Property management growth expert and founder/CEO of DoorGrow, Jason Hull explains the cycle of suck in property management. It’s incredibly costly, stressful, and competitive.
The “cycle of suck” is a phrase and concept inspired by one of Jason’s clients that noticed as he got rid of bad doors and bad properties, he actually became more profitable. The cycle of suck concept is true, powerful, and effective. What are the four steps of the cycle of suck in property management, and how can you avoid, escape, and reverse it?
[02:32] Step 1: You take on any client/owner or you take on a crappy client/owner.
[03:05] Step 2: You take on crappy properties, which means you have difficult tenants.
[03:37] Step 3: You have crappy tenants to manage if you have pushy property owners.
[04:44] Step 4: You have crappy reviews and a bad reputation in the marketplace.
[06:26] Don't get with everybody. Attract people you want because you are the prize.
[07:25] Protect Yourself/Team: Set standards, boundaries, limits when selecting clients.
[08:24] Sense of Scarcity: When competing based on price, it creates artificial industry.
[09:21] Reverse Cycle of Suck: Qualify clients, properties, tenants/owners, and reviews.
“The reality is, you don't want every client or you shouldn't want every client.”
“The owner is causing you to have more problems, more drama, more stress, and more challenges that are unnecessary simply because they're making things difficult.”
“You're going to have crappy tenants that are difficult, frustrated, and unhappy.”
“The best way to ensure that you're going to have really great tenants is to take on really great properties and really great owners.”
The Pumpkin Plan by Mike Michalowicz
All right, we are live. Welcome, DoorGrow hackers, to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.
DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income.
At DoorGrow, we are on a mission to transform property management businesses and business owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.
All right. It was tough for me to read that intro this time for some silly reasons. I have a bunch of things going on in the background on my computer and it distracted me. All right, so let's get into this. I was trying to think about what to talk about today. I want to go back to a concept that I've talked about for a long time now. I've mentioned it in several episodes, but I don't have an episode dedicated to it that I can push people towards, and that is the cycle of suck.
This is a phrase and the concept that I put together after talking to some clients. It was inspired by one of my clients who had mentioned that he noticed that as he got rid of bad doors and bad properties that he actually became more profitable. I had clients tell me about when I started to relate this idea of the cycle of suck. People would tell me about this book called The Pumpkin Plan by Mike Michalowicz, which is a good book, and an author that's been on the podcast before.
This concept is true. It's powerful. It's really effective. Let me explain to everyone the cycle of suck in property management. If you google cycle of suck, it tends to be that my old DoorGrow article about it comes up. Let's talk about this. The cycle of suck is pretty simple. It's four steps.
The first step is you take on any client or you take on a crappy client. That's one of the big challenges. If you take on any client, the challenge then is that you're going to end up with a door. You're going to end up with bad clients. The reality is you don't want every client or you shouldn't want every client. If you're taking on every client, your operational costs are going to be a lot higher. So the very first step in the cycle of suck is crappy owners. You take on crappy owners.
The second step is that you take on crappy properties. If you take on crappy properties, you're going to have a much more difficult time. That means you're going to have much more difficult tenants. You're going to have a difficult situation. If the owner’s pushing back on things, even if the property is a nice looking property or a nice property, that property becomes a crappy property in your portfolio.
If you have crappy owners and crappy properties, which is the second step, third step in the cycle of suck is you're going to have crappy tenants. It doesn't matter how much tenant screening you do if the tenants have A-grade credit. If those owners that you are representing are pushing back on things, delaying things, and making things difficult for maintenance, coordination, and getting things taken care of in the property, these tenants are going to become bad tenants for you to be managing.
These residents will be super frustrated at you. You then end up becoming basically a [...] show for a slumlord, which means now you are in between the tenant and the owner. But the owner is causing you to have more problems, more drama, more stress, and more challenges that are unnecessary simply because they're making things difficult.
At this stage, you're in the cycle of suck. You're going to have upset and frustrated owners and difficult and challenging owners. You're going to have difficult properties, challenging properties, and sometimes just actually crappy looking and crappy maintained properties. You're going to have crappy tenants that are difficult, frustrated, and unhappy.
The fourth step is you're going to have crappy reviews. You're going to have a bad reputation in the marketplace. This kind of sums up the entire property management industry in aggregate, as a whole. There's a lot of property managers that are just taking on any client. They're trying to get on any property they can. Most people know that most property managers suck. Most come to me and they say, I'm going to start a property management business and all the other management companies in my market suck, which is why I'm going to start a property management business.
The challenge is this is the default for the industry. A lot of people fall prey or fall into this cycle of suck. The temptation is, they feel a sense of scarcity, and they feel like they need to take on every client. How do you escape this? How do you escape the cycle of suck?
To consider, the cycle suck is incredibly costly. Your operational costs on a bad property and a bad owner could take how much more time? Ten times the amount of time. Can one of your bad owners and one of your bad properties easily take 10? Maybe even it's 100 times more stressful, or 100 times more effort.
I don't know if it gets that extreme, but it can be significant. It adds up if you have multiple doors, multiple properties, and multiple owners that are part of the cycle of suck, that are not really what you deserve, what you should be managing, and what you should be dealing with. If you had the business that you wanted and the business of your dreams and types of clients you really wanted to be with and work with.
You have to recognize that you are the prize. I want all of my clients to recognize that they are the sexy girl at the bar or the sexy guy at the bar, meaning they don't get with everybody.
Here's the reality. Let's compare this to dating. If you get with everybody, you're low value. You're not going to attract the type of people that you want or the type of clients that you want in business. So don't get with everybody. Don't be that type of person. You know what they call somebody that gets with everybody, right? You don't want to be that. That's not interesting to the really great people that you want to be working with.
The cycle of suck is stressful. It's really stressful. It means you are forcing and subjecting your team—if you have a team—to really difficult people and really difficult situations. It’s a display or it's you showcasing to your team that you don't care about your team. If you really cared about your team and you protected your team, you would have standards. You would have boundaries. You would have limits. You would not take on every client.
If your team members aren't protected, if your team members don't feel supported, they're not going to stay. You will keep some team members, but they will not be the kind of team members that really can help you grow and scale your business. The type of team members that you really want to be around, these are going to be people that are willing to be walked all over or willing to take garbage and deal with difficult situations constantly.
I get that property management can be difficult, and I get that there are going to be difficult situations. But if you are artificially inflating that by taking on situations that you know deep down you shouldn't be, you're not going to be able to keep and retain team members as well.
The next thing I want to point out is how the cycle of suck is competitive. If you have a reputation online, then you compete with all the other such property management companies rather than being the standout. Because the good ones are all taking all the best clients and you're stuck getting everything at the bottom of the barrel. Then at that stage, you compete based on price. If you're competing based on price, that's not really a great place to be.
This is what drives the entire industry to feel artificial like there's a sense of scarcity. You don't want to be in a situation in which it feels like there is scarcity. Scarcity is what causes the entire industry to have pretty not great pricing, and property managers are not getting compensated well enough. It causes the entire industry to have a bad reputation. Most of the property management businesses in your market, it's why they suck.
How do you escape? If we reverse the cycle of suck, if we take this in reverse, and add each of the four stages, that means that you're going to qualify your clients. In the sales process, you're going to determine what are you willing to take on and what you’re not willing to take on. What do you really want? How do I build the business that I want to have instead of the business that I can build? Those are two very different businesses.
The second thing, the next step is you need to qualify the properties. What type of properties am I willing to take on? What situations are we willing to take on? What do I want our portfolio to look like? You need to be the sexy guy or girl at the bar that does not get with every property.
The next is qualifying tenants, so step three. Everybody tends to screen tenants. You know that even if you do all the tenant screening in the world, you're going to run into some issues, but you need to qualify tenants.
The best way to ensure that you're going to have really great tenants is to take on really great properties and really great owners. Even if the property is amazing, if you put a tenant into it that has A-grade credit, you've done all the screening in the world, and they are not able to get taken care of the way that they want.
The owner’s pushing back on things. They’re dragging their heels, things are difficult, it takes two weeks to get a water heater replaced. It takes over a week for the heater in the winter to get fixed. They're going to be upset and you're going to deal with a lot more stress and a lot more phone calls. Your team is going to be battered by this. It's going to be frustrating.
Then the fourth thing is you need to figure out how to play the game of reputation or reviews. You need a strategy in place for filtering. Each of these is filtering—filtering clients, filtering properties, and filtering tenants. You need a strategy for filtering out the negative reviews and getting more good reviews, which means capturing feedback proactively and preemptively before they get to the heightened state where they go nuclear and want to destroy your business online.
Also, by taking on really good clients, really good properties, and really good tenants, you're going to end up with a lot better reviews, by having a process in place to consistently get good positive reviews, which we talked about in our reputation secrets training that we have in DoorGrow Academy for our clients. We talk about how to implement a strategy of warm outreach to facilitate that and make sure that you're getting good reviews. Good reviews can be more effective than having the top spot on Google because it's going to feed you warm leads that have a really high close rate.
Then guess what happens. If you're getting really great reviews, and you have a good reputation in the marketplace because clients are happy with you and telling people about you, tenants are happy and telling people about you, and you have great properties, then you have a good reputation. You're going to attract more quality clients. You're going to attract more quality tenants. You're going to attract more quality properties to deal with in your portfolio.
I remember when I was living in Santa Clarita, there were two major property management companies that seemed to have all the doors there. It was very clear in talking with people in the community, they knew one company. They were talking about being really bad, and another company they were talking about being really great.
They had very different experiences. I talked to people that had dealt with one company for maintenance versus the other when they moved into a new property and how dramatically different it was for them as a resident. These kinds of things get around to owners and show up on their reputation as well.
Moving forward, if you want to get free from the cycle of suck, which means you need to come into your business and your sales process with a lot more confidence with recognizing that you have value, with recognizing that you are the prize that solves their problem, and you want to be more effective at sales, reach out to us at DoorGrow.
This is one of the foundational mindset things that I like to push into clients' heads to get them to recognize that you can have the business that you want. But you have to become the person with the right mindset, with the right thoughts, and with the right sales process that can have the business of your dreams. If you don't yet have the business of your dreams, as one of my mentors would say, then you're not the person that can run it yet.
My goal as a coach in this industry, in property management, is to help you become the entrepreneur that can have the business of your dreams. If we can support you in any way, if you would like some help with your business, reach out. You can check us out at doorgrow.com. Bye, everyone. Until next time, to our mutual growth.
Generating revenue must outpace expenses and the gap between the two is cash flow. Where are you at and what function do you need to focus on most to grow and scale your business, right now?
Property management growth expert and founder/CEO of DoorGrow, Jason Hull talks about the six core functions of a business. It’s a concept he has expanded based upon what he learned from his mentors, Alex Charfen and Tim Francis.
[01:22] Core Functions: Jason took what he learned, applied it to property management.
[02:14] Rate and Rank 1-5: Assess your business through the lens of core functions.
[03:16] Function #1: Lead Generation - get contact info from potential prospects.
[03:39] Function #2: Nurture - take and follow-up on lead opportunities to build trust.
[04:30] Function #3: Conversion/Sales - deal w/ objections, convince others, close deal.
[06:36] Function #4: Delivery/Fulfillment - do property management work promised.
[10:03] Function #5: Customer Lifetime Value - increase long-term retention.
[11:08] Function #6: Finances - internal cash flow, revenue, expenses, and profits.
“Finances was the additional function.”
“You cannot have all of these areas be great at the same time.”
“Your ability to convert and convince people during the sales process is a skill that develops over time and gets better and better and better the more you do it.”
Profit First by Mike Michalowicz
Welcome, DoorGrow hackers, to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others impact lives, you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.
DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income.
At DoorGrow, we are on a mission to transform property management business and their business owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.
