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Colin Douthit, Owner of Atlas Property Management
"Technology has definitely allowed us to scale, knowing that we wanted to scale, focusing our efforts on making sure all of our systems could handle that. It would have been a lot harder if every 75 doors, we had to get another person on staff, right? We're able to stretch staff a little further because of technology." — @atlaspm
Managing 1000 multifamily properties is no easy feat. You need good people, good systems, and good tools to make it run as smoothly as possible. Atlas Property Management has mastered these components, and with over 1000 doors under their belt, they are not showing signs of slowing down anytime soon. Colin Douthit, the company's owner, joins us today to share insights on what it takes to manage a multifamily portfolio of this size. We hear about the impetus for starting Atlas, how they have managed to scale as quickly as they did, and what they did to overcome their growing pains. Colin also talks about some of the tools that help streamline property management. With more apps and platforms in the industry than ever before, there is no shortage of how property managers can leverage tech to suit their needs. Wrapping up, Colin talks about what's in the pipeline for Atlas. Tune in to hear it all.
Key Points From This Episode:
Links Mentioned in Today's Episode:
"So, each day of occupancy for them is worth $50 of top line revenue. So, that little metric right there, if you add that across the 10 to 15,000 homes that are going to buy, that really starts to add up."
[INTRODUCTION]
[0:00:13.8] ANNOUNCER: Hello, and welcome to Sync or Swim, a weekly podcast, brought to you by Rentsync. Where we take a deep dive into the PropTech, multifamily and rental housing industry. In each episode, we uncover the technologies and strategies used to help overcome operational challenges and increase the value of your multifamily investments. Let's get into our conversation today.
[INTERVIEW]
[0:00:37.7] MF: Okay, welcome back to Sync or Swim. I'm Mitch Fanning with Rentsync. Joining me today is Colin Douthit, owner of Atlas Property Management, located in Kansas City. Colin, how are you doing today?
[0:00:50.5] CD: Doing great Mitch, how about yourself?
[0:00:51.9] MF: I'm fantastic, like you said before, living the dream, every day. Today, obviously I want to get your thoughts on the property management industry a little bit and also, just managing a high growth portfolio, you've experienced a lot of growth over the last couple of years and we want to kind of drill into that. Before we kind of get into that, maybe you can do that intro some justice by telling us a little bit more about your background and how you got started or how you started Atlas?
[0:01:17.8] CD: Yeah, no, I'd be glad to do that. My background is professionally, I'm an engineer by trade, I got three engineering degrees. I'm a PE, corporate world wasn't for me after I was unceremoniously departed from my last company, I already had a few pieces of real estate that I had owned or it was under contract on. I just kind of focused on real estate over the next 24 months or so, we bought 70 doors to myself and some partners and I was self managing those and from there, I decided, "Well, why not look at starting a property management company or buying one?" with the goal that generated enough money from third party property management that I get my properties managed for free.
This was my way of thinking about it. Looked at buying one that deal fell through. I decided to start my own and kind of the rest was history, we've grown a lot, started with just basically rolling in my 70 doors and now we're just over a thousand under management.
[0:02:18.1] MF: Nice. Really, that was a follow-up to that but I think you kind of touched upon it but maybe we can double click into it, the question I had was, or the follow-up was like, what made you decide to start it? It was really to essentially get your initial doors kind of managed for free, it was kind of like the value ad there, is that kind of how it went?
[0:02:38.2] CD: Yeah, that was my thought initially. Now, to make sure our company retains financial health and I have a partner, I actually still pay for my property management at the end of the day and then we're like, "Well, I'm already in the real estate space, I'm already managing, I've already got systems and PM software so why not roll it out and do third-party?" I'd spent a couple of years self-managing, I had learned form a lot of mistakes, learned a lot of legal issues that I had to deal with and then frankly, I was like, "Well, I don't want to go back to the corporate world." I started my own business, start generating revenue from that. From that revenue, then I can start having more capital to buy more real estate.
[0:03:17.4] MF: You mentioned kind of that trajectory going from zero to 70 then now you're well over 500 doors I guess at this point. Really, my first question is, how did you manage that? How did you get from kind of zero to say, 500 doors in such a short period of time? Now, we touched a little bit on that but anything you'd be willing to share, I guess now that we hit record that would be great.
[0:03:41.6] CD: Yeah, I mean, my ownership stake really hasn't – I still own less than a hundred doors or have ownership interest in less than a hundred doors that we manage. Getting from zero to the first 70 was using capital we had saved up, finding some off-market deals, market wasn't quite as hot, that was back in 2017, 2018. We were able to smack some stuff at a pretty good price, of what we thought was pretty good price and grow that and then getting from the 125 doors under management, which is kind of where we started in 2020, I started doing some third-party stuff there and getting to a thousand doors, 16 months later.
That was the real hurdle for that growth in terms of just getting doors under management and just hustling for that year and a half.
