DGS 5: Foreclosure Auction Prospecting for Property Management with Kass Rose – Part 1 How An Auto Industry Veteran Brought a Unique Perspective

Kass has a fun story about how she got her start in property management. Learn from Kass Rose about how she used her knowledge as an auto-sales-industry veteran to grow her business from 0 to 300 doors in about 3 years leveraging the foreclosure auction scene. Part 1 of 2

Show Notes:

  • Lightning unicorn? [02:36]
  • Marketing is not the best way to start [05:20]
  • Prospecting as an Expert collapses the sales cycle [06:21]
  • Where are the investors? [07:24]
  • How Kass was “discovered” [08:02]
  • Real Estate looks weird to a car salesperson [10:54]
  • Kass “get’s the glue” & doesn’t wait for the “be-back bus” [13:01]
  • How an auto industry veteran had the opportunity to create something new in property management [16:50]
  • The beautiful thing about property management [19:49]
  • Her unique advantage in attracting & screening renters [20:45]

Tweetables:

Resources:

http://rentlucky.com/

https://rentmyway.com/

Transcript:

Jason: Welcome! If this is your first time listening then thanks for coming. The DoorGrow Show is a podcast for residential property management entrepreneurs that are interested in growing their business and life. If that is you, be sure to subscribe and rate us in iTunes and join your fellow DoorGrow Hackers online at doorgrowclub.com, our free community for property management entrepreneurs. I’m your host Jason Hull, the founder of OpenPotion, GatherKudos, and of course, DoorGrow. Now, let’s get into the show.  

Hello, DoorGrow Hackers. Welcome to episode number five. In this episode, we’re gonna be hearing from Kassandra Rose of RentLucky Property Management in Seattle who I nicknamed Badass Kass for a reason. You’re gonna hear why.  

She shares this fascinating story with us of transitioning from automotive industry, from autosales to property management which is a different transition than most real estate agents, for example, going into property management. She came in with unique perspective. She also came up with a unique method for growing her business to just under 300 doors in as little as three years by spending about three hours a week leveraging the foreclosure auction scene.  

The audio platform that we used was a little glitchy, so forgive the crackles. But the content is, well, badass. I split it into 2 parts, you’ll catch the second half in the next episode. I recommend you take notes. Let’s get to it.  

Cool, DoorGrow Show. Jason Hull here. I’m with Badass Kass and I’m gonna show off this t-shirt that I made several years ago. I don’t know if you can see it.  

Kass: I love it. 

Jason: It’s a lightning unicorn. I found some stencils, cut them out, and painted the thing. My three year old loved it.  

Kass: You can paint it and then wash it and it stays?  

Jason: I got t-shirt paint. You buy black t-shirt paint. 

Kass:It’s kind of fitting that you’re wearing a happy unicorn.  

Jason: Yeah, I think it’s happy. It could be angry, I don’t know, there’s lightning bolts. Today, I don’t even have that mindmap up but I’m gonna pull that up here.  

Kass: I don’t have a map. I’m gonna let you lead the show and I’ll answer as many as I can. 

Jason: Cool. If you know Badass Kass, she was recently published in the most recent magazine that came out from NARPM. If you’re familiar with NARPM, the National Association of Residential Property Managers, this organization, Kass was in this which is really cool.  

Kass: Kass with a K. 

Jason: Yes. Badass Kass. Kass built a property management business from the ground up.   

Kass: From the ground up. One house at a time. 

Jason: The majority of the doors that you got in and building these doors came through this method that we’re gonna talk about today. Is that accurate? 

Kass: Absolutely, I would say 80% of the doors were built. 

Jason: 80%, and how many doors under management do you have in the business? 

Kass: We are just under 300. We’re at the point now where we get rid of the bad seeds. We’re healthy enough. We’re like, “Hey, does it make sense to get rid of this guy?” We’ll fire some. We kind of go up and down right about the 300 mark.  

Jason: People can check out my cycle of suck video. Just Google “cycle of suck” in property management. Kass knows what I’m talking about here. She’s filtering out the bad crap. Awesome. How long did it take you to get to 300 doors? 

Kass: Three years.  

Jason: Ground up, three years, that’s roughly about 100 doors a year. I’ve talked to business owners, several, recently. Because I’ve created this thing, targeting 0-100 doors people. But I’ve talked to several that have been in business longer than three years. They haven’t even broken the 100 door barrier.  

Kass: Well, maybe I can teach them how. 

Jason: Yeah. There’s several tactics and this one is particularly genius and relevant to them. We’re gonna touch on it. We’re not gonna go in incredible detail here, probably. But I want to point out this idea just to plant the seed for people. One of the challenges in property management is everybody focuses on trying to market.  

Especially when you’re starting out, usually in the 0-200 door range. Starting out, marketing is luxury that they can’t afford. It doesn’t usually make sense. Most people, when they come to me, usually in the 200-400 door range, then they’re all of a sudden, “Hey, now we’re ready to do some marketing in our business.” They’ve grown their business entirely through word of mouth, hustling, and it’s taken them a long time. I talked to a guy who had 220 doors and took him 20 years to get there.  

Kass: Ouch. I don’t have that type of time.  

Jason: In building the business, the things that I think are really critical and really key are reputation. That’s a huge factor that people overlook. Because reputation sites like Yelp, Google, stuff like that, that can, alone, feed more business than you would get through spending thousands on pay-per-click, SEO, and everything else, for example. That’s one channel.  

Another channel is prospecting and prospecting is great because prospecting is collapsing the sales cycle, especially if you do it in a way where you’re positioned as an authority or an expert, then you don’t have to sell. Because another challenge I find with property managers is most of them aren’t really good at selling. Usually, if you’re in a position of authority, sales becomes a lot more natural, a lot more easy because they are coming to you for advice and information.  

This tactic of targeting, what we’re gonna be talking about targeting, foreclosure or auction market is a tactic to position yourself as an authority. You had explained to me, you literally spent about three hours a month then had a line of people that were investors, and people just lining up to get your advice. Is that accurate? 

Kass: Yeah. I have a room full of investors that need advice. 

Jason: A room full of investors. The number one question when I say, “You need to start by prospecting first.” They say, “How? Where are they? Where are the investors?” The only thing they can think of is, “Okay. I’m gonna go to realtors that have investors and annoy the hell out of them. I’m gonna try and pitch to their offices and do this sort of thing.” Which there are some cool tactics you can do there but there aren’t investors there. Those people know where investors might be, they have investors. 

Kass: Or it’s somebody who you have to filter through in order to get to the investor. I want to be an end user. 

Jason: You want that direct access to the investor. Tell us the basic idea and tell us how you started doing this.  

Kass: Sure. I’ll give you a little background about who I am and what I was doing prior to real estate and why it just became a natural fit for me to move into foreclosures. I think I was 18 years old when I took my first job at a car dealership, of all things. I was living up in Northern Washington and there was an ad running that said, “No experience necessary. Females encouraged to apply.” I was like, “I fit both those things.”  

I ended up selling cars at the age of 18 and it quickly showed me that you could show up every day, pay attention, use systems and get paid commission. That was my first commission. Actually, 20 years later, I’m older than 38 but 20 some odd years later, I’ve still only been 100% commission. I’ve never had a paying job or security. It was all based on my hustle. I ended up being in the auto industry for about 12 years.  

By the time I was 21, I was a finance manager. I was managing overgrown men. I learned from some of the best and I watched some of the worst. But what I did learn is that if you did a certain system, wash, rinse, repeat, you would get paid. Then my job was I needed you to like me, buy from me, and rave about me in less than a half an hour. That’s about how much time I had with each client as a finance manager. I don’t know the last time you bought a car but I was the one who sold you all the aftermarket products. That paid my bills. I was making $100,000 a year by the time I was 23 years old. 

However, I ended up getting sucked into that industry. What I realized is nobody was really gonna help me own a car dealership. This was a good old boys club. If you weren’t the wife of, or the daughter of, you were just supposed to sit there and look pretty and make other people rich. That didn’t work for me anymore.  

Right about when I turned 30, I decided to leave the auto industry. I really didn’t know what to do with myself. Here, I’ve been making a six-figure income and I had no college education. Well, a year of college education. I’ve got babies and mouths to feed. I didn’t know what to do. I loved branding and marketing. But all of those jobs, all the dotcoms, and everything that was going on, they wanted you to have a four-year degree and they wanted to start you out $40,000 a year. That didn’t work for me.  

I decided well if I could sell cars, then I could sell houses. I went out and got my real estate license. Now here’s what I didn’t like about real estate and I still don’t. Traditional real estate didn’t really satisfy me, because first of all, it was a very egocentric industry. Your face on a business card, your face on a park bench. It was all about ego. 

