From Grand Canyon to Gold Prices: Why Your PM Strategy Is Broken

There I was, listening to Peter complain about the unnecessary extra hill we were walking up in the bottom of Grand Canyon when he says over his shoulder:

"95% of the deals Warren Buffett looked at ended up in the 'too hard' pile."

Too hard for Warren Buffett? What? Surely any business 'problem' that had grown to the size and attractiveness to warrant his attention would not be "too hard" to solve? These were established companies, in compelling industries that had such good characteristics that they actually made it to his desk in the first place. Most of them? Too hard…

My response to Peter: "So he was just always looking to shoot fish in a barrel?"

And that made me wonder: "Am I working on problems Warren Buffett would toss in the 'too hard' pile?"

I can hear you. You're saying "Ya Mark, but you're no Warren Buffett, and I'm not either so this isn't worth thinking about." Walk with me just a little bit here because I think there's something worth exploring about our property management industry.

The brutal math: FR property management will never scale past 1,400 units for most of us

Maybe you caught Pablo's recent post about this: The Property Manager's Wealth Mirage. Here's the thinking:

• Some businesses are too hard to scale

• SFR property management is super fragmented because it is super hard to scale

• You owe it to yourself to consider where your time and talents are best applied instead of just blindly plodding along because it feels good to do so

There's a risk in never questioning what you're doing for work. Some people wake up 20 years later, sell out and get duped on the way out. "This is it! Don't miss this rollup!"

At this point Pablo starts talking about owning more real estate. At NARPM Southern States Conference I had a fascinating conversation with Justin Anderson. Did you know money supply has increased from $1 trillion to $19 trillion in the last 16 years? This is a big freaking deal, seriously. He's looking at home prices relative to spot gold prices and saying home prices are headed up. Wages will be moving up as well. We're basically just eroding the dollar and poor/middle class purchasing power by self-dealing our own debt. Justin knows his stuff - I'm just a hack learning from him.

Buying real estate (especially like Justin is by taking over existing 3% mortgages) is a great idea. But there's another really strong move we can make, and it's what I'm focusing on:

Fee maxing my owners and tenants to the absolute legal limit 🤣

Actually, here's the real play:

1. Drop churn from 20% to <15%

2. Start a Wealth Builder Program (which also helps with #1)

This business is tough to scale. You and I are probably not going to be the first ones ever to crack 40,000 units. But with some focus we can get up to 1000+ units, go really deep with value and have a tremendous business that positions us to maybe start a software company someday (did I just say that out loud? 😳)

The automated AI-powered transaction system that turns property management into wealth advisory

Value before profit.

These are the paths forward to unlock higher levels of value creation and exponential profit growth.

I sat down with Lior (from Blanket) for a couple hours last week at the conference. He walked me through his vision of how to bring this Asset Management and Wealth Building vision to our industry. We are getting SO close to having an AI-powered program sitting on the data that can be operated by a dedicated team member - acting as a virtual conveyor belt of transaction opportunities. And not just transactions that will make us rich at our clients' expense, but transactions that build toward generational wealth for the great people we serve.

So they can do more good in the world.

Jenni Utz and I are actually talking about this today live. Check out this link if you have time to join!

Here's what I've learned so far: The property data isn't enough. We also need to know certain key pieces of information about each client that will enable these wealth-building conversations to happen. I created an intake questionnaire to gather this info, then put the answers and the transcript of the intake call into a GPT folder with the program details. It's really helping create the wealth building plans, follow-up emails, etc.

Plot twist: The existence of a wealth builder program on its own raises all boats! What I mean is whether or not clients participate in the program, the existence of the program requires them to decide not to participate - but it still influences them. They know we do something different here. We think longer-term, we set our sights higher, and we expect ALL clients to do the same. There's a trickle-down effect and I think it will impact churn for the better.

Reply to me here if you are building out your own Wealth Builder Program. I'd love to hear what you've learned so far.

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Car update: The Plaid has games the Model 3 Performance didn't have! This is huge because I beat every game at every level in the Model 3 (lots of time waiting for girls at dance 🩰). Castle Doombad Classic is the current go-to. Cranking through levels right now.