Podcast: Play in new window | Download
How do you build successful referral relationships in property management?
Your property management company depends on relationships, and on today’s episode of The Property Management Show, we’ve asked Paul Boudier and Terri Alcala to join us. They have a unique professional relationship in place, and they’ve been referring business to each other for years.
Today, we’re diving into how their relationship was built and how they manage to sustain it so that each of them can attract more business.
Introducing Paul and Terri
Paul (BRE# 01179722) heads the Paul Boudier Team at Keller Williams Realty in Placer County. He’s lived in California for more than 50 years, and he’s been a Realtor for 25 of those years. He feels passionate about his opportunity to help thousands of families in the tri-county area find a home or an investment property that works for them.
Terri Alcala (DRE# 01168555) is a property manager who owns Action Properties in Roseville. She’s been managing properties for 30 years, and Action has been in business for 20 years.
Terri’s mother gets the credit for introducing the two. She was a real estate agent working with Paul in 1994, and she immediately grew to appreciate Paul’s work ethic and the way he presented himself. Since Action Properties is one of the few management companies in the market that doesn’t also do real estate sales, the partnership has been invaluable.
Paul and Terri agree that their relationship works because they make each other look good to their clients. That’s the foundation of a strong referral relationship program.
Referral Relationships in Property Management
Use Your Network
Terri and Paul were introduced to one another, and you also have a network of people who can introduce you to partners that may help you build a stronger property management business. Look for people you can work with and build relationships with. It’s difficult to call a random Realtor or property manager who you don’t know, so focus on the relationships that are already in place and see what else they can do for you.
With a relationship like the one Terri and Paul have, they refer new business to each other first. But they have other referral sources, too. Terri specializes in specific parts of Sacramento, for example, so when Paul has a client who is in an outlying area, he relies on other relationships in those regions.
Building additional relationships is its own form of lead generation.
Trust Drives Business
Neither Terri nor Paul rely on formal contracts when it comes to working with each other or with any other professionals in real estate and property management. They trust the people they partner with – which may seem old school, but is vital in their industries.
Terri says she still trusts that people will do what they say. There’s an understanding, and the people she works with are committed to that.
For Paul, communication works hand in hand with trust. He uses client experience to know that each party is holding up their own end of the bargain. When his clients are happy with the services Terri is providing, he knows the relationship is working.
Every agent and property manager handles their referral relationships differently. A lot of property managers also sell real estate, and, in that case, it’s important to track who is referring business to you. You’ll want to take care of the management of that property and then offer the business back to the referring agent when the client wants to buy or sell. This is all based on trust.
Property managers and real estate agents who are focused on good customer service will end up winning business and building both trust and relationships.
Seeking Out the Experts
Instead of sheltering in and keeping all the business you possibly can to yourself, rely on the expertise of others in your network. The relationships you build will bring in better business.
Terri shares an example of 1031 exchanges. As a property manager, she knows enough about 1031 exchanges to be able to have a conversation with a client. But, when a client wants to sell a property and perform a 1031 exchange, she calls Paul. She knows he is an expert in this area and can help her client get a better result.
This is about educating your clients and making connections. Terri probably could have fumbled her way through a 1031 exchange, but why do that? Connecting her clients with Paul makes her look good. It demonstrates her commitment to service and to people.
At Fourandhalf, we’re always struggling against the idea that people are afraid to share information for free. They don’t want to educate people because they’re afraid those people won’t need them. That’s not true at all. You’re building trust, and you’re building a relationship when you educate and share information and make referrals. Even if the person you’re helping doesn’t use you in that moment, they will likely come back to you in the future because they’ll remember how helpful and resourceful you were.
Challenges in Referral Relationships
Terri establishes personal relationships with the people she works for and with. Creating partnerships and relationships feels very natural. Her clients have known her for decades and they send birthday cards to her kids.
There are a lot of success stories. There are challenges, too.
While Terri and Paul have not run into any issues in their own relationship, Terri has had some issues with expectations while sharing clients. An agent had referred a client to her for property management, and when that client was about to close on an investment property, Terri conducted an inspection of the property. It was not in rent-ready condition, and she knew that the owner would have to spend at least $6,000 or $7,000 on paint and carpet cleaning and other repairs.
