Property Management Growth with DoorGrow DGS 100: Jason Hull on the Cashflow Diary
To celebrate the 100th episode of the DoorGrowShow, I’m doing something a bit different. Instead of me interviewing someone, I’m the one being asked the questions.
Today, I am featuring my appearance as a guest on the Cashflow Diary (CFD) podcast hosted by J. Massey. We discuss my journey into property management and how to optimize a business through organic growth to achieve success.
You’ll Learn...[05:00] Today’s entrepreneurs are like yesterday’s superheroes. They save lives.
[06:01] Who is Jason Hull? Someone who has never managed a property, but helps others grow and scale their property management business.
[06:48] Being an entrepreneur is in his DNA: Grew up with an entrepreneurial mother, who taught him to make more money and beat the competition.
[08:16] Failed Marriage and “Disney” Dad: Jason needed a job that offered freedom and autonomy to spend time with his kids and create clients.
[10:13] Website Design, Marketing,and Branding: How to win when competing with Goliaths and make it to the top of Google.
[11:53] Financial Decisions: Entrepreneurs like to make money, not lose it.
[15:25] Conventional to Comfortable Confidence: Do what works for you, not others, to lower pressure noise.
[20:15] Curiosity: See what others don’t and causes businesses to lose leads and deals.
[21:55] Still struggling with imposter syndrome? Hire a business coach who believes in you to rebuild confidence and effective communication to make a difference.
[28:55] Why choose property management and deal with tenants, toilets, and termites?
[32:53] Why choose Jason and DoorGrow? He helps create positive awareness and address negative perception surrounding property management.
[40:00] Cold vs. Warm Leads: Prospecting pipeline plugs leaks to grow business and get people to know, like, and trust you.
[44:56] How do good property owners find good property managers? Avoid sandtraps of solopreneurs with few doors; add doors to build a property portfolio.
[49:10] Short-term Rental Success: Get a property manager to solve revenue issues.
[52:32] Precipice of Decision: Believe in yourself, make it happen, and decide to be different by listening to your truest voice.
TweetablesToday’s entrepreneurs and yesterday’s superheroes save lives and make the world a better place.
Entrepreneurism: Insatiable desire to learn and explore opportunities.
Entrepreneurs: Allow yourself to do what you need to do to lower the pressure noise.
Entrepreneurs create positive, uncomfortable change wherever they go.
ResourcesCFD 542 – Jason Hull On How Property Management Can Change The World
TranscriptJason: This is a special episode because this is our 100th episode. What I wanted to do was share something different. I've been on a lot of other people's podcasts recently and this was one that I really enjoyed, this was with J. Massey of the Cash Flow Diary podcast. He was a really great interviewer, I really enjoyed being on the show. He asked a lot of questions and it really dug into me. I'm not used to somebody really digging into hearing about me as much. I'm usually the one digging in and hearing about other people. I thought my listeners would enjoy this podcast so I asked J. Massey if we could have permission to put this on our podcast and he was glad to let us do so. You get to hear this interview of me being on this episode of the Cash Flow Diary with J. Massey. Enjoy the show.
Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.
DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not, because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income.
At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.
J: All right, ladies and gentlemen. Welcome to another episode of the Cash Flow Diary podcast. I'm your host, J. Massey. I'm glad that you are here today because we are going to talk about something that I know, and my guest knows, is one of the most, if not the most, critical piece for your success, not only in business but specifically, the real estate world. I know that many of us were out there. We're trying to grow our cash flow. We're trying to make things happen. Build a bigger, better business, and you're doing it and you're succeeding, and that's great.
Also at the same time, many of you are like, “Man, if I could just figure out how to take what I'm doing in business and do it in real estate too, that would be great.” Some of you are like, “Man, I just want to grow that real estate portfolio and make it a little bit bigger and better, but I'm still having some challenges in these specific areas because I can't find any good help. I can't make anybody do what I think is common sense. There's just not enough common best practices out there. How on earth, J, can I find that particular property manager?” Or maybe you are that property manager and you're going, “You know what? How on earth can I find that owner that actually knows what's up and won't drive me nuts?” I believe we have solutions for you today.
I have with me today none other than CEO, Jason Hull of DoorGrow, doorgrow.com. Some of you may actually know him from his podcast, the DoorGrow Show. What's going to be interesting today is that Jason wasn't always a property manager. We're going to get to find out the story, the journey, and most importantly, learn the lessons around entrepreneurship along the way that have allowed us the world to be able to know and love Jason the way that he is.
Here's what we're going to do, ladies and gentlemen. We're going to pay attention, we're going to make sure that, yes, I know you're walking the dog and doing the dishes, but you're going to hit that mark, you're going to bookmark those spots so that you can come back and listen to the gems that he's going to drop. Most importantly right now though, let's just welcome Jason Hull.
Jason, how are you doing?
Jason: Wow, that's a great intro. I really appreciate that.
J: Thank you. I'm glad that you were here. I'm also excited because we're going to be talking about something that I'm passionate about. Real estate's really important, but more importantly, it's the people and the teams that you hire that tend to make things go well, and sometimes, not go so well. I'm looking forward to that, but before I get down there, I have to ask you the same question I didn't ask everybody else the first time that they're here, are you ready?
