Fourandhalf is an Internet Marketing Agency working with exclusively with property management companies. Here at Fourandhalf, our only job is to help your property management company grow. We research, develop and adapt the latest Internet technologies to help you get more properties under management.
So You Married a Property Manager? How to Make the Marriage and the Business Work - YouTube
Do you know any successful, married property managers? We do.
Hoffman Realty is one of the most successful property management companies in the country, and as you’ll soon learn, the owners of that company have a marriage that most of us would envy.
Why is everything working so well?
We’re going to find out on today’s episode of The Property Management Show.
Our guests are MaryAnn Hoffman and Andrew Dougill from Hoffman Realty in Tampa, Florida. MaryAnn founded the company in 1998, right after she graduated from the University of South Florida. There were a lot of investors who wanted her to manage their properties, so she started the company. Later, she met Andrew and got married.
Now, these married property managers work together and they’re going to share some tips for success. If you’re a listener who is thinking about going into business with your partner or spouse, you’ll want to pay attention. The advice you hear will help you decide if it’s the right time. It will also help you plan for the potential rewards and challenges.
How Did These Married Property Managers Get Started?
MaryAnn was already in real estate when they got married, and Andrew was working for a large corporation as an engineer. He had a nice corner office downtown and even his own parking spot. Then, he got laid off in 2000, during the burst of the dot-com bubble. This was scary for MaryAnn who wondered if her business could support the both of them while he looked for a new job in his field.
They created something good from a bad situation.
MaryAnn needed a website and a lot of technical support. So, she suggested that Andrew work for her company while he looked for his next job.
She was concerned that he was giving up some huge potential career opportunities, but after 20 years as an engineer, Andrew stopped looking for a new job and really became involved in Hoffman Realty.
They realized they were having fun working together. So, they took the plunge and officially went into business together.
Establishing a Routine and Setting Boundaries as Married Property Managers
In his former job, Andrew did a lot of traveling and when he would return home, it was difficult for him and MaryAnn to fall back into the routine of being together. Now that they work together, there’s a lot more harmony around the house. The couple is really in sync and everything runs a lot smoother.
There’s more of a connection within their professional and personal relationship. If MaryAnn is having a bad day, Andrew gets it. There’s a lot more intimacy when you know what each person is going through and what they’re dealing with on a daily basis. They help each other, and they rely on their own individual strengths to keep the company – and the relationship – on track.
Setting boundaries is also important. Married property managers bringing in their spouse to work with them might be concerned that their partner will try to take over and change everything.
That’s not what you want.
Andrew and MaryAnn decided that they would separate which parts of the company they were each responsible for running. MaryAnn is the people person and makes routine decisions about the business. Andrew handles the technology and the high level decisions and everything related to their marketing systems and processes.
In 20 years, these married property managers haven’t stumbled, and it’s largely because of those clear boundaries.
MaryAnn says she admires Andrew’s ability to handle what he handles, and she loves managing her end of the business. She doesn’t flinch when angry owners yell, but she has no interest in figuring out why a computer isn’t working.
Their strengths are much different, and they use those differences to make their company run better.
An organizational chart is more important than ever when you’re married property managers, even if you’re the only two people in the company. Write your name in each box that represents your responsibilities, and make sure you’re not both in the same box.
That’s where conflicts can arise.
If you listened to our recent podcast with Melissa Prandi, you’ll remember what she said about putting together a great property management team. She said make sure you hire people with different strengths. At Hoffman Realty, Andrew and MaryAnn value the separate things that they each do best.
When you decide to work with a spouse or a partner, make sure you can identify which jobs you are each responsible for, and then don’t creep over into each other’s areas. If you have the same strengths and weaknesses at your spouse, maybe you shouldn’t work together. Or, you should be prepared to hire people who can fill in those blanks.
Do These Married Property Managers Ever Get Tired of Each Other?
Working as married property managers doesn’t necessarily mean that you’re together 24 hours a day and seven days a week. While there may be challenges to sharing both a home and a business, you can make it work.
MaryAnn and Andrew think it’s fun to be together. They like laughing about work things at home. They enjoy opening a bottle of wine when necessary to talk about challenges or issues that are happening at the office.
It’s also important to maintain separate identities outside of work. You each need your own passions and hobbies. For example, Andrew loves sports. He’s always at football games or watching hockey. MaryAnn has a great circle of her own friends and is very involved with her children.
You can’t be together all the time. MaryAnn and Andrew have managed not to bring work home unless they want to work on something together. They respect each other’s private time and passions.
When you have other interests, you’re not in danger of getting tired of each other at home or at the office.
Working together makes both of them happy. They have a good relationship in the workplace and romantically. Part of the reason is that they have their own separate identities when they’re not working or together.
Time Management and Work/Life Balance
Working together also allows MaryAnn and Andrew to balance their time better. When she was doing real estate and property management but Andrew was working his corporate job, he would rarely understand why she had to take work calls on the weekends. He didn’t understand then what he understands now. If an owner calls at 7:30 in the morning and is ready to sign a management agreement, MaryAnn is ready to get over to the property, and while Andrew might have once suggested that it wait – he now understands the urgency.
Andrew says that when they had separate careers, it was difficult to understand the work/life balance challenges of the other person. Now, they understand each other completely.
They can also be as flexible as they want with their schedules. Sometimes they’ll take a few days off where they check their emails and handle urgent business early in the day and then spend time bike riding or swimming.
When One Manages the Other
In the beginning, MaryAnn was Andrew’s boss. He didn’t know the industry, and he had to learn a lot.
For example, Andrew has a need to fix things right away. MaryAnn had to coach him in and show him that sometimes people just want to be heard. If they’re upset and complaining, you need to let them keep talking because the problem they’ve called to complain about isn’t always the real problem. You need to give it time and dig a little deeper.
It’s possible to give feedback without being negative and critical. This is something you should set up as a rule. They give each other structured feedback in a way that doesn’t blame or accuse. They adopted the same practice with their employees. It’s effective and it’s kind. It also helps their employees. They can understand things from many different sides and attack a problem without feeling defensive.
MaryAnn, who has a psychology degree, says it’s important to say:
“When you do ______, I feel _______.”
People you disagree with aren’t necessarily doing something wrong. They may just do things differently.
Figuring out the Financials
One of the most important things for married property managers to think about when they go into business together isn’t necessarily the company or the relationship – it’s financial security. When both of you are in one industry and there’s a downturn, you’re both going to be affected.
This happened from 2007 to 2009 when things became difficult in the real estate world. Andrew and MaryAnn had a nest egg, but they were concerned about keeping the company afloat, and they stopped spending money that they didn’t have to spend.
The couple had just completed construction on a house that they planned to move into, but MaryAnn had a gut feeling that they should sell it. So, they did, and they made a great profit. That profit saw them through the hard times of the real estate downturn.
When you work together, you don’t have any diversity of income. That can be a risk, and you might not realize how likely it is to happen.
A lot of this will be completely out of your control. In 2017, it looked like Tampa was going to sustain a direct hit from Hurricane Irma as a category 5 storm. The hurricane turned and the Tampa area got soaked but they were spared the damage they were expecting. It would have been devastating to Hoffman Realty and many of the properties they manage. A lot of property managers in Tampa were wondering if they would be out of business after that hurricane.
The lesson? Plan for what will happen if and when both incomes are lost.
Things to Consider Before you Work Together
Andrew and MaryAnn have some things for couples to think about before they go into a property management business together.
Do you get along now?
Do you enjoy working long hours?
Are you ready to hire more people?
Do you have insurance?
