May 1, 2025 • 46 mins
Shawn Johnson shares his transformation from property manager to wealthy investor and reveals how property management entrepreneurs can leverage their position to build exponential wealth through strategic property acquisition.
• One owned door equals the profit of 33 managed doors
• Most property managers fail to recognize the wealth-building opportunities in client property sales
• Prioritize evaluating properties for your own portfolio when clients want to sell
• Structure transparent deals that make financial sense for both parties
• Create win-win scenarios by eliminating realtor fees, tenant disruption, and market uncertainties
• Focus on long-term wealth creation instead of short-term commission checks
• Implement systems that require minimal effort but move the wealth needle significantly
• Use seller financing to create favorable terms and help sellers avoid tax hits
• Develop a collaborative rather than competitive approach to property negotiations
• Balance running a profitable property management business with building personal wealth
Join us at our upcoming retreat where Sean will be sharing his expertise on connecting personal financial goals to business strategy, with the possibility of helicopter rides for attendees.
Join fellow property management entrepreneurs and 6 expert coaches in a small, private high level event at a mansion style venue with a private chef and personally selected attendees to maximize the value you receive while at the event.
Join the waitlist for additional information here: https://ONYXwaitlist.com
Save the dates! July 13th - 16th, 2025
visit pmsuccess.com for more value packed property management related information or to hire Tony as your property management coach.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
How do we achieve these milestones with as minimal
effort as possible and move theneedle as big as possible?
How do we actuallyexponentially grow our wealth,
together with the asset youalready have in the management
company?
Speaker 2 (00:12):
Welcome to the Property Management Success
Podcast, where we interviewleaders in the industry to
uncover the secrets toprofitability, efficiency and
achieving true freedom, whetherit's your time, money or
lifestyle.
I'm your host, Tony Klein, andI'm here to help you build a
wildly successful propertymanagement business.
Let's get to it.
Welcome back to another episodeof the Property Management
(00:34):
Success Podcast.
I have in the studio with metoday a great friend of mine,
Sean Johnson.
Sean, welcome back to thepodcast.
Hey, thanks for having me again.
Yeah, it's always good when weget to spend time together.
I always love the time we getto spend, and a lot of it is not
done on camera, so I thoughtit'd be fun to invite you in and
(00:57):
share what you've been workingon lately and share with the
audience some of the insightsthat you've uncovered about the
property management entrepreneur.
Speaker 1 (01:09):
Yeah, happy to do it, Looking forward to it, I love
it yeah.
Speaker 2 (01:13):
So for the people that haven't been following us
for our entire journey as we'vetraveled the property management
space together, you and I eachowned separately a property
management business and at somepoint we were at a NARPUM
conference and you had I thinkKristen had to cancel or
(01:34):
something, and so you invited meto.
I think we had like 36 hoursfrom the time we were leaving
that conference to you going toMoab.
You had a cabin reserved andyou had your four-wheel drive
Razors that you were taking outthere, and so you invited me
along and from that point, frombeing in a mastermind, started
(01:58):
just kind of brainstorming anddreaming and dreaming bigger,
and we eventually becamebusiness partners and have since
sold that business and we'vegone on in our own direction,
and so I want to give theaudience a chance to just hear
from you on what you've gotgoing on now.
Speaker 1 (02:15):
Yeah, so last I don't know eight months or so, I've
been really focused on helpingproperty management company
owners, or PMCs, level up theirwealth and their finances and
using their business as avehicle to accomplish extremely
big wealth numbers.
(02:36):
And the one thing I do loveabout this industry is it is
literally on the forefront ofexcellent real estate deals.
But so often I've found it's socommon that we get in the mode
that we should just pass it offto the sales agent or we are the
(02:57):
sales agent ourself, instead oflooking for avenues to purchase
that asset under our ownportfolio.
And when we change that mindsetand start buying those doors
not every door pencils,obviously, but when we change
that and we start buying thoseassets, it changes everything.
(03:18):
Because, well, take, forinstance, for my portfolio, it
takes one managed door to equal33 owned doors.
Excuse me the other way aroundOne owned door to equal 33
managed doors and equal cashflow or profit, if you will.
(03:39):
So that's a huge difference.
And obviously the stress levelgoes down, the time consumption
goes down in order to managethose doors.
The tenant issues don't have todeal with client issues.
You are the client, right, youown the door, and so you know it
changes everything.
Now I'm just such a hugeadvocate of utilizing the
(04:00):
property management portfolio tohelp you achieve these
financial goals.
It's not to say that I wouldever advocate to not be a
property manager and just becomea real estate investor, because
I think the two are in suchgreat alignment to achieve both
very well, and that's yeah.
(04:21):
That's been the mission foreight to 10 months or so,
because I went through thattransformation myself and I
realized by doing some deepresearch in the industry that I
didn't know it at the time but Iwas the exception to the rule.
There's not a lot of us thathave kind of conquered that
(04:41):
financial asset investment realmthrough the portfolio, and it's
fascinating to see that kind oflight bulb moment go off on so
many of the people that I'vetalked to of creating assets or
creating wealth, generatingassets from the portfolio.
Speaker 2 (05:01):
So I want to make sure for the listener here this
is not going to be a podcastabout real estate investing.
It's a podcast about howproperty managers can take
advantage of the situation thatthey find themselves in and
maximize their opportunities bybecoming an investor, and so
(05:22):
that's a significant difference.
As you mentioned, you wouldn'tadvocate somebody to stop doing
property management and justbecome an investor, and so
there's a significant difference.
As you mentioned, you wouldn'tadvocate somebody to stop doing
property management and justbecome an investor.
There's a million podcasts outthere that talk about how to do
real estate investment, so thatis not this.
This is a very, very specificniche that you have found
yourself in, and I've known youfor a long time and I've
followed you.
This isn't just something youmentioned the last.
(05:43):
You know six or eight months oreight or 10 months that you've
been focusing on this.
You've been focusing on this,on spreading the message, for
that long, but I've watched youlive this over the last several
years or a decade.
So I want to make sure thatpeople understand that's the
angle that we're taking.
And then I want to point outthat you mentioned that you are
(06:05):
sort of the exception to therule, and I want people to
understand that you are such ashining light in a dark space.
There are a lot of people outhere in the property management
space talking about how to doyour systems better, what
software you need, how toautomate your processes and, at
the end of the day, that doeshelp the property management
(06:28):
business run more efficient.
But, at the end of the day, ifwe're not focusing on how to
create personal wealth throughthat business, at the end of the
day, we've created one asset,we've created one way to earn
money, and that's through theproperty management business.
So I want to just highlight thepoint that you are helping
(06:50):
entrepreneurs in the propertymanagement space figure out how
to accelerate the rate at whichthey create wealth and to
utilize things that are right infront of them that they're not
taking advantage of.
So let's, so let's kind of diginto that a little bit.
Let's go back to before youstarted doing this.
You were doing some research tomake sure that you really had a
(07:15):
firm grasp, not just on whatyou were doing, but on what
other people were doing.
So can you talk a little bitabout that research that you did
that led you down this path?
Speaker 1 (07:26):
about that research that you did that led you down
this path.
Yeah, let me start with the whyfirst, why I wanted to do
research, like I mentioned,being the exception to the rule.
I actually didn't know that.
I assumed that so many morepeople were just like me and
they used their portfolio to buyinvestment properties and they
were really seeking out to scalea large rental portfolio, but I
(07:46):
was completely wrong about that.
What I discovered in thisresearch is that, really,
property management companyowners are just like general
society in the sense that, yes,they own a business.
However, most of the businessesare almost not even an asset.
It's almost a liability and aburden to them.
(08:08):
They're stressed out, they havehigh risk in owning a business,
but they've really not createda asset for themselves.
They've created a job and thatjob is not as favorable as a
business owner in a job than itwould be a W-2, because a W-2 at
least provides benefits, andthen it provides you the freedom
of time to shut it off at theend of the day.
(08:29):
And business owners know thatwe don't shut it off.
We obsess about it and we talkabout it and we think about it
and we probably our spouses getsick of hearing about it, and so
I found that that was oneaspect that was extremely common
.
The second aspect is most peoplehadn't even had the thought
process, the epiphany to, to buyproperties from their clients
(08:52):
when their clients so oftenraise their hands to sell the
asset.
It never crossed people's mind,uh minds, and that was really
mind blowing to me and I don'tknow what it was.
You know I didn't really divedeep into that side of the
research as to why that wasn't athought process, but it just
(09:13):
was.
Hey, I want to do propertymanagement, we also do sales,
and so when a client wants tosell, we'll shift it to our
sales department or I'll sell itmyself and I might get a
$10,000 commission.
But that's it right, and reallythat financial gain is very
(09:34):
short-sighted.
It's not a long-term method ofthinking and that is really the
general consensus in themarketplace plus society as a
whole.
It's lack of financialeducation.
