Calendar icon June 13, 2024

Understanding Property Management Company Structure

From innovative fee structures to organic marketing tactics, Peter Lohmann has made a habit out of innovation and outside the box thinking as the CEO of RL Property Management. 

 

Lohmann joins Andrew Smallwood to dish on the advantages and disadvantages of different PMC structures, how you can leverage organic channels to reach real estate investors, and his newest venture, Crane. 

 

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Season 4 Episode 11 features Peter Lohmann

The Triple Win Property Management podcast is produced and distributed by Second Nature

 

Peter Lohmann
More recently, departmental has become quite popular. I think that's probably the most popular way to organize a management company right now. That's how we're organized. What that means is you have specialists. You have someone who does the leasing for all the properties under management. You have someone who's responsible for rent collections for all the properties under management. You have someone who's responsible for coordinating maintenance for all the properties under management. And so you get this sort of niche down specialist effect where you have individuals that have very narrowly defined roles and metrics, and they can get very, very good and efficient within those roles.

Andrew Smallwood
Hello professional property managers Andrew Smallwood here on the Triple-Win Podcast. I'm joined live by Peter Lohmann who's joining us here from NARPM broker-owner. Peter, it's great to have you here. Thanks for taking the time.

Peter Lohmann
Thanks so much for having me. I'm excited.

Andrew Smallwood
So, Peter, for those who don't know you and might be encountering you for the first time, what should they know about you, RL, Crane, the kinds of media you do? What should people know about you?

Peter Lohmann
Yeah. So really, I mean, I own a property management company in Columbus, Ohio. We manage about 650 doors, and I've been in the business professionally for 11 years. So started from zero. Didn't know anything about what I was doing. I had no history or background in property management or real estate other than owning a few single family rentals. My background is engineering before that, so I've always been a systems and process oriented guy. So I took that approach to building our property management company, RL Property Management. So my co-founder and I, who was also an engineer, we started in 2013 when we booked our first few clients when I figured out, hey, this is something here, this is working. And so really, we've just been at it ever since. And we only manage single-family and small multifamily in and around central Ohio. So that's been, keeping us busy. And then in the last few years here, I've started to get involved in a few other things. He and I purchased a small engineering firm in Columbus, Ohio that kind of supports the property management company and vice versa to a certain extent. They do a lot of building engineering services throughout central Ohio. And then I've also got involved in sort of the media game. So I have a weekly newsletter for property management company owners. I have a podcast. I'm very active on Twitter, talking about property management topics. And out of that, Wolfgang Croskey and I co-founded Crane, which is a community for property management company owners with at least 100 doors under management. So that's really what I have going on. And it's all basically in service of and having to do with the property management industry, which I love. I love the people and nothing gets me more excited than finding new ways to connect folks and provide value. And yeah, that's what I've been up to.

Andrew Smallwood
Yeah. Can you share just like, what is it about property managers, there’s that thread of property management through everything, what is it about property management that you're most passionate about?

Peter Lohmann
So a couple of things. First of all, it's really hard. And I like a challenge. The engineering brain in me wants to figure everything out, and property management provides literally an unlimited number of things to figure out. Right. So you're never done. Like you're never, the business is never perfect. I get the sense sometimes that in other lines of work, you could just sort of get to a certain point, and from there it's on autopilot and you kind of got it all figured out. Whereas in property management there's just always something new. There's new technology, there's new laws, there's new markets to go into. There's new competitors. So that part of it is really exciting to me is staying ahead of that and figuring out how do we adapt, how do we stay profitable while competing with a new national player in our market? Right. How do we figure out how to provide outstanding resident experiences while not spending all of our owner's money? So there's a lot of that. And I think what I also really am passionate about with the industry is the people you come to these conferences, there's literally nothing as energizing for me as being out with other property managers, talking to them, hearing what they're going through. Not only is it validating my own experiences and challenges, but we're able to swap information and stories and best practices. And, you know, I've been around different businesses and different business owners over the years. There's something about property management company owners. They're just this right mix of entrepreneurial, smart, gritty, down to earth. They're they're just an awesome character. Yeah, they're just awesome characters. I guess the best way to describe that. So they just gave me excited I don't know.

