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    A Podcast | Mark Kreditor

    Pete Neubig:  [00:00:04] Welcome back, everybody. And as promised, I have national past president Mark Kreditor out of Dallas here. Mark, thank you so much for being here, buddy.

    Mark Kreditor:  [00:00:13] My pleasure. Good to be here.

    Pete Neubig:  [00:00:15] Now, in the intro, I told everybody that you'd sold your business in 2014, but I got a I'm a little bit of a fanboy mark, so I got to tell a quick story. And then I want to ask you what the differences are between 14 and 24. But, uh, you were one of the first people I ever saw speak at a NARPM national conference. I don't know if you remember this back in San Diego. I think it was 2015 or 2014. And I thought you were like a superstar. And I was, like, so nervous to even approach you. Uh, I did a year later. And you were the most kindest, gentlest person. And you, uh, spoke to me and, and gave me all sorts of great insight, uh, as I was super, super new to, uh, to NARPM and to the real estate and to property management. So, uh, always and I and I still think today you're one of the better speakers. So I'm excited to see you at Broker Owner when you speak there next. But thank you so much for being on the show today. So, Mark, tell me you sold your business in 2014. We're talking in 2024. Tell me some of the differences that you've run into. I know we were talking in the green room earlier and I'm like, oh, we gotta record. So let's talk about some of the stuff that you're that you're seeing then and that you're seeing now.

    Mark Kreditor:  [00:01:28] Oh, thank you so much. So I operated for 30 years in a room that had a front door and a back door, and we welcomed our tenants in the front door. And if they wanted to stay and pay and behave themselves, we kept them in the room. And if not, then there was a process by which owners hired us because they didn't want to do it, to have them leave. And this was really why I was hired. I was hired because people were not always compliant with what was written in the lease. What changed, mostly in the last ten years, is we still want to have that operation, but all the windows of this room are wide open for the whole world to look in and judge us. And that's the scariest environment that property managers today could have ever been placed in. Because of this environment, they need organizations like NARPM and experts like you and this show more than ever before. I mean, we really have. A culture that is always going to make the small business owner who, unfortunately, is in the business of providing paid-for housing for our clients, as a victim, as a source. Of being the bad guy. And I used to say that being a landlord was like being in a boxing match. You're on one corner and you know you have the owner on the other corner and the referee is beating both of you up. That's the tenant. Well, now there's like 12 tenants. You know, I used to when I used to go to California and speak, I'd say that LA being a property manager in California is like being on a basketball team where you have two players and ten referees and everybody was looking at you. Well, the whole country has become like that. So that's my first observation, is the property managers that I meet today at NARPM conferences are better than I've ever known before because they have to be. You cannot be a half-assed property manager because you're going to get destroyed either through social media or through, you know, price competition. But you have to be on your game all the time. This is the NBA of property management, and NARPM is the best training area to keep us good.

    Pete Neubig:  [00:03:37] I know that could be a negative, but do you see that as an opportunity? Because, um, you know, I've always been quoted well, in Australia 80% of the properties are third party managed, 20% are self-managed. And in the United States it's, you know, 70% are self-managed, 30% are are, uh, you know, third party managed. Do you see because of the windows and using that analogy that, um, more investors are going to start looking at professional property managers to manage their units?

