for the BDM Academy, which helps property management companies grow and scale, paying special attention to sales.The topic we’re discussing today is how you can support your business development manager so that you can scale your property management business.

Without a proper sales system and salespeople, a business will never grow to where you want it to be. In the U.S., it’s a huge area of opportunity. Kasey has been a BDM herself, and has over 19 years of experience and knowledge in this area.

The Role of a Business Development Manager

The role of a good business development manager is to bring new management accounts and be responsible for the complete sales cycle. This is typically done through different methods like handling telephone calls, building referrals, creating newsletters, and hosting workshops.

You’ll need to be clear as to what the expectations are for any BDM that you hire. You need someone who:

• is organized
• possesses great time management skills
• can prioritize and delegate
• has fantastic sales knowhow
• has networking skills
• and most importantly, has the right attitude.

Attitude is important. You can train skills, but you cannot train an attitude. If you are able to find someone with these qualities, then you will have the archetypal business development manager on your hands. If the BDM understands the direction and expectations from the business owner, you’ll get great growth, as long as they are dedicated to the process.

Two Common Mistakes Owners Make When Hiring Business Development Managers

Before starting on your search, be aware of two big mistakes people make when hiring and training a business development manager:

1. First, owners employ a BDM before the business is ready.

You have to analyze and assess your business. Otherwise you could think you’re growing, but properties are actually going out the back door because you aren’t providing the level of service that you need to provide. Make sure you know and understand your business and what you can take on. Have the processes, systems, and a database in place.

1. The second mistake is not looking at targets and keeping the BDM accountable.

Some business owners will employ a BDM and just let them go, leaving them to their own devices. No one is checking in or monitoring performance or keeping them accountable. Then, there’s no growth and no one knows why. You need to make sure that you keep your BDM accountable and sit with them regularly to review targets.

In order to have success with a BDM, do your best to avoid these mistakes. Strongly consider the direction of your business. This means knowing what kind of income is being generated, and how much it costs to manage those properties. With this information, you’ll be able to work out incentives for your BDM as well as the Key Performance Indicators (see: Property Management KPIs) and goals. Once you have realistic goals and targets for your business, from there, you can go through individual activities that you want your BDM to handle.

When Should You Hire a BDM?

Kasey decided her business needed a BDM when she was at 50 or 60 properties. At that point, she herself moved from the role of property manager to the role of BDM, and hired a property manager so she could focus completely on this part of the business. It accelerated her business quickly, allowing her to add 127 new properties in a year.

Where Do You Find a Good BDM?

1. Look at your existing business.

Depending on your size, you might already have a staff member in place who would make a great BDM. Maybe that person is not performing well on a sales team or property management role, or they are struggling slightly in what they are currently doing because their skill set is different.

1. Look outside of the real estate industry.

The hospitality industry is a great example; you always find great waiters and waitresses who have amazing communication and customer service skills. Deniz Yusef mentions that bank tellers are also a great place to source talented individuals. Ask them if they’ve ever thought about a career in real estate. Your BDM needs to effectively communicate with clients and deliver outstanding service.

Tasks for a BDM When Starting Out

As mentioned earlier, you need to be clear as to what you expect out of your BDM, or you and the BDM will find this to be a frustrating experience. When starting out, hone down what your priorities are for the first three months and then six months after that. You can even take it further and decide what to focus on in the first 30 days. These are a few things that you can have your BDM start out doing:

• Make sure the services you’re currently delivering are outstanding. That would be a specific task for the BDM because you don’t want to grow your business while losing business.
• Make sure your clients are happy with your team. Then, those conversations can lead to asking if there are other properties that need management, or if there are referrals that can be made.

The Five People BDM’s Must Know

Relationship building is vital to a BDM’s role. Once your BDM gets some familiarity with your company and its services, have them focus on developing relationships. There are five types of people that every BDM should network with:

1. A BDM’s first priority is to develop relationships with existing clients and tenants. Connect with your existing database of owners AND renters. A lot of property managers don’t treat tenants as opportunities.
2. Spend time with the company’s RE sales or property management team. Attend sales meetings to understand listings. Form a connection with other local sales agents, too. Form those relationships. If you send your BDM to other local sales offices, you’ll have a presence that will help you build your database of prospective clients.
3. Maintain relationships with former owners. They may not be working with you right now, but perhaps they’ll have a need for you in the future. They might eventually buy another property, or maybe they’re making plans to invest again. Your BDM needs to be available to them.
4. Pound the pavement by reaching your neighborhood. Put flyers around the neighborhoods you want to work in. Saturday mornings are a great time to do this because people are out and there’s more activity. If you recently leased a home, let people in the neighborhood know what you leased it for and how quickly you got it rented. This will put your BDM in touch with potential clients and get new opportunities in areas you’re already serving.
5. Develop relationships with the professional services industry. These include accountants, financial planners, tax professionals, and insurance providers. They can add value to your clients, so you can have them speak at webinars, seminars, and other educational events. Your BDM can work on these referral relationships that bring clients in.

At a certain point, the BDM role needs to be consistent in sales and activities. Next, we’ll go over the strategies that you can use to set your BDM’s up for success.

Three Prospecting Strategies for BDM’s

Having a personal brand, meeting new people, and attending networking events helps immensely, but to become a good BDM, prospecting is the main activity. They have to be comfortable picking up the phone and making those calls. They’re speaking to people they have never spoken to before. This is what property management company owners should expect from a BDM. When hiring someone for this role, consider that skill. Below are three proven prospecting strategies for BDM’s:

1. Reach Your Prospects with an Hour of Power

Prospecting doesn’t have to be uncomfortable, and there are some great methods for this part of a BDM’s role. Consider doing an hour of power, where the BDM stays late one day a week with your sales team calling your database of prospects. Have them talk to owners about whether they have any rental properties, and be willing to answer any of their questions. Make sure the BDM asks probing questions, talks them through investing in properties or tells them what happens in the process of finding a tenant. Then, at the end they can offer an appraisal. If you’re an information provider and not just giving them a sales pitch, you’ll get a better response.

1. Provide Value with Workshops

Have your BDM’s invite people to a workshop that provides information and education. Owners will be willing to spend some time learning, and this can be used as an opportunity to build a database of useful contacts. This is more comfortable than a sales phone call because you’re being helpful. It’s always a good idea to have regular seminars or webinars as those prospects will see you as the bonafide leader in the area. You’ll find the closing ratio is fantastic.

• Related Reading: How to Set Up Investor Meet-ups with Douglas Skipworth of CrestCore Realty

1. Connect with Vendors By Hosting BBQ’s

If you want to develop a relationship with vendors and contractors who can bring you more business, host a barbecue once a month or once every quarter. Kasey did this with the tradespeople she was already working with. She’d encourage them to bring other people, and she’d provide beer and food. It provided networking opportunities, and she’d have about five minutes to introduce herself and talk about her business. She was able to obtain new business directly from the people she worked with. This is a great way to build a referral network and establish new relationships.

Three Ways to Measure and Track Success

Measuring and tracking success is important because results are what you want all that work to produce. Look at breaking down your KPIs and setting specific targets:

1. Maybe you want your BDM to connect with 10 people per day.

If the target is to have those 10 physical conversations per day, they will likely have to make 20 to 30 phone calls since people will not be available and messages will be left.

1. Look at how many people were added to the database and what kind of opportunities are present.

Figure out what kinds of listings and appraisals came from the BDM activities. You want to determine how effective the calls and activities are, and if the goals are not being achieved, why not.

1. Look at how many management agreements are signed and how many listing presentations are made.

If the numbers seem low, figure out why those achievements didn’t happen. Talk through the activities with your BDM and find out what is preventing him or her from getting in front of people.

Key to Success: A Good CRM

A recurring theme for BDMs is their database of leads. A lot of people miss opportunities if there isn’t a good system in place. All the work that’s being done gets devalued if you’re not staying in touch with people. Follow up with individuals in the database. Track the letters you send through the mail and make sure all activity goes in the database. Track the newsletters you send every month and the seminar invitations that are sent out. There should always be some touch point.
Tracking activity is crucial, so you need a Customer Relationship Management system (CRM) to track your activities. Without a CRM, you can’t track anything. Track and document everything so you can accurately assess the performance of your BDM. You need to know what’s not working as well as what is working. You need to start building a database of leads and building a sales process even if you don’t have a BDM yet. Maintaining a list of contacts is crucial to your business.

Note: LeadSimple and Fourandhalf have partnered to deliver this service to property managers. Click here to learn more on how we can help your property management company.

Final Words

Please feel free to contact Kasey at BDMacademy.com.au. Hopefully, she will be at the U.S. to teach a session or two at the PM Grow Summit.

If you have any questions about what you’ve learned today, talk to us at Fourandhalf. To receive updates on the latest episodes of The Property Management Show, be sure to subscribe to us on iTunes. 

Get tips on how to handle the complete sales process for an incoming owner lead with our free eBook The Art of Winning the Sale!

Recommended Follow-Up Reading: 

• How to Compensate a Salesperson for Your Property Management Company
• How to Qualify Property Management Leads

The post How to Hire, Train & Succeed with Property Management BDM’s appeared first on Fourandhalf Marketing Agency for Property Managers.

Two guests are needed today because our topic is complex: attracting and retaining top talent for your property management firm. The specific challenge is that, according to Forbes, 60 percent of everyone in commercial real estate services will be at retirement age in the next five years. Even if you are a single-family residential property management company, are you attracting younger talent to your company and to the industry? There needs to be a shift from hiring people who just want to make ends meet, which is transactional and creates turnover, to hiring professionals interested in growing in the industry. The guests today are Joe Killinger and George Pino, who are experts in this field.

Two sponsors make this show possible: NARPM, the National Association of Residential Property Managers, and PM Grow Summit, the annual educational summit for growth-minded property management entrepreneurs.

Introduction: Joe Killinger and George Pino

If you visit therrd.com, Joe and George provide resources for real estate services and the property management industry. There is tenant screening, property and renters’ insurance, and other tools. It’s useful for property managers and individual investors. Like many successful Property Management company owners, Joe and George got into the industry by investing in properties themselves. TheRRD is meant to help property management companies build better communities. They understand the challenges of managing properties both as individual investors and as property managers.

State of the Job Market in the Property Management Industry

A lot of times, the starting pay is pretty low in property management. The numbers are tight and lean, and you won’t necessarily retire on property management unless you get to a large size. Typically, the property management industry tries to recruit people at low income levels. Employee turnover is high, and often they have no interest in growing. They are happy where they are. In order to combat this, there needs to be a fundamental shift of hiring people who are interested in the field as a career rather than people who just want to make ends meet.

Turnover costs money. When you lose someone, you have to train someone new and hope they will work. Property management is not a sexy career, so you need to reframe how you’re presenting the opportunity if you are looking for people who are looking to grow.

Overcoming the Challenge of Better Recruiting

Property management may not be sexy, but the real estate investor is sexy. Plenty of coaches are teaching independence through real estate investing. You can connect that to hiring employees for the property management field. You can position your job offer as learning to become a smart investor on someone else’s dime. People can learn the whole industry this way, from leasing to management to identifying investment opportunities.

Go after and look for people who are motivated by something other than a paycheck. Consider reaching people who are interested in property management because they want to become investors. If you can offer them an opportunity to learn how to be a better investor, how to save money, and how to learn from the property management mistakes that have already been made – you will find some great talent.

They may not realize it at the time, but there is also the potential to shape the landscape of real estate. On the residential and commercial sides, you can build communities. What a property manager puts forward and how they interact with tenants and owners is reflective of the community at large. A bad property manager can pull an entire community down.

How to Develop an Intern Program

An intern program can work very well. Interns who start with you and learn with you tend to stay on for the long haul. They might start with tasks around the office and some leasing, then they can grow. Get to know high school guidance counselors and talk to them about property management and the growth opportunities you offer. Talk about how careers in this field can affect the community. Reach out to small colleges, and you can get some candidate referrals.  

An internship program is the top of the funnel. It’s as simple as having your intern do some business development database management. You might structure your internship to be during the summer months, these can be college kids who are graduating or beginning their senior year. It starts as a daily grind and if there’s interest, you can give them additional opportunities. Someone with a yearning for knowledge is a good indicator for talent you want to keep. Have them show vacant properties or work on marketing. They can also put together ads and review information on properties as they update them in your system. From there, they can progress even further.

Usually, internships are unpaid because they are gaining knowledge and experience. Sometimes, you can pay for some living expenses, but it’s not typically a paid position. You can extend an offer of employment after that, and perhaps they’ll start as an assistant property manager. They can handle leasing, work with properties, and learn bookkeeping. Have new employees do different things and make positions interchangeable so they can learn the whole of the industry and not just one part of it. This also helps when you have vacations and time off to cover.

Investors can benefit from working with smart people straight out of college. These new hires have recently learned about finance; everything from mortgages to how to leverage funds. Show the employees that increasing income and keeping expenses the same will contribute to the exponential value of a property. Give them opportunities to see how that works. Give them the freedom to learn on the job. Let them hang out with maintenance guys for a few days and attend investor meetings. The goal is to show them how to connect what they’ve learned with what you do. Lead with education and information.

Statistics have shown that 80 percent of residential real estate is self-managed, and over 75 percent of investors own only 1 to 4 units. So, bringing talent in right out of college and exposing them to the day to day of real estate investments with your clients is a brilliant strategy for maintaining their interest.

 

Word from Sponsor: NARPM

NARPM has two specific designations for property managers – the Residential Management Professional (RMP®) and the Master Property Manager (MPM®). If you haven’t put yourself through these classes, you are missing out. Some of the most successful property management entrepreneurs have their MPM. These are the professionals who are always leading the pack in innovation, people, and technology. Go to NARPM‘s website to see the requirements for those designations.

Maintaining a Great Culture for Retention

Now that you are able to get some good, qualified talent to work for your property management company, the next challenge is to retain that good talent, so they stay with your company for the long term. Here are some tips that Joe and George recommend:

Make it a Great Place to Work

You’ll need ideas to keep everything engaging. If you’re going to engage and go after younger generations, you have to make it fun. It can’t just be a dungeon where people are sitting in the office typing all day long and calling tenants who are late with rent. You can learn something new from creating the right culture and space. In property management companies, you might still see the floral couches from 30 years ago and the same dusty ficus tree in the corners. Younger generations will not want to be around that every day. Make your company a destination smart people want to be.

Give Employees Freedom

You can create games and challenges, or give employees a paid day off to volunteer at a local charity. This is what freedom looks like to people, and creating freedom retains good employees. Keep communication open, and invite comments and suggestions on what could be done better.

Treat Employees as Your Clients

Treat everyone the same way. The way you speak to an intern should be the same way you speak to a client. Always be ready to listen, even if you hear horrible ideas. Treat everyone equally and with respect and ask why when you’re communicating or discussing ideas. It helps your new employees feel like they have the freedom to express themselves.   

Stay Up-to-Date With Technology

Always keep up with technology. Be efficient or you won’t attract young, progressive people. There are efficiencies you can create and use and embrace. It will help your business grow and attract the best people. Check TechCrunch and see what you can use of the tech that’s coming out. You’ll be amazed and you don’t want to be afraid of it. Technology is a big part of recruitment and retention.

Have Room For Growth

Also, make sure there’s room for growth, and show your employees there are opportunities within your company. It goes back to having these employees learn the whole of the industry rather than focusing on just one aspect.

Word from Sponsor: PM Grow Summit

The PM Grow Summit is the property management conference for entrepreneurs. Our 2018 summit is coming in January, and it’s for business owners and teams who want to grow. It’s in San Diego from January 31 to Feb 2, in the Gaslight District. For the price of attendance, you’ll receive education, meals, coffee, snacks, drinks, entertainment, networking, and a recording of all talks and corresponding notes.  This conference removes distractions and barriers and helps like-minded individuals learn from each other and from top speakers. Check out www.pmgrowsummit.com.

Property Management Compensation That Benefits Everyone

Performance compensation is important, and it starts with everyone in the company being in business development. You want to empower your team members, even the maintenance guy, to bring in management business. They should be compensated for that. You can also provide bonuses for portfolios and how they’re performing. Since this is a service industry, you’ll want to encourage good service too. Providing a bonus when you get positive feedback from a client is a good way to show that service matters to you. You want smart managers to provide good service.  

Experiment with your own way of providing bonuses, and align it with the company’s growth, direction, and objectives. Remember that experiences are just as good as money. Instead of holiday bonuses, treat the employees to something special. That takes more effort and time because you need to know what they want or need. You can do something they wouldn’t normally do for themselves. No one will remember how much money they have in the bank but they will remember the amazing trip or the great dinner or the special gift.

Can Profit Sharing Work?

If you’re buying properties and working with investments, you can provide for potential real estate investors. It gives your employees a different perspective. Even if there’s just a small ownership stake, it’s not someone else’s money they are managing, it’s partly theirs. So limited partnerships can be useful. When employees can have an ownership interest as a limited partner, you have a unique way to compensate them.

The idea is to buy properties as an organization, and bring in your best employees as part owners of those properties. It’s an interesting way to get them to understand the business and commit to it. Your goals are then aligned and you have a property manager who fully understands the end goal and how to make capital improvements work for them. There’s a new way of thinking – as an owner.

Conclusion

Live up to the promise of making sure your company is open and responsive in training, learning and listening or people will leave. When attracting younger talent, you need to be open to their ideas. When you were young you probably thought every idea you had was fantastic. As you get older, you may learn that only about 2 percent of those ideas were ever good. Be open to those ideas and incorporate good training. That shows employees you are listening to them, and they have value to gain by learning more from you. From there, you can reward that performance.

There’s a lot more to talk about when it comes to attracting and retaining great talent. If you have any questions about what you’ve learned today, check out therrd.com, or follow Joe Killinger on Facebook and Instagram, or talk to us at Fourandhalf.com.

The post What if Property Management Companies Recruited Like Tech Startups? appeared first on Fourandhalf Marketing Agency for Property Managers.

Our topic today is maximizing fees, otherwise known as value-added services. The main revenue source for most property management companies is their management fee, but there are many value-added services that can be incorporated to increase revenue. Our guest, Darren Hunter, specializes in this and is a household name in the Australian property management community. He has spent most of his professional life helping property management companies figure out their business and today he’ll go over fee maximization for property managers. 

Learn:

• The typical profit margin of property management companies in the United States.
• The psychology behind landlords and three-part pricing strategies.
• How you can implement 3 different value-added services today.

Who is Darren Hunter?

Darren Hunter began as a property manager in 1989. A consultant and trainer now for the last 11 years, Darren works with property managers and their companies in Australia, New Zealand, and the United States. He has specialized in helping real estate business owners earn more money not only with new business but with their current business as well. It’s called fee maximization, which is the ability to increase and add fees with current owners.

An Overview of Value-Added Fees

In Australia, there is a mentality on the east coast that the management fee should cover everything. Property managers are afraid to charge for things other than management and leasing. So, those companies typically earn 15 percent of their revenue outside of management and leasing fees. On the west coast of Australia, however, you find 50 to 60 percent of income coming from fees outside of management and leasing. Those are the best earning companies in Australia.

In the United States, most of a management company’s revenue is coming from management fees and tenant fees, but not anywhere else. It’s an interesting breakdown, and sets you up to easily double your profit margin. NARPM did a survey that said 20 percent of the average property management company’s revenue is profit. If you are earning a total fee income per property of around $2,000 per year for one property, and your profit margin is 20 percent, it means you’re only earning $400 on that property.

With traditional thinking, to double your profit margin, you need to double your roofs and front doors. But, all you really need to do to double your profit margin is find another $400 a year in these extra value-added fees. That’s a more efficient way to double profit. You won’t need more doors and more staff and more overhead costs.

On DarrenHunter.com, you can find a knowledge library that includes 11 Profit Laws Regarding Fees. The first one is easy. Two people meet each other at a barbecue and discover they own investment properties and they each use different management companies. Those two people will talk about what they’re charged in management fees but not any other fees. That’s not as high on their radar, and it’s not as important as management fees.

Focus on getting the management fee to be the market rate. Then, maximize the leasing fees. A lot of areas in the U.S. don’t have leasing fees at all. But, if you maximize that fee to the accepted market rate, you can then do the work in the add-on fees. That’s where you get your results. Property owners really focus on the management fee. You can work with add-on fees because your owners are not thinking those are as important.

Three-Part Pricing Strategies

Some management companies will set up a tier system where they have a low fee option that comes with optional add-ons, a middle fee option that includes most of the management services but still leaves room for add-ons, and the highest tier, which is one fee that includes everything. People often go to the middle and they tend to negotiate which package they want instead of negotiating fees. There are also two-tier systems with a lower package and a higher package. Two package systems still offer a choice, so there’s not just one fee structure. You can usually get a property investor into the top package, where one management fee covers everything. Just make sure that the fee is high enough to cover all your services.

Price anchoring plays to psychology. In a three-tier property management pricing structure, you’re really expecting to sell the middle package. The top tier package might not sell as often and the bottom tier package is the anchor against that popular middle package. There are different market cultures at play, and you have to go with what works.

Do your best to limit pricing choices to three. The more packages you have, the more confused people can get. That’s going to prevent them from making a quick buying decision. If you structure three packages right, you can succeed as long as it’s easy to understand. If it’s too confusing, you can lose business because people won’t be in the mindset that’s required to make a purchase. Experiment and see what works. Testing and measuring is the key to reading what people will accept in your market.

High Ticket Property Management Items: Lease Renewals

After management fees and leasing fees, you can charge a lease renewal fee. If the average rent is $1,500, and you charge $750 for a leasing fee, your renewal fee might be $375, roughly half the cost of the leasing fee. That fee alone, when done properly, has the potential to increase your profit margin by 50 percent. This fee comes up once a year. If you’re managing 250 properties and you expect half those tenants to renew, you’ll earn $46,175 on that fee alone, which looks like a healthy boost to your bottom line. It’s a pure profit strategy. You aren’t taking on extra work that will cost you more resources.

How would you go about explaining this to your clients? Well, another of Darren’s 11 Profit Laws is the Law of Alternative Cost. This is what it would cost if the service was not provided. So, if you didn’t provide a lease renewal and the tenant just went month to month, what would be the cost to the owner? The tenant might move out during the winter months and the owner may have a vacant property for longer. There will also be new leasing fees. So, the owner loses the cost of one month’s rent plus leasing fees. The alternative cost could be thousands of dollars. When the alternative cost is thousands of dollars you can justify a quality leasing fee. Don’t fail to express that alternative cost, or your fee will look too expensive.