Andrew Smallwood
Yeah. It also seems like very unique in the space that property management and leaders in the space like yourself are very cooperative. And collaborative, which, you know, we've had people join our team from outside the industry. But hey what are you noticing that's really different compared to like other industries where you've been. He's like, I'm shocked at how open people are. He's like in it's great. It's amazing. But do you believe that to be true is up in your observation?

Peter Lohmann
That's 100% true. I think part of that is a function of how fragmented we still are as an industry. You know, you and I were chatting this morning how many management companies there are we're not really sure. It's in the tens of thousands. So it's not like there's 12 companies. Right. And the pie is very clearly divided. And if I get a bigger slice, you get a smaller slice. Even though that's theoretically true on a macro level. The reality is in in day to day in any given market, there's plenty of blue ocean for all of us. I also just think, like I said, it's so hard. And so when you meet someone else, you're just so excited to have someone that empathizes with you and gets you that you don't care even if you're technically competing. It's just it's like finding a life raft and it's like, who's on the life raft? I don't care, I'm just getting on like this. I need some help. So yeah, I guess I don't know it is interesting. I've heard that before. Yeah.

Andrew Smallwood
So one of the seminal questions I remember was when I read this article a number of people, but the article, it's been shared widely. I'm not sure what started a newsletter on your website, but it's this question about how to structure a property management company and the framework. Correct me if I get this wrong or if your perspectives evolved here, but yeah, for a long time there were a lot of companies that organized from a portfolio dynamic. Then there's kind of the departmental approach and there's like a hybrid approach or a pod approach. You got to walk through your framework of thinking through that. And what you've seen kind of evolve in the industry of what seems to be working about each one.

Peter Lohmann
Yeah. So the classic model, we'll kind of, we'll take a different approach than I have in the article, and we'll walk through kind of chronologically as I understand it. So historically, property management companies were organized in a portfolio style. And that just means, hey, Susie, you have the northeast part of town, Jeff, you've got the west side, right? So every property manager has kind of like a territory or a number of specific accounts or property owners or properties that they manage, and they do almost everything they do the leasing, they're responsible for rent collection, they're handling lease renewals, they're taking incoming maintenance requests. And that's like their chunk of the business. And as you grow the company, you have to hire property managers. That's usually what that role is called is you hear people say, and even today, how many property managers do you have? Well, I never know how to answer that. I'll get to that in a second. So as your business grows, you need new property managers to cover all the the properties that you're managing. So what that is, you've got sort of a jack of all trades situation there where the you have to find people who are good at everything. This also means that if that person either goes on vacation or leaves, you're kind of stuck because no one else really knows what's happening with any of those properties. And that specific property manager is going to have their own approach to how they handle leasing, the how they handle rent collection. That may be different from how the other property managers handle it. By the way, all of these can be successful, and I know successful property managers who are using every single one of these that I'm talking about. They're not necessarily one is better than the other. It's just there's pros and cons. So those are the classic model. More recently, departmental has become quite popular. I think that's probably the most popular way to organize a management company right now. That's how we're organized. What that means is you have specialists. You have someone who does the leasing for all the properties under management. You have someone who's responsible for rent collection for all the properties under management. You have someone who's responsible for coordinating maintenance for all the properties under management. And so you get this sort of niche down specialist, in fact, where you have individuals that have very narrowly defined roles and metrics and they can get very, very good and efficient within those roles. So that's why I said people ask me how many property managers you have and like, well, zero. We have a bookkeeper, we have a maintenance coordinator, we have a leasing specialist. That's how I think of it. I think the more recent innovation has been this pod structure. Some people call it squad. That's where you have. It's almost like a mix. You've got 2 or 3 people on a pod, you have a lead and you have an assistant, and then sometimes you'll throw in like a maintenance coordinator. And those three people then have a specific number of accounts or a territory, but a much higher number than one individual could cover. So it's like you're taking a little bit of the best of both worlds between departmental and portfolio. You're adding some redundancy so that if one person from the pod is on vacation, there's still coverage, or if somebody leaves and there's a little bit of a clear advancement path for folks, there's usually like a pod leader and assistant and then sort of a third role. And as people gain an experience and skill, they can move up within that pod. So that structure, from what I understand, works very well at scale. So when you talk to people who have over a thousand doors under management, I feel like more often than not, I hear them describing how effective that organized organizational structure has been for them. So that's that's my understanding of it. I didn't make all that up. That's just things I gleaned from reading and conversations and kind of thinking hard about why and how these all came to be so.

