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HIGHLIGHTS FROM THE PODCAST With Michael Zuber:
2:22 - How Michael Zuber started in real estate 9:32 - Michael's outlook on keeping his day job and investing on the side 13:45 - Michael takes us through the journey of buying one property at a time 23:30 - How Michael manages his portfolio 29:37 - Matthew and Michael discuss the two most important factors in real estate. 31:36 - What a typical day looks like now for Michael 35:21 - Advice for Out-of-state investors FULL TRANSCRIPT OF THE PODCAST AUDIOMatthew Whitaker: The company can only grow as big as the leader's ability to lead it. And if the company ever outgrows me, then I either need to be replaced or the company will shrink back down to the size of my leadership. So I feel a real sense of urgency not to be the limiter on the growth, and to continue to personally develop myself. Spencer Sutton: Hey, everybody. Welcome back to another episode of 300 to 3,000. I am one of your co-hosts, Spencer Sutton. And I have got my other co-host, Matthew Whitaker, with me as always. Matthew, welcome back to the show. Matthew Whitaker: Yeah. And we've got a special guest today, which I'm really excited about. We figure people are probably getting tired of hearing from the two of us. Spencer Sutton: Yes. Matthew Whitaker: Brought in my good friend, Duke Dodson from Dodson Property Management. Welcome, Duke. Duke Dodson: Thank you guys for having me, always a pleasure. Matthew Whitaker: Duke- Spencer Sutton: Good to have you here. Matthew Whitaker: Yeah, we're excited. Tell me a little bit, just for the audience who might not know you, and everybody does know you. But for the one or two that might not know you, tell them a little bit about you and how you got into real estate. Duke Dodson: Sure. I live in Richmond, Virginia. I started Dodson Property Management in 2007, so we're 13 years old now. I got an interest in real estate from the investment side. I'd bought a couple rental properties, got obsessed with investment real estate. And after I bought three rentals I was looking for a property manager and couldn't find one that I liked, and so I decided to start the management business. And that led me down the path to where we are today. Matthew Whitaker: Was that a good decision, or you regret that every day? I got into this business when Spencer sold me a house, and I regret the day I met Spencer Sutton. Spencer Sutton: That's right. He's making me pay for it right now. Duke Dodson: Yeah. Obviously in property management there's lots of headaches. I mean, I would argue there's probably more headaches per dollar earned than any other industry in the world. That being said- Matthew Whitaker: The whole point of the job is a headache. Right? I mean, yes, what you are is... you deal with people's headaches. It's like, "Hey, I'm going to pay you money to deal with all my headaches." And we're like, "Yeah, sure. Sign me up." Duke Dodson: Yeah. I always say there's a lot of easier ways to make a living in America, but I haven't found one that I liked better, that I'm better at. I've got no complaints. There's certainly hard days in this business, but I've enjoyed the ride quite a bit, and I can't imagine doing anything different, to be honest with you. Spencer Sutton: So you said you started in 2007, so you were buying houses before that. So this was before the market started to turn, correct? And then you started it maybe- Duke Dodson: ... rental properties, then the market crashed and my net worth was minus a lot. Matthew Whitaker: Mine still is from that same crash. You're lucky you were only three deep at the time. Duke Dodson: I'll tell you what, I won't go down a rabbit hole a lot, but I will tell you this one horror story. I bought a condo, a rental condo in Myrtle Beach, South Carolina. Outside my market. Bad idea. Matthew Whitaker: You broke all the rules of newbie investing. Duke Dodson: Yep. It was $112,000. And the day I closed it appraised for 127, so I thought, I'm a genius. I'm just printing money here, right? And then the market crashed. And when the market crashed it was worth $35,000. And I owed 100. Again, 90% financing, so I owed a $100,000, it was worth 35. And here I am, a 27 year old and my net worth, just that one property, it was $-65,000. Now fast forward 13 years later, I paid my debt from 100 down to 79, and the value's gone from 35 up to 65. So 13 years later, I'm still upside down. Matthew Whitaker: You're closing the gap, though. It's getting there. Spencer Sutton: I just sold two properties this week at a loss, from back then. So I know the pain. Matthew Whitaker: I had to come up with some money to do it. So- Duke Dodson: Year arm or whatever, or five year arm. So it was interest for five years, and the rate adjustment. It was everything you could do wrong, man. It really was. Matthew Whitaker: All right. I want to get into the subject of this thing. We could talk all day about our mishaps, because the three of us have a laundry list of them. The goal of this though is, we're talking about how companies grow from 300 homes or 300 units to 3,000 units. And one of the biggest things I want to talk about with you is just strategy to do that. Dodson Property Management has done a little bit different strategy, or I would say a real different strategy than us. And let me see if I can do a good