Peter Lohmann's Podcast
00:12:51 · Peter Lohmann, Bri Leichliter
[00:12:51] S1: Just too small. [00:12:52] S0: With the sales. Just... Yeah. It just wasn't it wasn't worth it to give a piece away when I'm just trying to get, you know, a relatively nominal number [00:13:02] S1: Okay. [00:13:03] S0: In comparison to other things.
00:13:04 · Peter Lohmann
[00:13:04] S1: This episode is sponsored by DoorLoop. They recently put out an ebook called the Property Manager's Guide to time and getting sanity back based on a study of hundreds of property managers across The US. And one number from that research really stood out to me. The average property manager is spending seventy six hours a month on administrative work and rent collection alone. Think about that for a second. That's basically two full weeks of work each month just to keep the machine running. Not growing the business, not improving operations, just chasing rent, updating spreadsheets, and dealing with manual processes. How can property managers solve these costly issues? The answer is simple. Switch to a more automated system, something you know I'm big on. The study showed on average time spent on property management tasks was reduced by about 30% and cut rent collection time by more than 40% when making the switch. In practical terms, that translated into 23 a month saved. That's almost three full workdays you can get back every single month. A lot of that came from pretty straightforward tools, online rent payments, automated payment reminders, maintenance request tracking, integrated accounting and reporting, and centralized tenant communication. Nothing magic, just systems that remove the manual work most operators are still doing, which again is something I have a huge focus on in my business. If you wanna dig into the numbers and see how other property managers are reclaiming their time, DoorLoop put the full guide together. You can download the ebook for free at doorloop.com, and we'll link it in the show notes. Thanks again to DoorLoop for sponsoring this episode. As much as you can, I'd love to hear about the actual deal. I understand, you know Sure. Certainly respect you don't wanna, you know, share the price and things like that. But if you're able to share the terms, like how it was structured, was there any type of a clawback? How was it financed? Anything you can share along those lines? I think people are interested in that stuff. Sure.
00:14:59 · Bri Leichliter, Peter Lohmann
[00:14:59] S0: Yeah. So when I originally sent out my mass text message to... Or group text, it wasn't even a group text. It was three separate text messages to our potential buyers. I [00:15:10] S1: The group text could have been fun. You know, rental process right there in the in the text thread. [00:15:14] S0: Right. Right. And I think in my mind, I... When I sent what I did send, I wanted there to be some competition. And that's why that part of the reason I didn't put a price on it, and I wanted them to know they were gonna... You know, I sent it to three specific people. So first come, first serve, or give me the best... You know, bring your highest and best. And that was [00:15:33] S1: Yeah.
00:15:34 · Bri Leichliter
[00:15:34] S0: Kind of how I approached it. But in terms of the actual sale, you know, in in reality, we went fast. We... I got an LOI. That's what kind of triggered the process. So send it out to the three people, had some preliminary conversations, sent over data. That was the initial part. And then based on the data that they received, they did their own due diligence, came back, asked me questions, and then submitted an LOI. The LOI obviously had, you know, the general terms on it. I did negotiate my LOI to a degree. I had a couple of things that were really important to me that I wanted to make sure were built into the contract. So we had some negotiation on the LOI. Once we firmly came to terms, I think that probably took us two weeks of back and forth, several phone calls of, you know, getting the details. Once that LOI... We were good with the LOI, then we had an attorney draft a purchase con... An official purchase contract and bill of sale and assignment of contracts, you know, kind of a bundle of paperwork. And with property management, you can go as fast or as slow as you want. I mean, if you think about... You onboard a new client that has a 100 doors. Right? If that is something that you've done before, doing a sale and a purchase is kind of similar in that regard. You gotta onboard all of these properties. You have to have systems and people and all the things in place. So you can go as fast or as slow as you want. So what we decided was we officially closed where we sat down and had a notary. You know, we signed our bill of sale and our contract or assignment of contracts and everything on October 10. In our arrangement... And my attorney kinda thought that I was crazy, and you can tell when people don't understand your business fully too because
00:17:40 · Peter Lohmann, Bri Leichliter
[00:17:40] S1: Attorneys don't know about business. I have [00:17:42] S0: a They partner who don't [00:17:43] S1: says that often.
00:17:45 · Bri Leichliter
[00:17:45] S0: They don't know about what it takes to transition something like what we do. So what we, me, and the buyer had decided was we would close, and then we'd have a transition period before we did the official handoff of management where revenue changed hands. And that that was the part that my attorney didn't understand. Like, why can't you just do it tomorrow? I'm like, well, doesn't doesn't work like that. You know? You have a lot of stuff that you have to prep and get ready. So we closed on October 10 with the transfer of management services happening on November 1, which is still pretty fast. So one of the things that we decided that this is pretty general. It's not... You know, we're not talking specific numbers or anything that I feel like I am okay sharing is the arrangement that we made is while it was still under management of me and I was collecting the revenue, the revenue would stay with with me and so would the expenses. So for the rest of the month of October, I collected, you know, management income, maintenance revenue, all of that kind of stuff that still went into my organization, but then I still had to pay for payroll and Mhmm. All my software and all of that. So wherever the revenue was coming in, as soon as they're responsible for the expenses, this is how we made a very clean break. So when we transferred transferred management on November 1, then that changed officially as well. So revenue went to the buyer, expenses went to the buyer, and that's how we transitioned. So all of my staff that went along with the sale transitioned on November 1. And that happened to be a weekend, which, you know, rent collection on the weekend when you're transitioning management. I'm sure you guys all know this who have just onboarded properties and then have tried to, you know, collect management. The first month is a little bit rough, but it went... It actually went really well. So that was kind of our initial transitional month and timeline. Now what I will say that is an important piece to consider if you're... If you are selling is you have to understand what systems your buyer has.