5 Years, Near-Zero Churn: Stephen Glover's Owner Retention Playbook

build the position around what your company needs with no face and no name attached to it. And then figure out if someone on your team can truly fill that position. Otherwise, if you say, well, I have this person and I need this position and you try to fit both together, it's not gonna be the right fit for your company's growth and for the future of your company. So build the position nameless and faceless. And then if you have someone on the team that can do it, great. Train 'em up. You know, if they're 80, 90% of the way there and you think they can get the other percent, train 'em up. If not, you hire and then you tell the team why you hired, and then you present opportunities for your team to reach new levels. You just tell 'em how they need to get there.

Welcome back to the Peter Lohmann Podcast. I'm joined today by my friend and first-time guest, Steven Glover, CEO of Peak Property Management in Richmond, Virginia. It's great to have you, Steve. How are you today?

Thanks for having me on, man. I'm doing great. How are you?

I'm doing well. So you and I have connected through the NARPM circles. We were in a mastermind together for quite a while, several years ago, and I'm thrilled to have you on the show. You've actually been on my list as an operator I wanted to get behind the mic for a while now. I'm glad we're finally making it happen. So just to set the stage, if I have my numbers right, you manage about 1,500 doors. Over there in Richmond. And one of the reasons I first wanted to have you on the show is to talk about owner churn. So you shared with me some pretty incredible statistics around basically your lack of owner churn overall, but especially in the first few years of the business. If you wouldn't mind, just kind of share your journey with and your experience with owner churn, and we'll, and then we'll kind of dig into it.

Yeah. Awesome. So a fun stat for today. We are currently at 40% churn year to date in 2026, and I couldn't be happier.

Hmm. Okay.

We fired a very large client, so we went from 1,500 units to about 1,300 units.

Okay.

Wow. So, so year to date, if you look at our churn stats, it's, it's laughable. But we are very happy with that. I think overall year to date, we've lost about 40 units that we wouldn't have wanted to lose. So very respectable churn year to date in 2026 outside of that large client. So we got started about 2018. We grew pretty quick. We were about 300 units in 2020. We do single family and small multifamily as well. So that, that helps the unit count a little bit. And we did not lose, we did not get fired by a client until we had somewhere in between about 750 and 800 units. And so that was about 5 years. That's amazing.

So that's the size I am now.

Yeah.

And we, we've lost, hundreds and hundreds and hundreds of clients, right? So that, I mean, that's why I wanted to talk to you because you clearly got something figured out.

Yeah, we definitely, you know, we did have some people sold their assets during that time period, but they weren't, they were clients that were planning to sell, which is different, right? They say, hey, we're going to hold it for 2 years and we're going to sell it. And that's what they did. They weren't long-term clients that just said, oh, we're just going to sell, meaning they might have had a bad or an unexpected experience or poor experience along the way. These were like planned sales.

Would you take a client— you, you, it sounds like you take on a client even if they plan to sell in 2 years.

We would. Yep.

Okay. What about 1 year?

We would, depending on the circumstance, depending on what the situation was. But yeah, we've had clients say they were going to move back in or someone in their family was going to move back in or something. It wasn't like we wouldn't get super excited about it, but, but we would.

But there has to be enough time, I assume, for like a 12-month lease in there.

Correct.

Yeah.

And there would, there would be a conversation about some leniency there and kind of letting us operate and do what we need to do. If there was like a really strict timeline, we probably wouldn't take it.

Okay, cool. All right. Sorry. Go ahead.

Yeah. So we, we essentially would promote through those years that we've never lost a client. And it was incredible because, you know, literally anyone who came, we were like, hey, you can sign up with us, you can sign up with this other company, but we have X number of units. We've been in business for X number of years and no one has ever fired us. Everyone who has come to us has stayed with us. There's never been another property management company that has managed a property previously managed by Peak.

Mm-hmm.

So no one's experienced leaving Peak Property Management. And so during those times, we, we, we sort of like, what would happen is we really focused on the relationship. We were extremely selective. We had turned down over 4,000 units during that time period. We were extremely selective. And it built this really hard-to-get atmosphere. And so people would look at Peak and they would come to us and for several reasons, we would be really hard to get. We'd be very selective. And so people would call us and ask us if we would be willing to manage their property during this time. And so once they got in the door, they didn't want to leave, but they also didn't want to leave for another reason is because anything that happened that we did that was remotely questionable, we owned it and we made it right. We didn't focus on the pennies, the principal or anything. We owned it and we said, hey, let's play the long-term game. If these are good clients that we want, if they call us out on 3 or 4 things we don't agree with, we're, we're gonna let that client go.

Okay.

But if the client maybe hasn't, is, is upset about one thing and it's kind of a gray area, no problem. We take care of it and we keep rolling. And so for that reason, people, they trusted us. We had strong relationships when we entered into the, into the agreement. And then we did exactly what we said we were gonna do and, and own just about everything.

Okay, cool. Let me pause you there because I think you've just articulated something that every property manager listening would love to have, which is basically a, almost a waiting list of clients that want to work with them and an aura of exclusivity, expertise. Like some of the stuff that's really frankly worked for us well in Crane But I have not had success in translating that into my property management business. I would love to hear more about how you cultivated that setup, like that reputation locally. And when you say you turned down like 4,000 doors over that time period, I'm assuming some of those were larger multifamily properties, but like what percentage of client inquiries would you turn down?

Would you say it was Way more than we took in. I know.

Yeah.

And we were very, I think we sort of made a mistake through some of that where we were turning down bad properties as well, where now we focus solely on the owner and the relationship. We, some of those properties could have been improved and probably shouldn't have been turned down. We should have listened more to the owner and what their strategy was. But yeah, we definitely looked at whether it was slightly outside of our market or we just didn't feel like traveling that far yet. If it was an asset that we weren't ready to take on due to other growth that we had and we didn't want to provide a bad experience. Our, our whole MO was that client had to win first. And I know it sounds salesy, but my background is in the fitness industry and what I loved was creating an environment where every, like helping people get stronger and faster and healthier and more confident. And what drove me was helping other people win. That's where I really got the most fulfillment and enjoyment. And so when people would contact Peak, if I did not think we were right for them for whatever reason, whether it be their strategy, their goals, the type of property that had our expertise at the time, whenever they contacted us or our bandwidth, I wouldn't want to do— I'd say, hey, look, we're not going to be the best fit for you at this time. But what that generated and how I handled that, because I would have an hour, hour and a half long conversation with these clients. I would go grab coffee with them. I would to, you know, if I was turning them down, I would schedule coffee and say, well, let's figure out how we can help you from here. Mm-hmm. And so I would relentlessly try to help people become their faster, stronger, healthier regarding their investments and their assets, because that's really what I cared about. That's what drove me. It wasn't about the business to peak. And it took about a year for this flywheel to start spinning of business. It took about a year of investing this, of trying to help other people In fact, back in the day I had a business partner and he, I remember very vaguely, I walked in the office and I was so happy and I said, hey, I met a mortgage lender last week. He's well known. He's been in the industry for decades. He knows tons of investors. I just helped him get a $4 million loan. And my business partner looked at me and was like, great. When is Pete gonna start winning? When is that gonna start coming to Pete? Because this is about 8 or 9 months in of me just relentlessly trying to help other people. And just solve their problems, not even focused on me. And I said, it's coming. I can feel it. It'll be a couple more months. It's exactly what I did in the fitness industry that worked really well and it's coming. And then at about 2 months after that, it was just way more than we could handle. All of those leads and those resources came back with referrals. And in fact, we did no marketing until we were above 1,000 units under management.

Wow.

For that reason.

Okay, man, I knew I wanted to get you on the show because this is so fascinating. So a couple things there. First, And I did an analysis on this last year on like the, how long it actually takes to close the average property management lead. I think a lot of people think it's like a 30-day, 45-day close on average. My data from LeadSimple showed it's actually closer to 3 to 4 months is like the median. And you just kind of articulated similar, like you mentioned, took almost a year for all of your efforts to really start to show fruit. Now, That was more than just closing leads. That was, you know, a lot of building a reputation and things. But I think a lot of people, when they take a new direction with sales or marketing, they give it like 60 days and then whether it's a new lead channel, a new script or whatever it is, they give it like 30, maybe 60 days and then they kind of write it off if, if they're not seeing anything. I think my experience and yours too, it's like 6 months or more for some of this stuff to really fully bake and for you to be able to see the measurable results. Your focus on the people rather than the property and like their success rather than the success of the business. I have to assume that has everything to do with what you saw in terms of results for those first several years and your rapid growth and your low churn. And it's like doing the right thing by people regardless of the impact to you or your business. That's so clearly a winning formula for, for playing the long game, but so few people really do it. And like, I'm not even as good at it as I could be. Yeah, I love hearing about that. And was this something that like you learned from a fitness guy that you trained under, or your family, or where did that come from and how did that play out? Curious to hear a little bit about your experience with it in the fitness world.

Yeah, definitely a little bit different of a background. So to, it's, to make a long story short, was in a horrible motorcycle accident back in the day and almost died, had a very small chance of living. Traumatic brain injuries and things like that, fully recovered. But those doctors and surgeons telling me that like, I shouldn't have memory, I shouldn't be able to talk, I shouldn't be able to think the way that I think. There should be a lot of issues with me. They were like, you get a second chance in life. What are you gonna do with it? And so I decided I wanted to train to be a Navy SEAL. So during this training, I, you know, how do you get into that industry? How do you get mentors in there? It's not by slacking, or it's not by not doing what you say you're gonna be doing. It's not by being arrogant and all this other stuff. I mean, regardless of what you think about that community, it's largely very low ego. It's high teamwork, high communication, always taking ownership of when you mess up. And so I had met this Navy SEAL locally. And I wanted him to take me under his wing. And so that involved showing up every day, doing what I, uh, what he wanted me to do and doing what I said I would do and just putting out and working hard. And then through that, it was helping his community in the fitness, the fitness business that he ran. And so my entire mission was how do I strengthen that team, strengthen that company, and train to be a SEAL myself. So he would help me and, and he took me all over the nation. Traveling, working on teamwork, leadership, and communication, helping people with their health and fitness. And so we would work with corporations, we'd work with D1 athletic teams, professional athletic teams. And so that was the background, was always just focused on teamwork, communication, and, and really just leadership, you know, doing what it took to, to, to help everyone else win. And so with that background, I knew I, I, in the fitness industry, it was always just focusing on other people. Now, when I went into real estate, it was, it, it was very successful in the fitness industry because the more you could help other people, the more the company won. When I went into real estate, you have to imagine that I didn't know in 2018 that property management was an industry. I didn't know it existed. I didn't know that real estate investing existed in 2018. And so when I was going around trying to help people, It was me learning. I was just asking questions and I was learning and I was curious. There was no arrogance. There was no ego. There was no, I'm the best, we're the best, Peak is the best. It was, tell me everything you can about mortgage lending. Tell me everything you can about property insurance. Tell me everything you can about brokerage, about property management, about everything surrounding real estate investing. And then I would go see how I could help all of those people for helping me learn. After about a year of doing that, I really understood the industry, started buying investments myself, and then people started pouring back into me because I would work just as hard as I did when I was training to be a SEAL. I would work just as hard and put that effort not into fitness, but into their businesses and helping them and their goals and their strategies. And everything just came back to peak. And that, that lasted a, a number of years.