    Mark Kreditor:  [00:04:08] The answer is absolutely. But I'll always find a reason why it's the best time ever to hire a property manager. Even if the opposite was true, I would figure out an angle because we always have to be in demand. You know, we always have to be able to survive no matter where the economy takes us. So there's always a compelling reason to have a professional manager. But certainly, this is this is low hanging fruit because most individual owners aren't going to have a chance going to eviction court when even in Dallas County, there is a free lawyer in a booth saying for tenants to bring into the courtroom, I didn't have that ten years ago. We would have on on a monthly basis. We'd have 60 hearings and we never lost. We were very close friends with the judge. He was a good guy. He was very active in NARPM. It was it was pretty much whatever the property code said. Now there's a million loopholes, and I think individual owners are out of their minds thinking that they're going to be able to produce better returns than having a professional management company make sure they're in compliance. Compliance is always been the most important aspect of having a property management company. Now, people who are not in compliance have more to lose than ever before, which could be extended nonpayment occupancy because they're just playing the system over and over again, whatever it is. Pauper's affidavit, appeals, non-compliance, God forbid with some property code thing getting realized. Maybe the smoke detector addendum changed the locking device. So they call the city and they get you red-tagged. I mean, there's just so many things that have amplified in the ten years that I've left, but circled back around to the social media part, I have to tell a story that I still think I would be proud of. When I was at the NARPM conference a few months ago in Atlanta, I sat next to a really nice young couple. They had their own management company, maybe 4 to 600 doors, and but they were real players in the business. And I said, what's the biggest challenge you have? He says, well, it really breaks our heart If we get a four-star review from one of our tenants and not five, like, I'll go see the tenant to see why we didn't get the fifth star. And I'm thinking, this is the craziest thing that I ever heard, because why would anybody give you stars if you're doing something they don't want you to do, like make them pay rent, make them pay a chargeback, make them pay a homeowner's association charge. You know, like I think about this relationship, it isn't naturally Kumbaya there. You have to pick sides, and our sides are the owners. But they were so worried about their social media rating that I almost felt they were letting their guard down and their fiduciary responsibility to represent the owner. Like I said, well, what do you do if it's like because they don't want to pay a late charge, so they ding you on a star. He says, well, it's cheaper for us maybe to eat the late fee and maintain five stars, because that's the way owners shop.

    Pete Neubig:  [00:07:03] Now, you're now you're not adhering to fair housing.

    Mark Kreditor:  [00:07:07] Whatever. Yeah, I mean, all of that is even deep for me. But I'm just saying that that on the surface, their determination of how well they're doing is how well they're being rated by their tenant when they are going to naturally, at times be in an advertorial position to have to do something people don't like them to do. And I never knew from that. I only represented owners. And I almost would say to my owners, please, we have a half-star rating on on Yelp. You know, whatever it was, it was maybe three. And I said I was shooting for two. I'd say, read what they're writing. They're writing exactly about what you're trying to Hire me for non-payment of rent and see what I'm telling you needs to be done because I've done it. And they write about it. They write it about it on Yelp. I'm proud that that tenants who don't pay rent leave hating, hating me because you're going to get a tenant who pays. And I always played that card, being the toughest guy in the room, not afraid to take on noncompliance. I felt that I got money out of people that would never pay anybody else because they really believed that we knew what we were doing, which of course we did. Everybody does. But just this whole what happened in ten years, we've gotten soft. We've gotten soft as an industry, uh, because we're so worried about how we're perceived by social media. And again, I may be way off, but it's just real hard for me to kindly, um, accept, you know, somebody criticizing me that's going to harm me in the future because I'm doing exactly what the next owner wanted me to do, because that's where they hire me. You have to always figure out how to really position yourself that what I did was right, and I want people to know it was right. And here's why. You may not like it. Tough love, whatever you want to call it. So that's the first thing that I really noticed was everybody was trying to be, uh, in good graces with their tenants. And I understand they're my customer. When it came to fixing things, I was very good about it. I was good about everything. Except when you didn't pay rent. I mean, that was the least I could do for my owners was get them a rent check. I fought hard for my tenants about repairs. If my owners were not right, I would fire them or I would tell them, look, you can't not do this. I mean, that was easy. That was just property code, but non-payment of rent, boy, you got to be really aggressive and tenants are not going to like it. And they're going to write about you. And I don't know, it just seemed weird the way that everything was rated on ratings.

    Pete Neubig:  [00:09:30] So you mentioned, uh, you mentioned that you mentioned compliance and you also mentioned, uh, price squeeze. Talk to me a little bit about what you're seeing there. Uh, is this because the Institutionals are coming in and they're and they're kind of, um, charging low rates or are you seeing something else now, Mark?

