From Property Manager to PM Company Owner | Shannon Dukes

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Transcript

Stephen Fox 

Today I'm speaking with Shannon Dukes, broker owner at Ocean Realty and property management based out of St. Augustine, Florida. Shannon worked in property management for nearly 20 years for a bunch of different property management companies around the United States. And then four years ago decided to start her own property management company in St. Augustine. She was kind enough to speak with me today to share her experience building her property management company from the ground up where she literally started with zero doors four years ago.

So without further ado, let's get straight to it so we can start to learn from Shannon's experience.

Shannon, thank you so much for taking the time to speak with me today. To kick things off, can you tell everybody a little bit about your background and experience in real estate and property management?

Shannon Dukes
Absolutely. I started out about 25 years ago as just an agent realtor. Wasn't having a whole lot of success with selling properties, but at the time I was working for a pretty large real estate firm or working with them, I should say. And I was a single mom with three kids at home at the time. And

It just wasn't working for me. It wasn't paying the bills. So the administrative assistant who worked in the real estate office let me know of a job she had heard of coming available in their property management division and would I possibly be interested in it? So I said, yeah, why not? So when interviewed for the position as assistant property manager, I did get the job. I worked with them for

about two years as an assistant manager and there just wasn't really any place to move up with them. Their managers have been there for years and years and years. So I actually went to another large firm and started in as an agent there, but they knew I had property management experience, so they actually hired me on as a property manager. So I worked with

two other property managers that were within the office and we had one administrative assistant. I stayed with them for about four years and then a position came up as a manager, a lead manager for another company. It was a little smaller but the pay was a lot better for me so I said why not, let's do it. So I went over there and I worked with them for several years as well.

It just didn't work out very well for me. I didn't care for some of the things that were going on there. So I actually left and went back to another larger firm. I was hired on there as a property manager. I worked there for a number of years as well as their only property manager and the admin as well. So it's kind of a do all while working with them.

Shannon Dukes
I stayed there for a long time and then I actually had the opportunity to make more money going back as a property manager with the same company I originally started out with. So I worked there for them for several years as well. And then we actually got relocated due to my husband's employment. So we moved to Florida. Of course, I had to transfer my license from another state to here, and got a job here working as the office manager for a large local firm in their property management divisions here in the county which we live in. So I worked for them for a number of years and then I finally said why not do this for myself? I've been doing this so many years for everybody else. If I can do it myself, I can do things the way I feel that they should be run. working for the owners, of course. And here I am. I'm four years in now, almost four years in to own my own business. It's growing very nicely. It's at a great pace. Still, it's just me. But I am to the point that I am looking to hire somebody as an administrative assistant. So it's gone very well for me. And using Upkeep Media has really, really helped my business grow a lot.

Stephen Fox
Awesome. So I guess, can you walk me through the decision of, okay, you know what, I'm going to go out now and do this on my own. I've been doing this for a long time for other companies and now I'm ready to take the leap because it's a big decision.

Shannon Dukes
It is a very big decision. Like I said, over the years, I kind of saw some things that I didn't think were quite right in how some owners were done and how some tenants were done. And in all reality, we work for the owners of the property, you know, and I look out for both parties. So you have to kind of approach it - when you're looking at a property, you have to look at it from the owner's side. You also have to look at it from the tenant's side. And it's kind of hard to wear both hats sometimes. But I try to explain to owners, you know, we're looking at this from a tenant's perspective, you know, and prepping the house and so forth to try to find tenants and vice versa. But the main reason why I decided to do it myself was because I felt like I could do things my own way and how I thought they should be done.

Stephen Fox
So what was day one like? You leave your previous job and now you have your own company. Did you start off with having properties to manage right away or was it...

Shannon Dukes
I did not. It was very exciting. know, doing everything for myself finally and getting things set up the way that I wanted them set up. My goal right from the start was to be able to have it work remotely at some point too. I started out in my house in a home office, you know, managing the properties. What happened? I had zero properties when I started. Once I left the company that I was with, people started following me. You know, I sent out mailers, I did a lot of pamphlets, I made a lot of phone calls, just kind of letting people know, you know, I had ventured out on my own and I was doing this myself, you know, owning the business as a broker, owner. And...

A lot of people that I managed property for over the years actually said, well, wherever you're going, that's where I'm going. So they, you know, started slowly coming over. So I had three or four within a few months. By the beginning of the next year, I probably had five properties that I was managing. And I thought, well, this is nice, but I really, really want, you know, this to grow better than this. And then that's when I kind of started doing some research.

