In the first episode of LetHub’s podcast, we discuss the challenges of starting and growing a property management company amidst the COVID-19 pandemic. We also discuss the impact of eviction moratoriums on both property managers and tenants. Our guest is Brad Holtzman, CEO of Green Oak Property Management, situated in LA. Brad founded Green Oak with a partner of his, Jeremy Gerow, back in February of 2020 right at the beginning of the pandemic, which had its challenges that we will address in this episode.
Brad Holtzman got his license in 2016 and started working for a property management company, where he learnt the ins and outs of property management.
It was because of his experience working in a property management company that he decided to start his property management company, Green Oak, with a partner of his, Jeremy Gerow. And so together, they founded it back in February of 2020 right at the beginning of the pandemic, which had its challenges.
Green Oak just recently started its property management company and is on the smaller side, so their ideal clients are owners of single-family homes, townhouses, and apartments with up to 20-25 units. They’re a small- property management company right now and their goal is to prioritize customer experience along with stable growth for the initial few years. And that means working with mom-and-pop landlords who do not want to deal with the properties as much but still need learning and guidance. That's where Green Oak comes in. Green Oak Property Management can also help younger clients who are new to the property management business by helping them navigate and grow their portfolio.
The housing industry took the hardest hit by COVID-19 with many property management businesses shutting down. But for Green Oak it was just the start of their property management company. The biggest challenge for Green Oak even before the pandemic came in full swing was building relationships with the mom-and-pop landlords. A lot of these mom-and-pop landlords are not used to working with property managers and when they do, they have had terrible experiences. Not many property management companies know how to cater to smaller clients such as these landlords which makes it difficult to build a relationship with them.
The spread of COVID-19 worsened the conditions tenfold, making it more difficult for Brad to gain clients in an already saturated market.
Another challenge Brad faced was dealing with the non-paying tenants.
"Out of all industries, the housing industry is the one that for whatever reason, will allow tenants to defer their payments.”
As a result, Green Oak’s core target market mom and pop landlords struggled to pay their bills, taxes, and insurance, let alone hiring a property management company. So, where Brad was already having a tough time gaining these landlords' trust, growing the portfolio at the same time became impossible because the landlords themselves were struggling to make payments during COVID-19.
The eviction moratorium has been in place under various measures since late March 2020. The eviction ban went into effect in the fall of 2020 to control the spread of COVID-19 and prevent homelessness during the pandemic. It has since then been extended multiple times.
In Los Angeles, as a new property management company there was a lot to deal with. The regulations Green Oak needed to follow were three-layered, the City of Los Angeles, the County of Los Angeles, and also the state of California. And all regulations were extremely different in terms of leniency, with the City of Los Angeles being the most stringent.
The first and main challenge was dealing with the discrepancies in county and state regulations. Efficient systems weren’t in place and aids were not given to tenants or landlords on time due to software outages. It was a constant struggle to help tenants apply for the aids so the property managers and landlords could get paid but with the governmental inefficiencies it became a much longer process and issue than it had to be.
As a new property management company that had just started a lot of time went into dealing with the governmental inefficiencies.
One of the bigger strategies used by Green Oak in dealing with the moratorium was buying out tenants. Properties require constant repairs and landlords are supposed to keep them fully maintained by law If they fail to do so, it costs more property damage and financial loss in the long run.
However, with no rental income most property owners resorted to buy-outs. A lot of Green Oak’s clients worked with the tenants, and they ended up opting for a buyout. Not all of the owners and landlords were able to afford a buyout but those who could did because it definitely seemed like a lucrative option.
“Buyouts are great for the tenants and the owners in the long run, in the short run, it definitely puts a dent in your pocket. But as soon as the tenant is out the unit can be cleaned up and it can be put up for rent again at market price.”
Another strategy Brad and his team implemented was two-way communication between tenants and landlords as mediators throughout the pandemic. The first step in establishing good landlord-tenant communication is by letting tenants know someone is available to talk to them whenever they need something. The Green Oak team became a constant source of availability for tenants anytime they needed something from the landlord. Establishing open communication from the beginning saves time and money in the long run.
“At the end of the day, you know, another thing I always say is like, you can't be friends with tenants and residents, you got to be friendly.”
Whether your property management company has been in the business for years or you just started a property management company, the most crucial part is to win landlord and property owner’s trust.
This is exactly what Brad leveraged and focused on while managing his property management company remotely throughout the pandemic. For Green Oak Transparency is their number one priority. They don't have or use any in house maintenance, everything is done through third party vendors. They like working with vendors that the landlords and owners have already built their relationships with. This really helps Green Oak in building long-term relationships with the landlords they work with.
“Being transparent with the clients about what's going on constantly, makes them want to keep working with you even if you are new and just starting a property management company.”
Even with their pricing Green Oak charges a simple pricing structure without any hidden fees.
Green Oak is always looking for improving their processes through automation software like LetHub that can streamline the entire leasing process and make it more speedy and less frictional. With an intelligent platform like LetHub you can make sure that every part of the process is key, whether it's renter communication or pre-qualification.
With a leasing automation software like LetHub you can reduce vacancies by 25% for landlords because it is all about turnaround and saving time for property managers so that they can help their clients and landlords faster.
Green Oak believes in leveraging modern technology that not only ensure the company’s growth, but also helps in delivering the best experience for clients and residents.