Jason: Do it.
J: All right. I tend to look at today's entrepreneurs a lot like yesterday's superheroes—Batman, Robin, Hulk, Wonder Woman, you get the idea—because I think entrepreneurs and superheroes have a ton of things in common. For example, as an entrepreneur, occasionally, I can envision myself using our products and services, flying around town, and saving customers one sale at a time. Also, like a superhero, an entrepreneur has a beginning.
If you think about Spider-Man, for example, there was a time where he's just a kid going to school, doing his own thing, taking some photos, and then one day gets bit by a spider, discovers he's got a superhuman ability, and now he has to choose, “Will I use my newfound talents for good or for evil?” My question to you is as follows. Before DoorGrow, before your podcast, before your degree in marketing, your website design, before being a property manager, before everything we know you for today, what we want to know is who is Jason Hull?
Jason: That's a deep question. Let's sum up a whole person really quickly here.
J: No pressure.
Jason: Yeah, no pressure. First thing, let me just correct something real quick, I had never managed property in my life, yet I somehow am attracting property management entrepreneurs from all over the US and beyond, asking for help in growing and scaling their businesses. I'm more of a nerd that used to be secretly in the background, helping them and had to push myself out into the limelight to make a difference in an industry that I could see there was an obvious change needed to be made.
But my background growing up, I grew up with an entrepreneur mother. She is this amazing, loving, charismatic woman that is a real estate agent. She's just had hustle in her since she was a little kid. She's told me stories of she saw the other boys mowing lawns and she was doing babysitting when she was young, she was like, “They're making way more money than me.” She went around and she figured, “I could undercut them by a dollar, go door-to-door, and steal their business, and start offering to mow lawn.” She started mowing lawns to make more money. She just had that bite in her to accomplish and do things.
I didn't see myself as an entrepreneur, I didn't really know what an entrepreneur was, yet, I think it was just in my DNA. I was the guy in college that decided, “Hey, I want a band so I'm going to start one. I'm going to write all the music.” I was a guy going door-to-door, pre-selling CDs at girls’ dorms with a guitar in hand and a clipboard for an album that didn't exist so that I could pay for the recording time so I could fund an album, but I wasn't an entrepreneur.
J: Yeah. No, that’s not entrepreneurial at all.
Jason: I was thinking I needed to go get a job. I was like, “I'm going to finish college and I got to then find a job.” What thrust me into entrepreneurism is I had gotten married really young and the marriage fell apart. I had two kids and I needed to be able to have time that I could spend with them. I didn't want to just be Disney-dad. I had to create a situation in which I had freedom and autonomy. The other factor that played into it is my employer at the time got hit by the whole financial mess back in 2006–2007, I guess, and could no longer pay me. I was just doing nerdy stuff for them at the time. Then I realized, they were now a client. I started reaching out and creating clients.
One of the earliest people I had helped was my brother who was just getting started in the property management business. He had just bought a property management franchise, he was fresh out of college with his business partner, they had no doors under management, and they had this terrible website they got from corporate. He was like, “Can you just help me figure this out because you're smart? What do I need to do?” I'm like, “Add some phases to it. That'll increase conversion rates. Let's do this and that.” He's like, “Can you just do it for me? Can you please just build me a site?” I'm like, “Sure, but you're going to pay for it.” He's like, “Okay, no problem.”
I built him a website and then suddenly, all of his fellow franchisees—this franchise had maybe 200–300 franchisees in it—and I started attracting these people that had thousands of doors. They wanted what he had. They're like, “Hey, what he has is better. I want that.” Really quickly, here's me, a freelancer, web designer, starting to do websites for people with thousands of doors. Some of these are probably million-dollar-plus businesses. They had really great backlinks, so I was at the top of Google pretty quickly and started getting clients around the US within a short time. I was competing against Goliaths, just me. There we go, now then I'm an entrepreneur. I think I just have an insatiable desire to learn, I just always have, and entrepreneurship allows me to really explore and it's really exciting.
J: Got it. Now I see how I got confused about the difference between understanding what it is you do versus being a property manager. It's more you help property managers, is what it sounds like, become better versions of themselves with their marketing and advertising. Am I close?
Jason: Yeah. Over the years, I've shifted more into coaching and consulting, but we still do websites, we clean up branding. What I tell property management entrepreneurs in short when they come and ask me what I do, I’d say, “I'm not going to teach you how to do property management. I'm hoping you already know that and you're good at it. I’m going to teach you how to win, that's it.”
Basically, what we do in short is we rehab property management companies so that they cash flow effectively, so that they have revenue, they have growth. We optimize their business more for organic. We're cleaning up their branding. Probably 60% or 70% of my clients that come to me, I change their business name, which is ridiculous if you consider how painful, challenging, or scary it is for somebody to do that, but I'm really good at helping them see the principles that impact their decisions about what's going to make money or cost them money. Then it becomes just a financial decision. One thing I know about entrepreneurs is that they usually like to make money.