I knew from past experience that marketing, the way to go was online. Nobody reads newspapers anymore. Nobody does magazines anymore. Everybody looks online. There's so many, you know, big companies out there like Zillow and Trulia and Realtor.com and that is where people look for honey. So I thought, well, first of all, I have to have a website because I want to be able to have people, you know, be able to apply online for the ease of it and be able to pay, you know, any application fees and submit documents to support their application. So I started researching and you guys were right at the top when I started looking at all the reviews that I was looking at that people had written. were clients of you guys. They talked about how much you had grown their businesses in just a short period of time. So I thought, okay, well, let me reach out. So I did and you guys contacted me immediately. You did an introduction and kind of went over how everything works, the plans that you offer and so forth. So I started out at the six month where you all build it while build the website first.

And then after that, we started on a six month journey to kind of start building up our placement one, as we show up rankings online. And I thought, okay, I'll try it for six months and see what happens. The first month or two, maybe even three, it was still kind of slow, but then it just kind of started to seem to blossom. I just would get calls randomly.

I saw you online, you know, wanted to give you a call and then just started asking questions and we just kind of went from there. And I've been with you guys pretty much since the start of, you know, our company or my company. And it's been great. You, I mean, you guys have been excellent. I get a monthly report from you guys. It gives me an update on how things are looking as far as our rankings online and

Definitely what I see from you guys, it coincides with what I'm seeing with phone calls and traffic in the office, business that's coming in. So we get a pretty high return rate off of the leads that we receive from the website. I very rarely do I not make connection with somebody, even if it's down the road, it might not be immediate, but even down the road.

Stephen Fox
What is your sales process look like when those leads come in? I imagine, and this is just me guessing, but how you approach it now as being the boss versus how it was when you were at a really large firm is a little bit different. Can you walk me through that?

Shannon Dukes
I approach it the same way. I do. I tell every owner, I treat their home as if it was mine. That has been 100 % my philosophy as a property manager for all of these years. I don't spend owners' money without communicating with them and having their input. Communication is key in converting a lead into an actual property. You have to stay with it. You have to be timely in getting back with the person when you do receive the lead. You need to answer their questions. You need to be confident in answering their questions. And you need to be able to provide examples, reviews. I've had people that ask me for other client information where they could actually call somebody have been managing properties for over the years. So I have a number of owners who have told me absolutely anytime you need that, I'm happy to do it. And that has really, really helped me. Referrals, basically.

Stephen Fox
You mentioned that now you're at the point where you're looking to hire somebody. What problems, for lack of a better word, I'll say problems have started to arise now that you have a decent amount of properties that you're managing and you're managing it all by yourself at this point.

Shannon Dukes
Well, I have actually tried to hire before. It was toward the end of last year. The resumes that I received didn't really have a lot of property management experience. There was one person that did I thought would be a good fit. And she actually accepted another position with somebody else.

You know, the thing about it is I don't have a whole lot of time on my hands right now, so I really need somebody that will be able to sit in the chair and know what they're doing, at least for the most part, and can kind of answer phones and questions to some degree and do all the other things, putting files together and putting into the system, et cetera. And then when we have some slow moments, I can actually do some additional training with that person.

But to invest a lot of training in somebody right out of the gate right now, I don't have that time. But then I have also found that people just basically walk away after you've invested all this time. So I do have a person in mind to hire, but I have not reached out to them yet as a friend.

Stephen Fox
So at this point it's really trying to find a right-hand man. Someone that can take on a lot of the responsibilities that you currently have. 

Shannon Dukes
Exactly.

Stephen Fox
When you were first getting started, what were the primary tools that you needed to have in place to make sure that you were able to run things properly? So like a quick example would be that you use a common property management software. Was that from day one that you wanted to get that in place or what is that?

Shannon Dukes
I did. It's very important to be able to be transparent to owners. They need to be able to log in to their account at any given time and see their financials or if they have a work order or something to that effect. And if you're trying to do all of that on paper, it's just impossible. It's very time consuming. It usually ends up requiring a whole lot more people to be involved in it than what is necessary. So if you start right out of the gate with a good software system, I currently use Buildium for my system, which I was not used to. I had previously always used AppFolio, which I'm very familiar with after using it over the years. 

But, AppFolio, you have to have a minimum amount of properties to be able to get into their software. So I started out with Buildium because it was the closest I could find to the look of AppFolio. It is different in a lot of ways, but in some ways it is very similar. So that's why I went with Buildium. It was very cost effective starting out. I still have Buildium.

But I am considering moving to a different software company right now. Got some quirks with building them that just aren't working for me. But yeah, it's been great up to this point.

Stephen Fox
So it sounds like from day one you were like, okay, I need to have a website and I need to have a property management system in place. Were those the primary two things that you met and then from there you were ready to go?

Shannon Dukes
Absolutely, I had to go in and make some changes as well from where I had previously been employed. A lot of my like my Zillow, Realtors account, and things of that nature were all set up to, you know, a different company. So I had to start not only Realtor accounts, but also MLS accounts. And here we have more than one MLS. So then I had to have both of those, you know, had go in and change all of my information with those MLS systems. And then I individually had to go in each account, Realtor.com, Zillow, Homes, you know, all of those and change all of that information over to my company.

Stephen Fox
So you have experience both as a realtor, as a broker, as well as property manager. What is it that made you decide to focus, say, headstrong on property management versus just going and putting all of your effort into selling real estate?

Shannon Dukes
Correct.

Shannon Dukes
Absolutely. I've done some sales over the years, but not a whole lot. My expertise was in property management. I had been doing it for almost 25 years when I started the company. And that's just what I knew how to do. I had a lot of owners, you know, always telling me over the years, should do, you know, your own company. We, you know, where you go, we're going. 

So yeah, I said, well, why not? You know, I've been doing that for other people all these years. Why not just do it for myself and see how it goes? So yeah, I already knew what processes need to happen to start the business up just from doing it for so many years.

Stephen Fox
I guess at this point, what does a typical day look like for you?

Shannon Dukes
I hit the ground running. And I really don't quit until everything has been answered for the day. Sometimes it means 16 hours a day. Sometimes it means working on the weekends. Sometimes it may be a quiet day. And I give a little time to kind of just have to myself.

This isn't the time, summer is coming and that's the busiest time of year for property managers. I have a lot of move outs coming up. I have about 11 new properties that are being onboarded right now. And I have even some sales at this point because we've actually kind of started going towards that as well. It's been really nice.

Stephen Fox
Is the sales that you get, is it because property management is feeding the sales side?

Shannon Dukes
Actually, yes, it is. Two of my current owners, one of which decided for rent or sale whichever came first. So she asked me if I could put the property on the market for sale and for rent. I said, absolutely, I can. One of my owners' property is rented, but she's actually relocated other places and is ready to sell the house.

And oddly enough, this happened about two weekends ago. We sold the house, it went under contract. And the people who came to look at the house were actually former clients of mine with another company. So she put in an offer on the house. She was like, now I know where you are. You know, so I want you to keep managing this one for me since you already manage it. 

So not only did, you know, we sold it from the current owner, but now we have a new owner who has, you know, brought me the management still. But from that, she actually said, well, gosh, we've been trying to sell my dad's house for months. Would you do it? And I said, sure, absolutely. So you never know where you're gonna get business from. But that day just happened to be a special day I guess and she said yeah we definitely want you to list our dad's house for sale and I'm working on getting that done now so it absolutely is stemming from property management.

Stephen Fox
That's great.

That's the nice thing about property management is it can feed real estate sales and that increases your client lifetime value dramatically. Or in the perfect case, which is what happened with you, it sounds like you've had the property for years, then you sell it. And then the person who buys it wants you to continue to manage it. So now you can literally sell the same property multiple times over the course of an extended period of time.

Shannon Dukes
Absolutely.
Right.
Exactly.

Stephen Fox
Benefit from management fees for years, then the commission, then new management fees, and then a future commission. So it works really well, not only for recurring revenue, but also if you do sell real estate on that front as well.

Shannon Dukes
Absolutely.

Stephen Fox
So at this point, do you prefer working with clients that own multiple properties or the person that owns maybe one or two properties that is called an accidental landlord?

Shannon Dukes 
So I have a lot of accidental landlords, but I really don't have a preference. I think the relationship, the working relationship is more important. know, building the client base, making sure we're all a good fit for each other. I talk with all owners. I want to see the properties in person before I ever list them. A lot of times I hear, you know,

Somebody has told me my home is only worth X amount of dollars based off of some figures, you know, in the MLS, which that is a big part of it. However, to see a property in person, to know how to talk to another person about the property who may be interested in it is very important. If you've never seen a property and you're talking to a potential new tenant and you're like, gosh,

I don't know, you know, I've never seen the property. You don't sound confident in what you're doing. And a lot of people just go, gosh, this person doesn't even know what they're doing. How's it gonna be to rent from somebody like this when they don't even know the house? So I do make, I try to make sure everybody's in good fit. I try to make sure the owner, you know, talk with them and see what it is they're looking for, long-term tenant.

You know, if they're going to be coming back within a few years to the resident, do they think they're going to be selling it at some point? You want to have that initial talk because you want to know if you're going to be a good fit for them. You don't want to try and work with somebody that, you know, is not going to mesh well with you or another tenant potentially. So again, you want to make sure the home is in ready condition to be, you know, rented out.

It should be nice. I look at it like if I were the one that was moving in here, would I be okay with this? You know, and I approach that every time and I'll sit down and tell the owner, you know, this is what I see we need to do with the house before we market it in order to get the maximum amount for the house.

Stephen Fox
And in terms of selecting owners to work with, are there specific questions or a type of property that you're usually looking for?

Shannon Dukes
Not I try to make sure that they're in ready condition. I can give you an example. I had somebody call me and they asked me to go and take a look at their house, you know, for property management. And I did. This person was in another state, so they gave me, you know, access to get in. And I went and I took a look at it and it was awful. It had structural problems.

It needed cleaning desperately. needed some paint. It needed a lot to be done with it. And when I called them after I had a chance to go out and see the property, I told them, said, I can't help you with the property in the shape that it's in now. One, it has structural issues. That being the biggest thing that you need to overcome before I would be able to help you. I mean, the floor is literally sagging in one corner.

you know, it's not safe for somebody to live in. And, you know, I don't take anything like that.

Stephen Fox
Do you go kind of by a rule of if I wouldn't sleep here for the night I definitely won't manage it?

Shannon Dukes
Absolutely. If I wouldn't rent it or if I wouldn't live in it, no, I wouldn't put it on the market. Absolutely not. I try to explain to an owner, you this is, you have to put on tenant eyes, right? Not ownership eyes when you're looking at a property. And that's hard to do sometimes for an owner. They think their house is the greatest thing, you know? And they don't see those things because they see them every single day. So to them, they're not a big deal, know, marks on the walls.

You know, or the carpet has stain on it or something to that effect. But tenants go straight for that. That's the first thing they see. You know, so you want to have that talk with them and let them know if we want this to sell for maximum, you know, price, we need to do a few things first.

Stephen Fox
Makes sense. You've been in property management for a number of years at this point. I imagine you probably have some pretty interesting stories that you've accumulated over the years. guess during your time in property management, what's the craziest story or experience that you've encountered?

Shannon Dukes
Gosh, I've seen some, I've seen some bad things and I've seen some good. I think probably the craziest ones for me so far is the one I just talked to you about where I had an owner who wanted to sell, who has a tenant in place and the tenant didn't want to leave because they love the house so and then this new owner came in, bought the house, one I had worked with previously in property management.

And now, you know, I'm converting that back into a management for the new owner. You know, that's kind of crazy. It's never happened to me before, but I'm glad that it did. And it is really a unique experience. And then it ended up turning into an additional sale.

Stephen Fox
Sure. At this point, if you could go back in your journey in property management, what is the one thing that you would change that you think would have the biggest impact on helping you succeed at a faster pace, whatever your definition of success may be?

Shannon Dukes
I don't, I guess probably I would have leaned more towards like the accounting side of property management. There was always kind of somebody else in the background doing that no matter where I worked prior. And now that all of that falls on me as an owner, I have actually had to step outside and hire a bookkeeper.

And then accountant to make sure that you know numbers are correct. So yeah I would say probably that's one of the things that I wish I had done more of over the years. But as far as experience I literally started at the bottom as an admin you know assistant property manager and I worked my way up all the way to running two offices for a large property management company here locally and the experience throughout the years was everything that I needed to have and were to be able to do it on my own. So I don't regret any of that. I think I did this at the right time. I knew I had the experience that I needed, but I would have changed, you know, working on the accounting side more.

Stephen Fox
Getting more comfortable with the book, the finances behind property management.

Shannon Dukes 
Yes. Yes. I I know how they work and I've talked to owners about their statements and finances and all of that I understand. But actually being the person to input the information into these systems and to reconcile accounts monthly and all of that, I had never done that before.

Maybe I will be able to someday, at this point in order to do it safely, I have somebody else who's experienced doing it.

Stephen Fox 
Okay, so that's been the biggest learning curve and challenge of going from employee to employer.

Shannon Dukes 
Yes, absolutely.

Stephen Fox
Interesting. At this point, do you have any departing words of advice for anyone who's looking to start a property management company?

Shannon Dukes
Absolutely. I know a lot of people say it, if I can do it, you can do it. I mean, it took, it didn't take nearly as much, you know, financially as I thought it would in order to start up a brokerage. So yeah, if you really want to do it and you know that you can do it and you have those ideas that, gosh, I wish I could do things this way, you know, your employer does it this way, but you think it would be done better another way. Absolutely take that challenge. I say, you know, challenge yourself and then break it. You know, go the next level above. So that's kind of my philosophy.

Stephen Fox
Awesome, so push yourself beyond your comfort zone.

Shannon Dukes
Exactly. You'll surprise yourself.

Stephen Fox
Thank you so much for taking the time to speak with me. I really appreciate it. For anyone that would like to connect with you, where would be the best place for them to reach out?

Shannon Dukes
Of course.
Sure, reach out to me anytime. I can be reached at sdukes@oceanreality.homes I would be happy to answer anybody's questions. 

Stephen Fox
Thanks so much, Shannon.

Shannon Dukes
Your welcome. Thank you.