Today, I wanted to talk about what I would call the core functions. This is a concept that I built upon that I learned from one of my mentors, Alex Scharffen, and he had what he would call the five core functions of the business.
To me, it felt a little bit incomplete for myself and so eventually in working with Tim Francis, another mentor and coach and friend of mine here in Austin, I realized there was something else missing because I was focusing on those five core functions, but still, financially, I had some challenges. That's why I was working with Tim. He's a really good financial coach. He's one of the financial mentors that I've worked with. Finance was the additional function.
I'm going to take you through these core functions and this is a way you can assess your business. As you're listening along, feel free to assess your business through the lens of the core functions, take notes, and identify each of these core functions of the business, and rate them on a scale of one to five. One being the worst, five being it's amazing.
The most important thing I think to know about the core functions of the business and recognize is that it's impossible for all six of these core functions and the six core functions to be a level five at the same time. It's impossible. You cannot have all of these areas be great at the same time. As you grow and level up the business, you're going to notice deficiencies or you're going to want to level these areas up.
There are levels to each of these six areas in which you can get better and better and better over time. That being said, when something is doing really well, other things are going to feel constrained and be a challenge.
The first function that we'll chat about is lead generation. I call it lead gen for short. With lead gen, this is getting contact info and there are lots of different ways you can get contact info of potential people that might be interested in property management or potential prospects. In general, that's lead generation, so go ahead and rate that.
The next function that you want to focus on is nurture. This is where you take these leads, these opportunities, and you nurture them, which means you warm them up or inject more trust. You create more of a relationship to warm up these leads to move them towards the next function, so go ahead and rate your nurture.
Nurture relates to follow up, it relates to your ability to warm up these leads to build trust, to build relationships, and it could relate in your business the systems and processes related to this like whether you have a sales CRM like LeadSimple or something. Whether you've got the processes built out, you've got a good sales pipeline, you've got workflow you've got follow up, maybe having a follow up assistant, or needing one relates to the nurture category.
The next category is where nurture leads them to, which is conversion or sales. This is where you're closing the deal. Number three, conversion or sales. Go ahead and rate your ability in conversion or sales. This is to deal with objections, close the deal, convince them to work with you instead of the other company they're maybe talking to or the other companies they're vetting.
Your ability to convert and convince people during the sales process is a skill that develops over time and gets better and better and better the more you do it. Go ahead and rate yourself there. These first three relate basically to the front end of the business or sales. What I will hear a lot is people say, oh, my close rate, I'm like 90%. I'm a badass at sales, but then you ask them, where are you getting your leads? And they're like, they're mostly referrals, they’re referrals. Cool.
If you have a close rate less than 90% probably and they’re warm hot referrals, you probably have a problem. That's the cool thing. If you get the right type of lead generation, nurture almost becomes unnecessary. You don't really have to warm them up. Then conversion also is largely dealt with because you're going to get the deal, you just don't screw it up.
Now, when you start dealing with colder leads and colder prospects, my goal with clients is to make sure that you are a badass at conversion or sales and that you notice if that function feels weak right now because you've started maybe focusing on colder leads, or you're just not closing as many of the conversations that you've been prospecting or working with as you want. Maybe that function is weak. We can improve that significantly.
One of the easiest ways to collapse time on these first three functions is to just focus on warmer lead opportunities instead of advertising or cold lead opportunities. Cold leads would be like SEO, PayPerClick, content marketing, social media marketing, pay per lead services like [...] et cetera. Those take a lot more time and I've talked about that in other trainings and other podcasts, I'm sure many times.
Number four, this is more shifting into the back end of the business or behind the paywall. Once they've converted into a customer, they've signed the contract, they're now a client. The next step, item four, would be delivery or fulfillment.
Delivery, fulfillment largely is connected to operations. This is everything that you said you were going to do during the sales process. This is screening tenants, working to find tenants and tenant placement. This is maintenance, coordination, everything. All the work of doing property management. That is what is included in delivery fulfillment—dealing with tenants, all that kind of stuff. Generate reports, owner payouts, all of this that's all under delivery fulfillment operations.
What I'll notice a lot in the industry—for those that are struggling to grow—is they won't have operations delivery fulfillment. They'll have number four out of five or a really high level and yet then lead gen is like a one. If lead gen is one and delivery and fulfillment is like a five, you're making a big mistake in the business because what that tells me is you consistently keep focusing on the wrong things in your business. You're doing the wrong things.
Any function that you're focused on of these six functions, which we'll finish and go through in a second, any function you’re focused on primarily and trying to maintain it to five, that is not your weakest function. That's where your time, energy, focus, attention, cash, effort, et cetera are going, you are making a mistake. That means you are distracted.
Those are distractions because what the business needs most right now is whichever of these functions is weakest, that's where your five currencies I talked about time, energy, focus, cash, and effort should be focused on. This is where all that should be going so that you can get a return and you can level that up.
The goal is to level up the weakest function, and then if that's now a strength, now your other functions will appear to be weaker in relation. Now those you’re going to rate at a lower level and you're going to want to level those up.
This is the juggle of running a company and running a business is figuring out what do I need to focus on most right now. If you are at the helm, you are the entrepreneur, you are the leader, you are the business owner, you need to provide this leadership to the business to your team. You need to help them figure out what is our weakest function to focus on.
Too often, the business owners continue to focus on the function that they're already good at, that the business already has at a five, and they try to keep it as a five. You have to be willing to let a five slip in order to get something from a one or a two, and that's okay. Get those up to a three, a four, or maybe even a five. If delivery or fulfillment, for example, operation slips to maybe a three in relation because now you're getting so much business, it's uncomfortable, you can't onboard everybody, and things are starting to slip, cool. Now it's time to shift your attention and focus to that function. If you assess this regularly on a quarterly basis and brainstorm with your team through these functions, you will be able to make really good decision-making.
