Today our guest is Deniz Yusef, who trains business development people in Australia’s property management industry. We are definitely lucky to bring him on board; to date, we haven’t run into anyone like him here in the United States, or even elsewhere in the world.
Preconceived notions may have you thinking that you first need to get leads before you hire a business development manager, however, that is not the case. In this interview and article, you will learn:
- 4 new lead sources a BDM can bring to your property management business.
- Common blockages BDMs uncover when it comes to leads.
- How to incentivize a salesperson or BDM to sell beyond their sales goals.
- The big mistake owners make when employing a property management business development manager.
Listen to the interview above, or read the transcript below, and learn all that you need to know about Business Development Managers for your property management company.
When to Hire a BDM or Salesperson for Your Company
Q: One question I get a lot is: when should I be ready to hire a business development person or a sales person to sell my property management service? Is it 100 units? 800 units? What’s the answer you usually give?
A: Well, I usually ask, how serious are you about your growth? You can have a business development manager with no houses under management. Right now, I’m working with some people who are in Bali, trying to grow a rent roll in Australia. So, they will work remotely and hire a business development manager in Brisbane. He has zero houses under management right now. There’s no magic number really, it’s interesting to see what the goal is. Some people have started with six properties under management and the goal is to get to 38 or 40. It’s one of those questions that’s hard to answer because there are a lot of different variables to consider. How many properties can you manage? It depends on your backing and your assistance. So, there’s no real number to put on it. If you’re serious about growth, you need to be over-staffed to be prepared for that.
Q: A salesperson, in my opinion, is an asset to the team. They bring in a lot more than they consume. So, what would be the trigger or the number of units with an average management fee of $125 per month that the salesperson needs to bring in every month to justify their existence?
A: Well, this comes back to the average income that each unit is bringing your office. So, if you’re only averaging $1,500 per year in income, you’d want a minimum of 10 units/month to cover their wage. But again, it’s what your overhead is and what you can afford and who you can employ. Some companies will employ someone at a minimum wage and give a higher bonus. They are happy to wear the costs for 12 months. It’s a tricky question. Some people, if they get six new units a month, they are happy. I am preparing to train someone who is already leasing 28 units/month and they have employed me just to push them to 30.
Background on Deniz Yusef
Q: You had an interesting career path to get to where you are. Can you talk about your experience? You were the top business development manager in the nation.
A: I had no education or training in sales. My background is in hospitality. I worked in restaurants and moved into fruits and vegetables. I was a fruit vendor. My wife and I thought about traveling to America for two years with our two children, and then we got pregnant with our third child, so we didn’t travel. That’s when I moved from fruits and veggies into real estate. I was the leasing agent and then I became the business development manager after nine months. My job was solely lease management and growing the business. In essence, I took on the attitude of doing it like fruit and veggies. I knew how I got new clients for fruit and veggies, and so that’s how I approached it in real estate. I listed just over 60 managements in my first year.
Q: Just to convert to our US terminology, you basically sold 60 management contracts?
A: Right. We call it listing and I think you guys call it ‘getting a door.’ So, I got 67 individual doors that were then converted for management. That was securing the management contract. I learned a lot from my mistakes. I didn’t know how to sell the property management part. I reduced the fees because I didn’t know what I was doing. So, in my second year I sold 191 doors. The next year, I was up to 237, and my goal was to beat what I did the year before. I had a white board with all my numbers. I went to 317 the year after that, and I was averaging 34.5 doors a month. I was tired.
Q: You worked for another company?
A: Yes, I made my bosses very rich. That was 926 units total in four years or 48 months. The KPIs – Key Performance Indicators – had specific targets to reach and tasks to do, including follow-ups and a contact management system. I know you have a great contact management system with LeadSimple. I would have loved to have LeadSimple when I was a business development manager, but we didn’t have that technology then.
Q: As a property manager, how do I find the business development person who could have a relatively unsuccessful first year bringing in about 67 properties, and then boost that up to 317?
A: I’m fortunate to be training some of those freaks and I was lucky to be one of them. The biggest mistake I see people making is employing a property manager to be a business development manager. It’s a different mindset and those are two different positions and roles. I’m not saying a property manager can’t go out and lease properties, but if you want to be successful in bringing in a lot of management contracts, you need a person with a sales-mindset. One way to put it is like a car lot. You have mechanics and salespeople. The salespeople have a job to sell a vehicle. The mechanics look after the vehicle once it’s purchased. Those are two different mindsets. The salesperson won’t be good at the job of a mechanic. And I’m sure the mechanic is capable of talking about the car, but not as well.
