Mark Kreditor has forgotten more about the property management industry than most will ever know. He’s been active in the industry since the 90s, and over that time has developed some highly functional processes that have elevated the quality of his service.
Kreditor joins Andrew Smallwood to talk about his experience in the industry and some of the simplest ways that modern property management companies can elevate their service and stand out in an industry that faces commoditization.
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Season 4 Episode 13 features Mark Kreditor
The Triple Win Property Management podcast is produced and distributed by Second Nature
Related: Check out the other property management podcasts we recommend for single-family property managers.
Transcript
Mark Kreditor
There is a rapid transformation using technology that is not always the right answer for someone that's large, their largest single asset is in your hands. So I talked about being able to talk to somebody. That's important, but I have a saying that I wish every property manager listening would really consider, and that is you can't sell like you buy. Which means if I had an 80 plus year old client and a 20 plus year old client, or a 20 year old client that, you know, and I'm 45, I'm 65 now, but then I'm 45. I would definitely email the statements to the 20 year old, and I would mail the statements to the 80 year old, but some of my staff said, that's so inefficient. Why don't we just make the 80 year old figure out how to use our online system? I said, because he doesn't want to.
Andrew Smallwood
Hello professional property managers, Andrew Smallwood here with the Triple Win Podcast by Second Nature. I'm joined today by Mark Kreditor and Mark, I've been looking forward to this conversation for a couple of months. I know there's going to be people listening to this who know you and are familiar with you given your, you know, long and kind of recognized career in the professional property management industry, you're regularly tapped as an educator, in the real estate community at a local and national level. So, again, some people may be maybe familiar with you, but some people may not have had a chance to catch you at a NARPM Broker-Owner or, or otherwise. I'd love to, to get started first with just welcoming you today and, and appreciating you for coming on the podcast. So thanks for joining us today.
Mark Kreditor
Thank you. It's good to be here, and I'm happy to speak to you about my favorite subject, property management.
Andrew Smallwood
So today, I know Mark, can you share with folks how did you get started in this business and give a little backdrop and backstory about you and the company that you built and kind of how you got to where you are today?
Mark Kreditor
Sure. I come from a family of compulsive parents, so I was always very adamant about making sure that I was never late for appointments. And I was always going to be well prepared, or at least be able to wing it, to appear to be well prepared. So I found myself in college doing a lot of collection work for the school newspaper advertisements that were unpaid. I'd go after the retailer or whoever it was in order to save money, and I would get letters from people saying, you know, I've never met anybody as persistent as you, why don't you come work for us? This is a refrigerator rental company. I'll never forget that letter. So when I got into college, I opened up my business, which was called Get There First. And I started to do marketing. Direct marketing for people who are building condominiums. This was in the early 80s. There was a financial crisis. The condos couldn't be sold. They needed someone to rent them. And I was designated as the marketing guy to rent them. I got my broker's license and realized that I needed to cover the rent on my office very easily with the recurring revenue. So I started to manage ten houses and found NARPM in the late 80s, early 90s. And really, the rest was just applying everything that I learned from others and forums and NARPM is the most incredible networking organization. It was early on after that, that I was raising a family with my wife, with two daughters, that I realized that this is not a fun business. This is actually very aggravating. So I wanted to set in place the best and most efficient way to grow the business on behalf of my client owners. So we started to require tenants to pay rent on the first, which sounds simple, but we actually worked physically in the office until midnight on the first. And if the tenant didn't pay in Texas, at least we were able to put a sign on the door that said late fees now due. And the morning of the second, we had a whole crew that would go to the house and physically post tenants so late fees became a huge revenue source for us, and that revenue source led to, return payment fees because we were depositing the money as soon as we received it, funding the owners always the same day. So everything became as I was brought up to be very efficient. Our vendors were paid the same day. They paid a factoring fee for that. So that was called preferred vendor programs. It was a marketing subscription that they could pay for. It owners could then apply for eviction protection. I know many of these things are now illegal in many states. I'm talking about the 90s and the 2000s and I soon realized by networking and nonprofit that what I had built or was building was a very, very efficient, operation that was focused solely on taking care of owners in ways they've never been cared for before with regard to payment, taking care of tenants, because we did repairs just as quickly as we collected late fees. So everything was very