The next function after delivery fulfillment or operations, number five, is the customer’s lifetime value. The customer lifetime value or CLV includes retention, it includes resell, it includes upsell, and it includes your pricing. You want to make sure that your fee structure is good. That you've got really good fees in place so you're getting paid really well for what you do. That you're maximizing the lifetime value of these clients in that way.
Also, you're able to focus on the right types of clients in your lead generation and in closing that are going to have a lengthy retention rate. You're able to retain clients long term, or you're able to convert short term property management clients, not sure short term rentals, but accidental investors, for example, into long term buy and hold investors. You have some process maybe for that.
You want to increase the customer lifetime value. If you're losing a lot of customers due to sales right now, then that's the area to focus on right now. There's a weakness maybe on your CLV, for example, or maybe you just need to increase lead generation in order to counteract that.
Number six is finances. The financial area of the business means the internal finances for you as the business owner and for the business. This means cash flow, revenue, expenses, profit, reporting, financial decision making. If you do not feel like this is your strength or this is a weakness in the business, this is something that you will need to work on.
One of the initial baby steps I like to recommend is usually implementing profit first. You can check out my previous episode with the author of the book Profit First, Mike Michalowicz. You can just search for Profit First DoorGrowShow on YouTube if you want to pull that up or on iTunes, podcast app, or whatever.
I'm a big fan of Profit First. We operate with the Profit First system. We've taken things financially beyond that to another level in working with some of the financial coaches and financial books that I've gone through. I think that's a really fantastic starting place. It gets you out of the feast and famine of cash flow cycles getting scarce, then trying to make money, and the hunt and the chase constantly of trying to escape.
The way I like to compare finances is, the analogy I like to use is Indiana Jones. Indiana Jones running from the boulder. Everybody remembers this iconic scene in Indiana Jones and I believe the Temple of Doom and he's running from the boulder. He's just taken the statue, it set some sort of booby trap off, and now this boulder is chasing after him. He's running for his life.
Indiana Jones running is generating revenue, that's revenue. Revenue has to outpace that big boulder, which is expenses. The gap in between Indiana Jones running and the boulder coming after him, that gap, is cash flow. Some of that cash is already spent so there's really just free cash is the real gap.
Some of that cash is already going to be spent, you know expenses are coming due, you have to have it set aside. Profit first is going to help you kind of get this in alignment a little bit more. It's going to help you get better cash flow and it's basic. Some of you are basically borderline accountants, so this isn't maybe as big of an issue. Maybe the finances are tight.
A lot of entrepreneurs are more visionary-oriented, they're dreamers. Sometimes they're hiring staff too quickly. They're starting to focus on some of the other functions, building up operations maybe, and they're spending more money. All of these things go hand in hand. Finances also relate to the type of lead generation that you can do, all of these things interplay with each other.
My goal for those listening to this episode is to take a look through these six lenses of your business to figure out what does the business need most right now? What does the business need most? For those that are like why does he add the six functions of finances?
One of the things that's absolutely possible in some businesses is to generate enough deals, enough sales, and enough business to where you can't deliver quick enough on it to get the return or get paid on it and you can actually run out of money by doing too much sales.
Just focusing on revenue all the time in a top-down just revenue focus goal is not always the most effective financial goal in a business. It's the most typical, but that's not always the most effective. You can actually go too fast and grow too quickly if you're not taking into account the financial aspect in relation to the other core functions.
Take a look at your business, chat with your team, go through and assess your core functions. We have a more formal brainstorming methodology that will take clients through these functions to really assess their business. At a quick easy glance at your business, you can look through and just ask yourself, where are we at in relation to these functions. You can ask your team as well to get a perspective, and you will then have some pretty good eye feedback and a pretty good idea of which function you need to focus on most in your business.
If you find that operations are a big constraint for you right now, what you'll find then is lead gen and conversion will be heavily impacted because you won't really have confidence in your product, in your service, in your offering because you lack integrity.
If you are delivering fulfillment of three or less, and you're trying to go out and create new business, you probably feel like you're lying to people by saying, hey, we're really awesome. We're the best property managers. We do a great job. When deep down you're like a two in doing a great job on a scale of one to five. All of these impact each other.
Let's figure out what's your weakest function that you need to focus on right now and where does your attention needs to go. If you could use some coaching or some help, we'd love to get you into our DoorGrow & Scale Mastermind. Reach out to us, you can check us out at doorgrow.com. You can also join our free Facebook group by going to doorgrowclub.com.
Facebook's getting a little weird lately with censorship and craziness, so we're seriously considering exploring, shifting out of the DoorGrow Club to maybe Telegram or something else. Let me know your feedback on that if that sounds interesting because I think there's going to be more outages with Facebook, more censorship, and more challenges. I'm less and less of a fan of Facebook every day.
Let us know, but currently, our internal groups are in Telegram so we're solid there because it seems to be really reliable. Anyway, reach out to us. We're happy to help you figure out how to grow your business and scale your business. We can help you with getting things in alignment on the operation side. DoorGrow OS, building these systems, building a planning cadence, helping to get operators in the business, helping to get people to take stuff off your plate and to offload. There are solutions for each of these functions that we can point you towards as we coach you and as we help you scale and level up your business, so please reach out.
That's it for today. As always, my goal is for everybody to grow. To our mutual growth, everybody. Until next time, bye.
Do you enjoy sales? If you feel like you don’t, then you’re not good at doing business development. Why not just hire someone to do it for you? You have to get good at sales to be a business owner.
Property management growth expert and founder/CEO of DoorGrow, Jason Hull talks about and answers: When are you ready to get a property management business development manager (BDM)?
[01:19] When are you ready to hire a BDM? Wait until you are ready.
[01:58] How to know when you are ready to have a BDM to gain freedom and success.
[03:08] Business Owner: Learn how to sell, close to train your BDM to be successful.
[04:04] Partnership: If you’re not willing to do it, bring in experienced and proven BDM.
[05:33] Exception: Clients with BDM invested in and values business to get results.
[07:24] Sales can be fun, once you learn how to do specific actions and get good at it.
