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Show Summary
In this episode of the Investor Fuel Podcast, host Michelle Kesil interviews Shaun Mcclusky, co-owner of Rincon Ventures, a property management company in Tucson, Arizona. Shaun shares insights into the success of his business, which has grown from 13 properties to over 1,100 units since its inception in 2007. He discusses the importance of technology, employee retention, and investor relations in scaling the business. Shaun also highlights the comprehensive services offered by Rincon Ventures, including property renovations and real estate sales, and emphasizes the significance of effective communication with both investors and tenants.
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Investor Fuel Show Transcript:
Shaun Mcclusky (00:00)
Well, thanks for having me. We own and operate Rincon Ventures. We are located in Fima County, Tucson, Arizona. And we manage anywhere from 750 units to about 1,100 doors. We started in 2007 when the market took an absolute crash. And we started with 13 properties. So we’ve come a long way in a short period of time. And we do it with only five people. We do it with five people because we utilize technology to our advantage.And not just AI, is common of today, but we’ve been some of the innovators in using technology, even in very beginning, having online payment availability and or an ACH payment, which everybody does now, but 15 years ago, nobody did.
Michelle Kesil (02:09)
Everybody, welcome to the Investor Fuel Podcast. I’m your host, Michelle Kesil. And today I’m joined by someone that I’m looking forward to chatting with, Shaun McClusky, who has been making serious moves as a property management company in Arizona. So excited to have you today, Shaun.Shaun Mcclusky (02:28)
Well, thanks for having me. We own and operate Rincon Ventures. We are located in Fima County, Tucson, Arizona. And we manage anywhere from 750 units to about 1,100 doors. We started in 2007 when the market took an absolute crash. And we started with 13 properties. So we’ve come a long way in a short period of time. And we do it with only five people. We do it with five people because we utilize technology to our advantage.And not just AI, is common of today, but we’ve been some of the innovators in using technology, even in very beginning, having online payment availability and or an ACH payment, which everybody does now, but 15 years ago, nobody did.
Michelle Kesil (03:06)
Amazing. Thank you for sharing that. What has been some of the things that have allowed this success to occur?Shaun Mcclusky (03:13)
a little bit of luck and a little bit of, ⁓ good fortune. ran for political office in 2009 and that taught me how to market towards the specific investor or the specific homeowner. in politics, you need to get a individual who’s going to vote every single time. They’re called a four by four voter. Well, if you can get that list of where those people live, you can go attract that.you can go straight to their door or you can mail directly to them. What I did was we went to our title company and we did all in state and all out of state non owner occupant homes. And then we started targeting those and started mailing towards those. We started off with, I said like 13 properties and we’ve picked up, we’ve continually picked up 13 properties a month since the very beginning. So some months we’ll pick up 30 or 40 through one investor, but picking up those in the very beginning was the, was the perfect way to continue our growth in our business.
and not get too big too fast.
Michelle Kesil (04:05)
Absolutely. Wow, that’s such a cool story and that makes a lot of sense. What have been like some of your keys to keeping this business running smoothly at the growth that you’re at now?Shaun Mcclusky (04:16)
Again, we go back to our employee base. We’ve had two employees that have been with us for over 15 years, or 12 and 15 years. So they’ve been with us for a long time. ⁓ One of their sons actually works for us. He’s now gone on and he’s an engineer, bought his first house at 19. Having that family atmosphere or team aspect and having a really good cohesive team makes it very easy to continue to grow.We also pay our staff better than our competition and that allows us to keep them. We train them obviously to run our competition and be better than our competition, but we pay them better than our competition will pay them. Then we do that through incentives and through bonuses and through opportunities to make more money. And that’s a motivating factor, but it also makes them loyal. It makes them work harder. It makes them be part of the team and part of the growth of the business.
Michelle Kesil (05:50)
Yeah, definitely that makes sense. How you treat your employees and structure those things definitely support the overall growth. So that’s important. Yeah. So what are you most focused on now? What are you most focused on solving when it comes to the current state of your business?Shaun Mcclusky (06:01)
Absolutely.Scaling to not necessarily prepare for sale, but to be more attractive. We get offers from different acquisition companies all the time and I’m not happy with the number that they tell me that I’m worth. I think we’re worth more. So by adding more doors and adding more properties and adding more investors, that would give us an opportunity to go ahead and grow. It also gives us opportunity to make more money, which is always nice.
So I guess continued success is what we’re looking forward to. Continuing down the same path that we’ve been going down, but also learning new techniques and learning what’s out there and getting more exposure at every turn. But attracting investors is our primary goal. Without investors, your property management company doesn’t run. You need somebody to own the homes. And we manage them for them. And as long as you provide a good service and you meet their expectations or you exceed their expectations,
then of course you will continue to grow. We grow our business through investor relations and through investor referrals. Most of my investors are like, they all hang out together it seems like. And as they hang out together, they say, well, who manages your property? And then inevitably it all comes back to me. So locally, we’ve got a bunch that are together that know who I am, but even out of state in California, I have people that know in Sacramento that have friends down the street that manage, I manage their houses and they didn’t know each other until they got together.
So it’s been kind of neat that way.
Michelle Kesil (07:23)
Yeah, that’s so cool how people are connected just through the housing community. sense. Yeah, they say we’re like six people apart throughout the globe. Awesome. So tell me a bit more about your property management company. What are all of the services that you offer?Shaun Mcclusky (07:28)
yeah.much smaller world than we think it is.
You know all the basics. We have two companies really. We’ve got Rent Ready Repair, which is our repair company. So if an investor wants to take care of their properties by themselves and have their own maintenance team to go out and take care of them, we field the phone call at 2 a.m. that our online system takes care of that and we get notified when when a maintenance request comes in. But we really thrive on taking care of the client’s needs and expectations.
finding tenants, screening tenants, making sure that we don’t go to eviction court. Like I said, we have over 1,100 doors and we go to eviction court maybe once every other month. That’s attribute to our screening process. We set it fair and equal for everybody. They have to have a minimum credit score. They need to have a good time on job. They need to have three times the rental rate for their income. And by doing that, you weed out a lot of that unnecessary minutiae, if you will, but also advertising the properties and getting them in different websites and staying ahead of the technology curve.
A lot of people just like to use Zillow and that’s not the only game in town, so you have to be more well versed than that. There’s 18 different websites that you can spider your advertising to and when you get it out there, I mean, you’ve probably never heard of a site called Ool or Kijiji, but they’re both rental sites. And if you don’t know they exist, you don’t know to advertise there. So being ahead of our competition is always good as well. Again, utilizing technology, going to a web-based ⁓
or an app-based website. Those are things that we continue to change. Our website’s going through an overhaul right now, just because we always, like I said, stay on top of things. And our website was, when it was created, was very desktop friendly, but today nobody uses a desktop. And if you do, your mobile app will work on your desktop as well, but it’s not always the flip side. You can’t always get a desktop website to work on a mobile app. So.
Making those changes and staying up with the times is something that is imperative. We use a company called Rently and Rently gives us an opportunity to show houses without being present but still knowing who entered your home because they’re pre-approved and pre-screened. And that’s what sets us apart from our competition.
Michelle Kesil (10:12)
Yeah, amazing. I think that’s so important to have those little tweaks and user accessibility that makes people feel that you’re giving them a simplified experience that really always helps differentiate from what others are doing.Awesome. So what are you guys like? You mentioned renovations and increasing like how the properties are functioning. Can you explain more about that side of the business looks like?
Shaun Mcclusky (10:43)
Sure, it’s, you know, when you walk into a home, can easily tell if it’s been updated in the last 10 years, if you’ve got gold light fixtures and gold door handles and those sort of things. If you still have an incandescent light fixture, you know, everything now should be LED, everything in the university area especially. We pull out the outlets, so we put in the USB outlets along with the regular plug so that the kids that need all their devices that are USB charged, and they don’t have to go looking for a power back.Simply walking into a house and looking at the flooring and if it’s wood laminate flooring from the 50s and you change it to something that’s a little more today’s modern style, upgrading the carpet. But primarily the easiest and you’re not going to change the structure of the home. mean, you could take it down to the studs, but you’re still going to have the same basic shape. If you upgrade everything from the floor up, including the baseboard, you pull off the baseboard, put new baseboard on, fresh paint.
Fresh flooring fresh lights fresh door handles new cabinets new countertops those kind of things Taking a house that has a swamp cooler. Many people not might not know what a swamp cooler is A swamp cooler is a forced air System that makes wet pads and you cool the air by running the air over the wet pad It’s a hundred and five in Arizona at times. It doesn’t really work very well So taking that swamp cooler off saving the owner the monthly or the annual maintenance on the swamp cooler
Reducing the water bill, especially if it’s a multifamily property because you use less water with air conditioning than you do with swamp coolers or evaporative coolers if you will and That then gets that return on investment a little higher. Yes They may have an additional outlay on their air conditioners But over time you’re going to get higher rents because of that air conditioner and you’re going to have less maintenance and less expense with your water bill because you’ve taken those out of the equation so by doing those things and analyzing the properties
through the renovations, that’s how we make our investors more money. And then of course, once you take a property and you renovate it, if it was getting $800 a month, which would be four five years ago currently, now it’s going to get $1800 or $1900 a month. So there’s always room for improvement. And a little bit goes a long way when you’re looking at light fixtures and flooring and fans and you do you still have a fan from the 70s that’s got a wicker wicker fan blade on it? Or did you put something in there with a nice LED light bulb on it that
is energy efficient, doesn’t heat up, and doesn’t heat the house. Those kind of things.
Michelle Kesil (12:52)
Yeah, that can definitely make a difference in the aesthetics and the feel and yeah, just the overall ROI of the house. So that makes a lot of sense. So what are some of the benefits of working with you guys for investors specifically? Like what makes you guys different or unique or a good opportunity for the investors to come to you?Shaun Mcclusky (13:58)
I’m keeping your home full and treating it like it’s our property. We really take ownership of it. make, I mean, we’re prideful in what we do. So we want to make sure that you’re having a good experience as an investor with how your property is running, how your manager is running. Make sure we communicate thoroughly and effectively. And that’s really the biggest key is that I get complaints from most people that we acquire is my last property manager never called me. My last property manager never talked to me. If we have an issue on the property, we are in constant communication.We have maintenance coordinator that takes care of everything. She goes through and makes sure that you’re up to speed and up to date what’s going on. And our staff does the same thing via renewals and also when you get a new tenant inside. Just that communicative and reaching out to your ownership is huge. And a lot of people don’t do that. We get it from the tenants as well. And I know you said investors, but
on the tenant side of things, they’ll say, I’ve called five different houses to view and I can’t get inside. Well, if your investor plays end user and calls your property management company that they’re supposed to have on that use their wife’s phone, you don’t know the number and they don’t get ahold of anybody, they know how you’re not communicating with them. So if you’re communicating with your investor, they know you’re not out screwing off playing golf. They know you’re actually working and you’re working for them and you’re trying to improve their investment portfolio. By doing that, it gives us an opportunity to also expand our business because
Once you get an investor accustomed to how we do business and how we communicate, they come back for more. They’ll be, okay, this is a great process. It works well. Let’s buy the next one and they’ll use us. So we’re full service. We do both the rental side. We do also the real estate purchasing side and the benefit to the investor using us when we go and purchase the property is we know what we can get for rent. Instead of using a disinterested third party realtor who’s just out for the commission.
and they don’t care, they’ll tell you anything. You can rent it for $5,000. Well, I’m the guy that’s gotta live with that $5,000 number. So if I sell you the property, I will tell you upfront and be realistic and say, look, we can get this for it, and here, let’s run your numbers off of that. We also know the formula and the equations to get, if it’s a multifamily property with one or two units, and who pays the water? That’s really the biggest question. If you do it at 65 %…
expenses or if you do it 75 % expenses and when you extrapolate your numbers out you can tell what your cap rates going to be and what your return on investment is going to be and that’s most people in my industry can’t do that. Thankfully I’m the designated broker and co-owner of the company. I’m also a real estate instructor as well so I know how to teach the math. So if I can teach the math to my office I can also teach the math to an investor and if the investor knows the math he knows that it’s real he knows it’s realistic he knows what to expect.
And if you can hit those targets, you become more successful and you get more opportunities.
Michelle Kesil (16:36)
Absolutely, I love that. Can you expand on the real estate portion of your business? I would love to get more insight on what that looks like.Shaun Mcclusky (16:43)
Well, primarily we use investors or we sell to investors, but we also sell to our tenants as well. The hardest thing for a real estate agent to do is find a client that wants to be a willing, able buyer. And if you have the investor side, investors get tired or they want to move on to something bigger and better. So they come up with the opportunity that we want to sell or we want to buy. So we’ve got double sided there. And then on the tenants, we know the tenants, we’ve already screened them.income level. know if they can afford or not by doing mathematical equations and then we can refer them to a lender. So it’s nice to us to have the built-in homebuyer and also seller if you will, but we also do full service in the community as well. We do a lot of work with school teachers, firefighters, paramedics, know, law enforcement and those sort of school teachers I mentioned as well because we give back to them.
And we do a, it’s almost like a home for heroes program to where we’ll give a half percent of our sales commission back to help with their closing costs. So that’s the nice thing we can do that too as well. But when we sell to our regular clients, we just have a cavalcade of past clients and current clients that refer us. And we’ve got a great referral network. We’ve been in the business, like I said, since 2007. the last two years have been our slowest and we’ve still sold
45 and 55 houses for our office of five people. So that’s 10 homes for every agent. That’s a good income when you’re looking at it. Plus they get the property management side of it. So as I said before, we treat our employees way different than most companies.
Michelle Kesil (18:09)
Amazing. Yeah, and that definitely differentiates you from others. I think that’s so cool what you guys are doing so When it comes to growing your business Networking creating new relationships. What are some of the things that have made the biggest difference for you?Shaun Mcclusky (18:25)
Honestly, our advertising, it’s old school, it’s archaic, but it works. They’ve come out with, like I said, we mail postcards. We mail postcards to non-owner occupant in-state, not of state homeowners, especially the out-of-state owners. They need somebody locally to get their hands on and eyes on property. You can’t use somebody from Ohio to manage property in Tucson. It just doesn’t work that way. So our advertising brings us more clients.but we also use something called digital door knockers, which we can set up and we can go into neighborhood specific, subdivision specific. And if somebody’s selling their house or they’re getting ready to rent their house and they Google it, it comes up automatically on their search query. So that gives us an insight to that as well. We use a couple of mastermind groups and I’ve belonged to Mike Ferry and also Ryan Pineda. Both of those have helped us in the past to get investors, especially Ryan.
I would say that Mike Ferry is more of a attitude adjustment when you feel lethargic and you’re not producing the way you should. It’s a nice kick in the pants and he gets you back on track.
Michelle Kesil (19:26)
Yeah, absolutely. think those relationships building and those groups are really important and can really help you in this space. Awesome. So before we wrap up here, if someone wants to reach out, connect, learn more, collaborate, where can people do that? Where can people find you?Shaun Mcclusky (19:45)
I’m on Instagram myself. Our company is on Facebook. We’re also on our website as well. The shortcut is RV, as in Rincon Ventures, P-R-O-P. That’ll take you right to our website, and that’s the property management side of things. That gives you everything that you wanna do there. If you wanna look at our rentals, it’s RVRTO, and our full website is rinconventuresaz.com, and Rincon Ventures is plural. So we live in Tucson, Arizona, and Rincon Ventures is, we live next to the Rincon Mountain.It’s right behind us. So that’s why we pick her in Conventures.
Michelle Kesil (20:15)
Perfect. Well, listen, I appreciate your time, your story and your perspective. Thank you for being here.Shaun Mcclusky (20:21)
Thanks for having me, it was a pleasure.Michelle Kesil (20:22)
Of course. And for the listeners tuning in, if you got value, make sure you’ve subscribed. We’ve got more conversations with operators just like Shaun, who are building real businesses. See you all on the next episode.Shaun Mcclusky (20:23)
Have a great day.
