DGS 172: Creating Leverage at 600-800 Doors in Your Property Management Business
Once an entrepreneur reaches a certain level of doors in their property management business, they often seek to quit wearing so many hats and offload as much as they can. Unfortunately, even with 600-800 doors, PM entrepreneurs struggle to build an executive team, enjoy their day-to-day, and reach their business’s full potential.
In this episode, Jason shares his insight on the unique challenges that property management business owners face in the 600-800 door range.
[01:16] The Next Property Management Entrepreneur Avatar
[02:00] What Entrepreneurs Have in The 600-800 Door Range
[03:20] A Common Mistake Entrepreneurs Make with Ads
[05:59] Expanding and Starting New Businesses
[07:00] Why PM Entrepreneurs Get Stuck at 600-800 Doors
[08:55] How to Get Support and Get Unstuck
“It’s really difficult to outpace the market attrition with marketing.”
“If the main goal is the four reasons…If you do it the right way, this could be really a fun time in the business.”
“Have an executive team, trust them to implement things, paint the picture of the vision, and focus on building the right culture and investing in coaching and mentoring and supporting your team members.”
“We need a framework, a planning system, so that this is done effectively, that’s led by the team, that’s not top down and pushed and forced by you. This is where you really start to trust your team.”
[00:00:00] We get into this temptation where we’re like, “I can just throw money at things to solve a problem.” Unfortunately, this usually becomes painful as the market shifts. And at this stage, you probably are losing more doors due to the owners selling than advertising can replace.
[00:00:15] 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’re interested in growing your business and in life, and you’re open to doing things a bit differently, then you are a DoorGrow Hacker. 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.
[00:00:55] 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.
[00:01:16] All right. So today we’re going to continue on this series of going through these different stages of the property management entrepreneur life cycle. So really brief recap: we’ve touched on some of these different stages, like being a pure startup in the startup stage, solopreneurs, creating a little bit of leverage. Today we’re going to talk about the 600 to 800 door category. So last time, we talked about the 400 to 600 door category. And so, there’s kind of a category of property management business owners in the 600 to 800 doors. And at this stage, they are actively seeking to escape the day-to-day and to get others into key positions.
[00:02:00] So usually, universally, you have a BDM by about the stage. You’re probably no longer doing all the sales yourself. You might, if you really love that and you’re really good at that, you may hold onto that. But a lot of times they’re getting a BDM. They’re no longer focused on doing the sales. Either that, or you’ve made it probably your full-time focus like that’s probably your full-time focus and you now have somebody else handling all the operations. So you’ve picked one of those sides: you’ve either shifted to doing all the operations and kind of running the business, and you have a BDM that’s doing the sales, or you’ve shifted into being the salesperson, and you have an operator in your company.
[00:02:39] But either way, you’re likely totally out of the actual day-to-day, boots-on-the-ground-level work of operations or fulfillment in the property management business. So at this stage, you probably now believe in pulling in outside experts. You probably believe in using coaches and mentors. You probably believe in investing in yourself and in the business to move the business forward. I don’t think you generally get to this stage unless you’ve kind of moved past that idea that “I’m going to do it all on my own, and I’m going to do it all myself” and “I have all the answers.” Right? You’ve evolved beyond that. Because that would have held you back or held you small, you know, prior to this.
[00:03:20] So, sometimes at this stage, what I see is that they’re too focused, too heavily focused or in an unhealthy way, leveraged towards doing advertising. So they’re spending a lot of money on ads in order to try and get leads, to grow their business, and they lose sight of opportunities related to maybe warm leads or referrals or prospecting or networking methods that could be effective because they’ve gravitated towards something they feel like they can just throw money at. Cause we get into this temptation where we’re like, “I can just throw money at things to solve a problem.” So you might be trying to solve the problem of the lead generation by paying for ads or advertising.
[00:04:04] Unfortunately, this usually becomes painful as the market shifts. And at this stage, you probably are losing more doors due to the owners selling than advertising can replace. This happens depending on how the market is going. You’ll see property managers that are highly leveraged towards advertising and are spending a lot of their money and capital towards advertising in a bad market– or I guess I should say a hot real estate market where investors are selling. They usually find that they’re losing more doors than they can replace through advertising, because it’s really difficult to outpace the market attrition with marketing. Right. And so, a lot of times at this stage, I notice property managers still have branding issues, but usually at this stage, they’re a little less likely to make the changes they need to. So it’s really difficult. They feel pretty cemented in their name, even if it’s costing them money. So sometimes, I can get them to change or fix those things and it’s always worth it if there’s a leak there. But they’re a little bit more rigid.
