Intro: [00:00:00] Welcome to the Stacy Salyer Show, the podcast for property management leaders ready to think bigger about growth. I'm Stacy Salyer and the only acquisition strategist in this industry who sat on all sides of the m and a table. I've been the buyer acquiring a 370 door competitor during CO using seller financing.
I've been the seller building and exiting a seven figure business. And I've been the corporate evaluator as director of acquisitions, assessing over hundreds of companies nationally. That means I know exactly what you're thinking, what you're missing, and what actually works when it comes to buying and integrating in this space.
On this show, we dig into acquisitions as a real business tool. Not luck, not someday. You'll learn positioning, strategy, numbers, and integration from someone who's actually done it all. Let's go.
Stacey Salyer: welcome. I'm so [00:01:00] excited to have Patrick Hurley on today. We are gonna be talking about acquisitions from a broker point of view because that is what Patrick does and he's gonna spend a little bit more time going into what he does and how it helps acquire.
So I would love to have you take it away. Patrick, tell us a little bit about yourself, your background, whatever you wanna share.
Patrick Hurley: Sure. No I definitely appreciate it. Thank you for having me. Yeah, as you mentioned coming at it from a broker standpoint I am an industry specific property management company only business broker.
In addition to being a a current property management company owner. So, very relatable, all the topics, all , the challenges the goals were all just so relevant to me and everything that I'm doing. It's what led me , to the niche. Obviously it wouldn't make sense to be in that niche.
And, PM broker group as a whole. I mean, what we really focus on is representing sellers, specifically working on the transition plan the succession [00:02:00] plan, whatever their exit strategy might be or possibly aligning with folks. Now, obviously that does include working with buyers although we don't specifically offer buyer representation because I just never know where the next opportunity's gonna come up.
And I hate to tell somebody in Atlanta that I'm working with them and for them day in, day out when most of my deals are being sourced in the Midwest. But that being said, we are gonna be happy to launch a new buyer registration portal coming up by the end of the year.
And if you think about it like a Zillow, 4:00 PM companies where you can create a profile, what you're looking for your information is saved, and then when an opportunity does come up that might align with your goals, you're contacted directly and get first looks. So, , we help folks everywhere from the valuation, the assessment and valuation process to the marketing.
And then obviously once a qualified buyer comes in, we do deal structure and help through due deal diligence and see it on through to close. So it's a lot of fun.
Stacey Salyer: No, that's really [00:03:00] cool. So, I probably have a lot of questions for you, so I, yeah, so I teach acquisitions, so I have a program called Built to Acquire.
I'm doing, some one day in-person events and I'll be rolling out a a four month, group coaching program where we really dive deep into that particular person's goals , and strategies and working with them. So what's your kind of perfect client?
I mean, Mostly you represent sellers, so like talking, of the seller side. , What works best, like when they come to you, I mean, do a lot of 'em come to you already or are they a little bit messy and you have to like, give them guidance or what do you see?
Patrick Hurley: You get a lot of the mess. Right. I think like with any sales industry, particularly if you're a problem solver, you get a lot of people that come in with more questions than actual need at times. Right? Now, they may have the need down the road but there, what's my company worth?
Right. The number one question. Yeah. , and we can talk, on a macro scale, you can talk about general ranges for multiples and [00:04:00] things like that, but until you really dig down and get to know the operations, it's impossible to say. So I get that a lot. , My perfect client, , if I had to nail that down, is gonna be I've heard several people in the industry that teach you to build your business as if you're gonna sell it, even if you never do.
Right? Yeah. So perfect world has got a bow on it. But somebody , who's kept their financials, they know how to, they've at least organized enough where they can pull personal expenses out to get to a real seller, what we call A SDE or seller's discretionary earnings number. So somebody that's organized enough to get to that relatively easy and they've got a timeline in mind.
Somebody who says, I might wanna sell in 10 years, very difficult to plan, right? And I would tell them they need to be talking to Stacy, to really get , the coaching piece of it. And then when you're in that 24 month type timeframe you should know when you hit that because you've already done the coaching, right?
Right. And then when you get there, then it's time to start digging in see what you need to tweak in order to make it as [00:05:00] desirable as possible. And then it's a matter of marketing , and you expect from a contract anywhere from a 45 to 120 day close, depending on time of year, people's personal situations, et cetera.
So it takes some planning, but if I had to sum all the head up, people that have already given it fault, okay, that's the ideal client. Then they're coming at it , with some design and now they're looking for some help to refine and execute.
Stacey Salyer: Okay. Okay. And then what about on the buyer side? So I know you don't really represent buyers, but you probably have a lot, do you have a lot of buyers hitting you up?
Patrick Hurley: Oh gosh. I mean I think no surprise to anybody that would be listening to this that's the problem. Right? Not as many good companies to sell or access to them as there are people out there. Right.
Stacey Salyer: Okay.
Patrick Hurley: We got the industry was very popular, when all , the big money we're doing roll-ups and things like that.
And it started with service industries, right? HBAC and plumbers property casualty insurance, and then it trickled to our world. So I still get tons of those, and they [00:06:00] basically want somebody to be , their buyer's rep, just sourcing deals. That'd be really nice if that's how the world worked, from a buyer standpoint. My ideal person comes in knowing pretty specifically what area they're looking in. Okay. If they've got a deal under their belt previously that's a, it's a bonus, but a lot of times it's not the case. They've definitely looked into the financing piece.
Stacey Salyer: Yep.
Patrick Hurley: Because while owner financing It's maybe also what I'll say always possible. I, you don't go looking for a deal and just banking on it, right? Right. You have to know that there could be some debt service , and loan involved. And so a pre-qualified buyer , is huge. I think , we talk to and work with some of the same lenders.
They're industry specific. So having that conversation ahead of time , is key as well. So I think I probably touched on at least the key components, but some focus some planning on, particularly from the financing side, and then realistic expectations. You can only work with the tire kickers for so long or the people that only want the fix and [00:07:00] flips Right.
Type thing. Right. So, yeah, just , realistic, good people. That's what I'm looking for.
Stacey Salyer: Okay. Okay. Yep. And that's definitely, what I teach for sure as far as from start to finish and the, what I call the messy middle., so I was just curious and obviously the buyer part.
So as far as like the sellers what would be the advantage of using a broker? 'Cause I know there's like off market deals and then broker deals. What would be the advantage to that?
Patrick Hurley: A hundred percent. There are definitely always gonna be off market deals. I think that follows the real estate trend as well.
Right. I think that. That's probably actually why I identified the largest need for a market specific industry specific broker, is the fact that a lot of them do trade off market. And from a seller standpoint, you probably don't get as much bang for your buck as you would otherwise. Now, every now and again, you're gonna luck into that perfect person who's just been jonesing for your business, like for years.
Right. But that's always the way everybody thinks it's gonna happen. [00:08:00] And I liken it to we're obviously a very close parallel to real estate, right? Yep. And anybody who has a cool house or a notable house, they always will say, well, yeah, I've had 10 people over the years tell me if I ever decide to sell to let them know.
Stacey Salyer: Right?
Patrick Hurley: And then when you, give 'em the heads up, they're like, yeah, I'll give you 50 grand for it. It's on five acres and it's a cool place. Whatever. And it's yeah I'd, buy that too. So when it comes to the broker, the biggest thing that you're going to get is exposure.
Right? You're also gonna have somebody working with you to find that happy middle ground that's gonna be working, where both people are given some and you find a good workable solution. We see more deals, most sellers , that we speak with. I sat there and said, well, yeah, I had five other people approach me and it sounded great with the LOI.
And then we get past that and they screwed the deal up, with contract firms. Mm-hmm. Or things weren't open and honest, on the front end. So then when I got their books, it was complete crap, , or [00:09:00] whatever. And even if the books are crap. It might still be able to be worked through.
That's where the broker comes in and says, okay, well let's sort it out. Let's determine what it really is, and then we'll see if we're still on the same page. Right. Whereas if it's just buyer seller, a lot of times they just throw in the towel and, Hey, screw you, you lied to me.
I'm out.
Stacey Salyer: Right.
Patrick Hurley: Yeah. Thing.
Stacey Salyer: Yeah.
Patrick Hurley: So this, the problem solving is a huge piece of what I do. And just playing the reasonable person try to get two minds on the same page.
Stacey Salyer: Okay. So a lot of handholding at times
Patrick Hurley: can be absolutely. Can be. I don't think it's any surprise to anybody on this listing, and you run into it all the time, that not all property management company owners are true business owners at first.
Right. They're working in their business, not on their business. And so it could be very much a heavy lift on the babysitting portion at times. Right. And walking it through, but. That's, it's part of it too. We want to get somebody there. And the education piece is big during the process.
Stacey Salyer: Okay. So with [00:10:00] that, what is one of the weirdest things you've ever negotiated? Can you think of something?
Patrick Hurley: Maybe not weird, but probably one of the ones that I've seen to pop up and bite people mm-hmm. Is like employment, employee retention requirements Yeah. And things like that. Right. You better keep my number two because blah, blah, blah, blah, uhhuh.
And then the number two is resentful that they didn't get to buy it, and then they screw the deal later. Right. So having to try to work that out has been a challenge at times. One of the clawbacks, any kind of retention clause is always a point of contention. Yeah.
Because buyers want it to be strict as hell. Yeah. And sellers don't want any part of it, and so that's always a challenge to find the middle ground as well. Yeah. Nothing weird, it's not gonna be like the real estate one where they're like, my grandma's buried out back and I want to be able to visit her whenever I want.
It's luckily a little more normal than that most times.
Stacey Salyer: Okay. Yeah. There's no
Patrick Hurley: yeah.
Stacey Salyer: Chickens being negotiated. I have done that on real estate. Yeah. Some chickens and [00:11:00] pigs.
Patrick Hurley: Right. Absolutely. Yeah. You throw some livestocks, some weird personal items, things like that.
Mm-hmm. Now the business is usually pretty good, but it's the employment I mean, they'll want a family member to stay on board or something like that, and I'm like, that's just a bad idea.
Stacey Salyer: Right, right. Yeah.
Patrick Hurley: Almost always.
Stacey Salyer: Right. It, yeah. No, and I have seen that kind of backfire and the employee piece of it as well.
I've seen that backfire as well in the past as far as, oh
Patrick Hurley: yeah.
Stacey Salyer: The number two that, thought that they deserved it and didn't get to buy it, and then it, yeah. The resentment there's a lot of that kind of stuff.
Patrick Hurley: And I could relate to it specifically. So one thing I guess I left out of the intro is that as my, my, my journey of growth, I've had I think four, four or five acquisitions.
Mm-hmm. And I just learned it was school of hard knocks, right?
Stacey Salyer: Yep.
Patrick Hurley: Didn't know what I didn't know when I got into it, got kicked in the head, some lost my ass once or twice not on the whole transaction, but like something you didn't think about [00:12:00] all of a sudden.
The clawback I learned on my second one because the day we closed, her biggest client walked away. Ugh. And he just goes, you should have thought about that. I'm like, man and so I had no recourse, right? And so I got better on the next one and better on the next one.
So I've kind learned the mistakes. And I'd always rather learn from somebody else's mistakes whenever at all possible. So that's a big piece of the value proposition as well,
Stacey Salyer: right? Yeah, no that definitely points out some very key things for sure. And I think that's where that goes.
So as far as using a broker, the seller pays your fee, right? The buyer does not pay your fee,
Patrick Hurley: the vast majority of the time that is the case. Now there are some instances where. A listing is taken where the seller's only willing to pay X.
And so for a buyer to even really know about it, they're gonna have to agree to pay y. Okay. The delta on that. But from the seller standpoint, they also need to understand that if that's the case, they're gonna limit their number of buyers. I mean,
Stacey Salyer: sure,
Patrick Hurley: we can say, you can look at it either [00:13:00] way, but you can say that a buyer almost always pays a portion of it anyway because a seller would fluctuate their price based on it one way, so, so yeah.
Anyway, but generally speaking, yes, listing agreements are for the business and and buyers can make use of the service, but there are times when they need some skin in the game too. And I think that's valuable as well.
Stacey Salyer: Okay. And so with you brokering deals, are you brokering only contracts or will you also broker like the whole the whole company as well?
The, is it, yeah, usually it's like contracts versus like stock purchase. Right.
Patrick Hurley: We typically do ours as asset purchases. Okay. Where the company itself remains the property of the seller. Yeah. From a buyer standpoint, it's preferable. Right. Mostly because any liabilities left behind.
Now the flip side to that argument is, that those depending on how the contracts are written, if they're not assignable or assumable, then, a property owner could say 30 days in, Hey, I'm [00:14:00] out, day of closing. Right. Just I, just I experienced, Hey, I'm out. And you're SOL with, particularly without a clawback.
. But yeah, more times than not asset sale, minimal FF and e included in our industry. Sometimes real estate, but again, those are usually broken out. For the acquisition piece, although banks love it when there is real estate involved.
It gives them a hard asset to tie the debt to. Okay. And particularly if you're not currently an operator. They like that because they've got more security. decided to be a plumber tomorrow and buy a plumbing operation that bank's man, he's gonna screw that up and we don't wanna be on the hook.
Yeah, so real estate is a nice little feel good for the lenders a lot of times.
Stacey Salyer: Okay. And by real estate, you mean like an actual office, like a building, not real estate sales brokerage.
Patrick Hurley: Correct. Yeah. I apologize. Yeah, the actual physical building a location because again, it's a tangible asset as opposed to just papers promised to pay, essentially.
Stacey Salyer: Okay. So when you have buyers approach a deal, what's [00:15:00] some of the good advice that you could give? What do they really need to know, I guess to be ready?
Patrick Hurley: Yeah. the best thing that I, talk about ask and essentially require, and I will require it on our buyer registration if you want to actually be made aware of deals mm-hmm.
Is the prequalification piece. Okay. It's, you either have to have cash proof of funds, or you've gotta be pre-qualified through the lender, through one of these, preferred lenders because they're going to be able to give you specifics on what that process looks like. I definitely, go into it talking to buyers about being prepared for the unknown or unexpected, now I can also give them some of the examples of what those are. Right. It's a coach through contract structure and why we have it. One of the biggest things I run into buyers, and we have to hash out, is they always wanna know, well, how does it work as far as there being a complete standard or the norm.
Deal's different. It's the difference between, again, a fixed asset like real estate and somebody's got so many [00:16:00] moving parts that it becomes a challenge and don't expect it to be just easy A to B, you gotta go A to Z and each little step along the way might bring something different.
You just, you hash it out, right? So you gotta be patient you gotta be realistic. You can't be out for blood from the cellar.
Just trying to stick it to 'em, I don't believe that good, like legitimate workable deals with anybody walks away, bleeding or anything.
You just gotta know that you're in it together and you're working through. So if you're just, I don't work with people that just say, Hey, I wanna stick it to so and so and I'm just out for their business and if I don't, rob 'em during this process, I'm not happy.
That's not my client.
Stacey Salyer: Yeah. No, definitely. Yeah. Not mine either. Definitely not,
Patrick Hurley: right? Yeah, I don't, I bet not.
Stacey Salyer: Yeah. I don't wanna,
Patrick Hurley: I'm sure they'd be a joy.
Stacey Salyer: Yeah. No, yeah. I don't wanna, I don't want the negativity in my aura. That's
Patrick Hurley: right.
Stacey Salyer: Yeah. No, yeah, for sure. Well, I, look at it as, really a transfer, right?
I mean, somebody has worked really hard for a certain period of their time. I mean, whether it's their whole life or, you know, a [00:17:00] shorter time, but they've worked hard to build something, what, some sort of asset and, it's just a transfer to another party that's gonna take that and carry it on.
Again, most buyers probably have some sort of plan to, increase revenue. I mean, there's obviously a reason why people are buying businesses, but Right. It should still be respectful as a buyer for sure.
Patrick Hurley: Yeah, no I completely agree. And, and a big piece of advice on both sides.
Sellers can't be expected to receive compensation for expected future value, right?
Stacey Salyer: Yeah.
Patrick Hurley: Oh, if I only did this or this, it could generate x amount more money. It's like, why do you do it? And that's why I say build it to sell, even if you never do.
That's why I say, work with you on these things so that you can say. , Go ahead and tweak all this stuff and so that you're running at your peak of their peak when you go to sell it. You don't wanna sell on a decline when you start losing clients and, you can't bail water fast enough.
But you can't expect to sell up here if you're still climbing and you're not there yet either, so,
Stacey Salyer: right. [00:18:00] Yeah. Yeah. That's good. Yeah. So what other, I'm trying to think what other questions. Let's see. Do, yeah. What other things can we talk about?
Patrick Hurley: I know it's one of those weird.
Pieces of the industry that there's tons to talk about.
Stacey Salyer: Right.
Patrick Hurley: But then a lot of what you talk about is very deal specific, right? Yeah. It, it pops up in those specific deals. I could tell you a little bit about, where we're seeing most of the interest, We do get a lot of institutional buyers that inquire about things. I've actually had several in the last couple of days that have popped up. And again, it's I work for this fund and my experience is in other industry, and I now I want to get into, property management and things like that.
I tell sellers to be somewhat, I mean, I'll be a hundred percent honest. Mm-hmm. I tell 'em to be a little leery of those.
Stacey Salyer: Mm-hmm.
Patrick Hurley: Because they're only about the numbers on a balance sheet and in return. Right. So they will usually try to stick it to you a little bit on those things. And a lot of [00:19:00] people in our world, like you said, have built it over.
Whatever, it's five years, 10 years, sometimes 30 years.
Stacey Salyer: Mm-hmm.
Patrick Hurley: And they've got a lot of relationships.
Stacey Salyer: Right.
Patrick Hurley: And so they don't wanna sell it to the, to the one that's gonna strip it down and whatever else. So from a seller standpoint, I encourage people to look at it ahead of time and know what's important to them in a deal.
Is it timing? Like, how quick can you get out because you've got to meet, a goal to go do whatever, travel the world, spend time with your kids or grandkids, whatever, it doesn't matter. So you've gotta know what that timing looks like, right. You've also gotta know if there's an ideal buyer for you.
Is it important that you work with them during the transition? Right? Is it important that you get along or is it just about the number? I don't know. And then you also have to look at your contract structure. If you don't have management agreements that are assignable to be able to sign over to the new company, that's a lot of risk over there.
And if there's a clawback, that's a lot of [00:20:00] risk for you. Because you may very well depending on how financing set up I've closed them with money in escrow where there was 25 or 40 or 50 grand uh, to sitting over here and by such and such a date, it either went to the buyer or the seller.
Or in the case of an owner financing situation if there's a balloon payment or something like that due at the end of the term, all of a sudden that number's gonna shrink pretty quick. If if you start having, some losses on those contracts. So, some big pieces there to take into consideration.
On the buyer side, I would say that you've got to come in, again, realistic expectations, knowing what are your goals? Why are you buying? If you're buying to grow a business, you don't necessarily have to be a stickler on a specific return, particularly if you are going to increase the value by additional adding additional services.
