As you may know, I’m one of the founders of the National Property Management Network. Todd Breen, today’s guest, is another. Thanks to this close working experience with him, I’m deeply familiar with his expertise in the property management industry, and am glad to have him on the show to share that expertise with you! We’re actually recording this episode on location in Las Vegas at the NARPM Broker/Owner Conference.
Todd has been the owner of a property management company for over 30 years, but he has been involved in the industry from an early age. His dad was a real estate broker, so he began his unofficial training while working in various capacities for his father from the time he was young. Today, Todd is the owner of Virtually Incredible.
In this interview, Todd will talk about outsourcing and why it’s vital to keeping your rates competitive and being able to scale effectively. He also shares brilliant (and sometimes counterintuitive) advice, experiences, and techniques. For example, he explains how he actually increased his income when he reduced his doors from 300 to 140 in 1994.
Show Notes
[02:25] - Todd turns the standard script on its head by plugging Brad instead of letting Brad plug him. He and Brad then talk about the cost of putting things off instead of doing them right now.
[03:40] - Todd takes us back to his beginnings in real estate and property management. He also shares the problem with thinking that any money is good money.
[06:29] - We learn how Todd’s income actually increased when he reduced his total number of doors in half.
[07:16] - Todd explains how he handled reducing his number of doors, mentioning his book The Manager’s Manual.
[10:50] - Virtually Incredible focuses on three main tasks, Todd explains. He describes his shift from working in his business to working on it, and talks about how SEO factored into this. As part of this story, we learn how he met his wife.
[15:04] - Brad talks about his choice to make videos when YouTube came out.
[16:09] - Todd talks more about what Virtually Incredible does, and what he expects it to do in the future.
[18:24] - Brad jumps in for a moment to elaborate on what Todd has been saying about verification.
[20:12] - We hear about a secret shopping campaign that Virtually Incredible performs every so often to evaluate management companies in a specific geographic area. He then explains how having people answering phones 85 hours a week dramatically reduced his vacancy list and days on market.
[22:53] - The property management has largely ignored the consumer experience for too long, Todd says, then explains what he means.
[26:46] - Todd and Brad talk about DocuSign briefly, then move on to discuss the preference of today’s tenants to text rather than come in and talk face-to-face. At least 75% of people choose to pay a convenience fee for lockbox entry than to come into the office to get the key, Brad reveals.
[28:46] - The checklist Todd’s company uses for the leasing cycle has 72 steps.
[31:25] - Todd discusses outsourcing, and explains why many property management companies tend to stagnate at a certain number of doors.
[32:28] - We hear Todd’s thoughts on where he sees Virtually Incredible going in the future.
[34:13] - Brad talks about top-down pressure and capped out (or falling) management fees.
[35:53] - Todd offers a story about his grandfather, a pharmacist, to illustrate the risk of thinking you’re irreplaceable.
[38:24] - Brad and Todd move on to talking about their venture together, National Property Management Network.
[40:12] - Todd shares his closing thoughts for the interview, expressing his excitement at seeing people coming up in the industry. He then shares his email address to make it easy to stay in touch.
Links and Resources:
In this episode, we hear from Justin Bajema, a property management company owner from Michigan who recently moved to Texas. In this powerful interview, he talks not only about property management, but also his experiences in the Marine Corps.
In 2003, Justin was coming back from Iraq and got a care package from his aunt and uncle. Inside was a copy of Rich Dad, Poor Dad. From that book, he got the real estate bug, and got involved in the industry when he got out of the army in 2005.
In the process of learning about the industry, Justin’s wife actually went to work for a competitor (where she was open about their interest in getting into property management). From there, they transitioned into owning single-family homes. After finding out about the National Association of Residential Property Managers (NARPM), they set up their own chapter.
After learning about Justin’s background in property management, we’ll explore how his experiences in the Marine Corps contributed to what he’s doing today. He’s deeply involved with an organization called Warriors Heart, which helps members of the “military class” (including law enforcement and first responders as well) heal. We talk an important way in which property managers can contribute to this vital and life-changing program.
Show Notes
[02:09] - Justin talks about how he got into property management.
[04:00] - We hear more about Justin’s choice to start a property management company. He also talks about conferences in general, and the National Association of Residential Property Managers (NARPM) specifically.
[07:19] - Justin discusses owning their company from a distance. He talks about Michael Gerber’s book The E Myth. He then explains that he hated managing people, so he had to clarify what he did (and didn’t) want from a company.
[10:52] - What were some of the keys that allowed Justin to break away from being in the office on a regular basis? He and Brad then discuss employees in terms of hiring decisions and necessary roles, and talk about outsourcing bookkeeping.
[15:22] - Justin recently got rid of his in-house accounting, he reveals, in response to Brad’s advice about outsourcing certain services.
[18:35] - Justin talks about going completely electronic with all of their accounts payable. This is both more convenient and less of a security risk.