That's awesome. During this time, were you doing all the sales for Peak?

I was. And so that is a difference of when we started seeing churn eventually. And so when I was doing all the sales, of course you're talking directly to the owner.

Yeah.

I am committing an hour, hour and a half conversations at coffee shops or on the phone or in the office to these people. I'm learning about their families. I'm curious. I wanna learn all about their goals and strategies.. And more than ever, again, I know it sounds salesy, but it didn't, doesn't come across this way. And it wasn't the intent. I wanted to help them genuinely. I wanted to help them with no benefit to Pete.

Yeah.

And so you can't fake that.

And that, that's something that I never, frankly, I just never had that. I didn't have it in me. I didn't care as much as I'm hearing you articulate now. There's different things I'm doing now where I am getting to experience that. And I love seeing like Crane members be able to take their first Crane break. And I feel, right. I feel the way about that stuff, the way I imagine you feel about seeing these rental owners be successful with their rental properties. And I think that that intentionality matters. It's like the bedrock, right? You can put whatever sales mechanisms in place you want. If the company itself doesn't have that foundation of caring about the customer and wanting to see them win, you're always going to struggle in certain areas, I think.

Yeah. And I think you might be able to hire that out if you don't have that as the owner. I had it from that background in fitness and I saw what it felt, I felt what it was like when other people won because of you, because of your help and your effort and your investment in them. To me, it wasn't, I never really actually got the pull of like, let me help these investors make more money. It, it's just, these were people that needed help and I had all the tools and resources to help them and it made me feel good being able to do that. And so I was able to offer that to them. And then spend all this time with them and invest in them. By the time they went to that PMA, they knew about us, they knew our culture, they knew, and I would not talk about processes. I would not talk about really rates. I mean, we would talk about 'em a little bit just to get through the PMA, but like people would say, well, tell me what your leasing process is like. I'd be like, look, we'll get tenants placed in, you know, on an average of 21 days. I'm like, I skip over the whole question. That's not really what they care about. They don't want to hear what, like, what we do and the software we use and what buttons we push. And look, we're going to get at least— that's what you care about. Let's, let's focus on the goals and the strategy here. And so we basically would just learn each other for an hour, hour and a half, and then the sale would be super easy. We get them in the door. And then more importantly than ever, when we screwed up, because we weren't some like perfect company after that, I was very much learning. I was hiring people smarter than me to bring in the systems and the processes. When we screwed up, we always owned it. It was never like a, I'm not gonna give him $50. I'm not gonna, it's the principle behind it. You know, it was never, it was no ego. It was no arrogance. It was, hey, look, we probably could have communicated better. I see where we could have done this better. I see where we could have responded faster. I understand that. And there's some role that we play in this. So let's always point the fingers at ourselves first so we can learn something. And then let's base our response. On that, on that ownership. And then let's solve the problem. Let's not go tit for tat. Let's just solve the problem. And then those owners would see how we responded and then they would let other stuff be like, hey, look, I know you guys are on my side too. And it was just for the most part a smooth experience. And then again, around 700, 800 units, you have to decide, can you continue to contribute that time and effort or do you want to scale? And, and it, and I was working 80+ hour weeks at that time trying to, trying to hang on to all this. And it was the decision of like, I gotta hire a BDM, I gotta allow my team to handle the escalations now, and I have to do things differently. And so there's a series of things we learned once the churn actually started happening on how to control that from there as well.

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I can almost guarantee you that every time there's a problem, you did something— you could have done something better. Like, that's just the truth, right? Like, like, I, I would find it hard to believe that if there was if there's a conflict, the property manager is 100% correct in every scenario or in any scenario. I just don't find that. And again, this comes from a spot where I'm okay being wrong. I got nothing like it is what it is. I'm not going to be a perfect guy.

I mean, I'm okay being wrong, but there's times when we're just not wrong. Like, they're like, so I think owner, owner won't lower the rent and it's not leasing, you know, or, you know, a scammer broke in using the, the self-showing lockbox and stole something or Right. You know, the accounting doesn't make sense the way they think it should. Even though the numbers add up, they feel like the $50 is off or whatever.

I can think of how you could own all those.

Okay.

Like, all right, now we'll lower it. Yeah.

Tell me, tell me.

Owner won't lower the rent. Again, I'm just the top of my head. Owner won't lower the rent. What conversations were had during the sales process to allow that to become an owner in the first place? Right. There's conflict there with your company because now the owner won't lower the rent. It's not leasing. There's all these issues happening. Sorry, during the sales process, we should have been more clear. I know we mentioned this. I know we have it in writing right here, but maybe I should have got, you know, there was some part of me that, you know, maybe you didn't understand. You'd mentioned some other things. I should have made that more clear during the sales process. And I apologize for that. And I'm going to make sure we do better going in the future. You know, or I should have called this out because I heard you say it in the sales process. Maybe I should have called it out and maybe I shouldn't have allowed this to happen. And I'm sorry we got to this point. And then provide the solution from there. But there's always some ownership. Someone broke in and you're using self-showing, like, hey, look, we use self-showing. It usually works in these cases. You know, there is some degree, so there is a level of risk that we take. And, you know, that's something we have to own from time to time. But overall, we can get properties leased way faster and do all this. And it's way better for the landlord that we use this self-showing capacity. And so that's why we choose to do it. You know, I'm sorry that this happened on your property. Here's what I think we can do. To make this right. Here's what the solution is. And I could go on and on, but just about in every scenario, there's something we could have done better as property managers. And I think when there is conflict, we need to find that first so we know exactly where we stand and how our company can get better. Because if you don't own those things, they're not in your control and you cannot improve them. The sooner you own everything, the sooner you put everything in your control, You have a chance to get better and improve on those things. And so where I draw the line is if the owner comes at you and it's like the second, the third time, the fourth time, you find yourself continuously having to have these conversations with the owner, then you can take ownership of maybe not firing the owner soon enough.