Andrew Smallwood
So from your perspective and just your observations of and focusing a little bit on like the departmental and the pod structure, specifically, it seems like a problem people are trying to solve is how do we get the right people on our team with the right information to be able to communicate effectively with whoever, whether that's vendors, whether that's clients, whether that's residents. What's your kind of observation of the different approaches to that? Is it again, portfolio seems like, hey, this person's got all the information, the rest of that department, all this person's specialized, right? Yeah. And there's a focus on that. There's a hybrid approach that what do you feel like. Yeah I so think about it as you're considering them.

Peter Lohmann
Yeah. So this is a huge topic. It's really important. And it's I don't think it's quite solved yet. So my engineering brain is still turning over like some of this. So when I think about communication within a property management business, first of all it's really important because a ton of what we do is communication. I also want to emphasize that all communication is not good. There's often the case where a management company has too much communication happening, especially internally. And it's slowing everybody down. So that's the first thing I understand. I also like to think about communication in two parts. You have internal comms and you have external comms. Internal comm is communication among your team members. External comms is communication with property owners, vendors, residents and prospects. So for internal comms, we find slack to be very effective. We heavily utilize slack and channels within slack for internal communications, and we use email some as well, you know, and that's where you have like Jeff@ABCmanagementcompany.com, things like that. When you're talking to external comms, this is where you have to be extremely deliberate. And how you set this up and how you think about your customer's journey or your customer's perspective of how it is to communicate with your business. In the early days, this was very easy. I was Peter@RLPM.com and everyone just communicated with me there and that was literally all there was to it. And as we grew and we had a team members, you know, I'm just handing out email addresses to new members and now suddenly they're getting some communication with a different team member. No big deal. Oh, I know, I go to Peter for accounting and I go to Jeff when I have questions about leasing. As you grow and grow and grow, suddenly this becomes a big problem because customers, they don't know who to contact, they don't know when to expect responses. Should I call, which email address should I use? And then when you throw into the mix these different ways of organizing a management company, it becomes very convoluted and confusing. And the challenge here is customers often want a single point of contact or and that's sort of what their default framework is for interacting with a small business. As property management companies, as we grow, it's becomes less and less feasible for that to be efficient or effective. And so you have to think about how are we going to communicate with our customers. Are we going to still use our individual email accounts, or are we gonna sign a single point of contact? Are we gonna as a shared inbox, are we going to have specialists where they have a single point of contact, but a direct sum to different people in the company? I don't really know what the right answer is. It's different depending on how you organize and what technology you're using. I will say I'm a huge proponent of shared inboxes as a way to start to get a handle on this. So like we have leasing@RLPM.com, all leasing, comms, and external comms routes to that inbox. So if any individual person on our leasing team is out or leaves, we still have a whole record of all communications with any individual prospect or resident. Anyone in the company can log in and see the status of all of those conversations and pick up the slack if somebody has to leave or what have you. But sort of wrestling with this idea of how do our customers want to interact with us is a challenge. If you assign a single point of contact, expecting that person to know everything is not realistic, how are they going to know all the details of the turnover and the leasing and the rent collection and the maintenance and the accounting last year and all this. So now you're kind of putting someone on the phone who doesn't have all the answers. And that's also frustrating for our customers. But if you keep it completely segmented and you say, all right, all right, property owner, you call Susie for leasing, you call Jeff for accounting, you got and now they're like, I don't know who to call right now. Throw up their hands and they get frustrated. They just call the main line anyway. So you know I don't know what the right answer is, but that's sort of the some things I start to think through.

Andrew Smallwood
Yeah. Just like reduction of the ridiculous. You're like imagine somebody oh you call this person for on time five payments. You call this person for late payments, call this person. Yeah. You start to get to a customer experience that, you know, most people say this, this isn't what I would expect, right? And this is how I want to work with them. And the challenge of, again, I'm used to emailing Peter, but Peter is out at broker-owner for a few days. Am I gonna get the responsiveness I really want to correct? And hey, when I work with bigger companies, I thought I was actually, you pointed out like, here's the expectation of working with an SMB and it's an a service-oriented business versus if I'm working with a large or a massive company, I'm very used to interacting with all kinds of different people.


