1. Adding More Doors by Converting SMIPOs - Scott P. Brady
Helping property management companies tell a better story.

2. WHAT IS YOUR MANAGEMENT STORY? (And Does the Market Even Care?)
THE VIRTUES OF A VIRTUAL PROPERTY MANAGEMENT COMPANY
WHAT IS YOUR MANAGEMENT STORY?
(And Does the Market Even Care?)
HOW TO GROW, INCREASE PROFITABILITY & TRANSFORM YOUR PROPERTY MANAGEMENT COMPANY

3. Adding More Doors by Converting SMIPOs - Scott P. Brady
WHO AM I?

4. WHAT KEEPS YOU UP AT NIGHT?

5. How can I become more profitable?
WHAT KEEPS YOU UP AT NIGHT?
How do I add more doors?
How can I become more profitable?
How do I reduce my customer acquisition costs?
How do I effectively spend marketing dollars?
What market should I be targeting?
How do I improve my reputation?
How do I differentiate myself from the competition?
Is there a new business model coming in the market?
Where will I be in 2020?

6. WHAT’S YOUR STORY?

7. Why did you get into this business? Who are the founders?
WHAT IS YOUR STORY?
Why did you get into this business?
Who are the founders?
What challenges have you faced?
What is your current situation?
Where are you going?
What makes you different from other companies?
Use your story in your marketing.

8. This is every management company’s story.
THIS IS NOT A GREAT STORY
We collect rents.
We pay vendors.
We make monthly disbursements to owners.
We secure new tenants.
We fix things at your rental.
We make tenants abide by the contract.
This is every management company’s story.
You Can Do Better.

9. THE 13 EPIPHANIES

10. OUR STORY
Partners Real Estate Group -Is full service real estate more fulfilling?
Value Propositions - What are our value propositions?
Variable Pricing- How do we price properly for our market?
Transparency Tools- Are we completely transparent with our clients?
SMIPOs - Who are the SMIPOs and why do they matter?
Joint Ventures/Branch Managers - Are including Realtors and Brokers a growth strategy?
Buy a Door Program - Is it time to stop managing and start selling doors?
Transforming the Experience – How can we transform our property management company?
Virtual Property Management - Wouldn’t it be great not to have any employees?
Local Landlord Seminars - How do we become the pre-property management company?
Variable Door Value - Is every door (and Property Manager) worth the same amount?
Bid a Door Option - Should we sell a door for the same price every time?
Our (BHAG) Big Hairy Audacious Goal – Where will we be in 2020? 2027?

11. PARTNERS REAL ESTATE GROUP

12. 1. PARTNERS REAL ESTATE GROUP
THE 4 CHOICES
Race to the top.
Race to the bottom.
Start your own.
The Goldilocks Brokerage
PARTNERS REAL ESTATE GROUP
The Best of Both Worlds.
Low Split for All
Lower Fees
FUSE REAL ESTATE WITH MANAGEMENT
Credit the Client for their Management Fees
Real Estate Marketing
Include the Company in your Contract

13. WIIFT? WHAT’S IN IT FOR THEM? WIIFY? WHAT’S IN IT FOR YOU?
WHY REAL ESTATE AGENT BRANCHES?
WIIFT? WHAT’S IN IT FOR THEM?
WIIFY? WHAT’S IN IT FOR YOU?
Exit the Real Estate Income Roller Coaster
Every Door Counts
Work the Network
Proper Penetration
It’s in Their Wheelhouse
Doors Give Purpose
They Sell as Well
Quick Expansion
Better Penetration
They Pay for Marketing
Invisible Handcuffs
Ancillary Income

14. BE THE ONE-STOP SHOP COMPANY

15. THE MEANING OF LIFE If they sell fewer than 10 sides a year….
Monday could be Thursday or Sunday.
They have the time to learn it.
They have the time to do it.
They have most of the skills now.
They have the need.
Owners and tenants are their own worst enemy and need then.
They need a purpose.

16. VALUE PROPOSITIONS

17. 2. VALUE PROPOSITIONS WITHOUT VALUE, IT ALL COMES DOWN TO PRICE
30% only care about price in retail.
50% only care about price in property management.
Value propositions differentiate you from others.
7 Performance Guarantees
5 Step Property Certification
The Better Tenant System
OUR 7 PERFORMANCE GUARANTEES
Tenant Guarantee
Payment Guarantee
Fee Guarantee
Service Guarantee
Response Guarantee
Satisfaction Guarantee
Happiness Guarantee

18. PROPROPINC.COM

19. VARIABLE PRICING

20. OUR PRICE VARIES DEPENDING ON A FEW FACTORS
3. VARIABLE PRICING
OUR PRICE VARIES DEPENDING ON A FEW FACTORS
Type of Property
Amount of Rent Collected
The Number of Doors
“Special” Circumstance
Variable Door Value
SALES IS ABOUT QUESTIONS AND CONNECTION
The shorter the quote, the quicker the disconnect.
Is this a match? Are we right for each other?
Dig for more information.
Get their story.
If you are not fixed, you are flexible.

21. TRANSPARENCY TOOLS

22. CLIENTS WANT INFORMATION BEFORE THEY MAKE DECISIONS
4. TRANSPARENCY TOOLS
CLIENTS WANT INFORMATION BEFORE THEY MAKE DECISIONS
Comparison Charts
No Nickel and Diming
Online Access to our Management Contract
‘Where We Manage’ Map
Apply Online
Meet Our Team
THEY COME AND STAY FOR OUR STORY
Less Ground and Pound
Greater Retention
Better Understanding
Our industry is notoriously ”hidden”.
We Are the Trusted Source for Information

23. WHERE WE MANAGE MAP

24. TESTIMONIALS - REPUTATION

25. THE COMPARISON CHART

26. Self-Managing Investment Property Owners
SMIPOs
Self-Managing Investment Property Owners

27. WHY TARGET THE SMIPOS? COLOSSAL MARKET GETTING COLOSSAL-ER
40 million nationwide
5 million rentals in California
1+ million in Los Angeles, Riverside, San Diego, San Bernardino & Orange County
Total commissions for real estate sales for 2015 was 60 billion, total property management income was 40 billion and growing
No one knows for certain what % are SMIPOs (75%+?)
GETTING COLOSSAL-ER
More investors parking money in rentals
More owners converting properties to rentals
More tenants happy with the rental lifestyle
More cities allowing “high density” living
Cost of living shutting out buyers
Steve Murray of Real Trends predicts SMIPOs will shrink from 75% or more today to 50% or less in the next 10 years (10 million new clients nationwide)
GETTING MORE COMPLICATED
Fair housing laws
Pro-tenant legislature
Tenants want better technology
Savvy tenants know how to play the system

28. HOW COLOSSAL COULD IT BE IN SD?
The Baseline in San Diego
3,299,000 Total population
1,194,000 Total households
573,120 Total rental stock (42%)
401,184 Total private investment properties (70%)
If 75% of SMIPOs Become 50%
100,296 Current Non-SMIPOs
160,593 Future Non-SMIPOs (at 60%)
200,592 Future Non-SMIPOs (at 50%)
60,297 New Doors to be managed at 60%
100,296 New Doors to be managed at 50%
If 52% of Owner Occupied Becomes 40%
716,400 Total rental stock
501,480 Total private investment properties
100,296 New doors at 40%
25,074 New Non-SMIPOs (75%)
50,148 New Non-SMIPOs (50%)
If There is a Recession by 2020
30,000 Annual sales in recovery market
22,000 Annual sales in a recessionary market
12,000 new doors in a normal recession
97,371 New Managed Doors in a ’Good Squall’
162,444 New Managed Doors in a ‘Perfect Storm’
Only 100,296 Doors Currently Under Management

29. WHY SWIM IN THE SMIPO OCEAN?

30. WHY SWIM IN THE SMIPO OCEAN?
CURRENTLY UNREACHED
NO WEBSITES TO SERVE THEM
Some assistance from associations, but spotty.
THEY DON’T GOOGLE OR YELP.
They are happy and not looking.
MASSIVE MARKET
1million in Southern California
Growing
PERFECT FOR MULTIPLE MARKETING CHANNELS
Direct Mail
Public Relations
SEO
SEM
Blogs
Social Media
CURRENTLY UNKNOWN
NO ONE HAS SURVEYED THEM
Not CAR’s Target Market
Apartment Associations target big complexes for dues
NO ONE HAS ASKED THEM
Why do you manage your own property?
What do you think about property management companies?
Why did you pick a particular management company?
What would it take for you to stop managing your own property and hire a management company?

31. WHY ARE THEY SMIPO-ING?

32. WHY DO THEY STOP BEING SMIPOS ?

33. HOW DO NON-SMIPO’S FEEL ABOUT THEIR MANAGEMENT COMPANY?

34. WHAT WOULD IT TAKE TO USE US?

35. THE 4 PILLARS FOR SMIPOS THE TRAITS REQUIRED TO ATTRACT SMIPOS:
THEY MUST TRUST YOU.
You must offer VALUE PROPOSITIONS to the SMIPOs.
They must see the value in what you offer and trust that you will be able to do a better job than them.
Easy Exit Contracts. Better Tenant Systems. Performance Guarantees.
THEY WANT TO BELIEVE YOU.
You must make your business TRANSPARENT to them.
They must believe that you will do as you say you will do.
Rates. Fees. Contracts. Comparison Charts.
THEY DEMAND A “FAIR” PRICE.
You should price for what the market will bear at the LOWEST COST possible.
They are paying nothing now so they are price sensitive.
Variable Pricing. Economies of Scale. Ancillary Income.
THEY EXPECT EXCELLENCE.
You need to provide STELLAR CUSTOMER SERVICE at every level.
The only way to gauge their future experience is to evaluate your current relations with owners and tenants.
Top Yelp, Google and Reputation reviews.

36. REPUTATION MATTERS

37. JOINT VENTURES & BRANCH MANAGERS

38. In a Joint Venture, We Allow Property Management
6. OUR PARTNERS: JVs & BMs
In a Joint Venture, We Allow Property Management
With a Brokerage
With a Broker at a Brokerage
With A Licensee at a Brokerage
With Our Licensee at our Brokerage
We Help Our JV’s
To Find a Door – offer property management to their clients
To Build a Door – use our “turn-key” marketing to create leads
To Buy a Door – to buy a new door from Progressive
We Support Our Branch Managers
With Operations – all back office duties handled centrally
With Marketing – create sales supports tools and direct mail
With Sales Support – provide training and compliance

39. PROGRESSIVE BROKER ASSISTANCE
Joint Venture with Progressive Property Management, Inc.
65% Retained by JV
35% of Gross Retained by PPM
Training
Sales Support
File Audit
Insurance
Rent Collection
Owner Disbursements
Vendor Payments
Operations
Global Marketing
JV Marketing
Management
BRE Compliance
Trust Accounting
Broker/Agent/Brokerage Operates Branch Independently
“Buys” a Door
PPM Converts a Lead to a Door
JV pay 3 month’s management income
“Builds” a Door
Pays for Local Marketing
Direct Mail (.72 cents/piece)
On Boarding Fee per New Door $50
“Finds” a Door
Work sphere and clients
Manages Tenant and Owner Issues
Leases Up Properties
Sells Properties
“Owns” the Door

40. BUY A DOOR

41. IMMEDIATE INCOME GRATIFICATION
7. BUY A DOOR
IMMEDIATE INCOME GRATIFICATION
Instant Management Income
Lease Up Income
Sale Income
Resale Income
Referral Income
MAKE IT ZERO SUM (OR EVEN PROFITABLE)
Convert the Lead to a Door
Sell the Door for 3 Month’s Revenue (plus processing)
Bill out of Tenant Acquisition or Lump Sum
Cost of Marketing Covered by Sale of Doors
No Limit to Marketing Budget if ‘Zero Sum’

42. CENTRALIZE LEAD GENERATION
DRIVE LEADS TO ONE PLACE FOR CONVERSION
TRACK the Source
Web marketing
Lead generators
Direct mail
Yelp
PERFECT The Process
Capture all web leads
Drive all leads to one salesperson
Convert leads to doors
“Sell” doors to property managers
Make this a profit center
ANALYZE The Benefit
Better metrics on marketing
Consistency
Quality control
Quick response times
Lead follow up