Speaker 2 (09:49):
So I want to stop you right there, because a lot of
people teach that that's the bigwin.
You hold on to the propertylong enough to manage it to
where they want to sell it, andthen you bring in your
salespeople and you sell it andyou get that $10,000 commission
check and that's the big winthat people used to focus on.
And now what you're saying isthat's actually harming your
(10:14):
future if you take that approach.
Speaker 1 (10:16):
Absolutely Well, the time value of money.
Think about, say, you get a$10,000 commission, that's nice.
The problem is is most peoplewill then, with that
short-sighted mindset, will thenutilize that money to just
increase their living, theirlifestyle, instead of, if I can
get this home and it cash flowsand I also gain an equity, and
(10:41):
that is building a nest egg inan asset in and of itself, well,
that is not money for now,that's money for years and years
and eventually perpetuity of anasset and something that can
not only be a huge wealthgenerator for myself but also
could be passed ongenerationally, and so that's
(11:03):
the huge difference.
Could be passed ongenerationally, and so that's
the huge difference.
It might be $10,000, but that'sbeans compared to what equity
can do over time.
Appreciation on a marketplacecashflow, appreciation on rent
prices, because we know thatrent has substantially gone up
and up year after year.
So you have all these otherfactors that play into
(11:23):
compounding financial gain farbeyond just a you know, a
commission check.
Speaker 2 (11:31):
So I want to, I want to make sure we kind of ease
into this topic, because I thinkwe've got a lot of people that
listen to us.
As you know from the statisticsthat you've been doing your
research, a lot of propertymanagement companies struggle to
even just make money just asthe company itself right,
without having to look at allthese other areas to make money.
(11:52):
And so we've got people thatare listening to this, that are
they're in the trenches, they'redoing the day to day, they're
trying to keep their head abovewater or they're doing well, but
they're afraid to let go ofwhatever they've got to hold on
to because they finally made itout of the trenches, they
finally have a little bit ofbreathing room.
So I kind of want tometaphorically slap these people
(12:18):
and wake them up and say, okay,you have been thinking about
this in one way.
We just want you to have anopen mind and think about it in
a different way and think abouta different approach.
So for those people who just gotkind of smacked in the face and
said, whoa, what is this Like?
I've never even thought aboutthat, or I've thought about it
(12:40):
but I don't know how to go aboutdoing it.
What would you say would be thefirst few steps?
How does somebody get into thiswhere it's like, yeah, sean, it
sounds like a good idea and itsounds like you kind of figured
it out, but how the heck would Igo about taking those first few
steps to figure this out formyself?
Speaker 1 (13:01):
Yeah, I think the first and biggest thing is to
discover what is actuallypossible we have well in two
realms.
First of all, what is thefinancial strength of owning
rental properties, owningadditional real estate, if you
will, additional real estate, ifyou will?
(13:22):
That is one avenue that I thinkyou really need to dive deep
into to see the upward mobilityof that financial gain from
owning real estate, and we couldtalk about that.
Number two is to discover howrelatively simple it is to have
these conversations with clientsbecause they already know like
(13:52):
and trust you as a propertymanager, or we just shift it
over to the brokerage side andsell the house and actually have
a conversation so we cannegotiate a good win-win
situation for our clients.
Speaker 2 (14:07):
Sean, you just gave me a serving of humble pie,
because I used to think I was agenius.
I used to think I had itfigured out.
When we would have landlordsand their property would come up
, the end of the lease wouldcome up.
I used to think that I wasreally smart because I would say
, okay, here's what it's worthon the rental market, here's
(14:29):
what we can get for lease,here's what I think it's worth
on the sales market.
Let me know which direction youwant to go.
And I would be providing that.
And sometimes they'd say, yeah,let's sell it.
And I would be providing that.
And sometimes they'd say, yeah,let's sell it.
And I would think I'm a genius,because the listing presentation
at that point is you've beentrusting us for four or five
years with this asset, why wouldyou not trust me to sell it?
(14:52):
And so there was nonegotiations or over commissions
, there was no presentation ofhere's my listing presentation,
and I'm gonna compete againsttwo or three other brokers.
So I thought I had it allfigured out by when we came up
to the end of that.
I would then get that saleslead.
(15:13):
I would get that salestransaction, and not just now,
but what you shared with me justover the years is that's that
short-sighted approach.
That's that give me $10,000 nowinstead of bringing it into the
portfolio, so we can stillrecognize those opportunities as
they come up.
But what you're saying is havea higher level conversation
(15:36):
where, instead of us helping yousell it, we're just going to
transition it right into ourportfolio from one day to the
next, no sales necessary.
Speaker 1 (15:44):
Yeah, and I would say like to refine that out a
little bit just think of it asan order of operations, instead
of when somebody says I want tosell the property, going and
listing it as the automaticresponse.
Just put the highest priorityis hey, can I buy it and use it
as a win-win for not only me butalso the client.
And if that deal can't bestructured in a manner that it
(16:08):
makes sense, then sell it Likeyou still get the commission.
You're not missing out on anyof that.
That is the other thing.
The other factor is is that thetenant, who most well-done
property management companiesview as the highest asset of the
property, they are also notdisturbed.
(16:28):
They also get to stay in a homethat they are obviously
comfortable with living in.
And so I would just reorder theorder of operations in in
taking sales down one notch andplacing, uh, buying as a
investor one notch above.
Speaker 2 (16:50):
So you mentioned having those kinds of
conversations, making that thehighest order of priority.
What do you say in thoseconversations?
How do you structure those?
If I, if I want to takeadvantage of not the person, but
the, the opportunity, I want totake advantage of the fact that
they want to maybe, uh, get outof that asset and you want to
(17:13):
get into that asset, that's anopportunity.
How do we?
We've recognized it.
How do we start thoseconversations and and position
it to where it doesn't soundlike we're trying to take
advantage of them?
Speaker 1 (17:26):
Yeah, first, let's assume that it's an asset you
want to buy, that you know itfits the portfolio and the
assumption there is is, ifyou're managing it, it's
probably one you would also wantto own.
That's just an assumption.
But first I would just stop, orI would start with having a
conversation with the client asto why they want to sell it.
What is the pain that iscausing them want to sell it?
(17:49):
If there is and oftentimesyou'll discover that you know,
life has happened right, adivorce is happening, an
inheritance or an heir has tonow take over the property and
they maybe don't understand thevalue of that asset and so on.
So having a conversation likethat Second is to really present
(18:09):
an offer of a convenience.
It is an offer that isstrengthened not only by
financial means but also theconvenient of selling to you,
because, again, they don't haveto, uh, remove a tenant from the
house, so there's no carryingcosts, no vacancy costs, if you
(18:30):
will.
They also don't have to then goprep that house for sale.
You know, cause it it may needto get repainted or new flooring
or whatever after the tenantmoves out.
So that's super convenient aswell.
Don't have to pay realtor feesbecause, let's be honest, if
you're going to buy the property, you're probably going to waive
your realtor fees inside thedeal and make it even more sweet
(18:52):
for the seller, if you will.
Oftentimes we can absorb some ofthe risks in the property.
And so, and that being like hey, I've managed this property for
five years I know that, uh,perhaps it needs a roof or a
roof repair that the owner hasbeen unwilling to uh provide,
(19:12):
and so, um, I'm going to knockthat off or take that off of the
price, and that's a fair thingto do because we all know it's
needed for the house.
So it de-risks the sale for theowner as well.
And you de-risk it in the sensethat you already know and
you're going to reinvest intothis property.
And then the other thing isclosing costs.
(19:35):
You can conveniently take careof, at least in my marketplaces.
A lot of the closing costsright off the bat, like we'll
record this deed and, you know,save a lot of the, uh, the I
would always get title insuranceor a title inspection and title
insurance, but you know what Imean.
A lot of, a lot of the closingcosts that you go through on the
(19:57):
normal marketplace can beabsorbed as a de-risking factor
in that purchase, and so,therefore, when you wrap all of
those things into this scenario,or these buying opportunities,
it really provides a high levelof convenience.
It's the easy button for aseller and it's also an easy
button for a buyer to transactthat way.
(20:18):
Plus, it provides a goodexperience, often unknown from a
seller, and it's also an easybutton for a buyer to transact
that way.
Plus, it provides a goodexperience often unknown from a
tenant.
Speaker 2 (20:26):
So, if you've found an opportunity like this, does
the seller feel like?
Because you know one of thethings that I don't know if this
is true or just a perception,but investors want to buy
properties at a discount.
That's what makes them thinkthey're going to be the investor
(20:48):
, they're going to get thecashflow, but when they sell,
they want to sell high, justlike everybody else.
So you've got this person thatyou've been managing for.
They want to maximize whatthey're going to get out of it.
So you talked about how to makeit easy, how to make it simple.
How do you go about maximizingtheir returns out of it versus
(21:09):
you overpaying?
Because we've got two differentinterests.
We've got we want to make surethat it's attractive deal for
the seller, our client, but italso has to be attractive to us.
Just because we have anopportunity to buy a property
doesn't mean that we want tooverpay for it.
So how do you reconcile thosetwo things?
Speaker 1 (21:27):
Yeah, that's a great question.
So I like to be supertransparent with the seller and
so say, for instance, you wantto do a CMA and figure out what
this house would actually listfor first and foremost.
So that's, that's the dollar,right?
Uh, the top dollar, top linedollar.
And then in our marketplaces weknow that the average house
sells X percent under listing.
(21:50):
So I would back that out.
And then I would back out realestate or a realtor commissions.
Then I would back out, um, uh,some closing costs, if you will.
And, hey, if there'smaintenance or an HVAC that
needs to be done as well, likethese are all the things they
would have to do on the market.
So if they were to sell it onthe market, we're gonna net out
the same dollar amount.
(22:11):
And the caveat, I'm gonna put alittle asterisk so long as it
pencils as an investment, right,it's gotta still make financial
sense, but assume that it does.
Those are the things that youback out in a transparent hey,
if you listed it, this is whatyou're going to net out, what
you should net out, uh,approximately.
And if I buy it, this is whatyou're going to net out.
And oftentimes, um, that is athat can be a good investment
(22:38):
opportunity.
Plus, where the cherry on topis again is the convenience
factor.
They're not having to prep thathouse for sale, they're not
having to serve the tenant,they're not having to do a bunch
of maintenance to get it readyand so on.
And so when they see the netnumbers in alignment as a proper
investment, then they'regetting the max value out of the
(23:00):
house, if you will as a seller,and their convenience is really
that kicker to that.
Oh shoot, if I'm going to getthe same number, I might as well
just sell it to the easiestpath.
Speaker 2 (23:09):
Yeah.
Do you ever discount whatyou're willing to pay?
Do you attribute any value tothe convenience factor Meaning
Do you attribute any value tothe convenience factor Meaning
you don't give them exactly whatit would be on the market?
Do you try to get any extrajuice out of the squeeze by
saying, okay, we're going togive you 90% or 95 or 98% of
(23:32):
what we think you could get onthe open marketplace.
Is there any room in there thatyou try to leverage for that
convenience factor?
Or is the convenience factor oris the convenience factor the
kicker that that just makes it ano brainer for you.
Speaker 1 (23:44):
Yeah, I think uh, we generally side on the you know,
the convenience factors, the nobrainer, and we don't charge a
convenience fee, if you will, tothat or some kind of premium,
Um.
But I will say that, yes, youhave to be conservative in the
proposal numbers.
So say, for instance, if ahouse is listing for, or could
(24:06):
list for, $400,000 and theaverage house sells 5% to 7%
under market, then obviouslyoffer at the 7%, right, You've
got to reduce it a little bitmore to make their sum buffer.
And look, I want to beconservative as an investor.
It has to make financial sensetoo.
And so, not getting emotionallyattached to the deal, thinking
(24:28):
it's just going to go throughbecause I'm offering a big
convenience.
No, think rationally.
You expect your client to thinkrationally as well and to make
a proper investment decision forthemselves.
But I will say and I don't wantto underplay this is that you
don't know the life situationthat your clients are going
(24:49):
through, and so often it couldbe a foreclosure, or someone has
passed away in the family orwhatever, or a divorce or
whatever.
Um, and the convenience factoris a peace of mind.
Um, that can't be put.
A dollar amount can't be placedon.
So they, you know they wantthat ease of sale more
(25:12):
importantly than they want$30,000 more or whatever.
You know whatever dollar amount.
Speaker 2 (25:17):
Yeah, we didn't touch on this and I don't think we
necessarily need to go into itunless you want to.
But you have built a very largepersonal portfolio through the
methods that we're talking aboutand so you've had a lot of
personal experience in thesetypes of transactions.
When you're talking to a selleror one of your clients and
(25:41):
you're trying to make it awin-win and you're looking at
how you can win, how you canpencil it out, we're also
looking at how they can win.
That's what we've been talkingabout.
But do you have theconversations?
Do people generally share withyou what they're going to do
with the money when you buy it?
You know those to be able toidentify those circumstances,
(26:03):
the pain points, how to reallysolve those, or do they
generally kind of keep thatclose to their chest and not
really share their motivation?
Speaker 1 (26:12):
Yeah, I think it depends.
There's really kind of twocategories of negotiators, if
you will.
There's the negotiators thatare collaborators, will.
There's the negotiators thatare collaborators, and then
there's the negotiators that arecompetitors, and you will find
really quick in a conversationwhich type they are.
Collaborators are not there toyou know, squeeze the last
(26:34):
little dime or whatever, andthose competitors are more ones
like hey, I'm going to see, youknow, everything's a wall being
placed up so I want to see how Icould get the upper hand here.
It's not super successful intrying to figure out the win-win
on a competitive style ofnegotiation.
(26:55):
You're not going to know itbecause they are not going to
tell it.
You're not going to know itbecause they are not going to
tell it.
But for a collaborator, yeah,oftentimes man I've had I could
talk days on the stories thatI've heard in these
conversations.
You know my I inherited thesetwo properties and my dad didn't
really teach us on how tomanage these investment doors
and I I don't know how to managethem.
(27:16):
I don't want to learn, I'm 60years old and I just want them
off my plate.
Um, and that was a negotiate.
That example was a negotiationof okay, oh fine, that's cool.
Um, how about we just guaranteea thousand dollars a month for
each of these doors and, uh,that'll be your quote, unquote,
owner financing amount, Howeverthat term works out in interest
(27:40):
or, you know, amortization, andthen we'll take, you know we'll,
we'll rent them out.
And so they deeded overthousand dollars a month for X
years and they are happy why.
They're not dealing with thetenant anymore, they're not
having to worry about themaintenance and the ebbs and
flows of cashflow.
They, they get a guaranteedpayment every single month.
(28:03):
And some people just want thepeace of mind.
So, the ones that are willingto collaborate, if you will, and
solve, solve their problem ofselling, yeah, they, they will
tell you oftentimes what, uh,what they're going through
personally what they're goingthrough personally.
Speaker 2 (28:18):
I think that's something you touched on the
seller financing bit and I wantto come back to that.
I want to dig into that a littlebit more.
I don't have the experience withit that you do or the depth of
it, but I've done some of thisin my career and one of the
(28:39):
things that I would leverage iswhen somebody sells a property,
that's, they get taxed on themoney that they receive when
they receive it.
So if you can help them spreadthat out, then it can affect
which tax bracket they're in,which affects how much tax that
they pay.
And so what we would look at islet let me help you maximize
(29:03):
your return that you're going toget from this by having you not
take that large sum of cash allat once, but let's give you
some cash now to satisfywhatever needs they had at that
moment, but then put it on thatguaranteed schedule where
they're getting some cash overtime.
And I think that that's an areawhere people just miss that.
(29:26):
The seller is concerned withwhat they're going to make
overall and they're concernedwith what they're going to get
right now, but a lot of timesthey need to solve a short-term
problem, and it doesn't take allthe cash that they have in the
property to be able to do that.
Speaker 1 (29:42):
Yeah, that's, that's a great point.
We often had that same type ofconversation and it and often
resulted in hey, I've got a saythey have like $50,000 in equity
, I'll pay 20,000 now and we'llamortize the rest in the uh, in
the purchase or whatever,however that works out.
(30:03):
But yes, that is a great pointto help reduce someone's tax
liability or tax hit immediatelyfor them.
Speaker 2 (30:14):
I want to share with, or have you share, what you've
been up to lately.
You've taken this program.
I call it a program, you callit what you want, you tell us
what you want to call it.
But you've taken thismethodology and you've sort of
packaged it up and you'veactually been packaged it up and
you've actually been runningpeople through a program where
(30:34):
you're actually teaching othershow to do this and I'd love to
get some of those.
I know you gave us someinsights about what you learned
in the research that mostproperty management companies is
just a sliver of the samepercentages of society where not
many more property managers oreven any more property managers
(30:57):
have the wealth game figured out.
But, as you've been takingpeople through your program,
what comes top of mind, whatstands out for you of what
you've learned or what they'velearned from it?
Speaker 1 (31:11):
Yeah, the biggest ones is time and how to manage
time as an operator and to shifttheir abilities from working a
job, their business and workingon a business that really can
operate in so many ways on itsown but not only shifting that
(31:31):
but to utilizing thatmethodology to continue to grow
a business.
And it's amazing howsubstantial somebody's gains can
be when they stop working insomething and take their head up
from it and looking at thebigger picture and focusing on
(31:53):
what actually drives a businessforward.
Another big factor and peopledon't really focus on this
enough in our industry is that,look, in order for a business to
be successful, it has to beprofitable and in order for it
to be profitable, we have tocharge appropriate things for
the value that we provide ourclients.