Jason: It’s all about the photo. You always hear agents, “It’s all about the photo.” 

Kass: Yeah, so weird.  

Jason: It’s like Hollywood. It’s all about the headshot.  

Kass: In the car industry, we made a lot of money. We touched a lot of lives. We turned a lot of inventory and none of us put our face on our business cards. This was really a weird transition for me. I also found that it was very female dominated and I was used to the guys. I was used to the boys who rock and roll, high five when we close deals.  

Here, all of a sudden, I have to hang out with women who want to nurture these egos, and nurture these relationships. That was a hard learning process for me. What I needed is I needed deals. I needed inventory. I needed deals. I needed people to get in front of because I had proven that I can sell. I couldn’t survive off of one deal every three months for a big commission, that would bore me.  

I ended up hanging my real estate license with one of the largest property management companies in the Northwest or in the Seattle area. It took me about 30, 60 days for me to realize that everybody at that brokerage, at that property management company, was pretty miserable. What I realized is a lot of people in property management were overworked, they’re underpaid, they feel this burden that they have to do this cat and mouse game every single day.  

I ended up leasing up a property for a foreclosure investor. I’m gonna tell you, Jason, this is probably the coolest story about how it all happened. I’m in not the best neighborhood in Seattle. I’ve got some international students that have moved into town and they need a house. They’d show up in their fancy cars, in their Acuras, in BMWs, and everybody pulls up. I walk the house with them and they all agree that they like it. We decided that the rent rate is $2,000 a month. I looked over at them and I said, “Alright, I need everybody to fill out an application.” This is back in the day, this is nine years ago. 

Jason: Right. Everything was paper.  

Kass: Yeah. I had a paper application. What I did is I pulled out applications and literally, we signed them on the hood of the car. Then I looked at them and said, “Okay, now I need your down payment. I have to take this off the market.” In the auto industry, we call that ‘getting the glue’. Gotta get the glue, man, because nobody comes back. If you let them go, they’re not coming back. We used to refer to that in the car business as the ‘be back bus’. There is no ‘be back bus’. Everybody’s not gonna be on a bus coming back.  

Jason: Right. Because they say, “We’ll be back.” That’s what the potential buyer tells you. “We need to do this. We’ll do that.” Then they second guess everything. 

Kass: They don’t come back. 

Jason: There’s no ‘be back bus’. 

Kass: I looked at these international students and I said, “I need you to write the check for $2,000 to get the glue and take it off the market.” They said, “We don’t have any checks.” A lot of international students have really healthy bank accounts linked to their really healthy parents in other countries. I know this because I used to sell cars to these students as well.  

I said, “Okay, let’s go to the bank.” I jumped in the back of their Acura. We took off and we went to Bank of America. Everyone pulled all their cash out and then they took me back to the house and dropped me off. The owner of that property was a foreclosure investor and he happened to be there at the property doing work that day. He had a ball cap on. He was out front raking the leaves. He looked like he was hired help.  

Jason: He was undercover. 

Kass: He was undercover. In the auto industry, I know how to play house. It’s called playing house. I let everyone think he was the lawn boy but I really knew he was my client. By the time these guys dropped me off, I’ve got five applications, $2,000 in cash. I walked over, counted it right to him and said, “Boom, I’ll have this wrapped up tomorrow.” He said, “I have never seen anybody close a real estate transaction like that before.” I said, “I don’t know why you wouldn’t close it like that.”  

Jason: He was like this. It’s like WTF man? That never happens. 

Kass: Right. He immediately said, “You know what, I wanna introduce you to a group of guys that I know who are at the port, who do these foreclosures for an industry and I think you need to meet these guys.” That’s how I got in. I interviewed with the foreclosure company and they said, “Listen, based on your skill set, why don’t you start a leasing division for us? Basically, we’re gonna have all these mom and pops coming to the auction, and the one who wanna buy and hold…” Back then, this is nine years ago, we also had lease options which I’m not totally a fan of unless it’s structured right. They said, “Basically, Kassandra, we wanna give you a department. Build it from the ground up, figure it out, we’ll support you. But basically, we need our mom and pops who wanna be landlords to have some type of resources.” That’s how I got in.  

Jason: You hadn’t been a property manager.  

Kass: I have done five deals. 

Jason: Here’s the advantage in that, and I did the same thing in web design. The advantage in that is you came into the industry without any preconceived notions, ideas. You weren’t towing the NARPM line that everybody has fed you. You weren’t doing what everybody else is doing. You just said what’s gonna work. 

Kass: Right. Yup. 

Jason: Love it. This was a foreclosure business. 

Kass: Yeah. Now I’ve been introduced to this foreclosure company. It just so happened it was the number one foreclosure company in town. Keep in mind, foreclosures back then, we didn’t talk about it. Do you remember back in the day when people didn’t share the fact that they had a bankruptcy, it was very hush-hush, and embarrassing, and shame, and you lived in this little secret world where you cannot tell anyone? Then when the dotcom happened. 

Jason: In terms of evil, it is like I killed somebody, or I got a bankruptcy. 

Kass: Yes. When people started talking openly about their bankruptcies, it was right around the time that dotcoms busted. 

Jason: That was probably what 2000 and? 

Kass: Early 2000? 

Jason: The market went totally south 2006, 2007. It got really ugly. After that, everybody was like, “We’re all screwed.” 

Kass: That was the housing. Bankruptcies happened with the dotcoms. What these guys were doing is they were going to the foreclosure auctions and there wasn’t a lot of competition. There was no HD TV Flip This House shows out yet. This was a silent guys playground where the little boys hung out.  

Well, guess what? I happened to come from the good old boy car dealership and now I’m hanging out with the good old boy investors. Same type of guys. Sometimes I look back and go, “Why the hell did I surround myself with these types of people for the last 20 years?” That would lead into why I went into yoga, and meditation, and a lot of healing later.  

Jason: It was a catalyst for growth. It was the sand that helped you create the pearl.  

Kass: Right. Basically, we have to get beat up with adversity to come out and be even more beautiful on top. What I did is I ended up building a leasing division for these guys. I was with this foreclosure company through the good days, the bad days, when the housing market crashed. Here’s the beautiful thing about property management, it does not matter if it’s a hot market or a tanking market, you will always have renters.  

Jason: There’s always renters. 

Kass: There’s 100 million renters right now in the marketplace. 100 million renters and they’re growing. They all need somewhere to go. You’re always gonna have a rental market. That’s what I really loved is that when all these real estate agents were peeling their faces off the park benches, and off the buses because they couldn’t afford the advertising anymore and they were getting out of the business, I was fine. I was in property management. 

Well, actually, I’m gonna tell you another secret that I did on my marketing to get renters to rent from me. I wasn’t scared of foreclosures. I could talk that language. Let’s talk about it real quick. When the foreclosure boom happened and half of America went underwater, I just changed all my advertising. I said, “Do you have less than perfect credit? Are you bumped and bruised and broken? Call me. Because I might be able to help you rebuild yourself and put you back into a house.”  

While all the other property management companies in town were saying, “We can’t accept you because of your credit.” I was actually taking those people and looking at the whole picture. I was a finance manager so I’ve been looking at the whole picture of credit for 12 years prior. I was at the auto industry. I needed to know, based on your credit, does it look like you’re going to pay? We all have crap. We’ve all have been through the muck and the bad days. I’ve done it. I’ve had short sales. Does that define who I am? Does that mean I can’t afford? You know what I mean?  

It’s looking at it in a different way. I think my background of hustling in the auto industry, my background of being able to pull credit, read credit, read people’s body language, understand people’s stories, and then still put a deal together and close that deal, ultimately from my landlords so that they are protected, cash-flowing and they can sleep at night, that they’re not gonna get taken advantage of, that became the most beautiful marriage and something I got really, really good at.  

Jason: Yeah. It felt rewarding because you felt you were doing something. You were contributing to the marketplace. 

Kass: Yeah.  

Jason: Alright, let’s get into this auctions idea. Here’s why. These are the things we had discussed. Why target auctions and why target foreclosures? You can find clients there. Pretty obvious. But you can also find referral partners that will send you clients. You can speak in investing language to them which is a better language to be speaking because they’re a different crowd and then you become a trusted authority or advisor to them, as I’ve mentioned. You catch them early in the sales cycle before they get the investment property and start looking for a property manager. They already have a property manager in mind which is you. 

Be sure to tune into part 2 in our next episode where we get into more about the foreclosure auction scene and what goes on there. You’re gonna enjoy it.  

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