Manage episode 326665878 series 3020390
I have noticed that property management entrepreneurs often try to do everything themselves. They think they can figure anything out on their own. This leads to frustration and wearing way too many hats as the business owner.
Property management growth expert Jason Hull describes the next stage in the property management entrepreneur journey, the solopreneur.
[02:02] The Property Management Solopreneur
[04:19] The Cycle of Suck and the Solopreneur Sandtrap
[06:28] Fire Your Worst Doors!
[08:15] $100 Earned Does not Justify $100 Spent
[09:57] Don’t Undercharge
[12:14] You Are Probably Limiting Your Own Business Growth
[15:01] You Don’t Have to Do Everything YourselfTweetables
“It is absolutely possible to have the business of your dreams, to have the team of your dreams that supports you.”
“If you have a crappy reputation and you're getting crappy reviews online guess what you attract more of? More crappy owners.”
“You can't just go add another a hundred dollars expense because you're making another a hundred bucks.”
“You can either be right, or you can win. You can either keep your excuses or you can start getting results, but you can't have both.”Resources
[00:00:00] All right. 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 in your business and 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.
[00:00:42] 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.
[00:01:07] Alright, everybody. So I just got back from Mexico. My last episode was about the importance of taking a vacation and it was an awesome vacation, except for one thing. I got sick. I probably ate some food I shouldn't have, or maybe some seafood that wasn't cooked right. Or maybe I was at a bad restaurant. I don't know. Maybe-- I heard the ice sometimes, it's the ice, not what you're drinking, but it's the ice they put into it. Cause they didn't filter the ice. I don't know. So, anyway, I got sick and so I'm still feeling a little bit on the weather. I'm not feeling amazing or a hundred percent today, so you'll have to excuse me, because I am human.
[00:01:47] So, but today we're getting back into talking about these different avatars that we target here at DoorGrow in property management. And so we're going to talk a little bit about today the solo preneur property management. Last time, if you missed that episode two episodes back, we talked about seekers and then a couple of episodes before that we talked about pure startups.
[00:02:12] So if you miss those episodes, go back and listen to those, then there'll be very insightful for you to learn the entrepreneurial journey as he moved through various stages of property management. So today we're talking about solo preneur, property management entrepreneurs. And so these, I usually quickly categorize just based on door count. These are usually going to be people that are maybe you know, they're under a hundred doors. Usually they're stuck in the 50 to maybe 60, maybe 80 door range. A lot of times they'd been in business for two to five years. There is also a category of them that I call the stuck property management entrepreneurs.
[00:02:48] And they've been in business anywhere from four to 20 years. And they're still in that five 50 to maybe a hundred door range. So let's, let's first get into kind of identifying these solopreneur property managers. The reason I call them solopreneurs is they're caught in what I call the solopreneur sandtrap. This means they've been in business usually short time, maybe three to five years before they even reach out for help. I get a lot of people at that stage that reach out for help. They don't do it in the first year, first, two years, sometimes even the third year until maybe towards the end of that.
[00:03:24] Because lot of times, they think they can figure it out on their own. And they're trying. They're trying lots of different stuff. Usually they're right around 50, 60 doors, I find they might get up to maybe about 80 if they have a spouse or business partner or somebody that's kind of working for free, you know, in the business. You'll see sometimes they'll get up to maybe around 80, but that's usually about as many doors as they can handle on their own without additional team members. Or if they have a spouse or business partner. That's usually as many as they can handle dealing with, because they're caught in that cycle of suck. I've done episodes on several webinars and things over the years, I've talked about the Cycle of Suck in property management, which is you take on crappy owners, you then have crappy properties. And you take that on as well and then you have crappy tenants by default. Because they're difficult to deal with because the owner's being difficult, or the property's being difficult. And then you have a crappy reputation, and if you have a crappy reputation and you're getting crappy reviews online guess what you attract more of? More crappy owners, right.