NARPM Sponsor

NARPM has close to 7,000 members and their designations – RMP and MPM are invaluable. The MPM – Master Property Manager –is graduate level work and the RMP – Residential Management Professional – is great for property managers who are starting out. These designations will do wonders for a property management business. You get coached, and you’ll be able to learn from people like Darren. You’ll discover new revenue streams and build a support network. There’s lots of value to studying for your designations. Check out NARPM.org.

High Ticket Property Management Items: Inspection Fees

Inspections or assessments should be another service you offer. This is when you go to the property during the lease and make sure the tenants are following the terms of that lease. Many managers aren’t charging for this service as all. Property managers ought to visit the property once or twice a year, and you shouldn’t avoid charging for that service. If you sent a plumber to a property to fix a leaky faucet, what will that plumber charge? The plumber might charge $150. You wouldn’t call the plumber and complain about the cost. You pay it because that’s what a plumber is worth. In the property management world, what is your time worth for conducting that inspection or assessment? You are spending time:

• getting to the property
• inspecting the property
• and documenting the process.

This is a difficult job with a lot of risk management and compliance. Your time is worth something. Don’t charge cut-rate fees.

Some property managers might feel like property inspections are the essence of property management, and should be included. But, what does the rule book say? There is no rule book. The management fee does not have to cover the inspections. If you believe you’re worth it and you know how to justify it, you can charge for anything. You can even charge a rent collection fee on top of the management fee if you know how to justify it. So, if you think that the management fee must cover the inspections, then that’s your mindset and you believe it. But, if you think it’s separate, you can charge it.

You’re competing against other property managers who do include inspections as part of their management fee. However, the mindset is still more important than the market. If all your competitors are not charging for a routine inspection fee and you are charging a quality fee, your owner might question it, especially if competitors are not charging it. You’ll need to convey that your inspections are high quality and prioritized. Maybe the competitors aren’t actually doing those inspections because they aren’t charging for them. 

The amount of revenue you can earn depends on how many inspections you conduct. Inspections are typically done at least once a year, and if you can justify it, try to get two inspections a year. If you charge $100 for each inspection, and you have 250 properties that are inspected twice a year, you’re going to bring in $50,000. There is some labor and time involved, so your cost might be 50 percent, and you’ll have gas and mileage. So, you’ll have a 30 percent profit margin, which is $15,000.

High Ticket Property Management Items: Administrative Fees

Some management companies will charge a monthly administrative fee. This will cover postage and technology like your software costs. It might be $10 a month per property. Justify this by explaining your office operations and the costs that are associated. You can sell that you’re charging a flat rate on this fee rather than tracking and charging more or different fees every month. So, that might be an extra $120 per year per door. If you have an owner with multiple properties, determine whether you’ll charge this fee per property or per owner. But it’s fair to say you can charge this $120 annual fee on 75 percent of your properties. That’s another $21,000 per year, which is pure bottom line.

Again, this is a mindset. When an owner gets a letter or a notice about business expenses and overhead increasing due to compliance and the fact that the fee structure hasn’t been revised for the last five years, it will be accepted. Owners value their peace of mind over paying a little bit extra. A large majority of clients will accept the fees as long as you can justify them.

2018 PM Grow Summit

Many of you probably attended the PM Grow Summit last year. This year it will be January 31 – February 2 in the Gaslight District of San Diego. Check out PMGrowSummit.com and look at the speakers and talks from last year. The PM Grow Conference difference is that everything is included. It’s a VIP experience. You pay for your hotel and flight, and everything else is provided. All of the sessions are recorded, and you’ll get your conference notes as well. In 2018, we’ll be talking about how to learn to build, manage, and lead a team to scale. 

High Ticket Property Management Items: Additional Fees

Here are some other fees you can charge in addition to your management and leasing fees:

• Move in and Move out Inspections
• Photography and Video
• File Transfer fee on account set-ups when you inherit a property or a tenant in place
• Internet Marketing fee
• Eviction Protection Program
• Repairs and Maintenance fees
• Outside of Normal Duties fee
• Insurance Claim fee

The biggest impact from this list will be the marketing and maintenance fees. With maintenance, property managers will charge a percentage of the maintenance invoice. If you send a plumber out, you’ll charge a percentage of the plumber’s fee for your organization. It’s not popular, and you have to know how to present it.

Change the mindset that the management fee should include this. If you have an owner who pushes back against 10 percent repairs, maintenance fees and etc. and other agencies don’t charge anything, talk about your value. Properties that are old and neglected are usually managed by companies that don’t pay attention to maintenance. If you can demonstrate you’re proactive with repairs and maintenance, owners will see they have benefits. The property will be in better condition and its value will increase. You can frame it as reactive repairs versus proactive repairs. The best vendors are worth your maintenance fee. If you can point out that vendors are charging you less than they would be charging outside of your property management relationship, then that management fee will make sense.

The revenue here depends on a property’s condition and age. Maybe you could expect to earn $100 on a property’s maintenance annually. With 250 properties, that’s another $25,000 to the bottom line. This is much better than growing with rent roll growth. Rent roll growth requires extra overhead and additional costs.

Implementing the Value-Add Services

With all of the fees that have been discussed here, you could have more than $107,000 coming into your property management business. It’s up to you if you want to do this for you.

You can increase your fees. You can earn more money with the business you currently have. All of the mindset issues you have are dragons in the mist. They don’t actually exist.

There are three actual circumstances where you can’t do this:

1. If you’re offering bad service and you’re asking customers to pay more, it will not work.
2. If you don’t believe what you’ve read here, you won’t be able to do it.
3. If you wait and think about doing this in six months, you won’t be able to do it. Do it now.

For more information from Darren, please visit DarrenHunter.com. If you have any questions about growing your property management business, contact Fourandhalf.com.

People also read: 

• 10 Mistakes in Running a Property Management Business
• Different Pricing Structures for Your Property Management Business

The post Property Management Fee Maximization with Darren Hunter appeared first on Fourandhalf Marketing Agency for Property Managers.

How do you restructure your property management company or property management department to satisfy a savvy client? Rhys Standley, Owner of Just Property Management in Australia, has a creative solution that has increased his company’s client satisfaction and employee satisfaction. We met Rhys at the recent LPMA event in Australia, where the best minds and operations in property management meet once a year. Rhys started his property management company six months ago and manages 1,000-plus properties. He has also founded an outsourcing company called qResults. Today, we go over what Rhys did to restructure Just Property Management.

Property Management Clients are Savvy

There’s a new economy compared to what has been standard in the past. Customers and clients have a lot more information at their fingertips than they have ever had before. Now:

• they want to know more
• they do know more, and
• they want instant answers.

The days of making a phone call and waiting a few days to get a response is unacceptable in today’s climate. Because of that, a lot of property management companies are forced to change the way they do things. A process that once worked doesn’t work anymore because clients are able to expect more. Unless you adapt to new expectations, you’ll become extinct pretty quickly and you won’t grow your business.

Perception of Being a “Specialist” in Property Management

The typical real estate office is set up like a general practitioner’s office. There’s a lot going on; residential sales, commercial sales, auctions, homewatch services, residential and commercial leasing. That was the way Rhys had his company, until he completely rebranded his company by doing just property management. Doing only property management in his market was unique at the time, and landlords reached out to his company more often. Embracing that one specialty will shift the way your customers see you. You’ll no longer be a general practitioner – you’ll be a heart surgeon. People were happy to pay Rhys a little extra as they expect better service and advice because he’s a specialist, not a generalist.

This will create a culture shift in your office and in your marketplace. At that point, reality changes. You need to have the expertise you claim to have. Your systems must be on-point and your checklists have to be thorough, and everyone needs the right training. Going against what everyone was doing at the time has allowed Just Property Management to manage 1,000 doors in a relatively quick time.

If you already only do property management and your competitors do too, see if there is an opportunity to dig deeper and see what you can offer that the rest of your competition isn’t able to.

Revolutionizing the Property Manager Job Function

In your quest for efficiency and the best customer service, the role and the job of the property manager has to evolve. In the past, property managers have done everything, they’ve:

• shown prospective tenants their properties
• processed applications for properties
• completed property condition reports and entry reports
• typed lease documents
• conducted inspections
• and coordinated maintenance.

All these tasks help contribute to a high turnover in the property management industry, due to the stress that comes along with the job. So, Rhys asked himself: What is the one main thing that a property manager should do? It came down to communication.

Communicating with your clients is a manager’s most important role. If all a property manager had to do was take phone calls from investors, all of the other issues would take care of themselves. Owners would be a lot less likely to complain, and tenants would be happier too. Owners and investors don’t care who is taking care of maintenance or typing up lease documents. They do care when their property manager can’t be reached.

Here’s a typical situation. A property manager is out of the office doing inspections or dealing with a tenant issue at the property. An owner calls because he drove past his property and noticed the lawn is overgrown. He tries to reach the property manager, but can’t, so he leaves a message. By the time the property manager resolves the issue in the field and returns to the office, there are dozens of emails to respond to and phone calls to return. That owner doesn’t get called back, and then the problem is not an overgrown lawn – it’s a lack of communication and responsiveness. When property managers are time-poor, customer service suffers, and the property management business suffers. The issue for the owner is that he’s paying a property manager but that manager doesn’t have the courtesy to return his call. That makes the owner feel like the manager doesn’t care about him or his property. If you can cut that off and take the call, you prevent a lot of brush fires from occurring.

Internal communication is important for the property manager to focus on as well. Delegating tasks in the office is essential. The manager is not giving those tasks away. There will still be follow up, and the property manager will be aware of the maintenance, inspections, and other things going on at a property. But the manager’s role is to be the conduit to the owner; the front of all knowledge. The property manager needs to know what’s going on at the property, but doesn’t have to personally do every task. That saves a lot of stress and heartache.

Outsourcing Your Property Manager’s Tasks

At Just Property Management, outsourcing has been a major part of restructuring the property management business. Outsourcing helps with cost and productivity when a property management company can’t afford layers of full time management employees. You can outsource both documentation and physical tasks.

For documents and data entry, outsourcing to another country can be useful. Using a company in the Philippines gives access to people who have really clear and efficient English skills. They prepare lease documents, send out notices, and update reports. The owners you work with don’t care who is doing those tasks, they just expect that it gets done. It also frees up time for the property manager to do the things that matter most: communicate with owners.  

Outsourcing the physical tasks is a little different because you need people who are physically present. That’s where contractors come into play as they can help outsource entry report updates, and inspections. When property managers do inspections, it can actually be a conflict of interest. They are inspecting a property that has been occupied by tenants they have worked with for years. So, they might not give an accurate report if they feel intimidated by a tenant or they really liked a tenant. An independent inspector will give an impartial inspection report. You’ll also have someone doing these reports who specializes in the work and is able to dedicate the necessary amount of time.

Final inspections are time consuming, and they occur when a tenant vacates and it’s time to go through the property condition report. Typically, this process should take two and a half hours. If a busy property manager is doing it, they will feel pressured to get back to the office, so they’ll give only an hour to the process. That’s going to create conflicts, especially when things get missed. With an independent inspector, there are no time pressures. The property manager can show up at the very end and see what kind of damage was left behind so that the owner can get a full report. A good inspector will blend mechanical knowledge with an eye for detail. Recruit good inspectors, train them, and have them document everything they do.

Streamlining Operations with Job Sharing

When your business grows from 100 doors to about 300 doors, you face some new challenges. When you’re smaller, you’re doing everything yourself. You’re in the trenches. Then, when you get to the point that you really become a business, you have staffing issues to manage and these structural things become more important. At Just Property Management, there are full-time property managers and then there are part-time assistant property managers. Rhys used to employ full-time assistant property managers, but with employee turnover, it forced him to get creative.

He now only hires part-time staff members who will work for one week and then take the next week off. This type of job sharing ensures that you can cover all the gaps that might occur when someone takes a day off or goes on vacation or gets sick. The office is a lot more streamlined, and there’s really no downtime. That reduces complaints from both tenants and owners. It’s something to consider as you’re shaping your own management company.

If there is any feedback or questions, please contact Rhys at Just Property Management. If you have any questions about property management marketing or what is in the works for the 2018 PM Grow Summit, please contact us at Fourandhalf.

The post How to Restructure Your Property Management Department and Satisfy the Savvy Client with Rhys Standley appeared first on Fourandhalf Marketing Agency for Property Managers.

The topic today is how to sell property management services by building a powerful local referral network. Our guest, Joe Stokley, can speak intelligently on this subject because he is a master networker. Joe runs Stokley Properties, a successful property management business in Walnut Creek, California.

Joe and his wife began as real estate investors, and Joe worked for a large real estate investment company until the recession in 2009. Their own rental properties were facing foreclosure, so they learned how to do loan modifications and worked with banks to restructure. After fixing their own personal portfolio, they decided to start a property management company as they felt their skills were needed in the market. The business started at home, and within seven years Stokley now manages 500 properties. The key indicator to their success? Joe was able to build a third of his business through local networking. Below, you’ll learn Joe’s advice for any property management owner that is looking to gain business by being involved with the community.

Committing Time and Expertise

The most important thing to understand is that you can’t expect to show up to a meeting and expect business to come to you. It’s important to really jump into it and get to know the people and the process. Take advantage of the forum, and let the membership get to know who you are. This will help your networking plan take off.

This is a community, and word gets around quick about who you are and what kind of work you provide. So take it seriously and get involved. People will get to know you, and that translates into business. If you want to bring half a million dollars in lifetime revenue, you’ve got to do it right.

Where to Look to Find Existing Networking Groups

You might find a Business Networking International (BNI) group that allows you to meet people from different industries. That’s where Joe started, but it felt limited for his needs. There was one Realtor and one lawyer who could help him bring in business, but he wanted more exposure. So, he got involved with the Contra Costa Association of Realtors, and an affiliated group within that organization called the Contra Costa Real Estate in Motion, or CCRIM. They met weekly and had 150 members, all of whom were Realtors or associated with the real estate business.

There are local organizations similar to the Contra Costa group across the country. Lots of areas have a Board of Realtors, and there are networking groups that grow from there. They are specific to your local community, and it’s a great way to build a Realtor network. You need to show up to the meetings and see what sprouts. The Board of Realtors in your community may have their own networking group that goes on property tours or meets regularly. They can refer you to an existing group that is thriving, and that’s where you’ll begin to build your network.

These are not the only groups we have seen property management companies have success in. Consider these groups, if they are available in your local area:

• Rental Housing Associations
• Chambers of Commerce
• Rotary Clubs

A website like meetup.com is also a great outlet to help you discover networking groups within your local community.

Getting into a Leadership Position

As you network and share your particular area of expertise, there’s no reason why you can’t move into leadership positions, especially if you’re willing to put in the work. It’s as simple as sharing advice, and being proactive because when you do something for nothing, people will reciprocate. If you don’t do that, it’s easy to get discouraged and drop out.

Consider doing a sponsorship so you can give a presentation. When you sponsor a breakfast or something similar, you get an infomercial-type opportunity where you can give a presentation about the advantages of having a property management partner. That allows you to teach other people your trade. See yourself as an educator, and your audience will respond with questions. The Realtors Joe was speaking to wanted to sell houses, not deal with property management. As a trustworthy resource, he was beneficial to them.  

Moving from sponsorship to leadership is a pretty natural progression. Many of these groups have board elections, so you can run for office. Talk to people, be friendly, and be open to others. It’s helpful to ask questions and listen to people. Make sure you’re prepared, whether you’re giving a presentation or simply networking. Be ready and be practiced because it shows. This is serious and it deals with the professional lives of the people you’re meeting, so respect the organization.

The ROI on Joining Local Business Networks

At the networking group that Joe discussed, he paid $3,000 a year to be an annual sponsor. That investment plus the investment of 100 hours a year on meetings and events resulted in a lot of business. Joe said about a third of his business came from these networking events and the contacts he made through this organization. If you qualify that and break down the numbers, it’s pretty astonishing:

With one-third of business, or 150 properties coming from this network, and 6 years being spent there, the average is 25 properties per year that were acquired this way.

Joe’s annual contract value is $4,000 per property, per year.

Grab your calculator, and you’ll see Joe made $100,000 per year each year by spending 100 hours and $3,000 every year. And that’s just an annual value. In lifetime value, the number is closer to $800,000. It’s a recurring stream that comes from healthy networking relationships.  

Networking in your local community within local organizations is good for your reputation and an excellent way to earn money and grow your business.

This episode of The Property Management Show was brought to you by NARPM and the 2018 PM Grow Summit. Make sure you subscribe to The Property Management Show on iTunes and on YouTube. If you have any questions about growing your property management company, contact us at Fourandhalf – Internet Marketing for Property Management Companies.

The Property Management Show is brought to you by Fourandhalf. We help property managers strategize and implement marketing plans that bring in owner leads. Click the image below to get a free marketing assessment and find out how to start getting better clients into your portfolio.

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The topic of preparing your property management company for a successful exit is a big one, and our guest today is one of the brightest minds in property management. Andrew (Andy) Propst has experience in taking his company, Park Place Property Management, from 200 properties to 4,000 properties in eight years and in just the last year, he has added 700 doors organically, and another 400 through a local portfolio purchase.  Andy is also a NARPM past president, and he is now the CEO of HomeRiver Group, a nationwide company that acquires property management companies and their portfolios.  Andy will share with us his insights for any owner who is looking to position their property management company for a successful exit.

What Size Do You Need to Be to Meet Your Financial Goals upon Exit?

It’s an important question that 80 percent of property managers don’t ask themselves. People see property management as a source of income, which it is. But everyone who owns a business should eventually prepare to sell it and the sooner you start to prepare, the better. Let’s say you want to exit with $5 million, and the average rent you collect is $1,800. On the open market, you would need 2,000 to 2,500 doors to get out of the business with $5 million. Some people have a lot of doors but don’t earn as much on those doors and that’s going to alter your number.

5 Things to Avoid When You’re Planning an Exit

There are some things we see that trip up the acquisition process. Try to avoid these to make a smoother transition.

• Accounting struggles. Your property management company must reconcile accounts on a monthly basis. Get good reports from your system. Have a trust account balanced and a historical units report available. You need clean financials.
• Unclear data. You need to know how many units you managed six months ago or two years ago. Have transparent, accessible data.
• Inconsistent Formatting. Sometimes, formatting gets in the way. Something as simple as not being consistent with St. versus Street can throw off a whole system.
• Lack of strategic planning. It is rare to see a strategic plan or a budget. These things are important as buyers want to see your future.
• Too many receivables. When owners and tenants owe you money and you’re not collecting, you could have hundreds of thousands of dollars outstanding. That’s a problem when you’re trying to sell your business.

What’s More Important to Buyers – Top Line Vs. Bottom Line Revenue?

When you’re building a business to exit eventually, you need to focus on both top line revenue (gross sales) and bottom line revenue (net income). People base the success of their companies by the number of doors, but who cares how many doors you have if you aren’t making money on them? If you want to sell your company, you need to have a healthy bottom line.

A company like HomeRiver Group buys or evaluates on EBTDA – which stands for Earnings Before Taxes, Depreciation, and Amortization. You get a dollar amount based on your profitability margin. The higher the profitability means a higher payout for your company. The bottom line really matters.

The door count doesn’t matter as much as the overall performance of the company. In Andy’s experience as an acquirer, there is the potential that HomeRiver Group can take a company that’s underperforming and add some efficiencies to make it more profitable. If they can change the performance, they will pay for a brighter future and not focus on profits. There are other companies that do buy per door or based on gross revenue. However, the typical model is to look at the bottom line, add a multiple, and figure out the value of the business. It’s best to not overcomplicate it.

The Flaw in Evaluating Based on a Dollar per Door Method

Some companies have a portfolio of scrappy B or C level multi-family properties. There will be a difference in value for those businesses versus someone who has really paid attention to what they manage and has the best properties. Buying a property management company in an area where the rent is a lot lower and is generally a rougher area is a lot different from buying a property management company that handles rental property in the suburbs of San Diego. It’s important to grow your business door-wise, but it’s more important to have high-quality properties.

Ways To Increase Value in Your Property Management Company Increase Worth with Value-Add Services

Value-added services are sometimes called ancillary fees and are also a great way to increase a property management company’s market value. It shows continuity and opportunities. The common ratio is 60 percent of revenue from property management fees and 40 percent of revenue from value-add services. Try to aim for a 50/50 ratio when it comes to these figures. Some people might diminish such services, but it’s starting to change as the buyers now value those fees. Property management is an amazing business with recurring revenue that’s hard to match.

Increase Value with a Maintenance Company

Having an in-house maintenance company is valuable as it brings in ancillary business and profit. If it’s done right, it will be attractive to someone interested in buying a property management company. Right now, with the housing market doing so well, it’s hard to find maintenance professionals to do work. Being able to turn over houses in five days is a huge value add and it goes hand in hand with property management.

Fewer people are willing to make this work because maintenance is difficult. You can fake it till you make it with property management. You can’t do that with maintenance. It’s easy to lose your hat. If you want to do something in maintenance, have a great strategic plan in place, have a budget, hire the right people, and do it right. Don’t be afraid to spend money up front. If you don’t get the maintenance part right, your business can suffer. Consult a tax advisor and an attorney and find a mentor who can show you how it’s done successfully. Having a great maintenance company is about making good hires, utilizing technology, and having excellent systems in place. Track your revenue so you can be sure it’s profitable.

Increase Value with a Real Estate Sales Division

Many smart property management owners also do real estate sales. They see that they have clients who are investors, and also tenants who might want to own a home. So, they help their current customers buy properties. If a brokerage division within a property management company drives revenue, it will get the attention of companies buying portfolios. It can be a huge value as acquisition, management, and disposition are three huge revenue sources. Andrew has not done real estate in Boise in the past with Park Place Property Management, but with the sales market as it is, having a brokerage is the next opportunity.

Increase Value By Investing in Technology and Your Employees

It’s never too early to invest in technology and get your systems organized and in place. Some people are successful with virtual assistants. You need a happy team in place, too. A happy team means happy customers and happy shareholders. If a company is going to be purchased, team members can worry about downsizing. But a good team that cares about what they do will be reflected in the bottom line. People are the most important part of your company. HomeRiver has bought companies strictly for the people before. The doors were just a nice bonus. So, cultivate your people and your business and it will reflect in the bottom line.

Other Little-Known Factors That Influence Buyers

This isn’t a make or break decision for your business, but when people evaluate a business to buy, they do look into several factors such as the marketing you do, your growth over time, your future plans for the business, how you position yourself in the market, and your reputation in the area. If you struggle in those areas, it doesn’t mean your business isn’t worth a lot of money. But for companies like HomeRiver Group, it does mean a lot.