The referring Realtor took these comments to be negative and suggested she mind her own business.
People are going to get defensive and they’re going to misinterpret what you do. This is why working with experts is so critical. The real estate agent probably had an idea of what a rent-ready property would look like, but didn’t have the expertise to know that the home they were about to close on was not ready to be rented.
Knowing a little bit about something doesn’t cut it. Reaching out for help is good business because it serves your clients better and it helps you develop and strengthen relationships and partnerships.
Referral Culture and Focusing on a Good Fit
When we’re talking about referral relationships in property management, the burden of networking doesn’t fall on you alone. Neither Terri nor Paul are sole proprietors. They have teams, and it’s important that their teams are on board with building their referral relationships in property management and beyond. Terri has trained her staff to provide clients with two or three agent names when they want to sell or buy property. The team recommends their clients call each of the agents to talk and see if their personalities fit.
A good fit is important to you and your clients.
Even when people call Terri looking for property management, she recommends they call at least two other management companies. Feeling comfortable is important when you enter into a relationship with a property manager or a real estate agent. She works with people who want everything to be automated and she works with people who don’t own a computer. She works with owners who live overseas and haven’t seen their properties in years. She works with local owners who want to get inside and look around during every turnover.
In order to have good referral relationships, you have to have good client relationships.
Paul has found that earning respect through good experiences has helped build business. He knows that when a client needs painting done or gutters cleaned, Terri will have a great list of vendors. She has resources and contacts, and that provides a big opportunity.
The opportunity is more than providing good service to existing clients. It’s about broadening the relationship net. When Terri refers a contractor, Paul has served the needs of his client. He has also been given the opportunity to create a new relationship with that contractor. When he refers that contractor to 12 people throughout a year, it’s not unreasonable to believe he’ll get at least two referrals of his own from the contractor. They’re working together and helping each other grow their businesses.
It’s a conversation Paul calls “The Promise”. When a client of his is happy because they’ve found the right home, Paul wants that client to be a raving fan. To Paul, this means that the client had a good experience and can refer at least two people who are thinking about real-estate.
Terri knows that doing good work for an owner or a tenant can circle back around years later. She had a former tenant refer a co-worker to her management company two years after the tenant moved out. These relationships matter.
How to Grow Your Referral Network
This is something you’ve heard before – every business owner is in the lead generation business. You’re making contact with people every day, and every person you meet is a potential lead. Paul has an ambitious goal, which is to make 20 new contacts every day. He leads a team of five agents and every morning they have a huddle where each agent shares:
- What they did the day before
- What they’re focusing on today
- What their affirmation for the day will be
Terri tries to make one or two new contacts a day. It’s often more, and it happens organically. She’ll be talking to her painter, and the painter will know someone renting out a house. Some days, she makes five or six or seven new contacts and other days she doesn’t make any. Her goal is to reach 15 to 20 new leads every month.
We covered getting more owner referrals in a previous blog, but even if you’re not setting out to consciously earn new business, the number of contacts you make and relationships you begin will average out over the course of a month. You’re doing it all the time, even if you don’t realize it.
Paul’s positive energy every morning in his huddle sets a tone for the day, and Terri has learned from that. When her team comes to work every morning, there’s already a lot of negativity because they’ll have after-hours phone calls and maintenance issues to deal with. She brings in Paul’s tactics and also reminds her team to smile when they’re on the phone. People can sense the negativity during a conversation.
If you’re looking for rules to live by while developing your referral relationships in property management, this team has some:
- Get involved with NARPM. Stick with the industry standards and go to meetings.
- Network with everyone, from plumbers to staff to family and friends.
- Sustain curiosity and don’t judge. You never know who needs you.
- Dig deeper and learn more when you’re talking to people. Get to know their pain points.
- Read some of these books:
- A More Beautiful Question by Warren Berger
- The One Thing by Gary Keller and Jay Papasan
- The Millionaire Real Estate Agent by Gary Keller, Jay Papasan, and Dave Jenks
If you have any questions, Terri and Paul would be happy to talk to you. We can help too, so contact us at Fourandhalf.
The Property Management Show is brought to you by Fourandhalf. We help property managers strategize and implement marketing plans that bring in owner leads. Click the image below to get a free marketing assessment and find out how to start getting better clients into your portfolio.
