How to Take on Multifamily: Getting New Multifamily Clients [Video interview]

Tony Maiella
| 31 min. read
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Editor’s note: How to Take on Multifamily is a video series featuring Tony LeBlanc, multifamily expert and owner of Ground Floor Property Management. This series aims to cover exactly what property managers need to master the multifamily side of their property management business. Below is an abridged transcript of Episode #2: Getting New Multifamily Clients.

Tony M: Tony from Buildium here, the platform that activates property managers to own their everyday operations, make residents feel at home, and take on more doors. Today I’m here again with Tony LeBlanc from Ground Floor Property Management, and we’re talking about how to take on multifamily. So we’re in episode two now and this specific episode, we’re going to talk to about, essentially how to get new multifamily owners—how to get new multifamily owner clients. Because, of course, you can build it—but you also have to market it. So, that’s what we’re going to talk about today. Really excited. Let’s dive right in. So Tony, first of all, thanks for joining us, always a pleasure to have you and really psyched to be talking with you today.

Tony LeBlanc: Awesome, same here.

Tony M: When we talk about getting new multifamily clients and owners (we mentioned this in the first episode a bit), but let’s dig in a bit more…

How are multifamily owners and investors evolving?

Tony LeBlanc: Yeah, we’ve been privileged to be part of a lot of different real estate investors’ journeys, in terms of seeing them also, just like them (or as property managers and our investors), they’re also on typically an expansion journey—they start off small, they buy small duplexes, triplexes, and they eventually make their way up into the bigger buildings because they, as well, see the power of economies of scale. So, I know for us personally, we’ve had a lot of owners that have gone up that graduation chain and it’s really all about reducing risk.

Tony LeBlanc: I think a lot of times with these guys, they see an opportunity to liquidate a bunch of smaller assets, to be able to consolidate into one bigger asset: It’s just one roof to worry about, one foundation, and then from there, they keep growing it. Reduced risk is obviously a big one, as I mentioned, and usually the bigger the building, a lot of the times, we find that the clientele and the financials run a lot better and a lot smoother. So that’s the reason why we see a lot of that graduation with these guys.

Tony M: What types of different multifamily owners are getting into multifamily investing?

Tony LeBlanc: We see some real estate, like realtors, getting into investments. I think it’s a natural thing for a lot of those guys to do. We see a lot of professionals. We have a lot of clients that are doctors, lawyers, in those professional arenas, and we also have a lot of developers. So, either they’re home builders, or they’re developers in another city in a different part of the country, and they’re looking to diversify into different markets, to not have all their eggs in one basket where they live. So that’s been a great magnet for us.

Tony M: Yeah, that’s great to hear, and so, we talked about this a bit in the first episode, but let’s mention and bring it up again. I’m curious…

What are the qualities that these owner clients have in common?

Tony M: Obviously we mentioned that accidental landlords are very different from multifamily investors. It’s more of an emotional thing versus more of a numbers driven, focused on ROI. Maybe we could unpack that a little bit more?

Tony LeBlanc: Yeah, absolutely. In my opinion, it’s a lot of fun to work in a multifamily or business, because you’re working essentially with investors, and there’s a lot less emotion in a lot of the transactions—in the day-to-day discussions that we have. Essentially, these people are providing you with an asset to take care of. They’re expecting financial reports. They’re expecting you to prepare budgets, to be able to manage the expenses, and the income coming into the property. And it’s all from a financial perspective for them. They bought this property, they wanted to make money over time, and a lot of these guys (which is really great), are also willing to reinvest. They’re willing to inject capital into these things to be able to make more money in the long run. Sometimes…

Tony M: That’s huge. That’s huge for property managers, right? Because it just makes your job so much easier.

Tony LeBlanc: Yeah, it’s music to my ears. There’s nothing worse than dealing with an investor that is low on money, that they don’t have the cash to be able to inject in these properties, to make the necessary changes, to either upgrade or provide some better service to tenants.

Tony M: Mm-hmm. And then here’s an interesting question.

How do you vet owner clients? What are some of the things that you do?

Tony M: Because, obviously, we’re talking about ideal situations, like the ideal investor does have a reasonable amount of cash that is available so they can dedicate it to maintenance, or amenity upgrades, or just be in a good situation, so it makes your job easier to provide residents with an awesome experience. How do you vet those investors, if it’s someone who’s new?

Tony LeBlanc: Yeah, so two main things that I always start the discussion by, is one, I want to get a sense of their financial acumen, so I want to make sure that they have reserves, that they didn’t just buy a building and they’ve put every last cent that they have into this property and they are praying to the property Gods that everything just works out.

Tony M: Right. Or you, praying to you?

Tony LeBlanc: Yeah, exactly. Unfortunately, I’ve seen too many situations, where that just does not come true. I’ve seen a lot where it does, but it’s very difficult when it doesn’t, and they’re not prepared for it. So, financial security—I need to make sure that these guys are good if something happens. For example, something happened yesterday. We had one of our properties, the heating system is run by propane and one of the expansion tanks had a hole in it, about this big, and we had to bring in a vendor to take a look, and after it all, it’s going to cost $8,000 to get this thing fixed.

Tony M: Oh, that hurts.

Tony LeBlanc: Yeah, and this is an 18-unit building; it’s like $1 million building. If that would’ve been Joe Blow that didn’t have any money, well, I now have a big problem, because the heating in this building is no longer working. So they have no hot water and they have no heat. So it’s like, who gets caught in the middle? It’s typically us, because none of those tenants know this owner. He’s in Germany. So it’s super important just to be financially prepared for stuff like that. It’s not that we want it to happen, it’s just anything can happen in this business.

Tony M: Yeah, sure, and I hope you didn’t get that call at 3:00 AM in the morning.

Tony LeBlanc: I didn’t. My maintenance guys did. I found out about it the next morning.

Tony M: That’s good. That’s the way to do it, right?

Tony LeBlanc: Yeah, yeah. Number two for me is, I try to weed out penny pinchers, so if you’ve ever heard the phrase of… What is it? “I step over a nickel to pick up a penny.” Where they’re always, always, always just nagging on $5 expenses, $10 expenses, and it’s an argument—or I feel that it’s going to be a challenge to get into a discussion about getting stuff fixed in the building. We want nothing to do with that.

Tony M: And you can identify that from the get go, I imagine, when you’re in contract negotiations with an owner like that?

Tony LeBlanc: Oh, 100%. I’ll purposely show them like P & L’s of different buildings that we run and we’ll go through a few different situations, and I’m going to basically listen for the reactions on certain things, and I’m going to see how they pick apart the expenses. I can immediately tell the person that’s going to be all over me for everything, versus the person that looks at the bottom line says, “Oh, that stuff happens. It’s part of the business.” And those are the people that you want to work with.

Tony M: Yeah. So, write this down, everybody watching, go over the P & Ls, and then look for the signs. Look for red flags.

Tony LeBlanc: Yeah. Just walk them through, and say, “Yeah, this is what a normal building of your size looks like.” Or if you don’t have anything like what they’re bringing in, just give them an example and you’ll probably get a lot of great feedback, in terms of their personalities, what’s important to them. Some guys are really fixated on maintenance costs. Some people are really fixated on utility expenditures, in terms of if utilities are all included, are the tenants being conscious of closing the windows? and if there are spikes and expenses—all these little things that you can find out.

Tony M: Yeah, and I would say, as well, those conversations will give you some insight into the condition of the property and the main pain points of the property, whether it’s some old systems that are causing problems that need to be upgraded in the future, and any other potential things that might just be pain points for the property owners. So there could be an opportunity there.

Tony LeBlanc: Yeah. Yeah, for sure. And lastly, I always like working with people that I like. I like people that I can have stuff in common with. I like having general discussions that’s maybe not always just about buildings and have some great rapport. So there’s a personality aspect to that as well, to where you just get a vibe when you talk to somebody, and it’s like, yeah, I could see myself working with this person, or sometimes you can immediately tell, they’re going to be a handful.

Tony M: This is going to be painful, yeah.

Tony LeBlanc: Yeah, this can be painful. They’ve got a great building, but do I really want to put up with them? And sometimes the answer is “no.” A lot of times, the answer is “no,” to be honest with you.

Tony M: Right. And we mentioned this last, but it really could be first.

Tony LeBlanc: Yeah, yeah, absolutely. It’s that important.

Tony M: That’s awesome. All right, so we’ve talked about the different audiences—the different segments. You talked about professionals, you talked about other people in real estate, like brokers. We talked about a new investor, really a new group of investors that are springing up.

How do we market to new multifamily investors?

Tony M: Because it’s not the same as finding an owner lead, for example, from someone who’s an Accidental Landlord or in the same kind of way. So how do you go about doing that in the first place?

