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Manage to Exit is a PMI Acquisitions Team podcast sharing practical playbooks for buying, building, and preparing your property management businesses for successful exits.
You know, some of the
things that we've built at PMI
to really help
our franchise network
with is, is that books piece,
because it is such
an important component
and is often
an afterthought. Right.
The majority of us are out there
trying to worry
about growing our business
and managing our team.
And sometimes, unfortunately,
accounting can kind of
just become that necessary evil
that we decide
not to prioritize.
And and I can assure you
that it's not the right thing
to do, is you consider
selling your business.
And I'm sure if an order knocked
on your door, you'd probably,
you know, fly to Mexico
really quickly
because
might end up on some money.
Hey everyone,
welcome back to another
episode of the Managed Exit
podcast again.
You got myself,
Aaron McElhenney.
We've got Hunter
Goodall on our M&A team,
and we've got a big guest today,
a local celebrity
in the office, James Phillips.
Joining us.
How's it going, James?
Doing well, guys,
how are we today?
No complaints. Not one.
I got a little late start today,
but I'm ready to, dive
into this episode, and, just
keep it kind of free flowing.
Again.
This is all things acquisitions.
And James is a big part of,
what we're doing here
on the, on the residential side
as far as, local
business, consolidation
and, and, and acquisitions.
But, before we dive too
deep into that,
James is also very likely
the best golfer in our office.
And, I think you got a hole
in one not that long ago.
Right? My first hole in one.
I'm still debating
if it's legitimate
because it was a short
hole, so I don't feel great
What?
cool. So. Yeah.
Hunter just hit in for I think
you, it was a 167 yards.
167 yards.
I was in mid-conversation.
Did you get. I'm sorry.
Hole in one. Still in.
It was like I was in
mid-sentence talking to Aaron.
I wasn't even, like,
looking at the hole,
and I just hit it
while I was talking in it.
We've watched that ball
and we're like,
oh, dude, I think that's going
Yeah, it was second.
minds.
And I was like,
this is the shot.
This is this is what happens.
Like this moment
is why people play this sport.
I was like, I'm now I'm hooked.
Now I got to spend the next
40 years chasing another shot
Yeah.
This.
another hole in one.
Same thing with fishing, man.
The tug is the drag.
That's why I keep going back.
That's hilarious.
I mean, that's all.
We'll talk about golf
a little bit, but,
obviously it goes hand in hand
with acquisitions and,
I mean, we have fun
while we're golfing.
We have fun in the office, too.
But, but, yeah,
let's let's dive in a little bit
today and then, maybe,
maybe we can all golf next time.
Hunters in town, too.
let's talk about this
a little bit more like I know
when, Hunter and Tyler Tyler's
are, man behind the camera.
We're talking about
our guy in the chair.
We were talking about
getting guests on the show, and,
I mean, your name came up right
away.
Like,
just knowing the growth trend
that we've seen
on the acquisition
side, too, and, like,
how much we rely
on, your team as well.
A big part of the transition
of these businesses
that were helping people buy.
So, yeah, obviously,
we just want to get
your opinion on here
and also just get,
you know, people
to have their eyes on you, too.
Just knowing that
you're a resource in this space.
Quite a bit.
But I know you've been a part
of some of our bigger deals
this last year.
yeah,
maybe let's dive into your role
at PMI and kind of like
how long you've been with us.
And, kind of your team.
A little breakdown
there. Be awesome.
Perfect.
So, So, yeah, I've been
with PMI for about four years.
I actually started here
as our director of books.
So a little bit
more on the accounting side,
which of course bodes well.
Anytime
we're talking about acquisitions
and being able to
really look a little bit deeper
into that business,
not just from
a compliance standpoint,
but of course from a revenue
standpoint as well.
So, yeah, I'm
the currently
the executive director
of residential and commercial
property management here at PMI.
So I dabble a little bit
on the commercial side too.
Pretty interesting.
You know,
PMI was a big change for me
coming from kind of being
in the property management,
being in a local business
here in in Salt
Lake to seeing this, you know,
different
franchise esque version of it.
And it was amazing.
I was really surprised
when I got here to see,
you know, everything
being built and trained and,
and all those sorts of things.
So currently,
yeah, we're managing
just under 34,000
residential units.
Maybe to give a little bit
more flavor there.
We see residential,
of course, as single family
homes, townhomes, condos.
We also consider
small multi-family
as a part of residential.
So be thinking duplex. Triplex.
You know, we're not talking
large multifamily properties
but smaller.
We do consider residential.
And that's consisting of
about a little over 300 offices
that we have now
across the nation.
That's 48 states,
that we cover.
So it's a yeah, it's
just amazing to see the growth
at PMI and,
you know, see how
well we're kind of spread
across the entire U.S.
It's amazing.
And we kind of pull out
multifamily a little bit. Right.
So you hear 34,000 mentioned.
That doesn't include
kind of the separate multifamily
portfolio.
That's
still growing, in our space.
And a lot of people don't like
when they look at our, our brand
and they hear that
we're managing that many doors,
you know, like that's across
multiple states, right?
Like the franchise
model is super unique
because a lot of people
I've just run into this
where they think
that we're like this
massive consolidator
and we're running everything.
You and I and Hunter are just
managing everything from Utah.
It's not true.
Like we have local offices,
like our buyers and sellers.
They're all they live
down the street from each other.
And so our franchise partners
are actually the ones managing
in all these unique markets
across the,
you know, 34,000 plus stores.
Yeah I think that's really
the beauty of it. Right.
Is like
you have that local relationship
with that office
and you know, that's
that's important to anything
within the real estate industry.
You know,
whether you're talking about
business
purchasing or selling, right?
That relationship
is super important.
You want that local person.
You want to be able to see
that person.
You want to have your boots
in that office,
really understand
even the culture of that office.
So, so yeah, it's
really interesting
and just a lot of fun
to be a part of.
Yeah,
that's like one hurdle, though.
And I think like from the
the kind of client support
side of things.
Right.
We're like Hunter
and I, we're dealing with
sellers that have relationships
with their clients.
And they think that
they're handing off
something to a bunch of guys and
a bunch of young guys in Utah.
And, so that's actually one
like disconnect
that we always have.
It's just no, actually,
we're just we provide
industry guidance
and, and support
and we make sure that,
that our
franchise partners
are being taken care of,
but the local efforts
are still there.
So like when sellers hear
that they're used
to having these big companies
come to them and say, hey, yeah,
we're managing everything from
Austin, Texas, or, you know,
the Bay area, California.
And, like, that is a big shift
when we just say, oh, no, James
and Hunter and myself like,
we're just here to help you
transition this business
to our local buyer
who's literally down the street.
And it's just funny that,
I'll always kind of pitch
that element and a lot of our
calls here,
because that's something
that people still
I fight against that every day.
Like we're
just providing resources.
But the buyers and sellers, they
are all local business owners.
So pretty cool. Overall.
I was just going to say
it's so interesting,
like, from a,
from a resource standpoint
on our side to where,
you know, that that 34,000 doors
and however many,
you know, hundreds of offices
is very diverse.
And what I mean by that is,
you know, we've got offices
managing thousands of doors
that have
large teams already in place.
But what we've seen
a lot of this year
is actually our newer offices.
So, you know, August workshop
just happened.
We had brand new franchise
partners leave and kind of
get out in the real world
with no doors under management,
who are kind of trying
to get that first business.