intense. I realized I could not possibly do this forever. So we always and I say we my wife is a former CPA and I, you know, I mean, I would just look at the numbers every quarter. And I encourage people to be very aware of their business by looking and having a meeting with somebody, even yourself, every quarter. And I'd want to build it every quarter so that I always looked at myself as if I was a public company, and which the way I'm excited every quarter when they release earnings for Nvidia or Apple or whatever, I want to see the numbers go up. I felt the same way about my small business, and I never had a quarter, or certainly a year where we didn't not only grow in revenue, but in profit. And by the time I got to, 2012 or so, we were hovering above 1,500 doors and when I went to a NARPM broken-owner, I realized that a very nice statistic was that the average broken-owner made 16% of their revenue as their salary or their profit, and mine was 57%. And I realized that what I had built is probably A: not sustainable and B: something I probably could flip and get out of while the going was great. So this was about the time of institutional investors buying large sums of single family homes and creating these public companies. I realized they all need management expertise. We put the business on the market in 2014. Actually, ten years ago this week, we were about to close and within a few weeks had three offers and sold to a public company out of Parsippany, New Jersey at what I think is probably the highest multiple ever sold in our industry, simply because we had all these really funky revenue sources and all that. You know, I, I retire and I teach a little bit, but now I'm fascinated by what companies like yours have created in new revenue avenues for owners and for tenants and for property managers to participate in. So it's kind of this great wake up call that I feel the industry is in a wonderful renaissance, innovative service and fees. But, you know, that's where we are. And now I teach and I like to speak and just kind of keep my finger on it. But nothing ownership wise with real estate.
Andrew Smallwood
Yeah. Mark, thanks for walking through that. Like as you were talking about this, you know, where this started with a real passion for efficiency and operational excellence, that clearly you were able to not just execute on, you know, for a moment in time, but consistently over time where there was compounding efforts and really kind of building the business quarter over quarter. I get the sense in the way that you told that of kind of like where that comes from for you personally. What I'm really curious about is as you built a team in an organization over time, how, you know, were there challenges in instilling that same sense of urgency and the intensity you talked about, etc., across the organization in that kind of kind of translating through? And what lessons have you learned or shared about kind of building that culture across the organization for that real passion for efficiency and kind of operational excellence and sustaining that?
Mark Kreditor
So there was no question that if you came in for an interview with me, I would look you in the eye and I would say, there's nothing I've ever asked you to do in this company that I probably would not only do myself, but I will do myself if you don't do it quick enough and that this is the last place you want to work. If you think that this is going to be easy because we really, really strive for excellence. And I tell them the story about my dad, and he worked in a warehouse just for life, but he really brought me up with this idea that if you just can't keep up with the person that you work for, then the person you worked for replied doesn't need you anymore. Now, clearly a lot has changed in ten years, but I do still run into a lot of people who work for me and they really now say what you created was something different because we really cared about taking care of the customer tenant, certainly the owner, which I was pretty much the main contact or anything financial with the owners. And I had a maintenance man who took care of all of the service, was with me for 30 years. And, you know, we really were able to departmental eyes this whole business so that owners were able to always talk to us and that my concern is as we use offshore service companies, providers and what I saw happen with the purchaser of our business, I think personalized service is still what I consider to be our greatest asset in our industry. That is often lost as property managers search for a more efficient, more cost effective way to have somebody answer the phone somewhere else in the world because it's a dollar an hour and I, I never did anything like that. It was really always, always, you know, our team. So and I also paid way above market wages. We gave large bonuses at the end of the year. Business was always better than the year before. So people would always get, you know, 4 to 5 figure bonuses, which they weren't certainly expecting elsewhere. We provided at one point a 15%, self-employment pension to our employees, hoping that they would save for retirement, because I felt strongly that most people don't save enough money. I stopped that when I gave the checks out the next day, half of my employees had bought cars and I said that was what the money was for. So then I did a match, but it was still a, you know, 3% match. And people who wanted to retire someday did it. We provided health insurance bonuses and of course, the retirement. Those three pillars. I think what I created then would take more effort now, because I do believe the American workforce coming out of Covid has been spoiled by accommodation.
