Property Management Growth with DoorGrow

DGS 18: The Art of Buying & Selling Property Management Companies

Apr 10, 2017

Noel Christopher, Senior Vice President at Renters Warehouse, shares his expertise in property management acquisitions. He discusses what big companies seek when buying properties and highlights common buyer mistakes. Noel emphasizes the importance of proper valuation and due diligence, warning against hasty decisions. He also reveals strategies to make a business appealing to buyers, the role of current employees in transitions, and how to navigate complex acquisitions. This insightful conversation is a must-listen for anyone in the property management field!

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ADVICE

Integrate Pricing Models Slowly

Don’t immediately change acquired company's fee structure; let current contracts expire naturally.
Evaluate how different pricing models affect churn and integration risk before transitioning.

ADVICE

Avoid Overvaluing Your Business

Sellers overvalue emotional investment over financial metrics; focus on revenue and EBITDA when valuing.
High maintenance and repair revenue signals business misalignment and lower acquisition appeal.

ADVICE

Unify Pricing Structures

Standardize and unify pricing structures across your portfolio to be attractive to buyers.
Complex, varied contracts increase churn risk and reduce acquisition appeal.

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Learn how Noel Christopher, Senior Vice President of National Business Development at Renters Warehouse, has mastered the art of buying and selling property management businesses.

In this interview with Noel Christopher, you'll learn what big box companies look for when scoping out new properties to purchase, how to property value your company and portfolio, making your business attractive to buyers, and how to find the best buyers for your company.

You'll Learn...

[2:15] Noel Christopher's background in commercial real estate [3:25] Renters Warehouse [6:05] The most common mistakes buyers make when acquiring a new company [7:50] How to account for and deal with churn [9:45] Is churn inevitable? [11:00] The dangers of closing too quickly and not doing your due diligence [12:40] How to evaluate a portfolio [16:40] Creating a plan for taking over a company [18:00] The biggest mistakes sellers make [21:45] How to create a business that other people want to buy [24:00] Utilizing a company's current employees when you take over [26:55] Creating an incentive for a business owner to transition into an employee [30:00] Working with brokerages and accidental property managers [33:00] Identifying the two types of acquisitions: Companies versus contracts [35:10] Is Renters Warehouse flat fee pricing applicable everywhere? [38:00] Finding people that are willing to sell [40:15] Letting go of the all or nothing approach [41:40] Should you use a non-compete? [42:35] How Renters Warehouse structures their transactions [44:44] Do you need a middleman to handle the deal between two companies?

Tweetables

When you buy a portfolio, you're married to the seller for a little while.

The biggest mistake a seller can make is overvaluing their company.

For people looking to buy a property management company, a great target audience are the brokerages that are accidental property managers.

It's not about the lowest price, it's about the quality of service.

Resources

Want more from Noel Christopher? Send him an email at noelc@renterswarehouse.com or connect with him on LinkedIn.