And we've seen some of
those business
actually do acquisitions earlier
on in their kind of life
cycle journey with us, which is
just been really cool to see.
But of course, you know,
the resources are much different
from a well-established office
who kind of
has everything up and running
to somebody who's just getting
into property management.
The demand of resources
is so significantly different.
It's been a lot of fun
to work with those teams
and, you know,
help them find success
in the in the business
they've acquired.
I think that's
that's a big, factor into
what makes us such a strong
acquisition department here.
Like,
we do more property management
acquisitions
than anybody in terms of volume,
like the number of
of transactions that we do.
It's just so many,
and it's across the country.
But like Aaron said,
we're not the buyers
at the end of the day.
You know,
James is not the one buying this
and managing these properties.
I think that's a huge strength
to us. Is that you're right.
It is the local person there.
It's it's
someone just like the seller
there just down the street.
You know,
we're
working on a deal in Florida
right now
that turns out buyer and seller,
their offices were less than six
miles apart from each other.
Yeah. They
never knew each other. Yeah.
an existing operator who's
already operating in this space
already knows
how to do property management.
And they're going to take over
this operation.
It's going to be
a very smooth transaction.
But is it even if it's
if it's a brand new franchisee
like you just said,
James, we've had new franchisees
that just came into
into property management
who are doing these seven
figure acquisitions.
And the
reason that that's possible
is because they're not alone.
Right?
You have there's so many people
out in the market right now
that are trying to buy business.
As we talk about this
all the time,
where you get these college kids
coming out of college
and they're, oh, dude, I'm
going to go buy a business.
I have no idea what I'm doing.
I have no experience.
But somebody is going
to give me 100 grand
for a down payment
to buy this company.
And, like, good luck with that.
You know,
you're all on your own.
You're going to buy
this business.
That's a huge, risky investment,
but not for our franchisees,
because they've got someone
like James,
an expert in this space,
to help them make sure
that they're successful.
You know, James, it's not just
James, it's James has Trent,
you've got Sam,
you've got a team
backing you to help make sure
you've got a team of experts
to make sure
that these franchisees are are,
you know, going to be successful
and know how to operate these.
And so it's it's a really cool
model that we have here.
Yeah. It's great.
The team's huge for for our side
of things, that's for sure.
You know, Sam who, just maybe
to clarify for everybody.
So, Sam
is our operations manager,
so she's really deep
into process, into,
you know, how to handle the work
order,
how to market the property.
You've got trend,
of course, on the other side.
Who's a little bit
more of like that?
Higher level
deep growth, kind of focused.
Member of our team.
So you get kind of different
flavors
with a different team member.
And ultimately
what we're kind of trying to do
within the residential team here
at PMI is kind of mimic.
You know, the
the operations that happen
within the property
management business.
So you know,
you have the sales aspect,
you have the ownership aspect,
you have the operations aspect.
And so we're kind of trying
to cover all those bases
to ensure,
of course,
that, you know, our franchisees
or your franchise
partners are getting the support
they need across,
you know, all facets
of their property management
business.
I'm thinking about how your team
integrates with ours, James.
And just even how it's continued
to build out as we start
doing larger acquisitions
and have for the last, you know,
our average deal size is almost
doubled in the last 12 months.
So, like us relying on
you and your team,
especially in the due diligence
piece is like, huge for us.
Hunter and I are really deep
into the deal terms.
And then,
you know, obviously
we lean on your team to,
you know, go through some of the
financial aspects
of this regarding software,
regarding,
you know, triple tie outs.
And I think it's good maybe for
us to talk a little bit about,
you know, for people that are
even that are buying,
but also for sellers like
what are some of the things
that they should really be doing
to prepare their business for,
for a sale or for them to exit?
Yeah, that's
such a good question.
Especially as it relates
to like, this idea of being
triple tied out.
And so maybe just briefly,
so everybody knows, I mean,
really what we're talking about
there is compliance
with your trust accounts.
You know, so some states see
that a little bit differently.
You might have one
trust account.
You might have two.
You know
that doesn't really matter
as long as it's complying
with state.
But ultimately, you know,
we see a lot of businesses
who forget
how important closing out
accounts are
and reconciling accounts
and making sure money, of
course, is where it needs to be.
And so,
you know,
as we go into
some of these evaluations,
one of our biggest concerns
is that
money is
where money needs to be, right?
So that all ten security
deposits are accounted for,
all owners
money is accounted for,
whether it's just their reserve,
because you just paid
everybody out,
you know, or it's
or it's more than that.
That's
such an important component.
And, especially when I imagine
when it comes to the value
evaluation, because, you know,
I have seen businesses
spend thousands,
tens of thousands of dollars
to get their accounting
kind of back up to par.
So, you know,
definitely is you positioned for
a potential sale?
I mean, your trust accounts
need to be top of mind
because anybody looking at
that business
is going to run
like the thing is on fire.
If money is
not where it needs to be,
or they're really going to be
kind of picking at
you hard to ensure that
that's taken care of before
any sort of transition happens,
because the fear of that
new business owner. Right.
And probably depending
on how you buy the business,
you guys
can probably talk about
that side
a little bit more, is like
they might be assuming
some of the risks
that your business already has.
I believe
in a specific type of sale.
Aaron,
maybe you can talk a little bit
about like those two
different types of sales.
But but anyway, yeah, you know,
if I, if I were the one
looking at the business,
which often
I am kind of on behalf of some
of our franchise partners,
I am waving the red flag.
You know,
if those trust accounts
aren't reconciled
and there's a bunch of past do
or uncleared items
in those accounts, that's that's
a immediate red flag for us.
Totally.
And I mean, just for us, I mean,
I think we can
look at a business
pretty quickly,
like we've
looked at so many together
now, just even everyone on this
call that, like,
we can tell if the
valuation is going to hit,
you know, whatever
number they're trying to or what
multiple it's
going to really going to be.
And so a lot of the coaching
that we even do, even,
even the sellers is like,
hey, we're not going to
even get involved
in the transaction
unless these thresholds
have been matter.
These checklist
items have been hit.
And so I would just say
even from like,
succession planning
or exit planning piece, like
working with our team to even
prepare your business to sell
is is critical.
Like if you want to PM
my buyer to step in
and you want our team
to help with transition,
then we're going to give you
some guidance
on what you need to do before
we can even formalize anything.
So so a lot of sellers they like
I would just say that
that open transparency,
where we're actually
providing them information
that sometimes even helps
increase
the value of their business,
like they're not
getting that insight
from many other resources.
And so when we talk about
like the win win scenario, like
Hunter and I are
deep into this mindset
where it's got to be a good deal
for everyone
and we're only going
to encourage,
you know, good transactions
if it's something
we're not comfortable with or,
or Hunter
and I aren't even if we wouldn't
land on it ourselves,
then we're just going to go find
another deal.
Like there is no shortage
of transactions out there.
But yeah, like I said,
we really rely on your team
to help that piece of it.
And for a lot of sellers,
they just it's not just
Hunter and Aaron and Connor
and our team and Kyler,
on our team too.
But,
it's really a complete support
staff that they're getting from
PMI corporate.
And I think there's 100
or more people
on our corporate team right now.
So, yeah, I know
you bring up a good point.
Like things need to be cleaned,
the books need to be clean,
needs to be triple tied out.
You know,
we want a fair valuation, right?
Like,
we're happy to get a seller
a good price on their exit.
And obviously, we want a deal
for for our buyer, too.
But what about any other,
you know, kind of
maybe some best practices or
any other kind of deal killers
that, that,
that you or your team see just
from a diligence standpoint,
I know software
transition is a huge one to.
So maybe we want to dive into
that a little bit as well.
Yeah.
So for transition
I definitely don't think
we see that as like
a necessarily a deal killer.
I mean if there's no software
in place,
which for those of you
on the call, yes,
there are still property
managers
out in the world
not using software, if you can
Richie follow me. Right. I,
files boxes and boxes of paper
in their office.
And we're just like,
oh, this is a pain.
Yeah.
So the the industry is
definitely matured,
you know, where, any position
or any business
positioning themself for a sale.
I mean,
not having software and systems
and processes in place
is definitely going to be
an issue, like,
there's no doubt about that.
know, where PMI comes
in, of course,
where the residential team is,
we do have the resources.
We provide a lot of those things
for our folks.
So I would say it's a do
deal killer, but it's definitely
a big question mark for us
because really,
what you're talking about
with the software
change is as we, look at that,
what it is, we're looking at
what it means for the client.
So not even the individual
purchasing the business,
but what it means for,
for your current client
that is now not only going to,
you know, shift essentially
to a different ownership group,
a different business owner,
but also different systems,
different software.
So, you know, them
having some of those pieces
already in place, of course,
makes that transition easier.
Of course, the fear being that,
you know,
if some of those clients do
leave through some transition
like that,
then that's going to be,
of course, a concern
from from the buyer's side.
And so having really tight
processes and, standardize
management agreements,
you know, it's probably
another big one we see where,
you know, property
management is tough, right?
It's not like some crazy, crazy
margin thing.
Like you've really got to have
the system
figured out to make it work.
And so,
you know, standardize
having a standardized offering
where you don't have,
you know,
a hundred different clients
on five different property
management agreements, Sure.
this leasing fee on that one
and a different management
fee on this one.
And while this person,
we've got to give them
three property valuations a year
in this person we don't do
any for like that's really hard
to accommodate operationally.
So having some standardized
pricing really helps with that.
And yeah, that relationship
that you have
with those clients does matter.
And so, you know, as we as we
look at that relationship
that they have with you
or have with the brand,
we definitely want to take that
into consideration to
understand if any of those
are going to kind of churn
and potentially fall out
the bottom of the bucket
during a transition.
Yeah.
I think prior attention
is always the focus for us.
Right.
And, you know, oftentimes
there's deal terms that require
a certain percentage,
you know, come over right there.
If there's some loss through
a period of time, it's
not uncommon
to have some kind of clawback
language in agreements that,
you know, if,
if a client leaves
for whatever reason, not due to,
like the negligence of a buyer,
just for example, but,
it will absolutely affect
the deal terms and the payout.
So the tighter your systems are,
the more standardized,
you know, the processes are
and even just more consistent
consistency
within the management agreements
is is key because under
you and I both looked
at that too, where there's like
five different agreements
within 300 doors.
And we're like,
why are there all these
special exceptions in here?
And you can tell
that's like that
business
owner client negotiation
where they had to make
some concessions somewhere.
But yeah,
that lack of consistency,
you know, for us
that can impact value for sure.
it's like an example of
you got 500 properties
and maybe a third of them
are not assignable contracts.
So now we got to go through
500 contracts to see
which ones are not assignable
because like like
James was saying,
there's two different types
of acquisition sales.
Do you have an asset purchase?
Meaning I'm
buying all the assets,
none of the liabilities.
And we're going to
just transfer over all these
all these contracts.
So property
management is kind of
a unique acquisition
where it's like
there's typically not anything
on the balance sheet.
There's not any assets.
There's not equipment.
There's nothing tangible.
The business is based off
of contracts, pieces of paper
with 60 day outs.
And so it's like
the primary thing is
we got to make sure
that these contracts
transfer over.
And if they're not assignable,
we got to go figure out
which ones are not assignable.
And we got to make them
assignable.
Either renew them
or we have to change
the entire deal
structure of where it's
not an asset purchase.
It's now a stock purchase,
meaning I'm buying the assets
and liabilities.
And that makes due diligence
even harder and more expensive.
And so it's like
if the contracts
are not assignable,
it makes the deal
so much harder.
But then having like a mix of
of some of your contracts
are some of them are.
It's, it's just it's messy.
It's disorganized.
Yeah.
We're dealing with that,
one deal right now
in the Midwest, and,
it's involving
the seller has to be
super involved,
and they're
doing a lot of personal outreach
to get assignment consent,
and that's something we're
actually requiring before close.
But had the seller even
had a year in advance to prep,
they could have gotten addendums
to their agreements
to include that assignment.
and so it's
just one of those things
to look at for down the road
if you're not thinking
about selling tomorrow,
but you're prepping
for the next six months
or 12 months, like,
that's one of those
things that just kind of leads
into this next point.
As far as like, add value
scenarios and value drivers
and, like,
I think it's a good thing
to bring up to
just as far as not
just the buyer side of things,
but sometimes sellers
are leaving
opportunities
out of their business,
and it's not going
to help their business
if they're not up to speed
with local market norms or,
or industry revenue streams
like this
could be to their benefit,
like sellers could be
integrating these things,
because these are things
that we might integrate
down the road, too.
But like, you know,
what are you seeing?
And I know you work with a lot
of conversion offices to James.
And just for
people to understand
what that is, we have,
we have existing companies
that choose to join PMI
and convert
their businesses into a PMI.
But I think we should talk
a little bit about
kind of like value add scenarios
and some of the revenue streams
that we're seeing out there.
Oh, man,
I love that because that's
such a hot topic right now.
Like even in the industry
as a whole, this,
this like idea of of doors
versus, you know,
client value is this
is this big discussion.
And it's, it's so funny
that just the other day
I met with a new conversion
office.
Actually, if anyone wants to
follow me on LinkedIn, go ahead.
I just had a post about this,
which was,
you know,
when these businesses come in.
And so I'll kind of
wrap this around back into,
you know, the seller side
of the acquisition.
But ultimately, like,
you know, the the question
always coming
from these new conversions
coming in is like,
I want to grow doors, right?
It's doors. Give me more doors.
I want to add 100 more doors.
I want to be that thousand doors
by the end of the next
two years, you know,
I always say that right. Yeah.
So I.
Right.
And I think
that the whole industry
really has seen it
that way for, for a long time.
And that's starting to shift
where, you know, after
having kind of a consultation
with this individual.
I mean, it was clear,
I believe his business was,
around 200 doors,
maybe that just by focusing
on his existing
portfolio of business over
the course of the next year,
if we're able to implement
some of those revenue streams
that Aaron's kind of alluded to,
we will be able
to increase his profit,
or his top line revenue
by 60%, 60%.
So, yeah, same thing with,
you know,
what I was talking about
with like, these
or the older
property management companies,
that you know, aren't
using software
or using really old software.
It's really the same idea with
a lot of these revenue streams.
The industry has really moved
in a direction
of what additional services do
you know residents or owners
want from us?
And of course, us,
by providing those services,
ultimately create additional
revenue streams for ourselves.
And so,
you know, some of the big ones
I think, that are top of
mind would be like asset
management from the owner,
from the owner perspective.
So how are we working with
our existing portfolios,
what additional services
we can provide to ultimately
help the the client, the owner
client, grow their portfolio
of real estate?
So you're seeing some of that
on the other side.
You're seeing
a little bit of insurance,
you're seeing a little bit of,
you know, protections
or guarantees
that a business might offer
and kind of monetize to protect
from things like eviction or,
you know, damage to the property
and different things
of that nature.
And then, of course, you've got
the other residence side where,
you know,
what's what's the ultimate goal
for our residents,
I think, is property managers.
We often forget that,
you know, the resident
is just this essential piece
to our business.
And, you know,
I I've heard so many property
managers say, oh,
we don't care about the tenant,
right?
We don't we don't care
about the resident in the home.
We just care
that the owner is happy.
And and I understand that
for sure.
But ultimately, the residents
want paying the bills, right?
They're the one paying the rent.
They're the one, cash
flowing for the owner.
They're the one
ultimately paying our salaries.
And so, it's just
such an important component.
So what additional benefits
can we provide to them?
And, you know,
so things like things
like internet,
if we're able to provide
internet and,
create
additional revenue streams
through discounts,
we're able to leverage
because of size
or because of a partner
we might select
to help us in that.
Those are wins for us
and ultimately
additional revenue streams.
And so I think the message
ultimately is just that,
you know, if you have this model
where you've got
four revenue streams,
which are probably management
fees, leasing fees,
late fees and application fees,
like you really need to start
think about diversifying that,
because you're certainly not
creating as much value
within your business
as you could be.
So ultimately, what I'm saying
is, you know, sellers,
be worried about your door
count.
Absolutely.
But the the bigger thing
you need to be looking at
is revenue.
You know,
an operation of 500 doors
that doesn't have the revenue
to be able to support
and compensate.
A great team is a risky business
to buy.
Right?
And so, yeah,
we just want you to understand
that, that
diversification of your revenue
streams is ultimately going
to benefit you and increase
the valuation of your business.
That's interesting.
Like we had that conversation
with so many sellers because
I don't know why
it's an industry thing.
Everybody in
the real estate industry
and the property management
industry,
everyone's focused on doors.
Hey, what's the price
per door? Right.
And it's like, no, don't go.
It's how are those doors
performing?
Having a large portfolio
mitigates your risk.
Because, you know,
if if there's churn,
if some of the contracts, if,
if ten contracts leave over
200 doors versus over 30 doors,
that's a big difference, right?
But so it mitigate your risk.
But how are those doors
performing. Right.
Are you squeezing
a lot of revenue
out of these out of these doors
and getting a lot of opportunity
beyond just management fees?
That when when we see that
it's like, oh, this is
this is a good looking business
when it's like we see
a lot of revenue streams,
a lot of ancillary fees
and things that can help balance
this business out instead of
just being so singular on, hey,
we all we do is collect
rent and, it's price per door.
It's like,
no, we've got an operation
here, we've got revenues
for all these different doors
and balance in our company
where, it's it's
not one dimensional.
Totally like
I think just something
super relatable here
because I think we're in
like a pretty unique position.
Like where I mean, the
majority of our time is spent
helping franchise partners
via their property management
companies, merging
that with their PMI office.
But that other play
that I kind of mentioned,
this conversion office
like so
like Hunter
and I will talk to people
that they think
they're ready to sell.
They're maybe not ready to sell.
They're actually kind of excited
about growing, but maybe don't
have the opportunity to do so.
So we actually
include our conversion team
in that message where it's like,
hey, you,
maybe you want to hit a larger
exit price,
so you go through a valuation
with us.
It's not where you want to be.
So how are you going
to get to that?
That $2 million number,
that $5 million number?
It's usually a series
of acquisitions.
And that's something that you
can work with our team on to.
By converting a business
into a PMI location,
you can get access
to our team directly.
So like we're kind of on
two sides of this.
It's like,
yeah, we're happy to help you.
You know we'll definitely work
with a franchise buyer to
to help you exit your business.
But if you want to keep growing
and you want to join us
and get access to James
and his team,
like a conversion, into a PMI
office is kind of a unique play.
And so I don't know if there's
other people out there that even
do that.
I don't know, in the
franchise space,
I don't know if they're actually
doing conversions
like how we are.
But yeah, I'm just talking
to a guy, the other day
who's a recent conversion,
in Michigan,
and I think he has this is this
he you're talking about?
I'm not going to name drop, but
but, yeah, he's got 200 doors.
And, like,
the first thing that he said
was, like,
he and his business partner
wanted to do local acquisitions
and so we have a custom
game plan
that we were building with him
and his business partner
just to solicit target
and acquire, you know, over
the next few years
to hit a pretty large exit
number. So,
Totally.
And that, you know,
that's like what
we call a conversion office.
So, if you want to sell,
we're happy to help someone,
you know, buy you.
But also if you want to
keep growing,
there's ways
that you can work with us too.
So it's kind of a unique model
that people aren't
really used to getting
that level of transparency.
Go through a free valuation.
Hit your number. Awesome.
We'll help you with that.
If you haven't had your number,
we'll also help
you get to a higher exit
by doing this like it's a it's
kind of an odd play right?
it's so
funny that, we are
talking to the same individual
because I got
the exact same message from him.
Like he has no interest, really,
in growing organically at all.
You know,
he definitely wants to do it
through through acquisition,
which is great.
We love that.
And the amazing part about
that is, is with conversions.
So you know, like when somebody
when a new franchise
partner comes into the brand.
So let's think about somebody
who is not currently
in the property management
space
doesn't have existing business.
Of course, we have kind of this
whole journey spelled out for,
you know, many, many years
that they're kind of following.
But that journey
is so different
for a conversion office
to an existing business
that's already there.
And so we really come up
with a more customized plan
as it relates to you,
like Trent on my team. Right.
Like I was saying earlier,
he's our organic growth guy.
But do you think this conversion
we just have
is going to be trend?
No. Like that's just not
what he wants to prioritize.
He wants to prioritize,
you know, managing his existing
portfolio in an effective way
so that when he is
ready to do that acquisition,
you know, he's got a business
that's really scalable
and can handle that, that
additional door count coming in.
So yeah, it's just so cool
how we all get to work together
that way.
And then really round out
like this whole experience, of,
of acquisition.
It's just the cool thing.
still fun for us too.
Like, Hunter and I
are always chatting about this
and we realize like,
we're doing more transactions
than any other group
I'm aware of out there,
and it still feels like we're
barely scratching the surface.
Like we keep throwing out
this wild goal
for 2026
of 50 million in transactions.
And the more I talk about it,
the more excited
I get about it, because I know
the opportunity's there.
And so like from our buyer side,
like that's that's
where we want to be.
Like we want to help
people exit their PM companies.
We want to buy them.
We want to help franchisees
spend
$50 million in transactions
next year.
And that's that number
seems big.
But when you look at our market
share, it's such a small piece
of the actual market.
It's amazing.
Yeah, totally.
Property management not getting
any easier, you know?
I mean, like, regulations
keep getting passed.
It keeps getting harder.
Our owner clients
who we've been looking at
for many years,
who've been able
to really cash flow
well on their properties
and continue to buy
more investment properties.
You know, rates are
not in a position right now
where that's happening
unless you've got a lot of cash
buyers,
which is, you know, few
and far between. And so,
yeah, property management
is not getting any easier.
You know, we're going to have to
continue to figure out
unique ways to ensure
that these businesses
are sustainable over time.
And, you know, we're trying
to, keep up with everything
coming out of,
you know, California,
Colorado, New York and
seeing how those changes in
those markets are
somewhat starting to bleed into
other states and other markets.
And, you know, of course,
trying to stay ahead of that.
I've really quickly
got to come back to this thing,
a door council,
because I think
an important aspect of that is,
is your doors per owner,
I think is another interesting
thing within your business.
That's something
you might want to look at over
the next couple of years, is
you consider selling,
because if you've got
a portfolio, let's say, of,
you know, 500 doors,
but you've got five owners, like
there's some additional Yeah.
a fifth of your entire portfolio
and a huge impact
to the business,
the revenue of that business.
And so we really like
a sweet spot.
Like,
I love to see a sweet spot of
around two, two and a half,
I think is is great.
So two doors
per owner on average.
That just makes your business
so attractive because you know,
there are going to be clients
that that fall out.
I mean, that's just the reality.
When you do anything like this,
including any
like potential software
transition,
like it's just a natural thing
that happens.
And so if
you can kind of mitigate that
by having a diverse portfolio,
you know, where where again,
you're somewhere between 2
and 3 doors per owner,
that's a really, really
low risk
as far as churn that might
happen due to some transition.
That's one of the
first questions I ask sellers.
You know,
in my initial discovery
call, we'll talk about, hey,
how many properties
are you managing?
And then my very next question
is, okay,
You know.
like who's the largest?
How many do they own?
And they'll be like,
oh yeah, I've got,
200 properties
and my largest owner
has 25 of those.
And I'm like,
okay, that's a big risk element
because if that guy leaves,
you know, his contract says
he's got 60 day out,
he can just say give notice.
And he's gone in 60 days.
Well,
we just paid you three years
worth for it for that contract.
What are we going to do?
Like we got to figure out
how to mitigate that risk
because yeah.
If like I said earlier,
you have a bunch of doors,
if ten of those leave,
okay, that's not a big hit
when you have 500 doors.
But if you know
if 10% of the portfolio leaves
with one contract, that's a hit,
you know, like that's
that's big.
So those are things factors
that you have to be able
to mitigate in terms of risk.
Because when you're
looking at an acquisition,
we look about at the financials.
And those are supposed to paint
the picture of the overall
overall operation.
Right.
How organized, is this
operation and optimizes it.
But the other thing is we got to
look at all these risk factors.
Like I said earlier,
there's no tangible assets.
There's
no equipment that we can,
you know,
if this fails, we can still sell
all the equipment
and make our money back, right?
No, there's nothing like that.
It's just pieces of paper
with 60 day outs.
So it's like,
we really got to make sure
that we can reduce the risk
as much as possible.
And it's like sellers,
if you want to make more money
for your business, get on board.
Like make sure de-risk
this opportunity for the buyer.
That's
if you can reduce that risk.
You can increase
the value of your business.
And also just create
more confidence from the bank.
Right.
Someone's likely
lending on that deal.
Keep it simple.
Keep it very clean.
Get the bank
excited about the deal.
Like that's our job. But,
you know,
you can definitely make it
a little easier.
That kind of client to property
ratio
absolutely impacts valuation.
So so yeah
that's a good one to bring up.
And it does come up pretty early
in seller conversations
I kid you not. There's
probably a record breaker here.
And I can't remember
what market it was in Hunter.
But there was one business
that actually had one client,
and it was over 200 properties.
It's like that's.
Yeah, third party offering.
If you have one client and,
on all, it's 100 or more.
I was on the phone
I remember that conversation.
It was in the South,
in the southeast
Let's be careful
that we don't.
like the guy I was like okay
so how many properties are
that are in this business?
And then he was like,
oh, there's a few hundred.
I can't remember the number.
But yeah, it was
it was over 200.
There's
a few hundred properties.
And I was like, okay,
how many owners are there?
And he goes, well, see,
that's the thing.
Yeah.
one guy and I,
I stopped the conversation.
I was like, okay,
before we talk about anything
else, like,
you have to understand,
we have to get real creative
for this deal to work like
this is going to be finance.
The only way for us to do this,
you're not getting cash upfront.
It's going to be
we're going to pay you
a percent of management fees
over the next couple of years,
as collected, because it's like
if he sells all those properties
or if he says, you know,
in 60 days, he's like, you know
what, I liked my other guy.
I don't know you.
I'm going to go find my
another friend
that's going to manage this.
It's like we're hosed.
That was the whole portfolio.
So I told him that
and he was like,
yeah, you're right,
I know we got to.
We got to figure out
how to make this work.
He's like, oh, yeah. And by
the way, I'm the owner. Yeah.
I'm all for getting creative
and like, there's always, like,
a win win somewhere in there.
And maybe the win is that
kind of rev share type model.
Like, we we've done a fair
amount of that offering
lately on some smaller
portfolios that just,
you know,
we're trying to get
the sell or something on
some of the deals that maybe
are even less attractive.
Like there's always a win
in there for the seller too.
So I think, Hunter, you and I
are we're pretty up and on like
what options you have and like
how quickly that can happen.
Like,
hey, we'll just let you know
right now the bank's not going
to like it for these reasons.
And it's probably worth
from here to there.
And we're happy to find a number
that works for you
with some type of either
sell financed option or,
or profit share.
So like finding
that creative win win
is actually super fun and kind
of rewarding in its own way.
But but yeah, you got to think
about all of those things.
As far as risk mitigation goes,
it's risk for everyone, right?
Like we want a smooth transition
and we'll be as transparent
as we need to be
to make sure it's a fit right.
Yeah, definitely.
I think from the seller
standpoint, too,
one thing I was
going to bring up is like,
you know, I've definitely worked
with some of these where
the seller and buyer maybe don't
always see things
the same way, you know.
But,
I think definitely as a seller,
one thing that you
should be open to as you go into
that is like,
not only is this person going
to get really intimate
into your business
with financials and different
things like that, but like,
ultimately there's,
I think an expectation of you
to help facilitate, you know,
the transition
of the existing portfolio
just in the way that,
you know, we want communication
to, of course, be consistent.
Again,
this really is all surrounding
back to this conversation of,
you know, we don't want people
churning out,
because of clawbacks
or different things
that might be in there.
So to me,
like if you can stay really open
with that buyer,
like give them a lot more
confidence that you're kind of
going to be there
and be willing to talk
to some of those clients,
maybe before
the actual transition happens.
Like that's
a really important component
to really have that trust
with the buyer.
I think it's a big thing
for them to.
Yeah, there's definitely a
relationship piece there, right?
I mean, I'm
trying to think of a scenario.
There's
been a small amount of deals
where there hasn't
just been like
complete alignment on I'm
selling my business to someone.
I'm confident that's doing
a better job than I'm doing.
Right?
Like a lot of these sellers
know that they're
they've missed out
on a few things and they're not
they don't
need to change their model.
They did a good job
getting it to where it is.
And and they're,
you know,
overly confident in our buyers
that are just up to speed with
where they need
to be in the market.
So we just got off a call Hunter
and I did just before this,
we have a weekly diligence call
with one of our buyers
who's under contract on It's
just over a million,
I think, maybe,
it's a couple thousand
or more doors, but
there's definitely alignment.
For buyer and seller
like that seller
is confident in our buyer.
They're in there pitching
this buyer to their clients.
They're actually going
through each client
and reaching out to them
and telling them
about the retirement
and what the transition
is going to look like.
And that's a level of commitment
that we don't get
from every seller.
But when we see
sellers like that
that really care about clients,
that's
how we treat our clients too.
And and overall
that's going to help value.
Right.
Like we see that it's good.
Well, it's a little bit of
a little bit of that.
But it also just it's
the client support
and that, that we like to see.
And if someone's already doing
that, great.
You don't need to be up to speed
with every program
that's out there.
But if you've got
those relationships in place,
and you know, you're willing
to pass that on
to a qualified buyer
like that's you're
in a good position
at that point.
See that's an example
of what we were saying earlier.
Like sellers,
if you want to make more money
for your business,
de-risk the opportunity
for the buyer.
And so that seller's getting
ahead of it and saying hey
here's
some risk of these contracts
not transferring
over to our buyer,
I'm going to get ahead of it
even before closing,
and I'm going to contact
all of my clients
and be like,
I vetted this person,
he's taking over,
you're in good hands.
And he's making sure that the
these clients are happy
to transition to our buyer.
So it's like that
seller is getting more
because he's de-risking
the opportunity for the buyer.
And that's that's critical.
One of the things
I wanted to circle back
on, on accounting
real quick, Jens,
because you, you come from,
you have that background,
especially with,
with property management.
And this is actually something
that I'm, I'm
dealing with right now.
Connor and I were jumping
on the call tomorrow
with the seller, to talk
about some accounting mistakes
that we're seeing
in their business. Right.
And so one of the things
that I see
a lot in businesses, one,
if you want to get more value,
get all of your personal
expenses off of business, right.
You don't want to be riddling
your business
if you're trying to sell it.
You don't want
a lot of bad backs
for the buyer, like,
because that's all guesswork.
It's all estimates.
It's all hypothetical, right?
Remove it.
Just have the business
be clean. Right.
But one of the
accounting mistakes
that I'm dealing with right now,
I've got to have a call with
a seller tomorrow to talk about.
Okay.
You think your business
is making seven
figures and gross revenue?
Turns out you, your accountant,
has been counting
gross rents for your revenue,
and they're like, 1.6
million in revenue every year.
And I'm like, wait,
103 or 1.3 million of
that is going back
to the owners,
because that was their portion
of the rent.
So it is it's like,
I don't know why people do this,
but they count gross rents
as their revenue.
And I'm like, that's
that's not your revenue, right.
Don't count
that as your revenue.
But what are some
other mistakes that,
that you see in accounting wise
and the property management
space.
Yeah.
So maybe just on that regard
real quick, don't
forget everybody.
We 1099 owners for that income.
All right. That's right.
And show up on our
on our side of things. Yeah.
I mean, other things
that I've seen is, you know,
a lot of property managers
getting a real bad habit
of of journal
entering their way out of any
that mistake they might make.
And, you know, without having,
you know, I'm not schooled
accounting, by the way.
You know, I learned accounting
through my role
in a property management
business.
But, man, people
get in a really bad habit
of journal entry
and stuff out of the way.
And so, you know, when,
when things aren't lining up
right from account to account.
Well, there's a really simple
method to resolve that.
And it's just a large
journal entry that, well,
you know, we didn't know what
that was for.
We haven't we're not really sure
because we didn't reconcile
account for six months.
So we're just going to like,
yeah, now let it go
kind of through journal entry.
And of course
then that historical stuff
is is so hard to keep,
you know, find.
And so like
sometimes what we'll find is
because of some entry like that,
one of the accounts
is low in the reality of that
is, is guess
who has money into that account.
You do you know.
So so that's that can be
a really big pill to swallow.
know, like under I'm kind of an
operations guy, you know, too.
And so like, the biggest thing
for me on this side is like,
man seller,
if you are not in the habit
of keeping up
with your reconciliations.
Our books
team here that I helped build in
my previous role
is doing your reconciliations
daily, right?
We do them daily because
then that thing that happened
yesterday, we find it
the next morning, Sure.
like, hey, what did that?
What was that
$50,000 of oh, I,
you know,
had to pay this huge bill
for an hour or whatever it is.
Right.
But you know it like that.
And those are those things
that you let them continue on
and on and on for many years.
Well,
you know, you're going to forget
that $800 check
that you wrote to Joe's handyman
that you forgot to enter
in your management system,
and you're never going
to remember what it's for.
And again, the reality of that
is you owe that money.
That is your money that,
you know, to the to the account.
So, you know,
I mean, there's there's
all of those different things.
Anything that you don't have
very specifically
organized that you're
trying to journal entry
out of in
journal entries are okay
sometimes.
But if you're trying to journal
entry yourself out of,
you know, past
you bills that you're
not sure what they were for
or maybe a transfer
for management fees like that's
where you're really going
to find
that some deeper
forensic accounting is needed.
And the reality of that forensic
accounting
is it's it's really challenging.
And it either comes down
to, yes,
you're going to pay somebody
tens of thousands of dollars
to come in and consult and,
you know, do that
forensic accounting.
But the reality of the forensic
accounting is, is, you know,
they don't know the answer
either, necessarily.
So, you know,
if they're not able
to get in there
and clearly see that it was for
some work order or whatever
it was,
you know, the question
ultimately falls back on to you,
which is
what was that money for?
And if your answer is,
I don't know,
then the answer is,
is you owe that money.
Yeah, yeah.
why, you know, from
an operations standpoint and,
you know,
some of the things
that we've built at
PMI to really help
our franchise network with is,
is that books piece,
because it is such
an important component
that is often
an afterthought. Right.
The majority of us are out there
trying to worry
about growing our business
and managing our team.
And sometimes,
unfortunately, accounting
can kind of
just become that necessary evil
that we decide
not to prioritize.
And and I can assure you that
it's not the right thing to do
is you consider
selling your business.
And I'm sure if an auditor
knocked on your door,
you'd probably,
you know, fly to Mexico
really quickly because
you might end up on some money.
I just like us being able
to rely on your team
for that quick insight,
too, right?
Like we try to get you involved.
You know,
as soon as we have a signed ally
and for you guys to dive in
and pull out
some of those red flags right
away,
that makes our job a little bit
easier, too.
Yeah, like an actionable thing
that you guys can take away
if you're listening in is like,
go look at your last
reconciliation,
see if there's any uncleared
items, money
in or money out
that is like older than 30 days.
That's the stuff
that we're really
talking about here
that I'm worried about.
Because that's just the stuff
that it's so hard
to remember what you did
three months ago.
30 days ago.
I mean, even a week ago,
I don't even know what I had
for breakfast today,
you know,
like that sort of thing.
So I forgot to bring a shirt.
So I had to
go find a shirt in the office
and put
a nice shirt on for, for the
that life
happens and you know, things
get prioritized over others.
And for growth,
as we've kind of talked
about ultimately often
takes precedence.
But yeah, as you position
yourself to sell there's
there is nothing better for me
than when I can look at those
financials and just, you know,
within a half an hour say,
yep, guys, this looks good.
And then,
you know, from there, Hunter
now and and take over
and it's great.
I'm just thinking about to
some of the like,
we're working on another deal
right now
that actually had some books
that needed to be cleaned up.
And it's, setting a record.
It's over a year in the works.
That is not common
for us at all.
Hunters is, this blood pressure
is suffering due to the FDA.
But, you know, have they
worked with us a little sooner?
We could have given them some
corrective items to work on.
Unfortunately, some sellers
just talk to us
a little bit too late,
and they're already
kind of mentally done
with the ops of that business,
and they just want
to hand it off
and they'll get more
for their business
because the bank will be
more confident in the deal.
And we could bring it
to the bank sooner.
It'll be a quicker process
if we can just
the sooner we can talk
and kind of give some guidance.
The better.
And so
I mentioned that kind of weekly
due diligence
call that we have
with one of our buyers,
you know, realized
that those calls usually have
anywhere between 4
to 6 PMI team members on them.
So, you know, our
buyers are getting a huge amount
of support from our
our corporate resources here.
It's like I said,
we only want to do good deals.
And sometimes we break people's
hearts and say,
hey, this is not a fit for us.
We might break our buyers out
and say, hey, this is not a deal
you want to do.
so we're super,
transparent about, yeah, times.
specific. Yeah.
We're on the the West coast.
yeah, we'll tell them to run
when they should run.
And, so but like,
I would just say like for
2025, we'll probably end up
doing around
20 million and transactions
across the brand.
And you know, we're not slowing
down our teams growing.
James, your team's growing.
And you know, like
if we're going to hit a big goal
next year like like
what do you need from our team.
You know
like we're going to rely on you.
But like what is there
anything that we can help? Us.
Just a heads up man.
This is a big priority
for us for sure.
You know it.
It helps us
immensely, you know, and goals
that we set forth for the year.
And, know, of course,
we've been talking a lot
about same store sales and,
you know, seeing that growth
of our of our franchise partners
over time,
you know, so essentially
same store sales, maybe just for
everybody is essentially
like looking at the business
at a specific point in time,
and then essentially annually
at that exact same time, you're
you're reevaluating them, right?
In its simplest terms.
So, you know, goals that we set
forth as a team here,
acquisitions,
of course, helps support us.
And so you guys are
some of my favorite people
to work with around here.
Yeah. Helps us. Okay.
Feeling's mutual.
Okay. But.
Yeah. No,
this is still super fun for us.
Like, we're just glad
that we've got other resources
just beyond Hunter and Connor
myself.
Like, it really does take, like,
a full team effort
to have a smooth transition.
And we know of other buyers
that have bought
other companies,
and I've had to hire out
these consultants
to help with transition.
Like that's literally
what our team does.
Like we only do
PGM business acquisitions
in our support teams only help,
you know, transition and grow
PGM businesses.
So like it's a natural fit
for us to just keep, you know,
growing and really exploding
in this in this market.
Like I said,
26 will be a big year.
But we've you know, we've
gone over goal essentially.
You know
I'm trying to think, Hunter
when when you came on board
like it's only
multiplied every year.
So so yeah, expect to be really
busy with acquisitions in 2026.
And I would just say even
for people that are selling,
and if you think you're trying
to sell within the next 12
months, like your conversation,
if it didn't happen yesterday,
it should happen today.
Really getting you
prepped for it
because it might take
a little time
to clean things up and prepare.
And you can work with our team
to, to do that smoothly.
Like I said, we've gotten
that is, we're 450 transactions,
roughly as a department.
And that's only I was talking
to, Jeremiah about this today.
We've actually done
over 500 transactions,
including franchise resales.
So, you know,
I tell people sell about 50
or more businesses, too.
So when you are thinking about,
you know, selling, just realize
there's really 500
plus transactions
under this team's belt to sell.
It's very industry specific.
We're not business brokers.
We are free
consultants, in the space.
So, obviously
our PMI network benefits
because they get to
to buy these businesses
and we only bring in qualified
buyers.
We're not going to,
you know,
if we've got four buyers in one
market,
we're going to bring in a
qualified buyer
for your business.
yeah, I mean, that's
a little background into us.
Obviously we we kind of chime in
about some of these high level
points,
like a little bit of,
self-promotion in there, but,
but yeah, it really does
take a team
like Hunter,
and I cannot do it alone.
And so,
James, you've
kind of been in the background
a little bit,
but I'm glad you're on
the podcast so people know that,
you're really
we namedrop you said
we need to have a video.
Video evidence this.
Oh, it's so fun for me, man.
I mean, I could talk about this.
I could talk about
the perfect business
that I would want to buy
all day, you know, and it.
And not to get us off
on a tangent, but,
I mean, it's even
just more than just
the things we've talked about.
I mean, your team
that's in place
the way that you're structured
and in how you've modeled
the way that that team
effectively manages properties.
So if you're in more of like a,
you know, a pod model
or portfolio model,
or maybe you even just have
a bunch of agents
who are kind of dabbling,
like, again, all of those things
are definitely things
that we want to look at.
You know, we've we've just,
you know,
by nature of our industry,
you know, we've
we've seen both,
the really high
highs of great success
and amazing acquisitions
and converting businesses and,
you know, seeing a business
grow from 0 to $1000.
I mean, can you even imagine
just watching that?
It's the coolest thing.
But we've also seen
the flip side of that.
We've seen the dark side
is, is Hunter mind say we,
we've seen the the Sith Lord,
you know, come into
some of these businesses
and, wreak havoc, you know, so,
you know, we've seen doors leave
because a team member
leaves, right?
And they're like,
oh, I can do this.
I can go take this on
and start their own
property management company.
And now you've lost
a property manager
and 100 of your doors, right?
So yeah, it's
it's really interesting.
Just the,
the entire relationship
we have with the client,
you know, their, their lifetime
value with us is huge.
Door count
of course is a big thing.
But for me at least,
the ratio is more important
than the door count
and the revenue per,
you know, that sets us up
for a really good runway
where anybody
looking to buy that business is,
you know, feels confident
that they're going to
find success with it.
I mean, that's
the ultimate goal, right?
Is, you know,
no one's buying a business
just because they want
to. Right?
There's
some financial goal in mind.
And yeah,
so just a strong business
operation and a
strong business financially,
it's going to demand more money.
Yeah.
We're seeing a lot of,
I'd say the buyer networks
that have kind of,
in some cases, slowed down
some of the bigger companies
that are out there
buying up everything,
maybe paying too much,
have slowed down.
I mean, we haven't slowed down
at all because of our model.
I think mainly like we're
not the buyer in this scenario
or a zero debt business
like there are.
We have buyers that you know,
are taking,
you know, loans
for these opportunities.
But, like our model
and our local buyer model,
I think is really
our strongest play
with acquisitions, utilize
a national resource to help,
with the transaction
and the diligence side
and also that transition side
that you mentioned
being so critical.
All of that is just to support
a local buyer.
So, pretty cool.
Every time
we kind of reflect on that,
like what makes us
kind of unique in the space.
And it's it's a really fun role
that we're in doing this,
this kind of work for people.
Because you know what
I always say?
Like, I mean, there's
because we're changing people's
lives seller side by side.
We're changing
both of these lives, like,
their family's lives are going
to be drastically different.
Working with us and doing these,
these acquisitions
and our buyers,
they're able to do this
not just because of Aaron and I,
but because, you know, James,
because your team
and the rest of PMI
and it's it's kind of cool.
Our goal is 50 million
next year.
That's just I want that to be
the new standard.
Like we're going to be doing
50 million every year
because we're
we're bringing on more
and more franchises
and everything.
And it's like
we want to do 50 million
in transactions every year
because that's changing sellers
lives,
you know,
putting $50 million
out into the market
for for families, you know, hey,
we're paying this out to,
to take over your business.
And that's going to change
your family, right.
But so it's kind of cool
that we're going to be going
for 50 million each year,
but it's also like,
I want the world to know,
like I want everybody
in the United States, PMI,
we are the property management
buyers or what
we're working on right here is
I want to be able
to create this.
It's like a management training
ground here where we can take
property management offices,
teach them how to buy a couple
of businesses to roll it up,
get them to an eight
figure level business
that they can exit from.
You know,
they're not going to be doing
property management forever.
I don't know how long
the ten, 20,
20 years
of doing this or whatever.
And it's like, great,
now you have an eight
figure business
that you can exit from,
and now you know how to go and
do this again yourself, right?
Like you've
you've joined PMI to learn
how to do this, learn
how to be a really good business
operator,
learn how to buy businesses
and transition them and combine
them into one cohesive unit,
and learn how to sell that thing
later down the road.
And then, you know, that's you
just taught a man how to fish.
James, you're a fisherman
like you just taught you.
Just not only
did you give them the fly
and and the bait and everything
like you just taught them, hey,
you need to go dive.
And they said you're
you're looking
in this section of the pond
here, like, now
you know how to go catch a fish
for the rest of your life.
And it's it's a really fun,
model that we have here.
Yeah. It's cool. Like. Yeah.
I don't know how
you guys see it,
but I definitely don't see us
as like an institutional type of
company,
you know, understands point.
It's like, you know,
a lot of the benefit that,
you know, from my side,
of course, that we get is
we see a lot of really
successful small businesses.
I mean, it's it's, you know,
like that's the game we're in.
You know,
we're we're definitely no
Blackrock, if you will.
That's for sure.
Yeah, we're
in a super unique position.
And even when I'm telling people
about PMI
that are not familiar with it,
they're like
super intrigued by the model.
And then I
tell them why it works
and how it's been going
and kind of where it's
been trending.
And it's it's super interesting,
especially for our space.
Like property management
specifically is interesting.
Most people don't realize this
because we promote so much of,
you know,
residential businesses,
but we do a fair amount
of association management.
We do short term rental,
we do commercial,
we do an ancillary
type businesses
including maintenance, and
some janitorial elements too.
So like,
we really are kind of expanding
all these other ancillary
kind of industry adjacent,
to just traditional property
management.
Right?
Most people think it's
a stack of doors, sometimes it's
larger multifamily, sometimes
it's commercial, like I said.
But, but yeah, like, I.
a good, good deal
with residential and commercial.
That's my world I love Told
me too.
So I
like I'm actually seeing like
I'm hoping
that commercial trends
up a little bit more
to just like even some of the
I've seen some like
light industrial type ops, but
I think there's still this world
of like sub 5 million
sub $10 million,
commercial
and even multifamily companies
that are going to be true
targets for us.
I'd say, like historically,
we focused a lot and sub
$5 million transactions.
And I mean, we're seeing our own
buyers exceed those values.
And we have plenty of buyers
that are like, hey,
I want to build this up to
a ten, 20, $50 million company
and are working
with Hunter myself
on like a series
of acquisitions.
So, like,
we're not slowing down at all.
And we are kind of,
you know, chasing
some of these other management
verticals to sell.
Even a mixed portfolio
for us is exciting.
Some buyers, they say, no,
I only buy
residential only singles,
up to 4 or 6 units.
Like we like a good mix
portfolio.
It's got a little HOA in there.
Fine.
It's got some residential
like we're a unique buyer.
I think in that standpoint
that we manage all of that.
Yeah it's a huge unique
identifier for us
I mean, definitely,
especially as you might even
look at some other people
who are kind of a little bit
more true to our model.
Like we're the only one to offer
an a multipolar model.
You know, it's and it's
yeah, it's amazing.
And I think
from the commercial side,
it's really interesting
to, to talk about is,
like residential,
really mature.
So, so it's commercial, but,
you know, commercial, just,
the climate,
if you want to call it, of that
industry
is a little bit tighter,
meaning like for somebody
new trying to enter
the commercial management
space, it's
a little bit of a steeper climb,
right?
Like where
we're finding most of those for,
for our folks currently doing
commercial is like, oh,
they have a residential property
owner who just found out that,
you know,
PMI also does commercial
and they're like, hey, well,
you manage this for me, right?
Or some relationship
you maybe had through a broker
or something of that nature.
But acquisitions,
we definitely see as kind of,
you know, top tier of the
strategies we're looking at to,
really grow, you know,
our commercial pillar as well.
We manage,
today, close to 2,000,000ft²
of commercial space.
But yeah, because it's
a little bit of a steeper climb,
we don't quite
see the same amount of, like,
accelerated growth for people
who are doing residential
as compared to commercial.
But it's end like once you crack
that, then you're in right?
And you're in the,
you're in the club.
And so yeah, we see
acquisitions is a really awesome
strategy to, to help us grow
that side of the business.
I was just thinking
about our Arizona guys, and,
we've worked with, a PMI office
down there.
I think in total,
we've probably done
eight or more transactions
with them. 100.
You do you know that about eight
or more with that office?
It's up there.
It might be more than that.
Yeah.
And so they've they're actively
targeting commercial now too.
I mean they actually already
maybe one of our largest
operators in that space. are.
Yeah. Like I think top three.
Okay. Yeah.
So I know that they're actively
targeting commercial to.
And so I think we will see that
trend come up.
I think we're going to see
more more multifamily.
I mean we have a amazing amount
of kind of pipeline deals
that are coming through,
and the majority of them being
kind of residential focused.
But, as far as like,
you know, we're talking a lot
about 20, 26 planning ourselves
just on our team.
Like how
what are you guys seeing
just kind of
as we wrap things up like what
what are you expecting for 2026?
You got to plan ahead, man.
We're.
Yeah.
Two. Three.
about, like,
you know, year over year
if you kind of
look at it on average, like,
we typically see about 20%
growth of the pillar, you know.
So I think that's a pretty
realistic expectation of
like what
we'll see for, for next year.
So, you know, somewhere
in the range of,
you know, an additional 5
or 6000 doors under management
or of course getting set
our goals much higher than that.
But I think that that's maybe a
realistic kind of view of that.
You know, so, so end of 2026,
give me back on the podcast
and, I'll be
Yeah.
I think if we just double those
numbers now and I'm like,
yeah,
we're going to bring you
at least $10,000 or more, like,
easily.
Like I'm not even worried
about that number. So.
man, you guys are in
a really important to
to our equation
as it relates to those numbers.
So absolutely.
It's for sure AT&T is like
we couldn't do what we do
without the rest of the
the squad.
Like we really do
rely on a lot of people here.
I feel like I'd love to show
we should probably plug in,
employee photo at some point
so they realize it's not just 2
or 3 people on a podcast.
Like there's literally
there's 100 people here that are
making the thing happen.
So, yeah, for sure.
Now, I definitely
appreciate that.
But yeah, I know
I thanks for jumping on here.
I know,
like we'll rant a little bit.
Obviously
it's always fun to chat.
And I think our whole office,
we all get along
really well
and work together well.
So I don't know if every office
out there can say that,
but I think we can confidently.
Yeah.
Totally
completely agree.