[00:04:32] So then you're caught in this property management hell, this cycle of suck So you want to escape that cycle of suck. Now, a lot of property managers or solopreneurs, they want to get on every client. They take on anybody and they move right into that cycle of suck, and they end up trapped. They're kind of-- they've painted themselves into a corner. They can't afford to hire anybody. They don't have enough money and they can't really manage any more doors. And they're usually losing about as many doors as they're getting on every year because they've taken on a lot of accidental investors, people that are only going to stick around for maybe a year, they have a lot of attrition have to replace a lot of those. I mean, often the solo preneurs that are in this stage, they often dream. They dream. Their goal is to break that hundred door barrier. And if you've already passed that a hundred door barrier, you are rare. There's not a lot that do that. There's vast majority that have a lot less than this. There's a lot that only have a handful of doors and they're dabblers, right? The seekers.
[00:05:33] And then you've got quite a few they're stuck at this first major sand trap. This solopreneur sandtrap. Often I find they're in a worse financial situation than the pure startups. The pure startups usually know that it's going to take a little money to get the business off the ground and they have some cash on hand, but these solo preneurs have tried everything, and they're investing so much into the business and they're getting such a little return or yield from that. And they have all these new expenses. They just can't seem to make it work, and they're in a lot of pain. And so they have a harder time, sometimes-- than pure startups-- in signing up with us or working with DoorGrow. I love helping all of these different groups. Solopreneurs... One of the main things that I will generally have them do to get them out of the cycle suck, is fire some bad doors. So they usually have built a portfolio up that is maxing them out in terms of time and resources. And I know property managers that by themselves have managed 200 doors and that's absolutely possible, but it's not possible if you're caught in the cycle of suck and you have bad doors and bad owners.
[00:06:45] So you've got to get out of that. And so, right now, if you're caught in this sand trap and you know that your portfolio sucks, my recommendation is just fire your worst client. I guarantee if you do the math and you figure out your profit margin and you figure out the expenses that it costs you to manage that property based on profit margin, right?
[00:07:06] So let's say you have a 50% profit margin, which would be amazing in most, any business, right. That would mean for every dollar of expense that you have. You need $2 to offset that in sales revenue or you collecting revenue, right? It's two to one ratio. My guess is your ratio is even worse. So it doesn't make sense for you to even keep on somebody that the expense for this owner or operating costs based on what your time is worth and effort, you are giving up a lot more than just that money.
[00:07:41] And by letting go of them, it creates a lot more space. I would guarantee that these are not profitable for you to manage. The big mistake I see a lot of people in the solopreneur stage make is they don't really have a lot of financial savvy. And so you'll see people with this really unhealthy, unrealistic mindset where they'll say, "well, I'm making a hundred dollars off this door. So now that means I can now go spend a hundred dollars. That's not reality. If your profit margin were 50% that would mean you would need to make $200 in order to be able to justify a hundred dollar expense. So you can't just go add another a hundred dollars expense because you're making another a hundred bucks.
[00:08:23] For most it's way worse than that in the beginning, it might be instead of a two to one ratio, it might be a 10 to one ratio, which means you need to make $10,000 in order to justify a thousand dollar expense or by cutting a thousand dollar expense, that's $10,000 in sales revenue. You don't have the pressure of generating.
[00:08:43] You don't have to generate. So. They are usually in a worse financial situation. So right now, take a look at your portfolio. And if you have any owner or property, that's eating up a large portion of your time. It's not profitable. Let them go. If you dedicated that amount of time to grow your business or doing some strategies we teach at DoorGrow, you could easily offset that and create that space. And so you may also want to set a rule like maybe a three to one or five to one rule, in which you give yourself permission that if you can get on three good doors, you will fire that bad one. Or if you get on five good doors, you will fire your worst one until you get this portfolio cleaned up. A clean, healthy portfolio will make you money and be profitable and you'll have room to grow. If you don't have room to grow and you've backed yourself into a corner it's because you made some tactical errors in your business.