J: Yes, definitely, but what I like about what you've shared with us here is to some degree, you're in what I would call the reluctant entrepreneur category because you weren't even considering like, “I'm not one of those. That's not what I do,” and then over time, you start displaying these traits. Now I'm curious, did your mom ever suggest that, “Hey, son, you might be…” and you have this conversation with her like, “No, no, no, I just need to go get a job?” was that ever a thing?
Jason: I don't know if I was reluctant. It just wasn't something that anyone had ever explained to me. I don't even know if I really was clear on what technically an entrepreneur was. I think I'd always had an entrepreneurial spirit. I had a paper out as a kid, my mom would have us fold flyers to canvass neighborhoods for real estate as little kids. She would pay us a penny per fold, if we folded a piece of paper twice, we get two cents. I would fold hundreds and then she would have us go around either on roller skates, scooters, or whatever, go around neighborhoods and just canvas and put those out. She'd keep an eye on us, walk around a bit with us, and we would just canvas neighborhoods. I think I was just raised with it and no one had ever put a label on it.
J: Oh, man, this is great. I'm sure some people right now are listening like, “A penny a fold? That's nothing.” I'm sure that happens in somebody's head, but the principle was clearly laid down for you in such a way that you're like, “I'll do it. Okay, let's go,” and you didn't care, and spending time with mom is always awesome. But at the same time, this desire gets left behind and you just keep finding ways to create opportunity. That's what I hear when you talk is you just find ways to create opportunity relative to something that you're currently enjoying. I am curious though did you ever actually get the concert CD album sold? How'd that work out?
Jason: I did. We did create the album, we created the CD, I wrote all the music for it, I sang every song on it, and yeah, we got it recorded. It's a pretty decent little album for being self-produced. I was very into the Beatles at the time.
J: Okay, yes. There's something else that you're also mentioning, the thing that thrust you, I would say is the correct word, into considering something in entrepreneurship in a more realistic fashion was the combination of kids and your employer not being able to employ you, but most importantly, I hear of a deep-seated value. You’re just like, “You know what? Working for someone else can be fine, but I have two kids now and I value spending more time with them, so I'm going to become or do whatever it takes to make sure that I can do that.” I'm curious to know where that comes from.
Jason: I think at the core of people that are really entrepreneurial, they know deep down that they're unemployable. Let's be honest. I worked at HP, I worked at Verizon, I was in call centers, I did a lot of nerdy jobs, I was a nerd, and tech support, stuff like that. In every situation I was in, I think something about me is I create positive uncomfortable change everywhere I go. It's just how I'm wired. I cannot be somewhere and leave things as the status quo. I don't do anything normally. If you could see the keyboard sitting on my desk right now, it's not even in QWERTY order, I pop all the keys off and rearrange them when I get a new computer and keyboard.
J: I want a picture now that you said that, but okay.
Jason: Yes, somebody can just Google if they want to see a different keyboard layout.
J: Dvorak?
Jason: Dvorak, yeah.
J: Yeah, that's the only other thing. I was like, “What else could it be?” The only other thing I was thinking was Dvorak. But okay, that makes sense.
Jason: Yeah, because I'm the guy that my brain just says, “Why is everybody doing it this way? Is this the best way? If it's not, I don't care.” Conventional standards mean very little to me. There's a lot of quirky things about me, and I think entrepreneurs are quirky. You look at Steve Jobs or you look at different entrepreneurs, they have weird habits. Like Steve Jobs, I wear the same clothes every day. I have black t-shirts, I have black pants, I have a whole closet full of black pants and black t-shirts. I just want it simple. I don't want to have to make decisions about that. I wear black hoodies, and I put on a conference, I've been around lots of people in business suits, that's what I wear because I don't care. I just want to be comfortable and that's what I wear. I think ultimately, as entrepreneurs, we need to allow ourselves to do what we need to do to lower the pressure noise instead of trying to play everybody else's game.
For example, with the keyboard, I realized my wrists were hurting. I was typing a lot. I was getting my degree online at the time, I was also working, and I was typing a lot. I was like, “This seems stupid, this is really dumb. Why are my wrists hurting?” I did what I like to do, which is nerd out, and do some research in Google and I realized, “Oh, Dvorak has 50% less movement, it would cut my movement in half.” The home row on the left hand is all the most commonly-used vowels and the home row on the right hand is all the most commonly used consonants, so there's more back and forth between the two hands.
QWERTY’s history was that it was designed and developed to slow down typist. The keys used to be in alphabetical order and they wanted to screw them up because they were typing too fast and the typewriters couldn't handle the speed. I'm like, “Okay, why am I doing this?” It took me, maybe about a month to get used to typing in a different format. My wrist issues went away and I was a lot more comfortable.
J: I like you a lot, I like this. It’s like, “Hey, this doesn't work for me. We're going to figure out what does.” I now have this question. What was that transition moment? There's usually a moment at which, like I said earlier, the superhero recognizes. “I have something special here, and now I get to choose what I'm going to do with it.” You clearly had that moment, but that moment is often, we'll call it rocky, not as smooth, or there's usually some strong emotions around it in some way, shape, or form, or some pivotal conversation. What was it like when you realize, “My employer can't pay me. I guess they'll become a client,” and then you go, “Huh, maybe what I need to do is develop a surface around this whole thing and do my own thing?” What was that like?
