The Property Management Show

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: Education. We have doubled our speaker budget, and we buy top talent. Comfort. Our venue is a top tier San Diego luxury hotel with an exceptional rate. Depth. The information is at the next level. Some speakers are teaching workshops on sales and video marketing. 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. 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.