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Show Summary
In this episode of the Real Estate Pros podcast, Kristen interviews Mark Melsness, owner of Spinnaker Property Management. Mark shares his journey into property management, the importance of networking in building a client base, and the challenges posed by recent landlord-tenant laws in Washington. He also discusses his investment strategies, common mistakes made by investors, and the significance of mentorship in the industry. Mark emphasizes the value of community support and the resources available through his mentorship program.
Resources and Links from this show:
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- Investor Fuel Real Estate Mastermind
- Investor Machine Real Estate Lead Generation
- Mike on Facebook
- Mike on Instagram
- Mike on LinkedIn
- Mark Melsness’ Website
- Mark Melsness on LinkedIn
- Mark Melsness’ Phone Number: (253) 606-0573
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Mark Melsness (00:00)
Well I think the very first one is, is, Hey, Mark, we just bought an asset. Can you manage it for us? Well, sure. But you’re, you’re not going to cashflow because you did not take into consideration these expenses. And so we, we, we, I love to say, Hey, let’s stay in communication so I can keep you out of trouble, not get you out ofWhat we really love to do, which is not too rare, but it doesn’t happen enough, is to work with the real estate agent and their client to…
do pro formas and projections prior to the offer being made, which is really simple to do so that we don’t waste anybody’s time, energy or money.
Kristen (02:17)
Welcome back to the Real Estate Pros podcast. I’m Kristen and I’m here with Mark Melsness, who is the owner and designated broker at Spinnaker Property Management. They function out of Washington and we’re going to talk about everything property management, a little investing as well. So I’m excited to do this. Thanks for being here,Mark Melsness (02:33)
Absolutely,thanks for having me, Kristen.
Kristen (02:35)
So let’sgo back to kind of the beginning. How did you get into this industry?
Mark Melsness (02:39)
Well, I started in my high school summers my dad had a small portfolio of properties and that was back in the 80s so it was a bit ago and ⁓did a few things after high school and then eventually came back to the industry in 93 where I started pulling weeds and picking up
butts on larger multi-family apartment communities and worked through the maintenance and then through the, worked into the corporate office, or excuse me, into the on-site office and leasing agent, assistant manager, community manager, and then up into the corporate office. And after 19 years of having a relationship
with my dad and his business, I resigned. Yes, right, after 19 years of…
Kristen (03:31)
youMark Melsness (03:33)
of a family business, realized that my relationship with my father was far more valuable than my business relationship with him. And it was a very difficult thing to do with a family and a mortgage. But thankfully, the Lord was very generous with me and I started a business called Spinnaker Property Management on January 1st, 2013. And I took 19 years of commercialKristen (03:41)
Right.Mark Melsness (04:03)
level multifamily knowledge and began a third party single family small multifamily like 10 to 12 unit type homes or communities andIn a very quick time, we found ourselves managing far more than we ever expected and grew the team. now, what is it, end of 25, we’re just over 700 homes in four different counties.
Kristen (04:22)
Right?In the beginning, did you kind of ramp up your network? How did you build so many clients?
Mark Melsness (05:29)
Well, what I think the key number one factor was I started out as a franchisee for a real estate company called Windermere and I was embedded in a very large brokerage of a Windermere that had access to about 100 agents. And because one of our primary differentials from other management companies, similar to us, different and similar,is that we don’t represent our clients in purchasing sales. So when real estate agents are trying to find an answer for their client to invest in or to have rental properties, they’re hesitant to give them over to management companies that do purchase and sales. And because we don’t, we’ve become one of the number one.
firms for real estate agents to refer their clients to because we just send them right back to the client or to the agent if they want to work with each other again. And so we, over half of all of our referrals that come in are through real estate agents.
Kristen (06:35)
Wow,and was that kind of built by design? You kind of foresaw that being the case.
Mark Melsness (06:39)
I’d like to sayit was intentional from the beginning. realized quickly that the value was enormous and we’ve done some pretty miraculous things and some of the tricks are we work very closely. Now that I’m not with a single brokerage and other than mine, I don’t have a…
a known brand on my back so I can go to a number of different, all brokages without feeling competitive and present market knowledge for rental, landlord-tenant laws, investment, client management stuff in their sales meetings on monthly basis. In addition to that, we also have, which isn’t in every region, what we call Brokers Open. They’re almost like ⁓ open houses but only for brokers during the week.
