Tim Melton is the president and co-founder of SGI Property Management. Before getting into real estate, Tim worked in the automobile industry, where he gained experience working with dealerships and financing. As luck would have it, this correlates nicely to his work with property management companies.
Tim and SGI Property Management are based in Phoenix, but the company has worked its way up to several market locations. Tim started the company in Phoenix in 2011, but his goal was always to move into multiple markets, partly because Phoenix is a volatile market and expanding would allow for more stability. Now, SGI Property Management has grown into Memphis, Las Vegas, and Dallas.
In our conversation, Tim goes through quite a bit of the process of expanding into different market locations. He reveals the exact number of units necessary to make him consider a new location, and emphasizes the importance of understanding the local market dynamics in different areas. This includes not only the local culture and standards, but also practical details like the fact that some areas freeze and others don’t.
He also shares some great insights into how to run a company, with an emphasis on creating a vibrant office culture and environment. You’ll have to listen to the episode to hear everything he has to say, but I’ll share one excerpt here: in the center of the main office, there’s a house that will hold around 10,000 ping pong balls. For each signed property, they drop in a ping pong ball that’s color coded by market. This is a fun visual way of marking their progress toward the large goal of reaching 10,000 units.
As you can gather from that excerpt, Tim is creative, original, and results-driven. Listen in to hear his brilliant insight and advice!
You can find Tim here:
[01:44] - Tim launches off by talking about how he got started.
[02:44] - We hear more about Tim’s experience at the Van Tuyl Group in the automotive industry, and how this experience relates to what he’s doing now.
[05:31] - Brad takes a moment to talk about economies of scale, touching on what the concept means. Tim then elaborates, talking about how this applies to his business.
[06:51] - Tim goes into more depth about the value created by combining forces in the automobile industry.
[07:37] - We learn how this relates to property management from Tim’s perspective.
[08:20] - Tim speaks enthusiastically about Wayne Huizenga, who eventually had the nation’s largest trash route business.
[09:48] - His experiences in the automobile industry helped him know the goal when he began his real estate company, Tim explains. He then walks us through the company’s early days.
[12:27] - What does Tim consider the first big breaks for his business?
[13:47] - Tim talks about the visual motivation tool in the office, and also discusses several aspects of office culture and environment that contribute to strengthening the business.
[15:59] - Their employee of the month contest, which Tim describes here, offers some great insight into how the company works.
[18:00] - We hear Tim’s thoughts on the importance of keeping things exciting and worthwhile for everyone involved.
[18:42] - Tim talks about some of the challenges involved in being in multiple markets.
[20:40] - What gets handled locally in the related market, and what gets taken care of at the main location in Phoenix? Tim answers, then addresses some of the challenges and benefits involved in this setup.
[23:59] - The company’s structure gives Tim the ability to deploy to any market quickly. The break-even point to consider going into a new market for is 150 units. In discussing this, Tim talks about their expansion to Memphis.
[26:31] - Tim offers some advice that he’s learned from his experience with expanding into other markets.
[27:42] - With the acquisition trends we’re seeing, where does Tim think the industry is heading?
[29:36] - Tim talks about some of the roadblocks he’s encountered in the acquisitions efforts. He reveals that it’s very rarely about the money.
[30:43] - We hear about the multiples Tim has been seeing in the industry.
[32:56] - Tim and Brad discuss the correlation between the examples of the automobile and the waste management industry as it relates to the property management industry. They also talk about reducing overhead by tying into something bigger.
[35:48] - Where does Tim think the industry as a whole is heading?
[38:48] - What’s the best way to reach Tim? He provides his email address to make it easy to get in touch directly.
Links and Resources: