DGS 214: Starting a Property Management Business the Right Way

#DoorGrowShow - Property Management Growth

With the real estate market shifting, more and more real estate agents are going to be starting property management companies. Is this you? If you are starting a property management business, this episode is for you.

Join property management growth experts Jason and Sarah Hull as they discuss the best way to build the foundation of your property management business in the current market.

You’ll Learn

[01:18] The Trends in the Market and What They Mean

[07:10] Why You Should Start a Property Management Business

[10:09] Building the Right Foundation

[15:03] The Product Research Strategy

[17:39] The Next Steps for Your Business

Tweetables

“The biggest challenge usually getting started is just taking action to actually get the business going.”

“When you're in that dreamer or that fantasy stage, a lot of times we are very good at looking at all the upside, and we're very good at ignoring the difficulties or the downside.”

“Property management, like I mentioned in the intro, is the ultimate gateway to real estate deals, relationships, and residual income.”

“A lot of the people that are the least qualified to be doing it, they're going to be the ones that get hurt the most because they're not paying attention much to the market.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Jason: the biggest challenge usually getting started is just taking action to actually get the business going, and they get caught up on wasting a lot of time on stuff that doesn't really matter when the only thing that really matters is getting your first client, right? That first door is the hardest.

[00:00:16] Welcome DoorGrow Hackers to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing in business and life, and you're open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high-trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host property management growth expert, Jason Hull, along with Sarah I'm the founder and CEO she is owner and COO of DoorGrow. Now let's get into the show.

[00:01:17] Alright. So today's topic, we've been noticing there's some trends and some changes in the real estate industry, which is going to probably create some shifts. So what are we noticing?

[00:01:29] Sarah: Well, so some of you may have realized real estate isn't quite what it was a couple months, even a year ago, certainly not what it was two years ago. Things have a shifted a little bit in the market. There was a point where you can list a property, you would get, you know, multiple offers in one to two days, and it would sell for a whole lot over asking and it was very easy. It was simple because the market was just on fire. Things have changed just a little bit. They've slowed down. And we wanted to talk about what happens when the real estate market slows down.

[00:02:14] Jason: So, historically what I've noticed is anytime real estate kind of takes a nose dive or slows down or there's some sort of recession or something like this, I see a lot of real estate agents quit. There's a lot of real estate agents that don't renew their license. They leave, they quit, they give up. And a lot of these are the newer ones or the ones that came in thinking it'd be really easy when things were great and we had years of feast and now that there maybe is coming famine, they're out. And so we see a lot of that. I also see a lot of real estate agents decide to become property managers because they're struggling to get real estate deals. They're like, "what else could I do? I'm going to start a property management business because all of the other ones around me aren't that great."

[00:03:00] And so historically DoorGrow, we get a lot of clients coming to us, looking for new websites and starting a business when the market takes a nosedive or there's a shift in real estate. So the other thing, I just saw a video that was pretty interesting data, and it was showing how there's been this huge spike in inventory in Airbnbs, but the revenue generated on average by Airbnbs has dipped in some markets to like 50% of the revenue generated per unit or per owner. And so the revenue's dipping significantly, but there's a lot of inventory of Airbnbs. What's going to happen is that bubble is going to burst, it's going to collapse because a lot of Airbnbs are going to sell. I talked to a property manager here locally in Austin, and he said he already saw the writing on the wall. And shout out to my buddy and friend, Brett Koster. He said that he already saw the writing on the wall. Oh, Koster, Koster. I said his name wrong. He did. All right. Koster Kingdom-- sorry-- on Instagram. I got you. All right. I think Koster sounds cool, but it's Koster, it's not "coaster." So yeah. Sorry Brett.

[00:04:07] All right. So Brett said he already saw the writing on the wall and he went to his short-term rental clients and he said, Hey, let's convert these into long-term rentals. because this is what I see coming. So I think there's an opportunity for property managers out there. There's an opportunity for real estate agents to get into property management that brings a lot of unqualified people and people that are going to not be very great and make a lot of mistakes perhaps unless they have their own investments, they've been dealing with property management a little bit. We can help you do this correctly and we'll talk a little bit about our DoorGrow Foundations in a little bit, but those of you that are established property managers, there's going to be an opportunity for you to capitalize maybe on this bubble, this Airbnb bubble, and convert some of the short-term rentals or convince some of the short-term rentals to convert the long term.

