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The 1st Episode of the Property Management Show brought to you by Alex Osenenko, CEO of Fourandhalf.

If you've ever wondered how to buy or sell a property management company, then this podcast is the one for you.

Hello and welcome to The Property Management Show. I am your host, Alex Osenenko. My day job is serving as the CEO of Fourandhalf, a marketing company working exclusively with feebased property managers. I have spent the last seven years of my life helping property management companies become more successful by improving sales, marketing and operational efficiencies.

The topic today is how to buy or sell a property management company. That’s a vast subject, and our guest is certainly able to speak to the topic and clarify many of the different things that can confuse the issue. Not a lot of property management companies are bought and sold every year. There are only a few experts, and Mike Catalano is one of them. He is the CEO and president of a company called Real Estate Connections in the Bay area. He’s also an angel investor and a good friend.

Q: Let’s start with a question that I wonder myself: Why would someone buy a property management company? What are some of the reasons behind this?

Buying a property management company is the fastest way to grow your business. It’s always great to grow organically and advertise online, and you want to attract more business through word of mouth and referrals. Those are great strategies to maintain your business and allow it to grow at a decent pace, but the quickest way to grow a company is to buy one.

Q: So buying a company is essentially a way to expedite your own growth?

Absolutely. If Google can guarantee that you can get 200 new properties in a year with advertising and search, but you can also do that right away by purchasing a property management company for the same amount of money that you’d pay Google, you’re getting a good deal.

This market is so hot right now and everyone wants to buy a property management company, so the evaluations are similar. If you’re buying a larger company, they will have everything in place. Mom and Pop shops are smaller but there are some really good ones out there and they manage to stay in business by staying small. Larger companies have policies and procedures set, and the office dynamics are in place, so coming in and implementing things goes fast. Right now, with the way people have realized you can make money in property management; the evaluations have been pretty similar all around.

Q: The appeal of consistent recurring revenue makes property management a great opportunity and it’s appealing for a lot of people.

That’s why a lot of Realtors get into it. With low inventory, and nothing to buy and nothing to sell, Realtors are getting into property management themselves.

Q: So it’s a good idea to contact competitors and give them an opportunity?

Yes. Early in my career, I kept everything close to the vest, and I didn’t want to tell anyone anything. But now that we’re established and working so closely with NARPM, we do have competitors who we talk to a few times a year and those relationships are positive. If I ever wanted to sell, I can think of three or four companies I would want to contact.

Q: If you’re not part of it, the National Association of Residential Property Managers, NARPM, is the best organization for networking and information. It’s hard to imagine how competitors come together to share ideas and benefit each other and their clients at the end of the day. Because of NARPM, everyone is able to talk about new strategies and techniques and technologies. Part of the reason property management is finally getting the technology it deserves is because of NARPM. Vendors like AppFolio, Buildium and even us – Fourandhalf – we can come in and actually have a closely knit associated group of people who are interested in our products. There’s a good demand for us to improve and innovate, and NARPM is part of that. The property management industry went from obscurity to a great business to be in.

That’s true. The collision of technology and property management has been beneficial. The property management industry was historically pretty stubborn when it came to technology, but that’s changing. Technology alone and marketing has a huge impact on companies. If I was going to buy a property management company and I saw that they were using AppFolio or Fourandhalf and all this technology was working; that would make the property management business a more soughtafter company to purchase.