    Mark Kreditor:  [00:09:46] Well, okay. So there's so many things that are moving. You know, I had lunch with a very learned manager in our market, and he said that our industry is going towards a 0% fee for the owner by creating enough additional revenue sources and fees from the tenant. And I just I kind of absorbed that because, I mean, fees was what we were all about, ancillary fees. And at broker owner, I'm speaking about fees. Well, fees are now under attack. They're under attack by the fed, the state, the local. I mean, you're you really need to get on the bandwagon by being ahead of where these fee problems are. And I think it's going to be much more difficult for property managers to just randomly invent fees because everybody's looking at fees as if it's bad, you know, just junk fee concept that we're being put into. So I'm going to move that aside. I used to believe that when you charge a fee for a service, you want to charge for things that owners can't price, you know, it's almost like when I drive a Lexus or I drive a Toyota, it's really the same body style. In fact, we went to Canada, to the tour where the Rav4 was made, and the NX 300 is made. It's the same car, but why am I willing to pay? 20% more for the Lexus every day of the week, because they'll come and pick my car up for service, because they wash my car, because they give me a free toll tag when I go on the toll road with the with the loan car, like there's 9 or 10 things that Lexus gives me as perceived value. So I'm happy to pay more. But with property management, we have to be thinking of things that we are providing owners to get premium prices. You cannot survive with price because people are always going to come out with a lower cost basis for owners, or lose money and go out of business. And by doing that, it takes the rest of us down. Right? And I mean, we were always the most expensive management company in the market. We never discounted our price for any owner, but we always said, use somebody else first. And if they can't do these 12 things that only we do, to be sure that you get paid on the first and all this look, we're happy to to get their second. Our company is called get their first. And owners would always call back and say, oh, you probably won't take my business now because they didn't go with you. First. They said, no, of course we want you back. Come on, no problem. It I couldn't possibly play that game with these. It just was. There were too many other things. And I'll tell you the most valuable thing you can put a price on. And that's professional certifications from NARPM. I wanted to have your initials next to my name faster than anybody else in the industry, or certainly in my marketplace. So I was always getting certified for something, and our company always wanted to be the first Crmc you invest in yourself when you invest in NARPM? I'm taking as many classes, getting certified. You could become even licensed in certain things, whether it be to to pay, to obey taxes. But the more services you can provide under one umbrella, it's much like when you go to a, um, a doctor and, you know, they also have another certification. You know, I know some dentists who are also MDS, you know, or not an optometrist, but an ophthalmologist, you know, like, I mean, they're both going to check my eyes using the same archive, but I'd rather pay more and get the ophthalmologist because he went to four years of medical school or she went to four years of medical school. They so I'm always thinking about things you can't put a price on when I'm charging fees to my clients. And I really still think that there's room out there for us to have as part of the runway of additional services because keep discounting these management fees is going to just kill all of us. Um, the institutional question you asked, you know, most of these institutional managers, uh, you know, a lot of them own the portfolios that you really can't compete with because they're kind of working for themselves. But when they charge fees, um, they're often trying to put you into this square hole, into a round peg, and, uh, it doesn't work. And you have to be able to be flexible in order to, to charge more and outcompete like owners may want you to do certain things in terms of compliance inspection. And I and I just think that you have to agree to a lot of stuff and charge more for it, instead of nickel and diming and charging for every little thing. I find it incredible how we've peeled away the services, because I have to believe that it's harder to keep track of, whereas, you know, just go inspect the house. You know, we used to have runners, these guys who would just drive our girls, drive all over town just to take pictures of things because it was no problem. We'd have someone in the area tomorrow. We'd have the pictures in 24 hours. We never charged owners for them. We were in the neighborhood anyway. Anyway.

    Pete Neubig:  [00:14:44] Thank you. Say the argument against that is just everything's more expensive these days. And so, um, it's hard to. It's hard to be profitable if you're only charging the big three, right. The, the management fee, the lease fee and the lease renewal fee. And so there was a I don't know when, but a few years back, there was a pivot to charging more fees and obviously more fees to the resident than maybe to the to the investor or owner side of things.

    Mark Kreditor:  [00:15:12] Yes, I, I see that, yeah.

    Pete Neubig:  [00:15:15] Even today, um, I know that most management company owners would have no problem adding a fee to the resident, but man, if they add a fee to that owner client, they are sweating bullets or or they, they do everything they can before they actually charge that fee, even if it's a very warranted fee to charge.

    Mark Kreditor:  [00:15:34] So if you offered services to that owner that nobody else offers, what if you were able to provide that owner, you know, low interest financing when they can't afford to pay their bill each month? You know, I think some management contracts automatically charge owners 18% if they had a balance, you know, if they didn't pay back the money, that was a short shortage that they had to replace an air conditioner. I mean, what have I charged them? 12%. Everybody charges 18. The owner would say, well, I like going with them because they have a problem. It's a lower interest rate. It's kind of like the credit card that charges low interest. But you don't get any perks. I'm just thinking of things outside the box, things that are really impactful for owners. Maybe when the owner wants to sell the property, you have a better price. If they're a client of yours than what they would pay elsewhere, that would make up a year's worth of management fees. Maybe you'd have a rent due sooner in the month so they get their check faster. Maybe you process the checks faster. You know, all these things you can't put a price on. But if you add them all up, I'm not nickel and diming. I'm really just giving them a compelling reason to pay us, uh, a market rate for a market service. Um, and then the fee you.