(32:15):
And I know there's thatconstant pull right the
multi-investor.
They want cheap management fees, but the reality is they want
reduced costs and just becauseyour fee as a management company
may be higher or you'reproviding a value and you're
charging for it, doesn't meanthat doesn't reduce their costs.
(32:36):
There's other factors that gointo play, like liability and
risks and vacancy periods andfinding bad tenants and placing
bad tenants and tenantdestroying their property and so
on.
We all know those things, sothat's another huge factor to
this.
And then the next one is reallya systemized approach to
creating these opportunities forclients to reach out to you
(33:02):
when they are ready to sell andyou to be able to know how to
capitalize on thoseopportunities when they do come
up.
And then building your ownwealth.
So we manage the wealth of ourclients and we worry about
building their wealth so much weforget to focus on our own.
And that is a key component tothe program.
(33:26):
If you will, that I have theother ones is you're in a space
with other like-minded propertymanagers that want to be the
exception to the rule and aremoving hard at working on being
the exception to the rule,becoming a wealthy property
manager that isn't reliant uponone single source of income, aka
(33:49):
their management company, andis focused on gaining additional
assets to diversify and securetheir financial future.
Speaker 2 (34:00):
One of the things I talk about a lot is that a
property management businessreally, or any business, should
really only exist, or only existto feed the goals, the personal
goals, of the person that ownsit.
Right, and I know there's someother things about doing good in
(34:21):
the world and all of that andthat kind of stacks on top of
that.
But nobody starts a business orkeeps a business going if
they're not being somehowpersonally rewarded, either
financially or philosophicallyor philanthropically, whatever
they want to get some sort ofbenefit from that.
And so one of the things that Ithink is great about the program
(34:44):
that you have, which is youtake people who want more, want
to provide a better lifestylefor them, for their families,
for their employees, for theirchildren, whatever it is, and
you figure out, you show themthe path of how to do that
without really getting into.
(35:04):
You're not telling them hey, ifyou want to be wealthy, open up
, become a dentist, which istotally different from property
management.
What you're saying is you havethis great asset, you have this
golden shovel, and let's usethat golden shovel to dig out a
little bit more gold out of themountain.
And so it just adds on stacks,on layers on what they're
(35:28):
already doing, and I think thatit's really providing a lot of
value for the industry and thepeople who are courageous enough
to say I'm going to set asidetime to actually leverage what
is right here in my lab.
Speaker 1 (35:46):
No, I love that.
And you know, I think, just toadd on, is the it's minimal too,
in the sense that I've createdthis to be as least time
consuming and effortless aspossible.
I mean, like all this, all yougot to do is just put it in the
(36:06):
system, put the system in thecompany and it's done for you,
if you will.
And the point is is like look,I get it.
I know what it takes to run aproperty management company.
I know that you can have yourentire day planned out and then
the basement flood happens andit changes everything for the
day.
It not only changes that day,but it also changes tomorrow,
because you're still dealingwith the mess.
(36:27):
But it also changes tomorrowbecause you're still dealing
with the mess.
And so how do we implement thesethings that actually move the
needle forward with minimaleffort?
Yeah, there's effort.
I want people that are drivenand want to see the potential
and achieve the potential ofgaining wealth.
However, I understand that if Igave a 30 page document of a
(36:51):
task list that you had to doafter every learning session,
then it would never get doneRight.
So how do we?
How do we achieve thesemilestones with as minimal
effort as possible and move theneedle as big as possible.
How do we actuallyexponentially grow our wealth
together with the asset youalready have in the management
(37:11):
company?
Speaker 2 (37:12):
Yeah Well, I want to give people an opportunity.
If they've been intrigued bythis, I want to give them the
opportunity to find your program, and so we'll put a link in the
show notes and uh, and if theywant to hop on, they can do that
.
But if there's another wayyou'd like to share for them to
be able to get a hold of you,how would they go about doing so
(37:36):
?
Speaker 1 (37:37):
Yeah, I mean you can go to my website.
It's SeanAustinJohnsoncom,spelled correctly S-H-A-W-N.
A little poke there, butSeanAustinJohnsoncom slash.
I think I have a uh page justfor your podcast.
I'll find it, tony, so it's inthe link.
But they could also find me onany social media.
Um Instagram, sean AustinJohnson, twitter, whatever I'm
(38:03):
out there, um message me.
Facebook is a good place aswell.
So, um direct message me, I'm.
I'm happy to chat and see if italigns with your financial
goals and how we can accelerateyour wealth.
Speaker 2 (38:17):
Okay, I want to give one more way for people to
connect with you.
I'm really excited.
I got a lot of great peoplecoming to our retreat, but one
of my favorite sessions is goingto be about how to connect your
personal goals to your businessgoals and have the business
feed you personally.
(38:39):
And you're going to be therewith us in being one of the
experts in the room at ourretreat.
We're going to have six expertcoaches in the room with us for
three days sitting, going onhikes, sitting at the tables,
eating meals, learning from eachother, and we've got six expert
(39:01):
coaches and we only have 13available slots, and I'm really
excited to say that Sean is ourexpert.
That's going to kick off ourevent, and so he will get us in
the right mindset, the rightframework to be able to take
everything else that we learnedthroughout the rest of the
retreat to be able to applythose things to the goals and
(39:26):
the aspirations that we have,and so I'm really excited to
share with everybody that Seanwill be there with us and, sean,
I'm just really excited to seeyou there.
So if people want to come andspend three days learning your
tactics, rubbing elbows with you, um, that's the place to do it,
(39:46):
so um and here can I put acherry on the top.
Speaker 1 (39:48):
Are you going to let me do this?
Let's do it so.
Um, and here can I put a cherryon the top.
Are you gonna let me do this?
Let's do it, yeah, there is alarge possibility that I will
have a helicopter up in thatarea and if I fly it up there,
hmm, there may be a flight ortwo that could happen.
Oh, that's fantastic.
Speaker 2 (40:05):
Yeah, yeah.
So that's one of the thingsthat sean with with some of his
wealth.
You've been you.
How long ago did you preorderthis helicopter?
Speaker 1 (40:31):
I, uh, uh.
It's been three or four yearsI've been waiting for that's the
, the ultimate goal helicopter,and I still probably have
another year and a half to waitfor that one.
But I'm going to, I'm.
I will probably have an interimone in the meantime.
Speaker 2 (40:41):
Okay, this is super fascinating to me, so we're
going to take a little bit of adetour before we close up.
Tell them why it's taking solong for you to get that
particular helicopter.
Speaker 1 (40:51):
Yeah, so Hill Helicopters you can check them
out.
Hillhelicopterscom is a newerplatform that has been
developing for probably the last20 years, but it is the
greatest hits of all thetechnology that helicopters have
been so tragically sad atimplementing into new platforms
(41:13):
that hit the marketplace at anunreasonable price, and we won't
get into all of that.
But, for instance, a turbineengine is about a half a million
dollars.
It's because no helicopterplatform puts their own engine
in it.
They outsource it to RollsRoyce or Turbo Mecca or whatever
, Okay, and they're superexpensive.
(41:34):
But Hill is one that hasvertically integrated.
They've been doing this andbeen on this mission for 20
years and about four years ago Iwas one of the early adopters,
bought in and expect to have ahelicopter in the next hopefully
year and a half.
Speaker 2 (41:54):
Very nice, all right.
So yeah, I love the cherry ontop.
I can't wait to see theultimate one.
But yeah, that's a nice littleteaser about.
Hey, if you show up to theevent, there may be a helicopter
trip or two involved To makethat as much value as possible
for your event, tony.
Speaker 1 (42:14):
I'm really excited to be a part of it.
Speaker 2 (42:17):
That's cool.
All right, sean, I'm going togive you the last word.
I know that you and I could goover this stuff for days, and
it's not just your expertise onthe investment side.
I want to circle back aroundand reemphasize the fact that
you owned a very successfulproperty management company and
(42:39):
were a very successful investor.
They're going to pick up notjust how to do the investment
(43:01):
side, but actually how to run agreat property management
company that provides more andmore opportunities to be able to
have more investmentopportunities available to you.
So, yeah, is there anythingthat you wish we would have
mentioned was top of mind, thatwe started to, that we kind of
cut off?
I want to give you the lastword and then we'll wrap up.
Speaker 1 (43:10):
Man put me on the spot.
I don't know that there'sanything that we didn't mention.
What I would just say is that asimple reframing of the why
we're in business to creating anasset that creates wealth for
me and my family can be aparamount shift in your life.
For me and my family can be aparamount shift in your life,
(43:31):
and so utilize that mindsetshift to really drive your
decision-making.
Now is profit everything?
No, I'm not trying to say that.
