What are your current growth strategies? How are you adding doors, ensuring that the doors you add are good fits, and driving client retention?
Maranda Hunnicutt of Foothills Property Management joins the show to discuss her strategies for adding doors and acquiring new clients.
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Season 4 Episode 10 features Maranda Hunnicutt
The Triple Win Property Management podcast is produced and distributed by Second Nature
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Transcript
Maranda Hunnicutt
And I tell everyone that's dealing with, you know, direct customer service. You should only have tasks that fill up about 4 to 5 hours of your day. You should have 3 or 4 hours of your day work time that's open to handle what comes in, because there's a lot of things that are not predictable. You don't know, you cannot predict a pipe busting and having to immediately take action, immediately call the owner, like you can't do that, and then give an eight hour work load.
Andrew Smallwood
Hello, professional property manager, Andrew Smallwood here with Second Nature, your host of the Triple Win podcast. I'm joined by my good friend, an industry professional, Maranda Hunnicutt. We're recording this live at Broker / Owner. Miranda, always a pleasure to talk with you, work with you, appreciate you, and spend some time with us.
Maranda Hunnicutt
Thank you, thank you.
Andrew Smallwood
Yeah. And for those who haven't met you or haven't had a chance to catch one of your sessions, right. You're you're frequently tapped by NARPM as an educator. What should people know about you, Foothills, the company? Give a little bit of your backstory.
Maranda Hunnicutt
Started the business in 2010, and I was a 27 year old single mother that had been working in real estate, and this was the only plan. This was not plan A, this was it. And I was going to do it and I was going to make it work. And 14 years later, we're at 700 units with 14 employees and rockin and rollin, and my daughter's going to be in her senior year of high school, and she was three at the time. And it's crazy. But it's been a fun ride so far.
Andrew Smallwood
I mean, it sounds like there's a kind of a story of determination and persistence there. Yeah, I'm really into that. 15 years and there's been exciting growth. Like something we'd love to talk about today is, you know, property managers maybe at different stages of their journey. But thinking about how do I build a different business that stands out, stands alone to some degree, I'm that successful, but I'm growing in a way that's sustainable, growing in a way that's durable and built for decades plus, you know, type of type of impact and increasing the impact of the business. What are some high level thoughts you think about? If somebody is saying, that's my goal, what advice might you give them?
Maranda Hunnicutt
The first thing I would say is slow and steady wins the race. So I mean, take it all the way back to, you know, a good old fable. The hair wins in the end. I'm not the hair. The tortoise wins in the end. Right? So, when you're building something to last time, you need to make sure that you're laying your bricks very carefully. And you're not just piling up a bunch of sticks. Right. To stand the test of time. So as you grow, you need to make sure you're being mindful of that and that you can take on that growth and you can service those clients because you know, you do certain things to get a client, but then you have to keep them. So if you're, you know, losing 20, 30% a year and you have to grow 30 or 40% a year, you're going out of business. But if you can have a 5% loss because of sales market or whatever, and you're growing at 12%, which is what we've pretty much what we've done, we've had some higher growth years and things like that, but we've done double digits pretty much very steadily, but never like super crazy high because I know we can't service it. And there are times that you have people that really want to come on and you really, really, really want to take that business. But you know, you can't. And I, you know, sometimes you have to say, hey, I want your business, right now is not great. We're onboarding. And I want to ensure that your experience is good and that we can build a sustainable relationship. What do you think about six months from now or three months from now or whatever? And I think when you were close to someone at that level, they're like, okay, she's putting thought into this. She cares. She wants this to really work out. And it's in his honesty from day one and being fully transparent. So, for me, I think to have something that lasts, you need to be very strategic in how you build it.
Andrew Smallwood
Yeah, I mean, you just imagine I've heard this a couple of times now, just like the response you would expect from somebody as a buyer. Right? It is. Oh yeah. Whatever I can do to earn your business and earn your business right away, it's got to be almost like a oh, wow. I wasn't expecting them to say, hey, I'd love to find a way to work with you, but that I may not actually be next Tuesday. and here's why. And here's the experience you have with us, that you've been with us for a long time. This is a successful relationship. You know, I'm curious, are there moments or stories or examples you could share of, like, as opposed to the tortoise moment? It was the hair moment and lessons learned of like, here's an example of something we thought was the right decision at the time. But then here is the challenge that we face and what we learned from that.
Maranda Hunnicutt
Yes, it's so when we were at probably 380 units or so, and I had this client that, well, he wasn't a client then, but I had been talking to him for like, I don't know, maybe two years. He would call, ask questions, just have conversations and, and whatever. And I really wanted this business. I really liked the guy and it was like 70 units. So that's great, right? I'm at 380 Am this huge. At the same time, I'm also talking to someone else who's got a like 30 unit townhouse community. And honestly, I didn't think for sure I was really going to get either one of them. And they both wanted to sign up and they both wanted a February 1st start date. So the team and I are managing 380 units, and we have 100 units on board. And when I tell you I think I slept like, I don't know, ten hours that whole month. And I was like, are my people going to quit? Right? This is insanity. And it was a little a little bumpy to say the least. We got it done. We kept the client that has seven, the other client we kept for like 5 or 6 years. And then they sold, which was their plan all along. But wow, there were some lessons learned, a lot of lessons learned with that.
Andrew Smallwood
So if you could rewind and go back to that moment, how might somebody who's presented with that kind of opportunity now, how would you think through that and work through that? Knowing what you know today?
Maranda Hunnicutt
I would have said to the 70 unit client because they were single family. I would say, okay, let's get a plan to take ten units a month and focus on those, and it's going to be a seven, you know, seven month take over and or at the same time said to the 30 unit guy, hey, I really want to work with you, but February 1st is not a great day for me. How about September? Does that work? You know, and let me get my feet wet. But it was it was it was insanity. But the lessons that came from that mistake were invaluable. So I mean, I did learn something in the crazy, which was nice about it.
Andrew Smallwood
And, you know, another question. You're like a moment ago you were talking about churn and how if 20%, 30% right is falling out of the bottom on an annual basis, you got to sell 20 or 30% just to get back and all that work to do that 40% plus is, a lot of growth this year, just a little growth. So like the impact of churn on the overall impact, I'm curious about your perspective on when you think about churn, how do you how do you guys kind of assess here's what we think is good, you know, in our context and what we're doing there. We're kind of the sources of churn, you know, where you see that kind of coming from and how you get some approach that for us.
Maranda Hunnicutt
All of our churn comes from two things a sale or a termination, very, very rarely does an owner terminate us because they are unhappy with our service. And to me, that's like, if that happens, we are doing a total debrief. We are doing a deep dive. We are getting into it like everybody's all hands on deck meeting what happened? I need to know. Sales is I mean, that's going to be a normal natural, we've been in a very hot sales market and that's going to come. It's going to happen. And then I still do our BDM stuff because I really like it. And sometimes, I take clients that aren't a great fit because I just really want them to be. And I like them but I don't want their property and it's not it's not what we're used to dealing with. And, you know, it's not a good fit. And so I had to terminate a client that had what they had like 60 units last year. Well, so we had had 20% turn last year, the first year ever. our highest prior to that was like 6%. And we, I track that kind of manically, but they just weren't a good fit. They were not the properties. 20 of the properties weren't in our normal service area. The court system was different. The, you know, filing the evictions was different. Trying to get my vendors out there wasn't ideal. I had to really push them to go. And then the other, the larger apartment, the clientele was not what were used to dealing with. And so, you know, getting better was about being very clear on who you want to do business with and not taking people that aren't right for you. Lessons repeat themselves until you learn them. and that is one that has repeated itself for me, and I think I'm getting there on learning it. I'm getting better at it. At least I'm learning tidbits. I'm picking out some knowledge on it. But that's where most of our churn comes from. And it's good. Churn, to me, is a sale, right? They were happy there was not anything we could have done. We didn't do anything wrong. I didn't pick the wrong person. That's good churn. You've got what you wanted. The property is served as purpose. You're cashing out, moving on. Right. And then obviously, bad churn is when they say you messed up and I'm firing you, which is a huge now and then. Neutral turn to me is kind of like Miranda, come on now. You know better.
Andrew Smallwood
Yeah. I like how you're categorizing the churn. So say it's not all viewed the same like good churn versus bad churn. Some of this is market-driven or some of this is, hey, things that are more directly in our control or within our influence. And one thing that you said early on that struck me was like if bad churn is happening, you know, something within our control, how seriously you take that and it sounds like the culture is that's not just accepted or tolerated or like, yeah, that that's just what happens is, is that it's it's serious. It reminds me of a company that I heard of that was really known for like amazing customer service and retention. And they talked about how I think it was Andy probably told the story of there was a client that was saying they were going to churn him like the CEO, like flew to their house, right, to meet with them and say like, oh my gosh, like, what can we do? And just that attitude in that culture permeating the organization, you know, it seems like a key to success. 6% churn. You know, it seems like great. You know, performance-wise, if you look at benchmarks at the industry and something else that you were saying there that got my attention was you were talking about, okay, there's a sale, these right fit clients being clear about who you're for and not just the right fit, kind of the right fit property issue that I'm one of you can share, like as an example, for people, even even if it's not exhaustive of all the things. But here are some of the things where you found like here's how we have defined who our right fit client is, who our right fit property is versus just what you guys have found work for you. What you focus on?
Maranda Hunnicutt
Really, it's figuring out if their values, align with our values because service is huge to me. I mean, my business reputation is everything because that's something that you can lose so quickly and not get back. And you get business, you grow. I've never spent money marketing. I mean, I classified as marketing, but I gave it to charity and to events and stuff. But, I don't do mailers. I don't call people I don't have, you know, cold leads coming in or anything like that. All of our growth has been organic. And that's because I am crazy about our reputation and how our clients feel about us. But some of the ways we, you know, just in talking to someone and throwing out different scenarios and seeing how they're coming to us, what problems are they looking to solve? You know, if I'm on a call with someone and they're immediately talking about their old property, you know, I'm with this property management company and they're doing this, this and this. And I'm like, well, and I'm very on I'm very bored. And you know me, I'm very blunt, honest. And I just sometimes my filter is not there. And I'm like, well, we do that too. And this is why we do that. And if you're looking for a company that's not going to do that, we're not the right fit for you. And then what's their approach to repairs and what's their how do they speak about their residents. And you know what their kind of vibe is on that. And then I ask them what their plans are. Why are you buying this property? Is this your grandmother's house that you ate Sunday dinner at every, you know, every Sunday for your entire childhood and even here today. And like, you're going to craft somebody takes down the rosebush, and we're probably not a good fit for you if you're buying it, because, you know, your parents are getting older or your spouse is getting old or whatever, and you want to fund their long term care like nursing home care because we have several clients that do that. wonderful site for you because I'm going to I'm going to manage, you know, how you want and to be able to achieve your goal. So if what you want to get out of it matches what I know I can do, then we will. We're a good fit. If what you want to get out of it, I, I can't guarantee you that a resident is not going to chop down your grandmother twice, but I. I can't do it. So we're not getting that.
Andrew Smallwood
I love just like painting color with the specific examples there on how, here's a client with a goal that we can work on together and their requirements match our competencies, versus here's somebody with a goal that we don't have as much experience with or we have experience with. And it's harder for us to work successfully together. And the requirements aren't a match for what we really focus on being good at. so I appreciate you sharing that. Yeah. Maranda, I'd love to ask this question that feels like a persistent challenge in the industry. I don't know if it's spinning plates or what the best analogy is, but this idea of, like, every time I'm growing, I'm adding more work. And in fact, as I'm doing that and I get to a certain point, I, you know, usually it's a 301 unit point where you start to have to add more people get more specialized eventually as you go from there, there's like a management layer starts to come in and it's challenging. Like I hear a lot of people say, like, you want to try to push through that as quick as you can. But I also hear like you want to do that thoughtfully, right? Because otherwise you're causing other troubles. And so how how have you thought about kind of the balance of growth and operations working together to fuel the business and support and resource, the business being not good, not good too far? Header skis where you know, where it's affecting your reputation, how you guys manage that.
Maranda Hunnicutt
That is walking a high wire. Yeah. I mean that is really like don't look down. This is scary. That's a that's a good question. So we for me we kind of look at who does what and then what's that volume as we grow. So if we have so first we are I mean because we've kind of been down this road. So at first we were just, you know, 4 or 5 of us together. We just kind of handled whatever this person kind of was in charge of this. But we were all in a very small office, a mess it sometimes. And everybody heard everybody else's conversation. We didn't really have to communicate, because I'd just heard what you said to that owner. And, you know, I know who you said their name or whatever. And then as we, you know, we move, we're in a bigger office. You have different team members and, and all of this stuff. And it's like, okay, what what are you doing? What is your role? And then how much of that can you handle? Where are you at capacity and I tell everyone that's dealing with, you know, direct customer service. You should only have tasks that fill up about 4 to 5 hours of your day. You should have 3 or 4 hours of your day work time that's open to handle what comes in, because there's a lot of things that are not predictable. You don't know, you cannot predict a pipe busting and having to immediately take action, immediately call the owner, like you can't do that, and then give an eight hour work load. So when their capacity is getting closer to it takes me six hours, okay. And then we look at that and say, what are you doing that maybe needs to be automated or pieces of it be automated, or maybe some of it goes to an RTM. Or maybe we hire, you know, a third party to reconcile our books for us. So you're not doing that any more or whatever and manage the load that way. But then, I'm always just kind of taking a pulse. I think that's having a consistent pulse on who's doing what, and how much time it's taking. You know what, what's your capacity? I ask that all the time. What's your capacity? Are you fully open? You have some time. Don't. And they never know what I'm asking. So they're like, they're real honest because I catch them off because, I don't know, I might ask them to work on a special project with me. That would be super fun. Or who knows what it's going to be, you know, send them on some random wild goose chase that's, you know, a lot of fun. But I think keeping a pulse on the capacity and knowing where you're at because service, you can't be at 100%. You can't and do service. You have to have some open time.
Andrew Smallwood
So a question that I've just it's work for you because I've seen people kind of go about this a different ways. I remember talking to a VP of sales who was talking about capacity. I'm like, when do we know we need to hire another sales person, right? And add somebody on. And and he talked about, okay, here's this like sophisticated, you know, eight step dynamic kind of he's like or I can just like pull up their calendar and see he's like, I've got a simple way and I've got to like complex, right. Like I imagine you could go about that different ways. Like some of it could be like scorecard management. Right. And you're, you're tracking here's the number of tickets coming through. And you know what you're seeing there. Some of it's just conversational and talking to them. What what's work for you to get like a clear good sense of ground truth for that. And, you know, see how it's changing.
Maranda Hunnicutt
Lead Simple has been very helpful with that, which is one of the reasons we switched to them a couple of years ago. I can pull up at any time and see everyone's task because their cycles right in the month. So the first two weeks of the month, you're going to be a lot busier than you are the third and the fourth week of the month. Right. So and then we build them out calendars for them, like, and especially when we're onboarding a new employee, we're like, this is kind of how your work's going to flow because we know that you're going to have some downtime. So that's when you work on your renewals. That's when you send out, you know, the stuff that's time-sensitive and needs to get done. But it's not like as time-sensitive as a delinquency process. But lead tempo helps with that. And then checking calendars. Look and see, you know, how many calls were you on today? We used time, doctor, which is great. And but I would say number one.
Andrew Smallwood
Just in case I was not familiar with that. That's like a time-tracking tool. Is that right?
Maranda Hunnicutt
It is. So it it has screenshots and it tells you like I can look and see that are leasing coordinator spent, you know, two hours in our background check software and three hours inside of that file. Yes. And then you know, then he was on the phone for the other time calling people, returning calls or whatever and stuff then.
Andrew Smallwood
Yeah. And either that looks right or it seems like a lot of time in the screening piece. So let's dig into that and understand is there something slowing down and addressing that. And it sounds like, hey, when you notice somebody might be orange lining or red lining, that's when the group kind of comes together to say, how do we we identified a capacity issue or a constraint here. Do we solve this with a third party? Do we solve this with automation and software training? And that's kind of how you're working through that on an ongoing basis. Is that right?
Maranda Hunnicutt
Yeah. As we might not I mean, the answer might not be we might not need another staff member. We might need to just set up some relations, or maybe we just need to improve the process, or maybe we need to cut something out like it might. Does it matter or does it not matter? Because we do staff, we do a lot of staff, and sometimes we don't really need to do all that. We can just simplify it.
Andrew Smallwood
What I like about that is it seems like it can be reflexive to say, oh, we need to hire someone, right? We need to add more. But it sounds like you guys are posting, hey, what is the best way for us right now to create the capacity we need to do what we want? Yeah, there are options on the table there, so let's cool. Right, Miranda? 1 or 2 more questions here. What's something we haven't talked about as it relates to growing organically versus inorganically about growing sustainably versus unsustainably, about somebody growing in a way that builds a great reputation and also keeps solid momentum in their business? That's somebody's goal. We've covered a lot of good ground here, but what's something we didn't cover they think would be valuable for people here?