    Pete Neubig:  [00:16:42] Can charge, you can charge a higher management fee, but now it's all-encompassing, right? It adds, um, it adds all these other services or these perceived values.

    Mark Kreditor:  [00:16:54] Perceived value that you can't put a price on. Yeah. Like those initials.

    Pete Neubig:  [00:16:58] I first started my property management firm back in 2012. I was the $50 a month guy. And, uh, it took me about two years and I finally I did a complete overhaul on my marketing, my website and my image. And to use your analogy of the cars, right. I went from the Toyota to the Lexus, and overnight I became the highest, uh, the highest fee in, in, uh, you know, in Houston. And we started getting more business. Well, and I was getting better business, right? Because the guys that that were coming to me for at 50 bucks a month, would they only care about was only price. Every time they did anything was was based on price. The guys that came to me when I was most expensive, they cared about the service and the value and they weren't, you know, always worrying just about price, which means you get better homeowners that will take care of issues when they arise. As far as maintenance issues.

    Mark Kreditor:  [00:17:51] You know, sometimes when you look at the fee for manager or management company to a client, we're talking about a percent or two, like $20, $40. It's it's very low money. But yet if you have much lower prices from your vendors because they have to sign a contract with you in order to do work for your owners, that they're going to charge your owners less than any other management company pays, that's a perceived value that will come back to the owner. We used to run a program called the Preferred Marketing, uh, vendor Program, and they would be able to get their checks the same day that they did the work would factor the receivables for the vendor, but the vendor had to agree to charge us less than you charged, than anybody else charged. But they would be happy to because they didn't have a collection problem. They didn't have to wait till Friday or next week or next month. They would gladly charge my clients less money because we paid faster, and we would just tell the owners we did that. And if an owner has repairs, which they're gonna have repairs. Yep. Hopefully they'll see some of that savings when they get the bill for the repair. So little things add up.

    Pete Neubig:  [00:19:00] What's your, um. I know we hadn't we hadn't talked about this before, but what's your take on the the fixed flat? I'm sorry. Not fixed, but flat pricing or to or to three model price. You know, .99 1.99, 2.99 versus the percentage model. Do you have an opinion on which which one you like better as a company owner?

    Mark Kreditor:  [00:19:19] I definitely like a percentage model because I'm always going to be improving and raising rents, and I can't ride that curve if I'm in a fixed price model. Uh, fixed price models were not as popular ten years ago. So again, maybe I don't understand the marketplace, but I do understand inflation. I do understand that when I do a good job for my customer, my tenant, that a modest rental increase to them is not going to be a reason to move. And every time that happens, I'm getting a raise on the management percentage as well. It could be modest, you know, and small, but it's still meaningful and it adds up when you have hundreds or thousands of doors. So that's why the fixed price never made sense for me. Uh, because I was always trying to raise my portfolio value by raising the rents. And rents really have gone up a lot.

    Pete Neubig:  [00:20:13] Since 2020 for sure.

    Mark Kreditor:  [00:20:15] Now, we used to charge a fixed rate for renewal, and I always regretted that. And I always said if I had to redo the business model again, I would have charged a small percentage to do the renewal because again, the rents went up, but the renewal rate was always the same. It was flat, fixed rate and that was stupid.

    Pete Neubig:  [00:20:30] Yeah. We, uh, we used to charge, uh, a percentage for management fees and then a percentage for, uh, lease renewal. And then, um, we, we took all the late fees. And those are the three things that my, my salespeople would be able to negotiate. They could they could bring you down a point, or they can bring you down a percentage for the lease renewals. Um, yeah. And we feel very.