Andrew Smallwood
Oh yeah, it sounds clear to me that, hey, there's this conversation up front about you're not looking for the easy job, you know, setting standards and expectations about what the culture or the intensity, the sense of urgency, right, that people are going to feel and experience that they're they know what they're signing up for and that you're offering them, hey, there's an above market rewarding experience for doing more than typical. And so if you're ready for that, there's a clear give to get you know, for people that were joining you and that, you know, people are appreciating that.
Mark Kreditor
We were the Chick-Fil-A of property management. If you ever go to a Chick-Fil-A. The people are extremely accommodating and there seems to be an oversupply of staff. Their food is phenomenal. The prices are the highest. Or the way Amazon delivers your package. Or the way 1-800-myapple gets you someone answering the phone call, which is probably someone from America. you know, I believe those are the kinds of companies that I emulated to.
Andrew Smallwood
Yeah. And I think, you know, you alluded to this earlier how you focus not just on the core fundamentals of property, of course, the core fundamentals of property management, but beyond that, you had a unique revenue model, lots of different revenue sources and a business model that also supported right offering, you know, all right. Way to so some of that maybe driven by higher pricing that again customers are still getting value for an intense level of service. They're getting for that. But also other sources of revenue kind of transitioning there. You know, I'm curious your perspective. And as you're educating and talking to property managers today, what are some of the things that you think are most important for them to be focused on in building a healthy and sustainable business in 2024?
Mark Kreditor
I'm so excited to answer this question. There is a rapid transformation using technology that is not always the right answer. For someone that's large, their largest single asset is in your hands. So I talked about being able to talk to somebody. That's important, but I have a saying that I wish every property manager listening would really consider, and that is you can't sell like you buy. Which means if I had an 80-plus-year-old client and a 20-plus-year-old client, or a 20-year-old client that you know, and I'm 45, I'm 65 now, but then I'm 45. I would definitely email the statements of the 20-year-old, and I would mail the statements to the 80-year-old, but some of my staff said, that's so inefficient, why don't we just make the 80-year-old figure out how to use our online system? I said, because he doesn't want to, and he probably knows ten other 80-year-olds with rental properties that complain about the same thing from their property manager that they have to access the portal. They always forget their password. You know what I mean? Like, this is a real problem. You can't sell like you buy. So this is the message that I have is that you can outcompete your competition by selling things, but you can't price that 80 year old can't price the fact that he can open an envelope but doesn't want to go on a portal and be able to understand his statements. And this is just one example, and I believe so strongly in written newsletters that are not only emailed but mailed, especially to your older clients, because they then take it and give it to someone else in their church, synagogue, or a community center that's been complaining about their rental property. It's something they can touch and feel easier than forwarding an email. I just believe strongly that we spend way too much time believing that all technology is going to be is easy to comprehend for all generational clients and customers.
Andrew Smallwood
So I think you're making this important point of just it sounds like really strong conviction in aligning to buyer preferences, right? And the experience they're wanting and say, hey, we will do the hard work and commit to the complexity of configuring our service and configuring our process to meet that, you know, and where they're at. And I think, you know, you explained well, here's a lot of value and benefit that and again, not many providers are willing to do that. And so it's a differentiating level of service. Are there times you know, how do you think about like, hey, that's really just a universal maxim that you guys kind of committed to an all situations? Or are there times where you say, man, it's too much complexity to take on. It truly is too inefficient. We actually can't reliably deliver on this level of service. Where were there examples of that where you got more consistent and standardized, or how do you think about that?