What I'm saying is that if wefilter our decision-making as is
this beneficial to the businessand it grow and can I utilize
this business in manners thatcan create more wealth, that
(43:52):
doesn't create more time becausewe're already managing right
Then that will change a lot ofperspective on how we make
decisions in business.
Speaker 2 (44:03):
Very good.
And with that, sean, thanks somuch and we look forward to
seeing you there in July.
Hey, thanks, tony, appreciateit.
Thanks for tuning in to theProperty Management Success
Podcast.
We'll be back with anothervalue-packed episode to help you
level up your propertymanagement game.
If you've got somethingvaluable out of today's episode,
please share it with a friendor colleague, and don't forget
(44:25):
to subscribe and leave a reviewso you never miss out on future
insights and strategies andtactics.
Until next time, here's to yoursuccess.
How do we achieve these milestones with as minimal
effort as possible and move theneedle as big as possible?
How do we actuallyexponentially grow our wealth,
together with the asset youalready have in the management
company?
Speaker 2 (00:12):
Welcome to the Property Management Success
Podcast, where we interviewleaders in the industry to
uncover the secrets toprofitability, efficiency and
achieving true freedom, whetherit's your time, money or
lifestyle.
I'm your host, Tony Klein, andI'm here to help you build a
wildly successful propertymanagement business.
Let's get to it.
Welcome back to another episodeof the Property Management
(00:34):
Success Podcast.
I have in the studio with metoday a great friend of mine,
Sean Johnson.
Sean, welcome back to thepodcast.
Hey, thanks for having me again.
Yeah, it's always good when weget to spend time together.
I always love the time we getto spend, and a lot of it is not
done on camera, so I thoughtit'd be fun to invite you in and
(00:57):
share what you've been workingon lately and share with the
audience some of the insightsthat you've uncovered about the
property management entrepreneur.
Speaker 1 (01:09):
Yeah, happy to do it, Looking forward to it, I love
it yeah.
Speaker 2 (01:13):
So for the people that haven't been following us
for our entire journey as we'vetraveled the property management
space together, you and I eachowned separately a property
management business and at somepoint we were at a NARPUM
conference and you had I thinkKristen had to cancel or
(01:34):
something, and so you invited meto.
I think we had like 36 hoursfrom the time we were leaving
that conference to you going toMoab.
You had a cabin reserved andyou had your four-wheel drive
Razors that you were taking outthere, and so you invited me
along and from that point, frombeing in a mastermind, started
(01:58):
just kind of brainstorming anddreaming and dreaming bigger,
and we eventually becamebusiness partners and have since
sold that business and we'vegone on in our own direction,
and so I want to give theaudience a chance to just hear
from you on what you've gotgoing on now.
Speaker 1 (02:15):
Yeah, so last I don't know eight months or so, I've
been really focused on helpingproperty management company
owners, or PMCs, level up theirwealth and their finances and
using their business as avehicle to accomplish extremely
big wealth numbers.
(02:36):
And the one thing I do loveabout this industry is it is
literally on the forefront ofexcellent real estate deals.
But so often I've found it's socommon that we get in the mode
that we should just pass it offto the sales agent or we are the
(02:57):
sales agent ourself, instead oflooking for avenues to purchase
that asset under our ownportfolio.
And when we change that mindsetand start buying those doors
not every door pencils,obviously, but when we change
that and we start buying thoseassets, it changes everything.
(03:18):
Because, well, take, forinstance, for my portfolio, it
takes one managed door to equal33 owned doors.
Excuse me the other way aroundOne owned door to equal 33
managed doors and equal cashflow or profit, if you will.
(03:39):
So that's a huge difference.
And obviously the stress levelgoes down, the time consumption
goes down in order to managethose doors.
The tenant issues don't have todeal with client issues.
You are the client, right, youown the door, and so you know it
changes everything.
Now I'm just such a hugeadvocate of utilizing the
(04:00):
property management portfolio tohelp you achieve these
financial goals.
It's not to say that I wouldever advocate to not be a
property manager and just becomea real estate investor, because
I think the two are in suchgreat alignment to achieve both
very well, and that's yeah.
(04:21):
That's been the mission foreight to 10 months or so,
because I went through thattransformation myself and I
realized by doing some deepresearch in the industry that I
didn't know it at the time but Iwas the exception to the rule.
There's not a lot of us thathave kind of conquered that
(04:41):
financial asset investment realmthrough the portfolio, and it's
fascinating to see that kind oflight bulb moment go off on so
many of the people that I'vetalked to of creating assets or
creating wealth, generatingassets from the portfolio.
Speaker 2 (05:01):
So I want to make sure for the listener here this
is not going to be a podcastabout real estate investing.
It's a podcast about howproperty managers can take
advantage of the situation thatthey find themselves in and
maximize their opportunities bybecoming an investor, and so
(05:22):
that's a significant difference.
As you mentioned, you wouldn'tadvocate somebody to stop doing
property management and justbecome an investor, and so
there's a significant difference.
As you mentioned, you wouldn'tadvocate somebody to stop doing
property management and justbecome an investor.
There's a million podcasts outthere that talk about how to do
real estate investment, so thatis not this.
This is a very, very specificniche that you have found
yourself in, and I've known youfor a long time and I've
followed you.
This isn't just something youmentioned the last.
(05:43):
You know six or eight months oreight or 10 months that you've
been focusing on this.
You've been focusing on this,on spreading the message, for
that long, but I've watched youlive this over the last several
years or a decade.
So I want to make sure thatpeople understand that's the
angle that we're taking.
And then I want to point outthat you mentioned that you are
(06:05):
sort of the exception to therule, and I want people to
understand that you are such ashining light in a dark space.
There are a lot of people outhere in the property management
space talking about how to doyour systems better, what
software you need, how toautomate your processes and, at
the end of the day, that doeshelp the property management
(06:28):
business run more efficient.
But, at the end of the day, ifwe're not focusing on how to
create personal wealth throughthat business, at the end of the
day, we've created one asset,we've created one way to earn
money, and that's through theproperty management business.
So I want to just highlight thepoint that you are helping
(06:50):
entrepreneurs in the propertymanagement space figure out how
to accelerate the rate at whichthey create wealth and to
utilize things that are right infront of them that they're not
taking advantage of.
So let's, so let's kind of diginto that a little bit.
Let's go back to before youstarted doing this.
You were doing some research tomake sure that you really had a
(07:15):
firm grasp, not just on whatyou were doing, but on what
other people were doing.
So can you talk a little bitabout that research that you did
that led you down this path?
Speaker 1 (07:26):
about that research that you did that led you down
this path.
Yeah, let me start with the whyfirst, why I wanted to do
research, like I mentioned,being the exception to the rule.
I actually didn't know that.
I assumed that so many morepeople were just like me and
they used their portfolio to buyinvestment properties and they
were really seeking out to scalea large rental portfolio, but I
(07:46):
was completely wrong about that.
What I discovered in thisresearch is that, really,
property management companyowners are just like general
society in the sense that, yes,they own a business.
However, most of the businessesare almost not even an asset.
It's almost a liability and aburden to them.
(08:08):
They're stressed out, they havehigh risk in owning a business,
but they've really not createda asset for themselves.
They've created a job and thatjob is not as favorable as a
business owner in a job than itwould be a W-2, because a W-2 at
least provides benefits, andthen it provides you the freedom
of time to shut it off at theend of the day.
(08:29):
And business owners know thatwe don't shut it off.
We obsess about it and we talkabout it and we think about it
and we probably our spouses getsick of hearing about it, and so
I found that that was oneaspect that was extremely common
.
The second aspect is most peoplehadn't even had the thought
process, the epiphany to, to buyproperties from their clients
(08:52):
when their clients so oftenraise their hands to sell the
asset.
It never crossed people's mind,uh minds, and that was really
mind blowing to me and I don'tknow what it was.
You know I didn't really divedeep into that side of the
research as to why that wasn't athought process, but it just
(09:13):
was.
Hey, I want to do propertymanagement, we also do sales,
and so when a client wants tosell, we'll shift it to our
sales department or I'll sell itmyself and I might get a
$10,000 commission.
But that's it right, and reallythat financial gain is very
(09:34):
short-sighted.
It's not a long-term method ofthinking and that is really the
general consensus in themarketplace plus society as a
whole.
It's lack of financialeducation.
Speaker 2 (09:49):
So I want to stop you right there, because a lot of
people teach that that's the bigwin.
You hold on to the propertylong enough to manage it to
where they want to sell it, andthen you bring in your
salespeople and you sell it andyou get that $10,000 commission
check and that's the big winthat people used to focus on.
And now what you're saying isthat's actually harming your
(10:14):
future if you take that approach.
Speaker 1 (10:16):
Absolutely Well, the time value of money.
Think about, say, you get a$10,000 commission, that's nice.
The problem is is most peoplewill then, with that
short-sighted mindset, will thenutilize that money to just
increase their living, theirlifestyle, instead of, if I can
get this home and it cash flowsand I also gain an equity, and
(10:41):
that is building a nest egg inan asset in and of itself, well,
that is not money for now,that's money for years and years
and eventually perpetuity of anasset and something that can
not only be a huge wealthgenerator for myself but also
could be passed ongenerationally, and so that's
(11:03):
the huge difference.
Could be passed ongenerationally, and so that's
the huge difference.
It might be $10,000, but that'sbeans compared to what equity
can do over time.
Appreciation on a marketplacecashflow, appreciation on rent
prices, because we know thatrent has substantially gone up
and up year after year.
So you have all these otherfactors that play into
(11:23):
compounding financial gain farbeyond just a you know, a
commission check.
Speaker 2 (11:31):
So I want to, I want to make sure we kind of ease
into this topic, because I thinkwe've got a lot of people that
listen to us.
As you know from the statisticsthat you've been doing your
research, a lot of propertymanagement companies struggle to
even just make money just asthe company itself right,
without having to look at allthese other areas to make money.
(11:52):
And so we've got people thatare listening to this, that are
they're in the trenches, they'redoing the day to day, they're
trying to keep their head abovewater or they're doing well, but
they're afraid to let go ofwhatever they've got to hold on
to because they finally made itout of the trenches, they
finally have a little bit ofbreathing room.
So I kind of want tometaphorically slap these people
(12:18):
and wake them up and say, okay,you have been thinking about
this in one way.
We just want you to have anopen mind and think about it in
a different way and think abouta different approach.
So for those people who just gotkind of smacked in the face and
said, whoa, what is this Like?
I've never even thought aboutthat, or I've thought about it
(12:40):
but I don't know how to go aboutdoing it.
What would you say would be thefirst few steps?
How does somebody get into thiswhere it's like, yeah, sean, it
sounds like a good idea and itsounds like you kind of figured
it out, but how the heck would Igo about taking those first few
steps to figure this out formyself?
Speaker 1 (13:01):
Yeah, I think the first and biggest thing is to
discover what is actuallypossible we have well in two
realms.
First of all, what is thefinancial strength of owning
rental properties, owningadditional real estate, if you
will, additional real estate, ifyou will?
(13:22):
That is one avenue that I thinkyou really need to dive deep
into to see the upward mobilityof that financial gain from
owning real estate, and we couldtalk about that.
Number two is to discover howrelatively simple it is to have
these conversations with clientsbecause they already know like
(13:52):
and trust you as a propertymanager, or we just shift it
over to the brokerage side andsell the house and actually have
a conversation so we cannegotiate a good win-win
situation for our clients.
Speaker 2 (14:07):
Sean, you just gave me a serving of humble pie,
because I used to think I was agenius.
I used to think I had itfigured out.
When we would have landlordsand their property would come up
, the end of the lease wouldcome up.
I used to think that I wasreally smart because I would say
, okay, here's what it's worthon the rental market, here's
(14:29):
what we can get for lease,here's what I think it's worth
on the sales market.
Let me know which direction youwant to go.
And I would be providing that.
And sometimes they'd say, yeah,let's sell it.
And I would be providing that.
And sometimes they'd say, yeah,let's sell it.
And I would think I'm a genius,because the listing presentation
at that point is you've beentrusting us for four or five
years with this asset, why wouldyou not trust me to sell it?
(14:52):
And so there was nonegotiations or over commissions
, there was no presentation ofhere's my listing presentation,
and I'm gonna compete againsttwo or three other brokers.
So I thought I had it allfigured out by when we came up
to the end of that.
I would then get that saleslead.
(15:13):
I would get that salestransaction, and not just now,
but what you shared with me justover the years is that's that
short-sighted approach.
That's that give me $10,000 nowinstead of bringing it into the
portfolio, so we can stillrecognize those opportunities as
they come up.
But what you're saying is havea higher level conversation
(15:36):
where, instead of us helping yousell it, we're just going to
transition it right into ourportfolio from one day to the
next, no sales necessary.
Speaker 1 (15:44):
Yeah, and I would say like to refine that out a
little bit just think of it asan order of operations, instead
of when somebody says I want tosell the property, going and
listing it as the automaticresponse.
Just put the highest priorityis hey, can I buy it and use it
as a win-win for not only me butalso the client.
And if that deal can't bestructured in a manner that it
(16:08):
makes sense, then sell it Likeyou still get the commission.
You're not missing out on anyof that.
That is the other thing.
The other factor is is that thetenant, who most well-done
property management companiesview as the highest asset of the
property, they are also notdisturbed.
(16:28):
They also get to stay in a homethat they are obviously
comfortable with living in.
And so I would just reorder theorder of operations in in
taking sales down one notch andplacing, uh, buying as a
investor one notch above.
Speaker 2 (16:50):
So you mentioned having those kinds of
conversations, making that thehighest order of priority.
What do you say in thoseconversations?
How do you structure those?
If I, if I want to takeadvantage of not the person, but
the, the opportunity, I want totake advantage of the fact that
they want to maybe, uh, get outof that asset and you want to
(17:13):
get into that asset, that's anopportunity.
How do we?
We've recognized it.
How do we start thoseconversations and and position
it to where it doesn't soundlike we're trying to take
advantage of them?
Speaker 1 (17:26):
Yeah, first, let's assume that it's an asset you
want to buy, that you know itfits the portfolio and the
assumption there is is, ifyou're managing it, it's
probably one you would also wantto own.
That's just an assumption.
But first I would just stop, orI would start with having a
conversation with the client asto why they want to sell it.
What is the pain that iscausing them want to sell it?
(17:49):
If there is and oftentimesyou'll discover that you know,
life has happened right, adivorce is happening, an
inheritance or an heir has tonow take over the property and
they maybe don't understand thevalue of that asset and so on.
So having a conversation likethat Second is to really present
(18:09):
an offer of a convenience.
It is an offer that isstrengthened not only by
financial means but also theconvenient of selling to you,
because, again, they don't haveto, uh, remove a tenant from the
house, so there's no carryingcosts, no vacancy costs, if you
(18:30):
will.
They also don't have to then goprep that house for sale.
You know, cause it it may needto get repainted or new flooring
or whatever after the tenantmoves out.
So that's super convenient aswell.
Don't have to pay realtor feesbecause, let's be honest, if
you're going to buy the property, you're probably going to waive
your realtor fees inside thedeal and make it even more sweet
(18:52):
for the seller, if you will.
Oftentimes we can absorb some ofthe risks in the property.
And so, and that being like hey, I've managed this property for
five years I know that, uh,perhaps it needs a roof or a
roof repair that the owner hasbeen unwilling to uh provide,
(19:12):
and so, um, I'm going to knockthat off or take that off of the
price, and that's a fair thingto do because we all know it's
needed for the house.
So it de-risks the sale for theowner as well.
And you de-risk it in the sensethat you already know and
you're going to reinvest intothis property.
And then the other thing isclosing costs.
(19:35):
You can conveniently take careof, at least in my marketplaces.
A lot of the closing costsright off the bat, like we'll
record this deed and, you know,save a lot of the, uh, the I
would always get title insuranceor a title inspection and title
insurance, but you know what Imean.
A lot of, a lot of the closingcosts that you go through on the
(19:57):
normal marketplace can beabsorbed as a de-risking factor
in that purchase, and so,therefore, when you wrap all of
those things into this scenario,or these buying opportunities,
it really provides a high levelof convenience.
It's the easy button for aseller and it's also an easy
button for a buyer to transactthat way.
(20:18):
Plus, it provides a goodexperience, often unknown from a
seller, and it's also an easybutton for a buyer to transact
that way.
Plus, it provides a goodexperience often unknown from a
tenant.
Speaker 2 (20:26):
So, if you've found an opportunity like this, does
the seller feel like?
Because you know one of thethings that I don't know if this
is true or just a perception,but investors want to buy
properties at a discount.
That's what makes them thinkthey're going to be the investor
(20:48):
, they're going to get thecashflow, but when they sell,
they want to sell high, justlike everybody else.
So you've got this person thatyou've been managing for.
They want to maximize whatthey're going to get out of it.
So you talked about how to makeit easy, how to make it simple.
How do you go about maximizingtheir returns out of it versus
(21:09):
you overpaying?
Because we've got two differentinterests.
We've got we want to make surethat it's attractive deal for
the seller, our client, but italso has to be attractive to us.
Just because we have anopportunity to buy a property
doesn't mean that we want tooverpay for it.
So how do you reconcile thosetwo things?
Speaker 1 (21:27):
Yeah, that's a great question.
So I like to be supertransparent with the seller and
so say, for instance, you wantto do a CMA and figure out what
this house would actually listfor first and foremost.
So that's, that's the dollar,right?
Uh, the top dollar, top linedollar.
And then in our marketplaces weknow that the average house
sells X percent under listing.
(21:50):
So I would back that out.
And then I would back out realestate or a realtor commissions.
Then I would back out, um, uh,some closing costs, if you will.
And, hey, if there'smaintenance or an HVAC that
needs to be done as well, likethese are all the things they
would have to do on the market.
So if they were to sell it onthe market, we're gonna net out
the same dollar amount.
(22:11):
And the caveat, I'm gonna put alittle asterisk so long as it
pencils as an investment, right,it's gotta still make financial
sense, but assume that it does.
Those are the things that youback out in a transparent hey,
if you listed it, this is whatyou're going to net out, what
you should net out, uh,approximately.
And if I buy it, this is whatyou're going to net out.
And oftentimes, um, that is athat can be a good investment
(22:38):
opportunity.
Plus, where the cherry on topis again is the convenience
factor.
They're not having to prep thathouse for sale, they're not
having to serve the tenant,they're not having to do a bunch
of maintenance to get it readyand so on.
And so when they see the netnumbers in alignment as a proper
investment, then they'regetting the max value out of the
(23:00):
house, if you will as a seller,and their convenience is really
that kicker to that.
Oh shoot, if I'm going to getthe same number, I might as well
just sell it to the easiestpath.
Speaker 2 (23:09):
Yeah.
Do you ever discount whatyou're willing to pay?
Do you attribute any value tothe convenience factor Meaning
Do you attribute any value tothe convenience factor Meaning
you don't give them exactly whatit would be on the market?
Do you try to get any extrajuice out of the squeeze by
saying, okay, we're going togive you 90% or 95 or 98% of
(23:32):
what we think you could get onthe open marketplace.
Is there any room in there thatyou try to leverage for that
convenience factor?
Or is the convenience factor oris the convenience factor the
kicker that that just makes it ano brainer for you.
Speaker 1 (23:44):
Yeah, I think uh, we generally side on the you know,
the convenience factors, the nobrainer, and we don't charge a
convenience fee, if you will, tothat or some kind of premium,
Um.
But I will say that, yes, youhave to be conservative in the
proposal numbers.
So say, for instance, if ahouse is listing for, or could
(24:06):
list for, $400,000 and theaverage house sells 5% to 7%
under market, then obviouslyoffer at the 7%, right, You've
got to reduce it a little bitmore to make their sum buffer.
And look, I want to beconservative as an investor.
It has to make financial sensetoo.
And so, not getting emotionallyattached to the deal, thinking
(24:28):
it's just going to go throughbecause I'm offering a big
convenience.
No, think rationally.
You expect your client to thinkrationally as well and to make
a proper investment decision forthemselves.
But I will say and I don't wantto underplay this is that you
don't know the life situationthat your clients are going
(24:49):
through, and so often it couldbe a foreclosure, or someone has
passed away in the family orwhatever, or a divorce or
whatever.
Um, and the convenience factoris a peace of mind.
Um, that can't be put.
A dollar amount can't be placedon.
So they, you know they wantthat ease of sale more
(25:12):
importantly than they want$30,000 more or whatever.
You know whatever dollar amount.
Speaker 2 (25:17):
Yeah, we didn't touch on this and I don't think we
necessarily need to go into itunless you want to.
But you have built a very largepersonal portfolio through the
methods that we're talking aboutand so you've had a lot of
personal experience in thesetypes of transactions.
When you're talking to a selleror one of your clients and
(25:41):
you're trying to make it awin-win and you're looking at
how you can win, how you canpencil it out, we're also
looking at how they can win.
That's what we've been talkingabout.
But do you have theconversations?
Do people generally share withyou what they're going to do
with the money when you buy it?
You know those to be able toidentify those circumstances,
(26:03):
the pain points, how to reallysolve those, or do they
generally kind of keep thatclose to their chest and not
really share their motivation?
Speaker 1 (26:12):
Yeah, I think it depends.
There's really kind of twocategories of negotiators, if
you will.
There's the negotiators thatare collaborators, will.
There's the negotiators thatare collaborators, and then
there's the negotiators that arecompetitors, and you will find
really quick in a conversationwhich type they are.
Collaborators are not there toyou know, squeeze the last
(26:34):
little dime or whatever, andthose competitors are more ones
like hey, I'm going to see, youknow, everything's a wall being
placed up so I want to see how Icould get the upper hand here.
It's not super successful intrying to figure out the win-win
on a competitive style ofnegotiation.
(26:55):
You're not going to know itbecause they are not going to
tell it.
You're not going to know itbecause they are not going to
tell it.
But for a collaborator, yeah,oftentimes man I've had I could
talk days on the stories thatI've heard in these
conversations.
You know my I inherited thesetwo properties and my dad didn't
really teach us on how tomanage these investment doors
and I I don't know how to managethem.
(27:16):
I don't want to learn, I'm 60years old and I just want them
off my plate.
Um, and that was a negotiate.
That example was a negotiationof okay, oh fine, that's cool.
Um, how about we just guaranteea thousand dollars a month for
each of these doors and, uh,that'll be your quote, unquote,
owner financing amount, Howeverthat term works out in interest
(27:40):
or, you know, amortization, andthen we'll take, you know we'll,
we'll rent them out.
And so they deeded overthousand dollars a month for X
years and they are happy why.
They're not dealing with thetenant anymore, they're not
having to worry about themaintenance and the ebbs and
flows of cashflow.
They, they get a guaranteedpayment every single month.
(28:03):
And some people just want thepeace of mind.
So, the ones that are willingto collaborate, if you will, and
solve, solve their problem ofselling, yeah, they, they will
tell you oftentimes what, uh,what they're going through
personally what they're goingthrough personally.
Speaker 2 (28:18):
I think that's something you touched on the
seller financing bit and I wantto come back to that.
I want to dig into that a littlebit more.
I don't have the experience withit that you do or the depth of
it, but I've done some of thisin my career and one of the
(28:39):
things that I would leverage iswhen somebody sells a property,
that's, they get taxed on themoney that they receive when
they receive it.
So if you can help them spreadthat out, then it can affect
which tax bracket they're in,which affects how much tax that
they pay.
And so what we would look at islet let me help you maximize
(29:03):
your return that you're going toget from this by having you not
take that large sum of cash allat once, but let's give you
some cash now to satisfywhatever needs they had at that
moment, but then put it on thatguaranteed schedule where
they're getting some cash overtime.
And I think that that's an areawhere people just miss that.
(29:26):
The seller is concerned withwhat they're going to make
overall and they're concernedwith what they're going to get
right now, but a lot of timesthey need to solve a short-term
problem, and it doesn't take allthe cash that they have in the
property to be able to do that.
Speaker 1 (29:42):
Yeah, that's, that's a great point.
We often had that same type ofconversation and it and often
resulted in hey, I've got a saythey have like $50,000 in equity
, I'll pay 20,000 now and we'llamortize the rest in the uh, in
the purchase or whatever,however that works out.
(30:03):
But yes, that is a great pointto help reduce someone's tax
liability or tax hit immediatelyfor them.
Speaker 2 (30:14):
I want to share with, or have you share, what you've
been up to lately.
You've taken this program.
I call it a program, you callit what you want, you tell us
what you want to call it.
But you've taken thismethodology and you've sort of
packaged it up and you'veactually been packaged it up and
you've actually been runningpeople through a program where
(30:34):
you're actually teaching othershow to do this and I'd love to
get some of those.
I know you gave us someinsights about what you learned
in the research that mostproperty management companies is
just a sliver of the samepercentages of society where not
many more property managers oreven any more property managers
(30:57):
have the wealth game figured out.
But, as you've been takingpeople through your program,
what comes top of mind, whatstands out for you of what
you've learned or what they'velearned from it?
Speaker 1 (31:11):
Yeah, the biggest ones is time and how to manage
time as an operator and to shifttheir abilities from working a
job, their business and workingon a business that really can
operate in so many ways on itsown but not only shifting that
(31:31):
but to utilizing thatmethodology to continue to grow
a business.
And it's amazing howsubstantial somebody's gains can
be when they stop working insomething and take their head up
from it and looking at thebigger picture and focusing on
(31:53):
what actually drives a businessforward.
Another big factor and peopledon't really focus on this
enough in our industry is that,look, in order for a business to
be successful, it has to beprofitable and in order for it
to be profitable, we have tocharge appropriate things for
the value that we provide ourclients.
(32:15):
And I know there's thatconstant pull right the
multi-investor.
They want cheap management fees, but the reality is they want
reduced costs and just becauseyour fee as a management company
may be higher or you'reproviding a value and you're
charging for it, doesn't meanthat doesn't reduce their costs.
(32:36):
There's other factors that gointo play, like liability and
risks and vacancy periods andfinding bad tenants and placing
bad tenants and tenantdestroying their property and so
on.
We all know those things, sothat's another huge factor to
this.
And then the next one is reallya systemized approach to
creating these opportunities forclients to reach out to you
(33:02):
when they are ready to sell andyou to be able to know how to
capitalize on thoseopportunities when they do come
up.