Peter Lohmann
Correct. You call American Express, you're not going to get your personal credit card account manager, you're going to get their main line, and they'll deal with your problem however they deal with it. That's not probably great. We don't love that. But is it? I don't know I don't know what. I haven't cracked it yet.

Andrew Smallwood
Interesting. So transitioning a little bit Peter, you know, we'd love to talk about how you've been on this journey for the last few years, and I don't know if it started with a Twitter following and then evolved to a newsletter, but now I see a few different things. One is we've got a Twitter following and a social following. There's a newsletter that's been growing and getting just great qualitative feedback. I've heard from other people of like, this is actually really great, relevant content. This is something I look for, most PMs are like, another email or another column, here's what I look forward to. And I'm quick to open it on a Friday when I get it. You know, I've also seen, you do a number of things, your own podcast sort of occupied appearing in other podcasts. So these are a lot of the content creation side. And recently with Craig and starting to develop more of a I know the word mastermind is like overused, but really a community type of concept where there's kind of guided trade facilitation. We talked to Wolfgang involved about this earlier, and so I'm just curious, like what sparked this journey for you? And how are you thinking about building content, building media, building community where you right now.

Peter Lohmann
Yeah, it did start with Twitter. I started talking about property management on Twitter after I saw a few popular real estate Twitter. We call it Ari Twitter, real estate Twitter, a few of those accounts three years ago, approximately where it started talking about real estate investing and syndicating properties GG, LP stuff, like a lot of these are kind of like apartment guys Moses Kagan, Chris Powers, Nick Huber, all these folks. And I was watching them interact on Twitter and it was it was a totally different it was a totally different use case for Twitter than I had ever seen before. I had been on Twitter since 2009, but it was just a personal thing. It was like, follow sports or news or whatever drama or like or like my friends and stuff like that too. And it was more about, you know, like jokes and memes and stuff like that. And also I see these guys on Twitter who are sharing, you know, we were talking about earlier how we all share information so freely here and how unique that is. I was seeing the same thing happen on Twitter around real estate, real estate investing specifically, not necessarily property management. And I was kind of observing this. I thought it was fascinating, and I loved how these guys were all chatting with each other, helping each other. And it was clear that they were getting to know each other offline as a result of meeting online, and that they were getting immense value out of that, both personally and professionally. And so I was watching this and Moses Kagan in particular, started to encourage me to share more about property management and to start writing Twitter threads and engaging and sharing some of what we had figured out along the way. So I started doing that. I started talking about self-showings. I started talking about leasing. I started talking about how we organize our management company, and I didn't think anything was going to happen. I was like, how many people could there possibly be on Twitter that would care about property management? I mean, give me a break. And surprisingly, they got traction. Part of it was I was the only one talking about property management on Twitter on a regular basis, and part of it was Twitter was just hitting an inflection point. Around this time, it was hitting a critical mass where suddenly there were enough people on Twitter nationwide that there was enough to sustain a conversation. And I wasn't just tweeting into the empty space. Also, the algorithms had gotten a lot better at surfacing content that people wanted to see, not just from others they were following. So my tweets were getting reach beyond just people who were already following me. That wasn't possible even a few years prior. So the human brain being what it is, I got reinforced in the form of likes and comments from some of these things I started talking about. And so I did more of it. And then it was getting more of that, and I did more of that. And then I was watching my follower count go up, and I was watching my engagements go up. And so I just I thought it was really fun. And I got to get to know some of these folks on real estate Twitter. And that kind of spilled over into like a SMB Twitter community that was springing up. Some conferences popped up out of this community, one of them being reconvene that Moses runs. So I went to that, made more connections and so started a snowball. And what I realized during this time was that I did have some sort of ability to synthesize information and communicate it in a way that was helpful, and it resonated with people. I didn't know I had that skill. So that was Twitter. I did that for a year or two, grew my following to into the thousands of followers, and around this time I started noticing other folks were talking about the risk of essentially rented platforms. When you're on Twitter and you have a follower, you don't own that audience. You could lose connection with that audience at any time. You could. Your account could be suspended, the algorithms could change, and suddenly poof, all of your investment is gone and you're starting from zero again. So I was worried about that. So I started writing an email newsletter. At first it was just whenever I felt like it. Once or twice a month, and then I would share the link on Twitter underneath popular posts about, hey, here's how you can sign up for my email newsletter. I wanted to basically migrate my followers from Twitter to the newsletter in case Twitter ever went away. Also, around this time, I started to find out that I liked writing. That's another thing I didn't really know about myself that I enjoy the process of hammering out words into something that someone else might want to read or find valuable. Again, it's a challenge. It's hitting just the right balance of novelty, skill, interest. Whatever's clicking in my brain, it's giving me the dopamine. So start writing the newsletter and that starts to take off. I'll kind of sort this out, but I won't spend too long and, and and now I write it weekly, and we're about to hit 10,000 subscribers on that newsletter. And it's just it's been a blast. I love sharing what I'm learning. I love sharing industry news and events. I love connecting folks. And then Craine came out of that as a way of how can we, how can we get further and provide even more connection with some of these folks that I've gotten to know, and that Wolf's gotten to know within the community that are sort of like just super high quality folks, just folks that we want to learn more from, we want to share more with, we want to connect with in a deeper way than you can just on a Facebook group or on a tweet.

