EP. 54: Building a Property Management Empire

What separates exceptional property management from merely adequate service? Kathleen Caldarera, a seasoned asset management expert with Ghan & Cooper, pulls back the curtain on the multifamily investment world in this enlightening conversation about property management best practices.

Having built a property management portfolio from zero to 7,500 units, Kathleen shares the unexpected journey that began with an $8.50/hour assistant manager position in 2009. Her candid insights reveal why middle management quality trumps company size every time, and why transparent communication between owners and on-site staff creates measurably better outcomes for multifamily investors.

"Math doesn't lie," Kathleen reminds us when discussing property performance issues. While some investors are quick to blame management companies, she notes that 80% of problems typically stem from incorrect purchase pricing, unrealistic rent expectations, or insufficient rehabilitation. Her practical advice on where to allocate renovation dollars and how to evaluate management companies provides a roadmap for both novice and experienced investors.

Particularly valuable is Kathleen's comparison between Fort Smith and Northwest Arkansas markets. For investors seeking stability with potential upside, Fort Smith offers unique opportunities with the F-35 project and Chaffee County development creating pockets of growth that mirror Northwest Arkansas's dynamics. Meanwhile, Northwest Arkansas continues its stronger population and rent growth trajectory, particularly in higher-quality properties where home ownership remains challenging for many residents.

Whether you're managing your first duplex or considering a large multifamily acquisition, Kathleen's insights on secret shopping, staff compensation, and the importance of prompt communication will transform your approach to property management. Connect with Kathleen directly at [e-mail] to leverage her expertise for your next investment.

Episode Transcript

Speaker 1 (00:07):
Welcome to Northwest Arkansas Investing Podcast, your
go-to source for real estateinvesting in Northwest Arkansas
With your seasoned investor juststarting out.
We bring you expert insights,market trends and practical
strategies to help you buildwealth through real estate.

Speaker 2 (00:20):
From buying and selling to property management
and long-term investmentplanning.
We cover it all so you can makesmart, informed decisions in
this fast-growing market.
Let's dive in.
Welcome back to NorthwestArkansas Investing Podcast.
I'm here with Brian Wagersmyself, brandon Still and
Kathleen Calderera with GannonCooper.
Good to have you.
Thanks for coming.

Speaker 3 (00:43):
Thank you, I'm happy to be here.

Speaker 2 (00:44):
Absolutely, we're excited to have you on.
She brings a wealth ofknowledge kind of around asset
management, a lot of multifamily, obviously, which is a lot of
what our listeners love to hear.
And so she's out of the FortSmith area and so, kathleen,
give us a little bit of an idea.
We'd love to get just a 30,000foot view of of your background,

(01:07):
kind of where you started youmentioned we were just kind of
chatting before this but uh,kind of from New York area, I
guess.
Yeah, yeah, yeah, kind of.
We'd love to hear kind of howyou made it down here and then
what that journey's kind of looklike awesome, yeah.

Speaker 3 (01:17):
So I started.
I actually started in realestate in New York.
I was a realtor when I firstgot out of college.
I just had a baby, I had justgotten married and I'm like, oh,
I'm going to do real estate.
And that was a huge,unsuccessful go at it.
I was young, I was uneducatedand extremely inexperienced.
I'd never even bought a home,so I had no idea what I was

(01:37):
doing.
I think I sold maybe two housesin the year I was there and
then all of a sudden we had tomove to Fort Smith, arkansas,
from New York.
So I cried for about six monthsand then hopped in a car, drove
halfway across this countrywith my one-year-old to just
turn one and my sister and wehit Memphis.

(01:59):
So Arkansas, and it was justflat.
I'm like, oh my God, where didthey take me?
So we ended up here in FortSmith in 2006.
And I had really no job at thetime.
I was still kind of bartendingin the restaurant industry.
I'd been in that throughoutcollege and after college and my
husband at the time was goneall the time.
And so I was back in New Yorkand I finally decided all right,

(02:21):
kathleen, you've got to settledown.
You've got to make some friends, you've got to get a job,
you've got to do something.
And so I replied to a blind adfor an assistant manager that
was paying $8.50 an hour.
And I replied to it and it wasfor this property management
position which I had never heardof.
What did that mean?
And I'm like, okay, let meapply for this.

(02:43):
And they gave me the addressand I didn't know Fort Smith
very well at the time, sort of,and I knew right around this
area there was two complexes,one huge one and one kind of
smaller, less intimidating, andI remember the whole drive there
.
I'm thinking, please don't bethe big one, please don't be the
big one.
And of course I pull in andit's the huge one, uh and ps, I
still manage that property tothis day.

Speaker 2 (03:03):
So that was in 2009, until now.

Speaker 3 (03:07):
And I pulled in, interviewed, and they were like,
yeah, you can take the jobtoday.
And I'm like, okay, how do weget this started?
And through this time, I hadbeen divorced.
So they told me you have tolive on site.
And I thought, oh my God, Ihave to live on site with my
three-year-old at this hugeproperty, I don't know.
And I've lived on site with mythree-year-old at this huge
property, I don't know.
And it ended up being, you know, one of the best things that I

(03:27):
ever did.
I took that job, went on site,lived there.
I stayed there for maybe Iwould say it was about maybe a
year.
Okay, and at the time myex-husband was moving to
Texasxas and he was like, hey,kathleen, um, why don't you come
down here for a little bit too,instead of going home?

(03:48):
And then after that, you canmove back to new york, which was
my goal at the time.
I just had to get back home,get back home.
So I moved down to texas for alittle bit, uh, to live around
him, so he could be close to ourdaughter.
And I got a call from cliffcabanas one day, randomly in
texas, and he says he ownedTrinity Multifamily at the time
with John Baxter, and he said,hey, you used to manage

(04:11):
Timberline for us.
I want you to come back to FortSmith and manage this property
again.
I'm like who's going to be themanager?
And he's like I'm not tellingyou and I'm like, well, I'm not
coming.
So he says a name.
He says Zach Smithson is goingto manage it.
I don't know if you know whoZach Smithson is.
He partners with Dave Pinsonand Dave Pinson is going to be a
part of this and we want you tocome back and do it.

(04:33):
So I said, ok, I had no ideawhat I was doing with my life
still.
So we come back to Fort Smith.
And that's kind of where myreal start.
And that was back in 2010 againand that's when we started at
Timberline for real and realleadership and guidance.
I still say to this day that Itrained Zach and Dave how to do
the training they can kindathank me later for that.

Speaker 2 (04:54):
That makes sense, yeah, especially after having
Dave last week, right, yeah, sono, even, I mean just thinking
about around that time, 2005 to2010, kinda what, even even what
north west Arkansas was at thetime, yeah, like trying to
imagine how even Fort Smith wasgoing from New York, probably, I
mean probably not much at all,right, I mean, yeah, even, I

(05:15):
guess, even looking at your jobtoo, was there a lot of
multifamily at the time that wasbuilt up.
You know that that was outthere, like, was there a lot of
business available out there?
Yeah, no, I mean, fort Smithwas what it was.

Speaker 3 (05:25):
You know that was out there Like, was there a lot of
business available out there?
Yeah, no, I mean, fort Smithwas what it was.
You know, it was all localowners, nothing ever traded, not
that really hit the market.
You know, it was all smalllittle local owners and they
each owned and operated theirown apartment complex and that
was what they did.
You know, even when I firstjoined with Trinity, I mean, we
were not really a third partyproperty management company, not

(05:47):
truly.
I mean, cliff and John reallywere partners.
They had partners and this is Iwouldn't even call it
syndicated.
Back then, you know, you justfound a bunch of people that had
money in town and one personran operations, one person
brought the bulk amount of moneyand someone brought the
knowledge.
And you know, they bought theseapartment complexes and then we
just managed them and I rememberit was probably a year after I

(06:13):
was there so maybe around 11,sometimes 2011 they really
started to branch out into thirdparty and start to say, okay,
fine, he's my friend and we'regoing to take this property for
him and try and help him out.
And we were pretty successfulwith that in Fort Smith and Dave
kind of took over.
He at the time was the regionaldirector, um, for like the

(06:33):
Oklahoma City area, northwestArkansas area, and he still even
managed some properties thatthey had, I don't know why, but
in Fort Smith.
So that was kind of his roleand you know, you know we that's
when we really started tobranch out into the third party
realm a little bit, and that wasback before, you know,
repositions meant anything.
You know we were still, youknow, cutting the wires to your

(06:56):
AC if you didn't pay rent.
Back then, yeah, banging downthe doors or just leaving it
open if you didn't pay rent.
You know it was a a wild, wildwest still of property
management it's how I like tocall it.

Speaker 2 (07:07):
But that's awesome yeah, times are a bunch
different yeah, seriously, evenI would imagine even collecting
it looks a lot different nowthan it did back back then yeah
I know my dad even I mean he wasa small multi-family guy but he
, I mean he's going to knock onthe doors to get his rent every
month.
That what did that even looklike back, kind of when you were
getting started.

Speaker 3 (07:26):
I'll never forget this.
I had finally been promoted tomanager and I had an assistant
who worked out of my office andall of my assistants since I had
the only office that had twopeople in it.
Everyone else had one personoffice.
So if someone got a promotionand moved on, my assistant would
usually take their position.
So I had, you know, got apromotion, moved on, my
assistant would usually taketheir position.
So I had an influx ofassistants that were in my

(07:48):
office, which was fine.
By that time I could manage.
Tomorrow.
I was about 307 doors with myeyes closed.
I'd been there for so long andI had.
She was every bit of seven foottall, I mean every bit of it and
she would go out there and shewould be banging on people's
doors and she'd come back.
I think I got five dollars cash, you know, in her hands.
I'm like, oh my god, you knowwhat is happening right now.

(08:11):
And unfortunately, with thatkind of collections and cash and
people coming in, we started tosee like okay, um, application
fees are going missing.
Like what's happening to theapplication fees?
You know, you know little thingsin the office are going missing
.
And like what's happening tothe application fees.
You know, you know littlethings in the office are going
missing.
And I'm trying to talk to herlike, hey, what's happening is
application fees should betelling me these crazy stories
about you know.

(08:32):
Well, that must have.
You know, someone came into theoffice and they must have taken
that.
And I don't remember because Ithink I also got bit by a brown
recluse and it was in my arteryand I have cancer and it's like,
oh my God, I used to thinkpeople told the truth.
I swear to God, before I gotinto this industry I swear I
thought people told the truthand I thought people paid the
rent.
I had no idea that peopledidn't pay rent and I had no

(08:54):
idea how much people exaggeratethe truth.
So it turns out she wasdefinitely taking the
application fees and a lot morethan that.
So I think, after so many timesof learning, that we all
realize, okay, we've got tostreamline these processes,
we've got to get better software, you know, make people pay on
rent online, so that you canjust alleviate some of these

(09:18):
things that are justunfortunately a cost of doing
business and unfortunatelyhappen to you at some point.

Speaker 2 (09:23):
But that's awesome, yeah, the things you learned we.
I'd love to piggyback off ofthat, though, and get a little
bit more background on ongetting cooper in the company
you're with uh, same company, Iguess the whole time correct, or
it's kind of evolved, I guess.

Speaker 3 (09:37):
Same people, same people, same people yep, yep, uh
, in 2019, I had a client and hewas also a banker in Fort Smith
, pretty big investor in ourarea at the time, and he said,
hey, I've got these two friends,bob Cooper and Stuart Gann, and
they own Gann Cooper, which wasmore of a commercial brokerage

(09:58):
and management company, and theydid mostly their own stuff too
a little bit of third party.
But they're very centrallylocated to Fort Smith and pretty
big in that market itself andyou know they want to dive into
multifamily.
And I told them I've got totalk to you.
So I set up a meeting betweenus, I sat down with them and we
decided, ok, we're going tostart this property management

(10:19):
company and you know we're goingto buy the property the
property, kathleen then you'regonna manage it and you can
invest in with us too.
So in my mind and my naive mindat the time too and they'll say
this too I thought they weregonna buy the property and we
were gonna manage it not reallya lot of third party and I put
in my notice, but I gave Trinityabout like an eight or nine
month notice, which you have todo when you're at that kind of

(10:43):
level, and what was it?

Speaker 2 (10:45):
what was your title before?

Speaker 3 (10:46):
so I was and the first woman of that too uh, the
vice president of propertymanagement on the eastern side
of the company okay so I hadabout 11 states and 11 states.

Speaker 1 (11:01):
How many years were you guys up to at that time?

Speaker 3 (11:04):
Trinity itself was probably 20 to 22,.
Give or take, you know, takingsome on, taking some off 20 to
22,000.
And I probably had almost 11,12,000 of that.
There was three VPs at the timeI was leaving and my portfolio
was pretty big Again, fort smithand little rock, central

(11:25):
arkansas, and those were hugeareas for us.
So that's why my portfolio wasbigger than you know some of the
other vps.
They were, you know, and knewour markets for us.
But I went everywhere frommichigan, indiana, georgia, and
kind of straight down the easteast line of our company and I
use Fort Smith as the east andwest point, if I can.

(11:47):
I had about maybe eight or nineregionals underneath me at any
given time and you know, at thatlevel you're only hearing the
fires, you know Someone's mad orsomeone's done this or
someone's done that and afterthat long of doing that you're
ready for a little bit of achange yeah, yeah, don't blame
you, yeah, it's uh.

Speaker 2 (12:08):
I mean, yeah, property management.
I think when I just look atlocal companies that I I'm
typically working around here, Imean just when you start to get
in the weeds, I meanunderstanding kind of what goes
into the whole operation is iscrazy.
I used to think when I was incollege, uh, my dad had a client
that wanted us to manage youknow 20 units or so for him.
I was like dad, we should jumpon this, just only seeing like

(12:31):
the dollar value that we canpotentially make, not knowing
anything else, but kind oflooking back now, it's just,
it's crazy kind of what all cango into the operations of that,
and especially when you're doingit across.
You said 11 states, yeah, sotell me a little bit.
I'd love to hear a little bitmore on kind of like the early
influences of you getting intothis gig.

(12:54):
You mentioned that it was kindof just a job posting, but I'd
love to know was there ever areal estate background in your
family or a real estatebackground before, or was it
truly kind of by chance, truly?

Speaker 3 (13:04):
nothing.
Yeah, it was truly by chance.
I mean, I come from a family ofreally teachers attorneys some
attorneys, but a lot of teachers, just very standard middle
class family from Fort Smith.
I don't think that I even knewanyone that rented an apartment.

Speaker 2 (13:23):
Really.

Speaker 3 (13:24):
Not where I'm from in New York.
You know it wasn't really likethat now.
Now that looking back, I knowthat some of them rented the
houses that they lived in andstuff, but it just wasn't a part
of my culture growing upwhatsoever.
I mean, I had no idea even thebaseline of what to do when you
came into it and so.
But I think what that also mademe successful too, because I

(13:45):
can.
I was able to really trainpeople from the ground up,
because that's how I had tolearn it yeah.

Speaker 2 (13:50):
Trial by fire yes no, but it's.

Speaker 3 (13:52):
I always say this I hire back in the day.
Now it's a little different.
Back in those days, if you werea good waitress or bartender
that I had, I would always talkto you like, hey, come work for
me.
You know, because you are, comework with me.
At the time you had you coulddeal with people, which is huge.
And that's industry.
You have to be able to dealwith people and listen to their
stories Because as a propertymanager at that level, you're

(14:14):
you know the therapist they're,they're banker, they're, you
know what are they.
You give advice and you justhave to listen and you could
handle money.
You know it's a cash industrytoo restaurants.
So it was.
Hopefully you're a little bitmore trustworthy.
So that was kind of my thoughtprocess and I was pretty
successful in, you know, fortSmith when I first became
regional and hiring people likethat and really teaching from

(14:34):
the ground up.
Now I don't advise as much andI tell all of my clients is up
front, like you truly do getwhat you pay for and I've
watched time after time.
If you really put the moneyinto your staff, you get it back
in your returns and there'sjust no doubts about that.
I tell everyone don't be cheap.

(14:56):
You have a million to $30million asset and you definitely
don't want someone making $15to $18 an hour.
That for you right yes, they'rethe ones there every day.
I'm not there every day,they're there every day.
They're talking to people andyou want to.
You really have to have trustin that person and you don't
want them to job hop.

(15:16):
And it's so easy to do that ifyou're not happy where you are
and you're not making a livingthat's going to be sustainable
for yourself or your family.

Speaker 2 (15:24):
Yeah, no, that makes sense.
I think it's easy to whenyou're looking at it from a
numbers perspective.
Just, you know, there's placeswhere you feel like you can go
cheaper.
Yep, sounds like propertymanagement is never one of those
places where you want to.
I mean, if you really want tomaximize your dollar, having the
right property management ishuge.
What are some of those?

(15:44):
I guess big.
I mean this is super broad, butwhat are some of those big
lessons that you feel like youlearned early in your career
with Cannon Cooper on the realestate side or on kind?

Speaker 3 (15:57):
of the hiring side In real estate in general.
You know, when I first startedthis and worked with Trinity, I
think I learned my biggestlesson was that bigger is not
always better.
You know, it takes a lot ofmiddle level management
greatness to make a propertymanagement company run and if
you don't have that across theboard, it really is hard.

(16:19):
With Gannon Cooper, I thinkthat I have learned reporting is
so important, teaching andcommunication, I mean.
I think it's so hard when youknow someone like Brian or
yourself would come to me andyou know, kathleen, I want to
buy this property.
And here it is and I don'tcommunicate what your goals are,
what your performance is, whatyour budgets are to my regionals

(16:39):
for them to kind of tricklethat information down to the
staff.
You know them to kind oftrickle that information down to
the staff.
You know, and I learned, that ifyou put the staff in a weekly
call with the manager, a lot ofcompanies say, oh, owners can't
talk to managers.
I highly, highly disagree withthat.
I think that not only shouldowners talk to managers, but it
should be on a FaceTime of Zoom,so one you want to be able to

(17:00):
see and read a person just aswell as I can.
You know you can tell whensomeone's scared or not telling
you the full truth when you'relooking at them.
When they're just talking,sometimes you can't, and
sometimes you can't look at them, but you have a better idea.
You can see that they're in theoffice working for your
property and you can talk tothem.
Now I tell owners this on theside be careful what you say to

(17:21):
managers, because at the end ofthe day, they want to make you
happy.
So sometimes they don't tellthe full truth.
And my biggest thing to mymanagers when I talk to them is
you always want to be as openand honest as you can with your
owners.
Now, if you make a mistake,come to me first and tell me and
we will tell them hey, we madethis mistake, but here's what

(17:42):
we're doing to fix it.
And everyone has to realizethat mistakes will happen.
You know so I think that kind ofcommunication is the biggest
thing I've learned with GannonCooper.

Speaker 2 (17:51):
Yeah, I think, I think that's just such a key
thing, I mean key learning foranything in real estate or
business.
Wise in general is, I mean, thefor lack of a better term.
The crap always gets sniffedout for lack of a better term.
The crap always gets sniffedout, and so if you don't have
that open line of communication,honesty, in real estate
especially, I think there can bekind of a domino of issues.

Speaker 1 (18:18):
I think that key in hiring or partnering is not just
trying to save every last pennyand you get what you pay for
sort of deal.
So I think that's a key in any,whether you hiring property
manager or not.
And then I like that zoom, likethe.
It's kind of a tip.
You know, get, make, get themon, make sure they're on camera.
You know, like in the virtualworld we are in now, just one
are they paying attention?

(18:38):
And you're getting those readson them like how, if they're
squirming or not, yep on acertain question um I think
that's super key.
And real estate and propertymanagement, the transparency
issue like transparency andspeed of communication is super
important.
Like real estate is person uh,you know known as a slow moving,
but you know you see the stopstocks they're very fast.

(19:01):
You know real estate is alittle bit it's more like a
yacht when it turns in the waterboat but for me, always in real
estate I don't want anyonewaiting on me and I think issues
can get worse if, especially inproperty management and asset
management, if you don't actfast, issues actually get.
They don't, you know, buff out.
Some people like have aphilosophy of it like this will

(19:21):
buff out, but if you let thatyou know, kink or sore become
huge, or you let you know alittle cavity become a root
canal sort of.
I guess analogy there.
But I think that's super keyand what I've seen, and you
again and Cooper too, has beenkey in our building.

(19:42):
I like what you said abouthaving the background and
ownership too.
You know you look at deals alittle bit differently if you
have equity in them versus justtrying to get that three to.
You know single family peopleare doing 10% or 3%.
You look at it a lotdifferently and I think owners
respect that for sure.
So I think that's key.

(20:03):
Looking at it in an owner'sperspective, going back, like,
are we just fixing this a quickfix?
Is this going to keep happening?
If we're just doing this, youknow, trying to find solutions
for it, that is going to stopthe problem yeah, no, that's
good.

Speaker 2 (20:18):
I think I mean issues , and especially in property
management can, I feel like, bekind of like a roof leak?
You know it could be smalldrops but over a long period of
time can cause huge issues, moldand all this kind of stuff.
And so I mean I love kind ofwhat you're saying about, you
know, reducing those compoundingit can be a lot of bad news too
, so you like I think, I thinksome of those property managers.

Speaker 1 (20:39):
They're just afraid to give.
It's like I need to know, likelike I understand if it's better
, like maybe it's a mess up,it's, but it's like, just tell
me.

Speaker 3 (20:46):
Yeah, yeah and most of the time it's really not a
mess up.
Most of the time.
You know especially and most ofwhat I did was or do was bnc
class reposition, and you knowbnc class reposition is walls
out.
You know most of your problemshappen inside the wall.
So a class you don't have, asmuch as that.
So it's always so hard for amanager every time they say like
, hey, there's this plumbing joband we've gotten 13 bids all at

(21:07):
$70,000, and I don't know whatelse to tell you.
You know, and I think whatmakes a difference of you know
kind of what I used to have todo and what I do now is that you
really have to vet your clients, because I can't let you be
screaming at us or yelling at mystaff because you're mad that
the sewer line broke on yourproperty.
I mean that's inevitable basedon age or can sign lines or

(21:29):
things that you just can't help,you know, and so I think that's
an important key too is thatproperty managers have to vet
their clients as much as theirclients vet them.
And every time I talk to a newclient, I tell them, like,
please, like, interview as manyother people.
I'll give you people tointerview too, because you have
to have such a trust andcommunication that goes into it

(21:51):
and what I mean.
One of the things I love aboutBrian he never talks badly about
anyone and I love that.
You know most people love, yeah, to play the blame game.
Well, it's the propertymanagement company did this or
they did that.
Math doesn't lie.
I've looked at a lot of a lotof financials.
I've run out a lot ofproperties where I'd say, 20 of

(22:13):
the time I can clearly tell you,yeah, it's probably your
property management company, but80 of the time it's just a mix
of not buying correctly,overpricing your rents and not
getting there and not completingyour rehab correctly, and
that's been a big one.
What you do with your rehabdollars in the beginning is so

(22:35):
important, and that's why I tellpeople too, for me I love to
help you with the property fromthe get-go, Because you may have
a budget in mind of what youwant to spend on the exterior
and once you give it to me Ilove to tell you where I think
you should put that money andmake some changes right there up
front, because I know a lot ofpeople want to put it into you
know something that's just not.

(22:56):
They want to put it into like adog park or this and only rehab
40% of the interiors.
I'm like, okay, we'll take someof that out, do a little bit
more on your interiors.
I'm like, okay, we'll take someof that out, do a little bit
more on your interiors, becauseyou're going to have to do it
anyways.
I guarantee you, based on age,and we can save some dollars
here or there.
So it's, you know,communication is just.

Speaker 2 (23:10):
Yeah, that's a huge value.
I think when you're thinkingabout good property management
and you're an investor listeningto this, you should be there,
should be oftentimes whereyou're looking at property or
under, if you're underwritingproperty, you should be taking
that to your property managementand if they're good, in my
opinion and I've seen othersaround here locally they will be
willing to, especially on.

(23:31):
You know, as it gets largermultifamily, obviously maybe
that's a little bit out of theirscale, but especially when it's
kind of you know, in a.
My sweet spot would be kind of ahundred and less units, like if
you have a property managerthat's willing to kind of run.
Walk through those on thatunderwriting with you, help you
understand where they thinkrents truly are and can be and
not you know over overly youknow, I guess overly guessing

(23:55):
where they could be at.

Speaker 1 (23:56):
Have you ever had an owner not hire you because, or
you not go with an owner becausethey bought a you know very
dilapidated C-class property andthey had $0 for CapEx and they
said, oh, we're going to rentfor $2, you know, discrepancy
100%.

Speaker 3 (24:11):
I have no problem telling people when I'm not on
the same page as them, becauseif I don't believe in what
you're doing and here's what Itell people too the property
management company is the onethat's going to take all the
blame, no matter what.

Speaker 2 (24:22):
For sure.

Speaker 3 (24:23):
Nobody has any clue that Brian Wagers owns this
property.
They think Gannon Cooper ownsit, they think Gannon Cooper
manages it, they think GannonCooper is everything for that
property.
So I'm not going to takesomething where I think maybe
you're going to fail at this,because then it's just going to
make my reputation even worsetoo.
They have a plan like hey,kathleen, we know that these

(24:45):
numbers don't line out, buthere's the end goal and here's
what we're going to do.
And I'm like, okay, fine, solong as we're on the same page,
but you have to be on that samepage.
So, yeah, there's many timeswhere I've turned down a
property, and I'm sure thatthere's many times where they've
decided, hey, let's go withsomeone else because they're and
I know they have they tell methat this is going to happen and

(25:08):
you've told me it can't.
And I'm like, well, math ismath, right, sometimes I just
don't understand people's math.
But even to take your point astep further, if you don't have
someone that will help you, evenon 100 and less and I don't
typically manage less than 100.
It usually has to sustain itsown staff, but I will still

(25:29):
always run anything out foranyone.
It's how I built my wholecompany accidentally running out
property in Fort Smith becauseI had nothing else to do.
When I first started I had zerodoors.
I'm like he's like, oh, thisguy emails me.
I have no idea who he is.
Like, hey, kathleen, I heardyou used to work for Trinity.
I heard you used to managethese properties.
We have our own managementcompany that we like to use, but
can you just perform it for us?

(25:50):
Because you used to, yeah, whatthe heck.
And I'm like, well, kathleen,you've got nothing better to do
tomorrow.
Like, why not?
So I did and I ended up gettingthe properties because I
probably communicated fasterthan whoever they were using at
the time, than whoever they wereusing at the time.
I do think that was the issuethat that company was growing up

(26:11):
in the north here and notcommunicating fast enough, and I
think that's how most of what Ihave I got, even through
brokers.
I have a lot of referrals tobrokers in this area and I think
it's just because when theyneed reports, I send them.
I never understand why youcan't get a rent roll same day.

Speaker 2 (26:27):
I just or not in.

Speaker 3 (26:29):
PDF Like how hard is it to click that button?

Speaker 1 (26:33):
in.

Speaker 3 (26:33):
Excel and send it.
I to this day, I still have noclue.

Speaker 1 (26:37):
That's a good tip for our investors.
Your property manager better beable to send you a rent roll
within 24 hours.
It's not like they should be onthat, that's fine.
I don't think we've everdisagreed on like a business
plan or numbers.
You have turned me down forlocations, though you haven't
gone to certain locations.
I guess you know when we firstI started using you on Fort

(26:58):
Smith properties, you know itwas some smaller.
It was like some 20 units and54 units, some 79 units.
So has that evolved fromGannett Cooper now that you guys
are being more selective on,you know, 100 units and up?

Speaker 3 (27:12):
No, roll my eyes no.
So, sometimes I don't.
It's not that I feel bad forpeople, you know, sometimes I
see a bigger picture with agroup and I'm like okay, when
that was probably a case withyou, brian, I've known you, you
know, and we've done otherprojects, even with Trinity, I

(27:32):
think I was on my way out whenyou were on your way in.
And other times I get callsfrom people on this one.
I have a client out of Floridawho has 20 duplexes in Fort
Smith and one.
They're brand new, not A-class,but brand new.
And no matter how many times Isaid no, this isn't for me, give
you this person that company,he was like nope, you're going
to do and that's going to bewhat it is.
And sometimes that just happens.

(27:52):
And other times I do, I can seethe goal and I'm like fine, I
will help you and do it for this.
But here's the thing, and thisis what people have to realize
Anything from 30 doors to 80doors is just as much work as
100.
And you don't have the staff orthe funds to pay for it.
So it's, you have to bestructured for it, and I'm just

(28:13):
honestly not structured for it.
At a Fort Smith I have created astructure which I still don't
like, and I make $0 off thestructure.
But I I do it for some clientswhere it's a higher management
fee.
I pay the payroll and they Ibuild back for maintenance.
So I have a floating crew oflike five or six maintenance
guys and I can send them.

(28:34):
If they're not busy on one ofthe smaller assets, I can send
them to go help on, make ready'son my bigger stuff and we just
build them back to that propertyor and they can do HVAC.
So in the summers they'rebooked.
They're gonna do all a lot ofthe HVAC.
So in the summers they'rebooked.
You know they're going to doall.
You know a lot of the HVAC worktoo.
But it's I can't recreate it inevery market.
I've tried, it's just not aseasy.
And when you hit harder markets, you know and Northwest

(28:59):
Arkansas is not what I wouldconsider at all a hard market,
but Little Rock, oklahoma Cityare more difficult markets.
You know St Louis, atlanta whenyou hit those markets 50 units
you need a full time person.
If you don't you will fail.
You know.
Unless it's a brand new, youknow a class with not a lot
going on and people want to comein.
I've watched.

(29:19):
I have a few that are under 100.
Then we tried to, once westabilized that reposition, that
we tried to split out the staffagain and your occupancy drops
just as fast.
To split out the staff againand your occupancy drops just as
fast, and we were losing more.
Not losing more, not losingmoney, but not making as much as
when I just had the staff there, right.
So it's interesting.
Yeah, honest, with people thatyou know in some of these more
difficult demographic areas, youjust have to have someone there

(29:43):
you know?

Speaker 2 (29:44):
yeah, it makes sense.
It's almost like babies, I mean,they need the attention, every
single one of them and they needroutine exactly, and and even
just kind of going back toproperty management and kind of
the job that y'all do, I think,having, like you were saying,
having that local knowledge ofareas that maybe you don't you
know you wouldn't recommend tobrian or wouldn't recommend to
another investor, or even justunderstanding when they're doing

(30:06):
their pro forma.
Maybe a C-class building in acertain neighborhood or the
maintenance costs, upkeep, isgoing to be a lot more than that
same building in anotherlocation or whatever, because of
certain factors out there andso.
I think for you, any propertymanager out there, for them to
have that kind of localknowledge is super important,

(30:28):
and so investors that arelistening to this I them to know
that to have that kind of localknowledge is super important,
and so investors that arelistening to this, I think
that's definitely something toconsider, especially if you're
in the Fort Smith market, havingsomebody like Kathleen and for
that clarification on thelocation.

Speaker 1 (30:39):
It was that that's not a bad location.
It was, I think, logisticallyat the time Because we've done
some C-class.
It was in some C-class areas,for sure, correct.

Speaker 3 (30:47):
And I tell people this too and investors, when
they're looking they're buying.
They really, if they're buyingsmall, try and find this cold
called the smallest real estateagents or property management
companies in that area and askthem if they take on property.
Because you'll fall through thecracks with a big company
because there are big companiesthat will take you.
There are with a big companybecause there are big companies

(31:08):
that will take you.
You know there are, but you'llfall through the cracks.
It's it's way better if you canfind a smaller company that
already is set up for it.
It already does it, even on asmall local level yeah, that
would be my advice to.

Speaker 1 (31:18):
The smaller deals are harder to manage for like third
party, but they're as investorsthey're easier to put together
with the onesie twosies likeLike you have two couple
investors on one deal.

Speaker 2 (31:30):
Yeah, but you hear a lot of what you just said,
though, that it takes the sametime to manage 50 than it is to
manage 150.
And so you hear guys like GrantCardone, big real estate guy
out there.
I have listened to a lot of hisstuff.
A lot of others probably havetoo.
You're smiling because of it,but just like he's always said,
it's the same thing to buy thisto buy that and, and, uh, I

(31:52):
think you know, for investorsout there, outside of looking at
the price, when you're lookingat a function of of how you're
operating the business andpartnering with property
management, it makes nodifference, and oftentimes, more
is better is what it soundslike.

Speaker 1 (32:06):
Cardone says hey, what I agree on is like hustle
mentality.
There's the 10x rule, I mean ifyou're in sales.
That is a book you shouldabsolutely read.
But his real estate advicedoesn't apply to it.
I mean he's like don't buyanything smaller than a 32 unit,
don't buy your personal, don'tbuy a single like your residence
, just rent.
I've had so much equity just inthe home and made a lot of

(32:26):
money.
In the smalls it can be done.
But the philosophy is true.
Yeah, the 32 units just saysyou got to get a loan, you got
to get insurance, you got to getproperty management.
Same on the 100 unit.
You just might have to bringmore money.
You got to have a couple morepartners.

Speaker 2 (32:42):
Sometimes it's all with a grain of salt, with all
those kind of guys and stuff.
So I think it's interesting.
I'd love to start rolling inmore about kind of property and
asset management best practices,kind of what y'all see out
there.
What do you think is one bigthing that separates good from
great property managementcompanies out there, especially

(33:04):
for our listeners that may bethinking about you know know,
passing off their portfolio tosomebody and what that looks
like middle-level management.

Speaker 3 (33:12):
Your regional directors always ask where they
located.
You know how many, how manyunits so they have?
How spread out is thatportfolio?
Middle-level management toucheseverything you know your
regionalists talk to.
They talk to residents.
They talk to residents.
They talk to staff.
They talk to maintenance guys.
They talk to the owners.
They talk to bankers.
They talk to absolutely everyperson out there inspectors that

(33:34):
come to the property if youdon't, and they talk to me if
you don't have a really reallygood, strong, middle level
management team and your companyum?

Speaker 1 (33:47):
yeah, shout out, amy, shout out, thank you shout out
I have a bunch of now.

Speaker 3 (33:51):
So shout out amy, shout out alex.
I've got caitlin.
I've got a bunch of you know,really, really great middle
level managers.
I've got a couple of new onesthat are showing a ton of
potential too.

Speaker 1 (34:03):
Um so, you said earlier in the episode uh,
bigger is not always better.
What do you?
What do you mean?
Can you elaborate there?

Speaker 3 (34:08):
So you know, one of my biggest things with leaving
Trinity was that the goals ofTrinity at that time were to
become one of the top, you know,10 biggest property management
companies in the country, andthat, I learned, was just not my
goal.
My goal more was to stay small,be able to communicate and have
a little idea of who my staffwas, which I didn't.

(34:31):
I can't shop a property inLittle Rock anymore because I'll
walk in and they know who I amand I have no clue who they are.
But we were just so big at thetime for me.

Speaker 2 (34:42):
Did they have a one-in sign out there?
Yeah, you know what's funny.
Press this button.
Yeah, she's here, yeah.

Speaker 3 (34:50):
Most of them liked me Now not saying that they love
seeing me If I'm showing upsomewhere it's probably like
okay, something went wrong, butI think we had good
relationships.

Speaker 2 (34:59):
I'm like.

Speaker 3 (35:00):
Miss Kathleen, is that you?
Yes, it is.
Hello, you know, but I don'tknow that's awesome.

Speaker 1 (35:07):
I wonder if that's because it's a woman too Like.
If they know, like you know,it's usually a guy coming like
probably on these, you know yeah.

Speaker 3 (35:15):
Yeah, I'm sure.
Well, no, you know what I thinkif you're going to shop a
property, send a woman in there.
Men, oh my God, you guys saythe stupidest things you stand
out like we know who you are.
You know the second that youwalk through the door.
So you know if I'm shopping aproperty I'm trying to dress
down and you know, cover up whatI'm doing, because no one talks
to you if they know what'shappening, so dive in on that.

Speaker 1 (35:37):
Some of our listeners might not know what you mean
like secret shopping, shoppingwhat do you describe that?

Speaker 3 (35:43):
So I do it for a few different reasons.
One if we're just trying to getmarket surveys and we're trying
to say, hey, what's this staffdoing?
What can we be doing better, wedo that a ton in Northwest
Arkansas.
It's so competitive and thestaffing and the employees up
here are fantastic.
And you know you should go andlisten and learn is what I tell
my staff and they go out there.
What can we do better in ouroffice?

(36:04):
But most of the time if I'mshopping a property, it's
because I've had a client thatcalled me up saying, hey, we're
looking at this, do you like it?
And I just want to get my eyeson it.
I want to see what the staff isdoing.
Again, most brokers are goingto tell you that it's being
mismanaged and that's why you'regoing to be able to get $200
more a door and you're going todo this and that's always like
to see it for myself.
So we shop at first and we givethem a small report.

(36:27):
You know, hey, here's what wefound, here's what we think
exterior wise is going to need.
You know, most of my me I don'ttake just a straight C class if
you're not going to put anymoney into it, because unless
it's already, you know,stabilized.
But you know, if you want toreposition something, that takes
dollars.
So I want to see, and I'll tellyou what I think.
You know, roofs look good,parking lot, this high level

(36:49):
this is not to build yourcomplete budget off of, but very
high level what we saw,staircases, how they looked, and
what we think the apartmentneeds organically, what we think
the apartment needs toreposition, what rent rates we
think we could get afterwards.

Speaker 1 (37:04):
Just a very high level shop that we do and what's
the difference between shoppingand secret?
I feel like secret shopping.
I'm acting as a prospectiveresident to see how their
leasing functions, what theiractual rents are, versus
advertised Both shops.
That's probably all of it, yeah, and then shopping.
You kind of described that tooas also, like you know, checking

(37:25):
the exteriors, walking the sitelike Now I'm not walking to see
it.

Speaker 3 (37:28):
When you send a man to shop for that purpose, they
will be asking about theexteriors and trying to take
pictures.
I wait for later to do that.
So I always pose as someonethat's just looking to rent if
they're from my daughter, frommyself, something you know and
then I just notice things whenyou're walking.
You know, as I walk the pathI'm going to be able to see what
generally the staircases aregoing to look like.

(37:48):
Once I leave them, you knowI'll drive the property myself
and just kind of take a quickhigh-level look at what I think
it needs.
Other than that, I'm alwaysjust a renter.
You'll get the most informationfrom someone if you just post
as the renter.
Once you tell them you'reshopping or looking, half the
time they don't know what to sayor they're going to tell you no
.
So I always post as that.

Speaker 2 (38:08):
That's great work.
I think understanding that'sprobably the best way you can
get the understanding, likeyou're saying, and how energetic
someone is to help get yourinformation.
And you mentioned themismanagement piece.
I mean you really kind of get alens on that.
Are they going to answer yourphone call, correct?
Are they going to follow upwith you?
Are they blah blah, blah?
Yep, if they're doing all thosethings, maybe it's not

(38:30):
mismanaged 100%.

Speaker 3 (38:32):
You can ask my sisters in New York.
They get a ton of phone callsfollowing up on if they're going
to come rent an apartment inany given state.

Speaker 1 (38:39):
Let's all say that too.
I'm giving their number.
I have to.

Speaker 3 (38:42):
Mine says Kathleen, with Gannon Cooper, so I give
them my sister's number and theyget a lot of phone calls.

Speaker 1 (38:47):
That's awesome, you guys ever I think you brought
this up, but I don't know if Ifound this out from you but like
secret shopping, like your owncompany too.
100%.
Yes, I do it.

Speaker 3 (39:03):
I pay for it, I do it .
It is so cheap.
I tell them that I'm going todo it so that they answer the
phone.
Great, every time I don't lieto them that I tell them hey, we
secret shop ourselves, you'llget the report.
Not only do you get the report,you get it from me with notes.
You know I don't always agreewith the grades, but it's, I get
to listen to the whole thingit's, and I honestly do listen
to it, especially if the gradeis like lower and I can tell in
the first five seconds ofsomeone answering a call, let me

(39:25):
give them 10 seconds if it'sgoing to be a call.
That I think is good.
And not, hey.
Is it just them askingquestions or is it the person
shopping them or calling askingall the questions?
Is there any kind of aconversational flow?
You can find that out reallyquickly.
So yes, we do it.
If you work for me at GannonCooper, you get secret shops

(39:46):
that's awesome yes, and I rewardyou if you do well.

Speaker 1 (39:50):
So that's all.
And if you don't, I mean it'sgood.
Where can you improve?
Hey, you didn't.
You didn't call me right back.
You didn't call me back andsend me a follow-up email with
all the different available unittypes.

Speaker 3 (39:59):
I feel?

Speaker 1 (39:59):
feel like there's a lot of contract.
What's the most common reasonyou have to let go of someone
you know in property management?
How long is that they're notgood at leasing?
I mean, you saw it in thebeginning like people trying to
skim, like see an easy way toskim up.
I think it's become harder todo that when you're not dealing

(40:19):
with cash.

Speaker 3 (40:20):
Yeah, I wouldn't say that there's one thing that I
ever have to get rid of somebodyfor.
Honestly, if you're not a goodfit, I can see it overall.
You know it's usually going tobe in your income numbers, it's
going to be in your occupancy,it's going to be there in
everything.
And you know my regionals areso in contact with their staff.

(40:42):
I mean they're on a weekly callwith them and they're all in
their offices.
I mean they're on site, they'reboots on the ground, they're
there trying to help them.
So you can tell and we have somany calls with our owners, you
know.
And emails, you can tell.
You can watch my managersevolve to taking 24 hours to
respond to an email, to taking24 minutes to respond to an

(41:03):
email and it makes my life sohappy and they all know that I
love it, you know.
So, that they're just not a goodfit and there just are some
people that just are not a goodfit for property management.
Now I have some people who arephenomenal managers I mean
collect rent lease units butthey can't do reporting that I
can work with.
My regionals can help you withreporting.

(41:24):
I understand that that part ishard and difficult.
Not everyone can do it.
And just because you can'treport but you are killing it on
occupancy and your income, Ican work with that 100%.
But if you can't kind of dothose things, that's when I'm
like okay, me, yeah, let merefresh what we're doing here.
So, yeah, I'm pretty quick toto hire and fire.

(41:46):
I'm not one of those peoplethat thinks that you have to
really take your time, andthat's not my philosophy at all.

Speaker 2 (41:52):
I think that's important and those are all
really good business practices.
I think I personally don'tthink there's anything more
important in business thanpromptness, especially when it
comes to our businesses and realestate, like being prompt, like
I would love.
I think about that every nowand then I'm like I would love
for you know, I'm selling a bigdeal in Biddenville right now, a

(42:13):
bunch of duplexes, and thenI've just thought through like I
would love for one of theowners to have someone secretly
call me and just see how fast Iget back to them, because that's
something that I pride myselfin and I know the owners value
that.
And so I think for any listener, whether it's in your business
or kind of trying to figure outwhat property management you

(42:34):
want to go to, even just kind ofgoing through the interview
process, how quickly are folksgetting back to you and and uh,
or, or you know if they, if theymiss you, then how quick are
they falling back up with youand getting back with you?
So I think it's super important.
So one more thing before we I'dlove to get a little bit more
into kind of your opinions onnorth of sargansaw and fort

(42:55):
smith and and I think ourlisteners love to kind of hear
different things about differentmarkets.
But when this is also for ourlisteners, if someone is looking
for property management, whatwould you say?
And they feel like you know, abigger regional property
management company may not be agood fit for them because

(43:15):
they've got too much going onand this and that.
Do you think there's advantagesfor someone choosing a bigger
company like Gannon Cooper?
Do you think there's advantagesfor someone choosing a bigger
company like Gannon Cooper, ordo you think there's advantages
for, you know, a smaller localcompany?
What's your opinion andexperience on that?

Speaker 3 (43:29):
Well, one thank you, but I would never consider
Gannon Cooper a big company atall.
I think we're probably thesmallest big company out there
only because you know to managea lot of these Fannie Freddie
loans you have to be qualified.
Hud loans, you have to alreadybe on their list, so not every
company can do it.
So first you have to figure outwhere your lending is coming

(43:52):
from.
Local lenders won't care, butonce you get into the bigger
lending you have to have aqualified manager and that's who
they deem qualified.
I am not saying that that meansthat they're qualified okay.
So it's kind of a twofoldquestion.
It just depends on what you'relooking for.

(44:13):
So for the smaller people buyingunder $100 or under and going
with local, yeah, I think that Iwould still really talk to the
property management company.
If they can't help you performat a property and I mean truly
give you a perform, a performerI probably wouldn't say that
that's your best bet, you know,because this industry has
evolved too much to not be ableto do that.
You know, um, and I do thinkthat there are some smaller

(44:34):
companies that are still good,but they just manage a little
bit more old school and I thinkthat you will not feel the full
benefits.
I mean, these companies alsodon't do renewals anymore, or
still, you know.
So if you can't, if they can'tgive you a performa, I would be
a little concerned, you know.
Now again, if you're buying 10,I mean no, even for 10 houses
I'm going to performa it for you.

(44:55):
You know, because I want to seeif it's going to cash flow
before I take it, because if not, what would be the point of me
taking it if you can't pay?
So to me, I personally, onceyou've hit like 20,000 doors in
a property management company,is what says to me that you're
big.
You know, 15,000 to 20,000.
I don't even ever want to bethat big.
I think it's honestly personalpreference.

Speaker 2 (45:17):
What's Dan and Cooper at now.

Speaker 3 (45:19):
About anywhere from 7,000 to 7,500 at any time.
You know, I think we're we'reonboarding a few, a couple of
hundred right now, a couple ofhundred just sold.

Speaker 2 (45:30):
So and you mentioned you were, you started where they
were.
At what 300, 350?

Speaker 3 (45:33):
Zero.

Speaker 2 (45:34):
Zero, zero.
That was my first one that Itook, yeah.

Speaker 3 (45:35):
So, and that was we started in April, my first one
that I took.

Speaker 1 (45:37):
Okay.

Speaker 3 (45:37):
Yeah, so and that was we started in April 15th and I
got that one in September.
So I went Amazing.
Those months which I, you know,I did sell a property.
I thought I was going to be abroker PS.
When I realized okay, we're notbuying our own properties here
that I would be able to manageit, a genie hendrix, was the

(45:58):
first thing I ever did.

Speaker 2 (45:59):
um at gannon cooper yeah nice too.

Speaker 3 (46:03):
I sold it for I don't remember.
I couldn't even tell you rightnow what it, but to all of my
investors yeah, brian, I'd loveto ask you that too.

Speaker 2 (46:14):
As far as you, you have experience with both larger
uh asset managers and smaller.
What, what do you see asdifferences on those two?

Speaker 1 (46:24):
I would definitely start getting opinions early on.
When you're close, you're notgoing to do your
back-of-the-table napkin.
Make sure the deal works foryou.
Theoretically, you're not justsending them everything.
But if someone can't pro forma,pro forma also holds someone
accountable In 12 months, we canlook back and say, hey, this is

(46:44):
what we expect.
Like, if someone can't proforma, pro forma also holds
someone accountable, like in 12months, we can look back and say
hey, this is what we expect,like we're nowhere near this or
we're well above it.

Speaker 3 (46:50):
That's why you put the disclaimer at the bottom.

Speaker 1 (46:51):
Yeah To PS.
Exactly this is what we think.
But I think you should get agood feel Like that rapport
should be good.
We've talked a lot about speedon this podcast, but you should
feel good about the back andforth that you're having.
Hey, I'm buying whether it's.
Hey, I'm buying this eight unitfrom myself and Rogers, and
here's where the current rentsare.
My brother-in-law manages it.

(47:13):
I would like to putprofessional property management
on it.
What do you think the rents are?
What is your guys' structure?
Ask them what their structureis.
A lot of this sub 100 are doing,you know higher percentage but
they might not have payroll.
They might be like eightpercent and first more
traditional, like residential.
They structure it more likethat eight to ten percent, right

(47:36):
, and then you won't pay payroll.
But they also might get halfmonths rent free and I think you
can negotiate with them alittle bit to see how they
accept negotiation.
If they don't negotiate withyou, what's their reasoning for
why they can see if it's fine ifthey can't budge on certain
items but call around.
She had a good tip, you know,for the smaller properties call

(47:58):
some realtors.
If it's maybe like a PoteauOklahoma, you might have to cold
call around there.
I would always try to get threeopinions, unless you're running
with someone and they've killedit on my last property
management.
It makes sense just to repeatthat process, because then you
can build some scalability withthat company too.

(48:20):
So I'm asking them how manyunits they manage?
What kind of assets do theymanage?
You know Trinity and GannonCooper were first in C-class in
Fort Smith.
That was super important to me.
For C-class in Fort Smith I'mnot using.
Lund is a big one here inNorthwest Arkansas.

(48:41):
That's's growing.
They're doing a lot ofdevelopment a class, but I don't
know what kind of experience cclass experience they have.
So that's great.
You, oh, we managed 2 000multi-family units, and here's a
performance.
What does that portfolio looklike?
Is that a lot of smalls, a lotof bigs, a lot of a class, a lot
of c class.
So that'll help you, you andaccounting.
Before you get to accounting,it's huge.

Speaker 3 (49:03):
It's one of the biggest things that everyone,
anytime they're trying to do amanagement change, and I sit
down and I ask them what don'tyou like about your company now?
Um, what, everyone's biggestthing is always accounting how
they pay the bill.
So it's it's.
It must be a huge problem.

Speaker 1 (49:18):
Yeah, and I think that's also goes back to the
bigger, not better.
So I've seen first hand some ofthe property management
companies grow too big tooquickly and their back end falls
apart.
They can't keep up with theaccounting on all these projects
where they don't, where themiddle management might not be
that strong, because they'vegrown so fast, they're not
hiring the middle management andthat reporting is not good.
And then you've got thisaccountant.

(49:40):
They're trying to get scalethat they may not be paying and
you see that fall apart.

Speaker 3 (49:44):
so I think it's corporate and mom and pop too.
You hit a line where, all of asudden, you, you can't, you
can't do anything on your own,you know.
So my company, I if you send abill, I can pay it same day and
same hour, you know ask, ask fora report on an example.

Speaker 1 (50:00):
I mean, if you really want to get into, you could ask
for hey, could I see an examplemonthly report that you send on
one of your properties and seeif that a lot?
I mean one of the first ones Iwas using in springdale, uh,
they were using, uh, exceptmicrosoft excel.
Yeah, it was all just on excel.
Yeah, I could not.

Speaker 3 (50:18):
Yeah and bank accounts.
You know a lot of my smallerclients who have come to me
afterwards have said like hey,is this normal?
Like they have one bank accountand they feed all the money
from everyone's property intothis one account?
Yeah, back in the day that wasnormal, you know.
Now do you want to do that?
Or for an asset that's over 50dollars, no no, how do you?
set up bank accounts.

(50:39):
You know it's little thingsthat you don't even think of
when you're first buyingproperty, you know, and
investing and getting a propertymanagement company, I would
have never thought about bankaccounts Like I just assumed
you're going to open my ownaccount for me, right?