And then building your ownwealth.
So we manage the wealth of ourclients and we worry about
building their wealth so much weforget to focus on our own.
And that is a key component tothe program.
(33:26):
If you will, that I have theother ones is you're in a space
with other like-minded propertymanagers that want to be the
exception to the rule and aremoving hard at working on being
the exception to the rule,becoming a wealthy property
manager that isn't reliant uponone single source of income, aka
(33:49):
their management company, andis focused on gaining additional
assets to diversify and securetheir financial future.
Speaker 2 (34:00):
One of the things I talk about a lot is that a
property management businessreally, or any business, should
really only exist, or only existto feed the goals, the personal
goals, of the person that ownsit.
Right, and I know there's someother things about doing good in
(34:21):
the world and all of that andthat kind of stacks on top of
that.
But nobody starts a business orkeeps a business going if
they're not being somehowpersonally rewarded, either
financially or philosophicallyor philanthropically, whatever
they want to get some sort ofbenefit from that.
And so one of the things that Ithink is great about the program
(34:44):
that you have, which is youtake people who want more, want
to provide a better lifestylefor them, for their families,
for their employees, for theirchildren, whatever it is, and
you figure out, you show themthe path of how to do that
without really getting into.
(35:04):
You're not telling them hey, ifyou want to be wealthy, open up
, become a dentist, which istotally different from property
management.
What you're saying is you havethis great asset, you have this
golden shovel, and let's usethat golden shovel to dig out a
little bit more gold out of themountain.
And so it just adds on stacks,on layers on what they're
(35:28):
already doing, and I think thatit's really providing a lot of
value for the industry and thepeople who are courageous enough
to say I'm going to set asidetime to actually leverage what
is right here in my lab.
Speaker 1 (35:46):
No, I love that.
And you know, I think, just toadd on, is the it's minimal too,
in the sense that I've createdthis to be as least time
consuming and effortless aspossible.
I mean, like all this, all yougot to do is just put it in the
(36:06):
system, put the system in thecompany and it's done for you,
if you will.
And the point is is like look,I get it.
I know what it takes to run aproperty management company.
I know that you can have yourentire day planned out and then
the basement flood happens andit changes everything for the
day.
It not only changes that day,but it also changes tomorrow,
because you're still dealingwith the mess.
(36:27):
But it also changes tomorrowbecause you're still dealing
with the mess.
And so how do we implement thesethings that actually move the
needle forward with minimaleffort?
Yeah, there's effort.
I want people that are drivenand want to see the potential
and achieve the potential ofgaining wealth.
However, I understand that if Igave a 30 page document of a
(36:51):
task list that you had to doafter every learning session,
then it would never get doneRight.
So how do we?
How do we achieve thesemilestones with as minimal
effort as possible and move theneedle as big as possible.
How do we actuallyexponentially grow our wealth
together with the asset youalready have in the management
(37:11):
company?
Speaker 2 (37:12):
Yeah Well, I want to give people an opportunity.
If they've been intrigued bythis, I want to give them the
opportunity to find your program, and so we'll put a link in the
show notes and uh, and if theywant to hop on, they can do that
.
But if there's another wayyou'd like to share for them to
be able to get a hold of you,how would they go about doing so
(37:36):
?
Speaker 1 (37:37):
Yeah, I mean you can go to my website.
It's SeanAustinJohnsoncom,spelled correctly S-H-A-W-N.
A little poke there, butSeanAustinJohnsoncom slash.
I think I have a uh page justfor your podcast.
I'll find it, tony, so it's inthe link.
But they could also find me onany social media.
Um Instagram, sean AustinJohnson, twitter, whatever I'm
(38:03):
out there, um message me.
Facebook is a good place aswell.
So, um direct message me, I'm.
I'm happy to chat and see if italigns with your financial
goals and how we can accelerateyour wealth.
Speaker 2 (38:17):
Okay, I want to give one more way for people to
connect with you.
I'm really excited.
I got a lot of great peoplecoming to our retreat, but one
of my favorite sessions is goingto be about how to connect your
personal goals to your businessgoals and have the business
feed you personally.
(38:39):
And you're going to be therewith us in being one of the
experts in the room at ourretreat.
We're going to have six expertcoaches in the room with us for
three days sitting, going onhikes, sitting at the tables,
eating meals, learning from eachother, and we've got six expert
(39:01):
coaches and we only have 13available slots, and I'm really
excited to say that Sean is ourexpert.
That's going to kick off ourevent, and so he will get us in
the right mindset, the rightframework to be able to take
everything else that we learnedthroughout the rest of the
retreat to be able to applythose things to the goals and
(39:26):
the aspirations that we have,and so I'm really excited to
share with everybody that Seanwill be there with us and, sean,
I'm just really excited to seeyou there.
So if people want to come andspend three days learning your
tactics, rubbing elbows with you, um, that's the place to do it,
(39:46):
so um and here can I put acherry on the top.
Speaker 1 (39:48):
Are you going to let me do this?
Let's do it so.
Um, and here can I put a cherryon the top.
Are you gonna let me do this?
Let's do it, yeah, there is alarge possibility that I will
have a helicopter up in thatarea and if I fly it up there,
hmm, there may be a flight ortwo that could happen.
Oh, that's fantastic.
Speaker 2 (40:05):
Yeah, yeah.
So that's one of the thingsthat sean with with some of his
wealth.
You've been you.
How long ago did you preorderthis helicopter?
Speaker 1 (40:31):
I, uh, uh.
It's been three or four yearsI've been waiting for that's the
, the ultimate goal helicopter,and I still probably have
another year and a half to waitfor that one.
But I'm going to, I'm.
I will probably have an interimone in the meantime.
Speaker 2 (40:41):
Okay, this is super fascinating to me, so we're
going to take a little bit of adetour before we close up.
Tell them why it's taking solong for you to get that
particular helicopter.
Speaker 1 (40:51):
Yeah, so Hill Helicopters you can check them
out.
Hillhelicopterscom is a newerplatform that has been
developing for probably the last20 years, but it is the
greatest hits of all thetechnology that helicopters have
been so tragically sad atimplementing into new platforms
(41:13):
that hit the marketplace at anunreasonable price, and we won't
get into all of that.
But, for instance, a turbineengine is about a half a million
dollars.
It's because no helicopterplatform puts their own engine
in it.
They outsource it to RollsRoyce or Turbo Mecca or whatever
, Okay, and they're superexpensive.
(41:34):
But Hill is one that hasvertically integrated.
They've been doing this andbeen on this mission for 20
years and about four years ago Iwas one of the early adopters,
bought in and expect to have ahelicopter in the next hopefully
year and a half.
Speaker 2 (41:54):
Very nice, all right.
So yeah, I love the cherry ontop.
I can't wait to see theultimate one.
But yeah, that's a nice littleteaser about.
Hey, if you show up to theevent, there may be a helicopter
trip or two involved To makethat as much value as possible
for your event, tony.
Speaker 1 (42:14):
I'm really excited to be a part of it.
Speaker 2 (42:17):
That's cool.
All right, sean, I'm going togive you the last word.
I know that you and I could goover this stuff for days, and
it's not just your expertise onthe investment side.
I want to circle back aroundand reemphasize the fact that
you owned a very successfulproperty management company and
(42:39):
were a very successful investor.
They're going to pick up notjust how to do the investment
(43:01):
side, but actually how to run agreat property management
company that provides more andmore opportunities to be able to
have more investmentopportunities available to you.
So, yeah, is there anythingthat you wish we would have
mentioned was top of mind, thatwe started to, that we kind of
cut off?
I want to give you the lastword and then we'll wrap up.
Speaker 1 (43:10):
Man put me on the spot.
I don't know that there'sanything that we didn't mention.
What I would just say is that asimple reframing of the why
we're in business to creating anasset that creates wealth for
me and my family can be aparamount shift in your life.
For me and my family can be aparamount shift in your life,
(43:31):
and so utilize that mindsetshift to really drive your
decision-making.
Now is profit everything?
No, I'm not trying to say that.
What I'm saying is that if wefilter our decision-making as is
this beneficial to the businessand it grow and can I utilize
this business in manners thatcan create more wealth, that
(43:52):
doesn't create more time becausewe're already managing right
Then that will change a lot ofperspective on how we make
decisions in business.
Speaker 2 (44:03):
Very good.
And with that, sean, thanks somuch and we look forward to
seeing you there in July.
Hey, thanks, tony, appreciateit.
Thanks for tuning in to theProperty Management Success
Podcast.
We'll be back with anothervalue-packed episode to help you
level up your propertymanagement game.
If you've got somethingvaluable out of today's episode,
please share it with a friendor colleague, and don't forget
(44:25):
to subscribe and leave a reviewso you never miss out on future
insights and strategies andtactics.
Until next time, here's to yoursuccess.
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