job of framing it. You have decided to do multiple verticals. What I would say, going deep with a number of different businesses in one market, in your market, Richmond, Virginia. Versus us who is doing essentially the same thing, which is property management for single family and small multi-family in different markets. So we have gone very wide in terms of markets. And so wanted to talk about just the difference in strategies. I don't think there's any wrong strategy. But I'd love to start with, was it a strategic decision or were you just adding things just to make money, to go during the different verticals in one market? Duke Dodson: You know me, and you know me the second one. It wasn't this master strategy on day one. It was, I managed a couple single families and a guy had a duplex. And I said, "Sure, I can do that." And then another guy had a six unit building, it's like, yeah, I could do that. And then, if you can manage six units, why can't you manage 18 units, right? So, worked my way up the food chain that way. All things considered, I think the way you guys do it, I guess it all depends what your goal is, right? If your goal is to build this thing and sell it, I think focusing on just single families, especially in today's world, is a much smoother path. And the one you're taking for your goals, I would say it's a much smoother path because you do one thing, you do it over and over again, you get really good at it. You build all your processes around that one thing. And it's probably a smoother path. Matthew Whitaker: You know for 15 months I didn't sleep. You're telling me, it's just really much easier to do it your way. What I've done is this the harder of the two. Duke Dodson: Well, I mean, I've had some sleepless nights,. I mean, Matt, you had one business that you're trying to grow through no man's land. Imagine having five different businesses you're trying to go through no man's land. But no. So my path was more about, I came in as an investor. So I networked with other investors, I found investors interesting. And some investors kept doing single family, some did small multifam, some did commercial. I wasn't attracted to the development side of the world. And so I wanted to develop property. Being in Richmond, and our office being in the city, we're in an urban environment so there's a lot of six unit buildings over top of retail. And we manage a lot of those. I couldn't imagine being in Richmond and saying no to those, right? Duke Dodson: Some of our peers are in, say Atlanta, and the lane is so big they can do just Northwest suburb of Atlanta and have enough single families to support a business. I don't think we could have done that in Richmond doing just one product type. I could have done some single families in Richmond and then moved on to other cities, like you've done. But to grow the business I wanted to grow, we network with a lot of investors. And I wanted to be the solution for those folks as they bought multi-family and commercial properties, so we learned how to do it. Matthew Whitaker: And give me an idea of the scale of Richmond. How big is Richmond? Duke Dodson: I think 1.3 million, the greater metro. Matthew Whitaker: Which is almost exactly like Birmingham. I think we're at 1.2, so really close. We have a friend, Cliff McHugh, who is doing multiple verticals in one market in Chicago, that's just millions and millions of people. But I think the point here for me is, you are I had essentially the same decision to make. If we're going to grow a really big business, we're going to have to do more than just single family rentals in Richmond or Birmingham, Alabama. And so we decided, hey, we're going to go out and open this single family and small multi-family rental business in multiple markets. And you said, hey, I'm going to be the 800 pound gorilla in Richmond. So talk about, what are some benefits you see of essentially your strategy? Duke Dodson: So I think the benefits cross-selling and just brand awareness is easier for us than some folks. For example, we have an HOA division, right? And if you live in an HOA, we manage thousands of HOAs, so those people see our name. And when they want to buy a rental property or sell rental property, or an investment, a development deal, or whatever it is, our name is usually at the top of their list because they see us everywhere. Right? We couldn't be everywhere across the country or even in 10 or 15 markets, but we can completely envelop a market through Google search, through signage, through referrals, through relationships. The same banker that does a deal for me for a 12 unit building is going to do a deal for this guy for a 40 unit building, and do this guy for a commercial building. Duke Dodson: And if we're in that guy's ear, we're going get all of those referrals. Right? And so that's the benefit. If our audience is the NARPM world, which it probably is for this podcast, then I would say from 75 to 90% of the people out there, I would say your path is the one that most of them are following and the way to go. It's just a clear path to success. But I guess the greater lesson I've learned is just, do what makes you happy. And I think you are doing what makes you happy and that's why you're doing it. And you're going to reach your goals doing it that way. And what we're doing, we probably create more headaches than we need