Doubling Down on Property Management Business Growth: A Deep Dive
The property management industry is rife with opportunities and challenges. In the quest to double business growth in less than a year, there are several key insights and strategies that can be gleaned from industry experts. Let’s delve into some of the highlights from a recent discussion on this topic.
1. In-House Talent and Growth:
One of the pivotal moments in a company’s growth trajectory can be the recognition and utilization of in-house talent. Instead of seeking external hires, looking within can often yield the best results. A familiar face, likened to a “comfortable pair of shoes,” can sometimes be the perfect fit for a new role, especially when they align with the company’s vision and growth strategy.
2. The Role of Sales in Property Management:
Not all property managers are adept at sales, and vice versa. Recognizing this distinction is crucial. The process of onboarding new clients, preparing properties for the market, and ensuring seamless handoffs to property managers requires a specialized skill set.
3. Harnessing Technology for Growth:
Modern property management companies are leveraging technology to streamline operations and enhance customer interactions. Platforms like LeadSimple can provide insights into the sales pipeline, client interactions, and more. Such tools not only enhance efficiency but also provide valuable data to inform growth strategies.
4. The Power of Company Culture:
A strong company culture can be a driving force behind business growth. Participating in events, fostering a sense of community, and exploring additional revenue streams can all be influenced by a company’s culture and values.
5. Acquisitions as a Strategic Move:
Acquisitions can be a double-edged sword. While they offer rapid expansion opportunities, they also come with challenges. It’s essential to have protective clauses in acquisition contracts and to learn from both successful and unsuccessful acquisition endeavors.
6. Metrics and Growth:
Understanding metrics like customer acquisition cost, portfolio value, and lifetime customer value can provide a clear picture of a company’s growth potential. These numbers offer a pragmatic approach to business, removing emotions from the equation and focusing on tangible results.
7. The Importance of Continuous Learning:
The property management industry is ever-evolving. Staying updated with the latest trends, attending industry events, and learning from peers can provide invaluable insights for sustained growth.
Step #1: In-House Talent and Growth: The Untapped Potential Within
In the dynamic world of business, growth is often synonymous with hiring. Companies, in their quest to expand and scale, frequently turn their gaze outward, seeking the next best talent in the market. Job postings go up, recruitment agencies are engaged, and interviews are scheduled. But what if the key to that next phase of growth is already sitting in the office, working diligently at their desk?
Recognizing the Goldmine Within
Every employee in a company brings a unique set of skills, experiences, and perspectives. Over time, they also develop a deep understanding of the company’s culture, values, and objectives. This combination of skills and company knowledge can be invaluable, especially when looking to fill a new or expanded role.
The Comfort of Familiarity
Imagine slipping into a comfortable pair of shoes. They fit just right, require no breaking in, and you know exactly what to expect. This is the feeling many managers and leaders experience when they promote or transition an existing team member into a new role. There’s a shared history, mutual trust, and a level of understanding that simply can’t be replicated with an external hire.
Aligning with Vision and Strategy
One of the significant advantages of looking in-house is the alignment with the company’s vision and growth strategy. Existing employees have lived and breathed the company’s mission. They’ve been a part of past successes and challenges. When they step into a new role, they carry forward this understanding, ensuring that the company’s vision remains at the forefront of all they do.
The Bottom Line
While external hiring has its place and can bring fresh perspectives and skills, it’s essential not to overlook the potential of in-house talent. By recognizing and nurturing this talent, companies can not only ensure a smoother transition into new roles but also foster a culture of growth and opportunity that benefits everyone.
Step #2: The Interplay of Sales and Property Management: A Delicate Balance
In the bustling realm of property management, there’s a common misconception that property managers are also natural salespeople. While both roles are integral to the industry, they each come with their unique set of skills and challenges. Understanding the nuances between the two can be the key to a thriving property management business.
The Distinctive Skill Sets
Property Managers: At the core, property managers are responsible for the day-to-day operations of properties. This includes everything from maintenance and tenant relations to rent collection and lease enforcement. Their primary focus is to ensure the property is well-maintained, tenants are satisfied, and the property owner’s investment is protected.
Salespeople: On the other hand, salespeople in the property management industry are the front-liners. They’re the ones meeting potential clients, showcasing properties, and closing deals. Their role is to expand the company’s portfolio by bringing in new properties to manage.
The Crucial Crossover
While the roles are distinct, there’s an undeniable crossover. A property manager might find themselves in a situation where they need to ‘sell’ their services to retain a client or resolve a dispute. Similarly, a salesperson needs to have a basic understanding of property management to answer potential clients’ queries effectively.
Onboarding New Clients: A Collaborative Effort
One of the most critical phases in the property management lifecycle is the onboarding of new clients. This process involves both sales and property management skills. Salespeople lay the groundwork by attracting and securing the client. Once that’s achieved, property managers step in to prepare the property for the market, ensuring it meets all standards and regulations. The final handoff, where the property is transitioned to the property manager for ongoing management, is a testament to the collaborative effort between sales and management.
In Summary
The property management industry thrives on the delicate balance between sales and management. Recognizing the unique strengths and challenges of each role ensures that properties are not only acquired but also managed with the utmost professionalism and care.
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Step #3: Leveraging Tech Tools for a Thriving Property Management Business
In today’s fast-paced world, technology is no longer a luxury; it’s a necessity. For property management companies aiming to scale and grow, the role of technology is pivotal. From streamlining operations to enhancing customer interactions, tech tools are changing the game.
The Digital Transformation
The property management industry has seen a significant shift in recent years. Gone are the days of manual record-keeping and endless paperwork. Modern property management companies are embracing digital solutions to make life easier for both their team and their clients.
The Power of Platforms
Take LeadSimple, for example. This platform has become an invaluable resource for property managers looking to gain insights into their sales pipeline and client interactions. But it’s not just about collecting data; it’s about what you do with it. These insights can be the key to identifying growth opportunities and areas for improvement.
Efficiency Meets Strategy
The beauty of technology is that it serves multiple purposes. On the one hand, platforms like LeadSimple make day-to-day operations more efficient. Tasks that would have taken hours can now be completed in a fraction of the time. On the other hand, the data collected through these platforms can be a goldmine for strategic planning. Knowing your average response time to client queries or the most common reasons for property vacancies can inform future growth strategies.