Yeah. If you know what your current revenue per door is, you can then apply it to the new door [00:21:00] account. Particularly on the tenant side fees, right? You can't come in and just revamp owner fees and expect everybody to stick with you. But if your processes bring value to the residents and you make money on that.
Stacey Salyer: Then
Patrick Hurley: you can factor that into the equation when you're evaluating and when you're negotiating. Okay. Cool. I can give a little here 'cause it's worth blank to me.
Stacey Salyer: Right.
Patrick Hurley: I don't get it. I don't have any of that money, but if I get it, okay. It added four months , to my payback.
I'm okay with that.
Stacey Salyer: Yeah. No, you bring up a good point. I know I did that when I did a purchase in my market during COVID. Mm-hmm. It was the start of COVID and I looked at it exactly like that. I knew my revenue per door and then I looked at the door count and again, it wasn't even about the clients.
I actually didn't even really change. Their management fees for quite some time. It was really more about the residents and being able to offer way cooler like value to the residents. And then being able to make, some money on that, some revenue, and it, I mean, transformed my business [00:22:00] basically.
And it was a really good deal for everybody. All parties involved. So it worked out really well.
Patrick Hurley: Yeah. I mean, you may never be able to change and retain owners, change their fee structure and retain 'em, right? Yeah. Because at any point they can all go, Nope. If you're doing that, I'm out.
Stacey Salyer: Yep.
Patrick Hurley: But with your residents, and those are the same owners over and over, but with residents, you basically roll 'em over every 12 months.
Stacey Salyer: Yep.
Patrick Hurley: So it might be tough to change the people that are existing, right? Yep. And there's no real, you can't just change their lease terms to start charging them stuff that you just implemented willy-nilly.
But when they go to renew, they can either get on the same page or you get a new resident in there. And that new resident now they're just used to the, that way that it's, there is no history, no old, so something to remember that you do have a chance to change that up with the right planning.
Stacey Salyer: Yep, absolutely. And I think that's the, one of the big pieces is if you're a buyer, really looking at what you're buying and knowing that, yeah, it's not gonna necessarily change even in the first six months, [00:23:00] but if you can really pre-plan out, 6, 12, 18, 24 months that's right. And really look at that, the projection you can get some really good deals out there.
Patrick Hurley: Yeah, absolutely.
Stacey Salyer: Yeah. And then there's different things you can do on the client side as well. So maybe you're not necessarily changing their management fee, but maybe you're gonna offer them some new services that they haven't had. Like the one I bought, he didn't do inspections, like periodics, like nothing.
And so after I, had built relationships, I rolled out and I said, Hey, if you'd like us to go do these walkthroughs, it'll cost X amount every time. This is example of the report that you're gonna get. And I had clients that were like, oh, yes, please. Yes. And again, it was just additional revenue that was coming in.
We weren't changing their management fee, but we were adding something onto them that they found really valuable, and it also helped us manage it. Right. So,
Patrick Hurley: And that's, you're a hundred percent right. And I highly recommend that people, come talk to you to look at that, on the front end of things.
Hey what can [00:24:00] we tweak? Are we making the most out of it? Right? If you talk with a consultant the right consultant that looks at it the correct way and helps you evaluate these opportunities in your plans, then you're gonna say, Hey. If you could tweak this, and this, while you've got a relationship with people, now's the time to do it because otherwise a buyer's gonna look at this.
And that's a weakness, right? The inconsistency of management agreements. And so it's either gonna get flushed out now and you've got a chance to work it out, or it's gonna come to the surface when you're ready to sell and it could be too late. 'Cause you either lose a deal because of it or you lose a client then and, just nothing good comes from waiting essentially.
Stacey Salyer: Yeah.
Patrick Hurley: Ooh, one thing I thought about because I just wanna put on people's radar.
Stacey Salyer: Yes, please.
Patrick Hurley: In your management agreements, make sure that you have the requirement that landlords name you as an additional insured on their policies. Not an additional interest. But an actual, additional insured.
It very rarely adds any cost to the [00:25:00] policy. It provides additional protection for pretty much for everybody. But your insurance company will love it as well. Okay. Because now you can even get better rates on your gl, your general liability or your professional liability. Just because you've got additional coverage kind of sandwiched in there through those.
If you're thinking about selling it all down the road, then go ahead and start now. 'cause it's a process. Okay. We're auditing all of ours right now and making that requirement. But, coming from the learn lesson the hard way, you had somebody that, that agreed to do it, but never provide coverage.
And then there was an incident, coincidentally right when their coverage lapsed.
Stacey Salyer: Oh no.
Patrick Hurley: Oh
Stacey Salyer: yeah.
Patrick Hurley: Oh yeah. Yeah. Like I got some battle scars, so. Yep.
Stacey Salyer: Yes, we all do. We all do.