Maranda Hunnicutt
I don't have to tell you this because you already know this, but growth, you know, you have to have good relationships. So me sending a direct mail marketing piece to someone and their banker or their attorney or their CPA or their whatever professional service or a realtor, them saying, you know, you should come to Foothills because they're the best. That's gonna be such a warm lead coming in versus I got a piece of paper in the mail that I'm throwing away because, you know, I also have four car warranty offers or whatever. And that's where I think I've done well establishing those relationships and making sure, like, those people know because everybody, like, people want to help other people. That's just, you know, human nature. You want to be helpful, right? So when someone has a problem, you want to be the one that's like, hey, I've got a guy. I do it all the time. Like, I know somebody that if you just call them, I feel like that would be super helpful to you because I want to help other people so you need to build relationships with people who can say, I know somebody that can help you because you're getting a warmly, you're getting a reference. So and doing that, like, I have a commercial banker friend of several of them, but one very recently, I got a phone call and the guy had like 6 or 7 units he'd been self-managing. He was up for renewal on, you know, his five-year and whatever or five-year loan was up. And so was in talking, renewal and and sharing some of the problems and things like that. And she said, you should really call Miranda, and she can really just make this a lot easier for you where you can focus on this other stuff. And you, you know, just get a check in the mail, and it's wonderful. Right? And so he's like, oh, okay. And even though, like, we're well known in the community, he was like, didn't even think about it, you know, so doing that and I feel like in those kind of things you need to educate those people on what you do and the problems that you solve. Because you do a lot and you solve a lot of problems. So they need to know examples. They need to know that you signed up this portfolio and you increase rents by 20% in 12 months. They need to know that you had a squatter in a property, and you were able to get them removed in 48 hours. Like think about what the concerns are for landlords. Like there. That's the same every market, right. They're having trouble collecting the rent. They're having trouble with lease violations. They're not maintaining their property. They're not increasing their rents like these are their problems. So, in normal natural conversations that come up, throw it in there, and work your way in there with an example of something. And then that's going to stick examples and stories stick with people. So if you tell them a story about something that you did, then they will then relate that and be able to pull that from their file and refer you as you solved the problem and they know a guy.
Andrew Smallwood
Yeah, I mean, what I love what we're saying that ties back to earlier. It seems like almost everybody would agree that word-of-mouth marketing is like the best form of marketing because it's high trust, which means it's just more efficient, right? Buyers moving to the process. And yet not like, well, everyone would agree with that premise. Not everybody's taking the time to say, okay, how do we actually develop your problems and pain points in the stories we tell about them that are easy to retell and that people want to retell. So that actually happens, right. And focus on actually make it a part of their plan and strategy as opposed to. But it can be easy to just design a flier and send it out to a bunch of people. Right. And that could be easy to do. It can be harder to do the former thing. Right. But ultimately that's paid off for you guys to keep the focus there.
Maranda Hunnicutt
Ten-fold. I mean, zero marketing spent 14 years, you know, and started with 30 units, and I owned eight of them. Yeah. Yep. So 22 and just having that consistent double-digit slow and steady growth consistently. And that pays off so much. So being friends with those people are in take the time join rotary go to fundraising events. Go to your Chamber of Commerce events and meet people. Right. And be genuinely interested in people. Don't set out and be like, okay, I need to go to this event, and I need to find the CPAs so they can tell their clients that they should call Maranda because she gets great reports. They've now just like, go meet people and build relationships with people and it'll come. You'll have an opportunity, people love hearing crazy PM stories. They love it. They're so entertaining. They're like, they did what? And you're like, I know people are nuts and they love it. So, you know, they'll ask you, and then you'll have an opportunity.
Andrew Smallwood
Well, great, I love that and we’ll end on that note, just your passion for people and how that translates to your strategy of how you grow the company, it really rings through. So I always appreciate the time. Thanks for joining us.
Maranda Hunnicutt
Thank you.
Laura Mac & Carol Housel
And that wraps up another episode of the Triple-Win Property Management podcast. Thank you for pressing play. We hope you've gained valuable insights and inspiration.
The Triple-Win Property Management Podcast is proudly produced and distributed by Second Nature, where we believe in a Triple-Win, building winning experiences for your residents, investors and your teams with the only fully managed resident benefits package. Visit SecondNature.com to learn more and talk to an RBP expert in your area. If you have any questions or comments or want to weigh in on the conversation, we'd love to hear from you. Email TripleWin@SecondNature.com. That's TripleWin@SecondNature.com. Stay connected with us beyond the podcast. Visit our website at SecondNature.com to stay updated with upcoming property management events and articles. And don't forget, you can keep the conversation going in the Triple-Win Property Management Facebook group. It's exclusively for property managers. To receive even more valuable insights and updates, subscribe to our newsletter. You can find the link to that and much more in the show notes. On behalf of the Triple-Win community, this is Laura Mac, thanking you for tuning in. And on behalf of Second Nature, this is Carol Housel. Check back soon for another exciting episode. Until then, keep striving for that Triple-Win.