Unfiltered by PropertyManagement.com
00:00:00 · Josh Sterling, Dylan Scroggins
[00:00:00] S0: It started with $200 in student loan debt, and the house was upside down. Credit cards are my only option, but we built that from a ownership portfolio of one single family house in o nine up to today on about 1,200, and then we third party manage about another 400. [00:00:25] S1: Welcome to Unfiltered, the official podcast of propertymanagement.com. I'm your host, Dylan Scroggins, joined by mister Josh Sterling, chairman of Epic Property Management out of Southeast Michigan. Josh, how are you? [00:00:39] S0: Great. Thanks for having me on. [00:00:40] S1: I've already comped in on you on your golf gear. You got the hat. You got the shirt. I'm sure you got a couple of holding ones behind you. [00:00:46] S0: Not not quite. Working on that. [00:00:48] S1: Yeah. Have you already hit one? [00:00:49] S0: No. No. I've come close. But I think that's what keeps you coming back to that game. [00:00:53] S1: Well, you've probably gotten closer than me. I've had, like, a resurgence with golf the last, like, year and a half. I grew up, like, working at golf courses and even caddied. I swear that was the best job I ever had is being a caddy. But, man, you get momentum, and then if you don't keep playing, you lose it. [00:01:07] S0: I know. I know. And, you know, hitting that that great drive or that great approach shot, that's the one that keeps you coming back from the next 20 that don't go great. So it's a frustrating game.
00:01:07 · Josh Sterling, Dylan Scroggins
[00:01:07] S0: I know. I know. And, you know, hitting that that great drive or that great approach shot, that's the one that keeps you coming back from the next 20 that don't go great. So it's a frustrating game. [00:01:17] S1: Maybe that's what we need to do. I feel like at Broker Owner, some of these conferences, like the running, the exercise, and the five Ks are getting popular, we need to just go hit some range balls. Let me say, hey, look. Take a break from the seminars to go hit some range balls. Maybe that's... Maybe that can be our shtick. Were you at broker owner a few months ago? [00:01:33] S0: No. I wasn't. I heard about it. Heard was great. [00:01:35] S1: Yeah. You gotta fly down there, man. You're... You know, you mentioned being in aviation stuff. Nothing's stopping you. [00:01:41] S0: Nope. No. Definitely. I'll try to make the [00:01:42] S1: next Next one. Next one. Well, good stuff. Well, hey, we appreciate you coming on. I know Matt and Chuck spoke really highly of you in regards to a lot of the technical things that you're building. We will get to that, but just to stick on theme, at least at the beginning, would love just to hear high level a bit about Epic Property Management, just where you're at today, and then just a quick little background on how you got started in property management and how you got to where you are.
00:02:06 · Josh Sterling
[00:02:06] S0: Awesome. Yeah, happy to. So I guess I'll start it was... It's pure accident. I'm to be an airline pilot, and I went to school for that and just timed that completely wrong in a bunch of aspects. I started, you know, college for that a week before 09:11. That that was pretty hard on the industry. And as it picked up in about o five, right about when I was getting done with school, I I got on at the airlines, which was pretty fortunate or so I thought. And that unraveled pretty quickly in o eight with the the great recession. So, you know, all I'd all I'd known my whole life was how to fly airplanes. And I walked into work one day, and through, you know, really no fault of Mylan or any of my colleagues, we were all getting 50 plus percent pay cuts. And that there was, you know, fear that the airline was going under that we were with, which it eventually did. And so I realized pretty quickly that I need to do something else. You know, I'd I'd always been told growing up, you're... Go to college and and get a good job and buy a house for yourself. That's the American dream. And I came from certainly a, you know, middle class or lower middle class, you know, upbringing. I... I'd done all those things. I looked down at, like, twenty three, twenty four years old, and I said, man, I've got nothing to show for that and not a bright future. So I took a bunch of 0% credit cards, did the the balance transfer thing, and and went out and bought one single family house with that in about September of o nine. And so that grew and grew through single, and and I can... Happy to talk if we have the time on, you know, what we ended up doing to get that capital. But I started with $200 in student loan debt, the house was upside down. Credit cards are my only option, but we built that from a ownership portfolio of one single family house in o nine up to today on about 1,200, and then we third party manage about another 400.
00:03:43 · Dylan Scroggins, Josh Sterling
[00:03:43] S1: Wow. So you said you own 1,200, then third party managed 400. Is that right? [00:03:47] S0: Right. Top of that. Yep. [00:03:49] S1: For the record, this is not financial advice. For any young bucks out there, don't do what you did, but it did work. [00:03:56] S0: Right. Right place, right time. I totally agree. And, you know, I I certainly would never take that risk today, but when you're... You know, my my comment was if I'm already broke, I might as well be broker. [00:04:06] S1: Yeah. Seriously. Oh, man. That's that's wild. Yeah. Because I graduated in o nine from college, and I think, you know, the recession really hit formally, I guess, in fall of o eight. I remember looking at the, you know, the headlines of The Wall Street Journal. I didn't really know what it meant. Right? Like, I didn't really know any different. But then when you hit the job market in o nine, you're like, woah. I'm competing with jobs with, like, 44 year olds, and I'm 20 Like, what is going on? It really smacked you in the face. [00:04:35] S0: Yeah. It was a it was a tough time, and that was, you know, about the exact same timeline I was on. I I realized that my skill set was not very desirable, and I didn't have any other skill sets. That's a scary thing.
00:04:35 · Josh Sterling, Dylan Scroggins
[00:04:35] S0: Yeah. It was a it was a tough time, and that was, you know, about the exact same timeline I was on. I I realized that my skill set was not very desirable, and I didn't have any other skill sets. That's a scary thing. [00:04:48] S1: Yeah. Yeah. Flying planes. Well, you're much more qualified than me. So, well, that's awesome. Yeah. I, I know you mentioned earlier just about kind of the cumulative growth. Well, let's talk about those 1,200. So that was, what, almost twenty years ago or close to it when you bought that first. Do you still own that house? [00:05:06] S0: I do. Ironically, up until about a year ago, I could have said, yes. I still have the same tenant in it. Wow. Yeah. And they... That just turned over after, like, eighteen years or sixteen years or something crazy. So [00:05:15] S1: Yeah. Do y'all have, like, a ceremony or something? I feel like that's a [00:05:17] S0: big have. And no. No. It was just a sad day. I'm I'm luckily not so much in the day to day, so I just looked at our turnover report and realized that that that was the original house turning over for the first time. [00:05:27] S1: No way. That's awesome. I'm glad you still have that house. That's pretty cool. So tell us more about the operation. Once again, I know you gave us a breakdown, but, yeah, give us a good snapshot of your team. I think you said it's all single family. Would love just to hear a little bit more there.
00:05:41 · Josh Sterling
[00:05:41] S0: Yeah. No. So we're... You know, we started single family. Right? And eventually, that naturally, especially on the acquisition front, we're sending multifamily. So I guess to get a little granular on that, something that I think is unique and that is really structured the way our operation is set up today is I look at at real estate in three different buckets. You've got your small property that can be a single family or up to, like, say, you know, 20 in an apartment building or or less. Right? And then you've got your your large on the other end of the spectrum, which is, say, a 100 units plus, specifically that it will support on-site management. And then you've got your middle of the road, midsize multi 20 to, like, a 100 units that won't support on-site management, but are certainly too big of a scale for the mom and pop or the the one off landlord to really run well. So what we found is as we started... As I started accumulating capital and recycling capital, I could start buying bigger deals. I found that I was not intentionally, but because there was value in those mid sized multifamily deals, I was acquiring a lot of them. And in hindsight, the reason that is is because they're really, really hard to run. So the institutional money that can go buy a 300 unit deal, they can't run a 50 unit building in Windham, Michigan. You can't run it without on-site staff, and and it won't support it. And the mom and pop operator, which is typically who we acquire it from, often gets out over their skis. They don't have the systems and the resources and the technology to run it appropriately, and so they get pretty mismanaged driving great value. So in hindsight, looking back, our whole operation was built on being able to run this scattered site portfolio with the efficiency and the professionalism you see at a 300 unit building all day long. And so we've got some larger buildings and those are great and and it confirms my belief. They're much easier to operate once you have the on-site team there. But we built all of our systems so that we can treat that single family or that, you know, 25 unit building or 80 unit building like a 300 unit building. And and that's, you know, the the premise of where we came from.