Are you financially secured for this risk?
You have to get along already. If you don’t, this isn’t going to fix your relationship.
Andrew suggests putting your foot in the water before you take the plunge. He helped out in the business while he was still looking for other work. So try it out if you can. Have a Plan B if it turns out you’re not meant to do this together.
The insurance is a big deal. When Andrew worked as an engineer, they enjoyed his corporate benefits. When he joined Hoffman Realty, they had to find health insurance and other benefits. Make sure your company is profitable enough to offer strong salaries and good benefits. What will you do for retirement? Think about the long term.
MaryAnn recommends having enough money saved to get through at least two years of an industry downturn. When they suffered through the slow period, they wanted to preserve the business. They cared about paying their employees even when business was lacking. Make sure you’re in a strong position personally and as a company.
Making a Family Business Attractive to Owners
Another benefit to working together is that owners love the idea of working with a family business.
They feel better about leaving their biggest asset in the hands of a locally owned and family-run company. Everyone tells Andrew and MaryAnn that they want local management, not a huge national company.
Most owners know that a family business is going to care about their reputation within the community. When Hoffman Realty selects vendors, they always look for mom and pop businesses instead of huge companies where the customer seems to matter less.
While Andrew is often the face that potential owners see in the blogs and marketing videos created by Hoffman Realty, they are moving to a new, larger space and the plan is to have MaryAnn more visible as well. They also want to have their employees contribute to future blogs and marketing materials.
It’s hard, though, because Andrew’s British accent makes him sound like he knows what he’s talking about.
Of course he does know what he’s talking about, and so does MaryAnn. If you have any questions about how to work with your spouse or run a successful business while maintaining a successful marriage, these two are the people to speak with. You can contact them at Hoffman Realty.
How to Capture More Investor Leads with INVESTimate + Fourandhalf - YouTube
If you’re interested in capturing more investor leads, we have some exciting news.
Fourandhalf is partnering with INVESTimate® because our mission is to help you grow your property management business, and this online software platform is pretty powerful.
Think of it as an investment-focused Zillow.
INVESTimate® Delivers Qualified Buyers and Sellers
INVESTimate® makes it easy for your investors to search for investment properties directly from your website. The goal of this platform is to expand your business by bringing in more qualified rental property owners and rental property buyers.
INVESTimate® predicts an investment property’s value in three ways:
Examining the purchase price.
Factoring the potential rental income.
Estimating a property’s operating expenses.
How INVESTimate® Works for Property Management Companies
Your clients and leads can use INVESTimate® to identify rental properties that they’d like to add to their portfolio. Or, if they want to sell, they can sell directly to another investor, which reduces your churn. Implementing this on your website is a win for you and for the investors you’re currently working with or hoping to work with.
If an investor is on your website and wants to purchase a property, they can do so through this platform, and then they will naturally look to you to manage that property for them. You get a link through INVESTimate® that private-labels this service to your brand and your property management company.
Investors can spend time on your website searching investment properties for sale. They’ll be redirected to the INVESTimate® platform, where they will use specific and targeted search criteria to look at and evaluate available properties based on location, the amount of money they want to spend, and filters that separate whether the buyer will finance the investment property or use cash.
If they’re looking for income-producing properties, they can search by that field, and if they’re looking for high-growth properties, they can search that way. Maybe they want an investment that’s in-between; there’s an intelligent recommendation engine that drives the options your investor clients will see.
Based on the search results that are produced, your investor will be able to do a deep dive into one or two properties at a time. There’s going to be a lot of rich financial data available for each property, including:
Down payment required
Neighborhood stats including school scores and tenant demographics
Comparable data to other properties
This will be a unique service for local investors as well as remote investors who may not know your market. They’ll get all the information they need about schools, locations, and the tenant pool.
When you have an investor who wants to sell a property, it’s easy to do so through INVESTimate®. They can sell it as a rental property with a tenant in place to other investors. There’s no need to get the tenant out; it’s sold as-is to another investor.
This is a one-stop shop for all of your investor’s needs, whether they are purchasing an asset or selling one.
Grow your Business with Qualified Rental Property Buyers and Sellers
Give your clients access to a comprehensive online investment platform to buy and sell rental properties. Click to schedule a FREE DEMO.
Implementing INVESTimate® on your Website
If your website is with Fourandhalf, this partnership will make implementation a breeze. We can integrate the INVESTimate® platform on your site, and you can immediately begin providing value to potential investor clients.
If you don’t have a website with our team but you’re interested in adopting this on your own site, please contact us at Fourandhalf today. We’d be happy to help you reach this new market of potential property management clients.
Understanding Workflow Automation for Property Management Companies: When it Works and When it Fails - YouTube
Michael Lushington, the COO of Fourandhalf, joins Brittany and Marie on this week’s episode of The Property Management Show podcast. The guest is Will Gunadi of nextCoder, and the subject is workflow automation.
You might have read or watched Michael’s blogs about workflow and how to use it as a business owner when you’re growing your property management company. If you haven’t seen them yet, be sure to check them out:
Will is an expert on workflow automation, and we asked him to explain in simple terms what it is, and how it works.
Understanding Workflow Automation
Workflows are a series of steps. Those steps are repeated again and again. That’s why this particular process is so relevant to property management. If you think about it, your whole property management operation is full of workflows. Things are repeated. For example, tenants are always moving out. Each time that happens, you have to repeat the same steps. So, it makes sense for property managers to put an effort into automating the workflow. It’s natural.
You might have heard about business process management or even robotic process automation. Those are big terms, and they’re related, but workflow management is a discipline in itself.
Workflow automation is a combination of business process management and robotic process automation. There are smaller programs that are written to contribute to the overall automation process. Will jokingly calls those programs “minions.” So, with a robotic process automation, the “minions” are executing and overseeing the workflow steps. The diagram is what ties business process management into the whole scheme. If you search online for business process management, you’ll see a workflow diagram.
The diagram is a big part of automation. Workflows are not useful to you as a company owner if you cannot see them visually. So, combining business process management with robotic process automation is really what we’re talking about when we discuss workflows.
Automation: What it Is and What it Isn’t
There’s work that cannot be automated. Sometimes, people will have a vision of automating everything. They imagine they’ll just be able to press play and that’s it.
But, this isn’t the real purpose or function of automation.
Automation does not mean hitting play and sitting back. That might work when you’re listening to music, but when you’re managing 400 houses or even 1,000 houses; it’s not going to work. There are two types of automation:
Automate the steps of your workflow where it makes sense.
Automate the notifications and alerts. You can broadcast steps to people executing.
Forget the idea that automation means computerized. That makes no sense. For property management companies, the workflow has some steps that have to be done by a real human. That’s how you think about automation – it’s still a human function.
In property management, you can automate triggers to remind you to execute things. You can automate the steps of your workflow and the orchestration of the teams involved.
Is Your Property Management Company Ready for Automation?
If implemented correctly, automation will help a property management company scale up and grow. If you’re currently managing 100 or 200 properties, this is the time to start thinking about the workflow process. Start documenting what needs to happen. If you wait and start at 500 or 600 properties, you’ll find you’re too busy to put out fires and manage processes. So, start early.
Workflow automation is applicable to any property management company as long as it’s understood and acknowledged that it doesn’t mean computers take over everything. The steps are still extremely human.
Here’s an example: locks will always need to be changed on apartments or houses between tenants. No matter how good a computer program you have, it’s still going to be a person who goes to the property and changes the lock. It has to be documented. Automation can send you reminders and notifications when those locks need to be changed. But a human being has to go there and re-key the property.