43. Local Landlord Seminars Yelp Realtor Referral LOW VALUE DOORS
DOOR SOURCES
HIGH VALUE DOORS
Direct Mail
Client Referral
Local Landlord Seminars
Yelp
Realtor Referral
LOW VALUE DOORS
Thumbtack
All Property Management
Geek Marketing
Google SEO
CraigsList

44. TESTING THE “FUNNEL”

45. Where They Are Coming From
TRUST THE TRENDS
Where They Are Coming From

46. Web Activity Comparison for 2016/2017 -
COMPARE THE TRENDS
Web Activity Comparison for 2016/2017 -

47. THE SMIPO BECOMES A CLIENT

48. Owner Experience Manager
THE CRITICAL “OWNER EXPERIENCE”
Owner Experience Manager
from awareness to loyalty

49. TRANSFORM THE RELATIONSHIP
TRANSITION YOUR SERVICE COMPANY TO AN EXPERIENCE COMPANY (Joseph Pine & James Gilmore – The Experience Economy)

50. THE TRANSFORMATION PROCESS IN GROUP CYCLING
TRANSFORMING CYCLING
THE TRANSFORMATION PROCESS IN GROUP CYCLING
COMMODITIES – Rubber, Steel & Plastic
$40 for the raw materials to make a bike.
GOODS – A Road Bike
$500 to $5,000, if you ride 8 times a month, buy a bike for $1,000, the cost per ride is $3.50 over a 3 year period.
SERVICES – 24 Hour Fitness
You can join a health club for $50 a month, ride the stationary bike, and pay $6.25 per visit.
EXPERIENCES – 24 Hour Fitness “Spin Class”
For a premium membership, or $100 a month, join a Spin class and pay $12.50 per visit.
TRANSFORMATION – SoulCycle
For $30 per visit or $240 a month, you are physically and emotionally transformed at SoulCycle.
“SoulCycle doesn't just change bodies, it changes lives. With inspirational instructors, candlelight, epic spaces, and rocking music, riders can let loose, clear their heads and empower themselves with strength that lasts beyond the studio walls.”

51. TRANSFORM THE OWNER RELATIONSHIP
THE TRANSFORMATION PROCESS IN PROPERTY MANAGEMENT
COMMODITIES – Investment Property Owners
This is the total ocean of clients.
GOODS – SMIPOs
This is the blue ocean of clients.
SERVICES – Property Management Clients
These are satisfied property management clients.
EXPERIENCES – Loyal Property Management Clients
These are dedicated clients who stay longer, refer others, and say nice things about your company.
TRANSFORMATION – Loyal Real Estate Clients
The relationship surpasses the property management boundary and these clients will buy, sell, lease and consider you their real estate resource.

52. THE 9 CUSTOMIZED “TOUCHES”
Annual Market Value Analysis
Annual Lease Analysis
Annual Progressive Newsletter
Annual 1099 with Legal Update
Preventative Maintenance Program Report or Photo of Rental
“Should I Sell or Should I Rent?” 90 Day Letter
ROE Analysis
Invitation to Company Events
Pumpkin Patch Party
Local Landlord Seminar
Annual from the Owner

53. VIRTUAL PROPERTY MANAGEMENT

54. 9. VIRTUAL PROPERTY MANAGEMENT
ACHIEVE MAXIMUM OPERATIONAL EFFICIENCY VIRTUALLY
OUTSOURCE EVERYTHING – Be Lean.
Payroll. Reconciliations. Bookkeeping. Human Resources. Sales Management. Internet Marketing.
Property Managers.
CREATE ECONOMIES OF SCALE – Superior Cost Structure.
Price to where you are going.
MAKE OPERATIONS A FIXED EXPENSE – Know Your Numbers.
Every additional door over breakeven $5 in expense.
MAKE MANAGEMENT A VARIABLE EXPENSE – JV/BMs are Free.
Their time is their money.
With one door JV/BM profitable.
COMMUNICATE YOUR BUSINESS MODEL – Tell the World.
“Because we have a centralized operations center and local Property Managers to be your boots on the ground just a few minutes from your rental, we can price more aggressively than other property management companies.”

55. THE LOCAL LANDLORD SEMINAR

56. 10. THE LOCAL LANDLORD SEMINAR
BECOME THEIR PROPERTY MANAGER BEFORE THEY KNOW IT
Invite local investment property owners to a free seminar
Local Experts
Free Lunch
Free Raffle
Give them all the tools and tips to manage their properties more effectively
SMIPO Bible
The Ultimate Guide to Property Management
Vetted Vendors List
BECOME THE TRUSTED SOURCE OF INFORMATION FOR THE SMIPO COMMUNITY
Get your proverbial foot in the management door
Get more fannies in the seats
Make the event entertaining and engaging
Improve the penetration and conversion
Get more owners to use your services
Compelling Calls to Action
Offer Al La Carte service
Free Rental Market, Property Value & ROE Analysis
Convert more in the database
Compelling Drip Marketing
Wait for the Pain Points

57. VARIABLE DOOR VALUE

58. 11. VARIABLE DOOR VALUE NOT ALL DOORS ARE CREATED EQUALLY
Just as the fee we charge owners differs depending on the quality of the door, the fee we charge owners also differs depending on the need of the JV/BM.
NOT ALL PROPERTY MANAGERS ARE COMPENSATED EQUALLY
The hungrier the JV/BM, the lower the fee.
CREATE MORE DOORS
By competing in “low value” marketing channels, we generate more doors.
CREATE MORE JV/BMs
By having more doors, we can attract more JV/BMs
JV/BM MAKE AN INDIVIDUAL INCOME DECISION
It is up to each JV/BM to decide what their “time” is worth.
An agent hoping to earn $50,000 has a time value of $25/hour.

59. Client Loyalty for Profit
THE VIRTUOUS CIRCLE OF LIFE
Need SMIPOs for Leads
Client Loyalty for Profit
Need Leads for Agents
Add Agents for Growth

60. DOOR BIDDING OPTION

61. 12. BID A DOOR OPTION EACH DOOR HAS DIFFERING APPEAL TO EACH JV/BM
Door Variables
Monthly Management Fee
Tenant Acquisition Fee
Type of Property
Local of Property
Vacant/Occupied
Quality of Current Tenant
EACH DOOR BID ON BY JV/BM
Bid Variables for Acceptance by PPM
Amount Offered
Customer Service
Compliance
Type of JV/BM
EACH JV/BM DECIDES ON THE ECONOMIC VALUE OF THE DOOR
Source of Income
Net Present Value
Management, Leasing, Sales & Resale
Potential Revenue
Future Value

62. BIG HAIRY AUDACIOUS GOAL
OUR BEHAG
BIG HAIRY AUDACIOUS GOAL

63. WHERE WE HOPE TO BE IN 2020
California’s First Statewide Property Management Company
We will have 14 Regional and 120 Agent Branches covering all of California.
We will have 3 operations centers in Southern and Northern California.
We will be managing 3,000 doors (up from 485 right now).
Management income will be $300,000 a month with a $40,000 net profit.
New Marketing Channels
Experiment in high and low value marketing channels.
Radio, cable, YouTube & new lead generation services.
Zero Sum Marketing
Our customer acquisition cost will be $300 a door (really $0).
The Seamless Fusion of Property Management & Real Estate
We will close over 300 real estate transactions with $450,000 in company dollar.
We will exceed the service and surpass the perceived value of our competitors.

64. THE PROPERTY MANAGEMENT PUZZLE

65. WHOEVER SOLVES THE PROPERTY MANGEMENT PUZZLE, WINS MORE MARKET SHARE.
THE PROPERTY MANAGEMENT PUZZLE
WHOEVER SOLVES THE PROPERTY MANGEMENT PUZZLE, WINS MORE MARKET SHARE.
How do you get SMIPOs to stop SMIPOing?
What is the right price point?
What are the most compelling value propositions?
What training tools do JV/BMs need to be the most effective Property Managers?
What is the capacity for a Virtual Property Management company?
What is the true monetary value of a door for us? For a Branch Manager? For a Joint Venture?
How much will a JV/BM pay for a door?
What are the most effective marketing channels?