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00:06:15 · Dylan Scroggins
[00:06:15] S1: Yeah. I would say so. 75 to a thousand is amazing. So when you were starting out, you know, I love that story of being hired, you know, really for your attributes, not because you work for another PM group in town. You know, I come from the recruiting side to where I'm continually preaching that message. How big was the team then? And then walk me through that, let's say, like a 100 doors to 500 doors. Like, what was that first stage of growth look like as you were learning PropertyManagement, but also trying to build this business at the same time?
00:06:43 · Thomas Perfect
[00:06:43] S0: Yeah. So, I mean, we got a really nice relief at one point. Our our largest client is still about 40% of our unit count, and he kinda started bringing some properties over in waves. And, after I started, he brought on about 40 doors. So that took us up over a 100. And, adding those doors at that wave really gave us a better look. It was me, you know, working full time, another lady who was a retired real estate broker who was kinda doing leasing part time. And then my business partner was working on, you know, finding finding more doors. Right? And that was that was his job. So then almost a year into it, that large client had a big falling out with some... His situation with some of his family and a previous property management company. And they actually brought over four large apartment complexes that were 399 units. So we went from about a 150 at that point up to five fifty overnight, like, literally overnight. And I remember pulling, you know, sixteen hour days scanning in these documents. We had to go, like, stake out the old property management company to, like, literally get boxes, like, probably 25 boxes of physical leases and ledgers and whatnot out of this person. And that that old property manager, we actually found over $2,000,000 of embezzlement out of the properties. And that person serves in jail time and now sends our client about once every other month, $20 check for a repayment, you know? And Yeah. So that kind of kicked it off. We went from those three people in the office, you know, me, the the part time leasing person and and my partner. Now we have four on-site managers as well. So literally, you know, overnight in January 2016, it was it was a big jump.
00:08:37 · Dylan Scroggins, Thomas Perfect
[00:08:37] S1: So how'd you find the staff in order to service what you needed? I mean, it's a massive jump in company size. Were y'all just hiring as soon as possible? Were you able to take any PM from that other group? [00:08:49] S0: I mean, so on-site managers, lot of times, will transition over. Right? Because they live there. So we ended up hiring all four of them, because, you know, their company was essentially getting shut down. Their job got taken away. So if they wanted to continue doing their regular job, they would they would sign on with us. They did. And some of them stuck around for longer than others. We actually have one of those original four. She's amazing. So shout out to Dawn down there at Vista Bonita. She's been, on that property longer than we've managed it now, and that's been a little over a decade. And, you know, we're super glad that she's on our team, but we definitely had some big staffing issues that came up with, you know, when you have a a company that's doing things illegally, the chances of their employees doing things the wrong way or illegally, it was kinda rampant. Literally duct tape and gum fixes on stuff, and we really had to pull these properties from a c level up out of out of that, like, c, c minus level property. [00:09:45] S1: So what is your breakdown now? Is it... Do you still have those properties, you know, multifamily? What... What's your breakdown single family versus multifamily now?
00:09:45 · Dylan Scroggins, Thomas Perfect
[00:09:45] S1: So what is your breakdown now? Is it... Do you still have those properties, you know, multifamily? What... What's your breakdown single family versus multifamily now? [00:09:53] S0: Yeah. I mean, everything else outside of those four apartment complexes, we... We've taken on a few of them over the years and, you know, hold periods versus requirements and whatnot. You know, asset managers have a different, goal on things sometimes. So we've we've done management for a few other complexes over the years, but we... We've kinda trimmed through those as, you know, hold periods expire. So those are still our main, you know, 400 units under... For those large multifamily. The other 600 units are all scatter site properties. So the small, like, under eight unit multifamily units and single family homes. [00:10:29] S1: Yeah. That's a great breakdown. So for you, starting out in your role to now what it's become, when did the conversation start to shift towards, Hey, I'm a hire, now I'm a leader. How did that conversation go from being leader to owner? And when did that happen? Was that fairly recently? Was that five years ago? Walk me through that kind of last bit of from you two to more partner transition.
00:10:29 · Dylan Scroggins, Thomas Perfect
[00:10:29] S1: Yeah. That's a great breakdown. So for you, starting out in your role to now what it's become, when did the conversation start to shift towards, Hey, I'm a hire, now I'm a leader. How did that conversation go from being leader to owner? And when did that happen? Was that fairly recently? Was that five years ago? Walk me through that kind of last bit of from you two to more partner transition. [00:10:53] S0: Yeah. Definitely. I, you know, I was able to negotiate a great equity agreement. We started talking about that really early on because, you know, it was let's build an empire together. Right? So I was excited at that opportunity and we kind of went into that knowing that it wasn't gonna be a w two situation forever. You know, there are some things, you know, as, you know, people who know me have heard a little bit about that story and it was really nice for me to be able to jump in. So 2019, we kinda had negotiations come into a head, and it went effective in in 2020 where I essentially was able to earn 25% by being the CEO for five years and letting my business partner kinda step out. And I earned another 25%, gradualized over the five years for doubling the net profit of the business. Smashed those goals out of the water, then... Done that. And so I I currently own 50% of the of the business, and, it didn't cost my partner anything outside of giving up equity. But as I was earning equity, I was essentially growing the net profit so that he wasn't affected.
00:10:53 · Thomas Perfect, Dylan Scroggins
[00:10:53] S0: Yeah. Definitely. I, you know, I was able to negotiate a great equity agreement. We started talking about that really early on because, you know, it was let's build an empire together. Right? So I was excited at that opportunity and we kind of went into that knowing that it wasn't gonna be a w two situation forever. You know, there are some things, you know, as, you know, people who know me have heard a little bit about that story and it was really nice for me to be able to jump in. So 2019, we kinda had negotiations come into a head, and it went effective in in 2020 where I essentially was able to earn 25% by being the CEO for five years and letting my business partner kinda step out. And I earned another 25%, gradualized over the five years for doubling the net profit of the business. Smashed those goals out of the water, then... Done that. And so I I currently own 50% of the of the business, and, it didn't cost my partner anything outside of giving up equity. But as I was earning equity, I was essentially growing the net profit so that he wasn't affected. [00:11:57] S1: Yeah. Performance based equity. You have a lot of clients who would kill to have that scenario of someone come on board, really earn their keep those first five years, and the next five years step into more of that ownership role. I love that. Would you consider yourself more of a, like, integrator? Are you the visionary? Do y'all run on EOS? Just curious.