Kristen (07:08)
Right?Mark Melsness (07:29)
So we’ll sponsor that Brokers Open and pay for the snacks and the drinks and bring those so that the broker hosting the open doesn’t have to. And we get to intermingle with all the brokers that come and go, collect their cards, and on the next day we do a raffle and somebody wins a $25 gift certificate. And we’re just staying connected with the market.Kristen (07:52)
And that’s really smart, it’s smart to mark it in that way.Mark Melsness (07:56)
Right,and it costs us a bit of time and maybe a hundred bucks in snacks and drinks and the return is, you know, I won’t say unmeasurable, but it’s close to unmeasurable.
Kristen (08:07)
Yeah, absolutely. I I think that that’s such a good way to get out into the community. And it’s interesting that that’s how you’ve built your client base. That’s really cool. ⁓ You you talked about tenant laws, landlord tenant laws. I would love for you to kind of go into that. I know that’s a big, you know, hot topic in Washington.Mark Melsness (08:26)
Yeah,it is. Washington State just at the beginning of the year passed some sweeping laws. They’re not really too ⁓ confining, although they are different than what we’re used to after so many years of doing business. It’s what happens at the lower levels, maybe the county, but for sure the city and in Pierce County, the Puget Sound area, there’s Tacoma, Washington, which is where we’re primarily based.
the majority of our assets are in, they have some significant landlord-tenant laws like two separate eviction moratoriums where during the cold weather, no physical evictions and during school years for students and teachers, no physical evictions. They’ve limited deposit amounts. They’ve increased the…
the notice to increase rents or to renew leases by six months with dual notice program. And if you raise the rent over 5%, it
triggers an automatic relocation assistance program for the housing providers. So we also identify as housing providers, not landlords.
requires a housing provider to pay up to three times the monthly rent for that family to relocate to another place if the rent’s over 5%, excuse me. And a myriad of other things. And so knowing that is…
Kristen (10:28)
Wow.Mark Melsness (10:35)
really critical, especially as an investor and somebody advising investors in our territory. So I work really closely with people that are literally not only across the aisle from me, but you know, so far off the map of, I’ll say, common sense that whether I like what they have to say or not, if it passes, I have to learn how to navigate through that so we can protect ourselves and our clients from that.Kristen (11:03)
Absolutely, I feel likethat’s a really, probably a very large part of your job is staying on top of all of these laws and making sure everything is functioning correctly.
Mark Melsness (11:11)
Yeah,it is. It’s a big deal.
Kristen (11:14)
Yeah, and I mean, you’ve been in this business for really long time. I’m sure you’ve seen a lot of ups and downs.Mark Melsness (11:20)
Ohmy gosh, I remember when the three day notice to pay or vacate came out. That was a big deal. Three days. I think that’s probably appropriate. Maybe even 14 days, which was what it was. And now it’s 30 days. Yeah.
Kristen (11:34)
wow.Mark Melsness (11:36)
So yeah,that’s just to name one of the big deals. But you know, guess what? I don’t care what industry you’re in. As we progress, things are discovered that might not be equitable for both sides of the conversation. So how do we do that? And if smart minds are mature and work together, we can find common ground. And if one side of the conversation gets more ear than the other side with even a radical agenda, it can still pass like this has.
Kristen (12:06)
Yeah, absolutely. Well, that’s really interesting. I’m sure, yeah, that’s a difficult part to keep up on.You also invest yourself. So that kind of gives you even more clarity on the market and clarity on what people are looking for. I’d love for you to kind of go into that.
Mark Melsness (12:23)
Yeah, so as you know, my career started decades ago. I really didn’t have much to participate in there. And then as Ilearned more and progressed through the ranks. I earned opportunities to get into some of the larger multifamily and really know the books. I’d be a minority owner and still involved with the operations and knowing the cash flow and the books and the returns. And now I have ⁓ quite a few assets and
that are here that I have 100 % ownership in. And I focused in on the added value, for those of you who know what that means, aged properties that have been long-term owned by either some families or even owner-operators that were ready to exit the market after.
earning quite a bit of equity through their assets. So I was able to work out some really great deals that helped them and helped me and most of all helped the occupants that were remaining in the community. So I didn’t have to jack the rents up to pay for the new debt and the interest rates that came with it and the repairs that were required because some owner operators, you know, they’re not the…
Strongest on keeping the assets at the highest potential so Yet in doing that, you know, I have single families and small multifamilies and large multifamily stuff. So I really have ⁓
Kristen (13:55)
Yeah, but…Mark Melsness (14:05)
an experience across the entire market of residential and can bring that value to not only to my family but also to the clients that trust us when they hire Spinnaker to take care of them and their asset.Kristen (14:20)
Definitelyand kind of on the investing or on the property management end. What do you see? Maybe some investors where do you see them kind of make mistakes along the way in terms of you know hiring a property management company?