Post-Exit Involvement for Property Management Owners

Some property management company owners will still want to contribute, even after selling the business. People who want to exit are not necessarily ready to retire. They simply want to be part of something bigger, because when you’re running a business, you feel lonely. Having that outlet to be heard and have peers is an attractive option for many small business owners. On the flipside, these owners are appealing to companies like HomeRiver Group because their talent is needed.  

If you are thinking about selling your business, and would still like to be involved in building it up; it is best to have great operational instincts, be able to communicate effectively, have accounting know-how, and be good at building relationships. If you are able to really participate in the process, and grow the business organically, then you are at a premium.

How to Prepare for an Exit Within a Year

If you want to sell your property management company within the next 12 months, you need to start by going to the trade organizations to which you belong. Go and talk to other property managers, and see what’s going on in the market. See what people are paying for property management companies so you can get an idea. Talk to people trying to do this on a national basis. Have those initial conversations. You can talk to business brokers, accountants, and bankers. All these people are good at helping you understand what your business is worth. Once you come up with a number, let people know what’s happening. You don’t have to contact a business broker. There’s a fee, so if you’re a good salesperson yourself, you may not need it.

That’s a brief look at the value you want to have in your company when you’re getting ready to exit. If you want to talk to Andy, contact him at HomeRiver Group. If you have any questions for us about marketing your property management business to raise its value, contact us at Fourandhalf.

The post How to Position your Property Management Company for a Successful Exit appeared first on Fourandhalf Marketing Agency for Property Managers.

Hosting events that educate real estate investors will increase your visibility in the local community, position you as an expert, offer major credibility, be a potential boon for referrals, as well as get you in front of an ideal customer.  Needless to say, it is a great way to drive new business, and we have an excellent guest that will offer their advice on how you can successfully use it for your property management company today.

We bring in Douglas Skipworth, Executive Broker at CrestCore Realty in Memphis, TN. Douglas has found seminars to be a great way to establish trust in a very competitive market, and this has helped CrestCore Realty grow into the business it is today.

About Douglas and CrestCore Realty

Douglas got into buying rental houses, and that evolved into managing property and helping other people buy homes. Today, his company owns 800 properties, and they manage around 2,600 homes in the Memphis area. He believes he is a better property manager because he’s an investor and he is a better investor because he’s a property manager.

This episode is brought to you by the 2017 PM Grow Summit, gain access to 26 videos, 21 slide decks & 100 pages of notes for only $299. Click here to sign up for the exclusive material.

Investor Education Topics of Discussion

Putting together the content of your presentation is both an art and a science. When you’re trying to set up a class or a meet-up, choose topics that will attract people. You can:

• Go based off FAQs.
• Poll people and see what interests them the most.
• Think about what you wish you had known, what you want to know, or what people are asking you. Teach people what you have learned yourself. If something fascinates you, start digging. Then, share it.

When you find a topic, don’t be afraid to ask for help. Reach out to your current circles and recruit some of your best investors to talk. People can learn from any expert who has deep-seated experience in real estate investments.

Use Data and Statistics

Your presentation will need to include data that is applicable to the topic. The data might be trends in specific areas of your local market or what you’ll see over the next 12 months. You can:

• Talk about what financing looks like and pinpoint where foreclosures are.
• Look closely at price points and determine whether it is a buyer’s or seller’s market.
• Report on areas that are really performing and providing cash flow.

CrestCore makes sure to report back statistics they’re reading or data they have internally that they can relay to potential investors. They give them lease rates and rental rates and how much turnovers are costing. They’ll talk about evictions and challenges or how long properties are on the market. You can get as detailed as you want and provide ideas per neighborhood for returns and trends. Potential investors will find this information very valuable.

To Pitch Your Services, Or Not to Pitch?

For a property manager, you can occasionally pitch your services. You’re building your business by making these relationships and providing your content. You don’t want to sell your own services too hard in these types of events. Get in the frame of mind of doing your best to help people, this will indirectly help you. You are helping people become investors.

But if pitching works for you, go ahead and pitch. Sometimes you want to sell and that might work for you. Figure out what you’re comfortable with and create something that fits. It’s possible to gain hundreds of houses a year, and many of those will be related to your investor education. CrestCore Realty grew by 700 houses last year, and probably at least 30 of those came through these educational opportunities. Then, there were indirect conversions. Ten to twenty percent of his new business can be tied to that investor education.

The Not-So-Obvious Reasons Local Investors Benefit From These Seminars

Providing crucial insights and knowledge isn’t the only benefit your attendees will gain from these educational events. Think about this:

• You’re sharing knowledge and materials as well as resources. There are reference materials so they can take deeper dives on their own.
• They are also getting contacts with peers. One of the things that’s most important for newer investors is they get confidence. They learn that it’s not rocket science. Provide a friendly environment, contacts, and resources, and people will feel they are capable of becoming real estate investors.
• You can see if people are ready to buy properties by sharing specific deals. There could be deals that close or get started just from your presentations. It’s a great way to help people become financially independent.

No matter the location, people will always be interested in learning about real estate in their local area. Holding educational classes helps you stand out from your competitors, especially if you are just breaking into the property management industry.

Getting People to Join Your Investor Education Event

The fun part is gathering the investors to your event. You have something you want to share – so, use word of mouth, email lists, and invite former attendees. Be active in newsletters, reach out to friends of friends, and invite everyone. Use social media and suggest that everyone you invite bring someone. People who don’t have a list and want to try this for the first time can start small. Invite your clients, leads, employees, real estate agents, and those who referred you to others to your seminar.

Maybe in a room of 20 people, you know 19 of them but at least you have one new person. It starts like dry leaves that become twigs and branches and then eventually it becomes a fire. You don’t start with 200 people. You start small and you build. This will also give you an opportunity to vet your content and learn as you go.

There are services like pmleads.com where you can buy a list of landlords and investors who own rental property in the areas you want to manage. You could cold call them to invite them to your presentation. Tell them it’s free for investors and you’re going to teach them about a specific topic. From that one list you’ll maybe end up with four or five attendees. You can also run a Facebook Ad campaign specifically targeting landlords in your area and generate leads that way. For invitations, there are many avenues. It’s a good idea to have a website splash page where attendees can go to sign up.

Where to Hold the Investor Education Events

You can hold your investment presentations anywhere. Living rooms, offices, conference areas, restaurants, coffee shops, and places where you can have a lunch and talk about real estate investing. Use larger venues if you have a national speaker coming in. Action is a big part of your success here, you’ll be surprised at the locations that will let you host an investor meet-up.

You work with vendors like maintenance companies, banks, insurance agents, and attorneys. Their space is a great location if they have boardrooms. They may be happy to host, as the audience you’ll be bringing in will be great for them as well. They might pay for food or provide space and materials in order to get that exposure. Leverage your partnerships.

Costs of Setting Up Investor Events

You can pay for speakers and rent venues or provide food and books, which may cost up to $1,500. However, in most cases, you can get by for just paying for materials like copies and brochures. You can provide cookies and drinks or appetizers or sandwiches, which will keep you under $100 to do something small. The majority of the time, you don’t spend a lot.

The cost isn’t high, but you will spend time on it. The biggest time investment is the content creation. Getting the course together and making sure it’s usable will take up a few hours. You want your attendees to feel like they got a benefit from attending. So make sure you invest some time into it, and they will think about you going forward.

How to Market Your Event Once it is Completed

Once you have your presentation, that’s evergreen content you can continue to use. Have someone record a high-quality video, put it online and write up an article for it. Or you can use it as a webinar and collect email addresses. Lots of opportunities are there. A five-day investment in building top notch content is worth millions in the future of your business. It’s reusable and you’ll get a lot more visibility through the Internet.

Pro-Tips for Even More Success

Make sure you’re not one expert who does everything and gets overwhelmed. Let other people take the stage and speak about topics they are interested in and know about. When your employees participate, they will be able to invest in preparation and become experts in these areas. This will help inspire confidence in not only you, but your company as well.

When it comes to your current clients, stay in front of them with this new information and help them grow, even if they don’t attend. They’ll think of you as thought leaders in the industry. That leads to referrals and new opportunities.

Hold these events. To stay in the loop for future episodes of the Property Management Show, be sure to subscribe to us on iTunes. And if you have any questions about how to get started or how to leverage your content to build your property management business, contact us at Fourandhalf. 

The post How to Put Together Real Estate Investor Education Events with Douglas Skipworth of CrestCore Realty appeared first on Fourandhalf Marketing Agency for Property Managers.

Today, we are talking about maintenance services and how you can turn it into a competitive advantage for your property management company. Here with us to answer our burning questions on the subject is an expert in this realm: Curt Fluegel, the CEO and founder of PM Toolbelt.

About Curt Fluegel, the Founder of PMToolbelt

Curt started in the industry as a property manager, mostly fixing and flipping property during the recession. Maintenance is his specialty and had been a core part of his business — until he lost a lot of money on it. To combat this, Curt systematized his business and created PM toolbelt. PM Toolbelt is a software platform that helps property management companies manage maintenance services. Below are Curt’s tips for property management owners that are considering on providing maintenance services:

When Professional Property Managers Lose Money on Maintenance

If any property management company provides maintenance services without thinking it through or having a process in place, they would most likely make more money by not providing it. A lot of companies have lost money this way, and it’s often due to lost receipts or not tracking expenses well enough. You may not realize you’re spending more on parts and labor than you are earning. You have to make sure your maintenance personnel are busy working and not spending extra time at Home Depot. Fixing homes and providing a good maintenance service is great, but to avoid losing money, you need to track better and charge more.

Managing Your Time with a Property Management Company and a Maintenance Business

As a CEO you shouldn’t spend any more time on this than you do on other tasks. The amount of time a CEO spends on a maintenance business depends on communication and scheduling. There are tools that can help with the actual oversight of routine maintenance. You can look at profitability by property or by tech from a CEO level; it’s no different than spending time on anything else.

To control scheduling, getting the right systems is key. You can get away with a lot until your company grows too large. If you can alleviate the pain points like confirming that specific work has been done, or making sure maintenance coordinators, techs, and clients are all in the communication loop, then everything else can get pretty easy.

For maximum convenience, your software should allow you to drag and drop to schedule a work order. That way, there’s not a lot of task management activities except on your bookkeeping side. But, if you don’t have a dedicated bookkeeper, you may have a bigger load.

How a Maintenance Company Allows You to Take on Any Property

Curt managed to pull in 50 percent of his revenue last year with his property maintenance company. A lot of factors accounted for that, especially the property choices that were made. Because he provides maintenance services, Curt’s company has the flexibility to work with both carefree easy-to-manage properties and properties that would make the maintenance company a lot of money. So that opened up what they could go after, increasing his revenue.

Everyone wants the high rent/low maintenance properties in their portfolio. But, you’ll see other properties a little differently when you have a maintenance company to run. Adding an older home with repair needs to your portfolio means that the maintenance division will make a lot of money – money you wouldn’t make offering nothing beyond standard property management services.

Curt took on a lot of properties from new property managers who felt overwhelmed with the amount of preventive maintenance their investments needed. You can get away with a different management cost when you can come in as an expert and explain why the owner’s property will be a struggle to manage. Also, you can manage it better than a person who doesn’t know as much about maintenance. You can charge a higher rate and still bring in more profit from that investment because you bring stability to the property and to the owner.

What to Track to Start Saving on Maintenance Services

You need to track the location of your service technicians and where your parts are. If you don’t know how much time is spent on each project and you can’t say where each penny went, you’ll lose money every month. So you have to be firm with your service technicians. Service technicians are thinking only about what they need to do – you need to be planning their next move.

Tracking can be made easy; there are GPS apps or vehicle trackers you can use. There are cheap or free apps to help with time clock tracking such asTime Clock Wizard. QuickBooks allows for time tracking as well. The key is to track your employees. Software like PM Toolbelt helps property management owners achieve just that. Your service technicians are getting paid by the hour and you’re supposed to be making a profit. You need to know if they’re spending 30 or 60 percent of their time driving and what they’re spending on parts. Get very granular with it by tracking the details.

What details? You need to tie their hours to your money. Simple division can show their efficiency. If someone is working 40 hours a week, how many hours did he actually bill to you and how many of those hours are billable to charge back to the owner? If you get that one right, you’ll be in good shape. Look for efficiency in the 90 percent range.

Think of this not as a side business, but a good business in its own right. Everything should scale, including the number of workers you employ. While tracking is the biggest problem to solve, it can be simple to do with the right tools.

Communication, Reviews, and Customer Feedback

The next problem with providing repairs and maintenance services is communication. Generally, if someone is leaving you a bad review or thinks they received bad service, it’s probably for a reason you can understand. A tenant is usually happy until for some reason they don’t feel you did what you’re supposed to do when something in the home breaks. It’s typical for property managers to get bad reviews.

It’s an odd metric, but make sure you’re tracking your level of service. Be aware of the quality of communication your employees provide. For example, maintenance coordinators need to make sure the tenant knows maintenance techs are coming and/or that their comments and complaints have been heard. Tenants want to be kept in the loop, and they will appreciate the company that keeps open communication with them. Find a good way to track and improve that sort of communication because when your service quality goes up, everything else becomes easier.

With local businesses, customer experience is crucial in this day and age. People don’t choose a service until they see good reviews. Fourandhalf has a service where tenants and owners are surveyed any time there’s contact; whether it’s right after a move in or a move out, or once tenant placement is completed. It’s an excellent way to get reviews and to be aware of your customers’ experience with your business. The good reviews are made public and bad reviews will be sent to you so you can correct bad service.

Efficiency When Dispatching Techs

Your efficiency depends upon your scheduling. So, no matter how many technicians you have, you have to be able to dispatch them based on job priority. Decide what’s a priority, what’s past due, or what’s within 10 minutes of a tech who is currently in an area. For instance, in Minnesota, markets cover a large area, and some properties can be over 60 miles apart. That’s doable as long as you’re not sending someone 60 miles every time. Scheduling is less of a metric and more of an efficiency.

If you can’t create a good schedule, you’ll lose money, and the bigger you get the more challenging that becomes. We recently ran across an article about why UPS drivers never turn left. It was about how, to save money, UPS’s dispatch software routes drivers so that they (almost) never turn left in traffic intersections. That’s extreme, but you want to route your service technicians so they aren’t driving around all day or sitting in a parts store all day. Know how much of their time is billable, and if you can only bill for three hours in an eight hour day, you need to fix that.

Providing Maintenance to Other Property Management Companies

If other companies can’t make money off proper property maintenance, you should take it off of their hands. That business opportunity is a “low hanging fruit” if other property management companies trust that you won’t try to steal their clients away. Getting local customers is no more difficult than attending NARPM meetings, making friends locally, and having a couple of people trust you first. Everyone needs a qualified maintenance vendor, so you have a competitive advantage.

If you spend the time to get good techs on your side, you’ll sell your maintenance services more easily. The demand for property maintenance services is already there. Hiring good techs is often the hardest part. Someone at a NARPM event said they simply never close their job posting for techs. That’s good advice. There’s more of a demand for good techs than there is a supply. So qualifying the first tech is the hardest part and it’s like any skill; you’ll learn who to look for.

When to Start Your Maintenance Division

It depends on more than the size of your company. The type of properties you manage will impact that. If you’re in the downtown of a major metro area, you’ll have properties needing work all the time. People who are successful at this can start when they are at about 200 properties, but those who have 400 properties do even better. This part of your business takes up very little office space and you don’t need a whole different infrastructure when you incorporate a property maintenance team.

It’s a great opportunity, and when we talk about doubling your recurring revenue with maintenance, the opportunity could be worth the work. If so, PMToolbelt.com is a service you should check out. Reach out to Curt if you have any questions.

Subscribe to be in the loop for more episodes of The Property Management Show. If you have any questions, you can contact us at Fourandhalf.

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Today, we’re giving you the inside scoop as we listen in on one of our clients, Ryan Weir, with Walker Weir Property Management in Auckland, New Zealand. We’re going to dissect one of his sales calls, received from his Google Ads campaign – an owner lead, interested in property management. We’ll listen to Ryan navigate this call, and we’ll make comments in between and talk strategy. Below you’ll see the transcript of the call. Feel free to use this topic to train your staff:

Ryan: Good afternoon, Walker Weir Property Management, this is Ryan speaking.

Caller: G’day, Ryan, it’s Richard here, how are you?

Alex: Right off the bat, what do you hear? This introduction is what you need – he gives:

• the name of the company

• the service he provides

• and he gives his own name as well

Train your salespeople and get in the mode yourself that you identify who you are and what your company is every time the phone rings. You want to be friendly and welcoming to the person who is calling.

Ryan: Hi Richard, I’m good, how are you?

Caller: Good. The reason I’m calling is because me and my wife just bought a new place down in ____, but we have that place in ______ that we want to rent out. One of the terms on our financials is to have a rental appraisal that’s around the 620 mark per week. So, I was wondering how we go about getting an appraisal for that house?

Ryan: Sure. What was your last name, Richard?

Caller: ——

Alex: Here’s something else to notice right off the bat. Ryan is patient and he’s listening. He’s not interrupting and instead of going in to ask some questions, he’s going to identify the person and get the contact information prior to gathering more information. Let’s keep listening.

Ryan: Did someone pass our details on to you?

Caller: I found you on the internet.

Ryan: Perfect, okay. Where is your property in _______?

Caller: It’s at _______.

Ryan: And you’re moving out to ____ did you say? That’s pretty exciting.

Caller: Yeah. We thought it’s a good time to make a move and get some land.

Ryan: And will you be enlisting the services of a property manager such as ourselves?

Caller: I think that’s the goal, possibly. We will want someone to look after the place.

Ryan: The prices for rental property do change a little bit throughout the year. Auckland is a bit seasonal. So, when are you relocating out?

Caller: February.

Ryan: Cool. As it happens, that’s a good time to rent properties. The prices are good, and there are more tenants to choose from. Can you tell me a little bit about your _____ property?

Alex: So, what Ryan did there is pretty brilliant. If you noticed, he asked how did you find us. The prospect said the internet. So, that’s a good bit of information. You don’t have to dig too deeply into it. Your digital channels should be aligned, and you should be able to go to your LeadSimple software to track and capture those details. You don’t want to move the call away from its purpose. But this is a good initial bit of information. Then, Ryan did what we always recommend and train – he said “tell me a little bit about your property.” People are emotionally connected to the homes they live in. Now that they’re renting it out, they want to know that you’re interested and that you care. It’s a great question to use when you’re jumping into the discovery phase.

Caller: Well it’s three bedrooms, one bathroom with a separate toilet. We bought it about three years ago, and it was an old hoarder’s house. I own a building company so we renovated it. There’s a new bathroom and kitchen, it’s insulated and painted. Obviously, we planned on living there for some time, so we didn’t want much wrong with it.

Ryan: Does it have a garage?

Caller: Yes, a large garage. It’s sort of a single plus workshop garage. It sits on a large property, about 680 square meters I believe. There’s a private courtyard in the back that’s fully fenced. There’s a heat pump. It doesn’t have an HRV.

Ryan: I can look at some details online, but I always like to hear about it.

Caller: Yeah, the online pictures just don’t do it justice.

Ryan: Sure, if you’ve renovated it, I’m sure it’s quite nice

Caller: Yes, we have a concrete driveway that goes all the way up and a footpath. It’s all groomed.

Ryan: I’ll do some work on that and I can give you a call back tomorrow with an appraisal.

Caller: Perfect.

Ryan: And we can give you an appraisal that is satisfactory for the bank.

Alex: And at this point in the call, most people would simply give up. You have the address and some information about the house, and you’re going to give this person an appraisal that’s required by the bank for a new home they want to buy. Most people would say goodbye and get back to them the next day. But, Ryan doesn’t do that. He continues.

Ryan: It goes without saying that we’d love to manage the property for you, but we can keep in touch about that. What’s your email address? Do you have any idea about what we do here?

Caller: Well, what kind of rates would I be looking at for the property management of that home? Is it done by percentage?

Ryan: Yes, it’s done by percentage which is great because it gives us plenty of incentive to get the property rented as quickly as possible to a very good tenant. We only get paid when rent is paid on your property. Our going rate is about eight and a half percent. We’re a little different in that our owners get a free rental guarantee, which means when we put a person into your property….

Alex: Let’s talk about what’s happening here. By doing discovery and satisfying the prospect’s initial request, which was an appraisal, Ryan earned the right to present his company as a solution to this person’s rental home. Right away, you hear the differentiation that he introduces during his presentation. He explains why they’re different. That’s a great way to make sure you introduce points of difference and why you are the best person to earn their business.

Ryan: ..and if the tenant misses a rent payment or is late with rent, we still pay that rent to you. It’s a promise we give because we’re really good at collecting rent, so we put our money where our mouth is. If we find good tenants and we want to put them in your property, we have to back that up.

Caller: Despite what the bank needs, like 620, realistically we can cover our mortgage quite well at a lower rate.

Ryan: Yeah, they want you to be able to cover your payment by 1.5 times. It’s what they do. The other thing we do is we do meth testing at the beginning and end of the tenancy. That’s not because we’re picking people who do meth, but because every corner of society is now misusing it, whether a banker or a builder or an engineer or whatever. We do that test right in front of the tenants so they know we’ve tested the property.

Caller: That makes perfect sense, so they can’t say you manufactured anything.

Ryan: The other thing we do is to help with smoke alarms. This year, they became mandatory in all rental properties, so we make sure you comply and every year we test it and give you a certificate to state you have working smoke alarms.

Caller: That’s really positive, yeah.

Ryan: And, we ensure your property is looked after by inspecting usually every quarter, and then we send you a report. It’s about 17 or 18 pages with a lot of high quality photographs. We just want you to know what’s going on. The owners like to see the inside of their properties.

Caller: That sounds really good.

Ryan: I’ll include a booklet and an e-book that tells you everything that we do for you, so take a browse through it, and I’ll send you your appraisal. We’d love to manage your property and find you some great tenants for when you guys move out to _____.

Caller: I really appreciate it. You’re actually the first company I’ve run into, so that’s fantastic. Thank you.

Ryan: I’m glad. I’m a second-generation property manager. I rented out my first property when I was 19, and now I’m in my 30’s, so I’ve been doing this for a while. I’m also the owner, so I put a big emphasis on inspections.

Caller: I appreciate your time, and I look forward to working with you.