Andrew Smallwood
So a lot of your content is pointed at people who were probably listening to this podcast like property management company owner, operator. Now I do notice and I'm a follower on Twitter or that newsletter myself. There are vendors who are involved, you know, as well as some investors, it seems like if somebody is listening to this, they're saying, hey, I don't aspire to do what Peter's doing. From a standpoint of serving the property management company owner audience, I do have an interest in potentially reaching millions of real estate investors, you know, with content, you know, potentially or as a sub-community quite similar like that. Is there any advice you would share with them of how to think about that, or what you've learned through the process, how they might approach that?

Peter Lohmann
Yeah, I absolutely think you could follow a similar playbook on a local scale to serve and connect and reach real estate investors, property owners, rental owners who want to or could have an interest in property management. You can follow the same concepts of figure out a platform that feels fun for you. I think that's a really important part. A lot of folks get hung up on is that Facebook is a Twitter or is it LinkedIn? Is it Snapchat is a TikTok. What do you like? Where are you hanging out anyway? What feels native to you? Are you a text communicator? Do you like writing? Well, maybe Twitter or LinkedIn. Do you feel really comfortable on video or spur of the moment, having a little bit more fun with things? Maybe that's TikTok, right? So you got to figure out what platform feels easy and fun for me, because the reality is you're not going to keep up if it's not hitting some of that dopamine in your brain. Yeah, no matter how committed you are coming out of a conference, if you're not getting a reward along the way, because it takes a long time to build an audience and following to the point where it's kind of self-sustaining in that way, it's got to be fun for you along the journey. So find that platform, and I think you can start to create content catering to real estate investors. There's an unlimited amount of things to talk about that you have an expertise in as a property manager relating to real estate investing and property management. And I want to specific quickly highlight that. Don't just say, oh, here's how to pick a property manager. Right. That has its place, but you want to reach a broader audience of folks who don't even know that they may want a property manager eventually. So I think general real estate investing content, especially making it local and specific to your jurisdiction, is where the magic is. Richmond, Virginia New laws affecting landlords. If I'm a landlord, do you think I'm going to click on that? Heck yeah, I'm going to click on that. I want to know more about what's going on. And as a person who is on the other side of the camera or on the other side of the keyboard sounds compelling and believable, I'm probably going to hit follow because I want to know more about when there's another new law that's coming around. So just take that tiny little interaction and engagement and multiply it by 500 over the course of a year. And now you've really got something going. And from there, the nice thing about local is it's much easier to put together a meetup, leverage the fact that your business is in a specific geography and host regular get togethers. Doesn't have to be anything fancy. Second nature goes all out. That's awesome, but it doesn't have to be to that level. It can be as simple as, hey, I'm booked a room at this restaurant and I'm getting together with a few lenders, a few brokers, a few insurance folks, and anyone who owns rental properties. Self managing using a competitor doesn't matter. Invite your clients to hang out. Have fun, share, connect, make introductions. Yeah, to me there's nothing more fun than that. And it's it's fairly straightforward. And I will add just throw in to that email is kind of the king in my mind of keeping track of all this. So everything that you're doing should tie back to your email list and then your email list. You should be sending something regularly. That's a value. And it does not have to be long. In fact, it's better if it's short. It can be as little as a few sentences in one link and just say, hey, this is Peter. I'm reaching out. I just saw this. I thought it might be interesting. Here's some more info. That's the best email ever. Who wouldn't love to get an email like that? Because there's no hard sell. There's not a hundred links you're clicking through. It's not. This doesn't feel like a chore. So I think if you could execute on that locally, that's going to put you head and shoulders above your other competitors who are just making another blog post about how to choose a new property manager right from the.

Andrew Smallwood
It's something that's interesting to me is if you rewind the clock enough years back, like all of our first impressions used to be in real life, right? And now it seems like we actually often aren't entitled to our first impressions being in person, that a lot of them are digital, and sometimes that can be things pop measures are familiar with, of review sites and.

Peter Lohmann
Yeah.

Andrew Smallwood
Try to kind of get a sense of that, you know, but something that seems like a real benefit of creating this content on digital platforms is you start to proactively, you know, have permission this way, put things out there for people to encounter and feel like they get to know you. And I think actually my first impression with you was in person and meeting you, but it really felt my own experience was getting to know you. How you think and how you communicate in a digital way was something that made a feel a lot more comfortable. Right? Engaging with yes leader? Absolutely is. I've been true, in your.

Peter Lohmann
Experience, 100%. Yeah. When you start sharing online regularly in any capacity, any format, any app, folks, just like you said, they build an impression of you and they get a window into how you think. I think it was Nick Huber who coined that phrase. They get a window into your thought process, and the beauty of that is when you finally do connect with them in real life, they they understand how you operate. And you're you're so you're you immediately have wiped away some of that human, very human, not necessarily fear, but just when you meet someone that you've never met your size in a month, right, your threat assessing them. And if it's somebody you've already been following online for a year, there's none of that. It's immediately that warm connection. And you can kind of skip the small talk and the sizing up piece of it. And not for nothing. You're also positioned as an authority. You can sort of leverage that in a very positive way to further those connections. You can introduce them to others. You can I don't know. There's just something about that idea of getting a window into how somebody thinks, then meeting them in real life. That's extremely powerful. The other thing I really like about it is you have leverage there. You can write something once it goes out to 5000 people on an email list, imagine how long it would take to get to know those 5000 people one by one, to the point where they know how you think that was. You know, it's just not possible. And so that I've gotten a lot of value out of it. Now, I'm an extrovert. I love being out and about and meeting folks and hearing some of that. So but I think there's a, there's there's an angle here for everybody. There.

Andrew Smallwood
And one more thing you touch on here, Peter, is he talks about community a little bit earlier. And I would say it seems like if you're however many steps on the content journey, right, you're some number of steps kind of on the community building. And I'm just curious to hear, like today, how you were thinking about the distinction between content community, how you're thinking about it, what's got your interest with it?

Peter Lohmann
Yeah. So I started Pure Content, right. We talked about sharing stuff on Twitter and then the email newsletter that is content. And you really you nailed it. I've been really focused lately on as somebody who has a following, I can produce content, but there's another way to deliver value, which is community and connection. And even if you only have 25 followers, if you can connect them with each other, there can be immense value there, immense immense value. And what's what's an interesting phenomenon is if you host a small event, ten people come and five of those people connect, make solid connections with each other. I don't know how many connections that would be, would be like five factorial or I don't I, you know, my my math days are behind me. But what's interesting about this is the, the positive vibes or the the warm fuzzies that they get from those new connections. Part of that ascribes back to you as the host, even if you didn't physically connect them because it was your event and you organized it, they think better of you, even though you had nothing to do with their actual meaning and the value that they're providing to each other. And so it positions you as an authority. It gives you some social capital, and there's just a lot of benefits that that sort of reflect back to you when that happens. And also it's just frankly fun. It's very rewarding to connect folks and see them thrive. There's no one better in the game at this than Mark Ainley, by the way. I don't know if you've been on the other end of one of his connection emails. Jordan Whaley is also outstanding at making introductions. There's a few folks that I've learned a lot from in our industry, but the feeling that you get of connecting to people who then provide value to each other, it's so great. And so as I'm thinking about where I'm going with Krein, where I'm going with the newsletter, I'm thinking, yes, about content. I want to continue to provide valuable content. I want to continue to produce valuable content and stay on the forefront of what's interesting within our industry and, and to to the folks that are subscribe. But I also have been thinking a lot about community and connection. How can I take those 10,000 people and introduce them to each other because they have so much to share with each other? There's so much. There's lifetime friendships that are waiting to be unlocked in this list. That's sitting on an email server somewhere. How can we make that happen? And so Crane is like the start of that. And it's really gotten my my wheels turning about how do we how do we continue along that journey?