    Mark Kreditor:  [00:20:51] We feel very strongly about making our owners partners in late fees. And I would never keep all the late fees because late fees were a huge part of why owners gave us some slack, because if they weren't paid and I was getting the late fee that they would like to just file and throw them out because it's no benefit to me. You're keeping all the late fees. If they're my partner in the late fees, then they're going to run them some fishing line and let the tenant maybe have, until the court date, be a little bit more tolerant because they're getting a couple of hundred bucks more. Well, now we're limited to 12% the lodge change in ten years. So whatever. They're getting a percentage of that 12%. Whenever the tenant does cure and most of the tenants would cure, I mean, at least 80% would cure. Yeah, on a monthly basis, maybe 90%. So it was all about finding that perfect adjustment of partnership with the owner. And in my case, it was sharing some of those late fees and obviously, uh, being able to collect the money from the tenants so that you both were compensated for your delinquency. Um, and that's important, uh, which it's all changing now because tenants are getting so much lead line, it can take them months to pay. And then they leave anyway. I mean, this whole model is so much moved since Covid over to the tenant side that even.

    Pete Neubig:  [00:22:07] In, uh, you know, even in landlord friendly states like Texas, it's it's.

    Mark Kreditor:  [00:22:11] Yeah, you know, one of the things that I have really become a true believer in is that many of the things that are implemented thinking they are helping tenants, are actually harming the poor and the most vulnerable who need housing, because I would take much less risk on tenants if it was much more difficult to get rid of them. Just thinking about that, I mean, it's it's just why would I take someone with any credit blemish if if now the government is saying you need to give them a 30 day notice and they can file an appeal and get a free lawyer, I mean, no, if I could take a chance on someone, I'm going to take a chance on them. If I could cure it, if it doesn't work out faster. Same thing with getting multiple months of security deposit. It's the best thing in the world for a tenant. But every time they institute a law because they think that's not fair. Yeah, it's not fair. You're going to make us not want to rent to people that are high risk because we cannot rent to them. I mean, it's not like they have to be rented to. Right. Uh, you know, I just see this whole model has moved so fast over to the, to the tenant side that I think it's a little bit out of balance. And I think it's going to cause more and more. I've seen it already, more and more governments to force, um, builders to build low income housing. You know, we see it in Dallas right now.

    Pete Neubig:  [00:23:27] The the people who are making these decisions don't understand, um, the full the full picture or the macroeconomics of it. Right. They think, oh, they're very transactional, right? They're not strategic in their in their thinking. Like, I'm just going to I'm going to say this because that's going to help me get elected. Right. And most of the people in my in my jurisdiction are the renters. And so we're going to go ahead and basically say, you know, we can't charge double deposit, triple the whatever it is, not realizing that those people. Are never, never going to get a house now in a decent. They're only going to get the the lower income stuff.

    Mark Kreditor:  [00:24:03] Yeah. With section eight you know, section eight became difficult to raise rents and the government was determining what the market was so that a lot of people just said, yeah, it's not worth the trouble. It's kind of sad. Right.

    Pete Neubig:  [00:24:13] And then they try to say, well, you can't say no. Section eight. Right. So then they say that's um, disparate. That's a, that you're disparately impact. Impact.

    Mark Kreditor:  [00:24:21] Yeah. No I understand I mean I can go on all day about disparate impact, but I'm going to save that for broker owner because I got a lot to say about that.

    Pete Neubig:  [00:24:28] I like it. All right. Well let's talk about let's I'm going to shift gears here. Uh, one of the things that that you and I discussed, uh, in the green room was you can't sell like you buy. So understanding generational marketing. And so tell me a little bit of what you mean by that.

