Property Management KPIs That Help Landlords Scale to 300 Rentals

Cameron Tope (00:00)
Guys, You’re going to get kicked in the teeth at some point. It’s, it’s not, it’s not, you know, I, Issa, I when I talk to especially newer investors, it’s not about making a home run on your first deal. It’s about getting in, learning, and not getting taken out in your first deal. That is the thing. This is just a numbers game. It is a longevity game. The longer you’re in this, the more debt pays down, the more appreciation you get, the better— the better cash flow gets. But if you can’t— if you get knocked out on the first deal, you really stretch yourself then, put everything on credit cards.

Issa Hanna (01:59)
Welcome back to another episode of the Real Estate Pros Show. I’m your host, Issa Hanna, and today I have a property management legend, Cameron Tope with Emerson Property Management, a landlord extraordinaire here to share his knowledge with us. Cameron, welcome to the show.

Cameron Tope (02:10)
Issa, appreciate you having me on, man.

Issa Hanna (02:11)
Man, I’m super excited to have you on. The honor’s all mine. And for people that, you know, aren’t familiar with, you know, we— we said you’re a property manager. Give us like a rundown of what— what your day-to-days are like.

Cameron Tope (02:25)
Gosh, that’s the one beautiful thing about property management is there’s really no day that’s the same. So one day you get up and you know, during COVID was a whole different time versus pre-COVID. The market before COVID in the late teens was, you know, supply was constricted and there was all sorts of different things we were doing with properties versus now where inventory is proliferate and you’re getting a lot of competition in the single-family space. So, you know, no— no one day is the same, whether it’s hurricanes or freezes, especially here in Houston. You know, we get— we get those— those dreaded freezes every now and then. But as a business owner, I would say, you know, a lot of my stuff now is managing the team and making sure we’re hitting our KPIs and we’re hitting our— our metrics to make sure we’re delivering good service. So I have a lot of meetings, a lot of training is— is what I do to make sure that the— the team is in good shape. And then the team takes care of, you know, certain things with— that’s maintenance coordination or resident responses or owner relationships, and just making sure that I support them with whatever— whatever they need.

Issa Hanna (03:24)
Beautiful. And you told me that you’ve been able to grow your company from twenty nineteen from just you into eight employees into three hundred units managed. So how’d you start? How— how’d you get into it?

Cameron Tope (03:41)
Yeah. Well, you see, it’s not— it’s not like a straight-line trajectory, I can tell you that for sure. You know, in twenty thirteen I graduated with an engineering degree. I moved to Houston to work with British Petroleum. And right after I graduated, not within just a few months, oil went from like one-something down to like sixty bucks a barrel, fifty bucks a barrel, and everybody started freaking out. I was too. I had a bunch of student loans. I was, you know, just a few months into my career, and I was a petroleum engineer, which didn’t— which meant I couldn’t really easily go do the mechanical stuff or maybe the chemical engineers could do. So I was really focused on the proper— or the— the petroleum business. And that just, you know, when that oil price went down, it really kind of jolted me. It scared me, for— for lack of a better phrase. And so I was like, “What can I do to take control of my own destiny?” And Issa, there were these old-timers in the office. You know, guys in their fifties who’d— who’d seen this along, you know, been through many, many cycles. And they’re like— I’m— they weren’t worried at all. Their feet up on the desk, no big deal, not sweating bullets. And so I was like, “What— give me the secret, y’all. What— what’s the deal here?” And they told me, they just said, “Hey, over the years, I just picked up a handful of rental properties.” And I was like, “Okay.” So of course, engineer brain, I went right into analysis mode. I’m like, “My god, the leverage, the debt paydown, the appreciation, the— the tax benefits with depreciation.” It just, you know, and then the cash flow, the icing on the cake, you know, it just made a lot of sense. So I went to full, just, you know, threw that thing into third gear and— and went. And, you know, started buying up property. And in 2017, I was buying a house about every six weeks. And that’s when I was like, when I had like eight, nine, somewhere in there, I was like, “Okay, I need some help. I’m still working.” Interviewed a handful of property managers. Issa, I could not find anybody that just had the professionalism, but not, you know, so big, these big, huge companies that— that span multi-states. I just didn’t feel like they had the local knowledge or maybe the relationship. So I was like, “I’m just gonna do it myself.” Friends and family started piling on, hired my first employee, you know, in twenty nineteen. And then yeah, today we’re, you know, seven, eight employees and, you know, just under 300 properties can we manage.

Issa Hanna (06:38)
That’s an amazing story. And one thing, when we talked earlier, you said a strength of your business is operational excellence. With your background in engineering, I don’t doubt it, but shed some light to our viewers about operational excellence. What does that mean?

Cameron Tope (06:55)
Yeah. Well, you can break the business down into any— I always look at like the life cycle of a tenant. So when you get a vacant property, how do you get that property make-ready? How do you get it ready to market? Once you market the property, how long does it take you to get a tenant? Once you have a tenant, how long do they stay? And you just keep working through that— that circle or life cycle of a tenant. So we break each of those components down, Issa, and we say, “Okay, from the time this property is vacant till the time it’s listed, we want that to be 12 days.” And so if it’s out— if they move out on the last day of the month, we want that property marketed by the 10th, 11th, 12th. And then from there, okay, how long does it take to find a tenant? We have a 30-day lease guarantee. So we want that property leased under 30 days. I think last month we did 24 days, and the month before that we did like 22, 23 days. So we’re tracking all that stuff on a weekly basis. And the team is actually incentivized to hit those KPIs. So they— and a KPI, key performance indicator, for anybody that doesn’t know. And so that’s what we do. We take this big complex thing of property management and break it down into very, you know, specific, measurable things. And I don’t care if you’re offering like on your first house or first investment, just look at it like, “Okay, how many— how many deals am I looking at? How many offers am I writing? How many offers are getting accepted?” And you can create those things or those funnels or those metrics to be able to see, you know, break the components down of the business. Or, you know, if— if you own real estate, you’re in a business, whether you like it or not, or know it or not. So you can break that stuff down into very specific things that you can measure. And that’s what we do, you know, in— in the business. And we’re just, you know, my— I tell my team I’m a pedantic about it because I’m just so specific on that. What— it’s very easy to see. It’s hard, you know, feelings don’t measure very well. It’s like I can feel like we’re doing a good job, but if that number is off, that thing is is not emotional, it’s— it’s very specific and unique and easy to see. When you start tracing it, like, why is this off? What’s going on? Is this a leading indicator or lagging indicator? And we can really dive in, and then we find, okay, there’s a process issue or maybe a personnel issue. What is it? We go back, we update the process.

Issa Hanna (08:56)
Wow. You know, in real estate, the beautiful thing about our business, you can be analytical, you can predict numbers. And if you’re really good— and you know, you don’t have to have an engineering background, but it sure helps— you can— you can predict numbers, you can identify problems just through the numbers. And with that, I’m gonna segue to the next question because we kind of covered it. I was gonna ask you: as an investor, for new investors, what do you look for in a property when you’re buying a property? So you got the financial side out of it. Now physically, what do you look for when you’re buying a property and specifically what is a non-negotiable that you would walk away from the property?

Cameron Tope (09:38)
Yeah, Issa, I think my answer, if you’d asked me this seven, eight years ago, would have been very different because I was in building mode. And so for you, the— the listener, if you’re in building mode and you’re in a low interest rate environment, I would pick up as much property as you possibly could. I would be a little less worried about finding the specific deal. However, we are in now a high— medium to high interest rate environment and inventory— we have a supply glut. So I would be a lot more specific about the stuff I’m buying. And for me especially, like, I don’t have to, you know— I’ve got just over 30 rental properties myself personally. And so I don’t really have to take any swings. So the swings I’m taking, I bought one property last year, you know, there’s a hundred thousand dollars in equity the day I bought it. And so those are the ones where I’m like, “Okay, I’ll take those down,” but I’m really not actively going out and doing that. For you, the investor and the new folks looking at trying to find your first deal, I would say find desirability. You know, I used to hear the “location, location, location.” Well, that didn’t really matter during 2020 or 2013 to really 2020, 2021, because it was a huge bull market. I mean, you know, you could put lipstick on a pig, Issa, and it was— you would find a tenant. You would get it leased. It was no, you know, tenants stayed for a long time. And the low interest rate environment made it a lot of competition amongst investors. So I would find something desirable because now we are in a supply glut. When you go and look, just look down your neighborhood— “for rent” signs, “for sale.” We are getting a lot of accidental landlord clients, and which means people that tried to sell and couldn’t. So there— it’s a great time to be a buyer. You’ll be able to come in and negotiate, but you want to make sure you’re in a desirable area. That is one thing you cannot change. And then some of the other little odds and ends, you know, I don’t like septic tanks. There’s a whole ‘nother thing with that. So making sure you’re on city water and city septic is a big thing, and wells as well. Water wells can be problematic. But you know, there’s other little things in that, Issa, but almost anything, you know, outside of picking the property up and moving it, which is very hard, that desirability thing is huge. If you have a constant inventory, especially with a supply glut, if you are in an area people want to be, when there’s 13 other properties, they’ll pick yours. The other thing I would say from a property characteristic would be what I call functionally obsolescent properties. Big fancy word. I have a Southern or Ohio education, so don’t even know how I know that word, but the functionally obsolescent basically means like weird layouts. So when you walk into a property and you see like, “Whoa, I walk right into the kitchen,” it’s like, “Well, that’s weird.” Really tiny bedrooms, something that somebody put a wall that it doesn’t really make sense or flow. You— it’s hard to change those. You can. I mean, you can add bedrooms and do all that stuff, but it— for your first deal or maybe your first few deals, I would stay away from big structural things. So the first thing would be a property in a desirable area. And then the next thing would be: don’t get on well— well water, unless it’s very common in your market, or a septic tank. And then functionally obsolescent properties— anything that feels weird. And a lot of agents now, back when I started buying, they didn’t have all these 3D maps where you could walk through a house and do all that. Now you can do all that. You can get on Google Maps and look through all this stuff. So those are the handful of things, Issa, I would say.

Issa Hanna (13:19)
And you don’t learn these things— you’re not born with this knowledge, you guys. It’s a long, hard road to learn these things. So with that, every investor has a nightmare. Let’s hear yours.

Cameron Tope (13:31)
Well, I’ve got two properties that come to mind. One of them is a property where I bought a property that an owner converted without going through the permitting into a duplex. And hence, they didn’t have any of the proper documentation. They didn’t have the property properly sized for their septic tank, i.e., why I don’t like septic tanks. So they had these smaller septic tanks on the property, and when they added that additional space, those septic tanks were not sized appropriately. So to go back in and do it properly is going to cost like $20,000 to $30,000 because of the proximity to the property line of the neighboring properties. And so that was one that stung. I thought I knew a lot, and you’re going to get kicked in the teeth at some point. It’s, it’s not— it’s not, you know… I, Issa, I when I talk to especially newer investors, it’s not about making a home run on your first deal. It’s about getting in, learning, and not getting taken out in your first deal. That is the thing. This is just a numbers game. It is a longevity game. The longer you’re in this, the more debt pays down, the more appreciation you get, the better— the better cash flow gets. But if you can’t— if you get knocked out on the first deal, you really stretch yourself then, put everything on credit cards, you don’t give yourself an opportunity to bear the fruit from the tree that is real estate. You know, you can’t get upset when you’ve— when you plant an oak tree and you’re not sitting in shade in the next year. You gotta wait several years, preferably later, you know, five, 10, 15, 20 is the best and just, you know, let that— let real estate do its thing. But yeah, that one was one that— that— that bit me. And I had done probably over 10— I had owned probably over 10 deals before that happened, so I thought I— I knew what was going on. And you guys just gotta dot your I’s and cross your T’s on, you know, weird, weird things.

Issa Hanna (15:53)
And you know, I think that’s amazing of advice that you’re giving because you know, everybody wants to be that rock star, everybody wants to land that beautiful deal. Be safe in your first deal, please, folks. Be safe because, you know, like Cameron said, you can get taken out. You know, this is thousands of dollars you can lose. And if it’s your first one, this is your investment money. So don’t lose that investment money. Make sure the numbers make sense, you know. If it makes sense, it makes dollars. So, you know, great advice.

Cameron Tope (16:25)
Go ahead. No, Issa, it’s just— you— you’re so right in that. It’s like we— we try to think that— well, I’ll tell you this. I got made fun of a lot when I just bought single-family homes because then it started turning to Airbnb were all the rage, and commercial was all the rage. And I mean, it was like, and RV parks and self-storage. I mean, it was like all these cool strategies where, “Wow, you’re only making two hundred dollars a month in cash flow. I’m making two thousand dollars a month off this or twenty thousand a month off that.” And a lot of those investors aren’t around today. I’ve been doing this just over, you know, just about 15 years, and a lot of those are— they’re not around. So, you know, I just— yeah, be careful on sticking your neck out on the first couple deals. And I can tell you that a good deal today gets a lot better. It’s like fine wine— it gets a lot better with time.