Building relationships with your owners and tenants is also something that cannot be automated. You can automate the way that relationship is orchestrated. You can make sure your owners get the right information at the right time. You can automate alerts and accounting statements. That’s the value of workflow automation.
Automation is not a Magic Bullet
The technology behind automation is excellent, but there’s often a gap between what the company knows about how it works and the automation the company wants to put in place. You cannot decide to implement workflow automation if you don’t first understand how your work is moving around.
This is not a magic bullet.
You need the support of the toolmakers. When Will talks to property managers about his automated workflow process, he asks if there is any documentation of the workflow. The answer is either yes or not really, and the not really response usually comes with a lot of hesitation.
Will shows the graphical representation of the workflow that his automation product can provide. There’s something very serious that he has to explain about that diagram: It’s living.
The workflow will change as your business changes. If your business isn’t moving, it’s dead. So the diagram will never be static. It’s the toolmaker who needs to show you how it is maintained and how it is evaluated. As a property manager, you can really benefit from the expertise and the help of the toolmaker who designs your automation process.
If you’re going to embrace workflows and workflow automation, you need to understand your process. Put those processes down, and understand how they move. These are living tools that will shift the outcomes you desire.
Workflow automation helps you identify which parts of the process aren’t working. Make sure you have the tools that can identify when you hit a snag in your process.
Think of it as an audit. You’ll have a visual log that you can go back to look at. You want a workflow that presents your property management team with an idea of what has happened when the outcomes aren’t measuring up with the expectations.
Do You Understand Your Information?
Make sure the automation tool you’re using speaks your language.
If what you’re looking at makes no sense to you, it’s going to be difficult to glean any useful information from your dashboard or your workflow. If you don’t understand what you’re reading in your reports or on your screen, talk to your toolmaker. You can only keep track of things if you recognize the language. You’re entitled to something that’s customized for the way you work.
Property managers are busy. You are managing hundreds of properties and whatever comes with those properties. So, there’s very little time or capacity or energy to manage the automation itself. A client of Will’s recently asked him why there aren’t more people in the property management community managing workflow automation processes.
It requires a completely separate discipline.
To manage the workflow process, you have to know the system and understand business process management. You have to understand efficiencies and how to achieve them. These skill sets may not be possessed by property managers. Even if you do have the right skills and personality, there are only 24 hours in a day. Both workflow management and property management take time. You cannot run a property management company and a software company.
Profile of a Property Management Company Ready for Workflow Automation
A property management company that’s ready for this automation process understands who is accountable for which tasks within the company. They have documented those processes. This isn’t a requirement to get started, but it helps.
When Will begins working with a property management company, he’ll ask about who is responsible for which tasks:
How many departments do you have?
Who handles sales?
Who handles marketing?
Who works with tenants?
Who works with owners?
Sometimes, it’s one person who does all of that.
The profile provides a good recipe. You’ll start by establishing who is responsible for a tenant moving in. Who is responsible for a tenant moving out? How does the accounting work? Create a visual of your team and their responsibilities. Understand the accountability.
This is the best way to begin documenting your workflow. When you have a good idea about who is doing what, you can see which steps belong in each box, and then you’ll draw lines between the boxes.
Even here at Fourandhalf, we have identified what could be automated or passed on to other people.
It’s separating each task by outcome.
It’s achieving accountability by outcome.
After you create the workflow diagram, you may start to see six different departments that are handing off tasks and steps to each other. Even if you have one person doing all of this in the short duration, you’ll have a clear picture. It doesn’t mean you have to go out and hire six people for each department. But with the process in place, when you do start hiring people, they’ll be able to come in and do the pieces of what that one person did. There’s a training benefit, too. With workflow automation, people can come and go within the process and the process still moves along efficiently.
Profile of a Property Management Company NOT Ready for Workflow Automation
The property management company that isn’t ready for automated workflows is the company that thinks this is a magic sauce. If you’re an owner who just wants to sit back and hand everything over and think that it’s all going to flow through some system that you didn’t have a part in creating yourself, you need to re-think this.
As a property management company owner or operator, you need to be ready to commit.
You might think that automation looks and sounds great. But, if you’re not willing to play a large part in making this work, it’s not the right time. Automation isn’t something that happens outside of you. It includes you. It has to.
If you want an outcome, you have to make an effort.
You need to be invested, and your team needs to be invested.
If your team is broken and no one in your company communicates well with each other, there is no amount of automation that’s going to fix things.
Investment. Passion. Commitment.
Those things are needed for workflow automation to succeed in your property management company.
Getting Your Property Management Team on Board
Adopting workflow automation is easier in the property management industry than in other industries. That’s because things happen daily. You’ll know immediately when your system is being neglected. Things move a little slower in other industries. Property management is well-suited to workflow automation.
Sometimes, your team members who don’t yet understand automation worry that your new workflow will replace them.
It’s important to educate them about workflow automation and how it can help them complete their tasks. They can look forward to shorter meetings and automated notifications and reminders. The purpose of workflow automation isn’t to replace team members, but to replace the grunt work and the menial tasks that hold them back from the valued work that they really need to do.
Change management is a big part of workflow automation. Some jobs will shift and so will tasks and eventually, it will become intuitive. A lot of explaining will need to happen, but if you can get your team members attached to the outcome, you’ll have success getting them on board.
Make sure you’re automating what you should and not what you shouldn’t. You don’t want to be that property manager who is on the phone with a prospect at the same time that prospect is getting an automated email from you apologizing that you weren’t able to connect.
Removing the human element is not the goal of automation. Workflow automation allows the human element to shine.
If you’re at the point where you want your operation to grow, or you see that it’s growing on its own, join this trajectory and start thinking about workflow automation.
Find out more about what Will does for property managers by visiting Bionicpm.com. If you have any questions or you’d like to share some thoughts about this or any topic related to property management marketing, contact us at Fourandhalf.
Workflows Part 3: Implementing Workflows without Being a Micro Manager - YouTube
Have you been listening to our blog series on workflows? If you have joined us for the last two, then by now you have designed a fantastic and efficient workflow process, and you’re ready to implement it.
So, how do you know that everyone will follow the process you’ve so carefully outlined with your team?
In today’s discussion, we’ll show you how NOT to be a micro manager while still making sure your workflow process is working.
Be an Implementer, not a Micro Manager
No one likes having a micro manager looking over their shoulder every second to make sure the job is getting done exactly the way it should be done. As managers, we might feel compelled to do that to make sure there’s execution.
With workflows, you’re discovering ways of doing things that weren’t efficient or getting the job done. You’re making changes to the way things were running and as a business owner, you’ve invested a lot of time to develop a new process, review it with your team, and ensure everyone is clear on the objectives and tasks.
Once the workflow process is implemented, you want to make sure that the time you spent is not wasted.
How to be Sure Your Process is Implemented
Here’s a truth you probably know by now: no matter what you do with your workflow process, you have to have a great team in place to implement it. If you have any doubts or second thoughts about the strength of your team or how to build one, we’ve done a lot of blogs and podcasts about finding and retaining great employees. You could take a look at the podcast we just did with Melissa Prandi, for example.
With an exceptional team in place, there’s a three-step process to ensuring your workflow can be implemented:
Step One: Accountability
You can make sure accountability is completely clear to everyone involved in the process. Go through the whole flow one time and make sure you know who owns what tasks. You need to know that everyone understands that they’re accountable for the success of the entire process.
Step Two: Clarity
Make sure you have clarity around each task. Does everyone understand at a detailed level what the specifics are of each task? You could have written procedures for each task and task owner. Put any measures into place that are necessary to show you that everyone understands.
