Today’s show is sponsored by LeadSimple and Fourandahalf. Together, they’ve come up with one of the best conferences for property managers, called the PM Grow Summit. This event is laser-focused on growth strategies and brings together some remarkable thought leaders from around the country. I attended last year and was thoroughly impressed all around -- and that was just their first year! The next conference will be in San Diego in 2018, and I’ve already booked my spot. Go to pmgrowsummit.com to learn more, and enter promo code “Brad” to get a $100 discount on your ticket!
We’re also sponsored by Marc Cunningham of Grace Property Management. Marc has created some amazing products for property management companies, which we can say firsthand as we’ve implemented his systems here. Visit their website and try out their products! To get a 10% discount on any of Marc’s products, use the promo code “Brad”!
Today, I have the honor of being joined by the remarkable and knowledgeable Tom Sedlack. Tom is a longstanding NARPM member and instructor teaching cash flow analysis. I was lucky enough to have the opportunity to take his class, and found it incredibly valuable. If you want to experience his knowledge firsthand too, don’t miss out on his upcoming speech in Orlando at the NARPM National Convention!
In this episode, we’ll mostly talk about a separate business model that you may want to consider for your management company: HOA management. As Tom explains, he and his wife manage 20 HOA associations with a total of over 1,000 HOA doors. These are spread across two areas: the Twin Cities and Kansas City. (And yes, Tom will also touch on how he handles running a company in two locations.)
Throughout our conversation, we explore the details of HOA management. We’ll talk, for example, about how it’s different from standard property management, how Tom got started in working with HOAs, and what the process is for winning HOA clients. Tom also offers fantastic insight into the details of running this part of his company with recommendations about software, checklists, and much more.
Here’s where you can find Tom:
Show Notes
[02:37] - Tom starts things off by introducing himself, talking about his background, and explaining how he and his wife got into property management.
[04:12] - Is Tom running his two offices from a central location, or do they operate independently?
[05:24] - Tom discusses how he and his wife broke into the property management market in Kansas City after already having a business in the Twin Cities.
[08:03] - Tom explains that they knew they needed 40 to 50 doors in the Kansas City area to break even.
[09:57] - We hear about the software that Tom uses specifically for HOA management, and whether it’s different from general property management software.
[12:34] - Did Tom join a trade organization specifically for HOA management?
[15:59] - Tom discusses who is doing the actual in-office work of handling the HOA management side of the company.
[16:53] - What are some of the unique challenges in managing HOAs as opposed to single-family homes?
[18:16] - We hear about Tom’s company is getting leads, which Brad points out is step one. Tom then talks about whether he has a long-term goal in terms of door count.
[20:50] - Tom talks about the next step of the process, which involves talking to the HOA board members.
[24:33] - Tom discusses the challenges of getting people to switch from a developer’s default management system to his company.
[27:57] - We learn that Tom uses an incredibly detailed onboarding checklist to ensure they don’t miss anything.
[29:27] - Does Tom have any leads on where to get a checklist and a draft management agreement?
[31:19] - Tom talks us through some information about the profit potential for HOA management.
[34:08] - Tom’s company uses both flat-fee and percentage-based pricing, but it’s usually a fixed price based on the number of doors.
[34:54] - Brad requests a story about a case in which Tom walked into a bad situation and turned it around.
[37:20] - The average size of his HOA clients is around 50 doors, and so about 20 clients make up the 1000 HOA doors that Tom’s company manages.
[40:03] - What are the best techniques Tom has found to help agents learn about cash-flow analysis?
[42:09] - Tom talks about how he breaks down and illustrates numbers to his investors.
[46:46] - Brad and Tom discuss the fact that property managers are pretty much recession-proof.
[47:15] - What’s the coolest thing Tom has implemented in the past six to 12 months?
[49:15] - Tom shares where listeners can find him and learn more about what he does.
Links and Resources: