He Turned Down 4,000 Units And Still Grew - with Stephen Glover

We explore how Stephen Glover grew Peak Property Management from zero experience to 1,300 doors by reshaping fees around value, hiring experts, and building a culture of responsiveness and ownership. Profit finally arrived when the model matched the promise, and growth accelerated by saying no to the wrong clients and yes to clear standards.

• shifting from owner-does-all to vision-led leadership
• rebuilding fees around provable value, not market averages
• rolling fee changes to current clients with minimal churn
• creating recurring revenue via a monthly maintenance package
• turning down 4,000+ units to protect service and culture
• codifying responsiveness and communication into weekly KPIs
• hiring stronger players and empowering decisions at the edge
• sustaining growth with BDMs, marketing, and a founder podcast
• nurturing reputation and relationships to drive referrals
• balancing family time with scalable, high-leverage marketing

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Transcript

Opening And Stephen’s Origin Story

Tony Cline 0:00

Welcome to the Property Management Success Podcast, where we interview leaders in the industry to uncover the secrets to profitability, efficiency, and achieving true freedom, whether it's your time, money, or lifestyle. I'm your host, Tony Klein, and I'm here to help you build a wildly successful property management business. Let's get to it. Welcome back to another episode of the Property Management Success Podcast. Really excited today. I've got Stephen Glover, and uh Steven has joined me from his company, Peak Property Management. And Steven, how are you doing? Doing well. How are you, man? Thanks for having me on. Yeah, I'm doing really good. Uh, you and I touched base about a year ago, and you were talking about getting into the podcast game. So I want to save that for a little bit because I want to share with the audience how it's been going for you, what you've learned about it, because I know there are people out there looking at ways to get into marketing. But before we do that, I want to give people a little bit of your background and let people know who they're listening to. And I know you started your business back in 2018. Correct. And since then you've you've grown to a pretty large, significant, very respectable company. And I want to take people along that journey. But tell us what it was like when you first started out, and then uh give people just a little bit of a preview of where you're at now, and then we'll kind of go back and build the bridge between the two. Awesome. Sounds good.

Early Growth And Breaking Points

SPEAKER_01 1:25

So we're located in Richmond, Virginia. We we handle kind of the Central Virginia market. In 2018, I was in the fitness industry, knew nothing about real estate, knew nothing. I didn't, I quite frankly uh did not even know that property management was an industry. I didn't know that real estate investing existed. I just never thought about it. I had always been just busy doing my thing, whatever I was doing, whether it be in the motorcycle industry, the fitness industry, working, uh building corporate and athletic teams, um, was just doing my thing, didn't know anything about it. And then I got to a point where um a buddy of mine invited me to launch and said, Hey, I have this idea. Richmond needs uh kind of like a high-end property management company uh based on certain ethics and values and things like that. Would you be interested in going into business with me? And I was like, I don't, I have no idea what property management is, but I knew I respected that individual, had a high level of respect, good family man. He he had done really well in his construction business. And so I agreed to join him. Uh when I joined him, he basically just left me alone and said, figure it out. Um he would give me a salary, you know, year one until you know we started producing. Um, and so that was in 2018. In 2019, early, we started taking on some clients. I started buying investment property, everything kind of clicked at that point as to how it should work. Uh, and then currently, uh late 2025, right now, we're sitting around 1,300 units, going to be pushing 1400 soon.

Tony Cline 2:53

It's quite that's quite a big growth in in a short amount of time. How big is your team? Uh, we have somewhere around like 42, 43 people on our team. Yeah. Are most of them local, remote? Like, how did you go? I want to take people on this journey because I think a lot of people get stuck. They have these plateaus where businesses get to and then they get stuck and and they haven't figured out how do I break through this. And and so I want to give people a little bit of an insight on just what you did to build out this team to get to where you are, because quite frankly, most property management companies don't get to where you are. And I'm I'm sure that there were some very intentional things that you did along the way that worked and and maybe some that didn't work.

Taking Ownership And Restructuring

SPEAKER_01 3:36

Yeah, very clear, um, very clear stages in the business. Um, when we got to around 300 units, we considered selling the company because we were like, there's no way we could grow this thing and be profitable. This is not a profitable industry to be in. This is why people do sales so they can make up for losses in property management. And so I was like, this is a loss leader industry, et cetera, et cetera. Um, but what we were doing is we were just hitting a point in the company that we need to figure out how to get past it. And so my business partner at the time actually offered, and I had no capital at the time. The business had not produced any money. We were growing at a good pace. Like we, I was very good at sales. I understood what we needed to do to get clients, I understood investor pain points. I was buying property at this point. So I knew what I was talking about. I knew how we needed to care for investors. Um, so we were we were growing, but the profit was not. And so we kind of looked at this and and we got to a point where I remember having lunch again with my business partner, and he had offered to write me a check for$100,000 to go do something else and just let the business dissolve. And it was at that point where I was like, you know, this is why a lot of small businesses don't make it because it's easy to quit. You know, there's a plan, there's a there, you can go get a job, you can go do something else. And so I even had a hundred thousand dollar check for no reason uh waiting for me at the other end. And I had looked at that and said, am I giving up or is this really um a low margin loss leader industry? And why are companies failing? What do we need to do to find profit? And so instead I went back to my partner and said, Let me, you know, I don't think I'm making the decisions I need to make because I picture this whole thing as your money. And I need to make the decisions that I feel like I would make if I own this. Let me buy the company and and be like, let me have majority interest in the company. So it's my money that I'm dealing with. And so at that point, uh he agreed. Um, so he became a minority owner. I brought in other capital partners, silent capital partners, because I didn't have any capital. I need to be a smart business owner. And so they brought in uh operating capital for the company and financed my equity purchase. And then I was gonna pay them back off the proceeds of the company. That was in 2020, and around that was a really tough year. 2020 was we grew 400% um in revenue uh in started the year breakeven and end of the year break-even. And so and in 2021, we needed to figure out it's that, and that was around the 300, 400 unit range. Uh, we need to figure out if this this was something viable. And Q1 of 2021, uh, I realized some things we need to be doing better. I realized what stage I was operating in and how to get out of it, and things became clear. And then we shot right up to 600 and then hit another uh kind of plateau from there, and then just kind of figured out we just need to work through the plateaus. But it was uh Q1 of 2021 that I realized this could be a very viable business with very good profit, and uh and you could build a good team around it and and it could withstand COVID and things like that. So I became really attracted to the industry early 2021.

Tony Cline 6:43

Help help us understand. There's there's a few things that you said that I want to kind of lean into. You you quadrupled in size essentially, but were no more profitable with with the larger size. And then at some point something clicked and shifted. And walk me through initially, you were the guy that did everything. And I think this is a this is where a lot of the transformation happens for a company is when the business owner actually goes through the the transformation themselves. And you went through this period where you were growing, you got it up to 300 doors, ready to throw in the towel, and yet you decided not to. What what happened internally with you where you were able to say, okay, I've got this business, it's not working the way that it could be or should be. I need to make a change with the business. Did you go through any personal realization or transformation, or what did you do differently that helped you accelerate the business into that, you know, 600-door, more profitable company from that point?

Leadership Mindset And Team Building

SPEAKER_01 7:51

Yeah, so there's I think I was a little bit different than most. Uh, I had a background uh working with special operations teams. And so what I learned in working with them was that you could outwork anything. Uh it all just comes down to your mindset and you could do way more than you think you can. And so up to about 400 doors, and I think a lot of entrepreneurs learn that along the way. Up to about 400 doors, it is relatively easy. It gets very difficult towards 400 to outwork anything. You can outwork any issue in the business. The owner can outwork any issue. Yes, you're gonna need to hire a few people. The owner still has his or her hands in every aspect of the company. And so I can, at the time it didn't feel easy, but looking back, you can see why property management companies can relatively easily get to 200, 300, 400. When they get to 400, that is a massive struggle for them. For me, I never had an issue hiring anyone and trusting them to do the job because my background is building teams and communicating well. And so if I can work on my leadership and try to be the strongest leader I can be, and we can create the right culture in the team of communication and teamwork and leadership, then I can trust my team that they're gonna operate and they have the right culture and they care about the company and they understand the company's vision. And so I've always trusted my team. I've been able to hire and trust my team. I think with a lot of entrepreneurs, what I see is they need to do everything themselves and they will not trust their team. So the change for me really came down to profitability. It wasn't that I wouldn't hire people and wouldn't delegate and things like that. I was still working a ton because I wanted to fuel this company, but I had an issue seeing where what was the point based on the profitability that we were at. And so it just happened to be around the same time where everyone's feeling the pain, the same unit count where people were feeling the pain of I'm scared to hire, I don't trust my team, I don't know how to delegate, other people aren't going to treat clients as well as I do, other people aren't gonna treat tenants. I didn't have any of that. I trusted my team. We we put the right guidelines in place, uh, the right processes in place. That was fine. I was worried about the profitability. In Q1 of 2021, I figured out that my fee structure was way out of whack. I revamped my entire fee structure and within months was operating at 25, closer to 30% profitability. It was a really and we were growing quickly. So these people went quickly into this fee structure. And so the profitability just started jumping out. And I was like, okay, so now I have a team I trust. I'm able to delegate, I can hire people, and then I'm understanding everyone I hire is smarter than me, has way more experience than me in the industry, especially on the financial, the property management side, the maintenance side. Everyone, I'm bringing people in the industry around me that have years longer experience than I do so that they can add value and bring that information to our team. We're building this out together. Everyone understands the vision. We finally found profitability. Now we can bring even more uh experienced people in the team and continue to grow from there.

Tony Cline 10:56

I want to give your insight on this because I think you you touched on something that you uh had a strength in. And a lot of the people that come to me either when they they come to one of my presentations or they want to get some coaching, they come and they they are a little bit opposite of you in the fact that they've built a company around them. They are the the genius with a bunch of assistants, and you approached it differently from your background, you were able to build strong teams. One of our core philosophs philosophies at Onyx is we we build around what I call the championship formula, and there's seven core components of that. And then the the first one is what I call our game plan, and from that game plan, we have where we get really clear on that vision of what we're building, where we're going, and then we we have to figure out how to fund that. And another component is getting, or a subcomponent of that is getting really clear on our income and revenue streams. And since you already had that, that strong ability to build the teams, what what advice would you give somebody that is trying to switch from I I've built this business around me, I'm sort of the I'm the chief firefighter, everything has to go through me. I haven't really created an empowered team because they all know that I'm gonna make the final call, I'm gonna question their judgment. How do we shift from being the person that's doing all the stuff to being the person that is what I call the conductor of the orchestra, where you have an expert playing and in each position? What advice would you have to somebody that uh to give to somebody that was trying to make those changes?

Profitability Breakthrough: Fee Strategy

SPEAKER_01 12:38

Yeah, for me, as long as I could control the vision, the culture, and the values of the company, our company's gonna win. As long as I can control that. But I kind of am blessed with not having any preconceived notions of real estate, not thinking, you know, not doing, not knowing what everyone else was doing. And so I knew I'd come from a team-based background. Everything I've done in my career has been building the right team around me to be successful. And so I look at it as like a lot of it is humility. I'm not the best at any of this stuff. Like I think I'm I'm good, I'm decent at sharing the value, at creating a culture and at communicating, um, at looking out for my team and caring for them and giving them all the tools and resources they need to succeed. But I'm not the best property manager by any means. I'm not the best salesperson by any means. I'm not the best financial person. My team would laugh if they even heard me suggest that. And so the idea is I need to put those, it's my responsibility as a business owner to put those people in place and then let them work. Now, I don't think there's anything wrong with controlling everything if you only want to grow to about 400 units. If that's what you want, that is fine. Um, but I talk to local property management companies at around 100, 200, 300 units in Richmond pretty frequently. And typically the pain point is that when they hire people, they're not as good as the owner is. And so I would suggest maybe one way out of it. I mean, you have to be humble and realize that other people can do things that you can do. Uh, or you you should take ownership and realize you're not setting the proper um processes in place to allow your people to follow them. Um, you're not giving them the tools they need to succeed if they can't do it as well as you. You're not hiring the right people. You're not sharing the vision well enough for them for the right people to want to join your team. And so I think it starts with taking ownership and looking at yourself and not saying, these people can't do it as well as me. Why is it, why can I not scale? Why can I not hire people that are a good fit for this company and that can grow with this company? You need to look at yourself first as a business owner if you want to scale. If you don't want to scale, fine, that's okay. But you will not scale probably far past 400 with decent level of service, communication, responsiveness if you are the person who needs to outwork everything.

Tony Cline 15:02

I agree with that. I think there's I would add, I would even add a little, sprinkle a little extra flavor on what you said, which would be that there may not be anything wrong with being the person that has to control everything, but you need to realize you're not building a business. What you've done is you've created a a, in some cases, a high-paying job. In some cases, a very low-paying job, because if you haven't figured out how to become profitable, you wind up being the person that has to control everything. And in there's there's two types of people that I've found in in this business. The one that has to be the person that controls everything, all the decisions go through them, and they wind up being bitter and burnt out. And when they do hire, they want to hire somebody to make sure that they're not as good as them so that they can still kind of control the situation. The other person is when they've realized that they're building something bigger than themselves, they're building something that they've created this vision. And I think it's super important you touch on something, and I don't want to gloss over it, about the vision, really giving people something to buy into of this is where we're going, this is how you contribute, and we're giving people something to belong to. I really feel that people long to be a part of something excellent. And if you give them the place and the platform to plug into, they will do that. And then you have to go out and look for people and be humble enough to find people who are better than you at the areas that you're hiring them for, and then let them take it. And you become not a property manager at that point, but a manager of the vision and a manager of people and helping them achieve their highest level along the way.

SPEAKER_01 16:42

Yeah, a couple things. Like I've had people take pay cuts to come work here because they believed in the vision. So I get in and it always returned well in their favor. Like the idea was always, hey, look, this is what I have now, this is what I can offer. But when we get to the stage, if you believe in the vision and you support the company, we will get to the stage. And when that happens, this is what will happen. And it's happened every single time, right? Um, another aspect of that is if you're an owner and you believe that you're the best on the team, why are you proud of that?

unknown 17:11

Yeah.

SPEAKER_01 17:12

Like what what what are you building? Like that it's something that's never going to be better than you or bigger than you. Like it's just something to me, that is such a backwards way of thinking. Um I would prefer if everyone on my team were smarter than me and could could tell me what to do. And and the thing is, is like I it's just that's just how I operate. I think naturally, like, there's no, I don't need to be the best. It's not an ego thing for me. I'm okay if I'm wrong. I want to listen to my team. I want their feedback. I want them to take ownership. I want them to make decisions. When they make bad decisions, we we talk about what happened. There's no like reduce it from your pay or anything. Like, I want them to keep making decisions, whether it's good or bad, because no decision means that I have to make the decisions. And so I like my team needs to operate. I want to empower them to operate. I'm just so far removed from uh needing to be the best or the most knowledgeable or like stand my ground during anything. Again, like I want to be sure I control the culture, the vision, uh, the values of the company and make sure that stays in alignment with what we wanted to create. And if that's there, the team can put the processes and build the systems and build the company and make the hires or perform the terminations to get the right people in the right seats that are in line with the values and the culture and the vision of the company.

Tony Cline 18:29

Yeah, perfect. I always say that the business owner owns the vision, where we're going. You know, we're being being really clear about that. I I use it as a filter. People are either going to be excited about where we're going and they're going to get on board and they're going to put their efforts towards it, or they're going to be like, this guy is kooky. He's, you know, he's he's way out there. I'm not, I don't want to be a part of that, which is great. I mean, we want to filter those people out. We don't want to drag them along. We want to get those people out. And so the the vision and where we're going really belongs to the entrepreneur. Then what I call the the rule book, which is, you know, if you and I both bought an NFL team, we would the rules of how you win the game are already predefined. But we didn't do that. We we have property management companies. And so with that, we get to decide what winning looks like at our company. And so those are the policies of what we do and why we do it. And I still think that as the business owner, you belong, you, you own those policies.

unknown 19:28

Right.

Tony Cline 19:28

But what you mentioned was the process, the how we go about doing it. That should belong to the team. Here's here's our goals, here's our expectations, here's the requirements. And then as a business owner, get out of the way and and let them put together the process of how to adhere to or uphold those policies.

SPEAKER_01 19:46

Yeah, exactly. And as a business owner, we also look out for our team, right? We got to listen to that feedback. Um, we have terminated clients, large clients before based on team's feedback. Um, and we've turned on over 4,000 units. In our growth to 1300, we've turned down over 4,000 units in the past number of years to make sure that these are good relationships to get in business with, good assets to manage, and that our team would be happy and proud of managing them. So you you also are taking a proactive role in your team's success in making those decisions as well.

Selecting Clients And Turning Down Units

Tony Cline 20:20

Take me through that. I wanted to go in a different direction. I wanted I wanted to search uh the conversation we had and and talk about when you got to the point where you had to increase your your revenue in order to be able to make some of these changes because it wasn't a philosophy issue that you had or a methodology, it was a financial issue. So I want to come back to that. But you you mentioned something where um you know you you need to support the team and but you also wanted to grow. And you turned down over 4,000 units on your way to 1,300. Yep. Share with us what that looks like because there are people that are listening to this that would are are drooling over the fact that you even had 4,000 units to turn down. And and so take us through that process of how did you do that? Was it on the front end? Was it the you guys had really strict criteria for the types of properties or the types of owners, or was it a gut feel? Like how did we get to that point where we felt confident that we weren't turning down business, we were turning away properties or owners that weren't true opportunity, because I think that's a key differentiation.

SPEAKER_01 21:35

Yeah, there's the it's this is loaded, like there's there's a lot that goes into this. One clear um one thing that I would like to make clear is we also manage small multifamily. Okay. So when I say 400 units, that might have been a 50 unit property or something like that in that mix too. So it's still a substantial unit count uh that we could have picked up under management, but um it's not just single family homes. I want to be clear about that. We don't manage anything bigger than I think 66 units. So we don't do any like monsters or anything like that. Um, but to be clear, it's not that's not all single family, just to be fair to anyone listening. Um, but it it was uh I stopped counting about a year ago. It was 4,000. Um and and so what what that looked like, it was really um relationship-based. And it would be just during there was no strict criteria. I didn't want to put like too tight of a I I we needed that like human feel to the relationship because we very much are a community-based company. And so the idea was is it a good relationship for us? And so there's some obvious no-go's, like, like, hey, you're not allowed to lease to this ethnicity. Yeah, clearly not happening, right? Um, or other ones that like you go tour the property and there's a tree branch growing through the window, which is a true story, and you're saying, hey, we got to get this branch out of the window, and they'll say, no, we'll do it on renewal. Like, no go. Like, we're not doing that. So some of those are in the mix, but the idea was we had so many people coming to us to manage their property that we turned down 4,000 units. Now, um, we do, we are in a good market. I mean, we're in Richmond. It's not a, it's not a huge market, but it's really good for real estate. It's a good, it's a good, good market. There's some very successful property management companies here that we compete with. Um, but I I think really how this generated was our reputation and our relationships. And so when we started this company, it was we are gonna be different than any other property management company by way of our values, our ethics, our responsiveness, our communication, uh, and prioritizing relationships. And so the word got out pretty quickly that we were extremely responsive. We communicated very well, and we prioritized relationships. We did what we say we were gonna do. And I was willing to lose money on any mistake that we made and consider it tuition. I took ownership every time we made a mistake, it never cost the landlord anything. We still have that as a principle today, is we take ownership of everything that we do and we make it right before we make any excuses. And so that word got out and we started developing relationships in real estate. Then other investors started talking about us, then referral partners started talking about us, and then brokers and agents wanted us to work with their clients so they could buy more properties. And so it started bit like a complete like it took about eight months, 10 months, but it was like an avalanche of leads just came over the following years from that. And so uh you you hear it called like the word of mouth flywheel. We were we'd never done advertising or marketing or anything outside of a website, and so this flywheel was spinning so fast that we could be very selective about what we wanted to take. And in being selective, we literally would get phone calls and messages and emails and whatever to say, hey Steven, I know you're very selective about what you pick up. I have these eight single-family houses. They might not be in good enough condition for your team. Are you willing to look at them? And if so, I would like to come to you for management. So they were not vetting now, not everyone, but a large amount of people were not vetting Peak. They already wanted Peak. They were wondering if Peak would accept them and their properties. And so we had that going for a number of years. And then once you hit around a thousand units, it's you need to feed the team, you can relax a little bit, but we still maintain a very high uh standard of relationship that we take under management, and our team appreciates that.

Tony Cline 27:15

You mentioned that you you have a very quick response, you're very responsive, you take accountability. As you grow, I understand on the on the business development side, bringing doors in, that it can be it can be easy to sort of describe what you're gonna work with, what kind of properties you're gonna work with, what types of owners. But then once they're inside the company, once they've become a client, we have to teach everybody on the operations side that this is our level of responsiveness, this is how we communicate, this is where we take accountability. How did you grow with with you you've got team members and you mentioned over 40, I think you said 42, 43? Somewhere in there. Um if if you are at that size, how are you communicating your standards, your vision, your your policies? Like what does it look like to be able to get an entire team like that? And you mentioned you want to have them be more autonomous to be able to make those decisions. So you know, I always look at when I hire somebody, I want them to have the the authority to own the outcome. So the ownership of the outcome, the authority to make the decisions, and the autonomy to operate in absence of waiting for somebody else. At your size, that is that has got to be something that you've either lucked into, cultured into, trained into. How did you get to the point where people on the operation side are upholding the standards and the expectations that we set when we bring people through the sales process?

High Expectations And Raising The Bar

SPEAKER_01 28:53

Yeah, I I would say there's a lot of luck in what's happened with this company. Uh, tons of luck, but this is not one of them. You don't get lucky with good culture, you don't get lucky with good hires. Um, that is extremely intentional. Um, and it is something that you work on every single day. Every interaction that you have with an employee, you're either gaining relationship capital and leadership capital with them, or you're losing it. Whether you're saying good morning or, you know, good afternoon, or hope you had a good day, or just talking about their family or their, you know, something that they're dealing with, you as a business owner, you're either gaining relationship capital or you're losing it. You're either gaining leadership capital or losing it. And so every single interaction, you better be gaining relationship capital and gaining leadership capital. And if you could do that, people will want to work with you and want to be a part of your team. And if people want to be a part of your team, they're gonna be part of the culture and part of the values that you uphold. Now, as far as like getting that information across the whole team constantly, we obviously have like quarterly team meetings, we have weekly team meetings, we have we have meetings embedded where this is described and this is applauded and examples are called out and things like that. Um we have or 4.8 on Google with 1300, 1400 reviews. Um, and so we uh call those out frequently and reward that five-star service. We have KPIs that we monitor weekly that are self-reported by the individual that show that we're less than two hours response time or less than two hours to a solution via email across the company, company wide on our email systems, um, and then our our phone answer rates and everything like that. And so it's a it's a number of different things. It's a lot of uh acknowledgement, it's a lot of um encouragement, it's a lot of empowering the team and giving them, making sure you can hire enough people to be responsive. Because if you if you're understaffed, you can't get mad at your team for not being responsive. So there's a lot of things that you can do as a leader to make this. We have core value signs about responsiveness and communication uh all over the office. We have it in meeting um agendas and things like that. It is, it's everywhere. And so the company knows that we do not um, we are very forgiving uh and we pay a lot of tuition uh when we need to, and we're okay with that because it makes us stronger and helps us grow. But we're not forgiving when it comes to uh not following our core values, which are immediate responsiveness, top-notch communication, prioritizing relationships, and owning the outcome.

Tony Cline 31:29

I truly believe that most people will rise or fall to your level of expectation. And so if you have high expectations, most people, given the opportunity, will rise to those. And the ones that can't, you you're able to screen them out because you do have those high expectations. One of the things that we talk about a lot in my company and with the companies that I coach is the that championship mindset, the championship formula. And we we often say, would this happen or would this be tolerated on a championship team? And if the answer is no, then it shouldn't happen here, it shouldn't be tolerated here. And by having those high standards, not everybody is going to be able to meet those. But it's it's necessary to find out which ones can and which ones can't so that you can help train up the ones that can so that they can meet our expectations and so that we can help move the people who can't meet those expectations off. Because I've seen companies where somebody will be in a position for longer than they should have been and they are not performing. And when the business owner finally makes the decision to make a change, help that person move on and find another opportunity, the rest of the team comes and says thank you. And and what we've realized is that when if you have ten people on your team and one of them is not performing, you can't be thinking about, oh geez, I can't I can't fire that person because they have this responsibility, or it's too close to Christmas, or I'm gonna give them another shot. You can't look at the one, you have to look at the other nine. And the other nine are looking to see are you holding those standards that you've set? And if you're not, then eventually they're going to stop performing and achieving those high standards because again, people will rise or fall to your level of expectation, and they know even though you set those ex standards, you're not expected to hit them.

SPEAKER_01 33:33

Yeah, we absolutely have high expectations, but I also acknowledge that it's high expectations. Like, I won't just say do this and why aren't you doing it? Like, you know, if we have a hard time hitting a certain expectation, I'll acknowledge that, hey, look, this is a brutal KPI to hit, but this is what we expect. And it's because we want to be the top 1% in the nation. We we we are not building a local mom and pop management company. We don't want to necessarily expand to different markets and do all this stuff, but we want to operate as a top 1% company in the nation. We want to set the standard, raise the bar for what the industry is doing, and do our part to improve the industry and make a make a small impact on it in the market that we operate. And so, yes, our KPIs are tough. And yes, these standards are very hard to meet, but if they agree with the vision and what we're trying to do as a company, then they're on board with trying to hit that KPI. And so we do acknowledge that some of these are really hard and we are setting the standard at uh like I sometimes I'll I'll say, like, hey, our churn metric needs to be no more than 10%. And I will get on our team, we'll have some serious conversations if it's at 12 or 13 or whatever. And the thing is, is 10% is considered incredible in the industry. And but I will acknowledge that, I don't hide that from the team. But I also say we're expected to have an incredible team. If we want to raise the bar, 10% is where we're at. And so we need to start analyzing what we need to improve if we're at 13, 14, 15%. And that doesn't mean we're always at 10. There might be some, you know, there are some clients that we lose here and there, and there sometimes that'll that'll get high, but we understand exactly what's going on and we know what what changes we need to make and we get it back to our expectation.

Tony Cline 35:15

Yeah. I think it's really good to have the the communication that these are high standards, but we're gonna we're gonna hit them anyway. We're gonna target them anyway because that's the type of company we are, that's the type of culture. And this isn't just a place to come to work, this is a place to come to be your best and be around other people who are performing at their best.

SPEAKER_01 35:35

It it would be a shame to not accomplish what we're capable of. That is that is a fear that I have. We have such a good team, such a powerful team. We have great technology, great software, great market. We have so many things going for us. It would be a shame to settle for less. And so that's sort of the message that I give to the team is like, why would we do that to ourselves when if we work together, we can accomplish so much more? And I think that that clicks with my team. I think they understand that.

Rebuilding The Growth Engine

Tony Cline 36:04

It's funny you mentioned that. And uh I'll say this and we'll we'll switch gears. But um I I give a presentation and I gave this at NARPA National a few years ago, but at the end of it, I wrap it up and I tell people I, you know, my two biggest fears, and one is that I will die with unrealized potential, that I will have potential, and that I will have died without being able to realize that that potential and at least pursue it. And I think that you if you give people the opportunity to pursue their potential, um, it just opens up it, it becomes more than just a job. It becomes, you know, that that culture that you're trying to create. And once you have that momentum, it's just it's so much easier to stack better and better in people and processes and everything on top of that. Yeah, when you make some good hires and they come in and like raise your team up, it it increase like people are fired up.

SPEAKER_01 36:58

Like they're early on, we did have this thing where like I would I would hire some really some higher level people, and some people in the team would be like, Well, what about me? And I'm like, Look, hey, if we're you're playing a pick up a game of you know, you're playing D1 basketball or pick any sport, or well, let's stick with basketball. You're playing D1 basketball, and your coach tells you in his prime we could bring Michael Jordan on the team. Would you say no? Because what about you? Like, if if you're opposed to bringing a Michael Jordan on your team, we're not on the same page. We want to win, and we can do that. Michael Jordan on the team is gonna make you better, right? Like, and it's gonna make all of us better, and it's gonna allow us to uh you know increase revenue and have more opportunity. I could go on and on. But the idea is like we need to be proud and happy and celebrate the strong team members, whether they're hired above you, below you, beside you, and we need to work together to win. And that's the culture we have on our team. We understand that the stronger players that we have on our team, the more we're all gonna accomplish together. The weaker players we have on our team, let's say we hire, you know, some entry-level folks, the idea is the quicker we can get them up to speed, we want to make them stronger than we are. And so of course it doesn't always work, but the goal is is to, if anyone is underperforming, to strengthen them as much as possible so we have a stronger team. Why would we just want to eliminate them? Because you always eliminate the weakest link. You're just left with one person on the team eventually, and you can't operate. There's always going to be a weakest link. So, anyway, yeah, that's the mindset. And and definitely, yeah, we've learned these things. We certainly have made a ton of mistakes along the way and a lot of lessons learned, a lot of tuition paid. Um, but we've learned a lot over the past few years about building a team, who should be on it, what seats they should be in, how quickly you should make uh hiring and firing decisions. We've we've made all the mistakes uh and still will continue to make mistakes. But um I think the idea is we're willing to take some risks, but we're also willing to make quick decisions and take action when we need to to keep moving forward.

Tony Cline 39:03

All right. I I I teased a little bit earlier about the profitability. So I want to come back to that. Uh and then um I want to talk to people about what you're been what you've been doing as you've removed yourself more and more from the day-to-day. But take us back to when you said, I need to grow. We don't have the money to grow, I need to add some more people to the team. I need to change my compensation model. And I work with a lot of people, a lot of companies where we go through this process. And so I want you, as somebody who has not been through our program, to talk about what you did and how you decided what your fees should be. We don't need to talk specifics and numbers, but a lot of people are so afraid that I can't change what I'm charging because nobody in my market is charging that. I can't implement this fee or add this service because my competition doesn't do that. And they get so locked into standing on the edge of the pool wanting to jump in, but they're too afraid to jump in. So walk us through that. What did you do? What was it like? How did you just finally make the decision? And then what was that outcome? You can't add fees if there's no value behind them.

Marketing, Podcasting, And Community Presence

SPEAKER_01 40:15

So if you're scared to add a fee, you either should be because there's no value behind it, or you don't know how to, you're not focused on selling the value of the fee. So, like if you should be okay rolling out fees because you believe in the value that stands behind them. If you're just rolling out fees to make a profit, then yeah, it's gonna be terrible because you're not gonna be able to justify any of them, or you're not gonna know how to justify them. You're gonna say, oh, these other companies are doing it. You need to figure out why these other companies are doing it. What value does that provide to the tenant, to the client, et cetera, et cetera? If you can find the value, you can roll out as many fees as you want. As long as there's value behind it, people are willing to pay it. And so you shouldn't be ashamed to roll out fees. And so again, this is stuff I've learned over the years. I did not think like this a number of years ago, but for me, it really came from a place of not desperation, because like I was paying myself a very low salary, we were paying the bills, but like the company literally uh was making like a couple thousand dollars a year, like net. Um, and so out of out of all the revenue we were making and growth, we weren't making any money quite quite literally. And so um, but I needed to figure out because it was now a company that I owned, that I owed people for, that I had majority equity in. I had employees, and and you know, we were gonna build this thing, and I didn't want to give up. So I need to figure out how to make it worth it by finding profit. I had um really leaned into the property management. Community. That's about the time I was already in Narpalm, but I wasn't really taking advantage of NARPAM members in the in the sense of like building relationships with them. Um, but I was already in Narpalm, so I I was getting a feel for like who was out there in different states and different markets. And then I just reached out to them and just started having conversations and saying, you know, hey, I don't know anything. Uh, I'm new at this, like, I'm gonna sound ridiculous in everything that I say. Um, would you be willing to spend, you know, 30 minutes with me and let me ask you some questions? And they probably hung up and thought, this guy is never gonna make it, right? Like the probably the dumbest questions didn't make any sense, but they um they never gave me that impression. They were always, you know, uh the Adam Willis's and the Sean Johnson's and the you know, Matt Tringales and the and the the number of guys that I had uh reached out to for advice early on in those in those years were like, yeah, heck yeah, let's let's talk. And they gave me some great advice and kind of led me in the right direction. And and the and the the idea was I had a different mindset. My mindset was we were gonna win by now. I knew we were gonna be a really high quality company, um, like fat lightning fast responsiveness, great communication. We were gonna take ownership, prioritize relationships. We were gonna be different in that way. Now, I also knew that that meant that we needed to charge a premium to do that. And I was never the cheapest in our market on purpose because I thought that correlated exactly with our value. But what I didn't know, and I was a naive at the time, is I thought really it was only leasing fees, renewal fees, and management fees. And I thought I just need to have the highest management fee to establish my value, and then that would be okay. And so that's what I did. Everyone else would come back and say, hey, this other company's doing it for 8% or whatever percent, you know, this other company's doing it for this percent or that percent. And it would always be lower than mine. And I would say, no, I I understand the value we bring, I understand that that would be more attractive to you, but if you want us to manage your asset, this is our cost, you know, and then they would many times end up going with me, or maybe it wouldn't be a good fit and they just wanted a lesser cost. And so, anyway, I but that's what I thought would make me win is get more units at a higher management fee, and I eventually would see profit. And then 2020 taught me that 400% revenue growth still break even at the end. That's not the deal. And so early 2021 started connecting with people. I learned about RTMs, um, started hiring RTMs. I restructured the team, I restructured our fees, fee model, uh, which were pretty transparent about that, but uh restructured the fee model um largely off um the the fee max program that Tato puts out. Um we we took some of that and worked with that. We kind of modified some of it. We took some stuff that other people are doing and modified it, made it our own. We left plenty of fees out that I didn't feel comfortable justifying, uh, that had enough value that I could justify or felt comfortable justifying. Um, and then we implemented that. And within, again, I don't know exactly, but I'm gonna say within six months or so, it was a massive difference on our monthly uh income statement for for the um for the company. Um, and we eventually made a decision to roll it out um retroactively. I don't know if that's the right word, but basically to all current clients, uh, a modified version to start collecting to have a higher adoption rate of some of these fees, some of the more critical fees at least. It might have not been 100% uh fee rollout, but like a pretty heavy load. Um, in that rollout uh out of a good deal of clients, I think maybe we're again maybe around like 400-ish, 500 units at this point, uh very little multifamily. Um we had I think six clients that never signed the new PMA. One client terminated um just because she was probably gonna terminate anyway, uh, and she was gonna sell her house, but she terminated at during that conversation, I think, with like made it easy for her to terminate. The six that never responded, we just kept them on the same PMA. They stayed for years. We just didn't make fees off of them. And so our our company just changed, like it was it was fine. We were good. Um, and then that allowed us to hire more people, to become overstaffed, to uh hire higher levels of talent, um, get the right technology in place to take our company to the next level. And then we held our standards through the relationships we won under management uh even more because we were making a good profitability. We had the leverage in the and the conversations, we weren't desperate for doors. Uh I was able to hire a BDM and kind of get get out of the sales um and then sort of replace myself in the almost all property management activity outside of being the principal broker.

Enduring Grit, Ultras, And Final Takeaways

Tony Cline 46:29

You you mentioned something, I want to circle back to it because I want to reinforce this point. But you said that if if you don't feel like there's value behind the fee, then you shouldn't be charging it. And I 100% agree with that. I tell people that and and there are people out there, you mentioned Todd, there's there's some others. Um as a matter of fact, Mark Cunningham and I back in 2015, we we put on an event where we went through and talked about just various fee structures and not telling people what to charge, but just going through the different models that that are out there. And you know, one of the things, even when I did that back then, I had not yet made the connection that it it shouldn't be about how much can you max. There are people out there that promote fee maxing and maximizing, you know, if you can squeeze a nickel out of somebody, you should squeeze a nickel out of them. You know, I don't believe in that. But what I do believe in is maximizing the value you deliver and then being appropriately compensated for that value. And one of the ways that we do this, that we coach people through, is you you I had a mentor 30 some years ago tell me one time, he says, stop giving people what they want. Find out what they want and sell it to them. And a lot of times our clients don't know all the stuff we do in the background. They don't know the things that we're doing for them to make their property rent for the highest amount possible or to to be able to continue to rent at market or to be able to put the right tenant in there that's going to be able to pay the rent. They just don't get everything that happens in the background and they shouldn't have to worry about that. But if we can slice off the things that we do, we can slap a label on it, and now it becomes a valuable service we can deliver. And if we can stand behind that service, then again, we should be appropriately compensated for that value that you deliver that the person or the company down the street is not promoting, that they're delivering that value.

SPEAKER_01 48:25

Right. Yeah, we have we have a um sort of a maintenance package. So instead of charging a maintenance coordination fee, we've created a monthly maintenance package where they pay for it monthly that covers any coordination that could happen. It's a flat rate. Um, they pay monthly, regardless of work order submitted or anything like that. That no one else in our market is doing that currently, right? And so that is a fee we have to explain every single sales call. But for us, it's recurring revenue, it's consistent, it's known. We've done the math a million times based on a um coordination or a coordination fee based on invoice or tickets or whatever. Um, and we've stuck with the package, it's it's simple accounting. Um, and so it's things like that that that that is different than the rest of our market, but we have a ton of value behind that package and what's offered in that package that we can explain to set us apart. And so they could either go with an uncertain maintenance coordination fee or they can go with a known value of the maintenance package and what what that provides. And the investors that we work with really appreciate that package.

Tony Cline 49:34

I love it. Well, you had mentioned as as we get ready to wrap up here, you had mentioned that you you have been able to hire people, create the teams, create the systems that allow you to be less and less involved in the day-to-day over the years. You're at around that 1300 door mark, and you you are still trying to figure out, or you you have figured out, but you're working on what you should be doing, what you should be contributing. And I talk about there's$10 an hour tasks, there's$100 an hour tasks, and there's$1,000 an hour tasks. And the the job as the business owner as you grow is to relinquish as much of the$10 an hour activities as soon as possible. But sometimes we get stuck in that$100 an hour activity, and you have now elevated yourself where you're you're looking where can I contribute the most? How can I continue to be present in the marketplace? And so I want to dig into the marketing that you that you are doing now. Uh I think we we mentioned in the show notes that you've you've brought on a few people recently for marketing, you've launched a podcast. I just want to I want you to share with the audience what you're doing to continue to grow the company and do the things that only you can do while you've built out this team that does everything else for for the company.

SPEAKER_01 50:58

Yeah, and I'll say like we had a really good word-of-mouth flywheel, it was spinning fast. And so when we hired a um our first BDM, that flywheel spawned for a long time when that BDM was getting up to speed. We were still bringing in plenty of units. Um, over time, that natural like word-of-mouth flywheel starts to slow a little bit if you're not massively like nurturing it and building relationships and everything. So we actually have two BDMs now. They are keeping that flywheel going, but naturally, like people for good or bad, better or worse, people want to speak to the owner. There's there's something about talking to an owner that that feels differently to people. And so the owner, in my opinion, we we are very much a community-based business. I have great relationships in this market. Um, people will forget about me if I'm not putting out something, right? And at our team size, about a year ago, maybe a year and a half ago, I realized I was not getting out anymore. I wasn't talking to anyone. I was I was just focused on running and operating the team, not the business. They were doing the property management stuff, but making sure the team was up to speed. They had everything they needed to be successful and putting in my time and effort there. Plus, where's the business going to go? What direction? But that flywheel was slowing a little bit. The BDMs are still bringing in stuff, they're doing a good job, but the flywheel wasn't spinning as fast. And so the BDMs are getting less leads, and they're like, all right, we're, you know, let's start considering marketing because also at this point, we need to bring in more units to feed the team. It's no longer just kind of like a fun game of just bringing in a few units here and there. We have to be bringing in a solid amount of units. And so I looked at, you know, I have a three-year-old and a five-year-old, um, a wife that I love and want to spend time with. Um, I don't want to go back to 80-hour weeks. I don't want to go back to 60-hour weeks. Um, but I want this business to continue to thrive. I'm still very invested in this business. We have big plans. I think we've only made it a small fraction of the way we can make it with this company. So there's still a long runway of opportunity here. And so for me, it was how do we increase the word of mouth flywheel without me going to have to have five face-to-face meetings a day or going to after hours meetup events constantly every week and things like that. And so the idea was for me to just start an online presence as much as I don't really enjoy it, uh, being like in being in the podcast or being online or creating content. It's not really my style, but actually, like so I hesitated for about a year and a half. And and I delayed and I made excuses and I made all kinds of excuses. And then finally, after meeting with you and some others last year, it was just like, just do it. You have to do it. And so I started doing it, and guess what? Now I really enjoy it. I I I the podcast, the Virginia Investor Podcast, uh, it's VA Investor Pod on most social platforms. Um, that interviews local investors in Virginia that are doing awesome things, that think differently. Some are real estate professionals, but most are investors that have done awesome things that have different mindsets and different strategies and different tactics that we can learn from. And we record these awesome conversations, get them out there, and then of course, they are sharing it to their network. I'm getting to build a really good relationship with these guests that have come on, uh, some of which I didn't know previously. And then now I'm I'm getting to know their network and their projects and everything. And it's become a really cool way to get embedded in this market without spending 20 hours a week networking.

Tony Cline 54:36

I think one of the things that you said was you wanted to stay active in the marketplace. You wanted to still have a presence. But I think, and correct me if I'm wrong, but I think one of the things that you recognized is that it doesn't didn't just keep you active, but it's actually elevated your status in the marketplace. And and of course, um status in and of itself doesn't really bias much, but status unlocks doors and unlocks and creates new opportunity and builds that network.

SPEAKER_01 55:05

Yeah, I I would agree. I still think it's early for like the status, like I'm not like a look, quote unquote, like local celebrity or anything. It just it is what it is, uh, but it's definitely getting getting the name out, getting the brand out. Um, and and and the the thing is is I reached out to guests um that I have a high level of respect for um and ask if they want to be on a podcast. And these are people that I don't know, maybe I've never met, you know, I've I've seen them around in the market for years. And I've reached out to like one recently, and he his response was, Hey, I just got done listening to episode number 20. It was incredible. I'm about in uh, you know, 30 minutes into episode 21. Now, I had no idea this guy knew I existed. And he was just like, I'd love to be on the podcast. And I'm like, and this guy owns a ton of property, he knows all kinds of people, he's been investing for years. And so just the fact that like he was listening, I didn't even know. And then another aspect of this is do not, I think people say this, and and and you your ego can get caught up on this, is like, how many likes, how many followers, etc. I think the the the podcast page on Instagram has maybe like a hundred followers. I don't know, I don't I don't even look, but it's probably like a hundred, hundred and fifty followers. It's got close to 20,000 views in the past 30 days. So, like that many people have seen the podcast in some way, shape, or form in the past 30 days. And without the podcast and without posting content, like none of that would have happened. And so we are seeing like we're getting a lot more messages now. We're seeing a lot more things. People are saying, oh, is that the guy with the pocket, or is that the company with the podcast? Um, and so yeah, it's definitely, I think it's gonna increase the word of mouth flywheel on top of what uh the it's gonna supplement what the BDMs are doing. And then we've also hired a marketing team. We now have two RTMs and one in-person marketing person who just started to increase content and social media presence and uh all the other things.

Contact Details And Closing

Tony Cline 56:58

So Well, I love I love what you're doing. I think it's it's really smart to be looking forward of how you can continue to contribute to the business, but without being in the day-to-day, I think as going back to our earlier part of the conversation, a lot of business owners feel like I've got to be in the the fire to feel like I'm making a difference. And and you are you are showing, you are a living example of what happens to the business when you step outside of being the chief firefighter and you start thinking bigger and having a bigger vision and creating a bigger and better team. And uh so with that, one of the things that that you and I didn't get a chance to talk about, and I'd love to have you back on. I'd love to have you come back and talk about your your background with your team building. I know you mentioned in the in the show notes about running an ultra. You know, I've got to talk to you about that at some point because uh that that mindset that people go through, the things that you learn, not just when you're running those ultras, but when you're training for them, it just creates this mindset of I I actually can accomplish more than I thought I could. And the the more I search for my limits, the harder they are to find because I just realized the closer I get to those limits, the farther they're pushed out because I'm able to accomplish so much more than I previously thought.

SPEAKER_01 58:19

Yeah, absolutely. And I think that was a benefit early on in business when you have to outwork it. Um I didn't know anything about property management, so I was forced to hire smart people, but I knew I could work really hard, so it was easy for me to outwork it because it was not, it was easier than running an ultra. It was easier than being cold and wet for days at a time. Um, and so that work was easier and I didn't know anything, so I could hire people smarter than me. So I think it was a I think that part was luck falling into that sort of situation and being able to build from there. I had no option but to hire and and uh and definitely knew hard work ahead of time.

Tony Cline 58:54

Well, Stephen, this has been this time has gone by so fast for me. You you've been a great guest. I I uh again I invite you back on for us to continue the conversation at another time. But I want to give you uh space if somebody wants to reach out to you or if they know somebody that would be a great guest on your podcast or they just want to pick your brain. What's the best way for for people to get a hold of you?

SPEAKER_01 59:16

I think probably um like you can find me on LinkedIn pretty easily. Um LinkedIn, social media. I think I check LinkedIn pretty pretty frequently. I would say that's probably the best place. Connect with me there, um, and then we can just start a conversation.

Tony Cline 59:30

Very good. All right, Steven, thanks for uh being on the show. Thanks for having me. Thanks for tuning in to the Property Management Success Podcast. We'll be back with another value packed episode to help you level up your property management game. If you've got something valuable out of today's episode, please share it with a friend or colleague. And don't forget to subscribe and leave a review so you never miss out on future insights and strategies and tactics. Until next time, here's the your success.