Jason: I think really for me, it's been a longer journey than just right in the beginning. A lot of people see me is a really confident guy, but I really have a strong introverted side. I wasn't that confident guy. In school, I did a lot of performing, I did music, stuff like that, but I still had a strong introverted side.
I think that confidence level, part of it happened early on working with entrepreneurs and just recognizing that they couldn't see things I could see. I was like, “You can't see that this is a problem, that you’re branded as a real estate company and it's causing you to lose probably 50% of the deals and leads you should be because you're a property management business, but on the tenants as real estate. There were just things they didn't see that seems so obvious to me.
The other thing is I'm really curious. With each client I would work with, just to do a website, I would probably spend on average about six hours doing a planning and discovery process over, maybe a period of a week or two with them. Multiple sessions, getting clear on their target audience, their avatar, what needs to be included in the website, what their avatar’s pain is, what they want.
It became really clear to me that most of the websites were focused on tenants, yet they're not hunting for tenants, they don't have problems getting tenants, they want more owners to manage properties for. It just seemed obvious to me that everything was off on the websites that existed at the time.
I think I just grew in confidence that I could help people, but I still stayed heavily in the background. I was also in a rough marriage, my second marriage. I was in a marriage in which I didn't really have belief. I didn't have somebody that believed in me and that didn't help the confidence thing going.
Eventually, I signed up with a business coach. I went through several different coaches. Some I was a bad fit for, honestly, I just wasn't ready for them. Some, they were a bad fit. Some maybe were really great marketers and terrible coaches.
I eventually got a really great business coach that I've been working with for a couple of years now. I remember going down to meet with him in Austin. He has a fantastic podcast, by the way, called The Momentum Podcast. His name is Alex Charfen; a really brilliant guy. I went down and met with him and some other entrepreneurs down in Austin.
My business was struggling, we're maybe about $300,000 in revenue annually at the time. I felt like an ant in the room. I was around entrepreneurs that had multi-million dollar companies, I felt completely unworthy, my confidence just wasn't really strong, and yet when he would open up for dialogue, I would end up captivating everyone else in the room, and that was weird for me that I was able to communicate in a way that all of them wanted to know more and they were really fascinated about what I was talking about.
I had learned a lot, I just didn't have the confidence yet to put it out there. I hadn't said, “Hey, I'm going to change this entire industry. I'm the one to do it.” I was like, “Somebody else should do it. Somebody that's been a property manager. Maybe somebody that runs a big, huge property management franchise should be the one.”
My business coach was like, “Who else could do it? You're the one that you care about it, you're the one who can see what needs to change, and they’re everybody else’s competition. Why would they help everybody?” I'm like, ‘That's a good point,” but I had wicked impostor syndrome. I think that's a challenge for entrepreneurs that we have to kill is that impostor syndrome in which we don't feel like we're enough, or we're good enough, or that we qualify, or we’re worthy. We sometimes think we need to find that external validation to say that we're okay.
I think that came just in working with clients. I grew in confidence in situations in which I was able to finally place myself around other entrepreneurs because one of the most damaging things we do as entrepreneurs is that we spend too much time around non-preneurs.
J: Yeah, I believe you.
Jason: It's painful and it's difficult because we see opportunity everywhere. We see how we can change and impact the world. We want to make a difference, we want to contribute, and the rest of the world looks at us like we're crazy, we're making them uncomfortable. “Why can't you leave good enough alone?”
They hear the struggles we go through as an entrepreneur and they say, “Why don't you just get a job?” They look at us like we're crazy and then we look at them like, “Why don't I just slit my wrists now? How can you just sit there and tolerate, complaining about your boss and your job, and living for the weekend? Don't you want something bigger?” We don't understand them, but I think if we’re around non-preneurs too much, it wears us down. It breaks us a little bit. It's really hard and I hadn't really yet been around entrepreneurs.
I think as entrepreneurs are starting out in our early development when we're in the early stages of being an entrepreneur, one of the biggest things that hold us back is being lonely. That's it. We're just not around other people like us to say, “You're normal. You, as an entrepreneur, are awesome, amazing, and you can change the world. You don't have to live by everybody else's rules.”
J: Agreed. There's something that you said that I often have thought about myself. I know that there are people who are listening have had that same thought at least once. You mentioned that yes, we desire to make a difference, we want to see change, and we're not happy with the, ‘That's just not the way you do it, it should be this way.” That's just how we roll, and yet we're the ones who can see the problem.
Like your business coach is saying, why aren't we the ones who can resolve it? But more importantly or said a different way, does that come across to you when you can see an issue? Does it come across to you—I know it does for me—as a responsibility like, “Okay, it’s me, obviously. I'm the one who sees it, this is my thing. So, let me go solve this problem”? That's how it feels to me when I notice opportunity or something that's just not right that could be better.
Jason: Yeah. I think there are two sides to this. I think one, opportunity. On the negative side, I think opportunity also can kill us as entrepreneurs because we do see it everywhere. It can be incredibly distracting. There's that opportunist in all of us, and if we focus on too many opportunities, we don't really get to make any headway in anyone. That's a temptation and a challenge entrepreneurs deal with early on is struggle to focus and to niche down.