Issa Hanna (16:56)
Yeah, yep. Everything ages like fine wine when you— when you have that equity in it for sure. And, you know, your method and— and your philosophy, you’ve been able to not just grow your own portfolio to 30 properties, but you have 300 under your belt that people trust you to manage with this method. So, it’s a proven method, you guys. It’s definitely a proven method. Cameron is— is right on point with this. So take that advice and run with it. Now, people that are new, you know, they— they might just get their real estate license, they might become a property manager. This is a— a business where we have to generate our own clients, you know, we have to bring them in. So, you know, we have to foster business relationships, grow our network. What kind of advice can give you— can give our— our young listeners here, basically on fostering these relationships and growing it?

Cameron Tope (18:03)
You know, when I first started going to networking events, I was afraid to tell anybody I didn’t have a deal, or I was afraid to be like, “You know, I’ve got one property or no properties, or I’ve looked at all these,” or whatever. Don’t be shy about that. I think being— being coming forward and just being like, “Yeah, I’m looking. I have been looking. I’m trying to find this three-two in this area, or I really like— I want to do short term or I want to do furnished,” or whatever it might be, but just be forthcoming on that. I think, and doing that to your entire network, meaning, you know, the first— I bought four houses from one individual who was a family friend that my mom told her that I was in real estate. And she’s like, “Well, I’m— I’m actually retiring, and I’ll sell you these over time.” So I bought one from her, another one, and just slowly over time picked up a handful of properties from her. So just telling— as a new person, being okay saying, “I really don’t know,” and going out and telling every single person you know that you are doing this. “This is what I’m— I’m planning to do.” And don’t be afraid if somebody pushes back like, “Well, you know, little Johnny, you don’t really know what you’re doing,” or “That sounds risky.” Do— do the math, do the analysis, you know, follow and get— get on networks and— and podcasts like this where you can absorb this knowledge. And again, just get it out there, put it out there in the universe. And I think you’ll see that being in proximity of those people or going to those events and telling everybody, deals start to, you know, come your way. And maybe not every perfect deal, right? There might be something that looks in Shreveport, Louisiana— it doesn’t mean have to swing on it, but at least you get to— to exercise a muscle of analysis, of telling people that. Or, “Hey, I appreciate you sending me this, but I’m really looking for something in the Houston area or really looking for something in the Austin area.” So yeah, I think the biggest thing, Issa, is just getting out and telling everybody. And then you’ll slowly start building your team. You’ll find the movers and shakers, but tell people and just be honest. Don’t, you know— again, I was there too where I was embarrassed like, “My gosh, I haven’t bought a property yet,” but you’ll get over that. It— everybody starts there.

Issa Hanna (19:58)
Yeah, everybody starts at zero deals, you know. Don’t be afraid to get out there. You don’t get playing time if you were in sports— you wouldn’t get playing time if you don’t show up to the playing field. So show up, put it out there, and— and manifest it and it will come. So Cameron, man, you’re rolling with the advice today. I’m all out of time for the— for today, but I want to invite you back on the show at a later date if you’re interested, just because I’m enjoying this conversation so much. I would love to pick it up where we’re— we’re leaving it off at. But if people are at home watching this, maybe they have some properties and they’re like, “Yeah, I like— I like what that guy’s saying. I— I want to use them,” where can they get a hold of you?

Cameron Tope (20:39)
Yeah, well, first, Issa, I would be happy to do that. I think this is great, you know, information. And you know, I like— I like the style. You, you know, very easy to talk to. So like you said, I feel like we’ve been— we’ve known each other for a long time. Fellow Ohioans, right? So the— the easiest place, guys, is either just search my name, Cameron Tope, or go to EmersonPropertyManagement.com. And we do have a bunch of free stuff on there. I know everybody’s got calculators and stuff now, but there is some real targeted things on the website. So there’s an accidental landlord guide if you’re having trouble selling a property, or if you’re an investor looking for stuff, I’ve got my personal deal analysis calculator and various other things on there. So all a hundred percent free. And even, you know, if you’re having trouble screening tenants, I have a qualifications page on the website that’s— that’s open to the public. So steal that information, use it, you know.

Issa Hanna (21:27)
Definitely, go visit the website cause even if you don’t use him, you can get a lot of knowledge from him, like we just got a— a lot of knowledge from him in— in real life. So Cameron, once again, thank you so much. It was an honor to have you on my show. And like I said, I would love to have you back on in the future.

Cameron Tope (21:45)
Absolutely. So I appreciate it. Thank you, sir.

Issa Hanna (21:47)
Thank you. I enjoyed talking to you. And if you guys enjoyed talking or enjoyed this conversation with me and Cameron and want to see more just like this, make sure to hit like and subscribe. I talk to people every day that can bring us different knowledge on every aspect of the real estate industry. Until next time, the real estate pros are out.