    Mark Kreditor:  [00:24:42] Well, thank you so much. I nothing I enjoy talking more about than the challenges we have as, as an industry that has longevity, whereas you'll have clients who are in their 20s and you'll have clients that are in their 80s. And I learned a lot of this after I retired. I've always been involved with philanthropy, and I love marketing, uh, to get people to give money. And it's the same thing with trying to get new business. How you communicate to an 80 year old is different than how you communicate to a 20 year old. And in my world, I'm 65. I like to hold paper. I like to hold things. I like to pass it on to my wife. I like to show it to a friend who has a similar problem, problem three dimensional. And I love to tell you that maybe I'm not saving trees, but I am definitely getting business for whoever is taking the time to send me a package that I can hold and mail now if I'm 20, I'd be offended if someone took the time to mail it because I don't check my mail. But once a month. And I really only like things electronic because that's how I forward it to my friends. But nobody's going to convince me that email is an effective tool unless people open the email, you know, what do they call that, a read rate or something? I mean, and it's very low in fundraising. I know this for a fact. You know, we we talk about this with our churches and our synagogues who are trying to communicate events. Everybody went soft to email during covet or whatever. So now everything is sent by email. But I don't know. I feel like I used to know more about what was going on with organizations when I had a monthly newsletter that I would put down in front of me. So my point is to property managers. You are hiring a lot of people that have no idea how an 80 year old wants to be communicated, that you should give people options. Maybe they don't want to be emailed all of their statements and all their stuff, especially their tax statements. You know, even with fidelity, you get a box to check if you want to get certain things by email or by mail. They're smart enough to give people options. Why? Because most of the people with the most money in this country at Vanguard are probably 80, not 20. So they give people the option of getting their damn statements mailed to them. But property managers who are younger or want to save trees, they don't give options. And I used to, you know, fight this when I was in business because I had a lot of older clients and many of the younger employees would just tell them to check their owner portal, and they didn't know what they were talking about. They didn't have a smartphone or computer. They went to the mailbox. That's how they got statements for everything. That's how they kept track of things. And I feel you have to, um, you have to sell the way the client wants to buy. And many times there's just hard and fast rules with how people can receive things. Now, I'm not talking about tenants and payment of rent. I understand why that should be electronic. And ACH, that's not what I'm trying to change. I care much more about expanding my business. And if most of the wealth is in the hands of people like myself, baby boomers, or even older people traditionalists born before 1946, I want to know how they want to be marketed. I want to know how they want to be communicated with. I want to know how they buy. And I feel we miss that because every booth is all about offshore property management, services and maintenance, and everything is done to depersonalize what was always a very much person-to-person relationship. And when we sold our business as most companies when they sell, what changed the most that caused? Less than stellar. You know, success was when the buyer took the personal part out of it. And most do, and most try to mechanize this portfolio of a management company. And I don't I don't think we should get away from that. I think talking to owners and having people answer the phone, uh, is really important. I called the property manager from NARPM yesterday, coordinating my upcoming delivery at Broker Owner, and I remember it was a third-party answering service. And I'm saying to myself, you know, I'm just gonna hang up. I'm never going to get through to anybody. Everything is probably someone overseas. Well, would you know it that this answering service put me on hold and found the property manager and connected to two calls. So I'm not saying it doesn't work. It worked. It worked great. Like I got my call through, but my initial thought was, I wish somebody would just answer the phone, you know, like like I don't like pushing. Everybody does it. I know, but. 

    Pete Neubig:  [00:29:28] I'm chuckling. Because you're talking to a you know, a property manager who became a tech company I know of. So I'm kind of chuckling. But uh, my, my feeling is if you can use a remote team and lower your costs, you have more people to do the task and answer the phones. So I'm with you on on answering the phones when I, when I had Empire, um, we had I think it was a, uh, it was one of the phone trees that was like. It was like four menus deep. No. Right. I mean, if you don't want anybody to answer the phone, you don't want anybody to call in. You just create a phone tree with four with four levels deep. But by the time they finally get something that by the time they get to the third level, they're like, screw this, and they just hang up, right? So I'm like, great. I had no calls coming in, but of course I got the no one ever answered the phone, I can't get anybody, yadda yadda yadda. Right?

    Mark Kreditor:  [00:30:12] We definitely saw that happen to our business model. But talking about phone trees, I think there should be a hard and fast rule that they shouldn't be more than four options, and each option should have one level and everybody. And once they push the option, then it should go to real people. Like number one for me was if you're looking for a place to live, push one. Number two was if you're an existing resident, have a maintenance concern. Number three is if you wanted to talk about new business and, you know, number four was if you wanted to maybe speak to the broker, you know, I mean, you think about it, there's only really three things new business, fixing things and, and, uh, finding a place to live. And each one of those trees should go to some human person who's covering the second part of it, and that's better than four deep and four other deep. Anyway, so this whole impersonalization of a business models concerns me because I really, uh, want to sometimes think if I got back on the ring in the ring to build a business again, I might have a better chance because nobody still does what worked for me then. I think teaching classes at a community college to investors is the greatest way for you to show off your skill set in front of people live. I used to give these landlord classes at SMU. They had an evening program, Southern Methodist University, and it's in a very nice neighborhood. So most of the people who came to the classes had nice properties. They lived in these areas, and cities. And it's like teaching in, uh, River Oaks in Houston. And the people you would meet. Were such weenies, and I would show them these videos and these pictures of what tenants did to my properties or did to my client's properties. I show them stories about owners getting shot when they went by to talk to a tenant like I would, my job was to scare them to death, and then I'd go through the property code and the new lock locking device status and the new smoke detector status, depending on which county you're in. And I'd confuse them to death. And by the third week, they were running in with keys. Everybody wanted to talk to me about managing their property. It was the easiest way to build a business, and it was personal. They knew my face, they knew my voice, and they really realized all the stuff you can't say by email or even in the mail that's done better in person. And that's one of the pitfalls to self-management.

