How many PMCs do you know that manage 4,300 SFRs in just one market?
Gregg Cohen, Co-founder of JWB Real Estate Companies is a triple win-driven property manager who does things DIFFERENTLY.
Gregg and JWB have a podcast, a 3,500 person Facebook group, they don’t use PM accounting software, they collect and pay out over 99% of rent to investors, and about 47 other unconventional results and processes that produce results.
Listen as Gregg shares lessons he’s learned along the way, and
Listen to Gregg Cohen’s podcast, Not Your Average Investor.
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Hosted by Andrew Smallwood and Laura Mac
Featuring Gregg Cohen
Produced by Andrew Smallwood, Laura Mac, and Carol Housel
Edited by Isaac Balachandran
How great would it be if we could have our business supported by our property management income and then our repeat sales? What if I never had to sell another property to a new client? How much strength would that give me going into other opportunities, or even if there was a change? Even if clients all of a sudden hated me tomorrow?
Right new clients hated me tomorrow, and I never could bring on another new client? How much? How much strength does that give us? And so that's something that we've really, really tracked. We're not there yet. We should be there this year. And we're really excited about that goal.
Welcome and hello, Professional property managers. Andrew Smallwood here, host of the Triple Win Podcast. Great to have you here. Thanks to so many of you who contributed some great questions for Greg. We're really excited. He's here with us today. I've got a whole page of notes here of questions that I hope we can get to. We have more of these Triple Win lives going on.
We had one with Todd and Bob Hanson on security deposits. Tons of great feedback. If you were on that one, we'd love to just see in the chat you know what you thought of that. We got a ton of great feedback, a ton of five-star reviews, people really liking this and liking this format, and so we're going to keep it going.
We've got two more lined up for the month of March that is actually going to be covering insurance. So of course it's going to be Triple Winsurance is going to be how we cover that one. And later, in March, we're going to have Bob Preston, past president of California, Northam joining us, and a number of topics we can get into with Bob.
We'd love to hear your questions for him and we have mine. More to come. Let us know what you want to see. Let us know what you want to hear. This is all for you. It's why we're doing this. No commercials, no ads. We're just rolling and trying to bring value to everybody here who's elevating their game and professional property management.
So with that, I will give an insufficient intro to our guests, because if you're here you saw a number of the things that we highlighted about Greg. He's not one to highlight himself or pat himself on the back, and he's quick to talk about the incredible team that he's built around him and a great group of people. But I will say a couple of things to highlight for those just listening in for the first time.
There's a family of companies here and JWB Property Management manages over 4300 doors across over 1000 clients. They've got, I think, clients in 49 states and a dozen countries. We're going to get into the makeup of that portfolio. People are asking about that. And Greg himself is an investor. And Greg, I'd actually like to ask you because we weren't sure how many SFR properties do you personally own or the JWB folks?
How many do you guys personally own?
We own over 300.
300. So listen, meaningfully personally invested into SFR has been doing this and just built a great reputation. There's so much I'm excited to cover about how they market. They've got a Facebook group with 3500 plus people in it, a podcast with 170 plus episodes. One understands the thinking that went into that what's working there. And they've got really great content, what I would call IP developed that's kind of unique to them, how they frame and talk about things is really interesting and what I think Pablo want to want to Greg's friends and partners would call category design and their approach to the industry and point of view on the industry so much we're going to cover here and just so many interesting things. The last tidbit all week is, Greg, your team got off of kind of the standard app folio property where a real page off the shelf products and you guys are on your own instance in Salesforce, I believe is what you guys are using, not typical. So people have questions about what systems in tech and what motivated you to do those things, what kind of things you're able to do as a result of that.
Hopefully, we can get into all of that and you had a question, Greg, of Hey, owning 300 Single-Family Rentals, it sounds like you're really involved in the buying and selling. You're willing to buy products from people who are looking to sell them out of your client base. And some people's churn, you're turning into the deal flow, it seems like, which seems like really smart on its face, excited to dig into that one.
And also potentially the other way around, willing to also sell product to help investors meet their goals. And I know you're curious why other folks haven't done more of that. Some people shared some of their questions about financing, about conflicts of interest. And so we can dig into that and maybe offer some people who are looking to get into that some help there.
So listen, I got to cut myself off at some point, otherwise, I'll just keep introducing Greg until the hour is over. But Greg, I just want to say thank you for being with us and thanks for taking the time today.
My pleasure, Andrew. It is amazing to be hanging out with you because whenever I'm hanging around you, my head just like inflates. You say all these wonderful things. You're so smooth and I really appreciate the opportunity to be here with you and with the community. I mean, what a community we have here at your point. I mean, it's amazing.
So I'm really just happy to be a part of it and hope to answer questions and create as much value as I can for everybody here.