[00:09:41] So the next thing is you want to take a look at. and I can give some examples. You know, I had one of my clients came here and his name was Sterling. He was at about 60 doors. He was charging too little. So this is another challenge I see is they think getting into the industry, they need to charge less. And I've talked about that on some previous episodes, but he was charging too little on average, maybe only charging, you know, a percentage of $500-$600 rent. So he was taking on worse properties, didn't have as much margin. And I helped him double the amount of profit in his business simply by increasing his pricing. And that also filtered out some of the worst properties. He actually pretty much doubled his gross revenue because his fees were so low, right? Like if you imagine somebody taking-- let's just throw out their number-- like 10% of 500 or $600 rent. That's only 50 or $60 a door. It's not enough. It's not enough.
[00:10:40] It's certainly not enough with it doesn't give you enough space or room to grow the business or add team members. So, in six months, Sterling, after working with us and six months after we did some type of sales and did a website for him and some other stuff, he was at 300 doors and he was almost charging double. Right? So he was making a lot more money. We had a couple Will and Robin, and they built up a pretty sizeable property management business that they were focused on real estate and some other stuff. And they turned it over to a family member or somebody to run. And somehow all those doors whittled down all the way, to about 60 doors. So in about a year, we got them back up to 200 doors and they focused heavily on online reviews and some other strategies that were really effective building out a warm outreach program and some other stuff that we did with them, but they were able to build up the business really quickly and get out of that.
[00:11:39] And they were stuck, partially caught in the cycle of suck. And one of the ways to mitigate that cycle suck is to focus on the reputation piece, which is that fourth step in the cycle of suck. So getting things cleaned up is a really big deal for this stage because you've probably built the wrong portfolio. Now, there are a category of property managers at this stage that have been in business longer, like four to 20 years, like a lot longer. And what that tells me is if they're still under a hundred doors and they've been doing this longer than four years or for a long time, and this wasn't just some side hustle, they were really trying to do this... it may have just been a side hustle, which is the case a lot of times, but the reality is usually these are people that are going to stay stuck probably forever. I don't even think I can help them in a lot of situations because they are ironically really smart and they're adaptive individuals, but they appear stupid others simply because they cannot see how they're limiting their own growth by trying to control everything.
[00:12:45] So sometimes they are smarter than some of my other clients. And sometimes they just are too in their head. These are seekers basically that are stuck and stagnant. Their biggest challenge is their mindset that they can do it themselves. They just believe that it makes more sense to do it themselves and save money by doing it themselves, that it prevents them from being able to make more money and to grow.
[00:13:11] So that's the biggest challenge is that mindset. Essentially, they focus on saving money over the speed of speeding up growth and spending money to make more money. They're cheap basically. And so they waste a lot of time and energy by seeking out stuff on YouTube and trying to read a bunch of books and trying to figure out how to do it all on their own, rather than getting expert help. They sometimes have a decent amount of ego. Sometimes, they're a bit more analytical logical, and they just feel that there's so much out there that they want to do and can do if they just had more time, "if I just had more time, I'd be able to solve all of these problems." And that is probably true, but it will take a decade to do what can be done in a year if you are really caught up in trying to do it all yourself. And if you really are that know-it-all that thinks, "I am smart enough and I can figure this out on my own. I don't need anyone else to help me do this." So unfortunately they can't see this potential. They look at the expense, the potential expense of getting new team members as insurmountable unjustifiable, because they already have this discomfort of this limited profit margin and their inability to get support and help and pay for experts really is what holds them hostage. They're now a slave to this business. So they end up trying to just do more and become more productive and get more done.
[00:14:46] But everybody has a limited capacity, and they've hit their limit. And over time they build this business full of confirmation bias that relies more and more on them and reinforces the idea that no one else could possibly do what I can do. Right? They have this ego that no one else is good enough, and they view the world through this lens. So they might even try hiring a team member, and they're like, "they're so terrible." Or "they don't want to work" and they blame everybody else. And they're like, "only I can do this." And they have this ego that "I'm so amazing. I'm the guy or the gal and no one else can do what I can do." and so they make that true. It becomes this self-fulfilling prophecy because no savvy property manager would want to do things that way. And so they create this sort of prison for themselves, if you will. And in order to break out of that prison, it's a lot of work because they've built it up. They built up these walls.