[00:04:57] Otherwise, they're probably going to sell an exit. For real estate agents, that's your opportunity is maybe to identify those Airbnbs that really need to just get sold so that they don't end up losing out. A lot of unqualified people came into the short-term rental situation as a result of the pandemic and everything else thinking, "Hey, there's a bunch of opportunity here now afterwards, and they are, you know, a lot of the people that are the least qualified to be doing it, they're going to be the ones that get hurt the most because they're not paying attention much to the market.

[00:05:30] Sarah: And there's a lot of like coaching things for like, "oh, here, I'll teach you how to like, run an Airbnb or like a short term rental business." and I think it's a really great idea. It is. I think what oftentimes happens is people significantly underestimate the amount of work that it takes. Significantly. Like Jason and I, we were just at Melanie's event last week and we were talking with someone who manages two short-term rental properties and she is already done. She's completely overwhelmed. She hates it. And that's only at two, two properties. And she's like, "everything is just urgent. They need it right now. You know, you can't wait, and sometimes people have very unreasonable expectations and thoughts as to what is an emergency and what needs to be done right now." so if you're in that short term Rental game. Our advice to her was, "you need a property manager," like, and one that does short-term rentals like on a consistent basis, not one that is just able to say, "Hey, I can do short-term." When you get into the short-term game, your short-term game and your long-term game are completely different.

[00:06:39] They function like two very separate businesses, and we have a few clients that do both short term and long term, and they realize very quickly that they are not at all the same thing. They have to operate very differently just because of that quick turnover.

[00:06:57] Jason: Yeah, so I'm doing a webinar later today with a friend of mine that basically does some coaching stuff to the real estate industry to real estate agents. So I'm going to be talking to real estate agents about how they can double their real estate commissions by leveraging property management and there's an opportunity here. Real estate agents can either start their own property management business so that they can keep their investor clients or they can partner with a property manager locally, which could be you listening, and that could help them as well.

[00:07:34] I've had several clients that if they make the property management arm of their business, when they also have brokerage, double their brokerage commissions simply by making sure property management is healthy, that they're acquiring new clients, that there's healthy flow, and that has fed them a lot more real estate deals. A lot of companies get their real estate deals from the tenants that are looking to get into buying a home from owners that are looking to buy or sell, they're getting real estate deals and commissions and property management, like I mentioned in the intro, is the ultimate gateway to real estate deals, relationships, and residual income. And so there's an opportunity there for those listening to either start your own property management business if you don't have that yet or to partner with a property manager, and there's ways they can help you generate revenue, get more deals if you have a good relationship. Especially those of my clients because they know how to help real estate agents get more real estate deals and make more money.

[00:08:37] We teach them how to do this. So why don't we talk about to those that are looking to maybe get into property management or have been thinking about starting it up. Okay. Okay.

[00:08:48] Sarah: Okay. So if you're thinking about starting a property management business, I think it would be a very good time to do that because we aren't quite sure where the real estate market is going. Are we heading into a recession? Are we already in the recession? Is it going to continue to tank? We don't know. So I think it's a really great time to start a property management business. I actually started one years ago just kind of by mistake, and I learned some hard lessons along the way. So what we've done is we've created a course called DoorGrow Foundations for people who are starting, or who have recently started a property management company. So by like startups, we mean that you might already have a few clients, but you are just really not, you know, a big large company at this point. What we've done is we've kind of, mapped out.

[00:09:45] Jason: Or you have zero doors? Or like purely nothing.

[00:09:48] Sarah: Yeah. Started, I started by saying that, okay.

[00:09:51] Jason: Just to clarify, a lot of the people that I talked to that have started their property management business, they started it because they were an investor.

[00:09:57] They already had 10, sometimes even a hundred units that were their own. And then they decided to start doing it, third party, and then they were actually starting a business. So before that, they just considered themselves an investor. So why don't we tell them a little bit about our Foundations program

[00:10:12] then?

[00:10:12] Sarah: Yeah. So what we've done in DoorGrow Foundations is we have created an entire course that you can go through that talks about all of the things that you're going to need to know when starting a property management business. We go into all of the mistakes that we see a lot of people make right around this point.

[00:10:32] And I've leveraged my own experience as well to help people avoid making some really common mistakes. So some of the things that we've talked about are, you know, what do your bank accounts need to look like and what should your financials look like? And, you know, how do we prioritize, like how do we get started? What should my day look like? Like all of these types of things are usually questions that people have when they're starting up. And unfortunately, sometimes if you don't kind of set that up the right way in the beginning, then it comes around to kind of bite you later. So we've put all of this into a course and we've made this available because a lot of times we get people contacting us who don't yet have a property management business.

[00:11:20] They're like, "Hey, I want to start this. I want to get into it." But they haven't actually done it yet and made that leap. So we thought, 'Hey, let's help people by leveraging what we know, what we've seen by talking hundreds of property managers and my own experience in starting a property management company, let's put all of that into a course that people can have access to, and that way it'll help you kind of get things off on the right foot.'

[00:11:47] Jason: So in our DoorGrow code, a lot of. At the very earliest stage, we call those dreamers. These are people that have this dream of starting a business and we call them fantasy belts. You know, we have this belt system, so they're not even a white belt yet. When you're in that dreamer or that fantasy stage, a lot of times we are very good at looking at all the upside, and we're very good at ignoring the difficulties or the downside. And so there are a lot of potential pitfalls and mistakes that they make when getting started. and the biggest challenge usually getting started is just taking action to actually get the business going, and they get caught up on wasting a lot of time on stuff that doesn't really matter when the only thing that really matters is getting your first client, right? That first door is the hardest. And so our program is focused on helping you get that first third party door as quick as possible, getting the right things in place, that you need systems in place. And then we even have some upsells or upgrades in the program, so you can get a website and some of these other add-ons that you might want in starting your business. Let's talk about what the program costs.

[00:12:54] Sarah: Yeah. Okay. Let's talk about it. So the monthly investment for foundations is only $297 a month. And we price it this way because some people, it might take only a couple months to get through and some people might kind of hang out here for quite a while. So sometimes we see people really go through things like we have clients in our program. They go through things super quickly. They're rapid implementers. They get the knowledge that they need and then they just implement, move forward. And if that's you, then you can get through this really quickly. You might only be in there for a few months and at that point you might qualify for our mastermind if you need a little bit more time because. You maybe have another job or you've got, you know, other things that are requiring your attention. So you want to be able to do this so that you don't miss out on the opportunity, but you can't fully dedicate yourself to it, then that's okay too. It might take you a little bit longer, so it's only $297 a month. And that way as long as it takes you or as quickly as you get through it you still get all of that information and you can kind of work at your own pace.

[00:14:06] Jason: Cool. Let's talk about what you get with this program. So first you get access to the Foundation's training in DoorGrow Academy, which is going to help you make a lot of the right moves in getting this started. You also get a ticket to DoorGrow Live, which is easily worth the value of, you know, probably several months of paying for this program. But you get a ticket to DoorGrow Live, you get to attend in person, connect with other property managers, maybe make some connections, a friend or two, maybe find a mentor. And we've got some really great mastermind members in that, that are always coming to those events. You get access to DoorGrow CRM. So this is a tool that's going to help you to be able to keep track of potential deals and leads and to be able to move those forward more easily. And it has phone calling and texting and a lot of cool features. So DoorGrow CRM.

[00:15:00] Sarah: Branding pages, automation, all that kind of good stuff.

[00:15:03] Jason: So you get access to that and then we have a growth strategy that we teach in this as well. That's perfect and ideal for startups that we call product research interviews so that you can go out and have a reason to talk to investors or people that can connect you to investors and how to leverage that and how to have the right conversation. We give you the scripts, everything so that you can use this tactic to get your first clients, which are the most difficult to get. And if you do these product research interviews and you do them correctly, you'll get some clients. And this is how we actually use this strategy to start our mastermind and several other programs that we've had at DoorGrow is this strategy of product research interviews, which gives you an excuse to talk to somebody. Sometimes I call this the Trojan horse to selling, but basically you're interviewing people and able to then convert them into clients.

[00:15:58] And that can be really effective for startups because it's also going to teach you, by doing these interviews, you're going to learn the language and the objections and the pain and the pleasure, all the stuff you need to understand in order to sell effectively to clients. So this is going to help you collapse time on selling to clients so that you will be able to sell as effectively, or maybe more so than some people that have been in the industry or at this game for a long time. There's some knowledge that we need to collapse time on, and this is one of the strategies that will help with that. We also have a upsell to where you can, if you want a logo and you want a website, you can pay a little extra to get access to our team to do those things for you. We're the world's leading property management, branding and design agency, we've rebranded more companies than anybody else. Period. Hundreds. And we can help you with making sure you don't make some significant mistakes on the brand, which can cost you a lot of money in the long run. And I think that's about it, right?

[00:16:59] Sarah: Oh, they do the masterclass too? They get access to the masterclass.

[00:17:02] Jason: Oh. We also have a masterclass that we do once a month where we do a cool training on something related to helping you grow and scale your property management business. Trainings in the past that we've done, you will have access to is we did a training on creating the ideal pitch deck, how to create a really good pitch deck to increase your close rate. We did a training on the three systems you need in order to make your business infinitely scalable so you can scale quickly. And any others? We've done some others. We just did your priorities. We did, yeah. We just did a training on increasing your profitability by changing the priorities in the business. Stuff like this.

[00:17:39] So, yeah. So the Foundation's program is a really great stepping stone to enable you to get the funds and get in gear so that you can join our Mastermind. Now, if you've already got the funds, maybe you've got a healthy brokerage, we would recommend you start with our lite version of the Mastermind, and that would be a much better program to be in because it includes the foundation stuff, but then you get coaching and we take things to the next level. You get our more advanced growth strategies, and we do a full rapid revamp on your business, which includes the branding, the website, all that stuff's included. Based on the price points for those things, those upsells being included, it makes it a no-brainer you should do the lite version of the Mastermind, because you'll probably save money that way. So you'll definitely save money that way. Yeah, we would recommend that.

[00:18:31] Program is a one year program or a 12 month commitment, and if you're 200 doors + maybe $20k revenue and plus, then you probably are at a point now where you know how to add doors. Your business probably has a team, you're probably ready for our super system level of the Mastermind and that would be the that next level that we would recommend for those of you that are 200 plus. At least a hundred doors, but maybe 20 K in revenue, plus maybe to be in that level. So depending on what you need and where you're at, we can help figure out what do you need most and how can we best help you? So, yeah. Cool. So if you're thinking about getting into property management, my usual joke is, If you're considering it is, do you want us to talk you into it or do you want us to talk you out of it? because we can do either one. So reach out to us and we can help you with that. Anything else that we should say?

[00:19:24] If you are interested in talking to us, you are struggling in your property management business. You are wanting to take things to the next level. You really haven't grown much or significantly over the last year. Let us inject a little bit of juice and rocket fuel into your business and get you to that next level. We're really good at that. Reach out to us at doorgrow.com and join our free Facebook community. We have some free gifts and we will help funnel you through to working with us as a client. If you need a little time to be nurtured, go to DoorGrowClub.com. We have a lot of great stuff, free content. You get access to some of our master classes and the goal is to convince you that we know what we're doing and to get you to the point where you're working with us as a client. And we'd love to see you in there. So, and that's it, right? And you'll get some free gifts for joining. Until next time, to our mutual growth. Bye everyone.

[00:20:12] Jason Hull: You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead content, social direct mail, and they still struggle to grow!

[00:20:39] At DoorGrow, we solve your biggest challenge: getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today's episode on our blog doorgrow.com, and to get notified of future events and news subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow Hacking your business and your life.