The Customer Experience
In an industry where customer satisfaction is paramount, technology can be a game-changer. Automated responses to common queries, online booking systems for property viewings, and digital lease signing are just a few examples of how technology can enhance the customer experience.
Step #4: The Unseen Engine of Growth: Company Culture in Property Management
When we talk about the factors that contribute to a company’s success, we often focus on tangible elements like financial metrics, customer satisfaction, and operational efficiency. While these are undoubtedly important, there’s an unseen engine powering many successful companies: a strong company culture.
More Than Just a Buzzword
Company culture isn’t just a trendy buzzword; it’s the DNA of a company. It’s the collective values, beliefs, and behaviors that shape how the employees in a company interact with each other and with customers. In the property management industry, where relationships are the cornerstone of the business, culture can be a game-changer.
The Event Factor
One of the most visible manifestations of a company’s culture is its participation in events. Whether it’s industry-specific conferences or community service activities, the events a company chooses to engage in say a lot about its values. These events are not just opportunities for networking and learning; they’re also a platform to showcase the company’s culture to the outside world.
Building a Community, Not Just a Company
A strong culture fosters a sense of community among employees. This sense of belonging can be incredibly motivating and can lead to increased productivity and job satisfaction. In a field like property management, where teamwork and collaboration are key, a cohesive community can be a significant asset.
Exploring New Avenues
A company’s culture also influences its willingness to innovate and explore new revenue streams. A culture that encourages risk-taking and values innovation will be more likely to explore additional services like property maintenance or real estate sales, diversifying the business and potentially increasing revenue.
Step #5: The Power of Acquisitions in Property Management
In the fast-paced world of property management, companies are always on the lookout for strategies to expand their portfolio and grow their business. One such strategy that has proven effective time and again is acquisitions. But what exactly does this entail, and why is it so impactful?
What is an Acquisition in Property Management?
In simple terms, an acquisition in the property management context refers to the purchase or takeover of another property management company or its portfolio of managed properties. Instead of the slow and steady growth achieved by onboarding individual properties, acquisitions allow for rapid expansion by absorbing existing portfolios.
Why Consider Acquisitions?
- Instant Growth: Acquiring another company or its portfolio can lead to an immediate increase in the number of properties managed, boosting revenue potential.
- Diversification: Acquisitions can help diversify a company’s portfolio, allowing them to enter new markets or property types they previously didn’t manage.
- Operational Efficiencies: Merging operations can lead to cost savings and operational efficiencies, especially if there are overlapping resources.
- Brand Expansion: For companies with a strong brand presence, acquisitions can help in spreading their brand to new territories and clientele.
Challenges to Keep in Mind
While acquisitions offer numerous benefits, they come with their own set of challenges:
- Cultural Integration: Merging two companies can lead to cultural clashes. It’s essential to ensure that the teams integrate well and share a common vision.
- Operational Hiccups: Integrating systems, processes, and operations can be challenging and may lead to temporary disruptions.
- Financial Considerations: Acquisitions are a significant investment and require thorough financial planning and due diligence.
Step #6: Navigating the Numbers: Metrics and Growth in Property Management
In any business, growth is often the ultimate goal. But how do you measure it? How do you know if your strategies are effective, or if you’re moving in the right direction? In the property management industry, the answer often lies in metrics. Understanding key performance indicators can provide invaluable insights into your business’s health and growth potential.
The Metrics That Matter
When it comes to gauging the success of a property management company, there are several metrics that stand out:
- Customer Acquisition Cost (CAC): This metric helps you understand how much it costs to acquire a new customer. A lower CAC is generally better, as it means you’re getting more value for your marketing spend.
- Portfolio Value: This is the total value of the properties you manage. It’s a direct indicator of your company’s size and, by extension, its success in the industry.
- Lifetime Customer Value (LCV): This metric gives you an idea of how much revenue you can expect from a customer over the entire duration of your relationship. A higher LCV is generally better, as it means customers are more valuable to your business.
The Pragmatic Approach
Metrics offer a way to approach business pragmatically. They remove emotions from the equation, allowing you to make decisions based on data rather than gut feelings or assumptions. This is particularly useful in property management, where the stakes are high and the margins can be thin.
Tangible Results
At the end of the day, metrics provide something incredibly valuable: tangible results. They offer a clear, quantifiable way to track your performance over time, identify areas for improvement, and gauge the effectiveness of your growth strategies.
Step #7: Never Stop Learning: The Key to Sustained Growth in Property Management
In an industry as dynamic as property management, standing still is not an option. The landscape is constantly shifting, influenced by changes in real estate markets, tenant behaviors, and even technological advancements. To not only survive but thrive in this environment, continuous learning is not just a recommendation; it’s a necessity.
Keeping Up with Trends
The property management industry is subject to a myriad of trends that can have a significant impact on business. From shifts in tenant preferences to new property technologies, being aware of these trends can give you a competitive edge. It’s not enough to rely on what worked in the past; staying updated is crucial for future success.
The Value of Industry Events
One of the best ways to engage in continuous learning is by attending industry events. These gatherings provide a unique opportunity to hear from thought leaders, network with peers, and even discover new tools and technologies. The insights gained from these events can be invaluable, offering fresh perspectives and ideas that can be applied to your own business.
Peer-to-Peer Learning
While formal education and events are important, never underestimate the value of learning from your peers. Whether it’s through online forums, social media groups, or even casual conversations, the experiences of others in the industry can offer invaluable insights. These interactions can provide practical tips and strategies, and even help you avoid common pitfalls.
In Summary
In the fast-paced world of property management, continuous learning is the fuel for sustained growth. It equips you with the knowledge and insights needed to adapt, innovate, and ultimately succeed in an ever-changing landscape.
Bonus Step #8: Digital Marketing to Increase Property Management Growth
In today’s digital age, traditional marketing methods are quickly being overshadowed by digital strategies. For property management companies looking to double their growth, digital marketing offers a plethora of opportunities. One such strategy that has proven to be effective is the use of a marketing funnel to generate leads.
Understanding the Marketing Funnel
A marketing funnel is essentially a model that represents the stages a potential customer goes through before making a purchase or taking a desired action. In the context of property management, this could mean signing a lease or contracting your services for property management. The funnel typically consists of four main stages:
- Awareness: At this stage, potential clients become aware of your property management services through various channels like social media, search engines, or word-of-mouth.
- Interest: Once aware, they start showing interest by visiting your website, reading blog posts, or following you on social media.
- Consideration: At this point, potential clients are seriously considering your services and may engage with your content, such as watching webinars, downloading eBooks, or signing up for newsletters.
- Conversion: This is the final stage where the potential client becomes an actual client, either by signing a lease or contracting your property management services.
The Role of the Funnel in Lead Generation
The funnel serves as a roadmap for your digital marketing strategies. By understanding where your potential clients are in the funnel, you can tailor your marketing efforts to guide them to the next stage. For example:
- Content Marketing: Create informative blog posts or videos that address common questions or challenges in property management to attract people at the “Awareness” stage.
- Email Marketing: Use targeted email campaigns to nurture leads who are at the “Interest” or “Consideration” stages, providing them with valuable insights and solutions.
- Retargeting Ads: Use retargeting ads to re-engage potential clients who have interacted with your website but have not yet converted.
- Landing Pages and CTAs: Create compelling landing pages with clear calls-to-action (CTAs) to convert leads at the “Conversion” stage.
Measuring Success
The beauty of digital marketing is that it’s highly measurable. Tools like Google Analytics can provide insights into how well your funnel is performing, from click-through rates to conversion rates, allowing you to tweak your strategies for maximum effectiveness.
Conclusion: The Multifaceted Approach to Accelerated Growth in Property Management
In the complex and ever-changing landscape of property management, achieving rapid growth is no small feat. It requires a multifaceted approach that goes beyond traditional business practices. From recognizing and nurturing in-house talent to understanding the nuanced roles of sales and property management, each aspect plays a critical role in the company’s growth trajectory.
Technology has emerged as a powerful tool, not just for streamlining operations but also for gathering invaluable data that informs strategic decisions. Coupled with a strong company culture, these technological advancements can propel a company to new heights, fostering a sense of community and shared purpose among team members.
Acquisitions, while promising, come with their own set of challenges and must be approached with caution and due diligence. Similarly, understanding key metrics provides a pragmatic lens through which the company’s growth potential can be assessed, offering a data-driven approach to business decisions.
Last but not least, the importance of continuous learning cannot be overstated. In an industry that’s constantly evolving, staying updated with the latest trends and learning from peers are not just beneficial but essential for sustained growth.
In summary, doubling business growth in less than a year is an ambitious but achievable goal. It requires a well-rounded strategy that addresses various aspects of the business, from human resources and technology to culture and continuous learning. By focusing on these key areas, property management companies can navigate the challenges and opportunities that come their way, setting themselves on a path to rapid and sustainable growth.
One of the key aspects of accelerating your property management business growth is mastering the art of rental management. By optimizing your rental management strategies, you can significantly improve your revenue streams and client satisfaction.
Another avenue for growth that you shouldn’t overlook is Section 8 property management. This can be a lucrative niche if managed correctly, and it can contribute to doubling your business growth in less than a year.
Lastly, diversifying your portfolio to include multifamily apartment property management can be a game-changer. The economies of scale in managing multifamily units can lead to higher profitability and more streamlined operations.
Other Resources
- National Association of Residential Property Managers (NARPM): A leading organization offering certifications, resources, and networking opportunities for property managers.
- Institute of Real Estate Management (IREM): Provides education, resources, and certifications for real estate and property management professionals.
- Buildium Blog: Offers insights and advice on property management, including topics like tenant relations, financial management, and marketing.
- RentPrep: A resource for tenant screening services, including background checks and credit reports.
- Cozy: An online platform for property managers and landlords to collect rent, screen tenants, and manage properties.
- Property Management Software Reviews: A site that reviews various property management software to help you choose the right one for your needs.
- Fair Housing Act Guidelines: Essential reading for understanding the legal aspects of property management.
- Property Management Books on Amazon: A curated list of books that provide in-depth knowledge and strategies for property management.
About the Writer Federico Calderon
Federico Calderon is a seasoned real estate expert with years of experience in the industry. His insights into the world of real estate investing have been invaluable to both newbies and seasoned investors. With a keen eye for opportunities and a deep understanding of market dynamics, Federico’s expertise has paved the way for many successful real estate ventures.
About the Author
Federico Calderon is a licensed Broker and Property Manager with over a decade of experience in the Nevada real estate market. His extensive knowledge and hands-on approach have made him a trusted figure in the community. Federico Calderon’s commitment to excellence and his passion for the industry shine through in every transaction. He believes in empowering his clients with accurate information, ensuring they make informed decisions. When he’s not assisting clients, Federico Calderon is often found attending real estate seminars, staying updated with market trends, or mentoring upcoming professionals in the field. Choose Federico Calderon for a seamless, professional, and personalized real estate experience
YouTube Video “How To Double Your Property Management Business Growth in Less Than a Year”
In today’s video, we delve deep into the strategies and insights that can help property management companies double their growth in less than a year. From leveraging in-house talent and understanding the role of sales to harnessing technology and focusing on company culture, this comprehensive discussion covers it all. Tune in to hear from industry experts as they share their experiences and lessons learned in the quest for rapid business expansion.