Patrick Hurley: Right, right. So I like to, that's like a big thing. I'm just trying to put on people's radar not relevant necessarily to brokerage as much, but just for my fellow PMs out there, just out, make sure you got it.
Stacey Salyer: Yeah. And so [00:26:00] with that, how are you tracking it? Are you, do you have a global talent team member that's like tracking it in your, are you tracking it in your PMS system or? I always found that was the most challenging when it came to like renter's insurance and then like the same, I had that same clause in my management agreement.
But I guess we don't really get good at tracking until we have a problem.
Patrick Hurley: Yeah, unfortunately that is the case. And so, for the audit purposes, building out a spreadsheet, right? Yep. Building out a spreadsheet, and then you've got to, for each, we're a pod structure.
We're a little bit of a hybrid, but but we're mostly a pod structure. So each PM is contacting owners and getting them. Then we're having to evaluate, or, at least glance over each policy to see what their limits are and make sure that the languages in it, it includes us things like that.
And then we're uploading it. We're currently well, we always say we're in our software. We are uploading it to their portals and making notes now. Created property groups, basically. Okay. And since we're now in the middle of it I'm honestly not [00:27:00] 100% sure how we're going to track it moving forward.
But if you are an additional insured, you should also get notices for any lapse in coverage. Okay. And changes in coverage and things like that. Right. So, the carrier should. Send you something now, then it's the whole mail problem. I get it. And who's opening the mail? Does it get to you, cetera.
Stacey Salyer: Right. And who's scanning that? Who's alerting? Which team member? Yep.
Patrick Hurley: That's right. Yep. Who's trained to do it and what are the next steps after that? Right. So you gotta build that process out yourself, either within your software or through an apley or, whatever. So that workflow is consistent.
But that I will have to honestly say still a work in progress.
Stacey Salyer: Okay. Okay.
Patrick Hurley: Yeah.
Stacey Salyer: Yeah. Well, I mean that's, I mean, that's the nature of our business, though I have never met anybody that's run a perfectly well. I mean, nothing's ever perfect in property management. Correct. A lot of it.
I would say that we've all learned. Trial and error. I mean, I've also been, kicked in the head face [00:28:00] whatever more times than not. I mean, anytime my lease, anytime something happened on the tenant side, it went in our lease. Right? And then, oh yeah. Every time people are like, why is your lease 15 pages?
It's well,
Patrick Hurley: mm-hmm.
Stacey Salyer: Because I've been doing this for a long time. And the same That's right. With the management agreement too. I mean it's, a lot of it well, or I would go to NPA and I would learn from others. I'm like, oh, wow, that sounds like a horrible story. So I would go back to my office and then, add things, talk to my attorney, whatever.
But that's all we can do, right? So Yeah,
Patrick Hurley: that same, yeah, we just did a full lease revamp be like in the spring and it was funny. You take it to your real estate attorney who's been doing it for 40 years or whatever, and I'm like, Hey, review this. And he is holy crap. Like, how'd you think of all this stuff?
I'm like, I can tell you exactly. I mean, I had to deal with it, right. the least I use is two pages. And I'm like, well, mm-hmm. You're a big dummy. That's why you hired me. Right. And this is the same thing with the management agreement, right.
Unfortunately, it's the bad clients, the bad experiences that lead to [00:29:00] additional terms. Yeah. But you have to just be able to explain that to either residents or property owners, why it's relevant. Hey. Let me tell you the story, right? Stories sell, that's what we always, look at stories sell.
So I love Yeah. I'm happy to share with you.
Stacey Salyer: Right?
Patrick Hurley: And then they go,
Stacey Salyer: yes.
Patrick Hurley: Yeah. Then they go, oh, that sucked.
Stacey Salyer: Right? I know that could be a whole podcast in itself. The therapy sessions of property management.
Patrick Hurley: Yeah. You're not kidding. You're not kidding at all. It's funny, you and I can talk about that, off air here, but I think I'm actually gonna be working on something pretty similar to what you just said.
Stacey Salyer: Oh.
Patrick Hurley: Just as a fun side project, yeah. I'll fill you in.
Stacey Salyer: No, that's cool. I look forward to hearing more about that. Yeah. . So you work with sellers, when a seller comes to you, do you have a checklist for them of Hey here's everything that you should have in order so that you can be best served or make the most amount of money?
Or is that something you do or,
Patrick Hurley: I do, I mean, on, on the very front end, once determined a sufficient [00:30:00] desire and a good match. Right. Right. Again. If you don't click with somebody, if you're not, you're there. Hey it doesn't mean they're a bad person or I'm a bad person, just means, hey, maybe it's not the best.
But assuming you get past that, there's gonna be the general, I need this, and this. Right? It's gonna be past couple years, p and Ls, along with a year to date, p and l couple last couple tax returns. And then some sort of description on anything I need to know when I'm looking at them.
It's not that I couldn't pull 'em out of the financials but it's a lot faster. Somebody goes yeah. That auto in there, that's my personal truck I use for work.
Stacey Salyer: Right?
Patrick Hurley: That's what that expense, right? So we're working towards any add backs and things like that. And then copies of the most recent management agreement and lease, to see those.
'cause we're gonna need to know if there's any gaping holes. In the general operations. Lastly I would just say is the general description. What's your employment structure look like? How have you been trending? If they've got any KPIs they're tracking, I wanna look at whether they're growing or shrinking.
What they're doing to grow, et [00:31:00] cetera, et cetera. So, okay. Ba basic about the company stuff and then those financials and lease and management agreement. Nothing crazy.
Stacey Salyer: Okay. Yeah. And so like on the buyer side so if I'm teaching people how to acquire one of the things I teach people is to actually read every, or at least to make review every management agreement.
I know that probably sounds a little insane. I don't know if that is insane, but I will say that, from experience and even like my own company, I started with a management agreement and then. It morphed over time. I didn't necessarily change it for all my clients. Was that right or wrong?
Eh, whatever. But at the same time so I don't know, do you think that's like a crazy thing to be like, Hey, go double check 200 management agreements?
Patrick Hurley: Yeah, no, I think it's absolutely crazy. But I'm not saying it's not, I'm not saying it's not a good idea. I'm saying that in practice it's a huge challenge, right.
Because. There could be very small, [00:32:00] like nuances to a couple different versions. Right. And this is why we finally dug in and did a complete deep dive revamp. We haven't even launched our new management agreement. We're doing it in, we're doing our audit for our insurance. Step two in 26 is our management agreement rollout.
Stacey Salyer: Okay.
Patrick Hurley: I know we're gonna have some attrition. We're gonna lose some clients 'cause they think that now we're doing something. Weird, different, worse, type thing more strict where really we're just adapting and trying to protect everybody. Right. so anyway, yes, I think that is a huge task to review everything if, but if you ask me do I think that is the best practice, I'd say yeah.
Like absolutely. Okay. If you got the time and the bandwidth, then do it. I'm more of a, oh, squirrel, like you can't keep me reading those contracts. Maybe ai. Right, right. I maybe it's AI and you scan them all in.
Stacey Salyer: Yeah. Yeah. I was just gonna say, so that's the other thing I've been, hitting on is that, so like when I bought back in 2020, we didn't have that.
And even when I was doing it on a national level, we really didn't have that [00:33:00] either. But now going into 2026, I think it would be a great benefit to be able to like, upload everything into ai, from maintenance work orders. In fact, I've been talking with oo about that. They have a specific AI agent.
Who can review, a couple years back on the maintenance side. And then, even just using your general, non-agent AI to review some of those contracts and stuff may not be perfect. Mm-hmm. But it'd probably be easier. I mean, to be quite honest, would Stacy be sitting down reading 200 contracts?
I'm also pretty, pretty much squirrel brain as well.
Patrick Hurley: Yeah. Yeah.
Stacey Salyer: But utilizing your resources I think would be cool. So I don't know if you've seen that on the buyer side at all out there yet.
Patrick Hurley: I haven't really seen anybody doing it yet. Okay. Because even at that, it's still a heavy lift.
Stacey Salyer: True.
Patrick Hurley: Yeah.
'cause you think about it, if you scan 'em all together, 200 management agreements, even if they're averaging three pages you're still like 600 pages or whatever. Sure. I don't have any experience with knowing how effective AI is at that point.
Stacey Salyer: Yeah.
Patrick Hurley: [00:34:00] Then if you think about it, scanning 200 individual ones and trying to upload 200 attachments.
I don't know. Yeah. I mean, AI is cool. I don't know how much it likes that. Right. So yeah. Short answers, I don't know. It would be a great test. So if we've got any AI nerds out there,
Stacey Salyer: Right,
Patrick Hurley: Let's talk, let me know. Right. Right. And I mean that in a loving way.
Right. It's just not something I'm that knowledgeable about. So I don't know. Its capabilities.
Stacey Salyer: Yeah. Yeah. So basically this is a call out to the AI nerds.
Patrick Hurley: That's right. That's right.
Stacey Salyer: Something for us is pretty much what we're saying.
Patrick Hurley: Right. Well, and the ai, whoever those AI people are, they can come on that little side project that I would talk about if I ever get that up and running, because that's, I wanna talk through stuff like that, like the completely offhand, I mean, you might not even have to have a company that does it and you're trying to wreck your company, but hey, I'm an expert at blank.
Cool, let's talk about it, because I think it'd be useful info to get out there for the rest of the community.
Stacey Salyer: Yeah, absolutely. Yeah. Well, that's cool. So any other words of [00:35:00] wisdom you wanna share with the listeners on buying, selling?
Patrick Hurley: Oh, on the selling side I would say word of wisdom.
It is just plan. I'm not gonna use the phrase that it's never too early to start talking about the exit, but it's never too early to start thinking about it. Right? So if you do something with intention, you're much more likely to get your desired result, and outcome.
So that would probably be my biggest thing for sellers. For buyers, I would say that, my biggest piece of advice would be to narrow down what you're looking for, like to identify your target and stick pretty close to it. Or at least if you're gonna deviate from it, have a good reason that you did.
Right. Do the research ahead of time, put the homework in ahead of time to know, okay, I am actually open to the next state over. But I also know what it takes to get licensed there. Right. I know their trust laws and things like that. And I'm okay with it. It's a landlord friendly state, just like where I'm operating now or [00:36:00] whatever, so you just gotta know. You can't just say, oh, numbers, I want it. Right. Just know what you're getting into. I would not be a good buyer for a property management company in California. Right, right. I buy a lot of stuff and I'm not afraid to travel. So that's not it. Right. But California's so different than Florida.
Stacey Salyer: Oh very different.
Patrick Hurley: Right. I wouldn't know where to start. Right. When they're like, oh, the homeless guy moved in and they let him stay for 10 years. But I would've solved that problem in Florida and in California I can't, so just know what you're looking for. There's more to it than just numbers.
Stacey Salyer: Okay. Very cool. That is very good advice. And with that, I'm actually curious before we end, where are the hot markets?
Like where are you seeing stuff being like bought and sold primarily?
Patrick Hurley: It's largely gonna be landlord friendly states. Okay. I mean, that's where the most demand is. Florida has been a, a really hot market. Yeah. I get a lot of inquiries. I get a lot of inquiries up and down the east coast.
Okay. Texas several different markets in Texas. [00:37:00] Okay. Have been busy, centered around some larger cities. Chicago for some reason has been a big one. Some folks Denver area have hit me up, chomp into the bit. Okay. So it really is spread out and I realize that not all of those are landlord friendly, but if I had to say specifically from the buyer standpoint, it's the landlord friendly states.
Stacey Salyer: Right. Okay. Well that makes sense. I mean, I come from a very tenant friendly state, west Coast. Mm-hmm. Washington State, so Right. We compete with California. I always say that, california, Oregon, or Washington, Oregon, California. So Washington and California compete for the super crazy, and then Oregon's the middle child where they're like no, don't beat me out.
Patrick Hurley: That's funny. That's funny. Yeah. Yeah. And then we're, over here in Florida, it's the opposite, they keep trying to, tighten, ratchet it down, more and more. And, some of the jokes over here, don't, California, my Florida when we actually have teeth in some of our laws that will protect landlords.
And just a general shout out to npa. I can't speak to other state chapters [00:38:00] 'cause I'm not involved with them. But the Florida chapter has been awesome about that. My team participates in the day on the hill every year where we go during session and. And lobby, these members for the laws that govern our industry.
And protect our, we, it's not, we don't wanna protect residents. That's, but you can't protect them at the expense of the owners because without a property owner, there's nothing for those people to rent. So,
Stacey Salyer: A hundred percent. I am also,
Patrick Hurley: they do a great job.
Stacey Salyer: Mm-hmm.
Yeah. That's great. Yeah, I actually got to spend some time with the Florida State people. I got to go speak at the conference this year and it was super fun.
Patrick Hurley: Yeah.
Stacey Salyer: Enjoyed
Patrick Hurley: that.
Stacey Salyer: Yeah. Amazing group of, property managers and business owners. Mm-hmm. So, yeah, and I'm all for balance a hundred percent.
So I'll say the certain areas have lost the balance, but those dates that haven't yet, I do highly recommend get involved with Yeah. Bum, your local chapters, your state chapter, and just keep communicating and educating. I think that's the big piece is communication and education [00:39:00] with our lawmakers so that they understand what it's all about.
Patrick Hurley: That's it. That's it. Yeah. They don't know what to do if they don't hear from us, so stay involved. Yeah,
Stacey Salyer: a hundred percent. Well, cool. Well, we covered a lot of topics today and I
Patrick Hurley: Right.
Stacey Salyer: Thank you so much for coming on. It's always fun to talk to you, and I'm sure you and I could probably nerd out all day long on buying and selling businesses, so, you
Patrick Hurley: absolutely.
Stacey Salyer: Thank you again for coming on.
Patrick Hurley: Oh, absolute pleasure. I appreciate you having me, and and look forward to catching up again soon.
Stacey Salyer: All right. We'll see you again soon. Okay. Alright,
Patrick Hurley: thanks Stacy.
Outro: Thanks for listening to the Stacy Salyer show. Here's the deal. You can read about acquisitions anywhere, but you can't learn acquisitions from someone who's done it the way I have as a buyer, a seller, and from the corporate side evaluating hundreds of companies. That's why I need you to subscribe and share this with someone in your network who needs to hear it.
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