What are the Tasks for a Business Development Manager?
Q: What are the major tasks of a business development manager?
A: It’s a combination of everything. I like the analogy of an octopus. There are all these different areas of where you’re generating leads in different ways. If you have a sales department in the office, that’s one way of getting leads. Each lead has tentacles on it. So, there are sales leads from a broker who is selling houses and dealing with investors all the time. You’ll want to create relationships with them.
Q: So, building referral relationships with real estate sales shops is what you’re talking about.
A: Yes. In America, you also have sales-only offices and property management-only offices. So regardless, you have to network with other salespeople because they may not be happy with their own property management division. You’re always networking and creating sales opportunities.
Q: One value point here – I believe this particular revenue stream or lead source is exceptional, but you have to lead with value. People have to set up workshops, offer education, and do that for different real estate offices. They teach them for an hour, giving something for nothing. It’s an amazing opportunity. So, I like where you’re starting, by giving Realtor referrals around town. What’s the next lead source?
A: You’ve also got to think about who the investors are dealing with before they even think about buying an investment property. It’s important that business development managers set relationships with:
- a mortgage broker
- and an accountant
That helps you catch leads at the highest point that you can. Leads haven’t even talked to a real estate office yet, so if you can create a network and get your name in there and have an information night targeting those offices, it will help. We have conveyances over here when contracts are exchanged, so I would do a lot of network meetings with anyone dealing with real estate. In America, you have accountants, title companies, and you need to have the same meetings.
Q: So, it sounds like once property management business owners understand this lead source, then they will need to put the right people in front of their business development manager and set expectations. A lot of people don’t understand that giving without expectations is a great way to get to the golden rule of reciprocation. So, allowing BDMs to spend a little money and time to teach, answer questions, and educate will help build the referral network. What’s next?
A: Information Nights. These are meetings that you would have as part of your networking, with investors or potential investors. Seek the source directly.
You will need to get some speakers. Good examples are:
- Sales agents
- Tax managers
Various experts in their fields can come and speak, and feel free to be creative. If you know someone politically who has sway, invite that person too, because they bring a new crowd of people to something that is branded to your company. It gives you expertise. I was fortunate to be best friends with a mayor at one of our Information Nights, and it was hugely popular. We just had him speak for 15 minutes on the future development of our area, which was really good.
Another thing we do is letterbox dropping, which I’m not sure you can do in America because of your laws. But if we just listed a property and we’re going to look for a tenant, we’ll have a flyer that says there’s a property available on your street, do you know anyone who is looking to move, or would you like an updated rental opinion on your property? I would put that in the letterbox. See: Sample Letterbox Dropping by Deniz
Q: We are doing something like a mailer, which is where we physically mail the postcard that says, ‘there’s a new property available; if you know anyone or if you’re interested in a free rental analysis…’ We just have to pay the post office because we cannot walk up to a mailbox and put something in it.
A: When you share these mailers, you have to do it twice. You have to do it once you have secured a tenant as well. The level of branding in that little region in a short period of time makes a difference. Having a Call to Action on those mailings is important. When we walk around, I’ll stop a mom who is out for a walk with the stroller. I’ll start the network. There’s that one person who is always in the garden in every neighborhood. It doesn’t matter what country we’re in, there’s always that one person. So, you talk to her about who you are and what you’re doing, and the information spreads.
Q: Very few people do what Deniz just discussed. There are three tasks that your business development person should be committing to:
- building referrals
- organizing investor meet-ups
- and doing the “For Rent” announcement in the neighborhood.
These things Deniz covered are not your everyday ‘bang-on-the-phones’ things. These are foundational and they speak to building the relationships and nurturing referrals. So, I want the audience to realize that without a professional salesperson or business development person committing to these tasks, there’s no way for a property manager or a business owner to get quality growth. Can you give us one more key area, or tasks for business development professionals?
A: Everyone forgets about current managements. The clients you already have and the properties you’re already managing – have you asked them or called them to ask if there are any other properties that you can help with? Is there a brother or a sister or a colleague who might want to have the same experience? The process I use is to call people two weeks after we’ve secured a tenant for them and ask if they were happy with the process. Hopefully, they will say yes. If not, I would say thank you for the feedback, and I would fix it. But if they do say good things, I would ask if there is anyone else who would like to have an equally good experience with tenant placement. I might mention a special where you might give them a month of free management for every referral. Give them an incentive. We like to think that investors are like fish – they all stick together and they always know someone else who has investment properties. Another little trick; whenever a new staff person comes into the office, we always ask if they know anyone with investment properties. It might be a new person at the front desk. Put a referral system in your office. Pay bonuses.