to doing it our way, but that's what I want to do and it makes me happy. Duke Dodson: This job is great if I do what makes me happy. And if I was following a path I didn't want to follow, I would be miserable. I don't think I could do it two weeks, much less 13 years. You know what I mean? I think there's something to be said for just beginning with the end in mind, and doing what you want to do. And to be perfectly honest, if I sold my business for 60% of what I could have, if I did it a different way, that wouldn't make me any happier. You know what I mean? I mean, to be crystal clear, the way we do it by having five different divisions, that's five different sets of processes. I need a department head for each of those. Those people aren't cheap. If they're good at running a department they're expensive. Duke Dodson: Eventually, we've gotten to scale in most of the five divisions where now it makes sense. Now it's profitable. But if I did just single family, I would have been at scale a long time ago. It took me a long time to get multi-family and commercial to a certain scale where it makes financial sense to have it. Matthew Whitaker: I think there are similarities though. I think our similarities are the fact that when you have a, what we call a team leader in a different market, is that business profitable, right? Yeah, all the systems and processes, and you can basically carry over and have one person working in multiple markets, maybe remotely. But you still need a really capable person to run that business. And until those businesses, what we've seen, get to two to 250, maybe 300 homes, they're just really not profitable. And so I wouldn't say they're too dissimilar. And you actually brought up, which is a book you... Why didn't sleep for 15 months. The book, No Man's Land. Talk a little bit about the journey. And I think this is the journey from 300 to 3,000 in our world, which is the whole reason we created the podcast is to help people essentially go through what you and I have learned as no man's land. Duke Dodson: Yeah. I heard this speaker at a conference right around the time we were starting to feel the pain of no man's land. So we learned that term and heard the guy speak, bought his book. And it just made me feel terrified in a way, but also made me feel better that I wasn't the only one going through this. And there was a time where we were growing, and each year for the first, I want to say six years of our business, each year we grew in revenue and our profit margin increased. And all of a sudden we hit this wall where our profit margin decreased and went negative for a while. And as we were growing, and as a young entrepreneur your first instinct is, am I doing something wrong? What's causing this? And you don't really have all the answers. Duke Dodson: So the book helped me understand why. And it's pretty clear now. Looking back, it makes sense. Your business starts to get to a scale where it needs this infrastructure that you can't quite afford the infrastructure. And the infrastructure means maybe you need a CFO or a controller, head of marketing, and you need a head of sales. You need an HR department now. You need all these things that you can't quite afford. And in today's world it might be a little easier because there's fractional resources, or fractional controllers and fractional CFOs, and fractional HR departments and all that. But you still have those problems. Now I've forgotten your question now. You just said- Matthew Whitaker: No, we were just talking about no man's land. I mean, even for those fractional things though, you're paying a premium on the actual hour spent. Duke Dodson: You definitely are. Yeah. Matthew Whitaker: The other thing is just building in layers of management. When we were managing 300 homes, it was all about how well I could be a property manager. And then as we grew past 300, we started developing other people that were managing other people. And then it was, how good of a leader/manager was I? And that's the thing we often talk about with our team leaders in each market is, once you push past that 300 home barrier, you're really going to have to start leading people instead of managing properties. It becomes a different business. Duke Dodson: Yeah. Spencer Sutton: I want to touch on something that, Duke, you mentioned. Staying in your market and growing and developing all those relationships, this is something that we learned the hard way as we moved into Nashville, which was our first market outside of Birmingham. Was the difficulty. We went into Nashville not really having a lot of relationships, not knowing a lot of people. And so it makes Matthew Whitaker: With a lot of humorous though. Spencer Sutton: Yeah, with a lot of humorous, tons of humorous. And you just think, oh, we're going knock this thing out of the park. But you don't have those relationships. Matthew and I were both investors in Birmingham, so we had a lot of the relationships and knew a lot of people. So we were getting tons of organically. If you're thinking about going and starting in another market, you're going to have to rely on paid ads. So the cost of acquisition climbed, it goes up and up. Versus, just having these referral relationships that you've had maybe for 10 or 15 years. So I think it's something definitely that is an advantage if you're going to scale in your own market. Duke Dodson: Oh, definitely. And we've learned that the hard way too. We started our second market, single fam only, we started in Williamsburg, which is 45 minutes East of here. And a couple things. Number one, it wasn't big enough of a market for us to really sink our teeth into. And second, we started from scratch. We literally started with zero units and tried to climb our way up, and it took a long time. I think we did it for three years and we might've been at 100 units in three years and realized the most we're ever going to get to that market is 250 to 300. Is it worth fighting this battle for 10 more years to do that? And we thought, no. So we sold that and we learned kind of what you guys are learning. Duke Dodson: Our next market we acquired our way into it, Fredericksburg, which is an hour North. And that market is big enough to have a substantial business. We're at 300 units there and it works. But I probably wouldn't start again less than 250. But yeah, to your point though, you look at what you did in your first market and you think, okay, I'll do that there. And you don't have all the things there that you do here. One of them is you, right? One of them is your focus and your energy, and your maniacal desire to make enough money to eat. Right? Spencer Sutton: That's right. Duke Dodson: Most people never start a business, they don't understand that because they've had a job that pays them a certain amount. When you start a business, you really want to eat food and you want your family to eat food, so you work really hard to have enough. And that is really hard to replicate in another human that doesn't own that business. People always say you're not going to find people that work as hard as you. And maybe that's not really true, but there's a combination of the hard work and the desire and the need to survive that made the first market a thing. Right? And, to your point, maybe the business may be only three years old, but you lived in that market for ... you might have 10 years of relationships. And that's not replicated in the second market, so it's a different animal. Matthew Whitaker: One of the challenges we have too, is having to acquire to grow into a market. Like you mentioned, we need some sort of capacity to... And we're looking at some other strategies. We're actually trying a new strategy, about to announce a new office that you already know about, but about to announce it publicly in a new city. So we're trying to organically grow a business. But it's really expensive to acquire a business to move into a market, but it certainly is the best way to do it because growing one from scratch is almost impossible, because it's hard to replicate the hustle, hard to replicate the relationships when we got started. Duke Dodson: Yep. And you started at 250 plus units. For us it would be three people. One of those people can be fairly highly paid so they can be good at running a business and growing it. And you have three people there trying to grow it, each of them not overwhelmed with one particular task. And so I think there's a lot to be... And there's enough clicks to your website, enough signage where you can start to get some SEO in those secondary markets. Matthew Whitaker: Talk about some hurdles of, and you have mentioned some, but talk about some hurdles of growing deeper in one market with multiple lines of business. Duke Dodson: I mean, the challenge is having enough scale in each of those divisions to have the appropriate expertise. Right? If you're, for example, for us multifamily was the thing that came second. We were trying to grow multifamily in our market and we had 700 units, and that's not very much in multifamily. So the team we could acquire, we could staff, had to manage it and grow it. And you're competing with people that manage 5,000 units, 40,000 units. And so they're going to have better everything than you, as far as all your marketing and your HR, and your just accounting and financial reporting. So really trying to compete there, you're almost faking it until you make it, to a point. So I think that's the challenge, is affording the right head of department and team so you can grow, but compete with folks much bigger than you. Duke Dodson: So that's a challenge. You start having software and integration challenges. It's just, not every division wants to run on the same software and the same systems, that can be confusing and frustrating. If you're doing just single fam, like you may know, for example, Matthew, how your team does everything. What software they use, the processes, all of that. It's impossible for me to know that. And so I don't know. I trust each department head, but I don't know if they're doing it the way I would have done it. They're probably not. Hopefully they're doing it better, maybe they're doing it worse. But that's a risk you take by having multiple divisions, as you, as the head of the company, can't oversee everything. Right? And so instead of me building a system of how to manage a single family home, I'm building a system to build systems. That's my job, right? Some kind of framework for each department head to build systems, use the right tools, deliver the right customer experience. That's ultimately the goal. Matthew Whitaker: You're giving me a lot of credit for things I don't know sometimes. Spencer Sutton: And he doesn't know what's going on anywhere. No, I'm kidding. Matthew Whitaker: I have a goal I heard Robert Locke one time say. I have an AppFolio login, I just don't know what it is. That is my ultimate goal. I still have one. I honestly couldn't tell you what the password is. If I ever have to get a new computer though, I will have to figure out what my password is. Because I am to the point where I'll only get to log in to AppFolio maybe once a month. So pretty excited about that. That's one of the benefits of growing a big company. Duke Dodson: Yeah. I'll tell you a quick Betty Fletcher story. Betty Fletcher, from Little Rock. You know Betty well. She came to speak at a conference in Virginia when I was just starting off. I was in year one or two, I had less than 100 units. And I was the only employee. So I'm in this conference and my phone's blowing up, and I'm returning emails and I'm stepping out to take calls. And then Betty, during this presentation said... She was telling me the importance of hiring and delegating. And she said, "I now get clients or properties where I've never met the property owner. Never seen the property. Never met the resident." And I couldn't believe her. Like I couldn't believe. Right? So that's step one is getting to that. Step two is the Robert Locke, never logged into AppFolio issue. I'm not there yet either, so don't worry about that. Matthew Whitaker: Talk about, you mentioned something right there about acquiring talent. I think no matter what your strategy is, we all agree that finding the best people you can possibly get. I think the other thing you mentioned was a real challenge to find really good people. Because some of the bigger operators have incredible health insurance, incredible things that it's hard for you to duplicate as a small operator. How would you suggest finding talent regardless of which strategy somebody chooses? Duke Dodson: What has worked for us is picking a path, meaning the path for us is we're going to grow and we're going to provide opportunity, right? And so that's our sales pitch to people is, it's not a dead-end job. You come here, help us grow, and you have opportunities. And for the most part, that's been true. The second, people talk about culture all the time. And I think people are tired of hearing about culture, but it's still really important. And it almost is not cool for our culture to talk about culture. It has to be so organic and authentic and easy, but it's not easy. Right? So the second thing is just creating an environment in which people want to work. That was about 2007 through 2015, those first years. Our competition provided such bad jobs for people, meaning, go sit in that chair, do what you're told. Duke Dodson: You're going to get people to yell at you. There's no room for growth or advancement. Everything you asked me for I'm going to say no. That was what our competition, that's what the market was like. The labor market was so inverted back then that people thought you could treat people like crap and they would just keep coming back. And that isn't the case today, clearly. I mean, even pre-COVID the labor market was as good for employees as it's ever been. Still pretty good, I think it's coming back for employees. But just providing a place where people want to work is the best way to get people to do great things. You can't attract a great employee with a subpar culture. They just won't stay and they won't contribute. You can only do so much lifting as the ptenant or exec team member, whatever. It has to be done by some people other than you, they have to be the champions of the culture. They have to be bringing energy to the building and making this place awesome. And so they're not going to do that if your culture is crap. Matthew Whitaker: I think there's also some pressure to grow the business once you start to get really good people around, because they want to have more and more opportunities. This is something that we've talked about a bunch as an exec team. Is saying, "We have to grow the business because we have all these wonderful people that are going to want to do more and more and have more responsibility, and make more money really fast." And we feel the pressure to continue to grow to meet the demand of them. Now, obviously that's not a great reason to grow. But if you want to keep good people around, you're going to have to at least think through that. Duke Dodson: Yeah. I think I found most of our jobs here, if you're a good employee and you work hard and you have any level of ambition. Like if you do the same job for more than three years, you really start to burn out. And so there's some times they can hop laterally or hop to a different department, which is fine, but eventually they're going to want to go up. A lot of them will. And so it's a little bit of a pyramid scheme. Not everybody can get a promotion every year, right? So to your point, we work really hard to grow for that reason. But you're still not going to make everyone happy because there'll be more people than there are opportunities. Matthew Whitaker: Let's say, 2008, 2009 all over again. You're back at the beginning. And you have an opportunity to be more intentional and more strategic to get to where you are now. My question is, which path would you have chosen? Would you have done the path that you do now, or would you have done the single family path in multiple markets? Duke Dodson: Again, I think it's beginning with your end in mind. And I think for most sane humans they're going to choose the specialization path, doing just single family management. Because it's easier to do one thing well, and that one thing is the most profitable part of our business. Of all of our five departments, single fam is by far the most profitable per door, per any metric. And it's more sellable, right? It's more, if you want to exit this business, single family manager companies are very liquid right now. The other parts, you can find a seller for the other divisions, but it's not as easy. So I would say for most humans answer is specialize. I'd say for me, I still probably would have done it the same way. I would have done some things different. I would have maybe instead of starting a division I would have acquired a division somewhere if I wanted to have it. Duke Dodson: But for what we do now development-wise, we're built so whatever we develop we can manage. And a lot of what we develop is urban, mixed use, office, retail, multifam. We're doing one development now that is going to have two HOAs. And it's really cool to have those parts of the business there to manage. In 25 years, I hope that we are 50% of... So if we develop, is 50% of what we're managing in 25 years. And I don't want to develop something and give it to someone else to manage, that scares me. Because you know how hard this business is, how many people do it well, and it terrifies me to just hand off the keys to someone else. Matthew Whitaker: What do you think the future of the single family property management world is? Duke Dodson: I think more consolidation, but I still think there's always going to be room for the boutique, the mom and pop owned shop. That small business that provides really good customer service. Tom and Susie, the owners, who take the calls at night, seven o'clock on a Tuesday night to put their client's fears to rest. And I think consolidation will be a big thing. I'm not sure it's going to push people out of business, as some fear. But I think it may continue to push the envelope as far as what level of service is expected. And then maybe less fees. As more and more people do it, and do it well, there's more smart money to find a way to do it more efficiently, and that will eventually probably drive margins down. Spencer Sutton: So Duke, what's next for Dodson Property Management? I mean, you've got five divisions, you mentioned 25 years from now. So what's on the horizon? What's in the next five years for you guys? Duke Dodson: I think a couple of things. I think there's going to be some organic growth, especially in the multifamily commercial divisions. And I don't know if you can tell, I got this sun hitting me right here. I'm trying to move. Okay. Multifamily, commercial, and what we call tweener, which is small multifamily, I think those will grow mostly organically as our clients continue to buy more properties in other markets up. So our growth will be, those departments will go that way just to relationships more than anything. I think single fam and HOA will be more kind of what you guys do, like acquire in a new market and grow it from there. And then continue to acquire them the same market, which I know you guys have done that. We've done that in Fredericksburg, for example. Duke Dodson: And I think development will become a bigger part of what we do. Let me give you some scale. Our development team is two people, and our property management team is 100 people. And so our development team is really small, but it's pretty mighty. It's been growing in expertise and track record and brand. And I think we'll develop multifamily, commercial mostly. Some mixed use. And I think that will build our management teams as well by managing the stuff that we develop. Matthew Whitaker: All right, Duke, one of the things we asked on one of the podcasts was for people to submit questions, anything they wanted to know. And I got a LinkedIn inmail, or email from Jennifer Ruelens. And one of her questions I think is very applicable to what we're talking about. And I'm going to ask you, and then I'll try to answer it. I'm sure I won't answer as well as you, but maybe I can fill in some of the blanks. So the question is, at this point in your journey, what was surprising about the changes it required of you personally? Duke Dodson: That's a good question. And this is something I think Matthew and I have talked about over the years at mastermind. I think, what makes you good when you're one or two or three person company is different than what makes you good when you're 100 person company. And it might change seven times between three employees and 100. And so I think each hurdle you try to jump over as you're growing a business, you have to just be honest with yourself. What does it take to be successful at that particular point? And am I good at that, right? And hopefully you are, and hopefully you can learn to be good at it. And if not, you need to supplement yourself with people around you that are good at the stuff that you're not good at. Duke Dodson: But I think it's a constant quest for being curious, and a constant quest for wanting to win and overcome those, jump over those hurdles. Which, each one gets a little harder and each one's different. And each one takes a while to figure out what it is before you can even jump over it. But at the end of the day, you really can't be great at everything. But you can be honest with yourself about the gaps you have, and then hire really good people. Or bring on partners or whatever it is to supplement. So really her question is not just one thing, I think you and I probably reinvented ourselves probably seven different times in the last 10 years. I would think. And if you don't, you're going to hit a plateau and you'll probably stop growing. Matthew Whitaker: Yeah. I would say I'm actually reinventing myself now. I'm actually meeting with a coach that is helping me with communication, including things like this podcast, how to communicate with my team, communicate via video instead of being in front of people. Which makes a lot of sense for a remote team, right? And I'm not good at communication, but I'm getting better. But I started to realize how important communication was. I was telling somebody recently, there's not a, let's say two weeks that ever goes by, it's probably twice a month that I have a conversation that is worth probably more than a million dollars to this business in some form or fashion. And those are important conversations. You want to make sure that you get that communication right. Warren Buffett talks about communication. If you could teach somebody public speaking, it increases their worth, their value as a team member as much as 50%. Matthew Whitaker: And as we've started to grow the business, the business has gotten bigger, I see that, 50% may actually be undervaluing it. Because if you're talking about millions of dollars in conversations that are going on, wow. The lifetime value of having a lot of really good communication, really good conversations is really big. The other thing I would say is, it gets back to the technician versus the entrepreneur from the e-myth world, right? A lot of people get in this business because they're great property managers. And you said, hey, the future is going to be bright for the boutique managers. And I believe that too. I really feel like if you're a great property manager and you want to essentially own a business. And you're the genius with 1,000 helpers, and it's you, you've got a team of people, that is okay. That's a very profitable business. Matthew Whitaker: And I actually heard a podcast recently that talked about how profitable that business can be because you know so much about property management. But it takes a completely different skillset, which is why you and I have had to redefine ourselves to manage 3,000 units than it does to manage 300. Because it begins to be all about the people, all about the leadership. Back to communication. It's just really important for you to become a different person. Or if the role's just different. Very rarely do I make a decision about a clogged toilet anymore. And so it becomes more about people management instead of property management. Duke Dodson: Yeah. Yeah. And to be honest with you, every two years I have a freak out. Like, holy crap, am I the right person to run this business? And sometimes I think I am, sometimes I don't think I am. And then I try to pinpoint, okay, what is it? What would I hire in this position if it wasn't me? And then so far I've been able to figure that out. Okay, well I seem to be better at that. I need to learn about that. I need to be coached on that. But I mean, I'll probably have a freak out again in two more years. Duke Dodson: And I think that's okay. Right? I think it's, freaking out is probably too harsh of a term. But just being self-aware of what you would want in a leader, right? Who would you follow? And who would you want to get up and work for everyday? And if you're that person, great. And if you're not, pinpoint why and try to figure it out. Matthew Whitaker: John Maxwell, who's a leadership expert, calls it the law of the lid. And I often think about it. I don't want to become the lid or the limiter on the growth of this company. And the company can only grow as big as the leader's ability to lead it. And if the company ever outgrows me, then I either need to be replaced or the company will shrink back down to the size of my leadership. And so I feel a real sense of urgency going back to great team members. I feel a sense of urgency not to be the limiter on the growth and to continue to personally develop myself, listening to podcasts, reading a bunch of books. We both love to read. So thank you to Jennifer Ruelens, she is the co-founder and broker of One Focus Property Management. So thank you so much for sending that. She actually sent us a whole list, so maybe I'll read off another one at some point. Spencer Sutton: We will have some of the other ones. Spencer Sutton: All right. Well that does it for another episode of 300 to 3,000. I want to thank you, Duke, for joining us on this one. Really appreciate, you and Matthew have developed a great relationship. And I know that he's speaks very highly of you, and you guys in your mastermind helping us grow. And so thanks again for being on our show. Duke Dodson: Yeah, thank you, Spence, thank you Matthew. Always a pleasure, gentlemen. Spencer Sutton: All right. If you haven't already subscribed to this podcast, make sure you do so. Leave us a five star review and we will see you on the next episode of 300 to 3,000.