Andrew Smallwood
I mean, I'm curious, the name Crane, where did that was there a story behind that or.

Peter Lohmann
You know, we were looking for something simple and easy. We were looking for a decent domain. So join Crane SEO was available. I also the there's kind of a few ways to think about this. if you think about a construction crane, it really builds the steel foundation for a skyscraper, right. Or, you know, and that's how we think about Crane as building the foundation for outstanding businesses for for business owners. And then also the crane bird has some really interesting attributes about how it hunts and like, how it behaves. It's kind of aggressive. And so yeah, we there's no grand secret behind it or anything. We just wanted something short and catchy that didn't have to do with property management, real estate, realtor, home because those have kind of been done to death. And so we wanted something that would stand out a little bit.

Andrew Smallwood
Yeah, definitely a distinct brand as opposed to, you just imagine one more logo with. Yeah.

Peter Lohmann
We didn't we didn't want to call it, you know, p m owner mastermind or something. Yeah. So shout out to, some of the thought leaders in our space who have influenced how I think about that.

Andrew Smallwood
So yeah. Yeah. Very cool. Peter, one more question here. You've got your finger on the pulse. You know, you're you're engaging a lot of folks. You've had some conversations here right at this conference as you look forward, right, for the industry of professional third party property management. What's what's really got your attention or are you paying attention to and what are you optimistic about?

Peter Lohmann
Well, I'm so I'm paying attention to you right now. We need to know where we're at, actually. So the Iceberg Report came out, I believe, in 2017. There's some amazing research done by a few groups, and they're basically concluded that 70% of rental properties are rental homes, were self managed. Well, that was a while ago. And I want to know now what's the new number? So I actually reached out to the folks that produced the Iceberg Report, and I've started engaging with them about, hey, what would it take to produce an updated version of this? So that's something we're looking at doing as a way to figure out what's what's the status, where are we trending? Right. Because we can't how do we know what we should do if we don't even know where we are? So, you know, I'm big on like, data and and trying to think about because I think that should inform our approach. I'm also watching carefully self-managing is changing. And there's tools that are coming out that are allowing self-managing landlords to do a lot more than they used to be able to do with technology.

Andrew Smallwood
What's an example of that where you're saying, well.

Peter Lohmann
If you think about, like the property, the classic property management softwares, building a map, folio rent, buying property where there's a couple others there, they're sort of designed as full service heavy accounting suites, plus workflow, plus a whole bunch of other stuff. There are outstanding tools for professional property managers. Couldn't do anything without them. For a self managing landlord, they're kind of overkill. They're intimidating. They're expensive. Especially for somebody who has less than ten units. Right. And what we're seeing right now is there's a couple groups I'm kind of following, and I don't want to shout it out or I don't want anyone to pile on them or anything, but there's a couple groups I'm following that are targeting self-managing landlords specifically, and they're providing digital tools and platforms that basically magnify the ability of a self-managing landlord, whether that's by helping them screen tenants, find vendors, deal with the accounting workflow tools, checklists, all kinds of stuff. These are now I want you to understand these are lightweight tools. These are in no way going to replace Apple or building them for a professional property manager, but they might be enough for a self-managing landlord to get by without hiring a professional property manager. That I think is something we need to watch very carefully as an industry. That is the classic disruption model from beneath something that a professional property manager would look at and laugh at and say that I can't even do. I can't even do automatic lease renewals, what good is that? And that's never going to take off, right? And I want to be very careful with dismissing tools in that way, because if they can get to a certain point, especially at a price point that the self-managing landlords like, you know what this does 80% of what I need to do, of what a professional property manager would do for me, the other 20% I don't even really mind doing. In fact, I'd rather do it myself. I'm good. So I'm a little worried about that, actually. And I want to be careful about not writing off some of these potentially disruptive tools.

