Peter Lohmann's Podcast
00:23:11 · Peter Lohmann
[00:23:11] S1: Was tough. I mean, you had a buyer Yeah. Who wasn't as larger or experienced as some other buyers. And so Mhmm. You were having to help a lot. The staff, you know, was having to learn everything new. I think, you know, there are... There's advantages and disadvantages to selling to some of the big boys. You know, one of the advantages is they've done this 25 times, and so they have a process they're gonna run. And they're they're highly invested in making sure that every single owner, tenant, team member, all, you know, i's are dotted and t's are crossed. So in terms of the structure of the deal, like, did you get a big wire in your account the day you closed? Did you carry a note? Did they use, you know, Live Oak Bank or something to finance this deal? Like, how did that work?
00:23:59 · Bri Leichliter, Peter Lohmann
[00:23:59] S0: Yeah. So we ended up doing an installment sale. So there's four total payments in our contract. And the first two payments are essentially based on the initial number at closing, so the door count at closing. Mhmm. One of the things that I did in my contract, we had, like, a closing door count, and then we had what we call transitional units where the properties were already listed for sale. They were kind of a short term, you know, we knew they were gonna drop off. So we structured that slightly differently because, obviously, you know, from a buyer's perspective, if those properties weren't gonna stick around, then he didn't wanna pay for them the same the same amount as the other doors. Right? Yeah. So logically, makes complete sense. So I actually did a lot of work with my CPA on how I wanted to structure from a tax perspective. So what we ended up doing is we we did not collect anything at closing with the first installment payment happening this calendar year because we were so close to the end of the year. So, you know, that's that's more of a tax planning. Everyone's situation is going to be a little bit different in that regard. And essentially, Because, [00:25:21] S1: you know, presumably, your income was gonna drop for 2026. So getting that installment payment into this calendar year, I mean, you could have saved tens of thousands of dollars in income tax Mhmm. By having the sale take place technically or you get paid or however it works, you know, in Yeah. In the next calendar year.
00:25:21 · Peter Lohmann, Bri Leichliter
[00:25:21] S1: you know, presumably, your income was gonna drop for 2026. So getting that installment payment into this calendar year, I mean, you could have saved tens of thousands of dollars in income tax Mhmm. By having the sale take place technically or you get paid or however it works, you know, in Yeah. In the next calendar year. [00:25:43] S0: Right. Yeah. So the first two payments are based on that initial door count. So we split it up, the larger payment being the first one and then the second payment, and that happened in January, and then the second payment at the end of the quarter. There is no... In our arrangement, there's no clawback clause, but there is a true up period. So if if... At this point, the door count has not dropped significantly that, you know, the the buyer would be in trouble or they would need to execute on the clawback anyway. But the second and third payments are based on a true up. So running the numbers to see what the door counts are from a retention standpoint, and then there's a dollar value assigned to each of those. With my final payment be... The true up being at the one year mark, but the final payment being released in 2027, again, for tax purposes. [00:26:37] S1: Yep. [00:26:38] S0: So I kinda structured how I wanted the payments based on my tax largely in part of my tax strategy. Yeah.
00:26:38 · Bri Leichliter, Peter Lohmann
[00:26:38] S0: So I kinda structured how I wanted the payments based on my tax largely in part of my tax strategy. Yeah. [00:26:47] S1: Yeah. That sounds great. Now how has the churn been, meaning the churn of your portfolio, like owners who didn't transition or or who decided to sell or switch management shortly after the transition. What did you sort of model out or expect in terms of that... In terms of, like, percentage there, and how is it actually gone? [00:27:08] S0: Honestly, I wasn't sure how it would go at all. And part of the reason being is, one, I've never done the sale... This type of sale before, so I have no experience on, you know, my own personal experience. Obviously, I knew that there was gonna be some churn. But also, you know, the... From the buyer's perspective, they had never done an acquisition before of this nature. Now they had done other brokerage acquisitions, so they did have experience in buying businesses, which is great. But I was expecting there to be some. I had no real indication of how significant it would be. I will say that from client transitional perspective, when we announced it to clients, we were very strategic in having a united front on how we [00:27:58] S1: Mhmm. [00:27:58] S0: Addressed it. And I also... I didn't stay on from a payroll perspective. A lot of people do that at acquisition. Like, they'll keep the owner on for a period of time. I am on in a project manager capacity to finalize some renovation projects, but I'm not on as a payroll employee. [00:28:20] S1: Got it.
00:28:20 · Bri Leichliter
[00:28:20] S0: What we ended up doing was I stayed on from... It's built into my purchase contract that I have to be available for so many months, and that happened to be through at the end of the year. And we were just on joint communication for a lot of things. So when we made the announcement, it's like, hey. I'm not going anywhere for the time being while we transition. And I... If anybody had, you know, issues, I was talking them through that. We were getting on a call with the buyer. You have a joint call, you know, handling situations like that that came up. I will say one of the things that I structured in my contract that made made that make sense is I am still planning on doing brokerage sales. So as I sold my business, I sold the PM division. I could have kept my brokerage open to do to do sales only. I decided to not do that and went to another small brokerage, but just for, like, a rebranding purpose and a variety of other things. But I did, in my sales contract, retain my... Or the purchase of the business. I did negotiate to retain my clients as sales clients for a period of time. So what that allows me to do is I still have a continuous touch point with my... With a lot of my clients that transitioned. Still have that relationship with them. If they are having an issue, they are telling me, and I'm able to direct it to the buyer and say, hey. We have a problem just in case you weren't aware. And then, you know, we're kind of working through that. And I think that has dramatically helped. I think we would have had a lot more people that maybe didn't want to transition. But in terms of people who said, no. I'm not transitioning, we had one. And it wasn't because of the transition, they had some other issues, but one kind of pretty much right away that fell off in December. The transitional units that we had that I I call them transitional units that had properties for sale, we did have, you know, a couple of sales that were already in the works. It had nothing to do with the sale of the PM side. And, really, from people who have off boarded since we closed in October, we had one off board and change managers, and anything else that is off boarded has been because they sold our property. So it's not been a... I'm I'm super unhappy with services, and I'm leaving. So, you know, we're in March. Obviously, things can happen. I don't know.
00:30:56 · Bri Leichliter, Peter Lohmann, S2
But I'm still have great relationships with my clients. And, you know, if there's an issue, we're still... I'm still kind of feeding that over to the buyer. So I think that really depends on how your deal is structured on, you know, how close you wanna stay to it and try to assist with, you know, mitigating that churn. [00:31:18] S1: Today's podcast is sponsored by appgentic.ai. Ever feel like your best people spend half their day just routing calls? It's time to give every caller the service they deserve without interrupting your team's flow. Appgentic.ai can take care of this for you. Let's give them a call. [00:31:31] S2: Thanks for calling RL Property Management. This call is being recorded. This is Alex, your AI receptionist. How can I help you? [00:31:37] S1: Hey, Alex. I have a maintenance emergency. My guest bedroom light fixture isn't working. I need you to send someone ASAP. [00:31:45] S2: I'm sorry you're dealing with that. A light fixture or bulb not working is considered a nonemergency. We can still get this taken care of promptly. Would you like me to take the maintenance request over the phone now, or would you prefer I text you the link so you can submit it through the maintenance portal? [00:32:00] S1: I don't wanna mess with the link. Let's just do it over the phone. [00:32:03] S2: No problem. Can you please describe what's happening with the light fixture, like whether it's flickering, not turning on at all, or if you've noticed any burning smell or sparks?