[08:47] Level Suck: You have to do the work. You have to suck. That’s where you start.
[10:34] 4 Reasons: Live your purpose to get fulfillment, freedom, contribution, support.
[11:16] Right Type of Person: Give them your knowledge, experience to surpass you.
[12:18] Jason’s Recommendation: Do the work because there are no shortcuts.
[14:45] Sales Challenge: Figure out how to make it easy and not painful, uncomfortable.
“Sales is the lifeblood of the business. This is where money and revenue flow into the business.”
“Usually, we don’t want to do it because we aren’t good at it. When we’re not good at something, it’s not very fun.”
“You have to do the work, and you have to suck, and that’s where we all start.”
“I know what good looks like, and I know what great looks like, and great is better than me.”
Welcome, DoorGrow hackers, to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others impact lives, you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.
DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income.
At DoorGrow, we are on a mission to transform property management businesses and business owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.
One of the things I wanted to talk about is a common question I get asked and a common situation is when are you ready to hire a BDM? This question came up this week. One of my clients thinks they want to get a BDM. I've heard lots of people hire BDMs and fail. This is more common than hiring BDMs and having success. This is the default.
Anytime I hear somebody excited, they hire a BDM. BDM either quits, it doesn't work out. You may have tried to do this yourself. The challenge with this is that a lot of people tried to do this, but they weren't ready. Let's chat a little bit about how to be ready to have a BDM and how you know when you're ready to have a BDM. If you feel like you don't enjoy sales, you're not good at doing business development. BDM stands for business development manager. It's basically a salesperson in a property management business.
If you feel like you don't like doing sales, you want to bring somebody in to do this, and you're thinking, well, I suck at this. I don't want to do this. This is uncomfortable so I should just hire somebody. The challenge is sales is the lifeblood of the business. This is where money and revenue flow into the business. If you are making that mistake, you need to realize you are not ready to get a BDM because you cannot train them. You cannot onboard them. You don't have the scripts. You don't have the ability to bring them into the business in a way that they will be successful.
I probably touched on this before, even recently, but I want to reiterate that if you feel like you're not good at sales and you don't know how to do it, then your only option is to bring somebody in that is already really good and proven at this or you have to learn to do this. For most of you, that means you need to learn how to sell. You need to learn how to close. I know a lot of times there's resistance. Maybe it's that you feel like it's uncomfortable for some reason.
That discomfort is something as a business owner and entrepreneur, really, almost everything is sales in some way, shape, or form, which is just convincing people to do what's in their best interest, which is helping people and benefiting people, getting your kids to eat their food, getting your kids to do their homework. That's all sales. You have to get good at sales to be a business owner. It doesn't mean you have to be the salesperson.
But if you're not willing to do it, then you need to bring in another business owner. You're going to need to share some sort of relationship or create some sort of partnership with somebody who is a proven BDM that's added hundreds of doors to a property management business.
They will come in, but this is not going to be a cheap person that's a brand new first-time BDM who's never done this, that you can just go find somebody that knows how to do sales, bring them into the business, and they'll have success. That's not reality. You need to create a partnership. If you're really not the person to do this, you need to go find somebody that's at your level. They may want half your business if you're just starting out. If you are experienced and you have a good sizable portfolio, maybe you can bring them in some sort of percentage of the revenue or percentage of the business.
It would need to be a pretty tempting situation for them to come in. There needs to be an incentive. These are people that could probably build their own business up. I know BDMs that have added 700 doors to a business and then gone on to another business and did something similar again. These are rare unicorn people that have had the experience that has done this. If you don't know how to do this, you're not going to be able to bring somebody in that's starting from scratch and really be able to support them and convince them and tell them what to do.
Now, the only exceptions that I've seen to this, I have seen some clients come to me with a BDM. This BDM showed up and was invested in the business value, the success of the business, showed up to all coaching calls with me, got involved in the content in DoorGrow Academy, and they learned as if they were the business owner. They wanted to become good at selling, good at promoting the business, good at prospecting, good at driving revenue, and good at their job.
They were invested in it so they put in the work and the time to do it. They followed my advice and they were able to get great results. One client had, in just a short period of time, three maybe four months or less, had 300 doors, largely through creating a really good partnership with one owner that had a lot of doors, which is a dangerous situation normally.
Normally, I probably wouldn't recommend doing that. They were aggressive and they were able to start adding doors. Then they landed a partner that is going to bring to the table hundreds of doors in the long run. That's a really high level of investor.
Like I said, that can be dangerous, right? I'm sure many of you can guess why. You're putting too many eggs in one basket. That owner has a little bit too much power over you. Then later, they had to have a conversation about setting some boundaries and some clear expectations to really determine this relationship and to be willing to walk away from that relationship. They're in a position of power to be able to be a business owner instead of this person, this investor’s employee. It's possible and I've seen BDMs come in and do really great work, but it's rare. It's rare to find somebody that's willing to do and that wants to do that.
If you are wanting to go the more typical route, which means you need to learn how to sell. Usually, we don't want to do it because we aren't good at it. When we're not good at something, it's not very fun. It sucks to go play a sport like basketball if you suck at basketball. Once you get good at basketball, basketball is a lot of fun for people that play basketball.
Golf, maybe you sucked at golf, initially. If you're a golfer, once you got somewhat good at it, it'd be a lot more fun. Maybe you found a way to make it fun even though you just still suck. Here's the thing, you need to get to the place where you have put in the reps, you've done the work initially, to get good at sales, to figure out what works, what scripts to say, you have to get past that pain and that discomfort. Otherwise, you're always going to project that onto your team members.
You're never going to be able to guide them in the right way. You're never going to be able to know if they're doing a good job or not because you don't even know what a good job looks like because you haven't been able to do it.
If you're expecting to push just results on them like get these results and I'll give you a commission. You're setting them up for failure because they need specific actions. They need the scripts. They need the language. They need to understand the target audience. They need to know the objections and how to deal with those. These are the things you learn by sucking and doing the work. You have to do the work and you have to suck. That's where we all start. We all start at level suck.