Alex: So, let’s bring it all together. What do you think is the likelihood that Ryan will get this deal? Pretty high. So, let’s examine what he did and how he did it to get to this outcome.

Identify Yourself

Pick up the phone and identify yourself. Be friendly and then just listen to what the person has to say without interrupting. Get the contact information and ask how they found you without digging too deeply into it. You should let your tracking do the measuring if the lead came from the internet. You’ll know if it’s from AdWords or your website or some other source.

Discovery Phase

Next, you want to gather information. Ryan asked the caller to tell him about the property. That means so much to the other person. Most of us don’t realize it because we’re so much into the business. Sometimes we assume things. That really does a disservice. Every customer and prospect should be treated like the only customer you’ve ever had. What if every customer is your only customer? How would your attitude and your approach change? Treat it as such.

The Presentation

After the discovery process, you get to start your presentation. Ryan did an amazing job of quickly putting three key differentiators of his company. He explained them and connected the why. The first was the rental guarantee. Why is it important to this caller? Because he needed to guarantee 1.5 the amount of his mortgage payment. That was a qualifier. The rent guarantee gets him there.

The next thing was the meth test. Maybe it’s not as relevant in the U.S. but in New Zealand, it’s a huge factor. So, they are on top of this problem and doing this test for the tenants pre and post tenancy. This is a unique value proposition and it speaks to the FUD that a new landlord might have – Fear, Uncertainty, and Doubt. It’s realistic. The reality is that a meth user can destroy the property’s ability to make money in the future. Finally, he mentioned inspection reports and he told the caller that based on the size of his house, he could expect a 15 or 18-page inspection report. You could even offer to send a sample inspection report. There are also probably some nuggets in Ryan’s book as well.

When he closes the phone call, he says he will send the appraisal the bank is looking for, and he’ll also include an e-book with all the details describing the service he provides. At this stage, the fee that Ryan brought up is not really a problem. He focused the discussion on how he earns that fee and why these issues are important to the prospect even though he did not know about these things.

Ryan was the first person he called, and I think he’ll be the last person he calls.

End with Experience

Ryan ended the call by talking about his experience in the property management business. It shows that he knows what he’s doing. If you’re the salesperson and not the owner, you can still say “we’ve been in business for five years and we have these awards and manage this number of properties.” Prepare your close with the experience that differentiates you. Then, the caller knows that you speak and listen well and you’re qualified to do this kind of work. At the end of the call, you know it’s likely that this is going to turn into a management contract.

We run Google Ads campaigns for property management companies, and we track these calls. We provide customers with a recording of every call, even if it’s a missed call or a voicemail. These are useful tools to train and coach your team. You can sit down and do reviews with your staff. It’s phenomenal what you’ll learn.

At Fourandhalf, we have a tradition of doing “Breakfast Clubs”, which is an hour-long meeting every Monday morning. We learn something new each and every week! Something like this would be a great opportunity for your staff in a staff meeting – go through the specifics and make sure everyone is trained.

We hope this helps you get better and close more deals. If you have any questions, contact us at Fourandhalf.

The post The Anatomy of a Successful Property Management Sales Call appeared first on Fourandhalf Marketing Agency for Property Managers.

For this episode of the Property Management Show, we provide answers to sales questions about growing a property management business. This was done as part of a live segment at the recent PM Grow Summit in West Palm Beach. Along with Alex Osenenko, we bring in three experts who have already built high-growth property management companies, or have closely tied experience within the property management industry:

• Deniz Yusef – Gained 900 new management contracts over a 4-year period. Mentors agents across the United States, Australia, and New Zealand as The BDM Coach.
• MaryLou Tyler – Founder of Strategic Pipeline, a Fortune 1000 outbound sales process improvement consulting group. She is also the author of Predictable Prospecting: How to Radically Increase Your B2B Sales Pipeline.
• Jordan Muela – CEO of LeadSimple and ManageMyProperty. Co-Organizer of the PM Grow Summit.

All questions and answers were compiled live at the event from real property managers. Below we have the transcription of the panel.

Q. [1:54] Deniz talks a lot about live presentations and showing up to present to a client at the home. How do you modify that if you’re out of the state or even out of the country? – Bob, Alarca Property Management in Charlotte, NC

Deniz: I love this question, and showing up to present to a client at the home they want to rent out is really important. If you’re out of the state or out of the country, you have to use technology. Skype sessions make it possible to do a face to face presentation if your client is not local. Book an appointment, and send your information in an email ahead of time, and then go through everything. You can’t necessarily walk around the property with the client, but there are ways to work this out. You could do this through Skype and Google Hangouts and Facetime, and you can still be face to face with your client. There’s no excuse to not getting in front of a client in this day and age. You can engage and win their business by looking into their eyes and getting in front of that client.

Q. [3:26] Why go through the trouble of tracking sales activities if you already know the results? If I know the outcome, why go through all that hassle?  

Marylou: First of all, it’s not a hassle. You may know how many properties you’re closing, but it still matters that you track that activity. It’s fine tuning the process of getting from that initial conversation to identifying the opportunity and gaining the business. It helps you to close the lag time and note what pain point or challenge you could overcome for the client. Tracking sales activities can create a shorter sales cycle and helps you identify on what’s working and what isn’t.

Q. [4:21] I like what Deniz talked about in his presentation and my question is, how long or how much time should be spent at a presentation when you’re at a home? – Chris, Rent Pros Property Management in Sacramento, CA

Deniz: Give yourself about an hour and a half for the presentation. It may sound long now, however you want to be deliberate enough so you don’t go back and do a second presentation. It’s not very efficient to set multiple appointments for one door. Give yourself that full 90 minutes to plan and spend with a potential client. You can go to the property and do your presentation in that timeframe because before the meeting, you will have asked the important questions already. Make sure you can overcome every objection that you might hear. So, work on your presentation skills, practice, record yourself on the phone and really put together a great presentation. You’ll be surprised at how fast that hour and a half goes.

Marylou: There’s a process at the front end that needs to be in place. You want to do your qualification process and keep track of the client and the property before you get to the presentation.

Q. [5:56] Here’s a situational scenario. Let’s say I run a 200-unit property management company, and I do all the sales myself but I’m ready to hire a Business Development Manager (BDM). What are the first things that I do to structure the process so when that new BDM walks in, so there’s something for them to do? Simplify the first steps.  

Marylou: You need to immediately map out the steps for your sales process from the first conversation to the first visit, whether it’s remote or on-site. Look at the key milestones along that way so you can see the actual steps that create forward movement into your pipeline. Have those mapped out so you’ll know how long it takes, how many people you need to go through, and all the other details. That will shape the daily life of a salesperson doing this on your behalf.

Deniz: Have strong systems and procedures in place in your office. Even if you are starting your property management business, have the infrastructure in place to handle growth. You don’t want to have Band-Aids all over the place because you weren’t prepared. Show that you’re prepared for the growth and the handover to your BDM. When you talk to the BDM, get them to understand the process so they know how to sell your services. So many people in that role don’t know why the office is advertising or marketing the way they do, why they collect the rent a certain way, why they evict tenants or how. They need to know all systems and procedures of the office so when they have an opportunity to pitch for the business, they can explain everything and talk about the mistakes that were made and the knowledge that was gained.

Q. [8:34] For us as property management company owners, looking at marketing and advertising options, what kind of ROI should we look for based on your data? What’s the best baseline? – Duke, Dodson Property Management in Northern Virginia

Alex: First, you have to take a pulse on your existing business. ROI depends on the channel, such as Google Ads or referrals. Create a benchmark for each channel. Even if you’re only business is through referrals, out of ten referral leads, how many of those do you convert? Look at where those referrals come from and move from there. Once you have the pulse, line up your benchmarks, put it on a spreadsheet and set goals for each month. Every business is different. What works for you on one marketing channel might not work for another property manager, this can be attributed to your location or other factors. Set your benchmarks and goals, track your data, and see if you hit them.

Marylou: Every channel should be accountable down to the penny. So, you can see where you should put your marketing dollars based on your current clients or your ideal client. There’s a waterfall for outreach. There’s a crawl, walk, run stage. Usually, within 6 to 9 weeks we have something crawling and something walking. You can see your ROI in as little as three months with most marketing channels.

Jordan: Another way to frame it is by tracking time to payback. If it’s longer than 18 months, that’s unacceptable. If your time to payback is six months, you’re doing really well. You can also look at your customer acquisition cost and lifetime value ratio. Getting that at a 3:1 ratio is really the upper limit of what will be profitable. That’s what you can look at in terms of ROI. It can tell you your cost per lead and you can create a target.

Q. [11:34] Deniz mentioned sending videos out to prospective tenants and investors during the sales process. One of our difficulties is implementing a fail-proof process. What tools do you recommend with text messaging videos to make it more streamlined and efficient so we are sure it goes out every time and isn’t necessarily dependent on a BDM or a salesperson? – Michael, Real Property Management in Salt Lake City

Deniz: Sending text videos out to prospective tenants and investors during the sales process is an important part of preparing them for your presentation. A tool like VirtuallyinCredible can set it up for you. Doing video for sales is/should be a part of the job, simply because that is where technology is headed. This goes for creating content as well. Have that YouTube channel optimized to your website so everything works together. Some people prefer to read and don’t like videos. Make sure you cater to everyone just so you won’t miss out on anyone.

Q. [13:41] During a listing presentation, when you get towards the end, how do you transition into the potential closing? You want to get through the documentation, and there’s a bit of awkwardness after you’ve given the speech and it’s time to sign. – Brad, RentWerx Property Management in Austin, TX

Deniz: After you’ve made your presentation, and you’re at the end, how do you transition to the close and get your management contract signed? When you’re about to go in for the ask, re-visit the pain points that you discussed during the presentation. If your prospective client expressed concern about the type of tenant that would be moving into the property, re-iterate that question they had, and ask if they are comfortable with the way you said you’d handle it. Go through it again if you need to, and then ask if they are happy with the way you would manage the investment property on their behalf. You’ve brought up the hot points, so they’re going to say yes. Then, you can explain that you’re going to discuss the authorization form with them. You don’t want to push it on them, but you do want to go through the contract and leave it with them. This explains all the processes of property management. They have to agree to all your services and by this time, they are ready to have you take over the management and find a suitable tenant. It works almost every time.

Alex: This illustrates why the discovery process is so important. You have to ask the questions and listen so you can fish out the real pain points. They will realize your value when you go through their pain points and offer your solutions. Usually, you’re at the point where they’re ready to sign. If there is friction or something you have to come back to, you won’t get the signature at that moment. But it’s a natural process, and if you’ve done more listening than talking, you should be able to close that deal and get that signature. Use your tools. They will be ready to sign when you can help them.

Q. [17:51] I’m in New York City, where we have over a million buildings, and a lot of property managers. There are 20 people just like me in every corner. I’ve had to do sales pitches in front of a board with three other property management companies in the room with me. How do I compete in this market? – Abdullah, NewGent Management in New York

Marylou: The thing is, there aren’t 20 people just like you. If you need to compete in a market like that, you need to differentiate yourself. Dig deep into why you matter and what sets you apart from everyone else. Be able to explain why people want to do business with you. Focus on the reasons people should change property management companies and work with you instead. When you take the time to do this, it won’t matter how many other property managers are out there. Once you get that core essence of who you are, it will propagate through all your messages and videos. It bubbles up and resonates with your audience.

Alex: Branding is important as well. Go back to the basics. The power of content can really work for you because it gives you a chance to educate people and be a teacher. How many of those other property managers in New York City are educating and being open about what they do, how much they cost, and why the properties they manage are so successful? Probably none of them. So, stake that one corner and be the authority. Figure out what your ideal customers are asking, and answer those questions. Record 20 videos and use the content in your emails, texts, and brochures. You also have to ask for the business. It’s that simple sometimes. Talk to your current clients and find out why they chose you. It’s an eye opener. A lot of people see themselves one way but their clients see something else.

Have any questions about growing your property management business? Contact us at Fourandhalf – Internet Marketing for Property Managers. If you enjoyed this episode of The Property Management Show, be sure to subscribe on iTunes, and YouTube to stay up to date on the latest episodes!

The post Property Management Sales Strategies – PM Grow Summit 2017 Panel appeared first on Fourandhalf Marketing Agency for Property Managers.

Today, we’re talking with Brad Larsen, Founder/Owner of Larsen Properties in San Antonio, about The Top 10 Property Management Mistakes and How to Learn From Them. These tips will help avoid the pains of growing a property management business. We are excited to bring in Brad, who:

• is a retired army captain.
• earned a master’s degree in business administration.
• runs a property management company in the ultra-competitive San Antonio property management market.

Larsen Properties started in 2011 and has already emerged as a market leader in the San Antonio area. Brad will share 10 mistakes that he wished he had known about when he first started Larsen Properties.

#10 – Waiting Too Long to Hire Business Development Talent

Larsen Properties waited until they reached 250 homes under management before hiring a business development manager for their company.

Brad was first introduced to the idea of hiring a business development manager from the Leading Property Managers of Australia. This is one of the first things you must do if your intention is to grow. As a business owner, you are doing so many things from payroll to operations that you simply cannot commit to dealing with 4-5 appointments/week. Also, Brad recommends on not waiting too long in implementing a solid CRM platform, like LeadSimple, to systemize follow-ups to help your property management company. Combining those two areas will help your business development manager effectively do their job, as well as you being able to passively oversee the activity that is going on with your lead generating efforts.

Think about compensation as well because your model needs to be sustainable. Do a base salary and a percentage or a commission based on the lifetime value of that client. You want a motivated sales person, not a converted Realtor.

A great tip to convert a higher rate of deals is to consider having a portfolio manager go with your business development manager to appointments so that the potential client can meet the person who would be their point of contact. That helps a conversation start about tenant handover procedures, what will happen to get a home ready for the market, etc. Speaking the language is important, and the prospective owner will appreciate talking to someone who will actually manage the property.

Larsen Properties recommend that 100 homes is when you should start to seriously consider hiring a business development manager. At that point, you have more than enough to manage and you have enough income coming in from management agreements that can help you pay for that talent investment.

#9 – Not Establishing Metrics Early

Larsen Properties started a spreadsheet a few years ago that helps them track metrics

Track your metrics religiously every month. You can make adjustments quickly and discover where you are spending incorrectly. Key performance indicators (KPIs) that Brad likes include:

• Staffing to revenue ratio – staffing expense costs compared to annual revenue. The magic line in the sand is around 50 percent, and it might fall between 40 or 60 percent. If your total revenue is $1 million and your staffing expense as $500,000, that’s half of your revenue spent on staffing. It’s where it should be. Smaller companies can run their staffing at about 40 percent. If you’re above 60 percent, you want to look at that metric and see if you’re spending too much on staff.
• Sundry income to management revenue ratio. Sundry programs are small programs like eviction protection, early termination fee, late fees, rental guarantees, and any other things you may have against your management fee revenue. In Australia, it’s tracked at .25. So, for every management dollar you earn, you could/should be earning an additional 25 cents of additional revenue. At Larsen Properties, they’ve managed to earn 70 cents on every dollar above and beyond their management and leasing fees.

Pro-tip: One of the ways Larsen Properties is able to earn 70 cents on every rental revenue dollar is by charging a pet administrative fee. That covers the property manager’s ability to cover any damage that a pet causes above and beyond the security deposit. It’s a creative way to earn that sundry income.

#8 – Not Joining NARPM Right Away

It took Brad 2-3 years before he got really involved with NARPM

NARPM – the National Association of Residential Property Managers – provides resources, leadership, and mentors. A lot can be learned at broker-owner conferences and other events. You learn how your peers solve common problems in innovative ways. Check out NARPM.org if you’re not a member yet. There are state chapters as well, which provide excellent speakers and opportunities. You also get face time with vendors, which helps you get to know the people behind a product/service.

#7 – Not Establishing Enough Points of Difference

You need to create some points of difference between you and other companies. It should be easy for you to attract a specific category of clients who have a unique need; you can be the company that:

• Has an in-house maintenance company.
• Does videos that no one else does.
• Offers an eviction protection program.
• Works in a specific part of town.
• Offers a single point of contact. (Larsen Properties’ point of difference)
• Specializes in working with investors.

As you can see, there is probably something you already offer that the rest of your competition does not. There has to be a way to create a point of difference between you and your competition that will set you apart from everyone else who is managing homes. At Fourandhalf, we can personally attest that companies that are able to differentiate themselves with a unique value proposition usually see the best results. Work out how to differentiate yourself, especially before you launch a big property management marketing plan. (This is something Fourandhalf can help you with.)

#6 – Making Bad Hires

Brad admits that his strong suit is not in hiring people.

At some point, everyone will make a bad hire. The old adage, hire slow and fire fast, holds up, however, there is no perfect solution. A few ways to conduct interviews is by:

1. Do a panel interview after the initial telephone interview. Have your general manager and one or two other employees interview prospective new team members, and have a discussion about who to hire.
2. Turn the process over to someone else who will be good at hiring the right people.
3. You can also use a PEO, which is a payroll provider company that contributes HR help. You’ll get benefits at a much better rate.

There are performance concerns and culture concerns. Low performance is easier to measure and coach. A culture fit can be more difficult to address. That’s where having many different people interview a prospective employee can help. You want to understand the personality and make sure there’s a drive and a competence that will help your company. To put it simply, you want to hire people who care.

#5 – Dealing with the IRS

Larsen Properties kept getting hit with fines before instilling quarterly audits to keep things accurate.

Make sure your 1099s are in order to send your owners every January. Go through your process, make sure it’s watertight, and make sure you have good taxpayer identification numbers for the people you manage because the IRS will fine you on every incorrect one. This can be a headache. Larsen Properties tempered these fines by instilling quarterly audits to help keep things accurate.

You also want to file all your tax returns for your LLCs, if you have those set up. When you have an LLC with no revenue, it can be easy to forget to file. Get a good CPA who can manage this process for you. What seems like a little thing can lead to a huge IRS fine. A good bookkeeper will save you money.

#4 – Handling Vendors/Maintenance

Larsen Properties had to downsize their maintenance department to be more profitable

Everyone is going to have to do maintenance and there are different ways to handle it. If you run an in-house maintenance company, stay small or go big. Don’t be in the middle because you won’t make money. An in-house maintenance guy with a van might be all you need and that is what Larsen Properties does with a portfolio of 600 doors. The middle is having two to five staff members working on maintenance. The reason this didn’t work for Larsen Properties, is that over the course of a year, you will have downtime and it will kill your profits. Keeping all your staff people busy full time when you’re a medium sized maintenance company won’t work. If you have 15 or 20 maintenance trucks out on dispatches all the time, you’ll make money. However, the middle range is not profitable.

Talk to vendors who you’re looking to hire and secure discounts from them. Most software programs allow you to pay vendors a discounted rate. You have to negotiate that rate. Maybe you get an invoice for $100, and you have negotiated a 10 percent discount with a vendor. So, you write a check for $90, and now you have a 10 percent margin of profit just by doing that one thing. It can work up to thousands and even hundreds of thousands of dollars. Maintenance and management go hand in hand, so a preferred vendor list will help you from the very beginning.

#3 – Not Embracing Yelp and Google and Review Sites

Larsen Properties has a 4.8 average with 160 5-star reviews on Google

Make sure you’re present on Yelp, Google, Angie’s List, the Better Business Bureau, and any other review site available to you. Get past the point that you’re mad at Yelp. Everyone complains that anyone can say anything about you on Yelp. Turn your attitude around and embrace the review platforms. In the long term, they will probably be white noise. People will put a diminishing value on them, because at some point it all evens out.

Right now, you want to embrace review sites and make yourself stand out. It’s another good point of difference to have great reviews. Most of your clients and tenants are happy, but they won’t review you without you asking.

#2 – Failing to Implement

Brad learned quickly that by not implementing new and innovative ideas, that he would be losing money.

This is almost the biggest mistake you can make. If you fail to recognize a good idea and use it in your business, you’re missing a huge opportunity. If you see something at a conference and it sounds like a good idea, but then you go back home and forget about it, you’re making a mistake.

For example, Larsen Properties learned about tenant liability insurance at the Minneapolis National NARPM convention. He learned how one can earn thousands of extra dollars a year by implementing a program like that. It was a no-brainer. However, if he hadn’t implemented that immediately, he would have been out thousands of dollars over the past couple of years.

Write things down with a pen and paper. It can be easy to take notes on your phone, but writing something down physically is a tactile response and it will stay in your brain. Then, organize those thoughts later on and you can get to work. Complete the things that will make you more revenue.

#1 – Utilizing Set-It and Forget-It Instead of Measure and Improve

Good companies can fail in growth by thinking that they will hire a marketing company and stop thinking about marketing. Or, maybe they’ll implement Appfolio or Rently and think they don’t have to do anything more. Business growth requires that every system is always providing measurable indicators. Make sure your employees are responsible for certain aspects of your business and you can compensate for performance. Everyone should be aligned behind a single purpose. Manage your process and make decisions about how to improve your systems on a regular basis. Pick up on what’s out there, then come back and put it into your system. That will get you to a new point. Implementation is critical.

These are 10 major property management mistakes that you want to avoid making. If you enjoyed this topic, make sure to subscribe and leave a review for The Property Management Show on iTunes. If you have any questions about growing your property management business, feel free to contact us at Fourandhalf.

The post Running a Property Management Business: Top 10 Mistakes to Avoid appeared first on Fourandhalf Marketing Agency for Property Managers.

Our guest today is Jason Goldberg, who is a life coach, international best-selling author, a speaker, and just a great human being.

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Q: I have your book here, Prison Break, and let me set the stage for this podcast. I want to use our time today to get some deep wisdom in a fun and non-pressure environment. I also have a selfish purpose here, and this is it: for the last six months or so, I’ve been looking for a business and potentially a personal coach to help me and my team elevate to the next level. I’ve never done a coach interview for myself, so I’m hoping to use this as a discovery mission. Hopefully business owners in my shoes right now who need inspirational leadership from a coach can find this to be a helpful tool. How does that sound?

A: I love that. The only thing I care about doing in life is being of service, so let’s create an intense and massive service for you and your listeners.

Q: I’m defining service as the purpose of life. It’s such an immense satisfaction when you serve someone other than yourself.

A: Yes, but serving others is the most selfish thing we can do in the world. Anyone who tells you they serve others out of the goodness of their heart is lying. The reason being is we can’t help but to feel good about ourselves when we help others. And that’s okay – there’s nothing wrong with contributing, making the world better, and feeling good during the process. It’s an incredible feeling.