Awesome. And, hey, you bought me just a minute to pull up the chat. We've already got a question. Like, what if we don't remember our questions? Don't worry. We got 30 in an Excel spreadsheet. Over here. Go check out the Facebook post in the Troponin Property Manager Facebook group to find your questions if you've asked them previously. All right.
Greg, we're going to dove right in. So under the banner of how you grew to 4000 doors, I'm going to pepper a couple of questions and then just let you kind of talk around this so people can get some color painted on that number in some context. Can you do a little breakdown for us of that 4000 plus properties?
You mentioned 300. So call it 4000 left that are other people's properties. JWB you accidental versus intentional investors versus insta to channel capital billed for rent versus scattered site. And you know like your top five clients. How much of it is concentrated there versus spread across the other thousand plus clients have. Can you just give us a breakdown of what the portfolio looks like and your client base?
Yeah, absolutely. And I'll kind of go timeline for when we started in business and kind of when we kind of took some leaps when we started in 2006, our intention was never to own a property management company We were like most investors when you're, when you're just starting out in and in the beginning we were dealmakers, we wanted to buy the asset and we believe very much in the value of holding on the long term.
So in the beginning I have three business partners, so the four of us bought about 40 rental properties in 2006 before the Great Recession. So we bought at the exact wrong time, but we learned a lot through that first 40 units and in the midst of doing a lot of other things in real estate and seeing a lot of them not work out because of the Great Recession and lose a lot of money and trying to flip high-end homes and wholesaling and anything that you name we tried.
What we really zeroed in on was creating the same experience that we had as you know, 23, 24-year-old kids at that time being able to build up a portfolio for ourselves, understanding how financing works, understanding how effective property management works and create that same experience for others. So in the beginning it was our 40 units from that realization that that was our hedgehog.
That's what we wanted to be great at. We then tried to replicate that experience and perfect this experience for others, which became the turnkey model, which means of course that we buy the asset ahead of time. We then either build a home and new construction home or we renovate one, and then we fill the home with a resident and then sell that house to the end client.
And we operated only managing properties from clients who bought from us up until about three years ago, four years ago maybe. And then we made a shift. So if you take I mean we were probably at about 1500 properties, 2000 properties maybe under management, and that was from 2006 till 2008 Call it somewhere around there. And that was all clients.
We would, we would say no to managing any properties from anybody else. And those are all mom-and-pop investors every day. Investors actually intentionally do not serve institutions because they don't seem to get our value proposition. We are all about this experience. We're all about this relationship. And that's not something that they hold in high regard.
So the value just doesn't meet the cost. And so they've never really been a client for us. We don't manage any institutional homes. It's all Mom-and-pop investors. And then in 2018, we realize that in order for our entire business to create security, we had staff, probably 40 or 50 folks at that time and we knew that our staff was going to be growing.
We care a lot about our culture and it was a strategic decision for us to go and accept all forms of clients in terms of folks who would bring properties to us that they didn't buy from us. That was a very difficult decision for us because we knew we would have to be flexible in a lot of places that we weren't flexible before.
But we realized that in order to secure our business through multiple market cycles, we wanted to have that additional recurring income that property management provides. And once we did that, we opened it up to outside clients, and we also started to acquire property management companies. We've purchased four property management companies since then totaling about, uh, she's probably about a thousand units from acquisitions and then the remaining has been continued growth of our turnkey business, which is our, our hedgehog, and then continuing to accept outside clients.
And that's how we've gotten to 4300 overall about 25% of our inventory is managed by what our, what we can call outside clients, those who do not purchase from us.
Thanks for that breakdown. And you know, talking about your typical client, I guess, how do you guys define your ideal client and who you're working with today? The turnkey model, are they starting with one like are you taking a lot of people from zero to one? Do some of them have a couple of properties that may be outside the market and you're getting them interested in Jacksonville and so you get them into their first one in Jacksonville.
Can you tell us a little bit about the different groups, how you think about them and your profile and what your approach has been there?
Yeah, absolutely. If you ask the vast majority of our investors to describe themselves, they would never describe themselves as real estate investors. They would never describe themselves as experts in the Jacksonville market. These generally are everyday people who have had an interest or a desire to invest in real estate, largely because their other asset classes aren't exactly performing the way that they want it.
And they've seen or had some education and understand that there's an opportunity in real estate, but they've never had the team to support them. To make this experience easy. And so it is largely entrepreneurs, busy professionals, lawyers, doctors generally middle to high-income earners who are very busy and are open to alternative assets. Once we have that type of population reached There's a lot of education and a lot of hand-holding and a very slow and methodical sales process that we put in place.
You know, we love sales just like everybody else. Fast sales are great for cash flow. But at the end of the day, we view that there's a risk to the long-term relationship with that client. When you bring a client on who's very transactional and doesn't really get the full relationship because as we all know there are professional property managers there are a lot of expectations that need to be set and molded along the way.