Transcript:
you are now tuned in to the property
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management show with your host Alex Posen and home we bring in the experts of today so you
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can be the master of tomorrow in all things Property Management whether it’s
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getting more doors running a profitable fee based business or by simply being
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the best property manager so grab a pen and paper because this episode is sure
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to be a good one thank you and enjoy the show
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hey guys welcome to episode number 13 I
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think getting up there so maybe 40 no not yet not the anniversary one yet so
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my friend Josh McNeal and I we were talking about the PM bro summit and he
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spoke there last year on our positions and since then him in my catalana of his
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go speaker have done you know multiple additional acquisitions to learn a lot
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of things gonna bring all this new knowledge talking about talking about and jocks like Alex by the way
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said that by the way by the way I thought you know I’ve actually learned
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what I needed to know about getting a be DM Business Development Manager for my
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business and now I have one and we’ve doubled our growth oh by the way well so
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we had to set up this time and really sort of get this out in the open because I’m really curious and had talked and I
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talked about this a little bit and we’re gonna expand on it here specifically what sort of system he had before for
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his Alliance property management company up in Santa Rosa for buying for bringing
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clients on and woods system he has now and what sort of Delta to the change in
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growth he’s seen so jock welcome to show and thanks a lot for being here man hey always happy to talk to you it’s it’s
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very very mutual absolutely so hey we’ve been friends for a while I know your company very well up into your office at least couple of times you run a tight
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ship but tell me tell me sort of the state of pre sales process being that everything
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before sales who like when the inquiry came in when the leak came in who cared
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for it first of all you know what take a step back for sound sight maybe you can introduce yourself and tell folks where
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you are and who you are in your experience sure happy to do so my name
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is Josh McNeil I’m a co-owner and Broker of Alliance property management at Napa
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Valley and another company that’s commercial real estate company called true real estate partners and I’ve been
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at this since 1999 so it’s my 18th year in the business I have gone from doing everything myself
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to having a staff of 12 13 or 14 I can’t live lost count full-time employees a
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couple of part-timers three offices in the North Bay area of California and
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thank you for the compliment of running a tight ship I don’t think it’s a tight ship so much as I just know where all the holes are and I keep some to them
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so that’s very cool but what I’ve noticed is you have people that stay with you for a long long time very
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passionate buddy-buddy motivated employees and I know writing a business it’s very hard to keep people motivated
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for long periods of time and I think you’ve done you Frank done a good job on
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just just treating your people right I guess and gathering your client yeah
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thank you thank you yeah we’ve got got six actually seven property managers now
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besides myself with Frank the longest term property manager is just past the
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15-year mark we’ve got half a dozen employees over the 10 or 12 year mark
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and I’d like to think that’s because we provide them with great working environment good compensation and when I
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say compensation it’s not just the money it’s the benefits you’ve got to look at the whole package and a fun place to
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work where we’re focused on creating opportunities for them that’s very cool
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so I think that’s a subject for another show you can and you and I can exchange our own sort of tips and tricks and what
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worked with did more because I have actually very curious about fine to come across a successful business order that has a great team specifically you know I
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really want to dig in and find out what works but let your peers and talk about your your pre-sales process or your
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sales process for Alliance Property Management 3 2017 Peter Brown ok I’m
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going to take it back a little bit further I go back to 2014 because like that’s that’s when we used to the old
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fashioned way so as the broker and co-owner when a new client or a
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prospective client called us I took that phone call if I was in the office and I
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set up an appointment to go check out the property did a little research John where I was going I went out there have done with me face to face
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signed him up brought him in and him off to a property manager I haven’t managed
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property myself for probably 10 years so so I wasn’t their property manager and
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that was not to touch on that later because that was a tough tough thing to deal with so I was tracking everything
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on my spiral notebook I was doing all my own follow-up I was missing stuff the
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system that the funnel had speaks let’s put it that way and as a result I closed
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two or three properties a month and we were probably half the size where we are
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right now take it up to 2014 and and at
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the Atlanta and Northman conference we made a commitment to sign up for LEED
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simple and four and a half and that really created a good foundation for our
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sales model we weren’t tracking leads before how we tracked lease and that’s
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allowed us to make sure that we’re following up Jordans not gonna want to hear this but I don’t follow up or I
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don’t have this person follow up five times to get the sale and we followed a couple of times then we don’t go but
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that couple of times was more than liked it more attention than what they get from our competitors and so I’m not
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gonna say it’s shooting fish in a barrel but I’ll tell you what your close ratio goes up significantly but do you have a
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good process in place I always like to
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get in and see if we can pull out some numbers from here and he said you 2014
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you close in two to three properties you were doing it you solve so you took that upon yourself to generate new business for the company growth and all that
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stuff how many people do you have to speak to to closer to three properties it’s approximate sort of a gut feel
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probably five or six so your closing ratio was good oh yeah no I’ve always had a good close ratio but you know a
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lot of those leads were coming from there were warmly so there were referrals from Realtors there were
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referrals from people I know in the community you know Alliance property management as a company is very active
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in the community so we leverage that Network currently still to bring in new business and we’re very
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well known in our industry so that hasn’t been a problem but I wasn’t doing any Google ads I wasn’t doing any
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Facebook so it was just all our gang stuff Bree sell-offs Augusta 14
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I just qualified is two or three properties gained per month is great but I think 16 and 17 you would lose more
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than that per month yeah right a few so so a lot of ways referral and this is
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you have a lot broader reach and referrals that most of the companies because of the community work and Bollman you do but even if even at this
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level you’d probably just stay Eve with the referral based oh yeah my theory is
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you always heard my ideas you want to keep them coming in the front door faster than they’re going out the back
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door and you’re right our actual unit count during those couple years was pretty flat you didn’t really go up a
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lot and so we were probably like six or seven hundred units back then were about
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a thousand now you know my my problem in that time was that a lot of properties
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sell 2008 through 2012 took on a lot of clients that were kind of accidental
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downwards they moved into out of the area they moved into a house they couldn’t sell their house for what it was so as the value came back and the I
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could he was back they were able to sell them so we lost none of single families during that time yeah the sale up
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happened to sell it away you’ve got in alright so this is like I remember you and I speak you cuz four and a half
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we’ve we started at 2012 of course we do marketing right the property esra company so you know I remember you
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and I had multiple conversations his back when I was in a folio days but we talked about this and you were just like
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you were telling me like I’m just not ready for that what was uh what what made what I’m just this inflection point
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is might be interesting for the audience what made you feel you ready for like more like a full faucet marketing in a
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proper way going after new business well I’m a pretty practical person as far as
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numbers go and it was pretty easy for me to do the math and figure out that if we
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invested a little bit of money in our sales infrastructure that would get it back pretty quickly if we increased our
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close ratio and that the next thing we did was started doing some more advertising and
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investing more money at marketing and that paid back quickly as well so for me it was it was more practical numbers
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okay and I knew that the more volume we put in that funnel if we didn’t plug
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those leaves with a system you know CRM or a cute simple type system we were
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gonna lose all sorts of money and it’s just it’s about making efficient use of your efforts and resources yeah I’m with
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you in 2014 you slinging those BM agreements to three at a time in a month
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so take it what what happened so Atlanta you sign up for and how sweet simple yeah all right you got you started to
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get the process in place what happened next well we made a significant change so I told you we have other property
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managers in the office but we have four in the central office at that time and I said I’ll tell you what I want each of
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you guys to be able to take do business calls okay new business meeting perspective okay so that’s the first step have you
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posed the creditors entertain new business calls okay right all right let’s go define my reasoning behind that
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was you were missing calls okay so chances of one of those for being in the
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office but I’m not there is greater than if they’re just calling for a package so we handed over to the property managers
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and use the lien simple call routing you know if number one is not there it goes number two if number twos not there goes
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number three and we just round robin a through the office and that increased our intake we were probably bringing in
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five or six a month okay so double yeah we can have higher monster can have lower months but on
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average five or six but we’re still losing two three so it was you know we’re a little better than even but not
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quite where I wanna be still it was a good step for us because it created an opportunity for me to
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identify good sales people in my office okay a good sales people and get proper
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medical aren’t always the same people right in fact they’re rarely the same people so it was it was a good exercise
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for me to leave some money behind by doing it that way maybe a little bit but it worked out well and so we did a an
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incentive based compensation plan for each those property that was taking on new business a little
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bit every time they land in a new door and it worked fine nice thing was when
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that person went out on a sales call with a prospective client they met with the client the client clicked with them
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and ultimately made that client fully awesome okay so there were there was
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only one person who were dealing with all the way through and anybody who’s in the propagation business knows that it’s relationship based business primer and a
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lot of times you can accounts based on chemistry with the person you’re working it’s kind of like picking a CPA or an
12:26
attorney you’re going to go on a referral but you’re also going if you don’t like the person you’re not going to work with so that was kind of
12:32
interesting sighs so those four people take your calls um what how confident
12:41
were you in the fact that we’re doing a good job did you have any kind of metrics in place where you’ve listened recorded phone calls did you have any of
12:47
those systems quality monitor well you just sort of like okay I don’t have to
12:52
do it that’s good yeah I was a ladder I was okay I don’t have to do it that’s good and I trust they’re doing a good
12:57
job and like most things that I you know use a small percentage of what the
13:03
actual capability of that product is and you know you guys offered that type of thing you know being able to monitor
13:08
calls and being able on earth needs I’ll be honest I didn’t really want to micromanage that process so much I
13:15
really just wanted to see the numbers be positive and if the numbers weren’t where I was expecting to be then I would
13:20
focus it on on where the district were and try and address it individually there were some times when those
13:27
property managers got so busy that they wouldn’t take new business falls and that create a little bit of issue for
13:33
the remaining people because they end up taking more at thing we identified
13:38
during this process was if you’re spending time taking new business calls throughout the day at a very
13:44
unpredictable case they could be none there could be five calls today you’re not able to handle your property
13:51
manager workload okay which is fairly predictable but also can be controlled
13:56
chaos as well and so we sensed that some of the property managers weren’t
14:01
spending right amount of time on property management versus business or vice-versa and so we decided it was
14:09
time for a change this was a few months before going bro and you just started
14:15
thinking about the idea maybe we want to have a sales market first we didn’t know exactly what to call it he called us
14:21
with that hi so those few months before bro summit is it’s obviously conference
14:30
we’re talking about here folks who are not familiar but so that
14:35
happened in February of 2007 just just like less than a year ago so that’s 17 and so you came back and we
14:44
had some we had then his use of we have couple other speakers sort of discuss the BDM tucupi TM culture which is
14:51
business development manager what they do how to the mentee organization what
14:56
the responsibilities are all that stuff but of course that was like a you know a segment of getting exposed to the
15:04
information I to my understanding there’s not a book out there you can read you kind of have to kind of figure
15:09
this out right yeah yeah exactly and I think you know that exposure kind of
15:15
solidified the ideas for me that that was the direction we need to go and I
15:21
think everybody who has a bbm in our industry does it a little different because it needs to be that person that
15:29
position used to be a reflection of you in your company and for me I’m not a real salesperson not I don’t have part
15:36
sales tactics I’m more of a sales consultant you know I want to solve these people’s problems but I’m not like
15:42
super pushy guy and I needed the person that you’re going to choose for this position to be reflective of me and kind
15:49
of Alliance and our culture of being great problem solvers and consultants to
15:55
our clients and so you know we’re lucky to find that person so let’s talk about that journey because I think right now a
16:02
lot of folks out there thinking about making this happen but it’s a big
16:07
culture shift the Seaboard you know the culture is a you know I’m
16:13
matching that I haven’t thought about matching you salesperson to culture dot that we can explore expose that in a few
16:18
minutes but um you you did it in a different way
16:24
most of it most go out and start hiring did kidding he didn’t go did you post an ad or did you send off some people okay
16:30
so that’s it was faster so at the same time that my business partner and I were thinking about it I’d come back from
16:36
rogue started talking about it one of our employees approached us with the
16:41
plant that matched what we wanted to do so it was it was like banana comfortable
16:47
pair of shoes you knew this person very well liked them they were a great asset to our team and we decided that you’re a
16:55
killer shot to try try out this position and it’s been since they’ve been doing
17:05
it so far so good is the only time all
17:13
right so instead of going out there and publishing in that and testing and
17:20
interviewing some people you went in in-house as you said comfortable pair of shoes the person is in my next question
17:28
is inbound or outbound and how did you come up with a job description well you
17:34
know it’s funny I the job description was actually kind of tough I knew generally what I wanted them to do bring
17:40
on new clients and make sure that we don’t miss any enquiries but that evolved into a lot more meaning that
17:47
they actually are helping get the property to market rather than the
17:52
property manager because that takes a lot of time and so when they’re busy full-time right now they’re working on
17:58
meeting with the clients signing new contracts and then preparing those properties for market getting them set
18:04
up and photographed and everything like that so that when they’re handed off to the property manager they’re ready to go
18:11
they’re ready to have been to theoretically and you know we can start marketing that or that all we’ve got is
18:17
showing most of the leaves that we’re getting right now are inbound we’re actually starting to do more outbound
18:23
stuff but the outbound stuff such as you know networking at realtor events and
18:29
making sure that we’re seeing in the Chamber of Commerce and those kind of things they’re really hard for me to quantify
18:34
it’s more like brand building than anything else and don’t wear a little brandy only been around for a while but
18:40
for me those types of activities aren’t going to provide immediate results
18:47
compared to what we can do by just actually answering the phone when someone calls for or answering an email
18:53
I’ll be quick so yeah it’s probably we’re probably like 90% that’s a great
19:00
place to be I know that’s so so you keeping that’s a very interesting approach you keeping that person busy
19:09
available for inbound calls and qualified qualification and discovery process and closing and follow-up but
19:17
also you actually have another task for them you you have them get the house rent ready yep and the property ready to
19:25
advertise right then the handle happens to the property manager yeah and it may not stay that way forever
19:31
sure did you we just found that we couldn’t handle the new volume of new properties coming to the property
19:36
because they’re already you know let’s face it we’re already stretched and they all have a little bit of capacity but if we’re throwing them each three new
19:42
properties a month and they each take an extra you know three or four hours apiece now that’s a lot of work so with
19:50
the capacities that the BDM had we were able to fill it and and help out those
19:55
property managers ultimately if we keep up this kind of volume that man that’d be a standalone position for something
20:01
hmm interesting so let’s let’s go back and talk about the number did the other
20:08
day mean what what is it what does he produce and she I said he rises he so
20:14
obviously producing he it’s it’s in the first three months it was 30 units so it
20:20
also ten in ten units a month and we’re on track in the second three months – I
20:25
think finished out around 15 units a month somewhere in there and now we manage about half single-family home the
20:32
other half is small multi-unit so you know you could get one client that’s ten units a metal helping meet meet our
20:38
goals but a lot of what we’re bringing on right now it’s exactly stuff so yeah
20:43
it’s gone up quite a bit and then so out of 10 units that to the end trending upwards how many of them
20:50
are quality like how do you control quality that’s a good point there was an
20:55
interesting thread going on recently our listserv about that that I’m following
21:00
closely but we have a standard of property that we want okay we want the
21:05
A’s and the B’s we don’t want to see if we can avoid it we there are certain locations in our county that we don’t
21:12
service if we don’t have to and you know so we look for nice properties nice product attracts nice customers that’s a
21:19
pretty simple equation right the landlord’s the owners on the other hand you do need to screen so sometimes
21:27
we’ll come up with recommendations of work that needs to be done on a property their willingness to do that work
21:33
oftentimes dictates what kind of clients are happy and so we’re paying close attention to that we don’t have a formal
21:39
intake process but we’re experienced enough to know red flags when we see
21:44
them okay you know if the place has twenty-year-olds carpet and a landlord wants to try and rent it like that
21:49
that’s a problem or they’re just straight-up ignorant it could be either if we make a recommendation and replace
21:55
it and then replace it which they’ll have a good property for okay with that we’d like well capitalized investors you
22:01
know who doesn’t want to have the money to put it back in if we are asking for
22:06
improvements on a turnover between tenants and say it’s renting for X and it could rent for Y but you have to
22:12
invest Z you know we want to tell them how long it’s going to take to get paid back see so we kind of help them with
22:18
that math and figure out you know whether it’s a good play for them hmm okay so does your BDM Michael does he
22:27
have anything to do with lease renewals no no okay yeah but you have another
22:32
Department our property managers believe it or not we’re primarily most month contracts that’s another podcast topic
22:40
let’s not get into that that might be a regional or California thing but yeah
22:46
that seems to be what’s with what our market does right now month-to-month you mean beyond into full term no most month
22:52
Ross that I mean I’m in the Bay Area here I’ve never seen that yeah we did it
22:57
we want to touch on it right if you’re gonna get any calls on this one
23:03
we got a tenant that rents from us and there a problem of some sort we want to be able to get him out with a no cause
23:10
we can do it California if you’re on a lease you have to approve the breach and it’s longer and more expensive so it’s a
23:17
simple tactic that is very very clever okay so that way you guarantee or at
23:22
least you have a better well on one hand there’s a bit of a risk for that tend to be becoming a short-term tenant you have
23:28
to do a turnover but on the other hand there’s a if they’re non performing tenant you can get them out quickly yeah
23:34
and our real market is strong enough where we’re not worried about time too much and our clients understand the
23:40
risks that go with it that’s smart so play in the market and in timing all good speaking of market in timing do you sell
23:46
properties we do sell properties through a broker is called next home which is
23:52
national franchise it is not the same company as Alliance although it’s under
23:58
the same workers got it and then so as Michael your BDM participate in sort
24:06
of nurturing your database for sales opportunities yeah yeah a lot of times
24:12
he’ll come out and meet with a client or prospective client who’s trying to decide whether to rent or sell we’re
24:18
very very careful about protecting existing relationships with other brokers so he’ll ask you know if they’re
24:23
working with somebody if they’re not we can have that conversation with them we get a lot of referrals from Realtors and
24:29
one of the pieces were able to do that is because we protect those relationships of course of course I mean of course you do but but then there’s a
24:35
lot of people that you source through inbound through your can if your own reviews through your own campaigns they
24:40
have nothing to do with any other realtor so those are every you do those you can do so what would you say and again this is early uh we’re gonna have
24:46
to a follow up podcast here but I think it’s very very very important and timely
24:51
for the audience here how many sales opportunities you think he created over the last 90 days
24:57
can you quantify that or there’s still opportunities for property management sorry home selling opportunities versus
25:05
you know what I don’t know probably a handful because that is not our real focus
25:11
why not because we’re trying to get this one set up to work right I smelled the money you
25:19
know I smell it it’s easy to do and you know I would say it’s not that it’s not
25:25
a part of conversation we’re just not marketing directly to that side of our business right now sure understood I just wanted to explore
25:31
dine and potentially you know think along those lines a little bit but okay so he’s bringing ten properties per
25:39
month rents are pretty healthy where you add what is your goal how close is that
25:44
to your business objective growth of Jutta well we’d be very comfortable with 10 10
25:50
units per month for the next couple of years because that allows us to ramp up growth in conjunction with the other
25:56
things we do such as acquisitions and not kill everybody I really I really
26:01
worry about that because you know we don’t exist without our team and you
26:06
know we’re not a small company it’s not about me burnout it’s about them bring out and and feeling supported and
26:13
feeling appreciated and being able to provide a level of quality service to our clients so I think yeah we’re doing
26:20
10 units a month that’s a that’s a great goal that ends up being 120 units a year
26:25
and that’s you were running a thousand doors 12% growth that’s exceptional right – the the attrition which is about
26:32
what four three percent so you you’re growing at the good healthy sustainable rate absolutely but you also buying
26:39
companies left and right yeah the past few years we’ve done seven seven or
26:45
eight total I just left them right into it it’s an unpredictable source of growth
26:51
and I think it’s really important when you’re owning a property management company to look at where your growth is
26:58
coming from that’s sustainable and we can you know you can help someone build a funnel like you fell to us and have it
27:06
be just a consistent stream of business and I think if you’re doing that you can
27:12
plan for growth as opposed to you know having an opportunity to buy a business where you know someone calls me one
27:18
month next month we’ve taken over you know 85 units in another community somewhere that’s that could be really
27:23
stressful for our organization so it’s a it’s a multi-pronged growth gotcha what let me uh we’ll get into the
27:31
specific I think tasks and how you manage your BDM their day-to-day
27:37
activities and and and thinks that you wish you could implement moving forward
27:42
cuz you know it’s it’s a moving target right but Rob first I want to get a quick word from our sponsor who is the–
27:47
you guess what p.m. Gro summit the thank
27:52
you Jack the premier conference for property management in yours folks like Jacque was looking to take
27:58
their business next level meet other smart people you know associate with the right sort of business owner who’s
28:04
really focused on you know Smart Growth I would call it smart growth not just a breakneck growth but smart growth
28:12
company culture all these points are touched but mainly it is focused on you
28:18
know growing and sustaining your business and and potentially building out other revenue streams like these
28:24
sales like the maintenance business another way so you’ll find experts on on you know on marketing on on sales and
28:32
BDM you’ll find experts on websites and all kinds of things that you need to
28:38
know and understand and order run your business it is once in a year event this
28:44
year it’s in San Diego California on January 31st so if every second Jacque
28:51
is gonna speak there along with my Catalano and what they’re gonna talk
28:56
about acquisitions and what they’ve learned over the 12 months that they’ve since they came back from last summit
29:01
and you know we recorded a video you can go see that on our Facebook page on p.m.
29:06
girls summit Facebook page or p.m. girl summit common our blog where jock and I talked about about eight minutes of what
29:13
he’s gonna bring to the table because he’s gonna do a case study and I think Drock one of the acquisitions didn’t go
29:18
very well right you so you had it where it went poorly shortly afterward poorly as I
29:23
said we came out the other end doing okay doing okay so so there’s some takeaways on on how to sort of format um
29:30
you know reformat failure and and get it to success and I think Jacques was talking about writing specific terms
29:36
into the contract originally yeah you’ll protect yourself so yeah guys you gotta go attend this thing it
29:43
is just nothing better we have 315 tickets there’s probably about a hundred
29:49
plus left at this point but it’s early and it will sell out like it sold out last year so you put in the name Alex
29:56
when you booking a lax you get $100 off go book it now don’t wait book the hotel we have an
30:03
incredible rate it’s I think it’s under $270 about $250 in a $500 hotel it’s a
30:10
u.s. grand luxury hotel gas light district San Diego in the middle of January I mean I’m sorry you know end of
30:16
January how can you miss it you can’t you can’t alright alright
30:24
Jacque so let’s go let’s go and dig into bit of a process you said that your
30:30
video came to you and said oh here’s my job description or what do you do what
30:36
do you say well it was a he wanted to he wanted an opportunity for growth
30:41
you know our organization is pretty flat myself my business partner an array of property managers and support staff I
30:47
mean there’s not a lot of property supervisors you know I’m a general manager you run pretty easily like most property management companies
30:53
do and I think he saw an opportunity and basically came to us and said you know
31:00
I’d like to be the person who talks to all new clients we didn’t even call it
31:05
business developing yet this was you know kind of a new thing for us it didn’t take long for me to do the math
31:11
member I said I’m a practical yet you know financial person didn’t take long to figure out that the investment of
31:18
keeping him on it on his on a good salary at doing some incentive based compensation was gonna pay off
31:24
immediately immediately so you know it was just you sat down and did a pro
31:30
forma based on it figured out if it was worth the risk talked about whether he was the right person he was and went from there and
31:37
and the job descriptions been tweaked a little bit if anything we’ve had to it along the way and we’ll probably
31:42
