Christian Osgood shows landlords how to skip expensive property managers by building a hybrid system: automated marketing, commission brokers paid $15-20 per showing and $100 per lease, on-call handymen, and property software. Scale to 75-100 units before hiring full-time staff.
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Hello and welcome back to Multifamily Strategy. I'm Christian, your channel host. Today I'm going to go over a model that I have used for the in-between. You're an investor, you bought a few properties, you don't have enough time to perfectly manage them, do all the showings, take away from your life, but you're not yet big enough to either start your own PM company or have your own full-time employees. This is a problem I've seen with a lot of investors in the Multifamily Strategy Mentorship. They join, they go from single family to 12 to 20 to a 50-unit portfolio, and now suddenly they're like, well, It doesn't quite yet make sense in my budget to have a full-time employee working for me. That being said, it's actually taking away from my life to manage the size portfolio that I have. How do we manage this in a cost-effective way? I actually originally got this model from an investor out of New Hampshire named Matthew Hawkins. He goes by Lumberjack Landlord. Fantastic investor. I've employed this in multiple markets as I open brand new markets. This is how we start that market until we reach critical mass where it makes sense to have full-time staff. So if this sounds like you or somewhere that you're approaching, this is the solution. So the first thing that you need to do is you need to make sure that your marketing is set. So I wanna make sure that I am distributing to all the websites and especially I am actively managing Facebook Marketplace. Now you can actually use some really cool AI tools to automate Facebook Marketplace, but however you are managing it, you wanna make sure that you have your lead flow set and you can assign them easily from your phone. Step 2, you're going to find a network of brokers. Now in this case, you're not actually looking for the best agents, the biggest agents. I'm looking for young or new brokers that are trying to get their salary up. They're like, hey, I, I'm trying to get more reps while I'm building my career. I typically see this age range in the 20 to 25-year-old range, but you find a young hungry broker who has a little extra time, wants to make some extra money, and I want to build an arsenal of 3 to 4 of them. And I call this my broker network. All we do is when we have a lead and we have a showing, we have a fixed price. For me, it's $20 to do a showing to a qualified tenant. Now the prospective tenant actually has to fill out an application. So we have an actual applicant who is interested in the unit. I then will send a text out to the broker network. Hey, who wants to grab the showing? It's first come, first serve. So the hungriest agents always get the first shot. And I give them $20 per qualified showing as long as the person shows up and they're there, they actually do the tour. It's super easy for them to do. They're already comfortable in front of clients, or at least should be with their career path, and they're used to showing real estate. So you're having a salesperson who needs some extra money in a role that pays them right now that is, it goes hand in hand with their existing specialty. Now, whenever you design a program like this, you want to make sure that the outcomes are incentivized correctly. So we want to make sure we start with the end in mind here and go, okay, well, the goal is not to do a bunch of showings. The goal is to get leases signed. So you have to have a higher commission for them actually placing a tenant. However, this is usually a lot cheaper than having a full-time hourly employee. and many of them you also have to give leasing incentives to. So personally for me, it's $20 per showing. In certain markets it's $15, depends on where it is in the country, and it's $100 per tenant move-in. So ultimately what you have is a very inexpensive network where brokers don't spend a whole lot of time. Your real estate agents can show the units for you. It, you don't have to drive out, you don't have to do all the self-showing, and you can start leasing the units. You can do the exact same thing with a lot of your handyman tasks. Build a small network of local handymen, have them all go out on call, first come, first serve. But this model of the hybrid of, hey, we just do just commission-based, just for specific tasks. The goal here is to scale out of it. You actually do want to scale your portfolio where you have consistent people, you have more control, but when you're starting, you don't want to pay for that. I've seen investors kill all of their cash flow trying to set up a management model And they ended up building a property management company, which is not what you want to do 99% of the time. And while it's the model that I went for, I didn't do that till I had over 100 units. And today with a 600+ unit portfolio, I love having onsite staff who work in office at my larger buildings. Almost none of us, including myself, start there. This model allows you to move forward, have the controls you need, not pay for full-time management or your own in-house staff. And set up a simple hybrid self-management portfolio. Now you'll just partner this with any piece of property management software. I personally, when you're starting, recommend Buildium. That's where I started. And as you scale your portfolio, you'll eventually probably migrate to Appfolio, but there's a ton of different options out there. Choose the property management software and marketing software that you like the best, but automate the actual man hours. It's so easy to do. And if you have this simple broker network, you've basically built your internal TaskRabbit to run your portfolio the way that you want it run. What I typically see as a result of this is people lease faster than they do in third-party management. They have a greater level of control. They keep their cost way, way, way down. And if you can increase both your control and lower your cost, you have a more profitable rental. You can do this up to 50, 75 rentals. You don't need to get a full-time staff until you exceed probably 75 to 100 rentals, somewhere in that range. You start to get enough work to find your key person to help you run the portfolio. But until then, easiest way to run it hands down, go the hybrid method. Hope this helped. And if I'm being completely honest, while this is an awesome tip that I think is going to help you a bunch, not a lot of people are going to watch this video because videos on property management don't do amazing on YouTube. You do me a huge favor and click that like button for me so that at least recommends this to a few more people. I would massively appreciate it. So if you got value from this video, hit the like button and I'll see you on the next episode.