Those things we just talked about are just a couple of examples. A property manager’s job is to look after properties and it can be hard for them to want to grow the business, because it does create more work for them. We have done some studies that show when the initial phone call comes in from an owner who is thinking about renting a property out, there are 17 hours of work until you are actually collecting money for that owner.
How to Incentivize Your BDM to Continue Selling
Q: I can see why a property manager would hesitate. The payment is incremental and it’s hard to feel it. The property manager mindset is not that of a hunter. They’re farmers. They are great at farming. If you try to push them into hunting, the sales calls are not going to get answered.
A: Spot on. Most people who are in a position of business development are driven by money. So, it’s a different incentive. You were talking earlier about that magic number. It’s not about that one number to reach. There are increments so that bonuses grow the more they sell. You don’t want your business development person to achieve the 10 or 15 that you’ve required for the month and then save any additional business for the following month.
Most offices I come to, I find that typically happens. Instead, you want to have a base bonus for the first five properties, but then give a higher percentage for the next five. Some offices pay on a percentage bonus depending on annual income because they don’t want the fees to be reduced in order to win the business. There are different ways of looking at it. The mindset is different because money is a driver for the business development manager. They aren’t thinking about the work that new business will create. If there’s one person bringing in doors and angry property managers doing all the work, a balance needs to be created.
Q: I’ve been talking with my friend who has a big property management company and for six months we’ve been talking about why he should hire a business development person. He hasn’t yet. When I ask why, he tells me that he doesn’t have a lot of leads. There are only 10 leads a month coming in.
A: But you hire a business development manager to create leads!
Q: See? Exactly. Deniz just gave us four ways to have your business development person busy and creating leads. We have talked about solid ways that aren’t easy but very doable.
A: One year I brought in 237 leads, but our office only grew by 108 doors. If I hadn’t been there with all the leads, the office would have gone backwards and lost 129 doors. You must have someone generating the leads. That friend of yours who is only bringing in 10 leads a month – how many are being converted? Probably only three or four. And, how many properties are they losing? You have to make up for that.
Q: Yes, and one of the conversations we always have is about that they are staying even and plugging the leak. If the leak increases suddenly, they’ll fall behind. It’s the nature of recurring service. People sell properties and no longer need management. It’s a leaky bucket. If you aren’t growing, you’re dying.
A: And I would say that more than 10 leads are coming in, they just haven’t identified them. So, my job as the business development person and coach would be to go into that office and identify the blockage that’s stopping the leads and figure out why they aren’t converting more than five out of ten leads.
Q: Tell me more about that. What are some of the common blockages?
A: One of the biggest blocks is not identifying the leads. A lot of times, if someone is thinking about selling or renting, it only goes to one department, the sales or the property management department. A perfect way to overcome that is, whoever answers the phone or the email needs to send it to both departments at the same time. The old system is it always goes to sales, and if it’s not going to be a house to sell, they’ll toss it over to the property management side. That lead is getting beaten up. It’s simple to lose a lead that way. Second, the property management department doesn’t have a contact management system. A spreadsheet or emails kept in a folder serve that purpose. Tracking leads is vital. An office I’m working in now uses a spreadsheet with 400 names on it. That’s their lead management system. It’s lead collection but not management.
Q: I think this was a good first discussion. I’d like to see what people have to say about what you’ve said. I’m sure it will be popular and I’d love to have you come back after the PM Grow Summit. You’re working with a lot of American companies now who are taking these concepts and using them here. I look forward to seeing how you progress here.
A: Yes, I’ve been working with Steve Rozenberg for about a year and they are fantastic. I am training his business development managers on converting. I like to ask for business as soon as I’m in the door, and that’s what we’re talking about. The business development manager there is amazing and she’s now averaging 40 doors a month.
Let’s not forget, they do investor workshops and radio shows and podcast. They are working. They blow up in terms of growth. So, if you are in the audience and you haven’t seen the effects of this explosive growth, consider talking to Deniz at bdmcoach.com.au. Thank you, Deniz, for joining us and I look forward to seeing you at the PM Grow Summit.
Thanks for listening, and contact us at Fourandhalf if you have any questions.