DGS 163: Attacking the Myths Pure Startups in Property Management Believe

If you own a property management company, you know how difficult it is to get solid leads and add doors. It’s even harder to get started when you have no doors, no experience, and you are focused on the wrong things.

Property management startups often make a lot of the same mistakes. Property management growth expert Jason Hull addresses common property management startup myths and misconceptions about starting a property management business and adding doors. 

You’ll Learn…

[01:14] The DoorGrow Avatars: Pure Startups

[04:20] The Myth of Growing a Business by Stealing Prospects

[06:57] The Myth of Being the Cheapest Option

[08:36] Fantasy vs Reality in Business

[10:17] Embracing the Suck

[14:16] Become an Expert + Tenant Landlord Law

[17:26] Get Help and Resources!

[19:28] Branding and Website Mistakes

[24:52] More Helpful Resources to Check Out

Tweetables

“The biggest hurdle to overcome is they have decided they’re going to start a business, but they haven’t actually started it yet.”

“Every entrepreneur goes through this journey of learning through difficulty and pain.”

“Going with an unknown disrupts safety and certainty, which is the number one thing that owners want to get from a property manager.”

“There’s no reason to charge less than what the typical or most common market rate is. You’re just making your life harder.”

Resources

DoorGrow and Scale Mastermind

DoorGrow Academy

DoorGrow on YouTube

DoorGrowClub

DoorGrowLive

TalkRoute Referral Link

Transcript

[00:00:00] Alright? Nobody wants to suck, but the biggest secret I can tell a pure startup… the biggest secret is: you need to get the ‘suck’ out of the way. You have to suck.

[00:00:10] 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 your business and life. And you’re open to doing things a bit differently, then you are a DoorGrow Hacker.

[00:00:28] 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 

[00:00:47] 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, the founder and CEO of DoorGrow. Now let’s get into the show.

[00:01:14] So I’m thinking what I want to do with the next few episodes– and I may change my mind– is go over the different avatars that I recognize in the industry, or basically the different target audiences that we target as DoorGrow. So, this is something that, uh, we just brought on a new team member recently, and I was helping them to understand the property management industry.

[00:01:37] And we have this document that I’ve created once to give to marketers to help them understand who we’re targeting. We didn’t have much success with outside marketing firms. So it’s all in-house now, but I still have this document. So I wanted to talk a little bit today about startups and some of the challenges and what I’m talking about are pure startups.

[00:02:00] Pure startups are those that have zero doors right now. They have no doors. And I think I may have talked about the idea of fantasy versus reality, but I’ll touch on that again today. But pure startups are those– when they come through our funnel, their number of doors is zero. And the number of years is zero. So we know they’re a pure startup. 

[00:02:19] And the biggest challenge I noticed with pure startups, the biggest hurdle to overcome is they have decided they’re going to start a business, but they haven’t actually started it yet. And so the biggest hurdle is just taking that first step. It’s a huge step. They don’t realize how huge it is. So what they usually do as a first initial step is they build this fantasy business in their mind. And some of us remember those days. We had this big “pie in the sky,” huge vision and idea of how amazing our business would be and how rich we would be and how awesome things would be. I don’t know, maybe.

[00:02:56] This fantasy initially is how a business starts out. It’s not connected to reality because there’s a lot you don’t know. Like those of you that have been in this industry or in business or an entrepreneur for a while, know that there is a lot that you have learned. A lot of hard lessons, a lot of well fought lessons, a lot of painful lessons that you have absorbed or figured out. And some of these things were really challenging. Some of these things kept you up at night. Some of these things required legal battles and that was the tuition you paid to learn these lessons. Some of these cost you money. Sometimes there were refunds, right? And so every entrepreneur goes through this journey of learning through difficulty and pain.

[00:03:40] So pure startups: this fantasy is so seductive. It’s sexy, it’s delicious. And in their mind, what I hear from all the pure startups is every property manager in their market sucks. They all suck. And so they’re going to start one that doesn’t suck. So that’s the first challenge and they think that they’re going to be somehow magically different than all the other companies who have a lot more experience and a lot more knowledge. And the other weird thing I see really common with startups, pure startups is when I talked to them about their business plan, their idea, they usually have a couple of myths that they believe. 

[00:04:20] One myth they believe is that they’re going to win and grow their business by stealing other property managers’ clients. They think that this is how they’re going to grow their business. So that’s one of the myths I have to destroy with them is they don’t realize how difficult it is to get somebody to switch companies. Going with an unknown disrupts safety and certainty, which is the number one thing that owners want to get from a property manager. They want peace of mind, safety and certainty. They’re not going to give up what little peace of mind and safety and certainty they have, even if it’s not super great to go with an unknown.

[00:04:53] I usually like to use the analogy of a cow. He may see that there’s greener pastures over the fence, but how likely is it for that cow to jump over the fence? Not very likely. Could the cow do it? Maybe. Maybe the cow could do it ,and maybe the cow would do it if there was a raging fire or a rattlesnake coming after them or something that was really scary to the cow. It might jump into that other pasture, but it’s not generally going to happen.

[00:05:22] And what I’ve seen is people that make that their strategy and their goal and go try and reach out and target people, it doesn’t work. I’ve even heard property managers that are more seasoned when they’re meeting somebody new that’s competing with them in their market, say to them, ” Good luck,” you know like, “go for it. If you can get any of my clients on…” you know, “good luck.”

[00:05:44] Why? Because they know how hard it is. They know that it’s not likely to work. And it generally doesn’t work. And if anybody has had really amazing success in stealing business from somebody else, hit me up. I’d be super curious to hear about how you’re doing this. But in general, they have to be a really, really bad company. The only time I’ve heard people leaving or being able to get clients from other property managers is when they found out that property manager was stealing from them or doing something really gross or unethical, and then they were able to get them to switch companies. And if you ever talk to anybody, that’s worked with lots of property management companies and talks about how bad they all are. The red flag isn’t the property management companies usually. The real red flag you should be paying attention to. Is that prospective client. They’re the common denominator in all of these situations. So before you just believe that all of these companies are so horrible, you may want to take a really close look at what their expectations are and make sure you’re setting really healthy boundaries with this prospective client, because the likelihood is they’re the actual problem or bad egg or whatever.

[00:06:57] All right. So that’s one of the things, the other common myth that I see with startups: they believe they’re going to win business and be more successful by charging less money. This is so common. I always kill this very quickly. If I talk to a pure startup, I’m like, what’s your plan?

[00:07:17] They’re like, “we’re going to go around. And all the other companies suck, so we’re going to like take those clients away from them. We’re going to get their clients and we’re going to do it by being cheaper.” First of all by having lower prices than your competition, you’re just making your own life harder.

[00:07:36] There’s no reason to charge less than what the typical or most common market rate is. You’re just making your life harder. You’re not going to make as much money. You’re going to have much higher operational costs in the beginning because you’re taking on worse clients and you’re making a lot of mistakes in the clients you take on, and then you’re going to have less revenue, so you’re gonna have less profit than some of these companies. And then you’re going to be the next sucky property management company that you thought you were going to be competing with and helping people avoid. So do not just come into the market, playing the game of “we’re just going to be cheaper. And that’s how we’re going to get business on.”

[00:08:15] That’s not a very effective strategy. Most businesses that tried to do that generally end up failing. Can you build a really big portfolio really quickly by being super dirt cheap in the market? Maybe. But you’re going to be miserable and it’s not going to be very effective, and you’re not going to make much money and the business is gonna fail.

[00:08:36] So, the next thing that I notice is that we’ve got to get them past this hurdle of fantasy versus reality. So they often spend, at the pure startup stage, too much time preparing, too much time planning, too much time scheming. They don’t just implement and take action. They think they need a website in order to look legit and have a real business.

[00:09:03] They think they need business cards. They think they need a flashy logo. They think they need a whole host of things. And there’s really only one thing that you need in order to have a real property management company. You can have a business that has none of those things. It doesn’t have a cool name.

[00:09:22] It doesn’t have a cool logo. It doesn’t have a website. Like you can have a business that functions without any of that. You don’t even have to have property management software. You can just do everything in spreadsheets. I’ve seen that done. The one thing that you do need in order to have a legitimate, real property management business though, is clients. That’s it.

[00:09:42] And sometimes they focus on all these trappings and getting all these ducks in a row and all these things that they think they need. Meanwhile, they’ve got– sometimes they’ll tell me, “oh, I’ve got all these investors I know. And I’ve got all these connections and I’ve got some investors are saying they’re ready to work with me as soon as I’m ready.”

[00:09:58] And then, the property manager is spending a hundred hours building their own website on Wix or they’re like trying to do something that isn’t even in their skillset. Why do we tend to avoid as entrepreneurs getting started? Because the fantasy has to die. And the second we take a step into reality world, like we start saying, “Hey, I’m ready to take on your property.”

[00:10:21] There’s so many pieces that you don’t have that you realize that actually matter. You need a contract. You need to know landlord tenant law. You need to know how to onboard this property. You need to know how to get the property rented out. And these are all things in your brain, you didn’t have at a really specific detail level of how to do these things. So you’re going to have to figure it out. And what that means is you’re going to suck. 

[00:10:47] This is the next thing I want to point out is most pure startups, most property managers that are just getting started, no doors… they’re afraid to suck. Nobody wants to suck, but the biggest secret I can tell a pure startup… the biggest secret is: you need to get the ‘suck’ out of the way. You have to suck. You need to be willing to suck. We all start at ‘level suck’ in anything that we do that is new, and you have to be willing to do it. If you’re unwilling to suck then you’re going to just get caught up in your head in mental loops. You’re going to mentally just keep going over and over and over things, trying to figure things out. You’re going to do tons of research. You’re going to watch tons of videos and read tons of books, and you’re going to waste so much time. You want to know who learns fast? Those that are willing to suck that just do the work. They just go out and do the work and they suck and they learn really fast because sucking is painful.

[00:11:44] And as entrepreneurs, when we suck at something, we get good at it very quickly because we’re highly adaptable creatures. We adapt very quickly. We figure out how to not suck really fast. So the analogy I like to use for those that are stuck in this loop of preparation and trying to get everything ready and trying to look really a certain way is: driving.

[00:12:09] So I like to ask them, how many videos and books and things could you watch and go through to get ready to drive that would make you ultimately just be an amazing driver without driving a car? And they’re like, you could watch endless videos and books, and you’re not going to be a great driver. Right? You have to just drive the car. You have to start driving the car. You have to suck at driving the car. 

[00:12:36] I just taught my daughter Hailey how to drive and made her learn to drive in my suburban. Right? This is what she learned in. And we just helped her buy her first car, which was an SUV, but not a suburban, not that big. But she learned it’s something that was difficult and challenging. And she sucked in the beginning. She was really bad and she got better and better and better. And she was willing to suck. And I had to put pressure on her, like, “Hey, we need to go driving. We need to get your time in. We need to get all the hours that are required here in the state of Texas.” 

[00:13:08] And so, we got her to the point where she was ready to take her driving test and get her license, and she aced her driving test. She had to go do a driving test in a car that was not a suburban and much easier to navigate and much easier for her to drive. And she felt like she did great. And she did. She did really well. And I feel a lot safer with her driving her vehicle because she learned in a situation where it was difficult and she sucked. 

[00:13:35] So don’t choose out of the discomfort. Don’t choose out of sucking. Don’t avoid that because you need to do that. And a lot of startups just avoid that. You have to just choose into it. You have to step into sucking. You have to start sucking. And this is relevant to anybody listening to this. There’s always something that we know deep down we should do, and we probably could be great at it if we were just willing to step into it and just suck for awhile. And it doesn’t take very long. Sometimes even 20 hours of putting some work into one thing, you’re better at it than most of the people on the planet that are avoiding doing that thing. So just start sucking.

[00:14:16] The other thing that pure startups have that’s a challenge is they have no real knowledge of what investors generally really need, want, what their objections are, what the challenges are… They don’t know. This is where I coach clients on a strategy called product research interviews to collapse time on that without going into a whole lot of detail on this recording about that, it’s basically, you need to do some market research. You need to talk to people that are the type of people you’re going to be targeting.

[00:14:46] You need to get familiar with what their needs and their desires are and their challenges and why they aren’t working with a property manager. And that knowledge is usually earned by talking to lots of investors over time. Property managers that have been at this for 20 years, they know right away like all the challenges, all the objections. They know how to form their pitch to include all of these potential hurdles and challenges.

[00:15:13] You’re going to pitch, you’re going to talk, if you’re a pure startup, to somebody and you’re going to leave out all of these things that they’re concerned about internally. You’re not going to hit those and target those effectively because you don’t even know what they are. And so you need to do some research by talking to a lot of investors. Just ask some investors, go to some investor groups, talk to people there and just say, “Hey, I’m looking at starting a property management business. Do you work with one?” And they might say “no.” and then ask them, “why haven’t you worked with one yet? Like what’s preventing you from doing that? Do you see that there’d be any advantages? What’s your perception of property management companies? What would make you need one or think that you want one? What challenges are you dealing with with your properties currently? Right. You need to understand your audience. And the better you understand your audience, the better you’re going to be able to sell. 

[00:16:06] The other thing pure startups also lack that hurts their ability to sell or confidence is they don’t know landlord tenant law. And that varies by location, city, state. You need to be the expert at this. So actually read the laws. Just go find all the laws. Look for tenant laws, look for things related to properties, owners, and read the actual laws and get to know this stuff. Get familiar with this so that you’re aware of what the laws say. And then maybe even talk to some of the city officials, some of the people that are connected to this industry, some of the people that enforce these laws and ask, how does this actually play out in reality?

[00:16:51] You need to be educated. This is some preparation that would be worth doing, because if you’re going to step into this industry, nobody in this industry wants more shitty property managers. Everybody wants some really good people that really know what they’re doing and are giving really real, good advice. You may want to talk to an attorney or a lawyer, somebody that deals with landlord tenant law and challenges and ask, how does the law actually play out in reality? What happens here locally? How do evictions actually work or end up happening right now with COVID and everything else that’s happened?

[00:17:26] Right. So figure out that, that piece. Um, another challenge that pure startups deal with is they don’t get enough resources around them. They think they can figure it all out on their own. They think they’re so smart. Like, “I’ll figure it out on my own. Oh, this is going to be easy. I can read a book or I can watch videos…” or whatever. Get a mentor, get coaches, get connected to other property managers. That’s all going to help you collapse time because there’s so many things you don’t know that you don’t know yet. And you’re going to make a lot of mistakes. 

[00:18:03] Another big mistake that pure startups make is their growth strategy they think is to do SEO or some sort of internet marketing. They think this is their gateway to happiness and money and revenue and freedom. And this is a really expensive belief to have, a really expensive mistake to make. They usually think they’re going to just somehow get to the top spot of Google through SEO. They’re going to focus on pay-per-click and do Google ads or Facebook ads.

[00:18:31] They’re going to do content marketing, do a ton of social media marketing. Or they’re going to find some sort of pay per lead service, like allpropertymanagement.com or managemyproperty.com and they’re going to buy leads and they don’t realize how difficult this game is and how it just helps you get cold leads.

[00:18:53] So if you are a property management startup and you’re a pure startup, and you’re thinking about starting this business, or you’ve already started to dabble with some of this stuff and realize how difficult it is, then I highly recommend that you get into our mastermind program so we can help you collapse time dramatically, make a lot more money. The program pays for itself very quickly. That’s our initial first milestone actually in the program is to make sure the program is paid for. And our goal with clients is get them to do that within 30 days. So it’s a no brainer to stay in the mastermind. 

[00:19:28] So the other thing that startups do is they make a lot of mistakes on their branding. The most common is they brand themselves as something generic like “properties” or brand themselves as a real estate company, the most common, which is super detrimental to word of mouth and to getting referral partners in the industry and can cause a lot of challenges. 

[00:19:50] The other big mistake is they make a lot of mistakes with their website. They just go and get some sort of website maybe from their property management software company. And they do some sort of website there, and they spend way too much money on this. We include in our mastermind, by the way, a website for free. They’re included as part of the program now.

[00:20:12] So as long as you’re a mastermind member, we will work on developing and building a website with you, however long that takes whether it’s a month or two months or whatever it takes to get you to gather all the content and get everything up. We will build a website for you. We even have like 50 predesigned styles and we give you market exclusivity on that design.

[00:20:33] So that means nobody else in your state in the U.S. or your province in Canada, will get to have the same design or style as you. And we’re going to match the colors to it, put your brand on it. We also are the world’s leading branding agency. We help you avoid all the common potential pitfalls in your brand.

[00:20:53] We have training material on how to choose and pick a really effective name and branding, help you avoid common mistakes that really could cost you about 50% of the leads and deals you could or should be getting. We’re gonna help you avoid that. And we’ve rebranded hundreds of companies over the years. Nobody else has done anything close to what we have done for clients in the branding space or at the level or the amount that we have done.

[00:21:18] We’ve rebranded hundreds of companies. And anytime we help clients rebrand or help them redo their websites, they tend to get more flow of whatever their acquisition strategy is for getting new clients on. We also have really good strategies for you getting acquisition or acquiring new clients. So that costs $0. They just take time and they actually take less time than SEO, pay-per-click, content marketing, social media marketing, or pay per lead services. It takes less time than those because those are cold leads, and cold leads take a lot of time to nurture, a lot of time to follow up. We’re going to focus on warm leads, strategies, and we’re not going to fight over the existing market share, which is small and try and compete with other companies that are probably a lot larger than you spending thousands of dollars to employ those strategies. We’re going to sidestep all of that. And we’re going to capture people earlier in the sales cycle where there’s less price sensitivity. There’s a much higher close rate. They’re warmer leads, and you can charge more money on average. 

[00:22:22] And then you’re creating new market share. We call this the blue ocean strategy. Instead of fighting in the red ugly water with every other property manager, especially the big ones that are spending two, three grand a month on all of those channels, maybe even five grand a month and already have the top spot on Google, right?

[00:22:39] So we’re going to get you focused on something that’s more efficient, more effective. The biggest companies right now, most of them are down about 200 doors I’ve noticed over the last year or two, just due to sales and the sell-off. Investors are selling properties, so they’re losing more doors than they’re getting on, and they are spending a ton of money on marketing and it’s not even helping them offset that. But we’ve got clients they’ve added 100, 200 doors easily in the last year and they didn’t spend a dime on SEO, pay-per-click, content marketing, or social media marketing, or pay per lead. Nothing. No advertising costs. They did invest time into using our strategies, but they invested less time than it would have taken if they had gotten a huge pile of cold leads. And they’ve got a much better output. 

[00:23:25] All right. So hopefully that gets you a little bit excited about talking to us at DoorGrow. A lot of people wonder if we’re legit. We’re legit. This has been proven. We’ve helped a lot of clients do this. And if you’re willing to put in the work, you’re going to get great results. That’s the bottom line. There’s no system out there that’s just going to work for you and do the job for you. 

[00:23:45] We’re also gonna help you increase your close rate and help you be better at selling. And then the operational piece, which becomes the next big hurdle. We’re going to help you solve that, how to scale your team and your business so that your life and business gets easier the bigger it gets instead of harder, which most listening, if you’ve had a business for a while, your business probably feels really hard and you probably feel pretty stuck and you probably recognize you’re the biggest bottleneck in the company.

[00:24:11] And you’re probably frustrated at your team and in a state of overwhelm and wish they would all just think and make decisions for and on your behalf. We can help you solve that problem, probably within the first 90 days of working with this. We call that the scale program. And anyway.

[00:24:28] So we talked today about pure startups. Just get started, start taking action, don’t try to avoid sucking, and kill that fantasy as soon as possible by taking action and make sure you’re educated on the legalities of your industry. And I hope that this has been really helpful for those that are looking to start a property management business.

[00:24:52] The last piece is if you do not know how to manage rental properties, which is not something I personally teach anybody. If you need the nuts and bolts like the basics join. The National Association of Residential Property Managers. They have great training and resources. Check out rentlikeapro.com and Rent Like a Pro’s YouTube channel. They’ve put out some great content. There are books about running a property management business, things like that. So check out some of those resources we do have in our Facebook group doorgrowclub.com. Just go to doorgrowclub.com. If you join that and give us your email address, you will get some really cool tools, including a list of really cool software tools and vendor tools and stuff that you can use to build your business.

[00:25:40] We’ll also send a gift, which is a fee Bible. So how you can make more money, which is put out by Rent Like a Pro. The fourth edition of that is given to you for free. If you join the DoorGrow Club Facebook group, you will also get a email. We have like five different gifts that you’re going to get, a tool of how to grade your website in terms of getting business and some other things. So check that out. Get those free resources. We do have in the Facebook group, in the file, section a document for startups, with some of the things that I mentioned that can help you kind of get started.

[00:26:12] So I hope this has been helpful. And until next time to our mutual growth. Bye everyone.

[00:26:19] 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! 

[00:26:46] 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.

[00:27:07] Until next time, take what you learn and start DoorGrow Hacking your business and your life.

Enjoyed this episode on the common property management startup myths ? Get equipped with more content like it by exploring past episodes of the #DoorGrowShow.