[20:11] - We hear about Justin’s choices in software and banking.
[22:32] - Brad takes a moment to tell the story of how he and Justin met.
[23:33] - Justin went into the Marine Corps in May of 2001. 9/11 happened during his training. He served two tours in Iraq, and shares some of his experiences there.
[29:22] - We learn why Justin offered this information about his time in the military. He explains that a deep part of him still feels the need to take care of the guys in the military.
[32:03] - Justin talks about charities for veterans, and recommends going to an organization like Charity Navigator to assess a charity’s financials before donating to it.
[35:15] - We hear more about Justin’s move to Texas and his partnership with Warriors Heart. He then talks more about the program, what it does, and why it’s so vital.
[27:47] - There are two requirements for applicants to get into the program: PTSD and a chemical dependency. After discussing this, Justin explains in more depth why this program in particular was necessary, related to the story of what he saw happening to one of his close friends.
[40:26] - Justin touches on the possibility of the program expanding into more locations.
[40:55] - Brad and Justin came up with an idea for supporting the program through a referral system, which they discuss here.
[43:11] - Justin offers an invitation to visit the Warriors Heart property and program in San Antonio.
[45:32] - The program isn’t just for military, but rather for the “military class,” as Justin puts it. In addition to military, this also includes law enforcement and first responders.
[47:35] - What are Justin’s long-term goals for his involvement with Warriors Heart? In his answer, Justin explains the cost of the program, and where financial contributions go.
[49:14] - Justin lists ways to get in touch with him and learn more about the foundation. He also expresses that his biggest goal is awareness. He then invites listeners to email him directly at Justin@warriorsheart.com.
Links and Resources:
National Association of Residential Property Managers (NARPM)
First, a quick note: today’s show is sponsored by the National Property Management Network, which provides insurance products and services to property managers.
Today, I’m joined by one of my clients, Mark Clayton. He’s a successful long-term single-family home investor who will teach us about investing and working with property management. Best of all, he’s a landlord with a heart. That is, he isn’t in the real estate game just to make money, but also to make his tenants happy.
Before he got into property investing, Mark was the CEO of several hospitals. As a hospital administrator, he had to move from town to town relatively often. This led indirectly to his involvement in property management, as he bought various homes during this process. Once Mark got up to three homes, he started looking into property management and we began working together.
In this conversation, Mark talks about why he got into the single-family home game, explaining that these homes diversify him from a risk standpoint. If you own multi-family properties instead, a single issue or problem (such as a fire) could impact much more of your overall investment.
We’ll also talk about Mark’s financing techniques, why depreciation is a good thing, what Mark looks for when deciding on whether to invest in a particular property, a valuable tool Mark uses for establishing metrics, and finally, his end game and ultimate goal for his business.
Show Notes
[02:09] - Mark starts us off by talking about his background, and how this background led him into property management.
[03:50] - We learn more about how Mark got into single-family home ownership.
[08:55] - Why did Mark choose to go into single-family homes? In his answer, he explains that he asks himself whether he can see his mother living there as part of what he looks for.
[10:48] - Mark elaborates on how important it is to him to make sure his tenants are happy. He then gives an example of doing a repair right the first time around.
[13:48] - Mark talks us through financing, especially for his early properties.
[15:05] - We hear more about the nuts and bolts of Mark’s process, including his views on repairs and renovations.
[17:58] - The first three homes Mark bought, before meeting Brad, weren’t bought at a discount. He then talks more about these properties.
[21:19] - Brad points out that some homes may cash flow well, while others don’t, creating an averaging effect. Mark elaborates on this, and touches on his portfolio pruning process. He also describes the experience of working with A+ Federal Credit Union.
[24:58] - Mark talks more about the benefits of working with the credit union. He and Brad then talk about the challenges of moving beyond 10 single-family homes. Mark then recommends not giving up your steady full-time job before you transition toward a commercial lender.
[29:52] - Having professional property management in place was a big part of getting commercial loans, Mark explains.
[30:53] - Brad talks about the necessity of renting a home quickly, even if that means you have to drop the price. Mark then moves on to talking about why he finds Texas a good place to invest, and suggests being “regionally agnostic” to those in less ideal locations.
[34:53] - We hear about some methods that allow people to view homes from a distance.
[35:22] - Brad talks about a story of a home Mark bought in Georgetown. Mark doesn’t remember this particular home offhand, but talks about learning from his mistakes.
[38:15] - Mark talks about the tool he uses for metrics: Property Tracker. He talks in depth about how he uses this program, and also explains what he looks for when considering a new property.
[41:46] - Mark explains why depreciation can be a great thing.
[44:07] - What is Mark’s end game? That is, does he want to build up the business and sell it, or nurse the cash flow with no end in sight?
[45:58] - Mark ends the episode by expressing appreciation for Brad and his company, going into detail about what makes Brad and his team stand out.
Links and Resources: