This was the story of my first company I sold. And I learned quite a lesson. In 2014, I was getting ready to launch my second company Mile27 Realty (at the time we called it Real Estate Concierges and later re-branded it to Mile27 Realty) with my partner Jay. I has built and was running a property management division where we managed 55 residential houses, condos and townhomes around DFW. Honestly, it was a hard business and it rarely gave me joy so I was faced with a decision. I either needed to scale it or sell it. When I thought about future Heather, I could not envision actually building a huge property management company mainly because the very thing that allowed us to grow our entire company organically by word of mouth was that we cared so damn much. Probably too much, which is what burnt me out and made me realize how hard it was. I felt like I had 110 Children at all times (55 landlords and 55 tenant households) that I cared for, wanted to respond to quickly, and do the right thing for. I had no idea that we were even good at what we delivered and how rare it was to find the very criteria that I thought was so standard. Care, doing the right thing when no one is looking and just doing what you say you are going to do when you say you are going to do it. Sounds simple…but turns out it is super hard to find these traits.
Here is a pic of the team (minus my brother) before we sold it. The blonde on the end to the right was actually a former tenant who came to work with us.
When I was starting to face the reality of exciting property management in 2014, I did not go out to interview and sell to the highest bidder in the DFW property management space. I had my eye on one and only one company at the time. It was who I thought was my mentor. This guy, let’s call him Matt for the purposes of anonymity, had been in the property management business for 30 years, built the 2nd largest property management company in DFW from the ground up, was on the TREC committee at the time for making improvements to the lease, and did face to face lease signings to make sure tenants clearly understood what hte lease meant, their responsibility and how to care for the house. Additionally, he was a teacher at our Real Estate school in which I learned and received 2 multi-class and almost year long designations under the leadership of. Basically he was a super huge bad ass in our property management world I wanted my clients to have the best, so I picked him and had blinders on to any other person of interest. The only thing that worried me about ‘Matt’ is because he was in the business for 30 years already, I was curious how much longer he planned to drive his ship. When I asked him this question, he looked me square in the eye and said…I dont plan on going anywhere.
Let’s just say that we made an agreement on 6-19-19 and two months later he had his company sold and notifications were sent out on 8-18-19.
For me, it really was not about money, it was about placing my clients with someone I trusted. I am and have always been a long term thinker, like 30 years. I build long lasting, client for life relationships and believe in treating people right. That is how I built both of my companies almost entirely thru word of mouth and with very little marketing. I sincerely just wanted the very best quality and care for my clients portfolios…which is why I picked his company in the first place. But for him to know he was going to sell his to a mega company and all the high quality, caring, high touch elements that made his company and reputation so special would go away within months of his 8-18-19 sell, was very hurtful. I am gigantically big on integrity so when I stood behind his company to my clients and for my own investment properties, it felt like a ton of bricks fell on my integrity and I also felt the weight of the lack of his. I was upset and hurt by this lack of integrity on his end and what felt like mine for not sniffing it out better for years.
Here is a snippet from the letter that I typed to my clients when I decided to ‘retire’ from Property Management in early June, 2014. I was almost 35.
Here was the Letter that he sent to my clients dated July 3rd, 2014 when he was working on the transition.
Here was the thank you card he wrote me Late July, 2014:
Here was a very subtle snippet from him that went out in his newletter in early August, 2014 sort of suggesting…oh by the way, we sold the company, but dont worry.
Here is the formal letter that came out on August 18, 2014 saying…yep…we officially sold it.
I heard from him until about the end of year and that must have been when his transition agreement ran out because I never heard from him again. The company that bought it was corporate and only cared about the bottom dollar in my opinion. I believe in the mom and pop mindset because they care. Care has a HUGE value and especially to high touch, complicated, people based businesses like rental property investing. If I would have known and if he would have told me the truth about him only wanting to buy mine to increase his value, then that would have been a deal breaker.
I am glad I learned this lesson young and the damage was not too bad…after all everything is recoverable with time, healing and grace. Thank you to all who gave me the latter.
If you like this story and want to hear more check out our Mile27 Realty Youtube Channel to watch 100 Short Stories from 10,000 Long Hours in Real Estate or come back to this blog to read more.