So we go very slow. But yes, to your original question, we are largely taking folks that know nothing about Jacksonville have a little bit of insight into what real estate can do for them and a ton of education to get them to the point of buying their first one and then helping them get to three, five, 1015 properties in their portfolio.
I want to come back to how you're educating them and again, the podcast Facebook group content. And so I want to I'm not going to forget that. I'm going to come back to that because I think that's going to be valuable for a lot of people. But I just want to dig in here a little bit more. You talked about acquisition and merger, what came from there.
And we had a question from Matt Handy come in and it was from zero to a thousand, 1000 to 3000, 3000 to where you are today. What stage was like hardest? What stage was easiest? How how do you think about your journey and the difficulties and, and what's gotten easier?
I would think, to two parts being much more difficult than the rest from zero to 300. It's tough for every property management company because many of us lost money during that time. Right. The overhead that you need to support it unless you're just doing everything by yourself is probably more than the income you're earning when you have 100 units under management if you do have some support staff and systems built into it.
So we certainly you know, lost money in the beginning for a certain number of properties. Call it 200, 300, I can't really remember. So that was very difficult. It really tested our mettle in our long term belief in this model, and it fortified our belief because we, of course, believe in the long term value of the real estate, but we could have accomplished similar things that we feel like we're accomplishing now and not taking property management in-house and not taking that risk.
So it fortified our belief in the long term in the team that we were going to build and the vertically integrated business we were going to build by knowing that we were going to lose money. And diving into that for the very short run in the beginning. So that was tough. I'm sure many of us can relate to that.
You know, let's call it after 300 to about 1500 property management became easier for us. We had staff, we were making money, it was paying for itself and we were bringing on a very molded client, right when a turnkey client buys a property from us because we have such a long sales process. And when I say a long sales process, it's typically for calls, it usually is about a 20 to 30-day process of multiple phone calls, demos setting those right expectations before we'll even show them a property to purchase.
Because we do that, we have really wonderful clients that we love and they continue to buy many, many properties from us because we have a plan in place and we have really great customer service. So I remember 300 to 1500 being easier when we made the switch to open up to outside owners. That was a painful time for us to it was at that point we probably had maybe 60 people on staff.
We had different layers of management internally that had been trained under one type of client, which was the turnkey owner. And it was that is very different than calling it normal property management. So there was a lot of reeducation in of what the goal is and how the goals for an outside owner would be different or differ from a turnkey property management client.
It's a reeducation that was also the time that we leaned into Salesforce and that has been an incredible decision for us and has paid dividends and will continue to pay many, many dividends going forward. But it has been really painful and so there was a confluence of those things going on. Oh, by the way, while we were buying two of our property management companies that we were bringing in probably six, 700 units at that time.
So that was a tough time. That was a tough time for our team and it was tough for different reasons. But I think we learned we learned the right way to do things like that to the team. And really the big takeaway from that last tough time was while the numbers might make sense for an acquisition, we have to factor the team more into the equation.
And all we did from that point is that we said, listen, if we're going to take down that next portfolio of properties and that next book of business, the numbers have to be better. It has to be so much better. And we have to build an extra support staff to be able to handle the transition. But we've made it through that time, and we're certainly stronger for it now.
And so we get really excited when we see opportunities to buy books of business now or take on outside clients now. It's a really wonderful time to bring bringing business in specifically for outside clients on par now with bringing turnkey clients and we get excited about both.
All right. I'm going to ask one more follow-up question because I promised Janet Fields that I would, and then we'll open it up for some other people that just be brought up. Laurel starts queuing them up. So I guess the question I would have, Greg, is I know you guys set annual goals. I'm guessing you guys have a clear goal for the end of this year where you'd like to be from a property count, from a client count standpoint.
And if you could share a little bit of that and also, you know, maybe even a couple of years further out ahead, what you see as an executive and leader, your vision and how you think about is the potential for size of a property management company and unit count client count, etc.? How do you see the potential?
How do you evaluate the potential and think about that and what your opportunity is and how quickly you can get there as well?
I'll tell you what, what really drives us in terms of property management, right? It comes from the idea and the understanding that markets are cyclical. And we understand that while the market is on fire right now, you name some time period in the future, it's not going to be that way. It may be a recession, it may be a crash, it may be a correction, it may be a soft landing, may not go down.
Right. It doesn't typically go down, but something's going to change. And if you can have businesses that are thriving in counter markets, then we feel like we are really set up for success no matter what gets thrown our way as a business. And that was the big realization that we had three years ago, four years ago, to go very big into growing our number of doors under management and expanding beyond our typical clients.
And so for us, we look at the number of turnkey sales that we have, and last year we sold about 500. We'll sell somewhere around that same number this year, but one of the goals we have always had is how great would it be if we could have our business supported by our property management income and then our repeat sales what if I never had to sell another property to a new client?
How much strength would that give me going into other opportunities? Or even if there was a change, even if clients all of a sudden hated me tomorrow, right? New clients hated me tomorrow, and I never could bring on another new client. How how much strength does that give us? And so that's something that we've really, really tracked we're not there yet.
We should be there this year, and we're really excited about that goal. As far as the number of properties under management, two years ago, we set out a goal to get to 5000 we really rally the team around that, so we don't expect to be there this year. We expect to be there next year. I think by the end of this year we're going to be around 40 640 700 properties under management and then that's not counting on any additional property management purchases, any books of business where we're open to do numbers work.
So 5000. And then I just think it's I heard you say, hey, just looking at our existing client base and helping investors go from one to two and two to four and right. That, that, that's an important part of the growth strategy and what you're focused on. We got a couple of questions in the chat. So I think we're going to bring up Will, we're going to transition to a different topic here.
Yeah. Greg. Hey, I was just curious, when you're looking for your investors and purchasing properties and selling them what kind of cap rates are you looking at for.
As an investment strategy for them, that's going to work for you and keep them happy and all that right now? Yeah, absolutely. When it comes to pricing our assets, you know, most investors, most of our competition feel like they have to have the highest cap rates and the highest cash on cash returns. And we feel very much the opposite.
We don't really feel like we're competing with the dealmakers out there. We really feel like we're competing with the other asset classes that our clients might be putting their money in. And so you know, our assets need to be on par with what the stock market tends to deliver over the long haul. And if we can have a diversified approach, which we get in real estate and we can have an experience that's really easy in real estate and we think we can win and that people will see really a lot of value in it.
So whereas other people feel inclined to offer seven caps or higher in this market or ten or 12% cash on cash returns, we don't really feel like we have to. Our returns are between seven to 9%, and that includes tax savings and principal paydown included in those figures. So if you wanted true cash on cash return, our cash on cash returns are 1%-2%. And we spent a lot of time teaching people about the five profit centers in real estate because, you know, cash on cash and net rental income is really only one small part of the reason to invest in real estate. So there's a lot of education there. But yeah, if you went to our website and looked at the properties, which all of you can do, by the way, if you want to go there, you can check it out for your four for free reference there.
You can go to JWB inventory dot com, not to put your information in or anything you can just go to JWB inventory dot com and check it out. You'll see between seven and 9% for a conventionally financed purchase and that doesn't include the appreciation factor in our growth. Thank you. My pleasure.
Thanks for your question, Greg. I'd actually love if you could talk a little bit about the five profit centers because this is something you promote and it starts to get into educating and talking to people about your point of view on real estate. Know, maybe you could talk a little bit about the five profit centers, lay those out and how you teach that and describe that as well as how it plays into your point of view of you've got to buy and hold for a full cycle.
You got to do some of the things that you guys really stand for in your approach to investing in real estate, that would be great.
Yeah. And I just think this can help so much as property managers if we can help communicate some of these things that our assets have that these other asset classes don't, you're really going to help create a lot of trust credibility value for your clients. And if some of you choose to sell properties to your property management clients, it's going to help you create a lot of income, and my experience doing that, you know, I've been investing since 2006 in the beginning.
Nobody ever talked about these five profit centers, which I'll share with you you've got net rental income or positive cash flow. You've got tax savings, which is the ability to factor in depreciation of the building, which offsets your income and reduces your tax burden every year. We can go more into that if you guys would like, but you've got tax savings as number two, principal pay down, which is this beautiful thing that we all get to see every single month where you're resident is paying the loan down.
For your clients and for you who are investors as well. So principal pay down-home price appreciation, which we will need to dove in a little bit more here. Because it's largely misunderstood. And then the fifth one is inflation hedging. And almost nobody talked about inflation hedging six months ago or a year ago. And now it is all over the news and it's largely misunderstood as well.
So the more that we can kind of rally around helping people understand how much inflation is a thief and inflation erodes your wealth and how real estate helps you retain that wealth even in inflationary times, then you're really going to create value for folks. Right now, the Consumer Price Index, which is what the government uses largely to monitor inflation is at seven and a half percent, and that's the highest it's been in 40 years.
And so the ability to help people get into an asset that is largely tied to inflation, meaning as inflation happens, your rents tend to go up and your sales prices tend to go up, which is what we're seeing in the marketplace is really, really, really going to help people retain wealth in inflationary times. So I think I got a little bit off-topic.
I think I said the five profit centers you have to remind me, Andrew, what was the original question? Sometimes I just start telling.
That was where we wanted you to start. So that was a good break down there. This is something you talk about a lot, right? This is not something you talked about one time or it's sitting on a page behind a link somewhere. It's something you're constantly talking and educating people about and for strategic reasons that I think you start to layout there.
Can you talk a little bit more about what are some of those strategic positions or strategic opinions or points of view that you're educating the market to that you feel are critical where and when people say, yes, I see the value of a vertically integrated real estate partner in a company, and that's I'm going to make the choice to categorically work with that versus a different type of company?
You know, the same thing with how you're approaching just different education. You're doing different things that are that if my customers believe this if my prospects believe this, they're highly likely to work with us. What are those things for you and JWB?
I'll start with a few that are probably the most misunderstood, understood things that equate to instant belief in our asset class here. One of the things in Andrew is you know Pablo really well. Pablo is my co-host on the show that we put together. Pablo is a good friend and Andrew and Pablo and myself, we're kindred spirits.
When Pablo and I started this show two years ago, he was not a client at that point. And he would say to me, Greg, I've got all of my friends and you know, I'm starting to get interested in what you do in real estate, but I have a hard time communicating to them why this investment is better than the stock market.
And I was like, man, this guy has been literally listening to me every show. It's twice a week for an hour and a half, and we have hours of other time planning for the show each week. And I go on runs with him every Tuesday and Thursday morning at 5:00 in the morning, and we talk about this stuff and I'm like, if this individual who is more exposed at what I'm teaching has that question, I'm doing a very poor job of communicating the value here.
And so I think the most misunderstood thing here is that people only focus on cash flow when it comes to rental properties and they say, Well, jeez, why would I invest in real estate and rental properties? If I'm only going to earn $100 a month? I can go in the stock market and earn much better returns than that.
Why would I take the risk of this being a terrible experience for $100 a month? It's not going to change my life, and they're missing the point. And so what I shared with him is, again, there are five profit centers in the stock market. What we talk about is largely over time, you're going to earn between seven to 9% of your money annually.
But what we're talking about is stock appreciation. We're not talking about dividends or cash flow or tax savings or inflation hedging or anything. We're just talking about appreciation. But when we go into the real estate space and rental properties, for some reason we don't talk about appreciation. All we talk about is this cash flow and then we diminish cash flow and we say it's not enough.
On the stock market, you typically don't get cash flow. So what I shared with him and it was not a moment for me on the show is I started sharing with people that like, let's compare apples to apples in the stock market. All you get is appreciation in real estate. If we talk about what historical appreciation is, that equation starts to change.
So our returns are between seven and 9%. But that's not including home price appreciation in a market that appreciates, let's say, 4% each year, most people think well, that's an additional four points of return. For me, that's an additional 4% of return. And they'll say, well, jeez, it's largely like the stock market, but that's not really what's happening, because in real estate, we have this incredible opportunity to get smart debt, and that is a game-changer for real.
Estate, because when the market goes up 4% in real estate if you only put down 25%, then your return on investment from that appreciation is actually 16%. So you take that 16% and you can add in the other profit centers which are let's call it seven to 9%. You're not at what the stock market is doing when you count all five profit centers.
Stock market largely seven to 9% in real estate, if we compare apples to apples where we're 23% or 25%. And when I shared that with him and we continue to share it over and over and over again and we show people how this works on the show, we do it every week. At least one segment of the show is devoted to this.
It takes a while, but people started to get it and that was probably the number one missed misconception there.
That's great. We had a couple of questions actually come into the chat privately here, and one of them looks like they're asking me to ask this one. I've got a question from Jen. What strategies do you find most effective to educate potential clients? And maybe a way you could answer this is where are you doing that? You know, how are you doing that?
What are some of the decisions you guys have made, approaches that you're seeing working best for you?
So and like doing this for a long time and it's been my passion and my mission to kind of share what we have long believed in real estate with everyday people because I think you can help them. And, you know, as I think about how we've built up our client list, we have over 1300 clients now as I think about how good of a marketer I have been in the past, I would probably rate myself middle of the road, right?
You know, 1300 clients across 49 states, 13 countries. Right. I think that that sounds impressive, but, but in reality, I have been really good at making relationships with other folks and been really good at earning referrals, and really good at growing the business that way. And, and I just think that's not really being a marketer. So you know, prior to two years ago, I don't really think I was that great at framing.
I don't really think I was that great at marketing. This is all kind of come to me like in the last two years, you know, I think we all have points in our careers where we thought we were probably better than ourselves than we really were. And that's kind of how I would describe myself for the first kind of maybe 12 or 14 years in this business.
We had really great relationships where folks would come to us by way of referral we would treat them like gold, and they would continue to buy many, many properties because they liked us. But I just say that to kind of build this up because in the last two years I really had to take a deep dove and look at what I could do to be a game-changer in my business.
Kind of had that epiphany that I don't feel like I was as good as I thought I was. And I said, What are the things that have always driven more sales for us, and what are the things that have driven the right clients, those clients that you love to talk to, that ones that trust you implicitly and buy a lot of stuff from you?
Like what has always been that calling card? And what I rallied around was when people spend time with my team, they end up buying our stuff and they end up buying more of our stuff over time, and they end up becoming the best clients. When they spend time with our team. So then my next challenge became, I've got 80 individuals in my office.
I can't have them run out and go take everybody to breakfast. Who puts a lead-in at our website. I have to do this efficiently. How can I do this efficiently? Right? I only have a sales staff of two folks, two guys who sell our properties like they're busy. They're on the phone all day, right? How do I do this?
And so what I rallied around was kind of what you guys see here. It was this concept of the show. It was this concept of community. It was this concept of being there with people who are either clients already or have had that interest and just simply being their face to face. And it goes beyond just doing a podcast for me, right?
Like it is this experience that we're seeing right here right now that is really, really valuable for people. And it takes a lot of time and it takes a lot of work, but it is absolutely been the number one marketing strategy I've ever done, and it's worth every bit of time that I put into it every single week because our sales have skyrocketed right I've created more and more consistency in the types of leads that are coming to us and the quality of leads that leads are more conditioned to close, and they're better leads they're better clients later on, especially to.
Right. And it's not just because of the show is because of my team is why largely they're better clients. And in a buy more from us. But the show continues to help with that later on. Right. We've kind of created this community for people who take an hour out of their day every Tuesday and Thursday we'll have 30, 50 investors that show up into the show, and it's become half as much half of it as maybe the guest that I'm bringing on and half of it is just the ability for everybody to have friendships and to be a part of a community.
And so much so that now there are live meet-ups that are happening all across the country where clients are hosting meet-ups of people that they met in our show. And we're having ten, 15 people get together and I get to pop in and do like a virtual call and, and just say hello to everybody. And people are having fun and we buy all the food and the drinks and everybody has a really good time and so that sense of community is something I never understood in the past.
I think it's been more on display because of COVID as well. It's more important now. It's more acceptable to create a community. This way, and it's something that I think would be a game-changer if you are willing to implement that in your business as well.
Greg Dude, I'm like vibrating over here I'm so just invigorated by what you just shared, and I hope it's as inspiring for others as it was for me to hear, Hey, like From Zero, started a community, started getting people connected to each other and day in and day out you showed up and consistently brought value education to this group.
And I want to ask because, hey, it's easy when you're 3500 members into a Facebook group when those people are connected with each other multiple times and they're getting together in person, right? And like here we are now like, fast forward, here's the amazing things happen. And that's got to be very motivating. Encouraging. You got so many results to keep you going at this point, but I have to imagine there is a period of time where you were running in the dark a little bit and you had some faith that if I consistently do this, it will payout.
And I'm just curious what were some of the early signals that you saw that told you, I'm going to keep doing this? What were the things you did and focused on as a point of encouragement along the way that kept you going in this community-building type of effort?
Yeah, that's a great question. It's you know, I certainly didn't look to the number of downloads on my podcast or the number of people who showed up life as an indication of early success. If I had banked on that and made all my decisions on that, this thing would not be getting off the ground. I went into it with, I think, realistic expectations I went in with a long-term view and I said, I'm I believe this is the right thing.
I'm going to lean into this thing for at least a year and I'm not going to do anything other than lean in fully for that year. And we're going to see how this shakes out. One of the challenges with this, which is also the reason that it works is that it's hard to track. It's almost impossible to track.
We've got some metrics that we track that we've established really over the last few months that I think are the best thing that we've come up with yet to track. And I'm happy to share with you if you like. But the reality is there is a lot of feels as far as how this is working because when the sale comes in and you look at the lead source, it says website or online traffic or SEO or however you tag that it doesn't say I watched episode number one 32 of them, not your average investor show.
Right. So and there are 80 other people on my team who have some impact in driving that sale, whether that is our front end salesperson, our closers or our client service team who's responsible for repeat sales or property management team who just did something amazing to renew a resident or whatever it is. So it's it is not directly attributable.
And I think that's also the beauty of it because people love to be a part of a community and not be sold. People like to be a part of something to learn to get value. And then they want to raise their hand and take that action. And, you know, it's, in the beginning, it was largely based on feel we would track the number of attendees and luckily that went up.
Now, when I started it was January 20, 20 right before COVID and so. February 20, 20. I still didn't have a lot of people showing up. I had like five people. A show would show up and we had, I don't know, 25 50 people in the Facebook group yeah. Then when COVID hit in March, all of our clients needed, they needed to be there with somebody in terms of their rental property portfolio.
They need it. And our client service team is always there, but they needed somebody from an ownership perspective to be there with them. And so I really I mean, COVID's been terrible, of course, for a lot of reasons. But as far as the success of our platform in our community, we were able to build up a lot of trust because I was there every Tuesday and Thursday with them, even when I didn't have answers.
So our number of show attendees really kind of blossomed probably to, you know, 20 or 30 or 40 of a show after March and April. And that same kind of core group kind of coalesced and continue to show up every single week. But, you know, you also take something away from this, like I'm talking about 30 people or 40 people I'm not talking about hundreds and hundreds of people.
And from those 30 people that are 40 people that are the bedrock of this strategy for me it is created millions of dollars of sales from this community, right? Like you don't have to have a large number of believers who are willing to invest time with you in order for this to be monumental. Hopefully that, you know, just let you know how attainable it really is.
Our good friend Jordan, get up here to ask a couple of questions, and then we've got Wolfgang queued up after you, and yeah
I just want to say publicly, Greg, I love what you're doing. It's amazing. I think it's so dope. And I have two questions. And my first question is Greg, how do you learn from who do you admire who we're following right now?
My second question is, what's helped you go from podcast cool content to community because it's not necessarily one-to-one.
Yeah. Well, my two favorite podcasts are your podcast, Jordan and Andrew's podcast. So beyond that, I'm pretty much shut off to the world. What a softball?!
What a softball! What a softball! Maybe try again. I'd love to hear the real answer.
Yeah, it's great to see you, buddy, and awesome, awesome to chat again. So I have a three-headed we're a four-headed ownership team at JWT and I have three business partners. And, you know, I just think that's my source of the kind of like we have all kind of parts of the marketplace kind of tapped.
And so my business partner, Alex is very locally known just really up to date with what's going on in Jacksonville. So, he really is my source of what's going on in Jacksonville. And I get all that really important information from him. He's also in charge and some of our kind of innovative projects which we've been able to do to kind of think about how are we going to take care of clients over the next five to ten years as there are disruptions in the construction industry or whatever may come.
So, you know, beyond my business, he's probably my source more than anything as far as what's going on there. If I could think about other sources that are more accessible, I've been really blessed with great mentors along the way, continue to just invest in those relationships. I was starting out, I was mentored by Than Merrill and Paul Esajian from they were on that show “Flip This House”. So I got to know them before they became big TV stars and built this wonderful company called Fortune Builders. I continue to invest in those relationships and just kind of keep probably those four or five folks really close that have. They just know us and they know where we've been and where we expect to go.
And, and yeah. So I don't know if I have any monumental sources for you, but that's, that's really kind of what it is for me.
Jordan, thanks for the question. We'll bring Wolfgang up next, who I think has some questions about the technology system. Why are you on Salesforce? Wolfgang let's bring him in.
Yeah, that's pretty much it. I just wanted to know, what were you using before Salesforce? What decided what was the straw that broke the camel's back to go to your own system? How did you design it and how are your clients receiving it, especially with the trust accounting aspect?
It has a lot to it. It was a very big undertaking. I can't even tell you how much we spent on it. Millions. I mean, it was supposed to be done, you know, like a year implementation. I think we're on two and a half or three years now, and we're not 100% on to Salesforce. It is a major undertaking.
Prior to Salesforce, we were on Property Ware, Property Ware served as well from probably the time we had, I don't know, a hundred units under management all the way till we had I don't know, you know, 1500 or so really. The decision to branch out and solidify the business through taking on outside owners really coincided with the decision to really invest in our systems.
One of the things that meant the most to us is, you know, we do a lot of quarterly planning and annual planning and we have involved a lot of our management team beyond just the four owners. And I remember 34 years ago we asked the team, we said, okay, what are the biggest impediments to growth that you guys see?
And independently, you know, six of the probably eight leaders that we had identified all said it all said challenges. And so that was really impactful for us. And then we just knew where we wanted to go when we decided to bring on outside owners, immediately our minds became we're going to get to 5000 units under management or now we have rumblings of 10,000 right we see us continuing to grow there because it creates stability in the business and we have stability through market cycles.
We think that we're in a position of strength. So once we decided to do that, we realized that Property Ware was never going to get us there. And quite honestly, as we think about the return on investment and understanding what the cost is before you go into something. But for Salesforce, we just looked at the potential opportunity to, to be efficient while we were bringing on 5000 units and we also looked at the opportunity to combine our departments and create sales opportunities and better client service for our clients and you know, the price tag was a lot, but I don't even know what the price tag would have been for us to say no, honestly know
it's just worth it. It's, it's just worth it based on where we're going with the number of units and the number of clients we have. Awesome. Thank you. Tell them don't tell them. I said they did not go to Salesforce.
Now that Salesforce renewal offer is coming in soon.
Oh, man, that's really great. Hey, I know we had more questions that came in and maybe we'll address some of these other places in other ways. But here's where I want to end this on Greg. I'd love to hear just you're the leader who's got vision, you've got passion, you've got confidence, you've got a great team. You know what?
When you look to the future, of this industry and what you guys are doing, what are the most important things that you see? You know, what are the most what are the things you're paying attention to that you feel are most important, and what are those images of the future of what you see your company doing that excite you most?
Well, you know, we'll talk about it from a property management lens, but I'm going to talk about it also from a turnkey property lens because I think big changes are on the horizon. You know, we have been in a very unique time for the last ten years in the turnkey rental property space. We have been in this time where people assume that positive cash flow is our is a right and it's a bad deal if you have small cash flows or if its break-even, it's a bad deal.