On the positive side, we see that the world can be better. We can see it. We are the change-makers. We are the people throughout history, throughout time eternal probably, that were the ones that would move society forward. We would make everyone uncomfortable, we would change something, and we would move people towards a higher and better ideal.
J: Now, let me ask you this question. You could have chosen any industry to serve. Why property managers? I've spent so much time as the one owning the property. This may sound funny to you, but I never considered that property managers had a problem finding owners. That never occurred to me because it just never occurred to me that they had that as a business problem. Obviously, it's there because you're saying it, but as an entrepreneur, you could choose to serve anybody. You could have taken this skill to any industry, so to speak, because believe me, they're not the only one with a problem. Why property management?
Jason: That's a really good point. I don't think there was a time in my life as a child that I woke up and said, “I want to help property management business owners when I grow up. I want to get into this industry that's focused on toilets, tenants, and termites, that sounds exciting to me.”
J: It's right after firemen, I understand.
Jason: Yeah, I'll either be a superhero or I will be a property management coach.
J: Yeah, absolutely, totally right.
Jason: No, that's a great question. I think I resisted it, to be honest, in the beginning. It came to me like I just started attracting them, I tried to just help every type of business though, still, I didn't niche out. It took me a while. I started my corporation, my company back in 2008, but DoorGrow as a brand was maybe only four or five years ago. It took me a little while to, I guess, choose into that niche fully. I think it was imposter syndrome like, “I've never done this so I feel like I'm not the person to do it.” For a lot of people, it's not the sexiest industry.
Here's how you fall in love with property management.If you're an entrepreneur that's a little bit nerdy, property management is like the systemizable, more tech-savvy version of the real estate industry. It's residual income instead of the hunt and the chase for the next deal as a realtor. It's a business that can be optimized over time. It's a business that can follow the theory of constraints and you can make processes around. All of that appealed to me.
What I really fell in love with was not property management. It's the people that are property managers. Do you want to talk about resilient, innovative entrepreneurs? Property management entrepreneurs. You cannot imagine the level of challenges, difficulty, and negotiating. I don't think there's any industry like it because in terms of customer interaction, it's rated third behind retail and hospitality; it's heavily a people business. In retail and hospitality, you're not negotiating really difficult situations not unlike a lawyer between two opposed parties as the middle person, but in property management that's what you end up doing.
These are really some of the sharpest people. They're just amazing entrepreneurs to be around and honestly, I just chose into doing it because I wanted to be around people that are like me. Entrepreneurs. I love my clients. I love being able to spend time with them. I do not feel weird and I really enjoy that. I have a nerdy background and a lot of the clients that are attracted to me, they like figuring out processes, systems, technology, and that sort of thing. There's just a strong resonance in the type of entrepreneur that is in that industry.
J: For the person that's listening right now that happens to be a property manager or maybe it's an owner who's currently doing his own property management in some way, shape, or form, what would you say are the top three things you tend to assist a new client with from day one? How do they know, how can they recognize, “Oh, I need Jason”? What is it that you end up doing over there at DoorGrow for them typically in that first appointment or the first solutions you guys come to the table with?
Jason: Let's go back to the question you asked me earlier about the surprising problem that exists in property management.
J: Yeah, that is still a thing in my head like, “Wow, I didn't know they had problems finding me? I didn't know that.”
Jason: Yeah, every business exists to solve a problem. If a business is not solving a problem, they're stealing money. The problem that exists in the property management industry that I could see, property management has two major challenges. The biggest challenge first is awareness, there are a lot of people that have property. In the US, in single-family residential rental properties, only about 30% are professionally managed, 70% are self managing. The first biggest hurdle is awareness, there's just a lot of people that are not aware of what a property management company would do for them. The average Joe on the street if you said, “Hey, I'm a property manager,” they would say, “Great, I guess you manage a property.” They don't really know what that means. There's a strong lack of awareness to the point where property management really is relatively, in the US, in its infancy.
Let's contrast that with Australia. In Australia, 80% of single-family residential rentals are professionally managed. There are reasons for that. There's steeper legislation there, it's more consumer-focused and a lot of that, but the word on the street is that it grew 25% in a decade, it grew massively. But in the US, property management still is this ugly cousin of real estate, it has this negative perception, especially among real estate.
The other challenge is property management is the number one source of property management-related issues like fair housing challenges, mismanagement of trust funds, or leases, all this stuff, property management is the number one source of complaints at most any board of real estate. Not real estate, property management is. So, everything property management. This is why it's perpetuated heavily among the real estate industry. Realtors say, “Oh, property management. That's gross. Don't touch that. How could you do that?”
The second hurdle that takes the next big portion of potential market share away is perception. Property management has a very negative perception among investors, among people that are aware of it. There's a negative perception that takes away the next big chunk of potential market share.
After perception takes a hit, those that are aware and they think they have a decent enough perception to think, “At least, I have to have one or I need one,” or maybe they are okay—there are some good ones—then word-of-mouth captures what's leftover. Word-of-mouth captures the best clients that property management might get.