Andrew Smallwood
Yeah, we we we talked about this at Second Nature. You know, ultimately there's a class of tools companies capital pointed directly at self-managing landlords. And how do they close the gap between that group and what a professional property owner.

Peter Lohmann
And they're closing it, make no mistake. Like they're not opening it. They're closing that gap with tools and technology and scale and marketplaces and things like that.

Andrew Smallwood
Yeah, I think you're right to say this is not something to be too dismissive about, to be vigilant of, because there's plenty of smart people betting their lives. And yeah, plenty of, you know, dollars. Right. Going after that, obviously we're making the opposite. But how do we go for the professional and help them expand? But that to me like this is one of the things where the future is not a given. Right. And say that it's absolutely going to play out or it's inevitable one way or another. You know, I mean, it may not be the case. Yeah. So. Right. So it's something to pay attention to and think about. We you know, if there's parts of my business getting easier to duplicate because they're going to get more commoditized, I heard somebody share institutional, you know, owner of SFR talk about how, you know, can you think of any other asset class where it costs 6% to transact, right, or, you know, a double digit percent to manage it? Right. And the answer, probably no. Now, managing single family rentals, certainly the hardest all reason that it's exciting to be this business. Lots of probably saw that there's a reason for that, you know. But thinking about those typical market forces and how those play out over time, it's certainly interesting to think about how property managers are creating value.

Peter Lohmann
That's durable 100%. Yeah. And I think the way to combat what we just talked about is we have to find ways to use tools and technology and platforms to deliver better experiences for our property owners, potentially at a lower price point. And I know no one wants to talk about that, but this is a capitalistic society and I'm glad it is. So we need to be able to adapt and flex. We can't keep raising prices forever, and we need to find a way to deliver value so that the self-managing landlord doesn't get too excited about these tools that let them self-manage, you know?

Andrew Smallwood
So that's a really good point. What you're paying attention to as you think about what your most optimistic about looking forward. Yeah. What would the answer be for you?

Peter Lohmann
I'm so bullish on the sector as a whole and the people and the vendors and I just the industry is thriving. You can feel it at the conferences. All the classic things that make property management great recurring revenue, low working capital. You could argue it's got negative net working capital. You have counter cyclicality. I mean, a lot of the things that the sort of finance professionals, when they're evaluating sectors, a lot of the things that they that they would describe as being components of an outstanding business apply to residential property management. Now, it's super hard operationally, but the business model as a whole is outstanding. I mean, we have all the outstanding recurring revenue characteristics of a SaaS company, and we have a durability of a local services company. So there's a lot to love. It's I don't think it's going anywhere. And I love watching the competition bring out the best, both in the operators like myself and in the vendors that serve the industry. And think about where we are versus even 6 or 7 years ago in terms of the technology. That's that's letting us do our job. So I'm very excited about the industry.

Andrew Smallwood
I think that's a great note to end on. Yeah. Thanks for sharing.

Peter Lohmann
Yeah. Happy to do it.

 

Laura Mac & Carol Housel

And that wraps up another episode of the Triple-Win Property Management podcast. Thank you for pressing play. We hope you've gained valuable insights and inspiration.

The Triple-Win Property Management Podcast is proudly produced and distributed by Second Nature, where we believe in a Triple-Win, building winning experiences for your residents, investors and your teams with the only fully managed resident benefits package. Visit SecondNature.com to learn more and talk to an RBP expert in your area. If you have any questions or comments or want to weigh in on the conversation, we'd love to hear from you. Email TripleWin@SecondNature.com. That's TripleWin@SecondNature.com. Stay connected with us beyond the podcast. Visit our website at SecondNature.com to stay updated with upcoming property management events and articles. And don't forget, you can keep the conversation going in the Triple-Win Property Management Facebook group. It's exclusively for property managers. To receive even more valuable insights and updates, subscribe to our newsletter. You can find the link to that and much more in the show notes. On behalf of the Triple-Win community, this is Laura Mac, thanking you for tuning in. And on behalf of Second Nature, this is Carol Housel. Check back soon for another exciting episode. Until then, keep striving for that Triple-Win.

 

 

 

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