Mark Kreditor
Sure. So I'll use the example of payments. You know, tenants would physically bring us money orders or checks. We knew how to process those. That was easy. But when the whole ACH came into play, it was harder for us to have to then check with our bank. Obviously the bank is not going to credit it or update it till after the first, so we're missing an opportunity for a potential late charge because we don't really know when they sent it to the bank, especially if it's a bank holiday or a weekend. So we started to charge a fee, discouraging people from using online payment processing. This is in the earliest days. We wanted them to physically bring us the rent, or mail us the rent early enough and leave postdated checks is what I would always tell people to do. That was our model. And so the way you get people to fit into your model is to charge them a penalty if they leave the model, like maybe charge the owner. If you have to mail the statement, it's fine. I'm happy to pay for it. Then when the movement went to ACH, the exact opposite happens. Now people charge to get a physical check because there's risk in having money in the office. So you have to just kind of move, you know, the treble and the base so that you find that mid-range as the market shifts and that's just one example with payment. You know, I think the biggest problem and I spoke about this, at broker-owner, is that most tenants sign the most important contract of their life while driving the car at a red light, using a software program that signs contracts for them. And you are then living with this person as your tenant who has absolutely no idea of the policies, procedures, or rules until there's a problem. Then they come after you go to the newspaper, the lawyer, whatever, and say, this can't be legal. I can't believe you're doing this. So we would not sign leases electronically. That one I really, really held out for people thought I was nuts, but I personally wanted to read every lease to a tenant because I wanted the book to stop with my mouth and their ears, that they hear it from me, how they're going to get the best service, how they make their maintenance request known, what things to check if they have a problem, you know, breaker box, air conditioning, filter, whatever it was, but also about payments and also about early termination. And I did these lease closings. That's what I spent most of my day doing. We then videotaped it and we started to provide the lease as a link that they could watch. I was questioning whether or not they actually were watching it. So if I was to be in business again, I would set up a lease signing remotely, which everybody wants to do. But I would do it just like when I get a speeding ticket and I take the driver education class. They know how long I have spent reading that paragraph. And then they asked me test questions about the paragraph so that they know that I took the class. You can't just do the answers to the question, the answers to the test. I wish people would look at our leases that way, the answers to the test as they sign the lease, the initial every page. But you have not conveyed what you need, and you're going to have way more inefficiency. Getting yelled at and arguing over things they should have known was in the lease. Or they'll get a lawyer or go to the TV station. And this is what bothers me so much, because I'm so sure it's because people don't read what they're signing, or property managers or companies haven't created ways for us to show them what , you know, stopped up. You know, the wheels look like because they're not changing their air conditioning. Filter out, use something that's right up your alley. Like I had pictures of what these coils looked like and said, this is $300 worth of acid wash, which you can chew. Or right now, if you'll just remember to change your air conditioning filter again, this is ten years ago now. I would have a perfect answer for it. We're going to send you one every month, but I'd still show them the pictures of the coils because that's what I believe. When you see value, you understand value. You can't just tell somebody, you know, you’re going to pay rent on time. What does that mean? What happens if I don't anyway? So that's my big high horse.
Andrew Smallwood
Well, Mark, you're definitely singing a song that, Second Nature would add our chorus to here, which is, it's, it's like the most obvious. It's like the biggest problem in property management hiding in plain sight or like, kind of like the, you know, the biggest, secret that everybody knows about. So to speak, is that residents don't read their lease. And it increasingly and again I'll carve out that that maybe some do. And there's another question of those who are reading, how well do they comprehend the legalese, etc., and clearly understand what's expected of them, what their responsibilities are, what they can expect from you, you know, and what your responsibilities, the owner's responsibilities are in a way where you don't have these ticking time bombs later in the process where somebody is, you know, somebody is disappointed because the expectations and their experience don't match up these experience gaps that are happening. And so you talked about this important point, which I think is important across a number of factors of just like transparency in the great lengths to which talking about transparency and the importance of transparency in and the industry, it sounds like you've gone to great lengths and you still believe that's really critically important today. It's like, hey, the buck stops with you of ensuring communication. You talked about different ways of doing that more efficiently than, hey, sitting down person to person. That's obviously not scalable to thousands and thousands of units and units, right. For one person to do it, video makes that more scalable. But how do you ensure you're offering transparency and choice and, you know, convenient, flexible ways to do this. But accountability ultimately to a result of ensuring good communication is happening. What do you think it's important for property managers to be thinking about today as it relates to transparency communications, setting expectations with property owners and residents?