Tony LeBlanc: Yeah, typically these guys that own these larger multifamilies, they’re… I’m not saying they don’t, but it’s a lot rarer to see them going on Google and typing in property management in your city. Typically, these guys are accessible through networking. When I started Ground Floor 10 years ago, I don’t know, it was just second nature to me, that my initial goal was that I wanted to be known by everybody as the “apartment guy.” So whenever a discussion came up, I didn’t care where it was and who it was with, if the mention of apartments came up or investments, in terms of real estate, I wanted my name to be somehow brought into that discussion. So, that meant I had to make sure that a lot of realtors knew who I was, and that apartments were my expertise. So you’ve got to go put yourself out there, in terms of positioning yourselves as an authority and an expert in that specific vertical of property management, apartment buildings, and investment properties. You’ve got to know your numbers.

We sometimes take for granted, the knowledge that we have and the understanding that we have of how apartment buildings work—and we think that everybody knows it. Everybody thinks that they know how to evict tenants properly. They think they know how to deal with late rents. They think they know how to deal with all these situations, when the reality is, a lot of people don’t. And we tend to keep it close to our chest. So, I’ve always been a big proponent of putting yourself out there, whether if it’s social media, lunch and learns with different organizations, being involved with different entrepreneur groups, like BNI or breakfast workshops, and all these types of networking. But, at the end of the day, I strongly believe it’s all about who you know in that space. You’ve got to know who’s building it is.

Tony LeBlanc: I made it a point, and I still do to this day. I still drive around the city all the time and I make sure that I know who owns every building. Here, I can drive down the street. I’ll write down the address, and when I get home, I’ll punch it into the software that I have access to from the province here, and it tells me who owns it. So, if I don’t know them, I can guarantee you, they will know me soon. So, it’s just a matter of, okay, well how many degrees away am I from them? So, maybe I don’t know them, but maybe I know a banker that knows them, a lawyer that knows them, an architect knows them, a friend, a realtor. I’ll find them somehow. So, you’ve got to be visible for these guys to know that you’re there.

Tony M: Yeah. And I think sometimes as well, property managers are a little bit shy and they don’t recognize the value that they have, just in the knowledge of their local market. Right? So, if you’re managing a bunch of properties locally and you really know a neighborhood, knowing the vacancy rate and how to best manage that rental market can go extremely far, because if, especially you’re dealing with the people who are operating off of opinion, and you have the data to back it up because you’re using software to track it, or you just have your own way of tracking it and tracking those metrics, and then guiding the community, you can be a real voice.

Tony LeBlanc: Yeah, absolutely. It’s not abnormal for entrepreneurs, and that’s what property managers are, we get stuck in the minutia of the day to day. We get stuck in the business and it’s very hard for us to take our head out of that and see outside, and actually see what other people see, and you’ll find out quickly enough, that what we know and what we do is a very valuable asset to the right people. And if you can present yourself in a way that exudes that confidence and an expertise, the builders and the investors will find you. I get a smile every time I get an email or a phone call from somebody across the country, to where they’re buying a building and they’ve been shopping around for a while, and they tell me that everybody I talk to, tells me to call you. I’m like, ah.

Tony M: That’s awesome.

Tony LeBlanc: That’s what you want to hear. That’s exactly what and why I do what I do.

Tony M: Yeah. It’s the question: Who’s the best in town? A new investor comes in, they have a new multifamily on the target that’s being built. Who’s the person that’s going to get it done? And if you come to mind or you’re in the top three companies that are mentioned in that conversation, you’re doing well. Your branding is working.

Tony LeBlanc: Absolutely. Absolutely. You’ve got a shot.

Tony M: That’s awesome to hear that you approach it that way. Now I wanted to also mention something that I think is interesting, a methodology for property managers to consider with marketing, and it’s something that we use here at Buildium, but it’s called Account-Based Marketing (ABM), and what you’ve been explaining is just very targeted marketing. And so what account based marketing does, is it flips the marketing funnel, and instead of casting an extremely wide net and using Google advertising to capture leads, based on certain keywords, or doing broad marketing and then narrowing it down—it does the opposite. So, you’re saying you know every property owner, who owns a multifamily building, and you really know all the owners. That’s really means that you’ve got your finger on the pulse, and you want to target ones that don’t work with you, right?

Tony LeBlanc: Yeah, absolutely.