Okay. You know, is this like a Jocko Willink Extreme Ownership?

It's, it's very familiar. So basically this is how I was trained years ago. And then I read the book and he articulates it better than I ever could.

Okay.

So yeah, I fully agree with everything in that book. It's largely the principle of taking extreme ownership, but I'll say a, a lot of it came from my actual experiences hanging out in these groups, these capacities. And I should mention I was never in the military. I actually couldn't get in because of my traumatic brain injury. So I don't, I don't want anyone to listen to this and think, oh, he was a Navy SEAL, he served. I was not in the military. I hung out in that community for about 5 or 6 years pretty closely, but it was not in a service capacity. And so I don't wanna mislead anyone, but the lessons that I learned in that training was directly related to a lot of the stuff that Jocko Willink preaches.

Okay, perfect. Yeah, I, I, that is great. Thank you for sharing like the way you would've thought through those specific examples. That actually is really helpful. I want to ask about on the precipice here of where you made the decision to hire a BDM and start to let your team take the escalations. I want to hear a little bit about how that was for you mentally. Like, I think a lot of property management business owners reach that same point with their business where they're like, okay, I've got this thing maxed out. I'm running around like a chicken with my head cut off. The business is doing good, we're profitable, but I'm clearly reaching some kind of limit. But I'm, I'm scared to let go because I'm worried about quality. I'm worried about responsiveness. I'm worried about these owners who know who I am, but they don't necessarily know all my staff the same way. Tell me a little bit about, as somebody who is very taking extreme ownership of outcomes, how did you break through that and be okay with some mistakes being made here and there? Not always you on the phone with owners and some of these other things.

I've seen businesses get limited by that fear. Again, back, going back to that fitness company, I was not an owner of that company. That fitness company could have been massively larger and more successful if that owner allowed his team to work and did not let fear keep them from growth. Meaning that owner always had to be the number one guy. That owner actually would not market some of the things we were doing because he didn't want his competition to see what we were doing. And so we weren't marketing. And so that, that level of fear that we wouldn't do well or we would be copied or anything actually really hurt that company. Another aspect of this is we grew really fast. The only way we were able to do that and maintain our reputation was for me to hire people who were way smarter than me. You remember in 2018, I didn't know anything about property management. Years later, we're managing hundreds or above 1,000 units, and that's only because I was able to find people who knew exactly what they were doing and put them in the right seat. My strength is leadership, teamwork, and communication. Their strength is property management processes and software and, and, you know, rules and regulations and everything like that. Now I've learned a lot of that, obviously, you know, having to go through it, but that's what I hired them for. And so I'm gonna let 'em work. And I think any owner that really believes that they're the best at everything really needs to focus on their leadership and, and maybe how to train up people on their team and allow their team to work. I do believe that if you have the right culture, such as taking ownership and being responsive and communicating well, if you have the right values and the right culture and you monitor the culture tightly, you don't have to micromanage the property management task tightly. So my job is to monitor that culture and those values very closely and let them do the property management work. And it works out pretty well.

Love that. Okay, so let's move now Forward in time, you've reached 700-ish stores, you're hiring a BDM, company's scaling up, and you're starting to see churn tick up from essentially zero other than people selling. What are some of the challenges and successes and milestones or things that you had to figure out through, through this time period?

Yeah, it was interesting. So I had a coffee with another property management owner, a competitor of ours. Early on, maybe when we were out 300 or 400 units. And I remember specifically, I could tell you the table we were sitting at, and I remember looking at him and he asked, how's your churn going? And I remember looking at him, probably had like a grin on my face and said, we've never lost a client. And I remember his response. He looked at me, he's probably around 1,000 units at this point. He looks at me and says, you wait, you're just going to be trying to replace the doors that you bring in. And in my head, I said, nah, man, that's not me. We're gonna crush it. Like, that's, that's just not gonna happen. To the moon. Yeah. And so of course he was right, you know, so he, he knew he was right, which is one of the reasons I had coffee with him. I had a lot of respect for him. So, so basically what, what happened is you get to a certain point where you gotta make the decision, are you gonna continue being the BDM? Are you gonna be the CEO? Are you gonna focus on growth and scale, or are you gonna stay a little smaller and not really allow your team to work? And it's okay to do either. There are small companies, me and you know, that absolutely crush it financially and do really well. I just wanted to grow a little bit larger and see what bigger impact we could make in our community. And so in knowing that, I know I needed to hire BDM. I needed to let my team start to handle escalations and stuff like that. Give them a little bit more responsibility and allow them some promotions and advancements and stuff so we could scale. And it was time for me to start teaching leadership as best as I could. I still work on it every day, but like trying to teach leadership to the team so they could get a head start for when they were leaders on the company as well. And we could continue to scale that route. And so what I found was the BDM absolutely crushed it. The one that we hired, he had a ton of experience. We got super lucky with our hire, but he's not, he's looking for, for bringing in units. He's not looking to spend an hour and a half at coffee to learn about their family and like everything he's looking like, what is the quickest route to So that was something that I had to accept is he wanted to bring in units. That's what he's commissioned to do. And he does it effectively. It's okay. But we can experience a little bit more churn because we haven't established that very close bond in that relationship. Another aspect is these owners aren't talking to me anymore. They don't have my phone number anymore. And so they're not calling the owner of the company directly. And that owner of the company is not reassuring them that, yeah, We are on top of it and we're taking control on exactly what we're gonna do. Instead, they're talking to a property manager who is also taking ownership and following the culture, but it's not the same. And so we can expect a little bit of a rise in churn. Now that happened, I accepted it. It was within control. There was a point in time where our churn started getting higher and higher. We looked at that very closely cuz that was alarming. We were like, hey, this is not the company that we've ever been. We've never experienced this. And so instead of maybe like an 8% churn, we were now pushing like 15%. And I was like, this is not who we are. This isn't how we operate. I would rather stop growing now and get this straight because I don't want to hurt our reputation. What we did is we looked into it and largely it was caused by all of the processes that we now have set up are checkboxes. They're automated, they're tasks, et cetera, but it's, it's tasks that you check off. And so that creates a mindset that is checking the box. It's not focused on the experience. And so once we identified that, we actually went through all of our processes. We removed the word process from our vocabulary, changed everything to an experience. And so now we have a move-in experience, move-out experience, we have an onboarding experience, et cetera, et cetera, et cetera, so that our people, when they go through these experiences, that's what they think about. They think about the feeling, the outcome, what the results are, and not just like, yeah, send a vendor out and just see what happens, right? Check the box, right?

And so that really made a difference. Really interesting call out there. And as someone who is very process-oriented, I think a lot of this is tying together because what, what, and that's really a lot of how our company has historically worked is You follow the process, you check off the items. And what, what that, that does a couple things. One, it does sort of make it a sterile experience for the owner, but also it, what it does is it puts in the mind of the person who's checking the boxes, I check my boxes off, I'm good. So if the owner's got an issue, that's a clearly a them thing because my boxes are checked. Here they are, look at them. Right, right. And that's actually how I feel. Like, that was how I felt a lot in dealing with these owners is like, I was like, Mr. Owner, don't you know we have the best process? People copy, people pay me for my processes. We checked all the boxes. How could you still be mad? Right. But that's just, that's like my engineer brain. That's not like wanting what's best for them and the best outcome for them and thinking about the experience for them. So I think this is all really tying together nicely for me in my mind, which is like, If you cultivate a check-the-box employee culture, which is, you know, it's better than nothing. Like if you're at least you're checking all the boxes off, at least everything's getting done. But you may end up with a team who is defensive when an owner's upset because the team is feeling like, hey, we, we did everything we were supposed to do, man. I'm sorry about your luck.

So yeah, I would say there's a big difference in our personalities because I know you and I know how you operate. You, as an engineer, as most engineers are, are very data-driven. I'm not, I'm not analytical at all. I make decisions very quickly. It's largely based on intuition. Uh, of course I use data and I look at data, but I'm not driven by data. And that goes with our culture too. So like, if there's an issue, it's for me, it's going to be more of a mindset thing than it is a data or a process thing. I believe that processes break when people stop communicating issues or when teams stop working together. It's less of a process and a system issue. It's more of a team issue. So I fix that. You might go and fix the process, which is, is not the bad an— not the wrong answer. It's just two different answers. You might go fix the process or the system. I go fix the team and the communication. They're both the same end result. It's just, I go about it in my brain a little bit differently than I think some other people do. Where some people are focused on how the team works together, how they communicate, what their mindset is. Some people focus on what the data says, what the process tells you to do, and how to fix and improve that process because they may not be thinking about the mindset or the outcome. How do we make the process stronger to, to more focus on that?

Yeah, totally. That, that really resonates. I wanna hear about your experiences with where you've learned and grown in terms of business knowledge, professional knowledge, property management knowledge. How do you, how do you position like conferences, industry conferences, for example? Was that a big part of your journey as a leader, as a property management business owner, or, or do you think, no, it wasn't so much?

The first industry conference I ever attended was Broker Owner, maybe 3 years at Amelia Island in Florida. I think that was 3 years ago. That's the first conference I'd ever attended.

The one I ran into at the airport?

Yeah. Yeah.

Okay.

Yeah.

Yeah. Nice.

Yeah. So you were probably the first like professional outside of our market that I ever saw since I saw you before we got there. But what I, I would say that NARPL, no, I had started communicating with NARPL members very early, but I never went to local chapters. I never met with anyone in person. I would have phone calls with people early on. And they were, man, they would be so embarrassing to listen to now. But the NARFM community hugely guided how I operated. Podcasts that they put out and just different things online that they put out, phone calls with them, the people being willing to meet in different markets and really help guide me through my dumb questions and learning in some situations. The mastermind we were in, that like, like that mastermind we were in, I had no business being in that mastermind. Like, you guys are light years ahead of me. I kind of joked that I weaseled my way in somehow, was in the right place at the right time. But I just learned so much from people like you, and that allowed me to get where I am in the industry. Now I go to the Broker Owner every year now. I still don't go to any other conferences. There's amazing conferences out there from what I hear, but I value being home, being with my family, being with my team, being around my network. I believe I can get all the information I need without going to those conferences. And then the Broker Owner conference is really for those in-person relationships.

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Yeah, I'm a big fan of, again, it goes back to like anything you can do to help others. I relentlessly, even though I was probably, you know, one of the, one of the newest to the game in that group, I wanted to do everything I can to help the group. I found that I couldn't do too much because of the knowledge within that group. But the idea with the mastermind is if you can gather a, a group around you of, of people who may be a little bit ahead of you and a little bit behind you, and you can, you can help pull people up and then you, some other people can help pull you up. It's a perfect scenario, an absolutely perfect scenario to learn more about the industry. Now, we were with people who weren't in our same market. We could even share P&Ls if we wanted to. We were not in the same market. We could have open discussions. We weren't obviously competing. We had low ego in that mind. The mastermind, it wasn't people trying to one-up each other or anything like that. It genuinely was some people who wanted to get together, wanted to operate at a very high level and help that group do the same. And so it's similar. I'm a member of Crane and it's similar to that. Like, that's one of the reasons I wanted to be in that community is because anytime you can put yourself around other professionals that want to operate at a high level and have the mindset, the abundance mindset where they really, you know, we can share all we want, it's up to you to execute. And so we're willing to share whatever you need to learn or whatever you want to hear. And then it's, it's on you to execute. And if you execute and do a great job, awesome. We, we couldn't ask for anything more. And that's, that's sort of what both the masterminds do. And it, man, it, it propelled me. I mean, almost anything that I needed through those years, there were some quick answers there to help me get through some tough times.

Yeah, I love that. And I've been a member of several different masterminds. Of course, the one you and I were in, I was in a Profit Coach Mastermind for many years, which I am now again, actually. And obviously I, I run a whole community now, but You don't need permission to do this. You don't need to join Crane. You don't need to join Profit Coach. You can start your own mastermind for free.

Yeah.

So, and that's what, you know, the folks who organized that group that you and I were in did. So highly encourage folks, you know, don't let us stop you. Go out, do it yourself. Email some people on the NARPM, you know, in the NARPM community, or I could even help you organize, you know, some people if you're looking for people in your market, outside of your market, around your same size, whatever. It's a big deal. And I think it— there's something that is irreplaceable about meeting and talking to someone who gets you on a fundamental level because they're doing what you're doing and they've been through what you're going through now professionally. That is a very unique and validating experience as a human, I find.

Yeah, I have tons of local connections that own businesses and we talk all the time about business in general, but they don't understand what I go through as a property management. Yeah. It's just like, I don't understand what they go through in their own industry. Right. And so it's like therapy. You, you get in these groups and you can really talk about what's going through your head and what some of your options are, and they'll present options you didn't think of because they understand the game. And it almost frustrates me to some point when I hear, when people try to figure it out themselves, when they've been in business for so long and they're not asking other people or they don't want advice from outside people. I just, I don't understand it because you can do so much more as a team.

Yeah. And if you don't like what they have to say, you don't have to do it, but you can at least hear what other people, you know, are saying. I think it's that ego thing, right? Like a low ego person wants to hear everyone's ideas. A high ego person's like, no, because if they have a smart idea, then that makes me feel insecure, you know?

Right. Yeah, 100%.

So with, you know, 1,300+ stores now, I think something a lot of people are interested to hear about is putting in place a leadership team and specifically like a head of operations or a number 2. You know, I famously hired a COO all those years ago and wrote about it, and now I'm on, you know, my second person in that role. Do you have like a number 2 person who's been with you a while? How'd you find them? How does it work? What do you leave to them? What do you still have a hand in? How's that relationship function?

So we got lucky in a couple of ways where there— we have a good reputation in this market, but that's also for people in the property management industry that are local. And so there have been people from other property management companies that have heard and seen what we're doing and value our cultures and our growth and our reputation and want to be a part of the team. And so there was a large property management company that sold a number of years ago, and several of their core players were like, let's go join Peak. Let's, let's get over and get on their boat. And so one of them is now my vice president of operations, similar to a COO, and she basically handles the entire property management operations. Like, again, my role is largely culture and values and quality and some of the financial stuff. Her role is everything else. The entire property management team is under her. Shout out to Gina. She does a, a just a phenomenal job. She has been here for about 3 years, over 3 years, and she handles again all of our processes, our software. She interviews all the vendors to see who we should hire, who we shouldn't. She manages it all. And we have, we, we talk weekly and, and decide, kind of make some of the bigger moves together. That started at a senior property manager level. She worked really hard and proved that she knew what the boundaries were, what kind of, you know, sandbox she could play in. And then as she proved more and more, I could make that sandbox bigger and allow her to play more and then promote her and give her higher responsibilities. And over the course of 3 years now, she runs just about everything on the property management side.

That's awesome. All right. How do you think about hiring from, or promoting from within versus hiring from the outside?

I'm indifferent. Just a, just depends on, I don't, I don't think you're obligated to do either. I think you need to make, as a business owner, what's best for your company. If you have people, I have made the mistake of over-promoting from within and having to demote. I've had to do that. And so I would say build a position around what your company needs with no face and no name attached to it. And then figure out if someone on your team can truly fill that position. Otherwise, if you say, well, I have this person and I need this position and you try to fit both together, it's not gonna be the right fit for your company's growth and for the future of your company. So build a position, nameless and faceless. And then if you have someone on the team that can do it, great, train 'em up. You know, if they're 80, 90% of the way there and you think they can get the other percent, train 'em up. If not, you hire and then you tell the team why you hired and then you present opportunities for your team to reach new levels. You just, tell 'em how they need to get there.

Yeah. Love that. Are you guys using AI anywhere in your business? Are you seeing any success with this?

Yeah, not, not too, uh, I would say it's still surface level, like probably what most people are doing. It's, we don't have all kinds of agents, you know, I'm following what some of the Crane members are doing and it's phenomenal. We're, we're not on that level yet. We're watching it very closely. We're actually in the process of consolidating software and kind of picking a horse to run with so that we can, we can work through AI a little bit more easier. And so we, we certainly are watching it for now. We're using it absolutely on a daily basis, but it's probably how most people are using it. It's nothing groundbreaking.

Yeah. Okay. I wanna sort of take advantage of your experience here in rapid growth and just getting to the size that you're at. What's an example of something that you tried, uh, maybe as an experiment or a new direction that you thought was gonna be hot and it, it just didn't work out? It, it, you know, kind of failed?

I think the biggest— there, there was a couple things that we had to rewind from, and it largely was based on the client relationships that we had. And I think this probably speaks to most, most companies, but we had been very selective about who we brought on. We've had experiments taking on people that wouldn't necessarily fit our criteria, and that absolutely proved to be, be true. And so we've had to unwind from that. As I mentioned, like we had, we had recently went different ways with a very large client. We've had to do that twice now with very large clients and we found that like, it's just not a fit for us. Like we, we have some things dialed in, we have ways that we want to operate, and if it just comes down to every penny and we're not caring about the tenant experience, that's not really how we want to operate. We, we want to think longer term, bigger picture experience for both the resident and the landlord. And so we've established that. I would also say we were actually also managing commercial assets, meaning like retail strips, office buildings, medical office buildings. We still have some, we still have a few hundred thousand square foot of some under management, but we are unwinding from that as well. Our mistake there was, well, we were thinking we could diversify, which might be smart. You know, who knows what's going to happen in residential with, with rules and regulations and law and everything. So let's diversify. So we picked up a lot of like medical buildings and things like that through some relationships that we had. We figured it's property management investors all talk, you know, the success on the residential side will be like kind of trickle over into the commercial side. It's a wildly different network of people. It's a wildly different mindset, way different processes, different rules and regulations. And so after a few years of that, we've decided that it's smart just to focus on what we do really well. Let's— if we can't do commercial at a, at a very high level and continue to grow that at a fast pace, it's way less attractive. Let's stick with the residential side. And that's currently what we're doing.

On the commercial side, were you trying to do leasing or were you just doing the rent collection stuff?

We didn't do leasing. We would partner with brokers to do that. And just like on the residential side, we don't do brokerage. And so we actually have very good relationships with all kinds of brokers. Because we would use them for commercial leasing.

Yeah.

And we would refer them for residential sales as well.

So what, what ended up being different or challenging about medical office property management? Because to me it seems like the easiest thing in the world. There's no, you know, it's triple net, like they do their own maintenance. So all you have to do is just collect the rent once a month, right?

Yeah, that's, that's what you think.

That's what I think on the outside. I haven't done it.

Yeah, it's a little different. Like, you're— imagine your call center, like your after-hours call center, getting a call about, you know, a broken refrigerator or a broken HVAC in an operating room.

Ooh.

Okay. So like, it's like your pressure is not positive in an operating room anymore. It's now negative pressure, meaning it's taking in— it's taking in air instead of pushing out air. And it needs to be regulated because that's pulling in dust.

Yeah.

And sterilized, like Your after-hours RTM, they're gonna be like, okay, let, let's, instead of just calling this HVAC company, let's call this engineer, this, this HVAC engineer, which has a way more complex name than I can't even think of right now. Let's call them and make sure they're the one to go to that one unit in that building.

Wow.

On top of that, it is like triple net is awesome, especially like absolute triple nets where like the tenant takes care of everything. You still have to do the financing. And so we had to build out this really complex financing system, accounting system, or at least again, I'm not analytical. What I thought was more complex with CAM reconciliations, which, which aren't super complicated, but the CAM reconciliations, the real estate taxes, the all these different things that go into, like we're doing BMP inspections and then splitting it between different properties. There's all kinds of different utility rations and CAM that, that were, you can't exceed per, per year, per month and stuff like that. You're dealing with 20-year leases, rents where $100,000 a month instead of $1,500, $2,000 a month. So you forget an escalation on $100,000 because it's kind of off to the side over here and it's supposed to, you know, increase, you know, 4%. And you forgot to put that in your system. And 3 months later you realize it and they owe you, you know, $50,000. It's a different game. And so if you're not fully focused and fully invested on being the best at that, then I don't want to do it just to make money. We did good at it. But there are better options out there and it's hard for us to say that, that we're the option they should choose. So, so we're on— we're keeping certain relationships, but we're unwinding some others.

That was a perfect, like, little tease and taste of the problems in commercial property management. So thank you because you've successfully, like, steered me away from it now.

That's great.

I loved those, like, specific examples. Okay, so I want to come back to this big client that that you parted ways with, sounds like 1,000+ stores or 100+ stores, 200-some doors or something. Tell, tell me about like what was the nature of the client? Like was it one client with 100 single families or was it multifamily and kind of what happened?

Here's, here's kind of like a, a, a case that we tested to see if this would be a good idea. We actually didn't learn our lesson the first time, went in the second one and learned our lesson. And so this is kind of how it unfolded. And, and I wanna start by saying, For in case some of the clients listen to this, the clients are phenomenal investors, great people, excellent people, would love to do business with them in a different capacity, just excellent people. So nothing wrong with the client. If I say fire the client, it's not an unnecessarily any hate towards them. But with that said, we actually had a client with about 150 units, beautiful properties who put His nephew who was maybe 20 years old in charge of the management company. The nephew would walk the properties every day and would report back to ownership of what he saw. And then we were responsible, we're working with the nephew on the repairs. And so the nephew had to approve these, the nephew had to find different solutions, the nephew had to do a bunch of stuff. And so The ownership was trying to teach the nephew how all of this worked.

Mm-hmm.

But the nephew was getting paid for this and had this responsibility. And so when things, the nephew would be like, hey, I'll call that flooring guy. I got a different guy I can call. I'll call him. Wouldn't call him for 2 weeks. It would get back that this property's still vacant. People would be upset. All this would get back to ownership. The nephew would tell the ownership that we didn't make the call. And so I, it actually, after a few months got down after, after They were 80% occupied on 140 units when we picked it up. 4 months later, they were at 96% occupied under our management.

Mm-hmm.

Then, so we managed for about a year, everything was going smoothly, but then all these maintenance issues started happening now that this nephew was with us. And so I had to call the owner and say, hey, I know he's family and you might fire us after I tell you this, but he's lying to you and we're never gonna be able to win for you. If we don't change the relationship or the order of operations through here, it's just not, it's not going to— we had been through, we have hardly ever, ever had turnover in our team employee turnover. We had been through 4 employees on this portfolio because of this one person. And so I had to call the owner, had that conversation with them. About a month later, I called him and said, hey, look, like we can't continue. Well, we're going to run this down. We'll give— here's our 60-day notice. When we gave our 60-day notice, About a week later, client calls us, a new client prospect. After 2 years of on and off talks with this client, he says, I'm ready to hire you. This client has 300 units, same market. He has 300 units. He's gonna fire all his employees. He's gonna hire us.

Okay.

And he's seen what we've done on this other portfolio and he is like, I need that in my portfolio.

Are these single family?

No, these are, these are small multifamily, meaning like they might have like a 20-unit, a 5-unit, a—

okay, sure, sure.

Whatever. So this, this one with 300 had like, I think like 12 properties or something like that.

By the way, we've not had great luck with these types of clients either.

Yeah. So, well, there's a denominator that I'll get to because we've had wonderful luck with this asset type. But I've found the differentiation. Differentiation. So we had this one client and the second client was 300 units. We— I gave— I brought my whole team in on a meeting with this client and said, We will not tolerate this. We will not tolerate it. Speaking to the client said, we're not going to get into this again. We're not going to tolerate. Here's all the lessons we've learned. We signed up the client. All of those things started happening almost immediately.

Oh no.

So we unwinded 300 units about 3 months later after we had already invested all kinds of money. So we definitely lost money on that. And so what we noticed is the denominator was they had previously self-managed. Both of them were in walking distance to their properties. And both of them were real estate investors first and foremost.

Yep.

So with that, we have other clients that have 100 units, that have 70 units, et cetera, in these same asset classes, the 20 units, the 5 units, the whatever, 18, 12 units, those, we love them, but they're heart surgeons. They're, you know, name whatever professional, and they do this to use their capital as an investment. They don't want to be landlords. They don't want to self-manage and they want to trust us as the experts. And those people have never fired us from being in for years and years and years. They sign up. We've never lost one of those clients still. But anyone who is self-managed, we just found like that is something that we don't want to get back into. That larger owner that is self-managed, that lives by the properties and that is a full-time real estate investor. Yeah.

Here's the difference that I've seen because I totally agree. The difference between— and I think some people are hearing what you're saying and they're thinking, oh, so you don't want to work with someone who knows what they're doing? Like you're pulling the wool over the eyes of the surgeon or whatever. It's not that at all. The situation is when someone's a professional real estate investor, the income from their properties puts food on their family's table. And so every dollar swing, every toilet expense, every vacancy, every refinance hiccup or whatever is literally the difference between them getting to go on the vacation they promised their wife that summer and them not being able to do that. Them being able to get their kids into the school they wanted versus 3 extra months of vacancy averaged across 180 doors means now their kids can't go to that school anymore. And so that's the difference. Whereas the heart surgeon and these other folks, this is their retirement, this is an investment, this is not their income. So they think about it totally differently. They have a much wider lens. It's long-term thinking. It's building wealth through appreciation. It's maintaining the asset. It's, yeah, these buildings will be worth millions 20 years from now anyway. These little blips and burbs, whatever. As long as you're not calling me when I'm in the operating room, I don't really care what happens as long as you guys are doing a good job and not lying to me. Right. Whereas the guy who lives next to the building is like looking at the empty, you know, there's trash in the yard, you know, they're going crazy, right?

Yeah. He had on a 300-unit portfolio where, I mean, we're talking hundreds of thousands of dollars of income a month. He wanted a $500 approval limit.

Yeah.

And then on that, which is not normal for those assets and that type of investor, they shouldn't want to hear about that. And then we found ourselves— the reason we separated was largely like we were doing a phenomenal job. We were evicting, you know, maybe like 20 people every 2 weeks, like getting rid of this delinquency issue. We were backfilling people in. But, you know, there's a $2,000 repair. He would say no. He would find a $500 way to do it, but it would take 3 weeks to do. And this would be like broken HVAC or something like that. And tenants would go without hot water or HVAC. And it was because it was purely an investment and it was all that they were focused on and it was exactly how they survived. Right. And so it wasn't even like, if you, if you are a full-time investor, you can work with us. But if it's like, if you don't have the long-term game in mind and actually think outside of the numbers, again, it goes back to just being analytical, but also understanding like there are residents in place and maybe if you have to spend an extra $100, it's not going to absolutely kill your income. That resident may actually renew and your returns might actually increase if you take better care of them. You're going to have better culture at your properties and better experience. If you have better experiences at the properties, people will stay, retention's better, you can charge higher rent. So this is what we are trying to coach. But instead it's just the mindset wasn't the same and it was just a it was a miss. And so we both acknowledged that, that, that we weren't going to have the same mindset on how to operate these properties. And so we went separate ways.

That's a great story, man. Appreciate you sharing your learnings on that. Hey, this has been awesome to connect and chat with you and kind of operator to operator. For anyone who wants to follow along with your journey, are you— anything you can share? Are you on LinkedIn or anything like that?

Yeah. So you can find me individually on LinkedIn. I also have a podcast, The Virginia Investor Podcast, which is largely about investing in Virginia, but it might be good for other people to hear client investor mindsets and journeys and stories as well. But yeah, so the podcast and then Peak Property Management Pages, we're pretty active on social media and then I'm on LinkedIn, Instagram, Facebook as well.

Awesome. Well, thanks again, Stephen. This was great. Appreciate you coming on the show.

I appreciate it. Thanks, man.

I hope you have enjoyed this episode. If you like the show and want to get connected to the community, you can follow me on Twitter @PSLohmann and subscribe to my email newsletter on my website, peterlohmann.com. I try to share as much valuable property management content as I can on a regular basis. Thanks again for listening and have a great week.