Speaker 2 (50:52):
Right, yeah, I love it.
So I think, just kind of as wewind down, I'd love to hit a
couple more things, just kind ofmore market centric here.
As far as North West Arkansasand Fort Smith.
Obviously we've got we're inNorth West Arkansas, we've got a
lot of folks that listen tothis because they're interested
in North West Arkansas.
But we'd love to just get yourkind of thoughts on how those

(51:14):
markets differ from Fort Smithto North West Arkansas and kind
of what you see is as excitingthings coming to Fort Smith.
Obviously you've got a greatpulse on that.

Speaker 3 (51:23):
Yeah.
So as much as I say thatthey're the same because we're
in stable areas and it's amazingboth areas and I love them both
clearly Northwest Arkansas'sgrowth rent growth, population
growth we don't have.
We had a ton of rent growthhere since COVID in Fort Smith
for the first time, but beforethat was the most stable rent

(51:44):
you've ever seen in your entirelife.
You know, northwest Arkansas isnot like that.
You guys had great rent growthand you still do, and you have
great population growth andalthough it's slowed down a
little bit, you're still thepopulation growth here is still
growing.
Fort Smith is unfortunately nota growing population area not
quite yet.

Speaker 2 (52:01):
Do you see some of that spillover, though, even?

Speaker 3 (52:03):
So I think with the new F-35 project coming in, I
think that will certainly helpand maybe put us on the map a
little bit more.
But I think people shouldn'tjust tune out Fort Smith and I
think they did for a long, longtime and that was probably a mix
of the older know the olderowners not putting anything on
the market and just trade inbetween people.

(52:24):
And no one ever came in and youknow we couldn't even get you
know, fannie, freddie, loans andsecondary market.
I mean I remember walkingBricadia around Fort Smith
trying to prove to them why theyshould lend money in the area.
So, and I think now you knowthat's there and we've had
investors come in.
We've shown that there is roomfor growth there.
But nothing like NorthwestArkansas, you know you, you guys

(52:45):
just have such an influx ofpeople and cultures and it's
much more aggressive and your Aclass is so much better.
And I think that's because inFort Smith you can be lower to
middle A class and especiallydual income household and still
go buy a house pretty easily.
Northwest Arkansas you're righton that cusp Like hey, can I
buy a house?
Do I want to buy this house?
You know I'd rather go travel,and so your rent market for your

(53:08):
higher B's and A's up is justso much better.
C class, I think it's fairly thesame.
I think the income levels arealmost the same from Northwest
Arkansas down to Fort Smith it'sreally where your A class comes
in.
That just separates the wholemarket, and we're starting to
get a little of that with thenew college that came into Fort
Smith.

(53:28):
And again there's that 35project.
I've seen some rents that arematching what you guys get up
here, but that's in small, small, small scales and it takes a
lot longer to lease them up,sure, a lot longer.

Speaker 2 (53:40):
Yeah, that makes sense and I think that's a big
difference.
So, thinking about here I meanI guess anywhere where the
median home price is trending,and can someone buy something
for a similar monthly paymentthat they can rent and in Fort
Smith, I think there's a lotmore opportunity there to do so
than here, unless you're willingto drive.

(54:03):
But I think Northwest Arkansaswill continue to turn into a
renter community because peoplewant to be near things.
Walkability, right, walkability.
The median price is continuingto go up.
We probably will crack over themedian, the national median
home price once we, probablyover the next 10 years.
If I had to guess, if we docontinue to track towards what

(54:25):
they think, we're going to be ata million population in 15 or
20 years.
It only makes sense that we do.

Speaker 3 (54:30):
But we do have a lot of developable, developable land
, yeah, um, but it's just kindof only a matter of time, I
think yeah which is interestingbut good for investors it is,
yeah, and if you're building Imean because in Fort Smith I
think it's harder to build andhit the rents you need to for
what the cost of building is now, but in Northwest Arkansas it's
not, you know, and you can makethat work.

(54:52):
So if you're a smaller, kind ofnewer investor, like, come look
in Fort Smith because there'sstill some great deals and
there's no bad areas, you knowwhich?
Even northwest arkansas I canalmost argue any place to you.
You know it's a good area andit's going to be a good area and
I'll make the argument and Ibelieve in it, whether it
happens tomorrow or in four moreyears.
But I really can do that forthe same in fort smith, minus a

(55:14):
couple of locations where I'mlike, hey, it's still going to
be stable, you're not gonna.

Speaker 1 (55:19):
But just be a little bit more careful.
Yeah, you have to look at thedriving factors behind, like all
of that is very true.
And then what causes it to bemore of a renter?
Is these increase in population, there's more corporations and
we have three Fortune 500companies in Northwest Arkansas.
But what's interesting aboutFort Smith?

(55:47):
There's a manufacturing, like alot of manufacturing businesses
.
So you know, with the, thetariff situation, you know if US
manufacturing, you know, getsmore prominent, that's only
going to help Fort Smith.
You have the F-35, you have theF-35 program.
I didn't know about a newschool.
I know University of Arkansas.
Fort Smith has been kind ofsteady.

Speaker 3 (56:01):
Yeah, the osteopathic college, medical school that's
out there in Chaffee.
It's like driving, and if youhaven't driven through Chaffee
recently in Fort Smith, I mean,it looks like northwest Arkansas
.

Speaker 1 (56:12):
That's where you want to live, if you're.

Speaker 3 (56:15):
And I'll say this to anyone.
It's like do I want to live inBentonville or do I want to live
in Fayetteville?
It's the same thing.
Do I want to live downtown ordo I want to live in Chaffee?

Speaker 1 (56:23):
Yeah, chaffee kind of uptown, yeah, yeah.

Speaker 3 (56:26):
Yeah, it's all the new, all the.
You know, three four-storyapartment complexes that we've
never seen in Fort Smith.
That's where all that's goingto be.
I mean, at some point I thinkhis name's Kyle Parker, who runs
the university there.
He was giving a tour beforeanything was there and he's
looking out and he's like, yeah,all this is going to be banks

(56:47):
and homes and apartments andrestaurants.
I'm looking out there like whatare you talking about when?
And you know good for him.
I mean he did it and I thinkyou know Bob Cooper was huge in
Chaffee development too and it'sbeen quite the place.

Speaker 2 (57:03):
That's awesome.
Yeah, yeah, kathleen, we'veloved having you on the podcast
and kind of getting to know alittle bit more about what you
do and kind of your story alittle bit.
Where can people find you andcontact you if they would love
to do so?

Speaker 3 (57:19):
unfortunately, my easiest way is email, which is
Kathleen at GannCoopercom.
I don't have to spell that too.
It's hard, you know or justtext me 845-401-8939.
And that's the easiest way toget in touch with me.

Speaker 2 (57:35):
Awesome, yeah, you've had such good nuggets about
kind of property management,asset management, what that's
looked like for you over theyears, and and uh, I think
there's a lot of great knowledgefor investors to kind of be
able to take and and figure outkind of what that looks for,
that looks like for them andtheir investing journey.
And and uh, also the firstwoman on our on our podcast, so

(57:56):
we're super stoked to have you.
It was awesome and so justthanks again for your time.
We really value that.
I appreciate it it was fun.

Speaker 3 (58:04):
Thank you so much.

Speaker 1 (58:05):
Thanks, kathleen, appreciate you All.
Right, see you guys.
If you enjoyed the show, makesure to give us a follow on your
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content.

Speaker 2 (58:18):
I have a question you want us to cover, send it our
way and if you're interested insponsoring the show, visit
nwainvestingcom to get in touch.
Thanks for listening and we'llsee you next time.