Tony M: So, the way that you do that, and there are companies like Alyce, for example, to give them a little plug, that actually help business owners do that by sending out personalized gifts to top accounts. Even if you can’t pay for a service like that, even if you can’t do that, you can still embrace that methodology and say, “Listen, you know what? I’m going to send out a bunch of gifts to these top 20 investor owners in my market, who aren’t doing business with me, to try and get them to start a conversation, and at the same time, I’m going to email them.” And so it becomes a multi-touch marketing thing, where you’re really going after the big fish.

Tony LeBlanc: Yeah, yeah. That’s beautiful. I think a perfect example of that is, what I’ve just started doing is, and in my case, I’m sending people copies of my book, to some people that I’ve not yet done business with. I know them. I know they know me, but now I want to create, I want to bridge that gap on that relationship a little bit closer. Obviously, not everybody’s written a book, but everybody can go to their local bookstore and order a book, write a note inside. Find something that you think could be a value to them or, if you know they like sports or something financially or real estate related, and personalize a note inside: “Hey, thought you’d like this! We should get together for a coffee someday,” or whatever. That’s definitely going to elicit a response—I can guarantee it.

Tony M: Right? Because you’re differentiating yourself. First of all, writing a book— you’re doing something that’s different than most property managers. And you’re right, not everybody has to write a book, but you have to think about what your brand is and how it’s different from your competition. So, that’s awesome. Now I want to ask you this question because I’m curious how you leverage existing relationships and sometimes maybe some tricks that you have for getting foot in the door with a building, even if you’re not fully managing it.

How do you use existing relationships to get new business?

Tony LeBlanc: Let me think that through. So, with property owners or investors that I’m not yet working with?

Tony M: Yeah, curious if there are just some ways that you get your foot in the door with those investor clients.

Tony LeBlanc: For us, it’s always been through great referral partners. So, realtors can be really good and really bad, but when they’re really good, they can really pay off very, very well. So, that’s something that I always hold quite close to me, but also using my existing portfolio of properties and owners, and asking them, do they have any people that they know that are looking to invest in the area?” Sometimes it’s not about going and finding local investors. Sometimes if you have a group of clients that are from not around here, then you can actually talk to them about, “Hey, is there any other people in your area, wherever you live, that would be interested in an investing down here?” Then you can partner them up with a realtor and actually facilitate a deal to bring in the building into your portfolio.

I have (crazy that you mentioned that) but today, right after this video that we’re shooting, I have two owner-investors, coming in from British Columbia, that are friends of another one of my owners from Germany, and a couple of weeks ago, we got two 12 units under contract. So they’re coming to see them today. So we’re going to go see those for the first time and I’m taking them to go see an 80-unit complex, and another 24-unit complex. All because I mentioned it to that owner.

I’m like, “If you know anybody else in your area that’s hot for real estate down here, I’d love to be introduced to them.” So this was no one in my market—they’re on the other side of the world—but it’s paying very well.

Tony M: Yeah. And you would never expect that kind of thing, and it’s just good to keep an open mind about where that money and where those clients can come from. So that’s great advice. So, as far as the messages, we talked about the different kinds of clients, but I’m curious what messages you find generally work, when you’re trying to really show your services, show value. What are the kinds of things that you talk about with potential clients?

What kinds of marketing messages work to attract new owner clients?

Tony LeBlanc: Yeah, so the biggest thing, when we’re having these conversations with these people, when we do get in (whether if it’s on the phone or face to face), is really telling a story about your expertise, and your story, because whether it’s how you got into business, how property management came about, or what value that you can bring to the table. Honesty, trustworthiness and transparency is huge. These owners and these investors want to know that their property is safe with you. That’s number one. They want to make sure you’re not ripping them off. It’s really that simple.

“Is the $50,000 a month in rent going to disappear or do I know that it’s going into the proper trust accounts and I’m going to get my cashflow every month?” Those are definitely the most important things they want to know.

So we try to make sure that we give great examples of how we do things, so that they can be rest assured, and they have the confidence coming out of the call or the meeting face to face—that it’s like, “Yeah, these guys are good guys. I can trust them. I get a good vibe.” And that’s really been the cornerstone of our business. It’s worked tremendously well for us. It’s rare that I get into the whole details of why I created Ground Floor or why this or why that. It’s important to know, but you weave it into a different type of discussion with them.

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Tony Maiella

Tony Maiella

Tony Maiella is the Sr. Content Marketing Manager at Buildium. With a deep appreciation of storycraft, Tony leads Buildium's content marketing strategy to connect and educate property managers with the latest insights to grow their businesses. In addition to being a creative writer of content, he also has an affinity for Brazilian culture and will pick up a guitar any chance he gets.

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