If you’ve been a faithful listener of this show, you will already have heard of Pete Neubig of Empire Industries LLC, a property management company out of Houston, TX. Pete is partners with Steve Rozenberg, my guest on episode three of this podcast. In that episode, we went into great deal about satellite offices and marketing.
While Pete touches briefly on these topics, he spends more time on his areas of expertise. He’s the guy in the background who makes things run and ensures the systems at Empire Industries keep up with the growth.
Pete is also deeply knowledgeable about hiring and employee retention. He’s been using the framework of the DISC personality profile to ensure he hires the right people for the right roles, after realizing the reason he lost certain employees was because their personalities weren’t the right fit for their jobs. He’ll explain this in the interview, as well as offer insight into what personality types you should hire for certain roles within your own property management company.
We then take a deep dive into techniques for dealing with homes that have high days on market. He shares some tips and strategies for how to deal with a situation in which a home you’re trying to rent has high days on market and offers advice on how to get those rented. We cover, for example, the importance of keeping the owner in the loop, and of making the move-in process as simple and hassle-free as possible.
Show Notes
[02:18] - Pete starts things off by telling us that he comes from the investor side and needed to look for a management company himself at one point. He explains how this led to where he is today.
[03:55] - Brad gives listeners some background on Pete and his partner Steve Rosenberg. Brad then elaborates on their roles within the company.
[05:39] - Pete talks more about how the company handles the extreme growth that they’ve had.
[06:39] - The Property Management Mastermind Show was basically Brad and Pete chatting for the last couple years, Brad explains.
[07:19] - Pete brings up some challenges that may help listeners. One of his challenges is losing property managers, often from stress, so he’s been trying to figure out how to help them be stress-free.
[09:53] - Part of the challenge that Empire Industries had as a company was hiring a lot of inexperienced property managers. Pete then talks about the database he’s making for property managers within the company.
[11:16] - Pete discusses how he and Steve brought the concept of scripts in the sales world into the property management world.
[12:12] - Brad and Pete talk about one of Brad’s employees, “Rockstar” Ruby. Pete talks about his experience interviewing Ruby.
[14:16] - We hear more about what Pete has done in terms of opening multiple locations in Houston. They’ve opened six satellite offices at this point, in addition to the main office. Brad then talks about how this is important for showing up on Google.
[17:03] - Pete shares how important the internet has been for getting new leads, comparing it to agent referrals. He then talks about the challenge of keeping systems working with fast growth.
[19:25] - Brad brings up what Pete and Steve are doing in San Antonio today.
[22:00] - Pete mentions the last seminar he went to, which was the 10x Growth Con by Grant Cardone. Brad and Pete then talk about the products they’re developing, as well as why you should send a seven-page, heartfelt letter instead of a one-page letter.
[25:29] - When Pete does his marketing, he makes sure to hit each part of the DISC personality profile to appeal to everybody, not just one personality type.
[26:28] - Pete goes into more depth about the DISC personality profile, and explains how he has applied it to hiring managers.
[28:47] - Pete’s partner Steve is a very high I on the DISC profile, whereas Pete is a DC. Pete describes how this impacts their communication and interactions. He then talks about why a couple of CS portfolio managers have recently quit, and explains why they now hire CDs for that role.
[31:29] - Pete talks about the role of the DISC profile in his hiring process. He also offers suggestions for which personality type to hire for various roles.
[34:35] - We learn about Pete’s strategies for ensuring that days on market for his rentals aren’t getting too high.
[38:05] - Brad offers some techniques he’s heard of, including offering free TVs. Their internal strategy is to send owners a Monday morning update each week. He then dives into another of their strategies: getting more into the cash flow analysis.
[41:57] - Another strategy Brad uses is pointing out to owners how much they lose every month their property is vacant because they’re unwilling to lower the rent.
[42:46] - Pete talks about the strategy of lowering the entry point of how much a renter needs to bring in (for example, by offering two weeks free on the first month’s rent).
[44:07] - Pete explains how much of a detriment red tape can be when you’re renting out a house.
Links and Resources:
National Property Management Network
Steve Rozenberg on the Property Management Mastermind podcast
Last week, I had a great conversation with Todd Breen, one of my cofounders at the National Property Management Network. This week, I’m bringing you a conversation with another of the cofounders, Dave Holt. One of the benefits of doing this is that I know these guys well and can personally vouch for their expertise in their niches.
In addition to his role at the National Property Management Network, Dave is the owner of a property management company in Minneapolis, Minnesota. He’s been involved in the property management industry for around 20 years and is a past NARPM president
In this episode, Dave will talk in great detail about investments. He shares his tips and strategies for how he does his own investments, and shares the techniques he uses to find and buy investment properties. He also explains that when you manage single-family homes, you have some unique advantages when it comes to investing in them.
I hope you enjoy and learn a lot from this episode, which we recorded on location in Las Vegas at the NARPM Broker/Owner Conference.
Show Notes
[02:39] - Dave’s claim to fame and niche of expertise is investing for property managers. He touches on the benefits of being a property manager when you get involved in investing.
[03:34] - Dave shares how long he’s been working in the industry, and he and Brad discuss the cycles of real estate. Dave then talks about investing and property management in relation to recessions.
[05:27] - We hear a bit about where Dave tends to pick up his properties.
[07:01] - Brad talks about the “where” of getting leads. He discusses off-market chasing, explaining what the term means. Dave then talks about where he gets his leads.
[10:00] - Dave and Brad walk us through a scenario in which an owner wants to cut and run.
[10:53] - Brad and Dave talk specific numbers to illustrate what they’ve been discussing. They reveal that 15% off the potential list price is a more realistic number for what the seller might actually receive, and therefore is a fair offer for the property. Dave also clarifies what the MAO (maximum allowable offer) is.
[18:01] - Another factor to take into account is profit, Dave explains. He suggests not using appreciation in your formula.
[20:12] - The key to this formula is that there needs to be no lien on the property that will overshadow the calculations, Brad explains. Dave then gives an example of a time when he bought an underwater property.
[24:10] - How much did Dave make on flipping the house he just described?
[24:53] - Dave presents another scenario, this time one that doesn’t involve flipping. Buying and holding is a great strategy for property managers, he explains.
[27:10] - We learn how Dave explains to sellers that he needs to take over their mortgage payments. He then talks about some ways to do this, and he and Dave discuss due-on-sale clauses.
[29:28] - Brad talks us through some of the things he’s done with taking over loans. Dave then shares his method.
[31:55] - Brad explains that he’s using a series LLC for his properties, and shares the reasons he chose to go this route. Dave responds by talking about risk mitigation and exploring other options.
[35:11] - The important part of these strategies is the separation between personal and business finances, Dave explains. He and Brad then discuss owner financing deals.
[39:38] - Dave takes us through a few other examples and options. In the process, he talks about master leasing, and recommends looking up David Tilney to learn more about it.
[42:13] - Brad brings up depreciation, and he and Dave spend a moment discussing its importance.
[44:57] - What recommendations would Dave give someone on where to start? Some recommendations are Lou Brown (in Atlanta) and the BiggerPockets site and podcast.
[47:05] - Dave gives his final advice to property managers about how to start investing.
Links and Resources:
National Property Management Network
NARPM Broker/Owner Conference.