continue to add and subtract as as things change and our organization changes so you know one side point got
31:50
his movement as as a property manager ended manager position created three
31:57
internal promotions so one of our one so in our accounting department went into
32:03
his property management position an intern went into the accounting position and then we created a new property
32:10
management assistant position that took someone from our front desk so we had four people to move in term that’s the
32:15
kind of company we are I really like to both inside if I can absolutely yet you have to have growth for that mm-hmm
32:22
right you have to provide growth to your team otherwise they’re stuck so that’s very cool and then do you have any
32:28
specific detract at his activity or do you sort of like he just sort of run
32:33
kind of his own little business unit well we talk a lot we probably could
32:39
have better tracking but I am a micromanager I just I like to give
32:45
people pretty solid goals and objectives and let them work towards it on there you know with their own methods and then
32:51
revisit those periodically because we’re in the same physical office although I’m not here a ton you know we talked about
32:58
what kind of activities got going on I can log-in to lead simple and see what’s in the pipeline and what’s coming in and
33:03
we log everything so well not just the emails that get put in there automatically then we get a phone call if we get a walk in their recopies
33:10
required to put those in there so I can kind of tell how many contacts a month were getting and then I have gotten so
33:16
far nothing I don’t care but I haven’t looked at this close-ratio yet but it’s pretty darn good you know one one little
33:22
trick I can give you and we’ve been sort of using that and I highly recommend our
33:27
clients use that as you grow your nurturing list you know you have the people who don’t Chloe subscribers email
33:32
list yeah spend some time or have Michael spend some time maybe once a week or so look
33:38
at the most active people who open emails so this yeah have you done that
33:45
no that’s a great idea so go to MailChimp go to your MailChimp account and look at
33:50
activity it has an amazing depth into who opened when click and actually give
33:56
its own star rating so you can actually filter so what I do is you know we filter subscribers by star rating and we
34:03
know who’s warmer and we’ve calculated on average they takes four and a half 36 average average 36 weekly emails to
34:10
earn a client Wow yeah it takes a while to educate this is a complicate my cutting is complicated and you know it’s
34:17
just not that it’s not done and you know a quick decision so yeah and in this one
34:22
tip you know it’s it’s more it’s not an outbound per se but it’s more of a
34:28
little bit an outreach right so if they’re a good open rate good that chicken Oh interesting and thought of
34:35
that thank you very much that let’s see if that adds a little bit of a you know 10 to 20 percent more to your close
34:41
ratio but where were you I’m gonna ask you about tack you know that customer acquisition
34:47
so you put that in your mind you don’t have to share it then that number but if you give me a real light that you assume
34:52
that I know I was gonna work with you on this but you know what that’s fine um
34:59
you got you did Proform I don’t know what that means we did a Performa which was basically an
35:05
analysis of financial performance to determine if the investment was gonna create a profit for us that’s so so I’m
35:12
just coming at it from a different from a little bit of a different accounting purse but it’s the same thing right so
35:18
you know unit economics meaning that what does it cost me per unit all in to
35:24
acquire a single property under management which is CAC which is customer acquisition cost bottom line is
35:29
its it’s your marketing plus sales extol Michael salary plus and we could we can
35:36
talk about this offline but Marcus Michael salary plus all your marketing investments divided by a number of
35:41
properties you acquired in a period so let’s say in a year you pay Michael let’s say 60 grand whatever I’m just
35:46
gonna assume that and let’s say you spend on the 3000 market that’s 90 90,000 okay it’s a hundred thousand you
35:54
acquired 120 units what does that
35:59
they might eat just $2,000 a year yeah so it’s a 833 actually so if you hundred
36:06
thousand is you total investment for marketing sales divided by hundred twenty acquired units that’s eight
36:12
hundred and thirty three dollars and I’m saying that they each produce on average two thousand dollars a year oh sorry
36:18
about that so now we’re talking about annual I’m just gonna give this a peek into the industry until everybody speaks
36:24
this language so an annual contract value is what do you say about 2,000 bucks 2,000 yeah fair enough so you pay
36:31
back the acquisition if hundred K is your real number is you you’re probably more than hundred K right now it’s
36:38
probably probably right over with marketing uh yeah yeah probably okay so
36:44
yes you pay back your acquisition cost in about four months which is very very
36:49
healthy so in the recurring revenue now let me give you guys a lesson because I follow all these things I read all these
36:55
books I’ll run a recurring revenue business and if you pay back your customer acquisition costs within three
37:02
or excuse me within six months or less it’s a phenomenal phenomenal opportunity
37:07
especially if you retain on average more than thirty six months and most most of
37:13
you do I would say our retention rates probably in the six seven-year age yeah so that’s that’s ridiculous
37:19
yeah it’s great it’s great not to mention you know if I if we ever go to market the company you know the value of
37:25
those contracts is pretty strong too I don’t know if I’ll have it published by then but if you go to four and half
37:32
calm go to pricing page we’ve been working on this widget it’s pretty awesome you basically set your number of
37:40
units you want to grow by then you set your average rent and it gives you everything yeah oh it gives you a
37:47
portfolio value a annual contract value lifetime customer bet all these averages and pretty soon we’re gonna have a
37:53
little bit flexibility where you can put in your own numbers so it gives you actual numbers for you but right now
37:59
it’s it’s an average it’s pretty close to I think where you have it um well you know I think I think it’s a great
38:05
opportunity you know for you guys to help people like me who don’t know their cost-per-acquisition
38:11
to come up with it’s a really easy sale after that after you figure out you know the positive
38:16
number on the back end of it piece okay yeah it takes 36 weekly emails do for
38:23
people to get that that’s in that’s part of the reason why I’m pushing this it’s
38:29
it’s just it’s just uh it’s just such a mathematical way to do business like take emotions out you don’t like
38:36
yourself on video oh well you know you buying clients at eight hundred bucks they’re paying you two thousand a year and I got stay with you five years what
38:42
is there to talk about right what is there to talk about yeah that’s awesome
38:47
it I do wonder what will happen our community’s a half million people are our County and I do wonder what’s going
38:53
to happen down the road beats so long we can sell and all we’re doing is keeping them coming in the front door as fast as
38:59
they go out the back to work I think he had a while yet yes that I think you have a while yet I
39:06
mean there’s oh I’ve got a long time I’ve got a long time but I I like thinking you know in advance not only for myself but also for the person you
39:13
put in the position business develop manager what does that mean to them and I think that’s the nice thing about
39:19
having two other offices I can always focus those efforts in those markets that’s that’s exactly and I was gonna
39:25
say be like my Catalano you know start buying you know companies elsewhere in other towns and land and expand yeah
39:33
that’s what you know that’s what you did nappa right yeah we bought it and say only now which is north napa county
39:38
we just bought in clover note which is northern snow Makati if they’re both about 35 minutes away from us not areas
39:45
that we would service from our san Rose office so that was good so it kind of gave us an intro into an existing market
39:52
without having to bootstrap or marketing and have all that outflow of cash hmm
39:57
there you have it guys Josh McNeal runs a tight ship great company culture
40:03
growing through organic marketing got the BDM growing through acquisitions going to conferences learning and
40:08
implementing it’s not rocket science it’s not it’s not I’m a slow learner
40:14
you’re great but I appreciate you taking the time I know it’s it’s not very comfortable to sit here for 50 minutes
40:20
and talk about this but I really enjoyed it our audience I think is gonna get a lot out of it and I really look forward
40:26
to seeing you at the p.m. bro summit yeah looking forward to that too hopefully see you before then Thanks
40:32
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