After word-of-mouth, the scraps that fall off my client’s table, that fall off the word-of-mouth table, the coldest, crappiest, worst leads that are the most price-sensitive, that view all property managers as the same and is a commodity, that are the worst owners and properties to build a portfolio on, in which you're going to have probably an operational cost in your property management company of 10 times higher than that of having healthy good doors and owners, those are the people searching on Google. That's what's leftover.
Most property management business owners are trying to build their business on the back of Google. I'm wearing a t-shirt right now, you can't see, but it says, “SEO won't save you.” It has a hand reaching up out of the water, trying to grab a life preserver, a black t-shirt with white lettering.
This is a message I put out to the industry that they don't need to be playing the SEO lottery because, really, search volume in the property management industry has actually been on a steady decline. According to Google Trends in the US, it's been a steady decline since July of 2011. It's been going down, yet every marketer targeting the industry, every service provider, every web design company, they're shoving and pushing the concept that SEO is going to save them.
They just need the top spot on Google. They're playing into this myth, so all these property managers are spending marketing dollars, their hard-earned money, they’re trying to run Google Ads, everything to be at the top of Google, and they're not getting an ROI. They're not getting a return on that investment. It's an incredibly expensive game that has many potential points of failure.
You have to be a property management business, usually, at about 200 to 400 doors, with a business development manager. You have to be making sure that all of your phone calls are answered and you're following up on every lead within the first 10 minutes to really play that marketing game.
I found most property management business owners were not at that level. I wanted to create them, get them to that level. Originally, I was the guy doing that stuff, I was a marketing company, I was a guy helping with those type of things, and I realized really quickly that it wasn't working. They weren't even answering their phones. Why would I send them a lead that's only good for maybe about 10 minutes—that's how long an internet lead’s probably good for, maybe 15—and then 80% drop off in conversion rates if they're not going to answer their phones?
I just pivoted this company and I was thinking, “What would I do if I were going to start a property management business? What are all the most common problems that I can see even in the largest companies? Where are the biggest leaks in their sales pipeline?”
Just like the theory of constraints, I just went from the beginning of the sales pipeline, which is that awareness. It's branding. Branding was costing some of them half the amount of deals and leads they could or should be getting. Some companies do real estate and property management. By eliminating real estate from the branding, I helped double their real estate commissions, ironically, because property management is a great front-end product. Real estate is a better back-end product.
People don't wake up in the morning and say, “I want to find a realtor today. That sounds exciting to me.” No. They want property, they want to find buyers, they try to for sale by owner, but eventually, they list with an agent. The property management, if you have a constant influx of owners, investors that may get into additional properties, constant influx of renters and tenants, you have buyers and sellers. You have bodies constantly flowing into the business and this is the dream of a real estate company.
We just started addressing these big leaks from branding, reputation, which is word-of-mouth, their website wasn't built around conversions and targeting the audience, their sales process, pricing strategy played into this heavily, they were not priced effectively, they were taking too many deals at too low of a price point. Psychologically, for example, there are three types of buyers. Most of them just had one fee, serving one type of buyer, and there was no price anchoring. I just started to see all these different leaks that we could shore up through the pipeline so that we could optimize their business for organic growth.
Then the big secret is at the front end of this. Once we get all of these leaks dialed in, their sales process, they have follow-up, all these things are in place, what spigot should we turn on through this pipeline? They could go back and do cold-lead marketing, but cold leads are terrible. Conversion rates are low even if they're a bad A. I don't know what the rating is on your podcast so I'll be careful. If they're a bad A in sales, they’ll only get maybe about 30% conversion rate or close rate, but most people, say 1 out of 10 cold leads, they'll convert.
The hidden killer with cold leads in any industry or business—the secret the marketers don't want to tell you—is they can't give you contracts. Marketers cannot give you contracts. You can't hand dollars to a marketer and they will hand you written signed contracts or clients. What they can hand you at best, usually, the furthest they can push it along is usually a really cold lead. That's it. That's typically what they can give you is they give you a cold lead and this cold lead then has to be nurtured. You have to warm it up. You have to get them to know you, trust you, and like you.
Cold leads convert really poorly, usually, you'll get maybe 1 out of 10. The hidden killer though with cold leads is time. This is the hidden killer with cold leads that small business owners don't realize. Time on a cold lead is at least twice as much time as a warm lead or maybe three times as much. I found clients when I would ask them, “How much time do you spend warming these people up, calling them, meeting them at the property?” They say in total, in my sale-cycle time, three to six hours to close the deal. “How long does it take you a warm lead?” I was getting answers like 15 minutes, maybe an hour, it was like half, at least, half the amount of time.
These small business owners, if you give them 10 leads in a week and it's going to take them 2 to 3 hours to do all the follow-up necessary and they're going to get maybe 1 or 2 deals out of it, that's a full-time job. They don't have the time, as small business owners, to do that if they're also the main person doing the selling. They just didn't have the bandwidth to do it. It wasn't even possible for me to give cold leads to clients and have them win that game. They didn't have the time. They really work part-time crappy salespeople that had maybe about 10 hours a week to focus on that piece.