Mark Kreditor
Well, it certainly starts with the lease, and I really believe that they can't just just sign it at a red light. It is so dangerous for your staff. Have respect for the people who work for you not to talk to people and then say, I can't believe you said that. Yes. You can't. Nobody invested on the front end for them to understand it. So I believe strongly in this idea of having some time, questions, a test, maybe in the section on accountability to them may not like it, but I promise you, if they understand the lease, they're going to call you less with the same stupid questions like how do I break a lease? What happens if I can't pay? And then they'll still maybe email these questions. I would have a software product, which I'm sure you could figure out exists, that picks up certain words like breaking the lease repair request and boom! It immediately would push out information to the tenant that matches, breaking the lease to paragraph 26, which answers the question, which has a hyperlink to a video of someone actually explaining that portion of the lease. In plain English, I want to provide as many products as possible for my customer tenant to be able to understand this in their own way, so they don't have to call and take the time from our company or our staff because most of the answers are the same. Most of the answers are that same, and something else that I believe strongly is no good deed goes unpunished. And this creates also much more work for property managers when they say, well, they've never been late before, so we waive the late fee or, you know, the owner didn't want to really, you know, charge them for that because he wants to be. So he replaced it even though they broke it. I mean, we had none of that. We did exactly what the lease said because that's what we explained to the tenant we agreed to. Plus, it just cut out all the stuff that, well, you waved at last time. Can you ask the owner again? I mean, we pretty much told owners we're going to follow the lease unless you tell us not to. And every owner said, yeah, that's what I'm expecting. That's why I'm hiring you. So there was just no wasted conversations with waivers because no good deed would ever go unpunished. If you waive something, I, I and unfortunately, maybe I look back on that and said, you know, how could you be that kind of person? But it's a lease. It's just like if you release your car or you don't pay your mortgage or not your electric bill, they're not going to just say, okay, you could have the electricity for free.
Andrew Smallwood
So yeah, yeah, there's this, great dynamic of what you're talking about market and I'll save it for after the podcast, but I'd love to actually get your feedback on a product we've been building. It's in beta and starting to come out of beta later this year. That's really focused on this, and we're actually calling it resident onboarding software. And it's literally something somebody can do from their phone. Hopefully not at a red light. But what, you know, what they're getting is page by page and in unskippable format. Right. Here's the core things as a property manager, I need them to understand right about this lease. Here are the options and choices and flexibility that I'm getting. Giving them to configure their experience. That still works and is supportable right and fulfilled on our end. So they can make those selections with the ease of a click going through. And it configures the lease document right as they're going through that and culminates ultimately in the lease signing with the ‘yeah, I'm still asking them to read and say they've done the whole thing’, but kind of knowing the consumer behavior, hey, we're going to go to great efforts to communicate this upfront and make sure it's clear and that people are engaged as they're going through to help stop those, you know, ticking time bombs, if you will slow that show up later and, and diffuse that kind of earlier on.
Mark Kreditor
So Andrew, what would you just describe to me is the highest value resident benefit that I could ever think to provide and pay your company for is comprehension from that tenant. It would just be wonderful. Start with Texas. Start with the hardest states, the states where people say, I can't believe that's what it says. You know, we have some provisions in our lease right out of property code that are unbelievable. And I think that would be a fee I would charge to the tenant a processing fee or a lease closing fee. I mean, it was it's a no brainer. Just like I get charged those things on Vrbo and other platforms when I rent a house to understand the paperwork. Yes, this is exactly where I'm heading. I find that this is destroying the relationship our industry has with the public faster than anything else. This non comprehension. So the tenant, when faced with something that is not favorable this, this can't be legal, I can't you can't do this and goes and finds a large you know amplifier for their messaging, whether it's losing app fees or being evicted. I mean, we got a lot of problems in our judicial systems countrywide on behalf of landlords, simply because I believe we haven't worked hard enough to address it on the front end by explaining what options they have.
Andrew Smallwood
Yeah, yeah, I don't think you're overstating the problem. And I think you're describing a well, leases are getting longer. Right. And there's more options and configurability today than there's ever been before. And yet attention spans and consideration spans are getting shorter. Right. And so it's exacerbating this problem of really educating and enrolling residents with the right expectations. And that relationship in a way that builds trust versus destroys it. it's a problem we're trying to take head on. And that we've seen the industry around property managers not build the kind of tools, you know, that are needed to help us do this in 2024. So we're we're doing our best to answer that call. We expect and hope others will too. Mark, I want to talk a little bit about, you know, adjacent to this, there's a question in property management about the business model of property manager. And you alluded to, hey, there's things I was doing that actually, I don't know if I would be doing them today or I didn't see them as totally sustainable and durable. And so, hey, if you were building a property management business today, how would you think about the business model of property management and what kind of things you would focus on, you know, and the ways in which you would do that? you know, to build a really healthy, sustainable, durable business.