[00:15:44] Whether they're real or not, they built up these walls and this perception that it's insurmountable, it's difficult and they believe it. And so to destroy those walls, they fight for it. What I've noticed on calls with them is I will say, "well, you need to do this." And they're like, "well, I can't do that. I don't believe you, Jason. That doesn't mean." Or "does it make sense to do that?" Or " my owners would never go for that" or "that's how they are in my market. You don't know my market. And they always fight to keep their excuses of why they suck and why they can't grow. And it's impossible. It's really, I found it really impossible to try and squeeze a new idea into their head. And the only thing I could do is say, "look, we've got clients that were in a situation similar to you, but they're getting results. It is possible," but they are unwilling to believe it. And a lot of times, these property managers, they turn on me and they want to find flaws with me and believe that there's some sort of dirty secret about DoorGrow like we're not really in a state of integrity or we don't really do what we can do, or we're just in it to take money from people or whatever they want to believe. And they will try and find validation for this and they go hunting for it and they try and find, you know, every business that has success has a little tribe of haters, especially in coaching.
[00:17:00] Right? And so they go find the other haters that all are bitter and upset that also didn't want to do the work or didn't want to make changes or thought they were smarter than me or anybody else. And weren't willing to do the work or make the changes. And they were fighting to keep their excuses. You know and I sometimes will say and I heard other coaches say, you can either be right, or you can win. You can either keep your excuses or you can start getting results, but you can't have both. You have to give something up and then if you're not willing to change your story, you're not going to be able to change your life.
[00:17:37] If you're not willing to change the story about your clients or the market or all the excuses you have for why you're not winning and see something different, you will never have a different result. So if you are at this stage, you are a solopreneur property manager, you feel like you painted yourself into a corner, reach out. If you're humble enough and open-minded enough to reach out for help, we would be glad to help and support you.
[00:18:02] We can help you figure out how to get to that next level. Hopefully you've gotten a few tips and ideas just from this call alone so that you can get to that next level and move forward. It is absolutely possible to have the business of your dreams, to have the team of your dreams that supports you and to find people that are better at each of the things you don't enjoy doing in your business. Is absolutely possible to find people that are better in each of those pieces that you aren't naturally inclined to do or don't love doing. It's possible to find people that will be better at it than you. They will surpass your ability in those things. I've seen it over and over and over again. My team are built as a team of people that are all better at things that they enjoy doing and love doing and that they are doing. They're all better at those things than I would be. Most entrepreneurs, we're highly adaptable. I used to do everything in the business. Right now, you might be doing everything in the business, but you don't love and enjoy everything. I have an episode. Previously, I talked about the four reasons. Go back and listen to that.
[00:19:08] You are heavily out of alignment with the four reasons if you really want to hold on to everything and do everything and control everything. And there's a process to feeling safe, letting go of those things and finding people that are better at it than you and making the right hiring decisions at the right time. Otherwise you'll make a tactical mistake and you get crushed or your business fails because cashflow is king and you have to have cash in the business. So you don't want to hire the wrong person. You need to hire the right person with the right job to take off the minus signs or the things that energetically destroy your dream, and that's what you need most.
[00:19:44] So I'm really good at helping business owners build the right business and the right team around them. Instead, what most do is building the business that they think that and building the team that they think the business needs instead. So, and they just build a stronger and bigger prison for themselves as they gravitate up into the 200 to 400 door range, for example. So that is solo preneur property managers and stuck property managers-- that early stage-- stuck in that early stage. So if you would like to escape that and you're, open-minded enough reach out to the DoorGrow. We'd be glad to help you. You can check us out at doorgrow.com and you can also join our Facebook group by going to doorgrowclub.com.
[00:20:26] So doorgrow.com is our business, and doorgrowclub.com is our Facebook group, our community, for those that are enjoying this podcast, and we will be glad to start you on your journey of escaping being the solopreneur. And next time we get in one of these avatars, we're going to be talking about the transitioning property management entrepreneur that is moving speedily from a hundred doors-- they've broken that a hundred door barrier into the 200 to 400 door sand trap. Right. So we'll talk about that next. Until next time everybody, to our mutual growth. I hope to see you winning we'll talk soon. Bye everyone.
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