If you are willing to suck, you don't suck for very long because something's uncomfortable. There's pain and you change. You change quickly. You learn and adapt. That's why you're an entrepreneur. You are an entrepreneur because you are highly adaptable. You can change quickly. You can pivot. You can learn. You may have been rejected at some point in the past. Maybe when you were young, you got your feelings hurt, somebody rejected you or made you feel small or whatever.
Now, approaching people, starting things, or initiating seems threatening and dangerous to your brain. But your brain is a liar. Your brain is lying because it's trying to protect you. But if you actually do the work, and if you do the prospecting tactics and methods that I share in our DoorGrow and Scale Mastermind and you do the work, then you're going to get results. It's inevitable. I’ve seen clients come in over and over and over again that were terrible at sales. They’re not good at it and didn't think they liked it. They learned. They learned how to be good at it.
The common phrasing I hear is, it's become like a game to me. It's become fun. It's fun when you have the skill and the knowledge to be able to be good at it and then it becomes fun. It's like playing. You realize it's not about being pushy or whatever beliefs you have about sales. It's not about manipulating people. It's not about bothering people, prospecting, it's not. You are offering them some benefit. You're solving people's problems. You are making a difference in the world. That's really what sales look like.
Sales become fun because it allows you to live your purpose and to make a difference and get those four reasons I've talked about before. You're getting more fulfillment, more freedom, more contribution, and you're making a difference and more support.
Then eventually, if you have other things that are more fun for you—they give you more freedom, more fulfillment, more contribution, more support in the business. What you really love and want to be doing, maybe it's on the operation side, maybe it's on the accounting side, or maybe it's just not sales.
Once you are marginally good at it, a little bit good at it, you can bring in somebody else, get them probably to your point. If they're the right personality type, the right type of person that can be good at this, you can give them your knowledge, help share with them what's working, give them your experience, and they will then surpass you. They will supersede you.
I have team members on my team and I've done every role that exists in my business. But I have team members now that are all better at what they do than me. I've done it so I know. I know what good looks like and I know what great looks like, and great is better than me.
I bring in people that are better than me at doing these things. I'm actually in this situation now that I have somebody over sales and marketing on my team. Now he is offloading and bringing on and we're training two new salespeople. I'm rebuilding my sales team, so to speak, and I'm no longer doing the sales. I've been doing the sales for the last little while as we launched a new product and service, this mastermind that we've had for the last year.
My recommendation is to put in your reps, do the work, there are really no shortcuts to this. If you're willing to experience that pain, challenge, or whatever your brain is telling you a story, I think you'll realize it's never as bad as your brain makes it out to be.
I've seen entrepreneurs in property management with hundreds of doors that are down about 200 doors due to sales over previous years, which is very typical of the larger companies right now. They’re feeling pain and worried that they're not going to be able to pay team members. They’re going to have to lay some people off and try to hire a BDM through a BDM placement company. Then that person spends time and money trying to get them into the situation, expecting another company to be able to train them, bring them in and it didn't work.
I've seen small companies hire BDMs and bring them in, and it didn't work. You have to do this. My recommendation is to tell your brain to shut up. It's trying to lie to you and protect you. Sometimes you have to do the thing that's uncomfortable, even though it feels like you don't want to. You need to be willing to say, [...] to your feelings and do it deep down, you know you should do. If this is resonating with you, you deep down know that you need to figure this out. You have to eventually figure this out. You don't have to do it forever. You don't have to be the best at it. If you're going to run a business, you have to be able to sell your business or services. You have to be able to figure out how to do that.
A lot of you are the salesperson, you are the BDM for your business. If you're doing great, awesome. If I can help pour a little gasoline on that fire, that'd be even better. I love being able to do that. I love being able to double a client's close rate, increase the amount of deals they’re closing, help them figure out how to get more deals at a higher price point to eliminate the scarcity that exists in the industry, and eliminate the race to the bottom in terms of price. I can help you do that.
If you are not that personality type and you are avoiding sales, you find it uncomfortable. You don't want to do it. My challenge to you is let's figure out how to make it easy, and it doesn't have to be uncomfortable. I'm really good at helping people figure out how can we make this easy, not painful, and help destroy those lies that your brain’s telling you that people are going to be mean to you, people are going to feel uncomfortable, people are going to reject you, or whatever it is your brains trying to scare you and tell you that's true. Those are stories.
You can either keep those stories, or you can get results, but you can't have both. You can't keep these stories that are holding you back from doing sales or being successful at sales. Then also try and offload the sales. Train somebody else that doesn't know how to do it when you aren't in a state of integrity or know how to do it yourself. Let's get you great at it. It's not that hard to do.
I really believe sales is all about creating trust. It's being real with people. It's caring about other people that have been so caught up in your own head, worried about what you think, what you sound like and look like, how they're perceiving you, and/ all that uncomfortable stuff. You really just need to start getting out of yourself, focusing on other people, and caring about other people. I can help you make that shift.
Hopefully this is helpful for those of you that are considering getting a BDM, thinking it's some gateway to freedom and success. You aren't ready for that gateway of freedom or success until you have all the ducks in a row to be able to really support this person so that if they are good, they're actually going to stay. Because if they're good and you don't give them the support they need, they're going to be out of there. I hear a lot of people complain about BDMs and fire BDMs. When I really dig deeper and ask questions, it wasn't probably the BDM’s fault.
They sounded like a typical effective, probably good salesperson who just wasn't given the proper support, wasn't given the leads, wasn't given the attention, wasn't given the scripts, and wasn't given the knowledge of how to go out and create a business. They were expected to just magically figure it all out without any real guidance.
Property management is a different industry than a lot of industries. Just because somebody was successful in sales in another industry doesn't mean they'll necessarily be successful in this. It means they have the capacity, but they also need guidance. If you don't have the guidance to give, reach out, and let's get this figured out for you.
Anyway, I hope this is helpful for those that have BDMs that aren't really performing up to speed or you haven't really gotten up to speed in your own role as a BDM. Until next time to our mutual growth. Bye, everyone.
When you're competing for a sale or deal to close, to get a property management contract, or to get a referral partner, whatever it is you're trying to do, you need to take things to a deeper level than your competition.
Property management growth expert and founder/CEO of DoorGrow, Jason Hull talks about three magic questions to ask during a sales conversation. When you ask these questions, potential clients will know that you care and want to help them, and you're going to close more deals far more easily.
[01:50] Pendulum Principle: There are two extremes when it comes to salespeople.
[02:21] Middle Ground: Find the middle to be much more effective and productive.
[04:16] Question #1: Why now, what's changed? Client identifies, explains pain point.
[06:54] Question #2: What’s the biggest challenge with your rental property right now?
[08:42] Question #3: What result would you hope to see to know this was a success?
[11:02] Default vs. Creative Future Close: Depends on what challenges clients want.
[15:39] Primary Goal: Most people seek safety and certainty as their higher priority.
“You have to figure out where the middle is. The middle is the greatest place of power. It's where you should be. It's the point of truth.”
“Sales and deals happen at the speed of trust.”
“A business exists to solve a problem. If they don't have a problem for you to solve, they don't need you. There's no point.”
“You are selling safety and certainty, not property management.”
All right, we are live. Welcome, DoorGrow hackers, to the DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others impact lives, you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.
DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income.
At DoorGrow, we are on a mission to transform property management business and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.
In today's episode, we are going to be talking about three magic questions. I was doing my coaching call today, and yes it's a Tuesday. It's a day early because I'm going on vacation tomorrow. We did our group call a day early and one of my clients, he was talking about sales, and had some questions related to sales, and was having some challenges going into the conversation and being confident.
I talked about a principle called the Pendulum Principle which basically—a quick version of it, we could do a future episode on this maybe—if you recognize that there are two extremes. On one extreme you could be hyper-confident, maybe pushy as a salesperson, and a little bit too much. Then on the other side you could be a little bit not aggressive enough, too docile, not ask for the sale, and not try to close them that sort of thing.
You have to figure out where the middle is. The middle is the greatest place of power. It's where you should be. It's the point of truth. You need to figure out where you are and he was on the side of being a little bit too maybe nice, friendly, but not aggressive enough. He recognized it so I said, take the step into what feels like the complete opposite, being a little bit too aggressive, because if you aim for that, you'll actually hit middle and you'll be much more effective and productive.
We talked about how it doesn't have to be mean, or you don't have to be pushy or aggressive to go for the close. One of the things that he then got into were these three magic questions. I'm going to share these and we can talk about some other cool stuff related to sales maybe in a future episode. These are three magic questions that I find to be very powerful that I use during a sales conversation to take things a bit deeper.
If you want to beat out your competition, when you're competing for a sale or a deal to close a client, to get a property management contract, to get a referral partner, whatever it is you're trying to do, you need to be able to take things to a deeper level than your competition.
Things need to get a little bit more intimate, a little bit more relationship-oriented. There needs to be a little bit more connection because that's where trust exists. Sales and deals happen at the speed of trust, I often say. Here are three questions that I use in order to deepen the conversation and take things to a more real or more raw level.
Question number one that you should ask that I brought up is, why now? If somebody comes to you and they're like, hey, I've been looking to getting a property manager. I've had this property for many years, or hey, I got one of your mailers and it's from a year or two ago. A really great question to ask in the sales process.
For example, if you've been listening to my podcast for many years now, and then you get on a sales conversation, you're like, hey, now I'm interested. A great question to ask is, why now? Why now? What's changed is kind of the additional part of that. Why now, what's changed?
You've been looking at doing this for a while, or you've obviously had this property for a lengthy amount of time. What's changed recently that's caused you to be interested in property management? Or why now are you looking at getting a property manager? What's changed? Help me understand that.
That's where really deep stuff tends to come out. I've heard crazy why now responses from potential clients. I've heard things. I had one potential client say, I'm dying, I have this health issue, and I need to get this business healthy and ready quickly for other people to take ownership of it.
I've had people say that they just recently got divorced, so now they're looking to make a move, change things, and improve the business. You never know what's going to come out, but when you give them the opportunity to tell you, well, hey, something must have happened recently because things have changed. Why now?
Even just saying, why is now the time for you to do this? They shift into trying to explain, well, this is why it's important to do this now. Just understanding that is going to reveal some pain. In sales, to close deals, you need to know what pain or discomfort they want to move away from and what pleasure they want to move towards? Where's paradise for them?
If you know those two things, that's really the crux of all you need to know in order to close the deal. Can I then help move them away from that pain? Can I help them move them towards that paradise that they want, that pleasure that they want? If I can do those two things, then all I have to do is future pace them and paint this roadmap for the future in which they can do that.
The next question I love to ask that is relevant to uncovering the pain is the biggest challenge. What is your biggest challenge in dealing with this rental property that you're experiencing right now? I would usually ask, what is the biggest challenge you're experiencing in your property management business right now?
Cool, I can help you with that. I've heard it before. I've dealt with hundreds and hundreds of property management businesses, gotten to see on the inside. It's rare that I ever hear a problem that's new. You probably have heard of all the same things in property management, all the similar problems. You're probably not going to hear anything too new from an investor, so can you solve that problem? Yeah, you probably can. That's why a business exists to solve a problem. If they don't have a problem for you to solve, they don't need you. There's no point.
If I have somebody come to me and I say, well, what's the biggest challenge in your business? And they say, well, honestly, our business is really great right now and I don't have any problems. I say, cool. I'm totally open to that. I don't know how I can help you then.
Then I might ask a follow-up question, well, why are we talking? How do you think I might be able to help you? Well, I was thinking maybe you could do this and help me do this. Okay, cool. Maybe I can, depending on what they say. You need to figure out what the challenge is, the pain, or the problem. What's the biggest challenge you're dealing with right now with this rental property with your tenant, or with your investment portfolio? That's a really powerful question to ask.