[00:05:07] At this stage, they’ve broken through some major pain and major stress points in a business to get to this level that cause most property managers to just say, “I don’t want to get too big.” Most property managers feel pain in the 200 to 400 door stage, and it gets really painful as they’re kind of getting just beyond that, unless they finally break down and undo and redo how they do just about everything and finally let go of control and let go of doing some things and build an effective team or an executive level team. And so at this stage, you’re probably building an executive level team or have team members that you trust to kind of start to own pieces of the business a little bit. So you broken through those major things, but you’ve likely moved on to other opportunities and are distracted by other businesses. So this is really tempting. I see this a lot.
[00:05:59] Once you get this business somewhat healthy and you get it to this stage, a lot of these business owners decide “I’m going to go start another property management business in another city,” or “I’m going to go start another business like locally,” or “I’m going to do some other things.” So the entrepreneurial bug of startup stage that’s tempting: business gets a little bit boring for them. So then they go and kind of start to screw up their focus and their attention by focusing on other things. And so they go and start to start other businesses, do other things, and then the main business doesn’t really probably reach its full potential. It struggles a little bit. They might have some key people in place and they might get a little bit disconnected from reality or from what the business needs.
[00:06:43] So at this stage, this leveraged property management entrepreneur– we’ll call them leveraged because they have some leverage– they have some key people. They’re not having to wear every hat and do everything. They’ve probably got a pretty decent team by now. And very few entrepreneurs get to this level. Usually I see it, the 600 to 800 door level, the business owner starts to check out. Usually if they can get to this and they do it in a healthy way– it’s rare, but if I see them get to this stage and they do it in a healthy way, they will continue to grow and get to higher levels. But there’s a lot of property managers that get stuck or stop at the 600 to 800 door level, because they’re really burnt out on the business. They didn’t really build it the right way. They didn’t build the team the right way. And they are now trying to figure out: “how can I put somebody in place so I can get out of this business?” and so I see a lot of business owners during this stage kind of check out.
[00:07:38] By this point, they’ve been through so much pain and trial and tribulation and suffering and struggle that they’re burnt out and they’re done. So they get people in place. They get somebody to manage and run the business. They get an operator, they get a BDM, and then they’re like, “The only thing I’m going to do is maybe show up the broker on our conferences and talk about how many doors I have.” And you’ll see some people that do that even at higher level door amounts. But if the main goal is the four reasons as I’ve talked about on previous episodes– of having a business. This is the primary goal is to have more fulfillment, more freedom, more contribution, more support. If you do it the right way, this could be really a fun time in the business… if you do it the right way, but for a lot, at this point, they have the option or the opportunity to step out and get somebody else running the majority of everything for them, and just be an actual business owner, which might be tempting.
[00:08:34] So they might then put this business up and exit it fully, put it up for sale and find a company that is willing to acquire them. But this is a difficult stage. It can be, but I think the hardest stage is probably that 200 to 400 doors. That’s really tough. That’s one of the most painful stages I see companies at. So that’s about all I think I have to say about that. So if you are in this stage, you probably would like some support on the operational side of things. You might want to give your team members better coaching and better support, so we would bring you into our mastermind and we would support your operator and we would support your BDMs so that they can both become really exceptional in those roles, which helps the business grow a lot more quickly, and it would help you to be able to just focus on the visionary side of things in dreaming and coming up with new ideas. And it would help put your ideas into a framework that the team can help you to build. Because now you have the team that can help you build things. We need a framework, a planning system, so that this is done effectively, that’s led by the team, that’s not top down and pushed and forced by you.
[00:09:47] This is where you really start to trust your team. Have an executive team, trust them to implement things, paint the picture of the vision, and focus on building the right culture and investing in coaching and mentoring and supporting your team members. We can help you do that in our DoorGrow and Scale Mastermind. So if that sounds interesting, reach out to us. You can go to doorgrow.com, or you can join our free Facebook group, which you can get to by going to doorgrowclub.com. So that’s it for today. Until next time, to our mutual growth. Bye everyone.