Mark Melsness (15:16)
I think the very first one is, is, Hey, Mark, we just bought an asset. Can you manage it for us? Well, sure. But you’re, you’re not going to cashflow because you did not take into consideration these expenses. And so we, we, we, I love to say, Hey, let’s stay in communication so I can keep you out of trouble, not get you out of trouble. And so it, depending on thethe constitution of the client and what they’re able to muster through, we can over a period of time, which could be a year, two, maybe three, put a plan together that brings up the income and reduces the expenses so that we can start to either break even or create some cash flow if it was an unadvised acquirement.
What we really love to do, which is not too rare, but it doesn’t happen enough, is to work with the real estate agent and their client to…
do pro formas and projections prior to the offer being made, which is really simple to do so that we don’t waste anybody’s time, energy or money.
And then we can move quickly and with velocity if it works, which everybody loves to do. And it can even bring creative financing and our access to financing that may not have been considered because they just don’t know. ⁓
Kristen (16:47)
Yeah.Mark Melsness (16:49)
estate agent unless you’re working with a commercial real estate agent which isn’t always the case there’s not a lot of knowledge when a single-family resale agent is working with a client on an investment so and that’s and we offer that for no extra cost that is really for us the thepeace of mind that we deliver to our clients that will talk you out of the deal three times to one than getting the one. Because we’re not interested in you buying something and having it not work out because we had a conversation that occurred.
Kristen (17:33)
Absolutely, and feel like people probably really appreciate that and probably why you get a lot of repeat customers. Repeat clients. To switch gears slightly, I know that you have a mentorship program that you’re really excited about. I would love for you to kind of get into that and how it helps people.Mark Melsness (17:39)
Exactly.absolutely so. Spinnaker is really just an absolute dream come true, a blessing that I don’t have to spend.
majority of my time managing. I have a super great team, a super great leadership that allows me to step away and my goal over the next 14 to 18 months is to reduce my time here to two days a week that allows me to focus more on my mentorship program. So exceptional men’s mentorship program. So I know that
Part of my success is because I had OJT on the job training. I had started at the bottom and I worked all the way through the levels that I made it through. In addition to that, I worked closely, or didn’t work closely, I involved myself with NARPOM, RHA, IRAM education courses and really got some formal knowledge in education in our industry.
what was missing or what I didn’t really know is it was my dad so it was really hard for me to acknowledge him. But the mentorship that came with what he had already gone through he was guiding me through. And whether these young men coming out of high school or out of college have their formal education, probably not any much, OJT.
where they really probably don’t have access to a mentor. And the difference that makes up to have those three pillars in place that gives them access to faith, family, finance, and fitness, and then sets them up for a period of time to go through these exercises gives them confidence, gives them resources, it gives them the ability to start.
with a mentor early in life and maybe miss a few mistakes, quite a few mistakes actually. And that is really what my next mission.
Kristen (20:05)
That’s amazing. Yeah, I agree with you that having a community and mentorship is really important because, you know, trying to go off and learn everything on your own is really challenging.Mark Melsness (20:17)
Yeah,and there’s always somebody willing to pour into us. We just need to find that person. And asking questions is being curious and not being a know-it-all. I’ve been a know-it-all many, many times, and it didn’t get me much. When I started asking questions or allowing people to pour into me is when my growth really happened.
Kristen (20:41)
Yeah, and what you said, like there’s so many people wanting to do that. I think people get nervous to ask for help, not just out of pride, but maybe out of, know, they don’t want to bother people. But so many people are wanting to give back just like you.Mark Melsness (20:56)
Yup.Kristen (20:58)
Amazing. Well, I mean, I think you’ve given such great information about both the property management side, but also kind of how to seek community mentorship in your life. Tell people where to find you, to find Spinnaker, and kind of how to find this program.Mark Melsness (21:14)
Yeah.Obviously you can go to spinnakerpm.com and that’s our website. We’ve worked really hard to show up as an organic Google search. if you just type in spinnaker property management, you’ll find us there too. And if you needed to give me a call, if you had any questions, I’m always looking to work and network with peers in our industry that are in our area or out of our area. can give me a direct call on my line at 253-606-0573
Kristen (21:49)
Well, thank you so much for being here, Mark.Mark Melsness (21:52)
I thought we were going to talk about fishing. Was it all property management? Okay, we’ll do that. All right. Thank you for your time.Kristen (21:58)
We can talk about fishing next time. ⁓And thank you everybody for listening. Hope you learned a lot, got some inspiration and definitely check out Spinnaker, check out Mark’s mentorship program. I think it can help a lot of people. So we will see you back next time.
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