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Show Summary
In this episode of the Real Estate Pros podcast, host Micah Johnson welcomes Greg Flowers, a seasoned property management expert with nearly three decades of experience. Greg shares his journey from the mortgage industry to property management, emphasizing the stability and predictability that property management offers compared to the highs and lows of real estate sales. He discusses the importance of technology in modern property management, highlighting how it has transformed the industry and made operations more efficient. Greg also provides valuable insights for property owners considering hiring a property manager, including the benefits of professional representation and the importance of maintaining good tenant relationships.
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Investor Fuel Show Transcript:
Greg Flowers (00:00)
a good analogy would be a sailor and the crew. I mean, you can sail a lake. You may be able to even be able to sail the bay on your own, But it’s nice to have a crew. It’s nice to be able to delegate. They’re not going to touch the steering wheel. That’s the captain’s job. But we’re here as the crew to say iceberg dead ahead. Turn hard left, Captain.Micah Johnson (00:03)
Mmm.Hey everyone, welcome to the Real Estate Pros podcast. I’m your host, Micah Johnson. And today I’m joined by Greg Flowers, who’s been making some serious moves in the property management industry for almost three decades now. Greg, welcome in, man. Glad to have you.
Greg Flowers (02:09)
Hello,Micah. Thank you so much for inviting me.
Micah Johnson (02:12)
I’m excited for you to be here. I think our listeners are really gonna take something away from your experience and how invaluable that is, especially in the real estate industry and the particular markets that you work in. So let’s go ahead and dive in on that. For folks who may not know you yet, what is your main focus and what markets you’re working in right now?Greg Flowers (02:29)
Thank you, Micah. So 30 years in the industry, have the gray hair to prove it. I started in mortgages. Actually, we spoke earlier, a fellow Floridian moved to California in 93 and went right into mortgages, retail, then wholesale, then opened up my own mortgage industry, my own business. Then had that for eight years, sold it to JP Morgan Chase, got out of that industry in 2007, right before the crash. And then did what a lot of us did.Micah Johnson (02:57)
Good timing.Greg Flowers (02:59)
a lot of reevaluation of where I wanted to be. then property, I’d always done property management for my own and for friends. And then I decided to go into it full time in 2009 and was in Santa Cruz and then moved to Berkeley. I kept that branch and then opened up a branch here in Berkeley as well. So we still have the two branches and we’re just a little under 400 doors right now. So we’re growing. It’s a great industry, not a high wire act like the other two industries, real estate mortgage.Micah Johnson (03:01)
HmmGreg Flowers (03:29)
You get a paycheck every month. And in essence, what we are is we’re a trust fund managers that just happen to manage real estate.Micah Johnson (03:38)
It’s funny you explain it that way because.Real estate is interesting in that regard is the machines you build to make the industry run. They’re kind of universal almost in a way, but they trade in real estate is simply what they do. Opposite with property management. One way I explain to people that wonder about a professional real estate investment company is they built a machine that trades in real estate. That is what they’ve built. is it. And that’s how you spit it out, make it work over and over and over again. And it’s one of the things I love about the industry is
your experience really does stack on itself, where it doesn’t, you know, it’s not just left by the wayside as you change in the industry. Because I was, I’ve been a realtor before myself. I’ve sold houses to hedge funds. I’ve done all kinds of stuff in the industry. And one thing I love about it is it lets me readjust. Okay, where am I at now? What do I want to do with it today? And you’re one of the special folks that like property management. I got to say, man, that is usually folks thing that they don’t enjoy.
but it also lines up with if you can find your place in this industry, that thing that just does it for you.
Greg Flowers (04:45)
It does. And that’s a great observation. ⁓ There’s a lot of technology now that there wasn’t before. If you’re still doing it old school, know, checks in the mail and taking those checks to the bank and, you know, doing invoices every month. I mean, that that will be a miserable business, but there’s platforms now you can do rent online, ACH every month. You can dis disperse those funds through ACH. You never see a bank, which isIt’s a very depressing place to be these days anyway. don’t want to, I don’t miss those days, but thank God for technology. And then, ⁓ you know, it’s a system, it’s a, it’s, it’s like any company as you grow, you grow in experience and hopefully you get some loyalty, some good people that work for you and you can delegate some of those really not so pleasant parts of the industry.
Micah Johnson (05:18)
Yeah.Right.
So when you were, let’s go back to 07-09, you’re making that jump. What ultimately was it that was like, yeah, property management is the one I want to do.
Greg Flowers (06:27)
Well, it was just the ebbs and flows, the highs and lows. I just got so sick of that. know, you and a lot of people, wasn’t me, but a lot of people that I knew that were selling real estate, they were living on their credit cards and then they get a big commission. Then they just pay off their credit card and they’d be back to square one. And I just, you know, I didn’t like that lifestyle and, and property management was just steady, eddy. And especially after a time like 2008 through 2011, steady eddy, even though was a little boring, wasn’t sexy.Micah Johnson (06:33)
Hmm.Greg Flowers (06:57)
But ⁓ it was very appealing to have something clicking every month and paying you. And just customer service, I was always very customer service related. ⁓ So it was easy for me to make that transition. ⁓ And it’s good being a fiduciary. I’ve always enjoyed being a fiduciary. I was a stockbroker for years and I enjoyed that whole part.Micah Johnson (07:23)
Very interesting. So let’s let’s tap into your experience some let’s say we got a ⁓ Listener that they own rentals. They’re thinking about property management for the first time because most folks start out doing it themselves What is it that they what are some thoughts they need to think about first some questions? They they gotta have answered from any property manager and then we’ll they’ll specifically into California’s market So I know there’s some difference but just some universal knowledge first and then we’ll dive deepGreg Flowers (07:51)
Positives and negatives one of the positives is right off the bat. You have professional representation You have you have local up-to-date leases that are being provided look by the local association Normally property managers, know every state’s a little different but in California for sure you have to be licensed ⁓ To to do even touch a lease. So you have professional representation You have professional leases you have heirs and emissions insurance you have liability insurance. There’s a lot of things thatThe property manager has a lot of experience that he’s giving you. So you’re protected. Just think of it as an insurance policy right off the bat. ⁓ If you go at it alone, it’s okay. But I think one of the first things you want to think about is first, am I good working with people? Am I people person, so to speak? Do I enjoy the relationships or do I feel maybe it’s a little too close to the bone? I don’t want to do business and be friendly with my tenants.
Micah Johnson (08:27)
Okay.Greg Flowers (08:48)
A property manager will certainly give you arms length right there. ⁓ then another thing to consider is do I have the cash flow to be able to do that? How much rent can I get? How much of a deduction is this property manager going to take out of my pocket every month? Does this cash flow? So those are two things I would think about right off the bat.Micah Johnson (09:09)
Is there a particular timing, like a number of units or an amount of cashflow a month where it starts to become the obvious choice to seek that lead or that professional representation?Greg Flowers (09:19)
yeah, multi units.If anything, if you’re over a duplex, triplex, absolutely, I would I would get a property manager. It’s just it’s it’s a moving target and things happen and you have to be present in California. ⁓ The worst thing a property manager can do is not not be active in repairs. You cannot do that if if you delay repairs.
or you don’t act when people say act, ⁓ it’s the worst part of the business is repairs not being taken care of or not being responsive, neglect, those are terrible things. So you have to be ready to take that call at 10 at night if the house is flooded.
Micah Johnson (09:55)
Yeah.Right? And that’s kind of what the investors offloading to property manager. That’s, that’s what justifies that, not just what, but as part of what justifies that fee each month. Cause I’m definitely tracking with professional representation. The higher you get in this business, you realize you cannot do it alone. You can, but there’s only a certain size you can get. And no matter what, you still can’t do it alone. You can’t even buy a house by yourself. There’s like eight other people you need just to get to closing. So it, starts to line up that way where
Greg Flowers (10:59)
They’re partners.in childhood.
Micah Johnson (11:11)
One of the realms I had, and it showed me that I wanted to create space if I ever do single family again, a girl left, she abandoned the unit and left a six week old puppy in there. And I didn’t get out to the unit for about a week. And thankfully it was still live, but man, I was wrecked. I was like, ⁓⁓ I love dogs. like that broke my heart to see this little dog in there. And it started to click with, you know, okay, do you want to deal with people that way? Because I really like people. I’ll really help. I’ll really dig in. And at that point in my life, I was kind of doing it to my detriment. So I did it too often. And I see that in a lot of investors too, where, hey, you need to create a little space between you and your unit so that one you can breathe.
decide, hey, where do you want to go in life? You trying to add more, you want to build more, like what is it you’re trying to do? Also at the same time, not having to worry about background checks and screenings and all that stuff. mean, that’s what’s funny about real estate is each little section is its own business. And that’s where you start to realize, okay, mortgage is its own thing, property management is its own thing, real estate is its own thing, right? It’s all these little separate pieces that you’re building this puzzle with basically.
Greg Flowers (12:15)
It is.It really does. I mean, a good analogy would be a sailor and the crew. I mean, you can sail a lake. You may be able to even be able to sail the bay on your own, not San Francisco Bay, but a normal day. ⁓ But it’s nice to have a crew. It’s nice to be able to delegate. They’re not going to touch the steering wheel. That’s the captain’s job. But we’re here as the crew to say iceberg dead ahead. Turn hard left, Captain.
Micah Johnson (12:32)
Mmm.Greg Flowers (12:55)
It’s up to the captain to turn hard left. And especially on a long sail, you definitely need a crew. So think of it that way when you’re doing this property purchase. Think of it as that. You have the right crew. It can make the difference in a good sail and a bad sail.Micah Johnson (12:58)
Right.man, I love that analogy. Anytime I use a sailing analogy or some kind of ship analogy, I’m for it. I guess that’s the St. Augustine, Florida in me. because it is true, you can’t sail very far. You’re gonna need a big enough ship and enough people or you’re not getting very far. I love that. So let’s dive into for some listeners on some California specific stuff. What have you seen going on lately in y’all’s market that they need to pay attention to?
Greg Flowers (13:19)
Yep.Very true, very true.
Micah Johnson (13:43)
Because I know the rules are changing all the time, aren’t they?Greg Flowers (13:45)
Right. Well, it’s fair housing. Like we talked about earlier, about 60 to 70 percent of the laws that are for fair housing are in the favor of the tenant. So you really, really have to watch what you say. You have to watch what you do. You have to look at timelines. We talked about neglect. That’s the worst thing a property manager can do is not ⁓ answer a call and neglect a repair. That’s you can get a lot of trouble for doing that. I’m sure Florida laws are muchmuch more lenient, but still, eviction laws change all the time. The amount of amount of rent increase you can have every year changes all the time. And then, course, and then just tenant housing laws that that changes quite a bit as well. So you have to be on your A game. Another analogy is a shark infested waters. I mean, you better you better go with somebody that says I wouldn’t jump in there.
Micah Johnson (14:27)
Mm-hmm.Right?
Greg Flowers (14:44)
I would jump in over here.Micah Johnson (14:45)
Right?And I think that’s fascinating because we have those markets in America that some investors avoid because it’s a little more difficult to be in. However, if you know what to look for and think about, like one thing that just hit me, okay, a percent rate increase where if you’re going to go buy a property there and you’re penciling numbers thinking you can get right to a certain point, it might not legally be able to get there. You’re building a whole deal based off numbers that if you don’t talk to somebody could be getting you in a little bit of trouble. So
Greg Flowers (15:17)
Thank⁓
Micah Johnson (15:59)
Particularly if you’re listening to this, make sure that you are targeting professionals in the markets that are a little harder to deal with. And I got friends, they pick them specifically. That’s where everybody’s their own personality. Cause they’re like, well, most people won’t go do there. So I’ll deal with it and go into that market. And we’re all out there, but I love just pointing out things to pay attention to. You might not think of otherwise.Greg Flowers (16:20)
Yeah, it would be like your pro forma is way too blue sky. You’re never going to get that because there’s laws against you from doing that. And California is definitely one of those states. But on the flip side, your rents are astronomical. mean, two bedroom, one bath right now is $2,900 to $3,200. So times four, that’s a nice income.Micah Johnson (16:25)
Mm.Hmm.
Yeah.
Greg Flowers (16:49)
But there’s a lot of laws that protect the tenants. So you do have to be very, very careful. And again, neglect is the ultimate negative. You have to do repairs if repairs are needed.Micah Johnson (17:02)
And that’s what sets the best apart anyways, is even if they’re not with a property management company, like if you don’t have a tenant, you can get a bad rep as a landlord very quick. It’s not hard to, internet’s a big thing. ⁓ And it does that particular one because, I mean, just the human side of it, do you want to sit there? Like if you’re going through it, would you want to sit there not having the phone call answered and freaking out versus someone who just, hey, this is what I do. This is who I’m here to take the call, get the work done.Greg Flowers (17:30)
Exactly.Micah Johnson (17:32)
Cause like you said, that team on the, on the boat, someone’s gotta be up at night checking things. Nobody’s all asleep at once.Greg Flowers (17:38)
Yeah,you’re either sailing or you’re making bologna sandwiches, but you’re doing something.
Micah Johnson (17:44)
Oh man, that’s good stuff. So what are you excited about for 2026? What are you seeing in the year ahead?Greg Flowers (17:51)
Well, again, I feel that this is one of the best markets I’ve ever been in as a property manager. have two things working. Well, I listen again. We’re going to California. I’m not sure. I don’t know about St. Augustine, in California, affordability is at an all time low. ⁓ You’ve got the rent versus own math is way off. Why would you own it for seven grand when you can rent it for forty five hundred?Micah Johnson (18:19)
Right.Greg Flowers (18:20)
And and and just intelligent people know that so they’re gonna rent until things improve So attrition is very low, which means I don’t lose properties because the the market is saturated Nobody really is buying because it’s just not a buyer’s market. And then you also have a high caliber of tenants tenants It should be homeowners. They’ve got like they’ve got the income. They’ve got the savings. It’s justMicah Johnson (18:42)
Yeah?Greg Flowers (18:46)
The cash flow just does not make sense. So what I’m going to rent and of course then there’s all those repair costs that are astronomical as well. They dodge all those bullets as well. So I have a really high caliber tenant. I have a property that’s not going to get sold. It just doesn’t get any better. I have a business integrity level that’s never been higher. So it’s a pretty smooth business. As long as I do my job, I don’t really get a lot of bad tenants.Micah Johnson (19:08)
Mm.And that’s making your investors quite happy, I’m sure.
Greg Flowers (19:20)
It’s making me sleep good at night too.Micah Johnson (19:22)
And man, it’s hard to put a price on that. I know that much. That’s it. That’s it. I mean, there’s always a natural stress in the business anyways, but if the more you can mitigate to keep yourself where you’re laying there, not worrying about it, you’ve done something well. you’re, you’re, doing a good job at that point.Greg Flowers (19:24)
Good night’s sleep all day long.There is.
Yeah. And the opposite is,
I totally agree. And the opposite is true too. If rates are go to 3%, I’m going to, everybody’s going to bail and start buying houses. So I have a lot of vacancies and, and the only people that are going to rent are the people who can’t afford to buy, buy a house or that credit or, you know, basically a bad tenant. So then I have those problems.
Micah Johnson (19:54)
Right.Now, have you noticed in those markets it’s harder to fit? Do you still keep your units full and it’s just a less, not as quite as good tenant, I guess? Or do you struggle with vacancies then?
Greg Flowers (20:06)
no.Turnover is an all time low. People hunker down when there’s any uncertainty or the market works against them, they hunker down. They’re not going anywhere. So I have long term good tenants. It doesn’t get any better.
Micah Johnson (20:23)
Man, is seriously it’s what everybody’s after is someone that wants to be there for a long time and takes care of the stuff like that is the dream every landlord is hoping for. Is that right there?Greg Flowers (20:35)
Yes, sir. Andthe cool thing too, know, I’ve been in the mortgage industry, I’ve seen 10,000 credit reports, I know what good credit looks like. I know what good qualifying ratios are. And beyond that, I just get good tenants, I have good strong, almost friendship like relationships with these these tenants. And we have a good work, ⁓ a good work history.
Micah Johnson (20:47)
Right.Greg Flowers (21:02)
And it’s just a great relationship. So again, it’s the best time in the industry, right? In my opinion.Micah Johnson (21:08)
Hmm. That’s powerful too. I’m going back to the relationship part for a second for that landlord that struggles with it. They can literally hire someone who’s a professional at it. That’s man. Like you can offload so much off your plate by just thinking about, okay, what am I actually good at here? If I don’t want to do this.because it ripple effects. You think about, I just don’t want the phone calls to these other things, but it just hit me, man, you have someone like yourself that’s building a relationship with the person living in your property. Holy cow, that does create retention.
Greg Flowers (21:42)
It does. It does. And again, it’s just one of those, it’s one of those times in the industry where if you own real property, you’re feeling it. You see, oh, wow, this is good. As long as the economy stays stable, I think we’re in good shape.Micah Johnson (21:54)
Right. Right.I’m excited for 2026 myself. think we’ve got some good things on the way. ⁓ Greg, I really enjoyed your time, story perspective, my friend. Thanks for being with us today, sharing some experience. For those out there that would be interested in learning more about you, possibly follow along what you’re doing, what’s best place to find you?
Greg Flowers (22:16)
Thank you, Micah. It’s authenticre.com. Authentic and then re like real estate.Micah Johnson (22:23)
Awesome. And for those of you listening and watching, we’ll make sure that that link is in the show notes. Click on it. Check out Greg, see what he’s got going on. If you’re in that market, give him a call. See if he could be the right fit and help you grow your business even more. Again, Greg, thanks for being with us. Absolutely, man. Thank you so much. If you’re listening out there and you got value out of today’s episode, please like this episode, share it with someone else you think could get value out of it as well. And as always, don’t forget to subscribe.Greg Flowers (22:37)
Thank you, Micah.Micah Johnson (22:50)
We appreciate every one of you that follow along here with us. We have more conversations coming up with operators, just like Greg. We’re out there doing it the right way, building a real good business. And thanks, Greg. We’ll see everybody on the next episode.