Q: You have coached a lot of people, and you have this element of knowledge where you can look inside someone’s brain and help solve their problems. How do you help business owners define what they want? It seems like such an evasive thing. I don’t even know what I want. How do you help people do that?

A: Trying to answer that question becomes this intellectual exercise and one more thing to do on the to-do list. I am a fast person, and one of the biggest transformations in my life was to slow down. That doesn’t mean you don’t still work hard and hustle and do a lot of stuff. I still do a lot. But what I do differently now is I don’t allow the outside chaos of the world to impact the inside chaos of my mind. When you ask a question like “what do I want?” – if you’re trying to answer it from the head space of needing to figure it out, it won’t come. It can’t be pressure-filled and serious. Settle and slow down your thoughts, and mentally close your eyes to visualize it.

Picture a snow globe with a base and a glass and all the fake snow and liquid swirling around. When you shake up the snow globe, it’s beautiful from the outside. People love it. But think about it from the inside looking out. If you were inside the snow globe looking out, you’d freak out. You can’t see anything except the swirling flakes and liquid, and you just want everything to slow down. So, we are inside the snow globe and in that place, we can’t answer the question – what do I want? You can’t see the possibilities. You need to let things settle.

Q: What is it? How do you settle down a snow globe?

A: You have the snow settle by putting the snow globe down and stepping away. When it’s not being agitated, it’s calm. So once everything is calm and the snow settles, you’re inside this glass globe and you can see all the possibilities. When you’re wondering what you want, don’t answer from a place of chaos, but look inside, and settle down and allow yourself to figure out what you want. Look at it through a different lens.

Q: But you have to be purposeful in terms of looking for that answer. Putting things down feels like things are going to be ignored. I’m walking by the globe, but not paying attention.

A: Anything I know is from screwing up. So, you may think you’re walking past the snow globe and ignoring it, but you’re still in the chaotic mind space. Once you slow down, you can figure out what it is you want. Ask yourself what your ideal day looks like. Just an ordinary day, not an amazing day. This is everything from morning routine to how much time you spend with your family to the time you have for exercise or reading to what you do with members of your team to develop them to the time you’re out in the world to your at-home time and the meals you’re eating and the time you go to bed. All this really matters; you have to figure out what your ideal average day looks like. It’s a great first exercise, but the real thing that transforms business leaders is to look at that and decide who they need to be in order for it to be the average day. Who do I need to be? What do I need to cultivate to make that happen? Is it more courage, creativity, empathy, presence, what is it? Everyone knows what is holding them back. That’s something everyone knows, they just don’t give themselves the time and space to figure it all out.

Q: One of the most influential people in my life is Albert Oaten, who was a VP at a company I worked for. He was amazing at this one concept. He always asked “what does success look like?” He asked that about everything, and instead of engineering things as he goes, he actually visualizes them. He helped me to learn that practice, to visualize what the success looks like and then work backwards to achieve it. Is that similar to what you’re talking about? Visualizing your ideal day and writing it down to make it happen?

A: Yes, that’s the doing. There are two parts to success in my mind. It’s the being and the doing. We do ourselves a disservice when we focus only on the doing. I was speaking to a large Fortune 500 company about my plans to speak to their people, and they wanted me to come to a conference. They wanted the first half of the day to be devoted to talking about strategy and practices and hiring talent and social media, and more strategic doing things. Then they wanted me to talk about self-leadership in the afternoon, and I told them I had the perfect name for my session: Why What You Learned the First Half of the Day Will Never Work for You. It’s not that the doing is worthless, but if you don’t focus on who you’re being in the moment and your own level of calmness and connection and creativity and relationship with others, the best strategies in the world will do nothing to grow your business. And even if they do grow your business, it will be done with such a heaviness and force that you’ll never enjoy it. You’ll resent your own success.

Q: Let me ask you a rapid-fire question that may seem silly: how often do you get your haircut?

A: Usually every two or three weeks. My wife trims up the back of the neck and she’ll also trim my part.

Q: You always look sharp in your Facebook Live sessions and I imagine you travel a lot. Is it normal to feel bad between haircuts? I don’t feel great between them.

A: That’s not so silly. A dear friend of mine, Shawn Stevenson, has this practice that he calls the When Life Works list. It’s a list of when life works. There are 15 or 20 things on there, and when he’s doing them, his life just works. I would invite everybody to sit down and ask themselves: when your life is working, what is going on? What are you practicing and what are you doing? There might be 20 things on the list, and as long as you are doing two or three things on that list, life is working. One of the things on my list is to have a fresh haircut. So, I know that when I have a fresh haircut, my life works better.

Q: That’s pretty interesting. I feel like I blunder through it, and just try to help everyone around me. And not go insane. But I like the Life Works list. Here’s a more substantive question. As business owners, we need to tell good stories. It’s podcasts, blogs, conversations with associates and employees; you have to be a good storyteller. Jason, you do Facebook Live sessions and then you surprise me with the depth of these everyday situations that you convert into life lessons. You seem to shift your mind to perceive life differently and get lessons out of it. I used to be a good storyteller. Then when I was 18 years old, I read Dale Carnegie’s How to Influence People. It made me who I am today. But I realize now that I over-corrected. I stopped being interesting and I started looking for other people to be interesting. How do you practice storytelling? Give me some wisdom.

A: Business owners have to create relationships, especially today where social media has removed all geographic barriers. Intimacy with people is the new currency, I don’t care what business you’re in. It could be property management or a yogurt shop. The way to be successful is not your advertising business or dominating your local market. It’s about truly connecting with people online. Storytelling has grown and is needed for all entrepreneurs, whether they are looking for investment money or sharing a message with the world.

I am always looking for unrelated instances that are actually clues pointing me to some place that I need to grow. When I can find that for myself, I know that I am not special. Anything I am struggling with; millions of people are struggling with the same thing. We can be intentional about looking through our day for material to use for storytelling. You don’t have to be Tony Robbins or go to some special school. Just be intentional about looking for lessons in your day. Any small nugget will work. Not everything you share with the world has to be revolutionary. Tell a story that is evolutionary. If you believe one thing and then you hear a story that makes you think something different, that is evolution. It helps you and it’s better than sharing the greatest story in the world. Slow down, see what’s happening in your own life and be evolutionary.

Q: We have customers who can’t get away from a perception of perfection. If we ask them to film videos and get their story out, they feel very incapable of delivering even if they’ve been in business for more than 10 years. How do we help people go beyond this barrier?

A: It’s so simple. I struggled with this in the beginning. Public speaking is the number one fear of so many people. I get nervous every time I go on stage or do a video. They key is simple and illustrates why the being has to come before the doing. The shift is that when you’re too worried about being perfect or being in front of the camera, you need to shift from a place of ego to a place of service. It’s that simple. If you tell me I’m afraid to be on camera and I’m afraid to share my message, and I tell you that a woman will be watching this who has only two weeks to live because she has terminal cancer and all she wants to do is watch someone talk about what they really care about on camera, would you do it? She isn’t a business owner and she isn’t going to buy anything from you, she just wants the relief of watching someone talk about what they really love. Can you help her with that? In that moment, of course you can do it. Why wouldn’t you. That’s the shift from it’s all about me to it’s all about them. Shift from ego to service. Just show up.

Q: That’s incredible to use that perspective. It is ego. You’re afraid to be judged. It comes down to caring too much about your own self rather than putting information into the world and helping others. If you own a Chinese restaurant and a next door a competitor lowers prices by 30 percent to squeeze you out, what do you do?

A: That’s awesome because now they’ve created the ability for me to create a distinction. I’m not going to compete on price; even if I could do that, it’s not sustainable. The race to the bottom is never sustainable. So, I want to up the service level and up the experience level. I want people talking about my restaurant so much that the people next door could be giving away their food and people still won’t go there. There are a ton of different ways to do that. The biggest thing to do is bring creativity to this exercise. How can you create an experience? I want to maybe create some level of exclusivity. Let people feel special when they come into my restaurant. If I want to position myself as a premium restaurant, I might remove half the seats from my restaurant right away. It sounds ridiculous – why would I take away half of my revenue? But as soon as I remove half my seats, it’s 50 percent more difficult to get a seat at my amazing restaurant. And the people who do get in, they will be so grateful they got in, that when I deliver – and you have to deliver – I will create an experience not to be forgotten. You’ll be able to tell people every day that you’re sold out, and word will get around. Then, you can start adding five to 10 seats back in every week, and you’ve earned more business without raising your own prices.

Q: Go for scarcity, deliver a great product, and get the message out.

A: The key is, you have to have an incredible product. These aren’t tactics or strategies. These are ways to help people experience how good you are. When Steve Martin was asked how he got so successful, he said he did the work and he got so good at it that people could not ignore him. That’s how we want to be in our businesses. We want to get so good that people can’t ignore us.

Q: Gamification is a topic in your book. How does it help and how can business owners do it? We run a serious business, and property managers have tenants looking for good places to live and owners who want to earn rental income. How do you introduce gamification and make that work fun?

A: I like that you called your business “serious.” If I was your coach, the first thing I would ask is what that means and I would ask you to prove to me that the work you do is serious. I think you’d have a hard time doing it because unless someone dies from something that happens, not many businesses on this planet are serious. We believe that they are, and if we look through the lens of everything being serious, then everything will seem serious and it’s hard to implement things like gamification. So first, allow yourself to relax and see the possibilities of how you can have fun.

Last week, I had things I had to do that I didn’t want to do, and there are different techniques and strategies I could use to help myself. So, I was making lists and following my strategies, but then I realized that I don’t have to do any of it. I can stop all this and go get a job at Starbucks. So, I realized I can either find the fun and the enjoyment and the possibilities or I need to stop complaining and go get a job somewhere else. And this isn’t to beat myself up or make myself feel bad. It’s to create a sense of freedom and empowerment to see that I am choosing to do these things and that I have the ability as one of the most creative beings on this planet as a human to make everything more fun.

Gamification comes into play because we love games. I don’t have kids, but I have nieces and nephews. If you tell a kid to clean a room, they will pout and scream and cry. But when picking up your clothes becomes a basketball game, and you’re tossing clothes in the hamper, they are more likely to do it. We stopped playing games because it has been conditioned into us that the workplace is serious and not a place for games. Whatever your biggest challenge happens to be, you can create some friendly competition or games to address it, no matter how absurd it may seem. Create games around your biggest challenge, and it immediately becomes more fun.

Q: We manage people’s growth, which is serious. We have to deliver. So gamifying systems and goals is something I haven’t spent enough time thinking about. But I have thought about the jobs I really enjoyed. A lot of it was when things were interesting, and when there was a fun environment. When things stagnated and people became serious, it was dreadful to work.

A: So, you know what that feels like. And the distinction in that chapter of the book is game versus shame. You can’t fix things through shame. Let’s play with this for a couple of minutes. What is one of the biggest challenges Fourandhalf has? Let’s see if we can gamify it.

Q: One of the biggest challenges is the perceived notion of work. If our customers don’t see us doing anything, their presumption is we’re not doing anything for them. So, the business owner knows they are paying us $500 or $1,000 a month and they don’t know what they’re getting. They don’t see us doing specific things on a daily basis. They’ll call us and ask what we’re doing for them. As you grow, that becomes intense. That’s something we struggle with and we need to solve. How do we gamify that?

A: That is a communications issue and an agreements versus expectations issue. So, we probably can’t dive into the distinction between expectations and co-creations, as I call them. I get the difficulty of not having a physical deliverable. That can make it hard to justify the cost, so there are fun ways to gamify the communication aspect of this. The first thing that popped into my mind is an opportunity that 99 percent of service providers miss. Every single correspondence that a client gets from you should raise their level of consciousness and raise their spirits. They should see an email from you in their inbox and be happy. That’s something we don’t slow down enough to think about.

Before we send an email, ask how it will make the person’s day five percent better. It can be a joke, but it doesn’t have to be humor. There are four elements to the perfect correspondence. The more of them you have, the better. One is humor, one is value, one is possibilities, and one is curiosity. If you just slow down before emailing a client to find out if you are providing value, invoking curiosity, or helping them see possibilities, you can decide whether you really need to send that email. Do you ever get holiday cards or letters from people? Friends and family tell you what’s been going on over the last year. That’s fun. It’s like a year in review. So, what if your dedicated account managers were to send correspondence through that lens. Here’s what’s going on in our world, and here’s what we’ve been doing for you over the last two weeks or three months. Don’t just do a check-in. No one forgot about you and if they did, you aren’t serving them, so stop with the check-ins. Give actual value when you’re sending an email. Share an article about a new thing you’re researching for a company. Just give them something – a possibility, a value, a humor, and they will never again question where their money is going.

Q: That’s good. We do a weekly breakfast club where we learn together about a concept or hear a podcast and I think that will be our next breakfast club meeting topic. We can deliver additional value to our communications. Our clients have the same challenge. Their owners don’t hear from them until something goes wrong. As service providers, we are doing a lot of work but we don’t have good ways to communicate it or show it. Instead of focusing on property management as a negative business and worrying that all our clients hear are complaints, we can focus on delivering the highest customer experience. We can remove half those chairs from the restaurant and still grow. I like that explanation. Our challenge is to get to the filming of blogs. Our content sets the foundation of everything else we do. Content is an essential and foundational piece, and we can’t get people to that stage for filming. The ego versus service answer you gave earlier helps us add value to those communications too.

A: Service is really the way to go, and one of the core tenants of my business is a concept of Client Astonishment. I talk about creating clients, not finding them. You must transform some part of their life. If you have a business, you are trying to transform someone’s life or business. So, a lot of people understand Client Astonishment, and then it goes away once the client is signed. Don’t focus on client creation but on client re-creation. For your breakfast meetings, a tremendously impactful thing you can do is to have a small session on client re-creation. All those clients can go into a cup or a glass and on that day, pull out one client’s name and focus on astonishing that client. Do something they never saw coming. When a creative person really focuses on one name and you really get into it, and think about how you can astonish them, you will come up with incredible ideas and you will have that client for life.

Q: My business is based on my clients’ businesses, so this is important. Our problems are similar. Property managers are responsible for a portfolio of clients, so this concept works. Let’s shift to a rapid-fire question. What is the least manly thing you do on a regular basis?

A: Everything I do is non-manly! I don’t like sports and I do like fashion. The least manly thing I do is to shop for socks online. I’m a huge sock person.

Q: Socks are interesting. It’s a bit selfish. People don’t see your socks, only you do.

A: Well as men, we don’t have as many accessory options as women. So, I like coordinating socks with shirts or ties or just my mood for the day. It’s fun for me. Anytime I do cross my legs, people will start talking to me because they see my socks. It starts conversations. I took the thing I love the most – socks – and I used it to astonish clients. Someone wanted to be more bold and courageous in her job at a bank. I found some socks, one of which said bold and one said courageous. She knew that I was a sock person, so when I sent them to her, she wasn’t surprised. But she was astonished that I thought to send them to her. And then we did gamification. Now her challenge was to wear them at least once a week and show them to at least two people at the office when she wore them. It became fun, and she had to be bold and courageous. This created connections with her employees, and she felt like she was being more of her bold and courageous self.

Q: What kind of car do you drive?

A: A 2016 Kia Optima. This is my second Kia and I love it.

Q: My next question was why. Is it just transportation or does a car have more meaning to you?

A: I’ve always liked cars and I was into Japanese imports when I was young. It is a thing for me. I like comfort and technology and it feels good. I’m in the car a lot and I need to be comfortable.

Q: That’s less of a status symbol but an everyday important thing for me. It’s on my When Life Works list. I have a three-mile commute but I have to drive a stick shift car that I love.

A: I love that you’re clear on that.

Q: Let’s talk about the Game Winning Shots. You talked about an interview you had for a speaking opportunity and how instead of focusing on closing the deal and being intense and selling your value, you took the opportunity to shift your mindset and you decided to be relaxed and build a relationship. My question is, how do you do that? If you’re a professional sales person, how do you apply the concept of not every shot is a game winning shot to a daily sales routine?

A: First, it’s a top-down thing. There’s a conditioning in sales. Before starting my entrepreneurial endeavors, I was in I.T. and I worked in the telecom industry. Telecom is very challenging and it’s a race to the bottom. The stress and pressure on the sales people to learn a complex technology and then go out and sell this recurring revenue stream that could be in the thousands or tens of thousands of dollars per month and millions over the course of a contract is crazy. The fact that they have to close the deal quickly is something I don’t understand. I hated sales when I became an entrepreneur. So, by slowing down and asking myself what was really going on, I realized I didn’t hate sales – I hated rushing relationships.

It’s a top-down issue. If we had sales leaders or people in leadership saying our goal is to be of service and to find ways to astonish people even if it’s not on the PDF sheet of services and products we provide, we will eventually have all the clients we need. Instead, what’s rewarded are the quotas and conversions. I’m not saying don’t measure them – you need to know what’s working. But I’d rather focus on conversation over conversion. This is a distinction that a good friend brought up to me. To go into deep conversations, we have to go into the conversation saying “I don’t know if I can help you” instead of “I can do this I must close you.” So, it’s a conditioning that needs to be changed. Even if you are in one of those places with expectations and quotas, going into conversation with prospects from a more relaxed place, you will see more opportunities to serve. You will hear what’s going on between the words they say. You can be creative when they say no. Because within that conversation, you’re getting clues to what will turn the no into a yes. If you can be in this relaxed creative place, you’ll see opportunities. Don’t come from a place of scarcity.

Q: My career path was sales. I did gadget sales and software sales and then as a sales person, started my company and did all the sales for many years. I was never a slick talker; English isn’t even my first language. For me, it’s always been about discovery. It’s about being so curious that I’m more interested in my customer’s challenges than anyone else they will talk to. That was my success. I was a top sales person because of that. There was no slick sales strategy. I just listened a lot more. It also messed me up because I’m not as comfortable talking about myself or my stories. I’d rather educate.

A: if we went out in the world and were more of a Sherlock Holmes and less of a sales person, we’d create a lot more business. For sharing the story, I only ever share my experience of life. Nothing I have said today is right. I don’t do right or wrong; there’s effective and ineffective. Productive or unproductive. There’s no arguing because everything I do comes from my own experience.  

Q: This has been a great conversation, and I have one more question for today. Abi is our director of sales and she wanted me to ask you: often our clients deal with a client loss. It can be a loss of a client with one property or a larger client with 100 properties. This is a business loss and growth loss. What tips do you have for dealing with that cycle of business?

A: This is a call for more creativity. It’s beautiful when we lose a client because it allows us to step back and ask ourselves what is really going on here? If you lose a client that accounts for a large part of your business, you can come back and ask if you were focusing on the right mix of clients. Were we putting too much certainty or too many eggs in one basket? How can we get more creative? Is this even the type of client we need to be serving? It can be a blessing and a gift. That client leaving will teach us something about how we’re doing business. When we think about customer service as the person who takes the complaint calls, we need to switch that to having projects instead of problems. You’re getting real-time feedback from people who pay you. This is an opening for personal and professional growth. It’s time to sit down and see how you didn’t see the loss coming. What was missed.

Then, have a conversation with the client and ask for feedback for future clients to make sure your service is at its best level. And remember that this does not make the client dead for you. If they are changing and moving to a different service provider, you can stay in contact. Continue providing value. This is not an effort to get them to switch back to you, but to show you that you do care about them. One of my favorite questions that I ask clients any time something like this happens is – what is trying to emerge in this moment? What am I being called to step into in this moment? Am I being called to communicate better, to add more value, or to be more transparent about what’s going on? What is it that I am being asked to step into as a leader?

Q: Jason, this was as interesting as I expected. Thank you for your time. Where can people find you?

A: Thank you, Alex. I’ve set up webpage just for you and your listeners, where everyone can get a free copy of my book, Prison Break. It’s at www.thejasongoldberg.com/fourandhalf.  You can follow me and keep up with me there. 

That’s gracious, thank you. I approach everything with skepticism, but I connected with the book so I recommend that everyone give it a shot.

Thanks to our listeners, and if you have any questions about what Jason has shared with us, you can contact us at Fourandhalf.com.  

The post Jason Goldberg on Perspective, Stress, and Overcoming Property Management Challenges (Free Book Offer Inside) appeared first on Fourandhalf Marketing Agency for Property Managers.

Today our guest is Deniz Yusef, who trains business development people in Australia’s property management industry. We are definitely lucky to bring him on board; to date, we haven’t run into anyone like him here in the United States, or even elsewhere in the world.

Preconceived notions may have you thinking that you first need to get leads before you hire a business development manager, however, that is not the case. In this interview and article, you will learn:

• 4 new lead sources a BDM can bring to your property management business.
• Common blockages BDMs uncover when it comes to leads.
• How to incentivize a salesperson or BDM to sell beyond their sales goals.
• The big mistake owners make when employing a property management business development manager.

Listen to the interview above, or read the transcript below, and learn all that you need to know about Business Development Managers for your property management company.

 

When to Hire a BDM or Salesperson for Your Company

Q: One question I get a lot is: when should I be ready to hire a business development person or a sales person to sell my property management service? Is it 100 units? 800 units? What’s the answer you usually give?
A: Well, I usually ask, how serious are you about your growth? You can have a business development manager with no houses under management. Right now, I’m working with some people who are in Bali, trying to grow a rent roll in Australia. So, they will work remotely and hire a business development manager in Brisbane. He has zero houses under management right now. There’s no magic number really, it’s interesting to see what the goal is. Some people have started with six properties under management and the goal is to get to 38 or 40. It’s one of those questions that’s hard to answer because there are a lot of different variables to consider. How many properties can you manage? It depends on your backing and your assistance. So, there’s no real number to put on it. If you’re serious about growth, you need to be over-staffed to be prepared for that.

Q: A salesperson, in my opinion, is an asset to the team. They bring in a lot more than they consume. So, what would be the trigger or the number of units with an average management fee of $125 per month that the salesperson needs to bring in every month to justify their existence?
A: Well, this comes back to the average income that each unit is bringing your office. So, if you’re only averaging $1,500 per year in income, you’d want a minimum of 10 units/month to cover their wage. But again, it’s what your overhead is and what you can afford and who you can employ. Some companies will employ someone at a minimum wage and give a higher bonus. They are happy to wear the costs for 12 months. It’s a tricky question. Some people, if they get six new units a month, they are happy. I am preparing to train someone who is already leasing 28 units/month and they have employed me just to push them to 30.

Background on Deniz Yusef

Q: You had an interesting career path to get to where you are. Can you talk about your experience? You were the top business development manager in the nation.
A: I had no education or training in sales. My background is in hospitality. I worked in restaurants and moved into fruits and vegetables. I was a fruit vendor. My wife and I thought about traveling to America for two years with our two children, and then we got pregnant with our third child, so we didn’t travel. That’s when I moved from fruits and veggies into real estate. I was the leasing agent and then I became the business development manager after nine months. My job was solely lease management and growing the business. In essence, I took on the attitude of doing it like fruit and veggies. I knew how I got new clients for fruit and veggies, and so that’s how I approached it in real estate. I listed just over 60 managements in my first year.

Q: Just to convert to our US terminology, you basically sold 60 management contracts?
A: Right. We call it listing and I think you guys call it ‘getting a door.’ So, I got 67 individual doors that were then converted for management. That was securing the management contract. I learned a lot from my mistakes. I didn’t know how to sell the property management part. I reduced the fees because I didn’t know what I was doing. So, in my second year I sold 191 doors. The next year, I was up to 237, and my goal was to beat what I did the year before. I had a white board with all my numbers. I went to 317 the year after that, and I was averaging 34.5 doors a month. I was tired.

Q: You worked for another company?
A: Yes, I made my bosses very rich. That was 926 units total in four years or 48 months. The KPIs – Key Performance Indicators – had specific targets to reach and tasks to do, including follow-ups and a contact management system. I know you have a great contact management system with LeadSimple. I would have loved to have LeadSimple when I was a business development manager, but we didn’t have that technology then.

Q: As a property manager, how do I find the business development person who could have a relatively unsuccessful first year bringing in about 67 properties, and then boost that up to 317? 
A: I’m fortunate to be training some of those freaks and I was lucky to be one of them. The biggest mistake I see people making is employing a property manager to be a business development manager. It’s a different mindset and those are two different positions and roles. I’m not saying a property manager can’t go out and lease properties, but if you want to be successful in bringing in a lot of management contracts, you need a person with a sales-mindset. One way to put it is like a car lot. You have mechanics and salespeople. The salespeople have a job to sell a vehicle. The mechanics look after the vehicle once it’s purchased. Those are two different mindsets. The salesperson won’t be good at the job of a mechanic. And I’m sure the mechanic is capable of talking about the car, but not as well.

What are the Tasks for a Business Development Manager?

Q: What are the major tasks of a business development manager? 

A: It’s a combination of everything. I like the analogy of an octopus. There are all these different areas of where you’re generating leads in different ways. If you have a sales department in the office, that’s one way of getting leads. Each lead has tentacles on it. So, there are sales leads from a broker who is selling houses and dealing with investors all the time. You’ll want to create relationships with them.

Q: So, building referral relationships with real estate sales shops is what you’re talking about.

A: Yes. In America, you also have sales-only offices and property management-only offices. So regardless, you have to network with other salespeople because they may not be happy with their own property management division. You’re always networking and creating sales opportunities.

Q: One value point here – I believe this particular revenue stream or lead source is exceptional, but you have to lead with value. People have to set up workshops, offer education, and do that for different real estate offices. They teach them for an hour, giving something for nothing. It’s an amazing opportunity. So, I like where you’re starting, by giving Realtor referrals around town. What’s the next lead source?

A: You’ve also got to think about who the investors are dealing with before they even think about buying an investment property. It’s important that business development managers set relationships with:

• a mortgage broker
• and an accountant

That helps you catch leads at the highest point that you can. Leads haven’t even talked to a real estate office yet, so if you can create a network and get your name in there and have an information night targeting those offices, it will help. We have conveyances over here when contracts are exchanged, so I would do a lot of network meetings with anyone dealing with real estate. In America, you have accountants, title companies, and you need to have the same meetings.

Q: So, it sounds like once property management business owners understand this lead source, then they will need to put the right people in front of their business development manager and set expectations. A lot of people don’t understand that giving without expectations is a great way to get to the golden rule of reciprocation. So, allowing BDMs to spend a little money and time to teach, answer questions, and educate will help build the referral network. What’s next?

A: Information Nights. These are meetings that you would have as part of your networking, with investors or potential investors. Seek the source directly.

You will need to get some speakers. Good examples are:

• Sales agents
• Accountants
• Tax managers

Various experts in their fields can come and speak, and feel free to be creative. If you know someone politically who has sway, invite that person too, because they bring a new crowd of people to something that is branded to your company. It gives you expertise. I was fortunate to be best friends with a mayor at one of our Information Nights, and it was hugely popular. We just had him speak for 15 minutes on the future development of our area, which was really good.

Another thing we do is letterbox dropping, which I’m not sure you can do in America because of your laws. But if we just listed a property and we’re going to look for a tenant, we’ll have a flyer that says there’s a property available on your street, do you know anyone who is looking to move, or would you like an updated rental opinion on your property? I would put that in the letterbox.

Q: We are doing something like a mailer, which is where we physically mail the postcard that says, ‘there’s a new property available; if you know anyone or if you’re interested in a free rental analysis…’ We just have to pay the post office because we cannot walk up to a mailbox and put something in it.

A: When you share these mailers, you have to do it twice. You have to do it once you have secured a tenant as well. The level of branding in that little region in a short period of time makes a difference. Having a Call to Action on those mailings is important. When we walk around, I’ll stop a mom who is out for a walk with the stroller. I’ll start the network. There’s that one person who is always in the garden in every neighborhood. It doesn’t matter what country we’re in, there’s always that one person. So, you talk to her about who you are and what you’re doing, and the information spreads.

Q: Very few people do what Deniz just discussed. There are three tasks that your business development person should be committing to:

• building referrals
• organizing investor meet-ups
• and doing the “For Rent” announcement in the neighborhood. 

These things Deniz covered are not your everyday ‘bang-on-the-phones’ things. These are foundational and they speak to building the relationships and nurturing referrals. So, I want the audience to realize that without a professional salesperson or business development person committing to these tasks, there’s no way for a property manager or a business owner to get quality growth. Can you give us one more key area, or tasks for business development professionals?

A: Everyone forgets about current managements. The clients you already have and the properties you’re already managing – have you asked them or called them to ask if there are any other properties that you can help with? Is there a brother or a sister or a colleague who might want to have the same experience? The process I use is to call people two weeks after we’ve secured a tenant for them and ask if they were happy with the process. Hopefully, they will say yes. If not, I would say thank you for the feedback, and I would fix it. But if they do say good things, I would ask if there is anyone else who would like to have an equally good experience with tenant placement. I might mention a special where you might give them a month of free management for every referral. Give them an incentive. We like to think that investors are like fish – they all stick together and they always know someone else who has investment properties. Another little trick; whenever a new staff person comes into the office, we always ask if they know anyone with investment properties. It might be a new person at the front desk. Put a referral system in your office. Pay bonuses.

Those things we just talked about are just a couple of examples. A property manager’s job is to look after properties and it can be hard for them to want to grow the business, because it does create more work for them. We have done some studies that show when the initial phone call comes in from an owner who is thinking about renting a property out, there are 17 hours of work until you are actually collecting money for that owner.

How to Incentivize Your BDM to Continue Selling

Q: I can see why a property manager would hesitate. The payment is incremental and it’s hard to feel it. The property manager mindset is not that of a hunter. They’re farmers. They are great at farming. If you try to push them into hunting, the sales calls are not going to get answered. 

A: Spot on. Most people who are in a position of business development are driven by money. So, it’s a different incentive. You were talking earlier about that magic number. It’s not about that one number to reach. There are increments so that bonuses grow the more they sell. You don’t want your business development person to achieve the 10 or 15 that you’ve required for the month and then save any additional business for the following month.

Most offices I come to, I find that typically happens. Instead, you want to have a base bonus for the first five properties, but then give a higher percentage for the next five. Some offices pay on a percentage bonus depending on annual income because they don’t want the fees to be reduced in order to win the business. There are different ways of looking at it. The mindset is different because money is a driver for the business development manager. They aren’t thinking about the work that new business will create. If there’s one person bringing in doors and angry property managers doing all the work, a balance needs to be created.

Q: I’ve been talking with my friend who has a big property management company and for six months we’ve been talking about why he should hire a business development person. He hasn’t yet. When I ask why, he tells me that he doesn’t have a lot of leads. There are only 10 leads a month coming in.

A: But you hire a business development manager to create leads!

Q: See? Exactly. Deniz just gave us four ways to have your business development person busy and creating leads. We have talked about solid ways that aren’t easy but very doable.

A: One year I brought in 237 leads, but our office only grew by 108 doors. If I hadn’t been there with all the leads, the office would have gone backwards and lost 129 doors. You must have someone generating the leads. That friend of yours who is only bringing in 10 leads a month – how many are being converted? Probably only three or four. And, how many properties are they losing? You have to make up for that.

Q: Yes, and one of the conversations we always have is about that they are staying even and plugging the leak. If the leak increases suddenly, they’ll fall behind. It’s the nature of recurring service. People sell properties and no longer need management. It’s a leaky bucket. If you aren’t growing, you’re dying.

A: And I would say that more than 10 leads are coming in, they just haven’t identified them. So, my job as the business development person and coach would be to go into that office and identify the blockage that’s stopping the leads and figure out why they aren’t converting more than five out of ten leads.

Q: Tell me more about that. What are some of the common blockages?

A: One of the biggest blocks is not identifying the leads. A lot of times, if someone is thinking about selling or renting, it only goes to one department, the sales or the property management department. A perfect way to overcome that is, whoever answers the phone or the email needs to send it to both departments at the same time. The old system is it always goes to sales, and if it’s not going to be a house to sell, they’ll toss it over to the property management side. That lead is getting beaten up. It’s simple to lose a lead that way. Second, the property management department doesn’t have a contact management system. A spreadsheet or emails kept in a folder serve that purpose. Tracking leads is vital. An office I’m working in now uses a spreadsheet with 400 names on it. That’s their lead management system. It’s lead collection but not management.

Conclusion

Q: I think this was a good first discussion. I’d like to see what people have to say about what you’ve said. I’m sure it will be popular and I’d love to have you come back after the PM Grow Summit. You’re working with a lot of American companies now who are taking these concepts and using them here. I look forward to seeing how you progress here.

A: Yes, I’ve been working with Steve Rozenberg for about a year and they are fantastic. I am training his business development managers on converting. I like to ask for business as soon as I’m in the door, and that’s what we’re talking about. The business development manager there is amazing and she’s now averaging 40 doors a month.

Let’s not forget, they do investor workshops and radio shows and podcast. They are working. They blow up in terms of growth. So, if you are in the audience and you haven’t seen the effects of this explosive growth, consider talking to Deniz at bdmcoach.com.au. Thank you, Deniz, for joining us and I look forward to seeing you at the PM Grow Summit.

Thanks for listening, and contact us at Fourandhalf if you have any questions.

The post Deniz Yusef on What a Good Business Development Manager Will Do For Your Property Management Company appeared first on Fourandhalf Marketing Agency for Property Managers.

Alex is coming to you from the 2016 Annual NARPM convention in Maui with:

• Jordan Muela as the co-host; CEO of LeadSimple.
• Michael Monteiro, the CEO of Buildium
• Andy Propst, CEO of HomeRiver and past national NARPM president

Our topic is the state of the property management industry, and we want to talk about how small to mid-size entrepreneurs can compete in this space over the next five years.

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Outside Capital In the Property Management Industry

Alex: Let’s start with a tough question: at this stage, there is a lot of outside capital flowing into the industry. How do you think this shift will affect the competitive abilities of the small to midsize entrepreneur?

Michael Monteiro:

I think the same way that smaller independent companies have competed with better-funded companies since the beginning of time. It’s important for the property management company to first figure out how they are going to be different in the market. What will they be better at than anyone else, and what will they be known for? I think that’s how property management companies will compete with larger, better-funded companies. It might mean specializing in a specific kind of rental management or providing outstanding customer service. They need to be clear on their ideal customer and deciding what they want to be known for.

Andrew Propst:

I agree with that, and having their own story will make a difference. With larger companies, the story gets lost. A smaller company can go out there and share their story about how they got to where they are. They have an opportunity to connect on a local level and be meaningful. That will help them stay ahead. And it’s a great question; a lot of this is happening. Finding an identity and getting the message out there is important.

On Branding for Property Management Companies

Jordan: Doubling down on niche and brand, I know you both run companies where branding is a priority. Was this important to you from day one, or did it grow over time? How did your evolution happen?

Andrew Propst:

For me, branding was a priority from day one, just because with my personality, I care what people think about me, and I couldn’t differentiate my brand from who I am personally. We looked at our mission statement and we wanted our brand to represent our mission. I wanted to have the same message throughout our brand. We don’t think of our brand as the logo or anything like that. It’s how the public perceives us and what we do. I want that to be a good message. The brand is important and has been since day one.

Michael Monteiro:

I’m not sure we thought about it as brand 12 years ago, but it was important for us from the beginning. We wanted to be clear on how we would be different. Our market is competitive, and we have larger and better funded competitors in our space. But we decided early on that we would be laser focused on one property management vertical. We decided we would be laser focused on small to medium sized property management firms. And, we decided to be laser focused on residential property management. So, I’m not sure we thought about it as branding back then, but it is something we thought about in the early days: “where will we stake our claim?” That has helped us succeed in a competitive market.

Where Should a Small Property Management Business Invest Time?

Alex: What specific things would you advise these smaller companies to invest their time in? If they want to zero in on the perfect customer and building a brand that makes the business as attractive as possible to these folks?

Michael Monteiro:

We call that the ideal customer profile. The better and clearer you can be on your ideal customer, the more successful you’ll be. In property management, we hear all the time that people will take on any clients willing to hire them. Be clear on your ideal customer, and resist taking on anyone who doesn’t fit that.

Andrew Propst:

There are a lot of rabbit holes in property management, too. It’s a great business, and it’s a tough business for an entrepreneur because it opens so many different opportunities and avenues. So, it’s important for people good at property management to decide where to serve. There’s commercial and multi-family and real estate, but the people who run the best property management companies have the ideal customer in mind and they focus on what they do best. Then, they can do a good job growing their business.

Alex: So, having a clear focus and understanding the opportunity cost of having a squirrel mentality?

Andrew: Yes, there are a lot of squirrel opportunities in this business. If you don’t believe me, walk down the trade room floor. You could leave this place with a thousand different opportunities. Most property management companies don’t go out of business, they die of too many opportunities, which causes problems.

Situational Property Management Issue

Jordan: You need to have the discipline to say no. Putting ourselves in the shoes of some of the companies who are experiencing pressure, how would you handle a scenario like this: You are running a 250-door property management shop, and over the last 12 months a couple of well-funded companies have entered your market to compete directly with you. They are advertising low fees and attractive service offerings. For the first year since opening, you have lost more properties than you’ve gained. So, you can’t float or go sideways; you’re going to have to get to the next level or really start to suffer. How would you handle that situation?

Andrew Propst:

This is a great question because it’s happening now. The real estate market has caused a bit of an issue in property management growth. All the properties going on the market for sale are selling, so there’s more of a challenge for managers to grow their business, unlike 2008 through 2010, where no one could sell, so everyone was handing over doors.

You might have to take an opportunity to rebrand yourself. Look at what’s out there, because there are opportunities. In 2009, our company shifted. We saw that the market was going to end up like it is today, and we shifted to multi-family. The multi-family market is blowing up right now. So, if you’ve been specializing in single family properties, there’s no reason why you can’t make that shift. Those opportunities are out there, and I would strongly recommend not doing the same thing over and over again. I like to make big changes. For some people, smaller changes might be better. But it’s hard to control the market.

Michael Monteiro:

Diversification is one thing that you could do to continue growing. Not to sound repetitive, but it comes back to getting clear on what you’re going to do better than anyone else and staking that claim. Figure out what you can do that those larger companies cannot.

Local knowledge comes into play, telling that compelling story is an opportunity. Look to answer these basic questions about your company:

• Why do you exist?
• What is your purpose?
• What do you value and believe?
• What’s the vision two to three years out?

Answering those fundamental questions will help bring clarity to what you will do to compete. It’s one of those things that everyone understands but they aren’t always urgent things to address. This is an opportunity to work on your business.

Andrew: It’s not because the business isn’t coming in. With 250 doors, property managers are so overwhelmed with the property management work that they don’t have time to focus on the business and growth. They don’t have systems in place, so they feel dug in.

Statistics have told us that between 65 and 80 percent of rental properties are managed by self-managers, so there are opportunities out there. You can go get those opportunities, but it’s hard when you’re stuck inside your business. You have to get those systems in place and you have to get the right people on board. Once you can do that, growing your company is easy. Managing the growth is where you’re challenged.

Michael: That’s true. I always say it’s easy to start a property management business; in many states you don’t even need a license. But, it’s hard to grow.

Andy: What we’re doing at HomeRiver right now is finding people who are at this 250-500 door position. We can come in and help them with what’s dragging them down. We give them the resources to grow. We help them grow systems and not get stuck in the day to day, which is so easy to do in this business.

Tasks for a CEO of a Property Management Company

Alex: I spoke about this in my presentation for NARPM – “How to Convert More Leads in a Hyper Competitive Market.” Working on the business is foundational. It’s not a good idea to manage your own portfolio of properties so you can make more money yourself. Why spend 60 percent of your time managing your own portfolio when you have a business to grow? There’s a huge opportunity cost. If you’re making sure your owner statements go on time, there’s something wrong. That’s not a CEO job, that’s for the accounting manager to do.

Andy: That’s true. But as you see here at these conferences, all these people are running off to send out those owner statements and manage stuff like that. We are all control freaks, and it’s hard to let that go.

Alex: Speaking of branding, Michael’s shirt says “Ctrl freak.” He knows his clients.

Andy: It’s something I say in my speeches – we’re all control freaks. It gets a big laugh every time.

Michael: There’s a great book called E-Myth, which stands for Entrepreneurial Myth, and in that book, Michael Gerber talks about the trap that so many entrepreneurs fall into, where they don’t take the time to operationalize their business. So, they can’t think strategically about the business. They’re sending out statements and reconciling accounts and collecting rent because they didn’t think to take the time to put these business systems in place.

Building Culture for Your Property Management Company

Alex: E-Myth was a cornerstone for my business – I recommend it to the audience. It has a big following and there are coaches that follow the book. Here’s what most people get wrong: culture. We talk about the need to stop doing the day to day work and to focus on the big picture, but you can’t do that without a great culture. So, what are your specific pieces of advice for how to build your team? I know Andrew has lived it and Buildium has always been impressive with engaged employees…

Andrew Propst:

I could talk about culture all day long. It’s one of those things that is important and in my mind, it’s the only thing that matters. It comes from the word cult, which in religious terms is not a great word, but are you building something that will inspire people to follow you no matter where you go? If you can build a culture of trust in your organization, you can let those tasks go as an operator. Because the less you control, the more you can do. Get things off your plate so you can focus on the important and not the urgent.

Show that you trust your employees without expecting trust back. That will free up your time and get your employees on a career path where you can understand their goals and priorities. You’ll find your loyal co-workers will break through a wall for your company. When we have a good month or a bad month, that’s great. But when you see an employee reach a dream, there’s nothing that feels better. That’s the joy of owning a business.

Michael Monteiro:

Culture is one of those mythical words that means so many different things to different people. Some people hear culture and they think of beer fridges and ping pong tables and free lunches. For me, to make it more tangible, it starts with thinking about the environment you want to create for your employees.

At Buildium, we decided early on that we wanted to build a company that would stand the test of time. In 2012, eight years into our company history, we spent time describing what our employee experience was and what we wanted to create. That made it tangible.

So, my advice is to figure out what your property management business looks like in the next three to five years. What does it look like in terms of:

• Revenue
• Ideal customer
• Employee experience you want to create

Use words to describe it and be deliberate. That’s the other thing I would say; every company has a culture whether you’re deliberate about it or not. The best companies have founders that are deliberate about the culture you want. Otherwise, it will develop on its own, and then you can’t change it.

Jordan: Would it be impossible to change culture once it’s developed on its own?

Andy: I think so. A bunch of large changes are possible, but culture has a funny way of attaching itself to the least common denominator. You have to be able to get good people in there from the start because if you don’t, good culture doesn’t happen by accident. I felt like the culture that we built was from the ground up. We didn’t hand out mission statements. We all got together as a company to own it. The rank and file need to contribute to it and make it special. We read our mission statement and value statement every morning in our meetings.

On Property Management Technology

Jordan: What is your thought on the rate of change driven by technology in this industry? Are we seeing any plateaus? Is it accelerating?

Michael: I think everything is speeding up. Look at the vendors here today versus three years ago. It’s dizzying. Every year, there are more tools and technologies and more opportunities to automate. In general, this industry has been slow to adopt new technology and yet the rate of change is increasing, so I don’t think that trend will slow. It’s incumbent upon property management firms to figure out how to leverage the technology that’s out there. If they don’t, it will be hard to compete. There will come a point where there is some consolidation. But, I don’t think it will slow down.

Andy: I agree. A lot of these companies are betting big on technology, and they’re implementing it. The smaller companies will have to embrace that to keep up with the services. The good thing is, I’m not too concerned with developing an Uber for property management. We have a lot of regulation and the industry is fragmented, but I don’t think it will slow down. We’ll see even more of what we’ve seen.

Alex: Thank you all for your time. We appreciate this insight, and we’ll see you next time.

If you genuinely like the podcast, it would be a huge help if you subscribed and left a rating & review. It might seem insignificant, but it helps more than you might think.

About the Companies:

• Fourandhalf – Internet Marketing Exclusively for Property Management Companies
• HomeRiver Group – Nationally Branded Property Management Platform
• Buildium – Software that allows Property Management Companies to Run their Business
• LeadSimple – Lead Tracking Software for Property Management Companies

The post Disruptive Property Management Industry Trends in 2017 – Modernize, Grow, or Become Irrelevant appeared first on Fourandhalf Marketing Agency for Property Managers.

Our guest today is Andrew Warner. He runs a very popular podcast for entrepreneurs called Mixergy. If you want to learn everything that you need to know when it comes to business, you listen to Mixergy. It’s not Andrew teaching the wisdom of his ways, it’s Andrew interviewing all the top names out there. Some of his interviewees are:

• Tim Ferriss of the Four Hour Work Week
• Barbara Corcoran from Shark Tank
• Jessica Livingston of Y Combinator
• Brian Chesky and Joe Gebbia of Airbnb
• Gary Vaynerchuk
• Neil Patel and many others.

There’s some significant wisdom locked in Andrew’s head that we’re going to try to unpack a little bit, specifically for our property management tribe. Below is a transcript of our conversation:

Q: The concept out there is that 20 percent of the work brings 80 percent of the results. You said, and this is a quote: “when you build a start-up, the secret of success is to understand what that 20 percent is, and pay attention to it.” So, what is that 20 percent for you, Andrew?

A: For me, the 20 percent is a handful of things. One of them is to talk to my customers and my audience a lot more. Anyone who is involved with or excited about what I’m doing is someone I need to talk to as much as possible. At first, I thought online research was enough, but I discovered it’s about finding ways to get people on the phone so I can talk to them and understand what they’re going through.

I had been hearing that the founders of Airbnb went and lived in their customers’ homes and saw what it was like to list on the site. They wanted to understand the problems people might have. So they realized Airbnb shouldn’t be about just renting a room, but the whole house. They only discovered that when they got into a house. The thing is that it always seems so easy when you’re told to go talk to your customers. I tried doing this, but no one picks up the phone and no one wants to schedule a phone call. That creates more work for them.

It took a lot of creativity to learn what my customers are going through.

Q: What were some of the creative ways you learned your customers go through?

A: Here’s one: I didn’t say I want to learn from you so I can improve my product. Instead, I emailed them and said thanks for being a part of my community, I want to give you a free coaching session. With free coaching, you’re going to find a struggle that they could use some help with. If they’re not going through something, they won’t take me up on it. But if they are going through something, they’re going to take me up on that offer.

Once I get on a call with them, I can talk about what they want and why they signed up. They will always tell me about that one issue that they need help with and want to focus on with their free 15-minute coaching call. Then, I could understand the real problem and solve that problem or help them come up with their own solutions. More importantly, I could understand the problem better and build the solution into my interviews and everything we stand for at Mixergy.

Q: That’s pretty brilliant.

A: I know it won’t work for everyone, but it worked for us. The key that I’d like anyone to take away is that we want to learn from our customers what to create for them and how we can improve, but it’s a challenge to figure out how to get them on the phone. If we call them and they don’t pick up or we email them and they don’t respond, it’s not because this doesn’t work. We shouldn’t stop. Just spend some time figuring out the one thing that will work. When you figure it out, they will tell you what they need. When they tell you about the one desperate problem that they have, if you can address it even a little bit, they will be happy customers.

Q: I spoke to Lisa Wise, who is running an incredible property management start-up in Washington D.C. called Nest and it’s transformational. She built her office inside a typical house that these guys manage. So the employees can touch everything that would be in a house. They know how the heater works and what happens when the air conditioner goes out. This build empathy for their customers. It accomplishes two things: It shows you how to build your product and where to go with it, and it also builds the empathy you need to transform your services. 

A: That’s incredibly helpful. Can she get people into the actual homes? If they can get invited to dinner or in to repair something, it would be incredible.  

Advice on Pricing

Q: Sure. You could shadow your maintenance guy and see how tenants feel. There’s something to learn there. Within the last year, I’ve been fascinated with two things: pricing and unit economics, and how they impact the business. You recently spoke to Patrick Campbell with Price Intelligently. You mentioned something that might be useful for everyone here. You have used a tool to figure out your pricing and your revenue. Can you talk about that a little?

A: Profit Well is one of his products, and I use it to get a sense of who is buying from me and what they are about. And then, I learn how long they stick around. We use a software called Stripe to collect payment. Stripe is really good for processing payments, giving refunds, and integrating everything. But, it’s not great for giving you a clean dashboard or for even telling you how much money you made last month. So I signed up for Profit Well because I want to understand how many people churn or leave. I’m obsessed with why people leave. People who try us out and paid us but then leave have been let down somehow. I want to know why we didn’t meet their expectations.

Q: Do you have any advice for experimenting with pricing? I know some companies will help you do that. We are below that level but there must be some wisdom you’ve heard from other entrepreneurs.

A: Yes, I learned it from a guy named Will Schroeder who runs a bunch of companies that he has bought like Zirtual for virtual assistants, Launch Rocket for landing pages, and other businesses. He said to de-couple the price from the offer. That means, don’t say “here’s my offer, click this button and pay this much to buy.” When you do that, you can’t tell if people are turned off by the price or the product.

So, here’s what I do when I’m selling something brand new and I’m trying to figure out the price.

1. I collect my audience’s emails.
2. I email them about the new product, and ask them to click somewhere if they’re interested in it.
3. I tag those clicks, and there’s a page that shows the offer.
4. There’s a button that says “buy it.” I tag whoever buys the product.
5. Then, on the next page, people can decide which level they want or if they want to pay at all.
6. If they leave the page, and don’t pay, I know it. I also know if they decide to pay and how much it is worth to them.

That gives me a way to go to someone who clicked the email and wanted to buy, but then didn’t. I can go back to them and say that I noticed they were interested, and I ask them to help me understand why they didn’t go through with it. This is critical. I want to know if it’s the price. They will tell me. Or, they might say that they weren’t looking for a course because they’re in a different time zone. So, then I go back to my sales page and clarify that the course does not have to be watched live. So don’t just measure the progress, track the people who drop off so you can follow up and find out why.

Q: You need systems to be able to do something like that.

A: Yes, you need to be a tinker. It’s not expensive or hard, however. Any email system you have will let you keep track of who is clicking on links. You want to set it up and they’ll do it for free. The forms you use will allow you to capture the email address so you can keep track of who is pressing the button. Call the customer service people at MailChimp, Infusion, or whatever system you’re using. Home grown systems will have it. They will show you how to do it. It’s built in and easy, but very few people take advantage of it.

Q: So, pricing wise there’s some experimentation there and the tools we already have can help us with it. I have a story and a question. I just came back from a real estate conference and they had Darren Hardy speak, who is a super-coach motivational speaker and very knowledgeable. He told the audience that he coaches three CEOs from large companies and he was invited to play golf with them. He doesn’t play golf, so he didn’t want to go, but they insisted. So he goes to play golf and they get up and they’re about to tee off and he says here’s your first lesson: he tees off and it lands in the brush. Super-achievers suck at golf. He spends his time perfecting his skills to coach CEOs. He talked about his big Give-Up list. He gave up television, golfing, sports, and Facebook. So in your experience, I want to know: do people give up a lot of things to be that good at one thing, or do they balance?

A: They do give up a lot. One example that comes to mind is the guy who runs Y Combinator, the best seed funding company out there. He gave up so many different foods when he was building his company and ate only ramen. He gave himself scurvy. He made himself sick because he was so committed and focused. I see that kind of thing a lot. They are super-focused. They aren’t playing golf. They are focused on their business. When a friend of yours is going through it, it might feel like they’re being jerks, but you have to understand it and be supportive.

Q: I have two priorities: business and family. I cannot fit anything else into my schedule, or one of them will suffer. Do you give up for Mixergy?

A: I give up a lot. It’s work and family and it’s also a little bit of me. By that, I mean that I need to go running four times a week. It’s really important that I get that done. I need downtime at the end of every day, which is sitting and reading. I fight for that, and it’s worth it to fight because I need those things to be a better person. And there’s not much time for anything else.

Q: Do you listen to anything when you run, or is it music?

A: I listen to a little bit of everything. My runs are long so even though I’m not lonely, it’s the one place I feel alone; when I run. So I listen to audiobooks and podcasts because they’re productive and interesting. Sometimes, I’ll make phone calls while I’m running. These aren’t business-related calls, but I’ll call a family member and catch up while I’m running.  

Q: So this is a founder question. I feel like I don’t have alone time at all. Do we need that time? I like to go fishing, but even then I’m surrounded by friends.

A: You may not. If you do need it, you might have to fight for it. But if you don’t need it, that’s fine. But I do think we need something outside of work and family. I was running a company that was doing a couple million dollars a month in sales. Then, we suddenly went down to half a million dollars a month and I felt like such a failure. Everything was going down. So my business was everything I had. If I had the sense going into the office that I was a failure, everyone around me would pick up on that and they would begin to wonder why they were working with me.

I started to take up running and in the morning, I would run for a mile or two and I’d go into the office feeling like a victor, like I had done something meaningful. So I was doing something I didn’t think I could do. It helped me to think more clearly and I would walk in feeling like a winner. It would come across in the way I did business. We need something outside of work that we can be just incredible at. Moving our bodies is important, but it doesn’t have to be sports. Maybe it’s music and you’re playing a great set over the weekend. That next Monday, you’ll feel like a rock star and that will give you more authority and creativity in the office.

Advice on Coaching

Q: So to feel the satisfaction at work and with the business, you need to hit some milestones outside of work as well, whatever those might be. Let’s shift gears. Do you have a coach?

A: No I don’t now, but I have at different times in my life.

Q: Do you have any advice on finding a coach that matches you?

A: The best coach I ever had was a guy who was an interview coach. He was really good at one thing. He had done it, and he was really good at it. Every week, I would get the transcripts of my previous week’s interviews and we would do a post-mortem. We talked about what we should do differently, I’d talk about problems and what was coming up, and we’d strategize about what to do and how to overcome the problems. This was really helpful. I don’t know about other people. For me, the best people are really good at one thing specifically. When I first got into cycling and I couldn’t even clip myself into a bike, I found someone who did long distance cycling with me. He biked next to me and told me how to deal with the gears, when to stand up, and what to do with hills. All these things don’t matter if you’re going to bike 5 or 10 miles, but if you’re going to do a 100-mile or a 200-mile bike ride like I did, you need to know these things. So to me the only coaches that really helped were really good at one thing, and they taught me that one thing.

Q: So, I have never had a coach. I’m always worried about the cost. It costs so much money and I’m worried about getting the wrong one and hurting their feelings by firing them.

A: I get that, or getting the wrong one and then you are locked in. One of the problems that coaches and therapists have is that you don’t really know what you’re getting until you’ve worked with them for at least three weeks. Even if you have someone that is a great coach, it might not be a great coach for you because everyone is different. I wish it was easier to understand their methodology before you sign up. For example, if I was going to choose a running coach, I don’t want just any running coach or the one who got other people to do their first marathon. I’d like to get a running coach who subscribes to the methodology I use and can help me with my process. It’s the same with business. I volunteered for Dale Carnegie & Associates for a while. He’s the one who wrote “How to Win Friends and Influence People.” I noticed that these executives would hire Dale Carnegie & Associates, and they knew what they were getting. They knew that there was a methodology that included listening to people and caring about them and making them feel important. So they knew what they were getting. That’s hard to do with a business coach. It’s difficult to know their methodology.

Q: How do you find a coach that you synergize with?

A: I think that if someone reads a book by a person they really respect or whose methodology works for them, hire a coach that the author trained. So if you are into Dale Carnegie’s book, go to Dale Carnegie & Associates to bring on one of their coaches. If you’re into getting things done, go to a coach that specializes in helping people get things done. That way you aren’t getting a brand new system, but they’re taking system that works for you and helping you implement it better. If you like the E-Myth system, you can hire a person to help you implement it.

Q: There has to be a business out there for this. For the last two or three years, I haven’t spent money on coaching or improving myself because I worry about spending money on something that doesn’t work for me.

A: It helps to say that “I only need two sessions” and see what they can get you in two. You can tell after a couple of meetings if someone is going to work for you. Challenging them to produce results within two meetings can be really helpful.

The Next Steps for Mixergy

Q: I’m curious about Mixergy and where you’re scaling. So where are you taking it?

A: The vision behind Mixergy has always been to create a place where entrepreneurs can learn directly from other entrepreneurs. My preference is for long form audio, and I know there are other ways to reach people. There’s a group of people for whom audio just works. To be able to listen to the founders of Airbnb, for example, and about how the business was built, is helpful to other entrepreneurs. So I’m trying to run an online school and provide resources where people can learn from others. That’s been the model. The interviews I’ve done bring people into the fold.

For example, Justin Kan has had a number of businesses and is the founder of Twitch, a place where you can go to play video games and have people watch you live. Amazon bought it for almost a billion dollars. He’s got a course on Mixergy where he teaches you how to build a product that people really want. He’s not giving you theories or stretching out a multi-month course. He’s saying that in one hour, he can share the best ideas and process. He’ll talk about what went wrong and what went right and he’s sharing specific examples and demonstrating his credibility. That’s what I’m trying to do.

Q: Who sets up the course and how does the progression work?

A: It works in different ways. We hired a producer who went through all of his written material and the stuff he’s done online and on Snapchat. We accumulated the most applicable ideas for us and we said – here’s what we think your methodology is, are we right? He talked about where we should change and adjust it and we brought him our process. Then, we worked with his specific ideas and broke it up so that instead of giving it to people in one long chunk, we had examples and then moved onto something else. That makes it easier for people to remember. He used our process and he taught it. It’s unusual to have access to someone like that in the first place, and then to have that person trust our process really helped us deliver for each other.  

Q: So that’s really unique. Are you going to do a book?

A: I’d like to at some point. I’m not working on it yet, but distilling all the interviews into a book is the goal.

Advice on Leadership

Q: There’s a lot there. The biggest problem in my industry and small business in general is that we aren’t that good at building a culture in our organizations. We lose employees, there’s a lot of turnover, and this is difficult for small business. What are some of the less radical practices that founders you speak with use to foster competence and care in their teams?

A: Radical is a lot of work. With a big radical idea, you walk in and want to create a company culture and everyone knows you just read a book and want to start something new that will ultimately go away. Instead of that, pick one thing you stand for and do it in a small way so everyone knows this is the future. So if you want to establish that your company is going to be one that sends out gifts, create a culture where everyone in the company gives little gifts. So you start giving gifts to people and they will pass it on to others. If you want to create a culture where thank you notes are sent out, start sending them out to people who you work with as a way to start showing what it’s like. Then buy them note cards so it’s easy for them to incorporate it into their way of doing business. Find what you want to do, do it for your people, and then let them pass it on to others. That’s the best way to get started on culture.

Q: So I’m hearing you should lead by example. Do this yourself, don’t necessarily just talk about it, but do it and encourage your people.

A: Yes, otherwise people will give up on it. It’s not as easy as it seems. Then, it gets scrapped. If you do it yourself, you’ll feel the pain and pleasure and decide whether you want to continue it.

Q: If you were to coach, what would you coach in?

A: Meditation is effective and I use a process called true mind meditation. You don’t have to sit in a room; you can walk around as you’re meditating. You’re encouraged to listen to music, and the goal is to train your mind to focus despite all the things going on around you. It helps you deal with distractions. When we want to make a sale, it’s natural to think about all the reasons the sale won’t work out, and it’s natural to worry that the guy has heard it all before. Those thoughts are counter-mind thoughts and they distract us. By meditating and focusing on what we truly want and where we’re truly going, we learn that in the moment we can tune the distractions out and focus on what we want. That’s the most powerful thing, and I would love to teach everyone how to properly meditate. We are more active, so sitting in a calm room and meditating won’t work for us. Focus on the person you are – energized, determined, and looking to do something with your life.

Thank you for your time, Andrew. I think everyone should go to Mixergy.com and begin their journey into the minds of entrepreneurs. Thank you for sharing some of what you know. If you need help with sales or marketing for property management companies, please contact us at Fourandhalf. Thank you for listening, and we’ll see you next time.

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Our topic today is business process outsourcing for modern property management companies. My guest is Todd Breen, who has a wealth of experience in a couple of areas. He has been running his company –  Home Property Management – for 30 years, so he has the broker and business building experience from the perspective of a broker and property manager. His other venture is called VirtuallyinCredible, where he does video tours, training, and international speaking. He also does business process outsourcing.

Q: So Todd has the applicable knowledge on how outsourcing helps grow property management companies. My first question is the hard one – in the realm of property management, how will people know they are good prospects for potentially outsourcing work and saving money?

A: I get that question a lot. People always ask if they should outsource and what type of work should they outsource. The first thing I like to do is put up a scale. On one end are the control freaks who like to micromanage every process of their business. At the other end are the people who tend to fly by the seat of their pants and are trying to get the job done. They have no systems and no processes. So we help a company decide where they are on the spectrum.

As soon that’s determined, I can provide some insight on what it will be like to outsource and how their needs can best be met. So if someone has a tightly run operation with lots of systems and process already in place, they will be able to pass everything that’s in place onto us. Those people can be good outsource candidates provided they devote a lot of time and attention to learning the cultural differences in the Philippines or India or any other place that we outsource. They have to adapt a little to that culture.

Half the battle is done because you already have your system and your training in place. You’re just bringing someone in from across the world. It’s not a big deal and they work virtually. The people who have no systems or procedures should outsource after learning how much easier it is to let someone else do the work for you. They need an intermediary, and that’s where we come in. We establish those systems because the more systemized you are when hiring your virtual assistants, the less systemized you need to be when you outsource.

Q: So this works for a tightly run business with systems and management practices, who can hire talent from overseas for a lot less money to complete the tasks. Then, their more expensive talent can spend more time on value-added tasks than the menial data entry things. And it works for the folks who have no system, because you work with them to systemize and execute. Is that right?

A: Yes. It also depends on the size of the business. We know the larger the business, the more likely they are to have proven systems in place. When I see a company with 150 doors or fewer, I know that those are the entrepreneurial owners who are newer to the process and struggling to put together all their systems. Our best client at VirtuallyinCredible is the company with 250 units or less who is thankful for the affordable help in systemizing processes in their business that they didn’t know how to do.  

Q: So Business Process Outsourcing (BPO) companies are everywhere. You can buy their services for any business. The advantage of working with a property management centric business like VirtuallyinCredible is that you get help with the actual data entry and PCR reports or whatever, but you also get help systemizing and doing things efficiently, securely, and with deliverables. You help them systemize and execute.

A: That’s what happens. It’s such an “A-ha” moment when we do a presentation to a smaller business owner. They thought they were just getting labor help, but that comes with a built-in system, and it’s better than anything they’ve done. It works. As we go to 250-500 size companies, they have already struggled to create their own systems, and now it comes down to deciding which system is better – theirs or ours. Smaller businesses are grateful we’re here. Medium sized businesses require some communication. You have to fit well with the existing staff and handle turf battles with staff who may resist any changes. It’s a dynamic about bringing outsourcing to a medium sized business that is a bit artful. Not everyone is comfortable outsourcing.

Q: There are definitely negative connotations to outsourcing work to other countries. I think people have pre-conceived notions without necessarily understanding what the true concept is. Let’s explore the ROI. You said that a higher end property management company has to learn about different cultures to build in the processes. What amount of outsourcing do they need to do to get a good return on their investment if they’re putting in the time to get to know new cultures and time zones?

A: When I talk to someone with 700 or 1,000 doors, I’ll ask openly if we are a stepping stone or a permanent solution because at that level, companies can learn to outsource themselves if they want to. There are rules and laws to know. In the Philippines, you’re allowed to hire someone to work as an independent contractor for one year. After one year, if you don’t make them an employee, you are out of compliance with Philippine labor laws. So steps have to be taken to make a permanent outsourcing solution work. It’s important that you learn the labor laws and the taxation laws. When we were starting this, we had to learn what to do when paying a foreign worker in U.S. dollars. When you do that, you are required to do some withholding and make the foreign worker apply for a social security number. But if you pay in their local currency, that doesn’t apply. So you need to learn the tricks so you can do it yourself. If you’re a small or medium size business, it’s better to get other people to do it for you so you can focus on building your business. Then, you can take it over and increase your ROI.

Q: Tell me more about Virtually Incredible. If I own a 700-unit company and I tell you I have processes and systems in place, what can I give you in terms of processes and what can I expect in terms of ROI by using your company?

A: The ROI is dependent on property management business structure. The ROI can come in saving on overhead. You don’t need as much office space. There’s also ROI in your peace of mind. Staff will go on vacation and take sick days. If you have staff, you have problems. That’s just the nature of a business. The more staff you have, the more potential problems you have. ROI comes in clearing your mind and your calendar. You shouldn’t have to worry about those functions because another business is going to take care of those problems and staffing for you. Then there’s the obvious ROI which you know is important, being in California. What do you think is the average hourly price you’d have to pay someone to work in a management company?

Q: In the bay area, like $22 per hour if you want to hire and retain someone. $45,000 a year minimum.

A: Right. So when you look at what you pay US-based staff, the price adds up, especially when you include vacation and benefits. You can hire quality people in the Philippines for $3 an hour if you do it directly. They work from their homes. It’s a great starting point. We have close to 100 people working for us from their homes, which allows us to pass on a lower cost to our customers. We don’t have traditional overhead in the Philippines either.  

With our leasing line services, we answer leasing lines. One customer in Phoenix, Arizona had a commission leasing agent quit. That employee was earning $5,000 a month. When they came to us, they had 30-35 listings any given month and it was costing them $5,000 to staff that position for 40 hours a week. With us, calls were answered 80 hours a week, and our bill to them is $1,500 to $2,000 a month. So, they get double the efficiency at half of the price. And one person can only handle one call at a time. When we took over, we could expand to answer the leasing line even if three calls were coming in at once. So their listings went from 35 a month to about 15 per month. We also began answering their email inquiries. That added $1,000 to their bill, but their vacancy list went down. That’s an ROI too. In addition to saving money they picked up an extra month’s rent through reduced vacancies.

Q: So there are three main ROI areas: the delta between the cost of talent here and the cost of talent there. As you say, that can be 70 percent off. The second is the actual volume. Instead of replacing one person, you have a team of people. Third, the peace of mind ROI. Basically, you don’t have to worry about vacation, employees leaving, or taking sick days or making claims against the company. So the advantages are huge. Where do people fall down with this?

A: There’s a do-it-yourself attitude that prevails among entrepreneurs. People think they can do it all themselves, but they get so busy, they don’t do it as well as they could. I call that the Penny Wise Dollar Foolish approach. If someone tries to hire a person from another country, they might get it wrong. I had to learn the hard way what to say and what not to say. The Asian culture is all about saving face. Here, we can tell employees when they screw up. If you criticize someone there, they might not show up the next day and you’d wonder what happened. You didn’t know that you embarrassed them. I have people who say they tried outsourcing, and it didn’t work out. If you try to do it yourself, you may stumble.

Q: People tell me all the time that they’ve tried property management marketing or they’ve used Google Ads and it just doesn’t work. I always find that interesting because Google is a trillion-dollar company and 80 percent of their revenue comes from AdWords. If something isn’t working for you, there’s a reason.

A: It’s no longer possible to be a jack of all trades and a master of none. That doesn’t work anymore.

Q: I found myself growing up with the business. I wanted to touch everything and do everything. I’ve learned you have to trust vendors and establish good relationships. For the control freak that does it all, the opportunity cost is tremendous. You can be doing so much more with your time. The people who expect everything to happen for them are also making a mistake because they aren’t developing relationships. Those are the two biggest pitfalls for any business. What do you think?

