Peter Lohmann's Podcast
00:47:06 · Dan French
[00:47:06] S1: Yeah. And the employees. So I think, you know, from from... That's where Northpoint is gonna differentiate to all the owners who may be listening out there. You know, we we wanna actually partner with owners. This is separate from the other big players, I think, in this space that want you to just go away, that want you to just take a vacation, go on a cruise. That's not us. We want you to keep rocking with us, roll over some of your equity, and actually probably have an earn out based on what's happening with your current book. And and that way, you're much more aligned with us as shareholders. We are shareholders together, and we we keep your your name, and we go to market together to your owners and say, hey, you know what? This is brand new, but actually it's gonna support you better. Because now you have a much more... A much bigger platform behind you. So the consistency the consistency, the reliability, the the standards have just gone up. And they've not gone down. And truly, I think that's gonna make us a much better buyer out there, but but, you know, we're gonna lose out on certain people that just wanna say goodbye, and I don't think that's that's our preferred owner, you know, our preferred owner is that that person that that still has gas in the tank and wants to go kill it. Maybe they want to transition from doing ops all day to doing biz dev because they love biz dev. You know, I talked to an owner just like this recently, world... Very classy owner, and that person told me, yeah. She's she's like, yeah. I would love to do a small multifamily channel because I actually turn that away almost almost on a weekly basis. I turn away an owner who begs me to do the small multi in my market, but
00:48:36 · Peter Lohmann, Dan French
[00:48:36] S0: I just [00:48:37] S1: can't do [00:48:37] S0: it. Multi family is easy. It's the same as single family. We've been doing it since day one. [00:48:43] S1: Well, in her experience, you know, this is what I tell some of my team though, Peter, like, you're Peter, bro. You know? Like, what's what's easy for you? [00:48:51] S0: No. But this is even back when I didn't know anything about anything we were doing it. I mean, a a fourplex. [00:48:56] S1: Some people figure it out and some people don't. [00:48:58] S0: You know? I mean, a fourplex is the same thing as a single family. There's... It's no different. It's... You'd... [00:49:04] S1: No. That that play is sane, but she's talking about 50 unit deals [00:49:07] S0: and infill Yeah. We've actually struggled with those. We have struggled to retain those. We... We've had a real issue of churning out those owners. That's what happened That's what you're talking about. So that makes sense then. Please tell me the secrets because we we have not mastered that yet. [00:49:21] S1: Well, and just just watch the Northpoint journey because you'll you'll see all of them unfold in real time. We're gonna kill it in that space. We're gonna absolutely... We're gonna have 10,000 doors in that space alone very, very quickly, very quickly, and 10,000 in BTR. Yeah. How do you think
00:49:21 · Dan French, Peter Lohmann
[00:49:21] S1: Well, and just just watch the Northpoint journey because you'll you'll see all of them unfold in real time. We're gonna kill it in that space. We're gonna absolutely... We're gonna have 10,000 doors in that space alone very, very quickly, very quickly, and 10,000 in BTR. Yeah. How do you think [00:49:35] S0: owner of a 50 unit door property, would you say they're more closely aligned with an institutional owner in terms of show me the reports and the data, or would you say they're more closely aligned with the mom and pop, like, hey. That was, like, my grandmother's chair rail, and now it's ruined, and I have memories of that, and how could you let this happen to [00:49:52] S1: be Yeah. Much more closely in line with the institutional owner Okay. Expectation. This is almost certainly they have capital that they're reporting to. So... And now look, I've I've I've invested. I... I've been a g... A sponsor, and I've I've raised capital. I've done the whole stack. You know? I've done large scale multifamily deals. I've done hotel deals. Done 300 unit deals, 400 unit deals. So I I know how the... I know that owner, and I I believe, and I know enough of those small owners to to know how they think as well.
00:49:52 · Dan French, Peter Lohmann
[00:49:52] S1: be Yeah. Much more closely in line with the institutional owner Okay. Expectation. This is almost certainly they have capital that they're reporting to. So... And now look, I've I've I've invested. I... I've been a g... A sponsor, and I've I've raised capital. I've done the whole stack. You know? I've done large scale multifamily deals. I've done hotel deals. Done 300 unit deals, 400 unit deals. So I I know how the... I know that owner, and I I believe, and I know enough of those small owners to to know how they think as well. [00:50:25] S0: Got it. Okay. Last thought on the melting iceberg problem is that you... When you acquire... When you do a deal to buy a property management company, you... I I think, like, you have to buy the machine that produces the units. You can't... If you just buy the doors, then your your iceberg is gonna melt away. You wanna buy you wanna buy a machine that knows how to backfill the doors that it loses every year, which to me looks more like a stock purchase of a branded, well established management company with leadership in place. Like, that is a machine that knows how to backfill doors that it's losing every year. If you just buy 200 doors off of some brokerage guy, those doors are gonna melt in your fingertips. You know what I mean? Right. [00:51:21] S1: Right. Totally right. The last thing I'll say about, you know, churn is I was talking to this guy, Moses Kagan. Do you... Don't know [00:51:28] S0: if you [00:51:29] S1: heard that name. [00:51:30] S0: He's he's been a huge influence on my, you know, journey.
00:51:34 · Dan French
[00:51:34] S1: Yeah. I I thought so. I... Yeah. And, anyway, I was talking to him, and he really made it hit home big time. He's like, you know, he wasn't calling it this, but he he was really talking about a trust layer. So developing that trust layer between this platform you have and and the owners, if you can kind of occupy that space and build trust with your owners, then then look, it's property management, things go wrong. The roof is gonna, you know, leak, or days on market are gonna be more than you want because of some supply demand thing, but maybe you need to, you you know, you can't just have a knee jerk reaction of like, alright, I'm just gonna fire you. So if you have this trust layer where people look and they see a, you know, a living, breathing human person that represents a team that that is out there grinding it out for you every single day. They're gonna give you grace. And this is... I was telling my team this over the weekend, I wrote a a big long memo to them, but but basically one of the ideas I had was like, it's... When he told me that, it reminded me of doctors and malpractice. So very famous experiment or study in 1997, Malcolm Gladwell wrote about this back in his book called Blink. But it's a fascinating study. People with good bedside manner are doctors, and all they have to do is spend three extra minutes, you know, use inclusive language like we versus just like you. We are gonna do this, or here's what we're gonna do, or look at. They they use humor and empathy. They have a bunch of the different categories of stuff they do well. Right? Mostly it's just being human. Being human is showing up well and caring. But those people, those doctors get sued less. They accept far less, far fewer malpractice suits. And I think the same thing is gonna happen with churn. The people who can build a trust layer to their owners and let them know, like, we're grinding it out every single day for you. We're going to go to extraordinary lengths to preserve your property, care care for the residents and keep them safe. Be ultra compliant, and be as aligned economically as possible with your financial outcomes, those factors are gonna make the the melting iceberg go from 20 to 10, and then someone's gonna kill it.
00:53:45 · Peter Lohmann
[00:53:45] S0: I've been thinking a lot about this recently as well, and we're exploring a few a few a few components of this with the new PM trends report. My thesis these days, and I've swung... I've actually swung back and forth on this a couple times over the last twelve years, but my current thinking is that your clients want to call their property manager. They do not wanna call their property management company. Mhmm. And it's very subtle distinction between those two ideas, but it's extremely powerful. People wanna deal with people. They wanna know that somebody at this company... And they don't even really care what company they work at. They just wanna know that somebody at this company is looking out for them and their property. And when they call that person, they call them back, and they know what's happening. They know about the turn. They know about the eviction. They know about the rent collection. If that's true, like you said, a lot of grace is extended. I'll give you a specific example from the other side of the coin. We bank with Chase because Enterprise isn't operated in our state. We love Enterprise. We wish we could bank with them. But we bank with Chase, and we've been with them for forever. Huge company. Right? Of course. We... I have a I have a business banker there that has made an effort to get to know me, met him several times. Great guy. His name is AJ. And whenever I have a question now, I I get to just go to AJ, and he helps you. That... That's obviously a great thing. But I was thinking the other day about, like, when I call AJ, and I have his cell phone number, when I call him, he's like the equivalent of my property manager. Right? He works at a large company, but he's the one that helps helps me access the the large resources of this multinational, multi trillion dollar company or whatever it is. And I I like this guy, and I want him to be successful in his career. And he's been really helpful to me. And when I call him on his cell phone, if he doesn't answer, I don't sweat it because I know he's gonna call me back in an hour or two. Right? Now if I were to call Chase Bank and they didn't answer, I would be furious. I'd be like, this company doesn't care. They never answer the phone. Right? And you're already seeing the the parallels with your property management company.