Mark Kreditor
Today, I think most property managers go into the business and look for tools that are going to make them more efficient in terms of time. And I believe I always have that I can charge much more for my service if I provide things that nobody else can out compete. Like, for example, I've invested in this product. So for a product or my personal commitment to my owner that I'm going to read this lease to your tenant, nobody else does that. Newsletters to owners maybe have a company that writes them? I don't know, but our newsletters were the easiest way for me to teach my owners what was going on in our industry and certainly in our marketplace, so that when they got the call for me, they would expect it, whether it be to make certain adjustments, certainly, and security features and smoke detectors and other things. But I really believe that too many, especially young property managers who are good with technology, they miss the value of good service. And I would encourage them to go shop for a Lexus. And I really believe car dealerships are some of the greatest places where thought is given on customer experience. And when you go into any car dealership, I use this in my book runner, a presentation about fees and other things that people could buy. They show you pictures. My problem is I often run the rim along the side curb. If I miss it on the parallel park, we have to do it one time and the rim is totally chopped up. Thousands of dollars, but they show me pictures of rim after rim on this flip chart or on the iPad when I'm signing the papers face to face. But I would always pay this ridiculous insurance which people say never buy anything they sell you. I buy the tire and wheel protection plan because I know that whenever I bring the car in for service, I'm going to want to have my rims fixed and I have the coverage. The same thing about technology. I'm amazed at the Lexus dealership that they pay two people, two people full time, just to teach older customers who are probably the largest buyers of Lexus cars, how to use the technology. They care so much that people can experience the benefits of the car. So I take that to property management. You are not giving your clients the greatest experience or benefit. If they never talk to the same person twice, if they naturally feel that nobody really knows my house, they probably don't have my back. I would have a could tour property management company. I would say we do charge, you know, let's say 1% more, whatever the number is and it represents, I understand, $30 a month, but you're always going to be able to talk to someone who's walked your home, who knows your property, who can pull up on the screen everything about how the configuration is of the thermocouple on your hot water heater, whatever it is, I feel a lot of that is lost. And we're not as much about the real estate as we are about building people's, you know, pocketbooks. And the and I always used to say, put your commission. Second, like, you build a business by building your reputation and I always felt that owners knew that part about us, you know, that they would be able to talk to us, that we always answered their calls. And, I know that doesn't always happen in the new models being developed in our industry. So you asked what I would do. I would certainly go back to old school service and figure out how to charge enough to cover that.
Andrew Smallwood
Yeah, man, I love this point you're making of what are the things that only we can, or maybe only we are willing to do that put us in a different position where, hey, we can not invite comparison to what somebody can do on their own, or what another management company, again, may be offering. But you force a choice of if you want this and if you want this kind of thing, if you want this outcome, and if you want this experience that only we right, then you're going to choose us. And hey, there's there may be a premium attached to that, but whether there's even a premium or not, it puts you in a, a great position, right, to keep that customer ultimately over time and have it not be competed or commodified aware. So if you think about sustainability and durability, it's sort of what we started. It makes sense. But in the company in a differentiated position, I think you've given some good, good examples of where people can do that.
Mark Kreditor
Others also trust you more when they know who you are. When they trust you more, they then believe you. When you say never, ever go see this property again. I used to tell owners that I said, this is like taking a property that has been otherwise a very, very clean and holy place for a kitchen and, you know, opening up the most disgusting thing possible because that's how your tenant likely will live. Why do you need to put yourself through that aggravation? That's what you pay me for. That's why I have a security deposit. So please trust me. You know I'm here. You know, I answer the phone. Don't ever go by your property. Don't even drive by it. You just don't need the aggravation. You're you're, you know, your stomach and all that. And I had owners who really never went back to their properties, and they started to look at it as an investment that I was in charge of, and we encouraged them to pay off their mortgages. I do believe that you people get too in love with debt and leverage, and as you get older, you should probably think of a plan not to have that. And I have the most cherish thing. Some pictures even behind my wall. Your Gibson owners, when they paid off the mortgages, they bought me things which I. I find to be very valuable in my life because I had them for 20 or 30 years and they they listened to our advice. And didn't you know, go over to the property and, and do things for tenants because she seemed like she needed a break or whatever it is. I mean, I just it's a business.