    Pete Neubig:  [00:32:27] I think that that right there, that story right there is worth the price of admission. If you're listening to this and you're not doing some kind of teaching at a local investor group or at a local community college or wherever, um, that you're missing out on a potential huge opportunity, because when you teach, obviously you become you're in front of the room, so you become the authority figure, but you're also building that trust. And so no, they're not going to go shop around for another property manager. They're not going to do it themselves. If you scare the bejesus out of them like Mark did. Yep.

    Mark Kreditor:  [00:32:57] You you control the narrative. That's the key.

    Pete Neubig:  [00:33:00] That's right. All right, Mark, well, we're up against it. We're gonna take a quick commercial break, and then I'm going to catch you with the lightning round. Are you ready for the lightning round?

    Mark Kreditor: [00:33:07] Yes.

    Pete Neubig:  [00:33:08] Alright, we'll be right back. Everybody all right. Welcome back, Mark Kreditor. Get ready in the hot seat. The lightning round. Alright. What is one of the stupidest things you've done when you started your business?

    Mark Kreditor:  [00:33:19] Stupidest thing I did when I started my business was probably not investing enough money in signage. I think how you look and how you look in front of the property and the street is very important, and that is kind of like the display case of your retail store. So I would have made better use of signage and graphics.

    Pete Neubig:  [00:33:41] All right. What PM software did you use?

    Mark Kreditor:  [00:33:43] I used uh, Act to keep track of my tenants and Excel spreadsheet to keep track of the money. Up until 1200 doors. We had an Excel spreadsheet, and I wrote letters with word and wrote checks with quicken. When we got to 1200 or so doors, we went to Appfolio for one year, and then we moved to Property where because it had more flexible fields at the time. And then I sold the business with about 1650 doors, and I never ran the business better than I did when I had Act, Quicken and Excel, I.

    Pete Neubig:  [00:34:13] Remember I'm old enough to remember Act. That's funny man. Um, did did you use virtual assistants back then? I'm assuming not because they didn't come into In Vogue until after 2014. Yeah.

    Mark Kreditor:  [00:34:24] The only thing we had was a really elaborate, probably, uh, voicemail system, you know, where people would be able to get their calls forwarded to their mobile phones. I always wanted my managers to always be available.

    Pete Neubig:  [00:34:35] What is one piece of advice you would give someone just starting out in the PM business?

    Mark Kreditor:  [00:34:41] Try to use money to make money that, you know, it's very hard if you are not able to, uh, you know, invest in things that are just easy ways to make money. You know, I'm a big believer in financing trucks and beepers and whatever people need beepers, trucks and so forth and stuff for your vendors. Your vendors need to grow with your business. They don't have the.

    Pete Neubig:  [00:35:02] Audience just had a beeper. What's that? Yeah, I.

    Mark Kreditor:  [00:35:04] Meant the cell phones. Yeah. I think you need to start the business with some money. You can't start with zero.

    Pete Neubig:  [00:35:13] Does pineapple belong on pizza?

    Mark Kreditor:  [00:35:16] Absolutely not.

    Pete Neubig:  [00:35:18] Are you from New York originally, Mark.

    Mark Kreditor:  [00:35:20] Hicksville. Hicksville?

    Pete Neubig:  [00:35:21] Yeah, exactly. I know, but no, no real New Yorker would say that pineapple belongs on pizza.

    Speaker3: [00:35:26] It's a good question, though. What was your first job?

    Mark Kreditor:  [00:35:29] Oh, uh, my first job was probably piano playing when I was 14, but then I, uh, got a job at a sneak. I did a lot of things. I mowed lawns, but I got a job at a sneaker store, and I started to work there. And then I would go to the flea market on Sundays with the sneakers, and I made a lot of money, but I didn't graduate high school. I had $4,000, went to college, and I moved from sneakers to backgammon sets and sold backgammon sets at all the college bookstores, from New York to Texas and had a company. And then in Texas.