The third question that can be incredibly powerful is what I call the crystal ball question. This is a question that is helpful for creating a potential future and future pacing a client that includes you. The crystal ball question usually looks something like this, usually, you're going to use the one-year timeframe. Maybe you even use three or five years, depending.
The crystal ball question would look like this, hey, Mr. Owner, let me ask you a question. Just thinking about the future, if we were to work together a year from now, looking back on this moment, if you signed up with us a year from now looking back, what would have had to have happened for you to realize this was a great decision? Or what result would you be hoping to see to know that this was a success?
Then they start to use their imagination, which is powerful. They start to imagine a future. They're imagining they signed up with you because you brought that into the conversation, and they're imagining this potential future timeline a year from now that exists with some great result. There's enough time to get to a result. They're imagining that you were a contributor to that, and so they're creating all of this in their head.
The brain's super powerful. It's an amazing supercomputer at doing this kind of thing, so they're going to imagine this and then they're going to tell you what this is, what this looks like. Which is basically saying—you're just asking—how do we know that we can help you? What does winning look like if we were to work together? What does that look like?
They might say, we're getting all of our rent collected, finally. We've got great tenants in place. The properties are all updated. Everything's going great, blah, blah, blah, blah, blah. You can then say, that sounds awesome. I'm confident we can help you do that. Let me share some stories or examples that are similar to that we've already done so you can see this can be a reality for you. We've created this reality for other clients.
I usually call that close the default future close versus the creative future close. The default future, this is what you're going to continue to get more of—more challenging tenants, more situations like you've dealt with. You mentioned these things that are challenging.
If you do not work with us, this is probably what will happen or maybe they've had bad experiences with another property manager because there's a lot of sucky property managers out there. If they mentioned a bad experience when you're asking these questions like, why now, and what's your biggest challenge. You say, hey, well, you can continue to go down that path and choose another bad property manager and another bad one, or you could work with us, and here's how this would work out differently.
First of all, we're not going to do custom reports for you and we're not going to let you micromanage us, so we're not going to do things the way these other companies worked with you because you're trying to run them from the back seat. We are going to be in control and in the driver's seat in helping take care of this property, and that will allow you to trust us more. We're going to take ownership of this and we're going to be really good at this. This is what we do for clients that are in your situation.
They're going to go, cool, and they'll say, but I want this. You'll say, we are not going to do that custom report for you and here's why. We're not going to do that for you and here's why. Or there's a fee for this, or there's a fee for that.
Once you explain why they're going to go, oh, this person is on top of stuff. They know what they're doing. I can finally relinquish control and give up all that safety and certainty I'm trying to force to create in them. They're going to just provide it for me. I can trust them, and I can lean into their frame that they're going to do a great job and provide good service.
If you know why now, their biggest challenge, and the crystal ball, you've asked those questions, you've got those answers, if you know that, you should have a pretty deep conversation with them and really understand how you can best help them. If you connect that to other tactics I have like the golden bridge formula and other things to create trust beforehand, you ask really great qualifying questions, this should be very easy for you to create a relationship with these people, if you want it.
Anyway, that's my tip for today is to ask those three big questions. Start asking, well, why now? Very easy to ask. Why are you doing this now? Why didn't you do this a year ago? You’ve had this property for a while, why are you doing it now instead of later this year? Why is now the time to do this? Why now? You'll get really interesting answers.
Ask what's the biggest challenge that you're dealing with right now because that's going to help you understand their current immediate pain. Maybe there isn't anything really major or really immediate, but help them that you could go deeper and say, well, what challenges have you dealt with that you don't want to deal with in the future?
Then the future pacing question is a crystal ball question. Looking forward, if I had a crystal ball or you had it and you could see a year from now and you would sign up with us. We're working together and we've done a really great job, what would that look like to you? Where would you be a year from now? What would your life look like? How would that be different with us having been a part of it?
Hopefully that's helpful to all of you listening. I hope that you find those questions as useful as I've found them to be in the sales process. These were born just out of a real desire to care and take care of my clients, to really understand what they were going through, and figure out how can I help them, what do they need, and can I help them.
When you start to ask really good questions like that, they will know that you care, especially if you're coming from a space of wanting to help them and you're going to close more deals far more easily. Because a lot of companies are spending way too much time trying to sell property management and they don't give a [...] about property management. They don't care about you or your business, they care about what they need, they care about their pain, their challenges, what they want, and outcomes they want.
If you can help them see that you can help them get out of the pain and get the things that they want, they're going to want to work with you, they're going to want to sign up with you, they're going to feel safe with you, and trust you. Remember, their primary goal usually is safety and certainty. That's more important than the four reasons, which I talked about in a previous episode of fulfillment, freedom, contribution, and support. They want safety and certainty.
After that, then they would like those things. But for most people, safety and certainty is a higher priority. That's why they want and get a property manager. You are selling safety and certainty, not property management. Just make sure you get that.
That's it. Hopefully this has been helpful, and until next time, to our mutual growth. I'm Jason Hull of DoorGrow. Reach out if you would like some help growing and scaling your property management business.
Quickly, just got off the phone with a past client, he was like, are people losing properties like doors due to sales right now? I said yes, everywhere, but not the clients that are in my mastermind, which you should join. The clients that are in my mastermind, one of our clients has added over 200 doors since joining in November. That would be impossible by spending money, doing advertising, doing SEO, doing pay per click, doing content marketing, doing social media marketing.
We would get you doing things that actually work that are far more effective and it costs him nothing. It actually took him less time to get those doors on than it would take if you spent a whole bunch of money on cold lead marketing because then those cold leads take more time than warm leads and you get less results.
If you would like some great results and you would like to start adding doors, scaling your business, getting out of the day-to-day operations, having more fulfillment, more freedom, more fun in your business, reach out. I love helping clients get that. That's what I live for. That's what I get to do every day. I love doing it, and we would love to help you grow your property management business. All right. Bye, everyone.