Step Three: Measure Results
The last and best way to make sure your process is getting done will involve clear measureables associated with your checkpoints throughout the workflow. Then, you know that everything is getting done the way you expect it to, and you’re seeing improvement over time.
Fine-Tune your Tracking Process
Measuring your outcomes is critical. It’s tracking the process objectively without your interpretation of what is working. You know whether you’re hitting the mark or not.
Track the time it takes to execute each task and the time between each task. That shows you the total time required to complete the entire process. When you track these times and look at them through several instances of the process, you know if you’re on target or below target. You know what is or isn’t getting completed.
Finishing early doesn’t always indicate that everything is working. Maybe something is being skipped. Maybe there’s an extra task that people didn’t identify when you were planning.
When you’re tracking the process, you need some understanding of how long things are taking. Track it over time so you know if the process is or isn’t working.
Track Early and Then Let it Work
You’ll track these individual tasks early on, just to make sure all the effort you’ve put in up front is paying off. Make sure it’s on track. Then, you won’t have to track it all the time. You’ll only need to revisit it if things get off track from a delivery standpoint.
Everyone with an individual task should be keeping track on their own for how long things are taking them. When you add it up at the end of the week, you have a KPI for how the process is doing. You don’t have to do this for weeks and weeks. Just do it until you understand how long the process takes and to see if there is room for improvement.
Remember this: if you have great people, everyone is contributing to the outcome, and the process inherently works.
We’re glad you’ve joined us to talk about workflows. It’s a personal passion for us at Fourandhalf, and it really helps to sort out a business. Remember that they’re a tool to help your business become more efficient and to help you understand how information moves and flows through your company. But, it’s just a tool. You need great people and an interest in growing your business.
Watch out for next week’s podcast, where we take this a step further and talk in depth about workflow automation with Will Gunadi from nextCoder.
If you have any questions about workflows or how to grow your property management business, please contact us at Fourandhalf.
How to Build & Keep a Great Property Management Team with Melissa Prandi - YouTube
Your team represents your property management business, and today we’re talking about the importance of building and keeping a great property management team with Melissa Prandi, of Prandi Property Management. Many of her employees have been with her for 10 years or longer, and she’s quick to tell us that having the best team she’s ever had provides confidence and opportunities for growth.
Where We Are Now: Prandi Property Management
Melissa owns Prandi Property Management in San Rafael, California, which is right between the Golden Gate Bridge and Napa Valley. She’s been in the business for 37 years, and started working for her property management company as a receptionist at the age of 19.
When she bought the company, it was small. There was a bookkeeper and a full time property manager and Melissa. Now, she has a staff of 15 and three virtual assistants. It takes some work to bring all those personalities together, but when it works – it really works. All you have to do is check out Prandi’s reviews. Customers benefit from a strong and thriving property management team.
Building and maintaining a great property management team may seem basic. But, if you don’t take care of basics, you cannot grow and scale as a business. Your team is your foundation, and that’s why we’re talking about this today.
Where do You Start? Making the First Hire and Adding to Your Team
If you’re just one person or you have a small two-person property management team, your first hire needs to be someone who complements you. Look at your own strengths and weaknesses as an owner or a key manager. Then, hire someone who has a different set of skills and strengths. Melissa is a visionary. She describes herself as a people-person, and someone who loves to share. Her logical first-hire was Christine, who has been with Prandi for 18 years. Christine fills in the gaps while Melissa is busy rushing from A to Z. She is practical, detail-oriented, and really good at implementing.
Find someone to complement your personality, especially if you have a small staff.
Hire for attitude. The first team members you bring on don’t have to have property management experience. Christine didn’t even know what property management was when Melissa hired her. Now, she has all of her designations, including Residential Management Professional (RPM) and Master Property Manager (MPM).
Melissa’s son is the Business Development Manager at Prandi. People love that he’s the owner’s son, and they like being drawn into a family-oriented business. Prandi Property Management markets themselves as being Family-owned and Community-focused. That’s powerful. Matt started working as a property manager; he got his real estate license at the age of 19, and then got his broker’s license.
Most people don’t start out as property managers – Melissa didn’t start out as a property manager. The front desk role used to be where new employees learned about the company and the industry. Now, there are virtual assistants answering phones at Prandi. However, Melissa says her best people have typically come in as assistants and learned the ropes. Good property management team members learn by doing everything.
Keeping Team Members Happy and Motivated
Christine has been with Prandi for 18 years and Melissa’s bookkeeper has been in place for 13 or 14 years. Why do people stay so long?
Melissa says she respects them and knows what it’s like to be an employee.
It starts with respect and inspiring a culture of respect in the office.
There’s also a great benefits package including a 401k plan with a four percent match. She keeps her team happy by encouraging them to grow with her. You don’t ever want your staff to feel like they can’t learn more.
Another important tip to keeping your team members happy is this: ask what they want. The retirement plan came about during a staff meeting when they were discussing what they really wanted and valued. Medical is provided after 90 days and dental is provided after a year. The staff wanted a retirement program and because Melissa is committed to listening, respecting, and keeping her valued team members happy – she investigated how to provide a 401k. NARPM members were, of course, an extremely helpful resource.
Conferences are another benefit. Last year, there were eight team members from Prandi at CALNARPM. Bringing team members to an educational conference shows that you’re interested in investing in them. It also demonstrates teamwork and positivity. It gives your employees a chance to step out of the day-to-day duties of putting out fires and it builds a passion for property management. They also get to meet vendors and colleagues. The expense of including team members in these conferences is worth it.
How to Hire: Be Direct and Involve Others
Before you can retain, support, and train a team, you have to build a team. Melissa does a few specific things when she’s looking for a new hire:
Request a cover letter, resume, and a simple typing test. Ask for this directly in your employment ad because it will show you if applicants can follow direction.
Ask them to complete a Tony Robbins personality test. This is interesting to see, and a personality test helps you match people to the jobs they will do.
Include team members in the interview. Melissa always interviews potential candidates, but she also wants to make sure her team is comfortable with new hires. And, she wants the prospective employee to be comfortable with the team.
Collect 10 questions before the interview. These are questions like “what are three words that describe you?” She also asks what people love and don’t love about their current or last job. Not only does this give her an introduction to the person she’s going to interview, it also gives the interviewee a chance to really think about what they want in a job.
Everyone will have a different hiring process. As long as yours meets the needs of your company and doesn’t rely on only one person to do all the hiring – you can slowly and deliberately build a great team.
Team Building: The Importance of Relationships
Getting outside of the office is an important part of building a great team. Last year, Melissa’s staff spent an entire day on the coast for some team building. The experience strengthened the team and really allowed people to get to know one another. They laughed, they ate great food, and they spent some valuable hours growing closer together.
There have also been days at the baseball park and breaks at property management conferences. Melissa honors birthdays and anniversary days. Recognizing her team members is an important part of nurturing them and growing her business. During their all-day coastal retreat, they built some really positive energy which stayed with them even when they went back to the office.
Leading by Example: Ownership and Action
Turning negativity into positivity is a lesson and learning experience. Melissa believes in leading by example.
There was one day that Matt was in a hurry and on his way out of the office, he asked Melissa to call an owner – a potential new client who had a duplex that needed management. She waited until the afternoon to make the call, and by the time she reached that owner, he had already met with another property management company and signed an agreement. Matt had explained that he was ready to go, but other things were happening, and the opportunity was lost.
The first thing Melissa did was to take this struggle to her team. She explained what happened and what she meant to do better next time. She used it as an example to demonstrate that responses mean everything.
Next time, she told her team, I’ll call right away.
This is a critical lesson for team building. The owner of the company held herself accountable in front of the entire team – she admitted to not being perfect, and shared a plan for what she’d do to improve herself. That’s some bold leadership.
Keeping your team on the same page as you get larger is hard to do. Trainings help, and so does structure. Communication is especially important. Not only do you have to communicate well; you have to establish a process for communicating. Melissa has a systematic way that notes are to be kept. Every team within her management company follows the same note-taking format. It keeps communication flowing and consistent.
The first thing you need to do is to take out a notepad or open up a computer and make a list. On that list, you should write down everything that you don’t need to be doing anymore. You can call it a stop list.
Melissa has found success putting a new person in the same office as herself. The right person will immediately begin taking initiative to help out. An employee who was training as an assistant spent two months in Melissa’s office and then was promoted to a lead position. That employee learned quickly, evolved, and is now doing a fabulous job with the company.
Be open to promoting people from within your organization. You don’t want to box them into the role they were hired to do. It’s possible they can surpass what you expected and give your company more.
Hire Slow and Fire Fast
If you hire someone who turns out not to be right for the position, you’ll know pretty quickly. Melissa admits there have been times that she hasn’t hired well. She tends to believe she can fix or change or nurture a person into performing the way the company needs them to.
Check in with your new hires. Find out how it’s going. Property management is not for everyone, and you might find out they don’t really like it. If they don’t like it, you don’t want them to plant a seed of negativity in the office.
Try hiring through word of mouth. Let everyone know you’re looking for a new team member. People know people, and you might find a really good new hire by asking others if they know anyone who would be a good fit.
Incentives that Don’t Cost Much
Prandi’s 401k plan for employees is great if you can afford it – but, what if you’re still small and trying to compete for employees with companies that have larger budgets for benefits and pay?
Sometimes, people just want a day off. Send everyone home at 1:00 p.m. on a Friday. It doesn’t cost you much money, but it does provide your employee with value.
Monitor workloads. No one wants to burn out. Foster a culture where team members who aren’t swamped are willing to pitch in and help others who are swamped.
Close the office for lunch. It’s too easy for your employees to sit at their desks and work through lunch. Send them away so they return to work refreshed.
Recognize when your people need a break. It doesn’t cost a lot to give employees a beach day or a day off with pay. If you can’t afford a retirement plan, do small things to keep people happy.
And, ask what’s important to them. Personalize the incentives. A lot of employers don’t ask; they make assumptions. It’s not always about money. Remember that respect and meeting their needs is just as important.
December is known for Fun Fridays at Prandi Property Management. The team members are put together with individuals they don’t normally work closely with, and they plan a meal every week and play games. One day they might wear pajamas to work, and the food might have a theme like Mexican or Italian. It’s never boring.
Don’t get Discouraged and Learn from Mistakes
When Melissa decided to elevate her two best employees (she calls them her bookends) – Christine and Matt – she knew she had to get them away from running the portfolios they were currently managing. Hiring their replacements was not as easy as she anticipated, and she made some mistakes. Stress levels went up. She didn’t do it right the first time, but that’s okay.
You can quickly see what you did wrong, and then learn from it. Don’t get discouraged.
Melissa hired the wrong person to replace Christine and then held on too long to the wrong person she hired to replace Matt. Sometimes, you have to go through some difficult situations and spend some time with the wrong people to see what you really need.
Another mistake Melissa is willing to acknowledge was made when she and her team had three candidates for a single position. The property management team keeps a scorecard during interviews and Melissa’s choice was the one who scored in second place. The rest of the team liked the person who scored first. Melissa hired her favorite, and that person worked for them for a week.
The lesson here is to trust the process, and trust the scorecard.
Vendors and Partners are Team Members Too
Vendors are often invited to do Lunch and Learn events where they can get in front of the Prandi Property Management staff and talk about things like what to look for in a plumbing problem or how to handle water restoration. Vendors work hard and Melissa believes in treating them as part of the team because if something goes wrong during a repair, she will hear about it.
Educating the vendors and providing them with expectations is an important part of team building. Let your vendors know how quickly you need them to respond. Vendors are an important part of your success as a property management company.
With Melissa, it always goes back to accountability. She recently had a tenant who was rightfully upset while trying to get a fridge replaced. After spending an hour on the phone with the angry tenant, Melissa sent a handwritten card and a $150 gift card to a local restaurant. This responsiveness almost certainly saved her from a bad review.
Lead by example and show your team that you support them. If they’re being screamed at by an owner or a tenant, let them know it’s okay to step away and pass the situation on to someone else. Leaning on a manager goes back to respect.
Everyone celebrates five-star reviews at Prandi Property Management. Melissa’s team believes in treating everyone the way they want to be treated. Every relationship is a two-way street.
We received some good information from Melissa today, and we’re able to share the 10 pre-interview questions she uses while building a team as well as her scoring model when she’s interviewing contenders.
Be open minded. Be respectful. Never stop learning. And, contact us at Fourandhalf if you have any thoughts on this podcast or ideas about who we should talk to next.
Workflows Part 2: Elements of a Good Workflow for Property Managers - YouTube
In our last Fourandhalf blog, we talked about the value of a workflow for property managers, and we helped you understand how workflows can provide a better understanding of your property management business.
Today, we want to continue that discussion and show you what a workflow looks like.
Three Workflow or Process Levels
The first thing to understand about workflows or processes is that you can look at them from three levels:
This is the highest level. The Level One process is more of an overview. So if we’re talking about a maintenance process, at the first level, our process would show that the maintenance request comes in, and the issue is resolved. That’s the process.
The second level is what we like better. It provides more detail so we can really understand how our business works.
At the third level, you really look at your business closely and do a complete drill down into each step and list out each actor responsible for those steps.
As you undertake a process analysis for your property management company, we suggest you look at Level Two. This will help with efficiencies.
In our first blog, we talked about the three things you need for putting together your process flow. Those are:
An understanding of outcomes.
A capture of the people involved in the workflow.
The discrete tasks that are included in each workflow.
We’ll show you how those are incorporated into a workflow with an example.
Representing Your Workflow: Introducing Swim Lanes
There are different types of workflow representations, and at Fourandhalf, we like to use swim lanes. With our swim lanes, you can clearly see the accountable party, the task, and then if you want to drill in and connect the Level Three to the Level Two process model, it’s easy.
So here’s what a swim lane looks like: (click to enlarge)
On the left side, you can look at the people or the actors involved in any process for which you’re establishing a workflow. The key thing to note is that the actors can be a system or a person; it’s not always an individual. On right side, you will see those lanes extending across and the arrows connecting task boxes with each individual task.
This shows you how information is moving through your workflow.
If you want to go through the detail, and visit the Level Three model, you can go into each box and type out a detailed procedure in that box. You have both a high level view of how information is moving and a detailed step-by-step procedural account of how you’re getting things done at the task level.
As you look carefully at the swim lane model, you can see that filling out each box and associating those boxes with their lane or with each actor, it’s easy to connect the boxes and arrows. It gives you a visual sense of how information is traveling.
Workflows and Decision Making
When decisions need to be made, you can represent those decisions with a diamond shape, and then offer a yes/no box. The arrows can point to what happens if the decision is yes or no.
So if the decision is yes, you can follow the arrow to the set of tasks that occur after a yes answer. If the decision is no, then you’ll follow the arrow to a box that indicates what happens if the answer is no. This allows you to represent the decision aspect of the workflow and the corresponding individual tasks.
Looking at this, we hope you get an idea about how to put together a workflow. If you have questions or you’d like to talk about this in depth, please contact us at Fourandhalf.
Chrysztyna Rowek is the owner of Lighthouse Cove Property Management in Washington State and an active member of NARPM. She has gone from cleaning houses to buying/acquiring property management companies, and she joined us on The Property Management Show to share her experiences and the lessons she has learned along the way.
Chrysztyna likes to tell clients that she’s supposed to teach their kids how to speak Spanish. That’s what she went to school for, and it was her planned career when she moved from Canada to Greece to the U.S. But, her Canadian degree wasn’t enough to get the job she wanted, and instead of spending more money in pursuit of a master’s degree as an international graduate student, she got married, had a child, and began cleaning houses for extra money.
Soon, a property management company hired her to clean their rental properties. Then, she started working in the office, and then she got her real estate license in 2007.
Then, she bought the company.
Chrysztyna admits she had no idea how to buy a company or how to run one. But, she dove right in. After considering a loan from the Small Business Administration, she borrowed the money from her father instead and bought Lighthouse Cove Property Management.
On July 17, 2007, after having a license for two months, she owned the company. It had 190 doors which were mostly single-family homes and multi-plexes.
When Sellers are Difficult
Perhaps the seller didn’t think Chrysztyna would actually buy. Perhaps she had second thoughts about selling. Whatever the issues, there were difficulties almost immediately. She wasn’t much help, even though Chrysztyna was very new to this. There was no advice on how to run the business or how to run this particular business. There was a lot of pushback, and two days after the non-compete agreement expired, the seller opened up a new property management company in the same market and went after many of Lighthouse Cove’s clients.
It was disappointing.
The Importance of Transition Plans
The plan was for the seller to stay on as managing broker at least until Chrysztyna earned her managing broker’s license. In Washington, a broker has to be licensed for two years before taking the managing broker exam. The seller was unresponsive and unavailable, so Chrysztyna had to find another managing broker and completely cut all ties with the seller.
In an ideal situation, the buyer will have access to the seller for at least 90 days. That’s a minimum – 120 days would be better. Put that paperwork in place when you buy or sell.
Then, build relationships with the clients right away. The clients you’re buying trust the person who is selling. So, the seller has to help ease the transition so that the clients trust you too. If the seller trusts the buyer, the clients will trust the buyer.
People are loyal, and it’s a shock when companies are sold. Make sure that as a buyer you have access to your seller for at least three months.
Building and Preserving a Team
When Chrysztyna bought Lighthouse Cove, there were only three employees; the owner, the accounting manager, and another staff member who did everything involved in property management. She kept the staff on and then eventually moved to a new office and hired some new people.
During this time, Chrysztyna also kept cleaning. But she learned she had to take better care of herself and be more protective of her time.
If you’re leading a company, you have to take care of yourself. If you’re not feeling 100 percent, how can you give top-notice service and provide high quality work to your clients?
Losing Properties and Acquiring another Company
When Lighthouse Cove’s seller opened up a new company, she took a chunk of Chrysztyna’s clients, but the company was growing. She added 50 new doors, and then she bought another property management company. It was a book of business that she bought from a local real estate office in 2009. So, by growing Lighthouse Cove and taking on the new company, she grew to over 500 properties.
While Chrysztyna had learned a lot during her first acquisition, there were still mistakes to be made with her second one. The big mistake she said she made with this purchase was that she didn’t adequately check out the properties that were coming with the business.
It’s hard to drive by all the properties you’re taking on when you buy a property management company, but it’s a good rule to look at a third of them. Just drive by the outside and see what they look like. You’ll probably know if there’s any deferred maintenance. If they need new paint, or they have failing roofs, be wary of that trend. You may be picking up owners who don’t want to invest in work on their properties.
Chrysztyna always says she will pick up C class properties if they have A class owners. What you want to avoid is C class properties with C class owners.
So how do you distinguish A owners with C properties from C owners with C properties?
An A owner makes sure a C property is safe, habitable, and clean. Not all will be perfect properties. But everybody needs a place to live, so a property can be old or dated, but it has to be safe, clean, and up to code. You want owners who realize money needs to be spent on their home. Make sure they’re willing to make updates and improvements over the next two to five years.
When you’re buying companies, remember that the number of doors you’re acquiring is not nearly as important as the quality of owners you’re working with.
It could be a deal breaker if you’re getting too many C owners. Think about what you want to deal with and what you want to put your staff through. They are the ones who will onboard tenants who are unhappy because they don’t like change. They will have to deal with owners who resist spending money on properties they have ignored.
Growing through Acquiring Property Management Companies versus Marketing
Chrysztyna admits that after buying three companies in the last 12 years, she knows that she could have taken all the money she paid for those companies and grown twice as much with just organic growth.
Does she regret growing through acquisitions?
No, but she has spent $600,000 on acquiring properties. What kind of growth do you think a $600,000 marketing budget would have delivered for her?
Growing organically takes more time but you can be choosey with the properties you take on, and you can encourage the owners you love to buy more properties for you to manage.
Chrysztyna acknowledges that buying a business will give you more properties right away, but you have tenants to onboard and you don’t know if they’d meet your own screening criteria. You don’t know what the property looked like when they moved in. You don’t know the owners, either, and you may have to make concessions.
There are a lot of successful business owners who believe acquisitions are the best way to grow. That’s the right path for some people. But, organic growth is less stressful and has its own benefits.
Defining Organic Growth
There are lots of ways to market a property management company and its services. So, what do we mean by organic growth?
If you are educating people on something and you are a professional in the field, you’ll become a go-to person, and that’s organic growth. If you have 1,400 friends on Facebook like Chrysztyna does, and they all know exactly what you do – growing won’t be difficult. People will look for you.
When you grow through acquiring property management companies, you’ll also have to factor in the properties that you’ll lose. Consider this before you buy. The industry standard is about 10 percent. You’ll lose 10 percent of your business any time you make a change; whether it’s a new owner or a new property management agreement.
Some people don’t like change, or they wait for a big change to make the decision that moves them on. Keep that 10 percent number in mind.
Change and Integration: Move Slowly
When acquiring property management companies, you don’t want to immediately begin raising prices and tearing up leases.
Wait for about a year and then roll out a new property management agreement and if necessary, updated fees. Take a look at the competition in your market and at the industry standards. If you’re the only one charging a certain amount and everyone else is charging less, you’ll need to explain what you’re offering that justifies the increase.
Sometimes, owners who want a lease-only contract will not understand that once the tenant is placed and the lease is signed, they are responsible for managing the property going forward.
Chrysztyna got a great piece of advice about lease-only leases. She puts her company name all over the lease. Usually, owners will have questions along the way and when they want to know what to charge for a renewal fee or how to handle maintenance emergencies, they call her and she ends up manage the property.
According to Chrysztyna, it takes about six months to a year before she decides she cannot work with an owner. Lots of clients will show their challenging sides quickly. When an owner insists that his cousin install a new water heater or an owner wants to pick his own tenant, Chrysztyna will likely have to fire that owner. She believes she doesn’t do it enough.
Acquiring Property Management Companies and Lawsuits
So with two purchases under her belt and lessons learned, Chrysztyna felt pretty comfortable going into her latest acquisition. She was buying a company from someone she knew for years. She did her due diligence and the books looked fine. The numbers looked good. The seller was a member of NARPM and a colleague.
She should have done some deeper digging.
A month after the sale was completed, the company’s accounting manager noticed that the check the seller gave them for the security deposit trust account didn’t match what was reflected in the accounting software.
Security deposit money was missing.
Forensic accountants were called in and old school spreadsheets were created to figure out what tenants paid at the beginning of the lease, and where that money went. Sometimes rent was coded as deposits. Pet fees were counted as pet deposits. It was a tedious year that resulted in a lawsuit.
The bigger problem is that the security deposit trust hit zero dollars, but tenants were still moving out and needing those deposits back. It’s been a rough few months and has cost a lot of money.
The lesson here is to hire a third party auditor to look at the books and make sure everything adds up.
It takes courage to talk about things that you do wrong. The experts fail a lot before they figure out how to do it right. Chrysztyna teaches a class on her mistakes and how to avoid them. It’s humbling, she says, to stand in front of hundreds of people and tell them how you screwed up.
But, it has helped a lot of people who might have made bad purchases.
Chrysztyna isn’t sure if she’ll buy again. It’s a great feeling, but it’s a lot of work.
The three biggest tips for someone acquiring property management companies are these:
Trust your gut. Your gut is hardly ever wrong. There were red flags but Chrysztyna was too busy and excited to get into another market. So she didn’t listen to her gut. That ended up biting her in the end.
Hire someone if accounting is not what you’re the best out. Spend the money to have someone else look at the books. This is worth every penny.
Make sure how the seller does business is how you’re willing to do business. Culture and operations have to match.
Finally, go with the seller during a property management interview. See how they are selling their services and get an idea of why they are doing what they’re doing. If that aligns, you can work with the deal.
If you have any questions about the information Chrysztyna has shared, or about acquiring property management, please contact us at Fourandhalf. We’d be happy to tell you more and share some additional resources.
Workflows Part 1: Get in Touch With Your Property Management Company through Workflows - YouTube
How well do you understand the flow of information, tasks, and projects in your property management company?
If you’ve been running your business for a while, you probably have a pretty sophisticated process with multiple hand-offs every time something needs to be done. But, how do you know who is accountable for what, and when?
The answer is a solid workflow, and today we’re talking about how workflows can benefit you and the outcomes your management company is able to achieve.
Understanding How Work Flows through a Company: Michael’s Process
I’m Michael Lushington, Fourandhalf’s COO. Prior to working with Fourandhalf, I was a business technology consultant for 20 years with large companies. I got to know those companies really well, and I always thought it was exciting and a little scary walking into a new company without knowing what they do or how they do it.
The way I became comfortable with new companies was by understanding workflow and knowing how information moves through the company. If there was no documented process, doing it myself helped me understand quickly what was going on inside the company. I could identify value and see opportunities for improvement.
How does this apply to you? You can get to know your business by building a workflow. Take a step back and really understand how information is flowing through your company.
Putting Workflows to Work for Your Property Management Company
In our next blog, we’ll talk in more detail about what a complete workflow looks like and give you some examples.
Today, we want to share three important things:
What is the process you want to identify? Usually, this is associated with some specific outcome. A good example is the way your maintenance process works.
Identify the individual tasks involved in completing that process.
Make sure you know the people involved in the process.
If you have the outcome, tasks and people, you can build yourself a workflow.
Examine Your Own Process from the Outside
Once you’ve got your people identified and your tasks listed out, you can look closely at your process. Step back and look at it from the outside in.
Some things to consider or notice might be:
Are there opportunities where you can identify defects in the process?
Can you speed things up?
Are you taking too many steps?
Can you expedite hand-offs and shorten delivery time?
This will help you improve what you’re doing, whether it’s maintenance or leasing or tenant turnovers or something else.
One-Person Processes are Still Processes
Something we hear a lot is: I don’t need a process because it’s just me doing the task or completing the work, and I know what I do.
Terrific. But, sometimes one person doing it all isn’t the best solution to solving a process. If you have an opportunity to share a project or parts of a project, you can become more efficient in the way you run your company. It’s better if you’re not doing everything because when you delegate tasks down the chain of command, you’ll find yourself with more time to actually run your business.
A workflow is a tool to produce an outcome. Your outcome is to better understand how you run your business and to identify the types of cost-effective solutions you can put in place to streamline what you do and how you do it.
Workflows also help you identify defects in your process. This is used in the service of your company, and with your small investment of time, workflows can produce a big understanding of what your business does and how it does it. They are powerful tools for helping you to quickly see how information is flowing through your company. It shines a light on who is accountable for what.
We’ll be talking more about workflows soon; this is just the first in a blog series on the topic.
If you have any questions between now and our next blog, please contact us at Fourandhalf.
Not Your Typical Exit Strategy: How Stephanie Gordon Sold Her Property Management Business - YouTube
As the owner of a property management company, have you thought of your own exit strategy yet? Whether you’ve already chosen your path, or you’re still unsure about the best option, it’s worth listening to how Stephanie Gordon did it.
If you don’t know Stephanie Gordon yet, you should. She is the founder and CEO of Gordon Property Management in San Francisco, and she has been a successful business owner and thought leader in the property management industry for decades. In July of 2018, she sold a large part of her company to a trusted team member.
Stephanie joined us on The Property Management Show to talk about how she came to that decision, what the deal looks like, and why she didn’t pick a different exit strategy.
A Different Property Management Exit Strategy
The decision to do this began taking form a few years ago, when Stephanie started to feel burned out. Her company has grown a lot over the years and she knew it was time to start thinking about an exit strategy when she noticed a shift in her attitude. She had always cared about her customers and their properties, but suddenly she didn’t feel excited about adding new doors to her book of business. Things felt different, and she knew something had to change.
After 32 years of operating a property management business, her burnout is understandable.
As a starting point, Stephanie sat down with all of her financials and analyzed the value of her company. She realized she could squeeze through an early retirement if she really wanted to, but she didn’t want to give up the lifestyle that she loved. So, she reluctantly decided to keep running the company and managed to get out of the funk she was in.
Months later, as Stephanie was taking a walk near her Sonoma home, she had a bit of an “aha” moment where she realized the perfect solution: sell part of the business rather than the whole business!
It was a simple exit strategy that would allow her to continue earning income while easing into a better retirement. So, she spoke to a trusted team member if she was interested in buying half of the company. This person’s name was Meghan.
Meghan Guerin has been working with Stephanie for more than 15 years. She knows the company, she knows the business, and she is great leader in the organization. Stephanie always told her in passing that she’d sell her the company when she was ready. This worked for everyone because it kept Meghan at Gordon Property Management and gave her a pretty substantial goal to work towards. It also provided Stephanie with an alternative exit strategy if her children didn’t want to over the business. Selling Gordon Property Management to a stranger was completely out of the question for her.
The opportunity to buy half of the company was great news to Meghan because she would continue to have Stephanie’s support as they transitioned into co-owners and partners.
So, last summer the deal was closed: Stephanie owns 51 percent of Gordon Property Management, and Megan owns 49 percent of Gordon Property Management.
What That One Percent Means: Owning 51 Percent versus 50 Percent of a Company
Every expert Stephanie talked to advised against a straight 50/50 split. If there’s a disagreement, Stephanie has the final say and the majority control. That’s important to her since she’s not ready to give up the business entirely. No one anticipates a situation where Stephanie has to outvote Megan, but if the unthinkable happens – she is prepared and protected.
Getting to the Deal: The People and Concepts that Helped
When Stephanie met Greg Crabtree, the author of Simple Numbers, a few years ago at a retreat hosted by PM Grow in Puerta Vallarta, she began to understand her financial position and her company’s numbers a little better. Greg helped her analyze her income and expenses and reach a better understanding of her bottom line and where the money was really being made at Gordon Property Management. She learned how to see patterns in her financials and what that meant for her company’s value and her financial potential. She could take a clearer look at how her maintenance revenue impacted her income and what she was spending on maintenance staff. It gave her a clear picture and a detailed report.
She consulted with Greg for six months and worked with Danny Craig and Jordan Muela at Profit Coach so she could put together reports and data that reflected everything she needed to know about her company and its financials.
Stephanie said this was fascinating information.
Once she had all the data, she shared it with Meghan. They began to discuss conceptually how the deal would work. They each had a number in mind about what half the company would be worth, and those numbers were pretty close.
This tells you how well Megan knows the business.
How to Fund the Deal and Cover “The Four Ds”
Stephanie loaned Meghan the money to buy her share of the company. It was a 15-year loan that can be paid off in 10 years, but not sooner. You wouldn’t do a 15-year loan if you were selling your business to someone you didn’t know. But, this helps Stephanie to spread some income out over the years, making the deal more favorable from a tax perspective. It’s also an easy loan for Meghan to pay off while enjoying the financial rewards of being a partner in the business.
The loan can also be seen as a 15-year employment agreement. Meghan gets the loan and Stephanie gets the partner. Stephanie will still earn some income even while she slowly exits the business and does a lot less.
One of the things Greg advised her to think about is: what happens after the deal? She can buy Meghan out and Meghan can buy her out. The purchase agreement is pretty detailed about what needs to happen if one party wants to sell their part of the business to the other.
This is important and if you’re creating a deal with anyone to buy part of your company, you want to cover the Four Ds – Divorce, Disagreements, Disability, and Death. The agreement Stephanie and Meghan put into place covers all of these things and it’s been reviewed by two lawyers.
Common Exit Strategies: Selling versus Passing the Business to Your Children
Many property management companies are family businesses, and that makes an exit strategy easy: your company goes to your kids.
But, not all children want to inherit a property management company. Stephanie’s kids grew up while she built her company. They remembered the apartment showings in the evenings and the middle-of-the-night phone calls. They chose other paths.
A lot of property management company owners get attached to the idea of handing off the business. But, if it’s not something your kids want, don’t force it. They won’t pay attention to the business the same way you do. They won’t be excited or passionate about it.
There are other ways.
Meghan was Stephanie’s clear and obvious choice. She was the second person Stephanie ever hired, and they have worked together for a long time. Meghan has been running the day-to-day operations for years, and her experience is invaluable. She has had every job in the company and she’s done everything that the business requires. She has a broker’s license in California, and she passed the exam on the first try. She’s organized, calm, friendly, and really good at sales.
What Stephanie’s Role Looks Like Now
Now, Stephanie is working on the business not in the business. She’s not dealing with any of the day-to-day operations at the company. Instead, she’s focusing on projects and things that she’s wanted to give her attention to for a long time. For example, she’s nearly completed re-writing her property management agreement. She’s working with Andy Moore to implement EOS at Gordon Property Management. This is important because they’re putting together an organization that can run without Stephanie, and Meghan has not replaced herself yet. So – they’re parsing through a decision about who the next hire needs to be.
Without going into the office, Stephanie is taking the company to the next level by paying attention to where the industry is going. She’s following all of the tech and the venture capital money that’s flooding into the industry. There are a lot of new tools to learn, and she’s gathering all the resources that will improve the efficiency of her company and make Meghan’s life easier.
The new ownership structure was announced to the team at a company lunch meeting. No one was particularly surprised. The team has been reporting to Meghan for years, so this didn’t feel like a big deal to anyone.
Then, Stephanie took a four-month sabbatical. She composed an email and sent it to her clients. The brilliance of this email is that it was personal. She told everyone that half the company had been sold to Meghan and that she was going to spend some time relaxing in her garden in Sonoma, playing with her granddaughter in Virginia, and traveling to Italy.
This is excellent customer service. She didn’t want to send an email that said “I sold half the company and now I’m leaving for four months.” Instead, she wanted to share her story. It worked well and she received a lot of warm, supportive, and touching emails from her clients.
Advice for Exiting Your Property Management Company
If you’re working on your own exit strategy, choose a way that works for you. Don’t sell half your business to someone you don’t know and trust. If you have a Meghan in your organization and you can structure a sale this way, you’ve really got something to work towards.
But, it’s not for everyone.
Make sure your employees have a path up in the company, and if you have a shining star – this is a great way to see if there’s a future. Make sure that shining star has everything he or she needs to learn and grow. Give them the gift of time. You’ll need at least a year to establish and reach your financial goals. You’ll need time to figure out what this will look like and what you’ll need to make it happen.
It’s okay to put growth on the back burner while you figure this out. For Gordon Property Management, they’ve been more selective than usual in deciding which new properties to begin managing because this transition needed all of their focus. Then, it was a rough winter in San Francisco will all of the properties flooding at one point or another.
Now, Gordon Property Management is trying to focus on maintenance so they can set themselves up for some new and profitable growth.
If you have any questions for Stephanie – she doesn’t have an office phone anymore. But, you can find her at some of the best property management conferences and mastermind groups. You can also contact us at Fourandhalf for any questions about growing your property management company – or even exiting from it.
Incentivizing Your Online Property Management Reviews: What to Do and What Not to Do - YouTube
You know how important those online reviews are to your property management company. Incentivizing your reviews can be good or bad and can help or hurt your online reputation.
Today, we’re talking about what you should do and what you shouldn’t do when you’re trying to increase the number of positive reviews you receive from owners and tenants about your services.
What NOT to Do: Incentivizing Clients
When we talk about bad incentivizing, we’re really talking about paying for good reviews or giving the impression that you’re paying for good reviews.
How does this happen?
Perhaps you offer a gift card or a raffle entry to any owner who leaves you some feedback online. It might seem like you’re offering a harmless incentive, but it can damage your authenticity and your credibility.
It can also backfire.
We have seen companies do this, and it doesn’t always work out. A person might write a review publicly saying that the company tried to pay them or give them a gift card in exchange for a positive review. Not only does this result in a negative review about your brand; it also makes people stop and question the positive reviews that you do have. They’ll wonder if you paid for those.
In this scenario, all of your positive reviews become stained with the suspicion that they aren’t real. Owners want to leave their investments with someone who is trustworthy and credible. If they don’t think you’re authentic, they won’t believe you can take care of their home effectively.
What you SHOULD Do: Incentivizing Staff
When we talk about great ways to incentivize, we mean your staff. Motivate your team members to ask your clients for feedback online. You can incentivize your employees in many different ways, and when they reach out to your clients to ask for reviews, those will be genuine reviews that prospective owners will appreciate reading.
You want your staff to make the extra effort in attracting good reviews from your clients. You can start with these steps:
It’s important to have a budget. Decide how much you’re willing to spend on your staff to move them towards asking for more reviews. Break it down into how much you’re willing to spend on each positive review.
Decide how you’re going to incentivize your staff. Perhaps it’s with PTO; people love extra time off. Maybe it will be with a gift card or an office raffle.
Benefits of Incentivizing Your Staff
This is a really great way for your staff to become more involved and invested in your online reputation. When you can motivate them to ask your clients for reviews, you’re accomplishing two important things.
First, you’re earning more positive online reviews.
Build the online reputation of your property management company by gaining more reviews and encouraging your staff to reach out to owners and tenants for feedback. It keeps you authentic and protects you against angry clients who may feel used if you try to incentivize them for positive reviews.