    Pete Neubig:  [00:35:57] How long? And you still call them sneakers? I love you, man. I still call them sneakers, too, man. They're they're not not, uh

    Pete Neubig:  [00:36:04] Them. They call them Tennies down here.

    Mark Kreditor: [00:36:06] Uh, running shoes, running shoes.

    Pete Neubig:  [00:36:07] Tennis or running shoes. Yeah. What is one thing that most people don't know about you?

    Mark Kreditor: [00:36:14] Um, well, I can tap dance, but really I play. 

    Pete Neubig:  [00:36:24] I learned something new about you. I thought you're going to write that you write parodies of, uh. Of, uh, yeah. Property management songs.

    Mark Kreditor:  [00:36:29] Most people.. Know that. Yeah. I'm big on, uh, writing songs. I teach music every week. I do a lot with music. I love music and 20th century songwriters and, uh, musicals. Like, that's my thing.

    Pete Neubig:  [00:36:42] You heard it here. You heard it. Here first, folks. If, uh, you go see Mark at, uh, broker owner, he's speaking. He's going to tap dance and do a musical number for you.

    Mark Kreditor:  [00:36:49] Uh, my opening song is about junk fees.

    Pete Neubig:  [00:36:53] Uh, what's a book you're either currently reading or one that's impacted your business or life?

    Mark Kreditor:  [00:36:58] I would Zero written by a Houston, uh, money manager poker player. And it just says that all the money that you're accumulating. And I love talking about accumulating wealth and reinvesting money. I mean, I did that at the, uh, convention keynote, but I really think that you have to, uh, use money to enjoy memories with your family so that when you die, you don't say, God, I wish I would have done that. You know, it's a Die With Zero was very impactful book that I read this year. I read a lot.

    Pete Neubig:  [00:37:30] I'm actually going to write that one down.

    Mark Kreditor:  [00:37:33] It's an easy read. You should. Read it. Yeah. Die With Zero is a great book.

    Pete Neubig:  [00:37:34] So, you know, my my business partner, Steve Rosenberg. I don't know if you know Steve, but, uh, his son suddenly passed away last year. He got hit by, uh, by a vehicle and passed away at 19. And, um, Steve, uh, has all of these memories. Him, his son. Been to 23 countries, been skydiving, rappelling, Grand Canyon stuff, uh, motorcycle, all this stuff. And, uh, Steve and his wife Renee created a a, uh, non a non profit called Live Like Jet. That's their son's name. And he literally talks about what you just said. Money's great, but if you don't use it to build memories, it's it's useless. Uh, it's paraphrasing, but yeah, that's, uh. So I love that I answer, uh, do you prefer dogs or cats?

    Mark Kreditor: [00:38:21] Dogs.

    Pete Neubig:  [00:38:21] Dog guy. All right. Uh, Mark, if somebody was compelled, they wanted to reach out to you. What's a great way to, uh, for them to reach out to you?

    Mark Kreditor:  [00:38:30] markkreditor@gmail.com

    Pete Neubig:  [00:38:31] markkreditor@gmail.com. And that's Kreditor with a k.

    Mark Kreditor:  [00:38:35] Yes. And Mark with a k.

    Pete Neubig:  [00:38:37] A k. And if you are listening to this and you have not joined NARPM yet, why not call them at (800) 788-2345 or go to narpm.org. And if you want to uh, if you, if you are looking for remote team members, or virtual assistants, please check out vpmsolutions.com. You can hire some folks that can answer your phone. You don't need those four-level phone trees like I did back in the day. Mark, thanks for being here, I appreciate it.

    Mark Kreditor: [00:39:06] Thank you.

    Pete Neubig:  [00:39:07] Uh, all right, everybody, we'll see you. Uh, we'll see you next time.

    Mark Kreditor: [00:39:11] Thank you.

    Apr 11, 2024

    A Podcast | Mark Kreditor

    NARPM Past President, former owner/broker of Get There First Realty a Dallas-based PM company managing 1650 properties when it sold in 2014 to Realogy, Mark will be speaking at NARPM broker owner and if you have not had the pleasure of seeing him speak you are in for a treat.