Andrew Smallwood
I'm sure a lot of people listening what they man having an owner relationship for 2 to 3 decades, right. Like that's a really attractive thing. I think that a lot of people listening would want. When we talk about the Triple Win, a lot of it is how do you create a resident experience so good that people don't want to leave? How do you create a investor experience so good they don't want to sell, they want to hold until they fully paid off their mortgage. And even by now you mean it's more and an employee experience so good that people want to be in your company and grow in your company and be in the industry, putting those all together at the same time. You really get the most powerful force in business working for you, which is is momentum, right, that you can keep keep building on, and turning that flywheel Mark. I know we're coming up on our time. So last, last couple questions and a couple things I want to make sure we cover is you just gave this keynote presentation and now from Broke Ground and you've alluded to it a couple of times. Is there anything else for kind of like the Cliff notes or SparkNotes version of key messages or points that you shared there, that you think would be important for an audience that wasn't in the room or the audience. It was in the room to hear you're again.
Mark Kreditor
Well, you picked up on it so beautifully when you said, you have to really sell what's your best stat? And you sell things that people can't compete with. So I would encourage every property manager to sit in a room, maybe with their staff, their spouse, their team, doesn't matter their partner and just figure out what are we good at and therefore what can we then do with that? I was always really good with money. Other people's money. And I would invest security deposit so I would get the maximum return. I mean, I was crazy, I had every nickel of deposits working for me and bonds and stuff, CDs. We didn't have to pay the tenant anything. So it was a you I mean, it was just a big revenue source. I also had no problem lending money to vendors to build the fleet of trucks to get staff, since they needed it to buy parts, because they're going to go borrow 30% or 25% from from God knows where I can lend it to him for 10 or 15, which is three times what I was getting in the bank. And I can use money to make money. It also requires no labor. So I'm a big believer and you have to look at what is the time factor and whatever this new profit center is. I talked about tenants leaving appliances behind. When they move out of properties, there'll be huge opportunity to capture those appliances. Tell them you'll take them if they're in working order, partner with the repair company to maintain them and lease them back to future tenants so they can have appliances, whether it be refrigerators or washer dryers. You multiply that by a couple a hundred appliances, bringing in $3,050 a month. You have a reoccurring revenue source provided they don't break or get stolen. So, you know, I just think about these things all the time. I never stopped thinking about new ideas with which to make money. With the money that we already have in property management, I feel the management fee is a lost lead because it requires the highest amount of labor. The rest of it is really what you need to focus on at the services and benefit packages, whether it be for owners or vendors or certainly residents that are listeners, should recognize is going to be the most profitable area for areas of their business.
Andrew Smallwood
Yeah. That's great. And you know, Mark, I'd say as you kind of look from 2024 ahead to 2025, 2030, as you look to the future for property managers and property management, business owners, what do you see that gets you most excited? What do you see that has you most concerned? What do you think is most important for people to be paying attention to as they're looking to build their business in the years ahead that we haven't discussed yet?
Mark Kreditor
Well, I'm easily excited. So I want to change the word, excited to just things that I really think about. And I think that every property manager needs to be a legal expert in property code. You can't just wing it anymore. You said earlier that the leases become more, longer and more complicated, that I and most ashamed, when I meet people in the industry that don't take the time to really know the lease, the property code, the compliance, the answers to the questions, how do I get out of my lease? You know, we were we really were very adamant about it. And I still am. I really often hear from students that I teach a class to, you know, you've convinced me that I will never get into property management. And I say, good, just keep selling homes because property management, you shouldn't do half way. It's bad for you. You're going to probably have problems that take a lot of time and money to get out of. And you're giving a very poor name for an industry. So that's that's kind of my main final thought. Is that part you're going to have to study a little harder.
Andrew Smallwood
But it's I think there's a lot of people listening to this that would agree that the professional segment and staying on top of regulatory changes, legislative changes, compliance, etc. is a core part, you know, to reducing their business risk and also increasing the reputation, right, of property managers collectively in this industry in the in the years, years, years ahead, that they're fully, fully committed and dedicated to that. Mark. I just want to wrap with saying thank you. There was so much great stuff. I appreciate you covered. Tactical practical examples today. You shared a lot of passion and new ways of just thinking about the business and opportunities and challenges. The risks are here today. I love your examples and stories and what they're what they're grounded in your experience and just really appreciate our conversations. I've enjoyed getting to know you, over the last couple of months. So thanks again for joining us today.
Mark Kreditor
My pleasure. Thank you for all you're doing for our industry. I really mean it. Thanks.
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.