A: When we get the business owner that hires us and hands us a mess and wants us to do it all, I always wonder how well or how long we are going to work together. Because if they don’t have enough care and concern with how they turn things over to us, what else is happening at the business that I don’t know about? So I always make a point of reaching out to those companies and making sure we are working with them to bring down their outsourcing bill. We don’t want them to spend any more than they have to, so we work with them. Sometimes, the set-it-and-forget-it people lose an opportunity to shave 10 or 20 percent off their bill.

Q: We use lots of vendors and we pay thousands of dollars to places like Reputation.com. It’s so tempting to just shift my focus elsewhere because that’s done and they’re taking care of it. If staff are responsible for those vendor relationships, great. But if you don’t pay attention, you can have price increases and changes that affect your customers that you’re not even aware of. That’s a problem. Maintaining relationships is part of building your business and I think vendor relationships are key building blocks of our company.

A: I grew our company from zero doors when I was 21 years old. I’ve been doing this for a long time and when I look at people trying to grow a business now, I look at all the resources they have that we didn’t have, and I can’t believe the opportunities. A lot of people really leverage those opportunities, and that’s smart. You can get software as a service, you can get a website from an expert and you don’t have to figure that out yourself. There are lots of property management vendors available in the NARPM community. The one thing I’m surprised with is when I look at the amount of resources a company spends answering leasing calls. Usually, when I go into a business and tell them to look at the number of calls they get a month, 70 percent of calls to their business are leasing calls. So how do you grow a business when you’re doing this 70 percent of your time?

Q: One of the biggest reasons our customers don’t succeed as much as they should is because they’re unable to get to the owner call. Guess what those are being mixed up with? The leasing calls. So I can relate to that.

A: Outsourcing the leasing calls should be a number one priority. Out of the 700 calls that might come in a month, only five or seven new leases come from those. So, 1 out of 100 calls makes money. And 99 out of 100 didn’t come with any money, but those are still being answered. Most business owners will take an inbound call for new management prospect and answer questions but then never follow up with that prospect, even while they’re answering 700 calls a month about leasing. That imbalance keeps them where they are – disorganized. So outsourcing those leasing calls is one of the best thing you can do to focus on growing a business.

Q: We include LeadSimple for all of our packages because leads are usually a perceived problem. There are enough leads, but they aren’t being followed up on or treated like the lifetime revenue value they are. Put these owners and leads on your pipeline and follow up. So, you’re right. You have to pick your battles as a small business but dealing with new business is the biggest problem I see. If they pick up the phone they will probably close the deal. If they don’t, the lead dies.

A: But someone who follows up will close them. The same thing happens on the leasing line. We will mystery shop any company’s leasing line and the results are really eye-opening. We get people answering the phone and they’re busy and distracted and they don’t even want to answer questions or, we get voicemail 50 percent of the time. Voicemail does not rent houses. It’s very intriguing to see how businesses are running themselves. If I could tell any business anything, it would be to get rid of the things that are not making you money and focus on what does. Right now, a management company can be bought for $4,000 to $5,000 a unit. So the resale value of those units is amazing. That shouldn’t be the phone call you put on hold.

Q: We are solving the same problem from a different angle. We have each identified and have a solution to increase the owner calls and pay more attention to them, while reducing the distraction and getting better quality leasing. You provide a better customer experience, and houses are rented faster.

A: Yes, and sometimes people ask if we can answer their new management calls. No, we should never do that. That’s your job as a property management business owner. New prospects don’t want to talk to someone in the Philippines and no one outside of your business should answer those questions. So get rid of the other calls that aren’t going to make you any money and focus on doing a great job and working those leads like it’s your job. Grow your company ad you’ll have a valuable asset. With a resale value of $5,000 per unit, if you add 100 properties, your net worth went up half a million dollars. That’s a lot of money.

Q: Yes, and for a 500-unit company, with proper marketing, it’s reasonable to grow by 100 doors a year. Being better at the sales process, you get even 20 or 30 more. That’s quite a paycheck.

A: I made some choices with my business to take the biggest issues I didn’t like, and I outsourced them. A lot of processes I keep within my business. There are some companies that outsource individual processes like if you want your leases entered or your renewal notices sent out. You have other companies that answer repair lines. All those are great things. I focused on those 70 percent of phone calls. That’s been the fun part of helping people. We also do tenant screening. And that’s because you want peace of mind. You want to know there is compliance with federal regulations, conformity, and trust that every tenant who applies gets handled the same way.

Q: Fair housing laws are pretty clear. Owners hire a property manager so they don’t have to deal with the headaches. But if you get sued, you’ll lose your business.

A: No one can afford to even be checked twice for fair housing problems. We have all those systems in place. Systems keep you in compliance. If you have no systems, you have no routine compliance. Shortcuts will leave you open for risk with compliance. So those are the two major departments that I outsource at my company; leasing calls and screening. Then, anything we did successfully I scaled for other property managers.

We would love to talk with you again. Thank you for your time. It was a pleasure, and I will see you at a conference soon, I hope.

If you need help with sales or marketing for property management companies, or you’re interested in learning more about the PM Grow Summit, please contact us at Fourandhalf. Thank you for listening, and we’ll see you next time.

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Our guest today is Lisa Wise, who is with a company called Nest DC. As we go through this show, you may want to visit nest-dc.com to get exposed to the actual website so you understand Lisa’s company and what they are all about.

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I came across Lisa’s website by accident while we were doing a property management webinar with LeadSimple. Her page was assigned to me for conversion optimization advice. As I was reviewing other websites, I stumbled upon Nest, and I got a great tour of that website. I liked how it looked from site aesthetics to their 6-minute promo video. I wanted to meet the person behind the company and talk to her about what it took to build Nest DC and where she’s going with it.

Q: So on the last podcast I heard you on, which I think was Executive Leader Radio, you mentioned that you are at about 500 properties. That was about 10 months ago. Where are you right now?

A: We’re in the same place right now with Nest DC, but we have spun out our portfolio and separated the residential management side of our work that falls under the umbrella of Nest DC. Our association management is no longer in that portfolio, and is now managed under Roost. So, we’re still growing and building out new opportunities for revenue streams. We’ve tightened up the portfolio so we can really focus on different specialties with the two different companies.

Q: So Roost is also your company?

A: Yes. Roost DC is an outgrowth of Nest. It’s a sister company. Nest has become a success because we’ve had an exceptional team. Without our staff, we don’t have anything to offer that’s out of the ordinary. I have put together a loyal, fun, sophisticated, and motivated team of people that have made this company thrive. So one of the things I wanted to do was to reward those team members with an ownership opportunity, to really feel like their stumbling upon Nest was a good, once-in-a-lifetime opportunity. Rather than splitting Nest up, which would have been logistically complicated and less prudent, we took the associations we were managing out of the portfolio and we spun that work out into a new company called Roost. Roost DC is an LLC with 11 owners. All of the Nest employees were invited to become shareholders. Eleven of them did, and we are not aware of any other employee-owned management company that is not a family.

Q: Very impressive.  So I am a big proponent of making sure that employees are happy. Happy employees make happy customers, and that is the perfect world. What you guys did is pretty amazing. We have a standard and generic offer like most technology start-ups where we offer options to our employees, but you actually made a company for those committed to the cause. I have met thousands of property managers in my career and I’ve never seen anything like that. How is it working for you and how long have you been doing it?

A: We’re approaching the end of our second year of business with Roost and it’s been one of the best professional decisions I’ve made. I’m proud of it. One of the great things about working with colleagues who are also co-owners is that you’re getting real buy-in and commitment. There’s a focus on high-quality customer service, attention to the brand, teamwork, and a level of focus that you won’t get from an hourly employee. You can reward them all you want, but when an ownership is at stake, it really lends itself to a different customer experience, and it’s been great for business. It’s been fun to work with team members who are co-owners and it’s created a different experience for our customers. One of our chief complaints we get in the association environment is that there’s a lot of turnover. And when you’re a team of co-owners, that variable goes away.

Q: When you say turnover, you mean employee turnover, right?

A: Exactly. Traditional portfolio management brings a lot of turnover, and some of the buildings we work with get frustrated if one to two different managers are their point of contact annually. It’s hard to maintain the institutional knowledge that you need to manage well.

Q: I couldn’t agree more. The continuity and progression of a team is paramount in a service business. I model a lot of my back end organization after the most successful property management companies I work with. The team needs to be responsible for their portfolio of clients. A lot of things can be done on an assembly line, but when it comes to relationships, it’s not assembly line work. People need to be connected to individuals making customers happy. Before becoming a property manager, what did you do, and how did you get into the property management business?

A: I was a policy consultant for a healthcare organization and then moved into senior leadership roles where I was the executive director for healthcare or environmental nonprofits. I segued into that after graduating with a degree in political economy and before that a film degree. I always joke that a film degree gets you from one end of town to the next. Those educational experiences prepped me for what I would do for 12 solid years. When I was living in Arizona, I bought an 1893 adobe duplex. It was cheaper to own something in grad school than it was to rent, so I bought it. I loved working with my hands and I liked giving my neighbor and tenant a great and unique living experience. I sort of kept that in the back of my brain and used that property to buy and manage other properties. I had a nice little portfolio on the side while I pursued my nonprofit work. When the great recession hit, I was really burned out from raising money in nonprofits, so I decided to pivot and start my own property management company. I did it really organically with our core philosophy, which has been the same since the day we started: we believe high-quality property attracts high-quality tenants. When people are happy where they live, they make better neighbors and you have a greater city. That philosophy has always shaped what we do. Here we are with a viable company eight years later.

Q: What were the first and biggest challenges you had to overcome? How did you do it? What would be your constructive advice for anyone starting out?

A: Billing. It’s really hard to ask people to pay you for your time and your work. It’s hard to place value on that, particularly when no one wants to pay you for property management. We wanted to make it something that people felt great about buying into, but that took a lot of time. So billing and justifying our rates and helping people understand that there is value in something that they may never actually need to leverage. At some point, property management is a great mixture of service and passive income. If you’re lucky, there’s not a lot to be done. You take care of emergencies and you can sail a little bit. So it’s hard to always justify your value. In the beginning, it was hard for me to figure out how to do the baseline contractual billing and to help owners understand that properties need to be maintained to a certain standard in order to manage them well. Then, I’d feel bad about approaching them with turnover costs or telling them they needed to have their windows replaced. It felt like because they were so put off by even having to pay for management at all, I had to be the bearer of more financial bad news and I’m still never comfortable with it.

Q: We just had a conversation with Deniz Yusef, who is a Business Development Coach in Australia, and one of the first things he said is that clients are almost ashamed to charge for their services. I understand that it’s hard to justify your value to customers and to figure out a fair rate. So how did you overcome that, because it’s very common for business start-ups? What measures have you put in place to combat that and move forward?

A: I think that when we could make the argument that by paying our fees and helping us ensure that the tenants have the best possible experience and the space is maintained and cared for, you’re really setting the relationship up for success. So if you have a great property, you’ll have tenants that care about it and respect it. So spending the money on us and on making sure you have a great product will save you money over the long term. I think that once we were able to make those arguments and actually anchor them in real life scenarios and examples, it was easier for owners to understand that. And being able to present the idea that you can pay $1,500 to get everything done right now or $3,000 over the course of a year, it’s really the right investment. It’s another sales technique and something we believed in.

Q: How did you communicate that? You’re in a space where you had some really good case studies. I’m trying to fish out specific advice for people dealing with this. How do you tell customers this?

A: Our proposals are very transparent with pricing. Be up front so no one has to ask you why you charge what you do. Be proactive and define the fee structure. People are concerned that they’ll get nickeled and dimed. Let them trust you. Be ready to answer their questions, but show them everything before they ask. Don’t be apologetic. We are experts and we have learned a lot of lessons the hard way. Offering free property management is easy to slip into if you’re not careful.

Q: How do you feel about publishing pricing schedules on websites?

A: We publish our rates, and happily so. If someone is price shopping and they see our rates our higher, then they skipped a phone call. There is no reason for us not to be upfront about our pricing. If competitors want to charge less, that’s fine. Our attitude is that there is plenty of business, so we want people to get the right fit. Publishing rates is transparent and it saves the customer time.

Q: I think the most successful people I speak with agree. Everything should be detailed and laid out, and we like to connect growth goals with our prices. I want to communicate to potential customers, not competitors. We want to work with people who fit our criteria as much as they want to find a service provider who fits their needs. What do you think about offering two or three different plans instead of just one model?

A: I have tried every version of pricing out there and the more straightforward and simplified we could make it, the more efficient it was. Different packages really didn’t work out for us. We had situations where we would offer a lease-only option and that equaled total disaster because the tenants didn’t want to deal with the owners, they wanted to deal with us, because that’s where their relationship started. Owners didn’t understand the complexity of being a landlord, so they were trying to save money, but weren’t prepared for what they had to do. So we don’t do different versions of management. We know what we are successful with, and we want the owners to understand the value of our work and let us do every part of it. People who want to slice and dice what we offer are generally the people who are going to question our value over and over again. So we just stopped doing that. We offer management of a condo or a house. The property management fee structure is different because one is more complicated to manage than the other.

Q: You have tested and went through iterations of your business before you came to this decision. It’s all about trying different things. You’ll never know until you try different things. You could be a thousand-unit company if you had many different levels of service. But that’s not your goal, is it? You don’t want to be everything for everyone. You have a specific niche, and I respect that.

A: We learned the hard way.

Q: That’s what testing is all about. You want to fail so your fundamental setup is established. Do you sell yourself, or do you have someone doing that for you?

A: I have several people. Most of my team is cross-trained to do that, which is good because everyone can represent the company. There are three people who will rotate with sales calls and leads and then follow up with a client and go all the way to the point where they start paying their leasing fees.

Q: And you have 21 people in your company. So, that’s another distinction that I see between high growth and highly profitable entrepreneurs and companies that are just sort of there. It’s the effort to get new prospective clients and have sales people or people who care enough to sell and get the right client in the door every time the opportunity arises. I think that’s paramount. Investing money, effort, and training so sales people can represent your company and answer questions. What were some of the particulars that you can share, some methods for training and helping people get up to speed to be great sales people for your company?

A: Empathy is the most important thing that any of our sales reps and staff can have when they get to work each day. I use the word pretty strongly. We need to understand where our tenants are coming from and the experiences they are having. We need to understand our clients and what they are going through. We’re dealing with people in highly emotional situations where they’re talking about moving their highest asset, which is their house, and they’re generally in a point of transition that can be very charged. Coming to those conversations, whether it’s a sales conversation or a maintenance conversation, with empathy helps us be our best. It helps us in our day to day work and it better represents the work we do for people who sign on with Nest or with Roost. So we talk a lot about what each experience means for our clients. What is it like to prepare a property for rent? We take for granted that it’s every day work for us, when for most of our owners, this is the first and last time they will hire a property manager. The strongest impression that they can get from a company is that we understand what they’re going through. I think that the empathy piece helps us anchor the conversation and keep our clients comfortable and trusting. You’ll have better luck bringing people on board who feel good about the management relationship they’ll have. So we spend a lot of time going over these scenarios so we can understand what it’s like to be moving or the stress around a bad tenant. We put ourselves in their shoes. From there, each of our staff members need to understand how houses and apartments work. That’s part of what we’re selling – that we know how they work. There are a lot of property management companies with people answering the phones who don’t know how to help. We spend a lot of time training our team to know how our property functions. The space we occupy actually is similar to some of the properties we manage. So we get to interface with our work and see what a living and breathing building is like.

Q: Really innovative. One of the people I follow and listen to a lot is Gary V., and one of his key hiring principles that he uses to measure interviews is emotional intelligence. Empathy is a big part of it. Building that emotional bridge between you and a prospect is critical. I advise against just working off script. There’s space for the scripting, but once you have someone on the phone and you can connect, it makes a difference. One of the key principles is building an emotional bridge. That’s a huge differentiator between you and your competitors. This is critical and I’m happy to have found that your principles are so core to our human psychology. Very few people use this. Listening helps, and it’s what I teach. You have to care more than anyone else. We bring property management clients into our office and talk through their day. My team is immersed into their lives. You do that too; you even have a house that is similar to your clients’ homes. There are filters and heaters and toilets. Is there a specific way you teach empathy? How do you determine if someone has it? Besides giving them exposed to the challenges, are there specific things you do to build empathy?

A: When we have staff that take frustrated clients really personally or when a situation starts to go south and people take it personally, those are the staff members to invest in. We talk about how intensely emotional this job is for everyone on our team. It seems like a drawback, like we should be able to leave our work at the end of the day and not care whether or not a refrigerator gets replaced. We stumble on that sometimes, and from an efficiency standpoint, it’s a losing battle. But from a caring perspective, it’s really what makes us special. If we didn’t care so much, we wouldn’t be good at what we do. Staff members who blow things off or displace blame or don’t see their own responsibility, those are not people ready to create a unique experience. That’s how we vet for empathy.

Q: Have you had to fire people?

A: Oh, yeah.

Q: How do you do that? This is, I think, something we have to do. It’s difficult and I hate it. But for the welfare of our company, some decisions need to be made. It’s especially hard when they’re good at what they do, but they don’t fit. They don’t have that empathy. How do you do it?

A: Sometimes, very well and sometimes very poorly. The moments when we have handled it well are when we quickly realize that a person isn’t a fit, and we let them go quickly. That’s better for everybody. It gets harder when you have a relationship with someone. They might get along with staff, but maybe they don’t have the skills to do the job well. And you’ll wonder if you can make things better. There’s a relationship, and we value culture and staff. If an essential staff member leaves, it’s hard on everyone else. But if you’re investing in someone who doesn’t add value to the whole team, it’s not fair to the others who are pulling their own weight. So, we try to position it as an opportunity to be somewhere where they are going to thrive. We try to keep people as part of the family even if they’re not part of the team. It’s the pits, but it’s also necessary. Do what’s best for the business so everyone thrives.

Q: The hard ones to fire are already part of the group and they might be a good culture fit, but not a professional or business fit. I’ve always struggled with it. Are there any specific ways you interview new team members that may reveal some of that emotional intelligence, or empathy? How do you give them a chance to be a great team member from the start? Do you have any tricks?  

A: It really depends on the position we are hiring for. Generally, we force them to spend a lot of time with us, and if they can hold their own with us, and all of our interesting and familial interactions, they have half the battle done. We aren’t ever interested in people with property management backgrounds. They tend to come with bad habits. We talk about approaches and customer service, but it depends on the position. We spend a lot of time with people and different teams of people interview. When people can get through that and they are still excited about the job, then they’ve passed half the test.

Q: We do similar things. It’s almost a whole team interview that takes half a day. They might be able to trick one person, but they can’t trick 10 people. So we collaborate as a group, and we agree. So the advice is to immerse your whole team into the interview process. Let your people be the character judges with you. I agree that industry experience isn’t necessary. We’re looking for character and emotional intelligence. Property management and marketing are not rocket science. You need the right people and the skills can be acquired.

A: I always make the argument that property management is very easy and relationship management is very hard.

Q: Very true. One last question – being in the service business like me and all of our listeners, when do you know when to hire the next person? How do you make that decision?

A: When people are crying at their desks.

Q: Okay, projections are sometimes off. If you think one person can handle 100 accounts, but 20 clients are bringing in 30 percent of the revenue, and the rest don’t, then certain clients take more time. So anything beyond that?

A: As an employee-owned company and a profit-sharing company, we now have our team that’s fairly motivated not to just add folks because we’re busy. We need to look at the season first. It’s cyclical. We might be breathlessly busy and begging for a new staff member, but two months later we know it will be slower. So we have to ask if we can get through the storm without committing to more payroll. We have managed to bridge those gaps and get past harder and high season periods. We hire temp help when necessary, and that has worked. College students have come in to do showings during the summer season. So, you have to be creative. We also take a look at what’s making us busy. We study why we think it’s time to hire. Is it because we are spending too much time on back and forth conversations or data entry or systems problems? If that’s the problem, then we are obligated to fix the system and then add staff second. We have gotten much better at doing that. Now we ask ourselves how we can grow as much as possible with the best customer experience inside and outside.  Our team members are customers, just like our clients. If people are happy and we know we’re delivering an exceptional service, then fine tuning the systems is the way to go. If we feel like we’re compromising our services, staffing is the way to go.

Q: I like that distinction. A systems problem versus a staff problem. When you’re scaling and starting out, there are a lot of hats to wear and it’s hard to be disciplined to review and implement systems.

A: Right. Every system is temporary. Your portfolio will collapse on your systems at some point, and you have to start over. If you’re not open minded about doing that, it can be destructive. You won’t be able to make up for the mistakes that are happening.

Q: Two more short questions. What do you do as a CEO? What does your day and month look like?

A: My in-office time is purely collaborative. I spend a lot of time available to my team to solve problems, and answer questions. There’s a lot of sales and project management involved. We do a lot of construction and project management in our company, and I like that. So I work with our contractors on large-scale projects in the field. And then growth projections and looking at how we’re going to increase the business over time. So there’s a lot of strategic planning and looking at our systems and investments. A lot of networking too. That’s generally how I spend my days. And then getting to the client interactions on nights and weekends. I invest the time to make sure I’m still offering a quality customer experience. I don’t want to sell something and not be able to deliver on it.

Q: Let’s finish with this. If you and I talk in 12 months, where would you like to be? Are there any high level goals?

A: I’d like to see 100 percent growth in Roost DC and 25 percent growth for Nest DC. I’d like to see 200 percent growth in our construction and turnover business, and I’d like to see us continue to win INC 5000 awards, the DC City Paper Best Places to Work, and make sure that if we are reaching out to the community they are telling us we’re doing our best work. I want to make sure we are having a strong and meaningful impact on the community. I want to point at what we’ve done for the Food Bank and the Humane Society and the Neighborhood Society. We are part of a community and we want to make it better every day.

I appreciate your time, Lisa. Thank you for sharing some of this wisdom.

Thank you to our sponsor, the Property Management Grow Summit, which is in January of 2017. We’ll essentially be pulling back the curtain on the greatest growth strategies in the industry. That agenda includes things like lead generation, strategic planning, sales, productivity, lead nurturing, financial models, etc. This conference is truly designed for the growth-minded property management entrepreneur who wants to step out of the norm, like Lisa. She will be speaking at the conference, and we’re really excited about that. If you haven’t seen the site yet, go to pmgrowsummit.com and check it out. Look at some speakers and check out some videos.

If you need help with sales or marketing for property management companies, please contact us at Fourandhalf. Thank you for listening, and we’ll see you next time.

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