I had to create a system that will allow them more warm leads. Instead of the front-end of this pipeline, what I teach clients to do is to go to prospecting. There's 70% self-managing. There's so much blue ocean in property management and yet everyone's fighting over the coldest, crappiest, worst leads that fall off the word-of-mouth table, that are searching on Google in the bloody red water. It's created this false sense of scarcity that's so strong in the industry that everybody feels like the industry is scarce, yet there’s 70% self-managing and none of them are really happy doing it.
J: I have been doing real estate for over a decade and I have never even considered this concept from the property manager’s perspective in this way. I've always considered them partners. I've never wanted the lowest guy, they’re such a critical piece. Some of the things that you said, I was like, “Why would somebody bargain-basement shop for a property manager? That's just silly, you don't understand, you can't do that. That's not going to work long term,” but I've never thought about the fact that they would have trouble finding the quality owners. Just hearing you describe their world, it's like, “Oh, wow, yeah. I can see why that would be a challenge.”
I'm curious, though, when a property manager is out there and trying to make it work—I'm just going to throw it out there—how can the good owners let the good property managers know that, “Hey, yeah, I would love to have you”?
Jason: I think the biggest challenge I usually hear is that there aren't any good property managers. How do you find one that's good? Those owners feel completely unsafe. The industry has a really bad reputation as a whole. One of the concepts I teach—all these principles apply to really any industry, in any industry—branding has an impact, reputation has impact, pricing strategy has an impact. There's nothing I'm doing for this industry that is only related to this industry. I think the challenge the industry has, though, is it just has a lot less awareness, but I think that also means there's a lot more opportunity. There's a huge opportunity in property management.
If we were to grow even remotely close to how Australia's grown in a decade, that would mean the industry in the US would double. I think property management could be as big as the real estate industry here in the US. There's much potential. I don't think it's been tapped. I think property management in the US has artificially been kept small and it is really a business category that's in its infancy.
If you look at business categories that are relatively new in the US, you've got marijuana, vaping, and stuff like this, maybe Bitcoin or cryptocurrency, there's these fledgling industries. Property management's been around a long time, but it's still in its infancy. There's a huge potential there to grow.
There are a lot of bad owners. That's true, too. The accidental investors didn't really want to have a rental property, but they needed it, and they just want to get rid of it after a year. If a property manager builds their portfolio on those type of doors, which some do, they have to replace every single client every single year.
J: Yeah, that's an untenable situation that would go with that.
Jason: Yeah. You'll find property managers fall into this first sand trap of 50 units or so. One question you can ask them is, “How many doors do you have under management?” If they're in the 50 or 60 door category, then I call that the first sand trap. That's one of my key avatars that I want to help is to get them out of that first sand trap.
I call that the solopreneur sand trap where they're doing everything in the business, they've taken on too many clients at too low of a price point. And this applies to any industry. As a small business owner, you take on too many clients at too low of a price point, you back yourself into a financial corner, and you take on the worst clients because you're needy, and your operational costs with bad clients are 10 times higher than that of having good clients, easily.
One bad property or a bad owner that tries to micromanage you is easily 10 times the operational cost, time and attention, and stress as one good door or one good owner, easily. If you build a portfolio of that, you're stuck. You're backed into a financial corner, you can't afford to hire anybody, and you're losing as many doors as you’re getting on in a year. You're stuck. Sometimes, I have to tell them to do really painful stuff like fire customers in order to create space.
J: Yeah, that makes 100% sense. For those that have listened to this far and want to find out more about what you've got going on, what's going to be the best way for them to track you down?
Jason: I love connecting with other entrepreneurs and a really easy way for them to connect with me, I'm on every social channel—probably—that exists, because I'm nerdy, as @KingJasonHull. They can connect with me as @KingJasonHull on any social channel, especially Facebook. Then if they're in real estate and they're really considering getting into property management, they've managed rental properties, they feel like they know how to do it, but they want to grow that side of the business and maybe feed their real estate side, or they’re a property management entrepreneur that's been struggling at doors and they want to make a difference and grow, then they can just reach out to us at doorgrow.com.
J: Okay, I've got a question I just got to ask now. I wasn't going to do this, but I got to ask. My entire world when it comes to real estate, is all around the whole world of short-term rentals. It's what we do, it's what we teach, it's how our students have achieved success. One of the interesting things is that when we're interfacing with individuals, we often get the question, “Why don't I just get a property manager?” I'm like, “You don't understand. What we are talking about is completely different than what a property manager would typically do.”
I'm just curious if the whole idea of short-term rentals or things of that nature, because being able to add that, if property managers took that on, they'd be able to solve some of their revenue issues for sure. Is that something you're seeing happening and in any way with your clients?
Jason: Yeah, I think there is a trend of short-term rentals coming into the space. If long-term rental property management is in its infancy, I think that's even younger. There are property managers, especially in more resort-like areas where vacation rentals are more popular, I think all of them have some, they get into that, especially the larger management companies, just by nature of having a larger business and lots of different investors, they're going to have some short-term rentals. Short-term rentals make a lot of sense for them. It's a lot of turnovers, it's a lot more work, but it also can be a lot more payout for them. There is a trend shifting towards that.