And it was never that way decades ago. You go back and you read books. You know, I, I started reading a book called The Weekend Millionaire, this yellow book that was on my dad's bookshelf. I started reading that, you know, 16, 17 years ago and it was written probably 20 years before that. And it talked about how you can become a millionaire if you buy one property a year, and it pays for itself every single month.
And that's what you do in your own management. All right. So what that really meant is if you hired a property manager, you were going negative. And you know that model, this asset that we have really has stood the test of time, not based on cash flow. It's because of those five profit centers. But for the last ten years, everybody has just somehow gone so far on the other end of the spectrum that if it's not cash flow, it's not a good deal.
If it's not positive cash flow, it's not a good deal. I think the markets and the providers who sell based on cash flow are in for a rude awakening because those cash flows are going away due to interest rates going up and home prices going up over the next year. And that cash flow that they sold on is going to be largely going away or much lower than what the alternatives would be right.
And stocks and bonds and whatnot. So they're going to have to really learn what the real value of real estate is, which is the one rule, one that's always been for decades. Those five profit centers buy and hold for a full market cycle. One of the most misunderstood parts of investing in real estate is how to evaluate home price appreciation Right.
In 2006, when I started to buy rental properties, everybody thought the market appreciated every year. It never went down in value. That is what I thought. It's what everybody thought. And at that point, everybody talked about home price appreciation when they were buying the deal. Then in 2007 and 2011, we all realize that's not the case. And so since then, everybody has said, I'm never going to evaluate home price appreciation because I can't count on it.
I'm going to take it out of the vernacular. It's not going to be part of the equation. Well, that's not the right way to go about it either. If you look at the data and you look over a full market cycle, and you look over previous market cycles, a market cycle being between ten to 20 years, what you'll see is a lot of consistency in the average appreciation rates.
And when you think about it, we talk about real estate being cyclical. This is what a cycle is. It comes back to the norm. So if you know what your historically accurate appreciation rate is in your market with really good odds, you're going to be pretty close to what your average depreciation rate is going to be over the next market cycle, over the next ten to 20 years.
And so if you look at that data and you believe that, then your job as a property manager is not how to collect rent today or how to keep your house rented, it's how do I manage somebody's money for the next ten or 20 years. And if I do a really good job of it and making it a great experience for them, then they can count on this home price appreciation which is going to increase their overall returns tremendously.
You're going to do a lot of good for them. And you're going to make a lot of money in the process. So I really think that is the move that those who sell are going to have to learn how to sell differently. We really have to understand what the asset is really all about. And I think for us as property managers, we need to be helping people see the real value and how to tap into the real value beyond just the year over year, beyond this the transactional, beyond just the near term.
If you buy into a full market cycle, hold you fully can take advantage of home price appreciation and not be concerned about what happens today, tomorrow, or the next year.
Greg, I'm just rewinding to where we started, where we are now, and I just think about the thought process that people go through here. I've like you're telling people about why this asset class, right? Why this asset class? And that question gets answered and hey, and the way you approach this asset class, it's got to be over this period of time, right, for a full cycle.
And you're doing it in such a way where what you're focusing on is how do we maximize these five profit centers over this time period. Right. Okay. So people are there with you then it's a wide Jacksonville, right? And then you're selling, hey, okay, have all the choices. Here's why here. And then it's why GWB, right? Like those questions get answered and it's just it's easy to follow, it's easy to remember, it's easy to tell other people you know, and I think you've gotten there from where you said you were at one point.
You rate yourself an average marketer. I'd say it's coming through pretty clearly. And I hope people here are taking a lot from that of just, again, how you've developed that point of view, how you communicate it and how effective, how what the great results that you're delivering for your clients and how you're just building a great team and a great experience for residents all together as part of it.
So, man, we are so privileged to have had this hour with you. I thank you so much for spending time with us. Thanks for all the questions. Greg, thanks again for being a Triple Win-driven property manager and generously sharing everything you did with us today. Everybody listen, if you want the conversation to continue. Join the Triple Win property manager of Facebook Group.
Come hang out, ask more questions, talk more about it, share your takeaways.
You guys have been great really, really appreciate the opportunity. Andrew, Laura, this is awesome. Thanks again for allowing me to be a part of it.
All right, everybody. Till next time. Have fun coaching baseball. Yeah, that's right. Good luck with all the coaching, Greg. And everybody keeps stacking your Triple Wins. We'll catch you next time. Take care. That's all for today's Triple Win Property Management Podcast. Thank you so much for listening. Thank you so much for sharing a piece of your life with us.
We do not take it for granted. I also want to give a shout-out to Carol Housel for everything she and our team does to make this possible. It's crazy to think about over 5000 professional property managers have pressed play on episodes in season one and season two now. And we really want to encourage you to keep giving feedback because more and more people are listening.
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