J: Yeah. I just asked because, in order to do it effectively, there's just specialization that's required. That's why we just stepped up and started doing it because we can’t find the property manager that could do a good a job as we have learned to do and now teach others to do. It’s just like, “You know what? We'll just do it ourselves.” That's what's happening, but at the same time, in the back of my head, I'm like, “Man, they're missing an opportunity. If they would just understand some of these things that we're doing, I think it would work well.” I was just curious, it's been in the back of my head, I'm like, “I wonder, considering you're helping them put their services together.”
Jason: Yeah, J, be careful because that is the story that almost all of my clients tell me. You may end up in this industry. That's what they all tell me. They all come to me and they’re like, “I started this business X number of years ago and it was because we were investors and we couldn't find a property manager that was good enough to do things the way that we needed it done, so we started one. They're all bad and we're good,” I hear that almost every day.
J: Oh, man, I love it. Okay, as we wind down, I've got a final question for you because I'm really curious to hear your answer. Here's what I know. I know that individuals started the call on one spot, and now, as we’re ending, they're in a different spot. They're at what I like to call the precipice of decision. It's where they go, “You know what? That's it. I can do this. I can make this happen.” Maybe they are a property manager and, “Yeah, I should call Jason. That's exactly what I need to do. I need to track him down, figure this out.” They're drawing that proverbial line in the sand, they're saying that's it, and now they're going to be different.
Now, Jason, you know like I know that when we make those types of decisions, we often have a companion, and it's a companion that comes in the form of a voice that says things like, “You? Now, you know good and well last time you tried anything, it didn't really work out. What on earth are you thinking about? Oh, my gosh, no one's going to buy anything from you. You're not going to be able to get any clients, whatsoever, so why don't you just go back to your job?” For some people, they're related to that voice.
My question to you is as follows. Let's pretend that this time it's going to be different. This time they're going to do exactly what you suggest and they're going to do so in the next 24 to 48 hours. What would you suggest that they do?
Jason: If somebody has a voice, especially if it's an external voice, saying, “You don't have what it takes. You can't do this. You need to play it safe,” they need to find another voice. The truest voice that we all have is the voice deep down. That's never the voice that we have deep down. When somebody says, “Oh, deep down I knew it would be like this,” or, “Deep down I knew I should have done this,” or, “Deep down, I just knew it was the right move.” The voice deep down—you can call that the voice of God, you can call that your intuition, you can call it your gut—is the truest voice and that's the only voice we really should be listening to.
Let me close an open loop I left open earlier. I mentioned how I was down in Austin, I'd met with my business coach for the first time down there, I was around all the other entrepreneurs, I felt like an ant in the room, but I was sharing ideas, they were resonating with it. My business coach asked me to describe what I did and he said, “Oh, that'll never work.”
Then, I explained to how much money I was making and what I was doing, so he understood it, he looked at me and he said, “Jason, you have a $20 million company and you don't even know it.” Do you want to know what I started doing? I started crying. I had had little validation, I had much resistance from spouse, I just had no support around me in terms of being connected to entrepreneurs, I started crying in front of a room of other entrepreneurs. I needed that in that moment, badly.
Fast forward. In a year, I had 300% growth. We were a million-dollar company in about a year. I was crying and it was like a cathartic thing that somebody could see what I felt deep down and they believed in me. I don't know if there's anything more powerful than that to be seen for who you really are and I think that is the love or energy that we all need as entrepreneurs in order to grow. We need that belief.
J: 100%. I definitely appreciate the journey that you have been on. I thank you for taking the time to distill your knowledge down in such a way that you could then share it, become the person that's capable of sharing it, and influencing an industry that's very close to my own heart. At the end of the day, it's where it's been at for us for quite some time, it's where we're going to stay, but the more that you enable property managers to do what they do and find the customers that they need, the better I think it all gets for everyone. Just let me be the first to say thanks for taking the time to share your knowledge, wisdom, and insight here with us today at the Cash Flow Diary.
Jason: J, it's been an absolute pleasure. In line with what you just said, I really do believe deep down that good property management can change the world. The impact that they can have in that industry is massive. They're affecting homes, families, on the tenant and the owner’s side. They're affecting people's cash flow. They're affecting their finances. They're affecting real estate investors that got into the real estate investing with the myth that it could be turnkey. The impact is massive and I think that's what gets me excited about the industry. We're contribution-focused banks as entrepreneurs, we want to have an impact. I appreciate you allowing me to share that message and to be here on your show.
J: All right, ladies and gentlemen, you know what time it is? It's time for you to move at the speed of instruction. What does that mean? That means get over to doorgrow.com. That means go listen to his podcast. That also means connect with him. He said he wants to talk to you, it's very simple, ladies and gentlemen.
One of the things that I hope you learn from today's episode is when you see a need, it's probably your responsibility to go fill it and just figure it out along the way. You don't need to understand everything at the beginning, but over time, you can get there. But most importantly as you heard and I heard, you want to follow that path, follow that voice that is telling you there's greatness inside.
Ladies and gentlemen, it's been fun talking to you today. I look forward to talking to you soon. Until next time.
Jason: You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com.
Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. At DoorGrow, we solve your biggest challenge getting deals and growing your business. Find out more at doorgrow.com.
Find any show notes or links from today’s episode on our blog at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow hacking your business and your life.