[0:04:32.6] MF: Got you. Here's a difficult question but I think it's always an interesting one. If you had to kind of, do it all over again and you can pick any phase whichever phase you want but if you had to do it all over again, what would you do differently?
[0:04:45.6] CD: I would call it during that hyper growth phase which essentially for us was all of 2020, contrary to what the rest of the world was doing, I would have been more selective with certain clients. I would have not let certain clients make up such a high percentage of our portfolio.
Additionally, I would have been more selective about the quality of properties that we were bringing in, just kind of took anything, anywhere and it has been a great learning experience. It allowed us to hit a lot of critical mass steps that would have taken us a lot longer if we had done it.
I don't want to say more deliberately but if we had been more selective, it would have taken us a lot longer to hit the scale that we wanted to hit but without that scale opportunities that have risen from that but that would have been a portion. I would have been more selective about certain owners and quality of properties.
[0:05:34.5] MF: Got you, on the flip side, what do you think you guys did well?
[0:05:40.1] CD: Adaptability, stretching, you mean you add effectively, we'll say, 800 doors, 700 doors in a 12 month period, there's a lot of stretching on everybody. All of our systems would get stretched and broken, we'd have to retool a system, whether it was our maintenance team, our construction team, our property management, our software, whatever we were doing, accounting, everything just got stretched, broke and then retooled to make it stronger and better for the next stage and growth for the business.
[0:06:11.0] MF: Exactly. On the flip side, now that you're at kind of the level that you're at, I guess we kind of touched upon it a little bit, what specifically or you mentioned, systems and kind of the tools, what specifically changed in your business? Again, you can pick any area and maybe kind of give us a sense of how it went through a bit of an evolution.
[0:06:36.6] CD: When we started out and we were at 125 doors at our management, it was me doing everything. I was the leasing agent, I was the maintenance coordinator, I was the property manager. Taking the next step and hiring staff to start taking specific responsibility, this was a large evolution. I'd say, the one that's been the biggest gain for us, actually, in the last 60 days or so, we hired a director of operations/regional property manager who has 30 years of PM experience and he's been a regional, he's been a COO, that sort of thing.
Bringing him on as just a layer of management to protect my time and then also to bring in more training, more experience for our PMs to support them fully, that's been a real big game changer and without that critical mass, it's not to say that we wouldn't have been able to have it then probably.
[0:07:34.2] MF: Obviously, that's the people piece and you've spoken a little bit about the process, were there any specific tools that you or – what is your maybe your tool, your tech stack look like currently and how has that evolved?
[0:07:46.5] CD: Currently, we're using Monday.com for our project management. Also, Lightlaids, we use as our CRM, just tracking projects or properties that are coming online on the PM side. Additionally, we use that for tracking our construction projects since we have our own construction company in-house. We use it for tracking unit turns as well.
Grasshopper's our phone system, it's all Internet based so the PMs download the app on their cellphone, it rings the cellphone, they can call out through the app as well and it shows up as the office main line. That allows for a lot of adaptability as we expand and add extensions and week in numbers and making bracket when it's going to ring on the PM cellphones, when it
does and when it goes to the receptionist, when it goes to after hours, et cetera. Those are two things that we're valuing, that we lean on a lot right now and obviously our PM software.
[0:08:34.4] MF: The PM software, what does that look like? Which vendor do you typically use right now?
[0:08:38.8] CD: We're actually migrating to AppFolio right now and that one should be going live any day now.
[0:08:44.9] MF: Maybe I'm kind of as I said before, I tend to go off script, this is in my foray into that. The use error to property management company in 2019 and kind of, I had spoken about my experience kind of pre-2010. In your mind, what's been the biggest difference, say, starting a property management company in 2019, say, versus five or even 10 years ago?
[0:09:13.4] CD: Well, that's going to be a little bit of a difficult question because I don't know what the property management space look like five or 10 years ago. I mean, I guess four years ago, I was self-managing my own properties, right? That's kind when I got into it so that was early 2017, four and a half years ago. I couldn't tell you what it looked like in 2010 because I was graduating college then.
I imagine the technology has improved, it sounds like from talking to people that have been in a while, the PM software has been what's been one of the biggest changes, with it all going web based, with all the integrations in the software, with the way the properties are getting marketed, right? I mean, it seems like some of these websites that listings are getting syndicated to, it's all of a sudden it's like, "Oh, there's another one, that's a big player, right? I've never even heard of that one."
I think the way the properties are getting advertised has been a big change within all application process. I mean, for instance, in 2011, 2010, I rented my first apartment after I graduated college and maybe I looked at apartments.com I think back then. I went and drove to the apartment complex, I talked to a leasing agent, I filled out a paper application, we signed the paper leases, we don't do paper applications, we don't do paper leases.
Just from my guess from my experience as a tenant, those would be the biggest ones. We would walk to the leasing office on site to submit a maintenance request or call. Right now, it's all done through a web portal.
[0:10:38.7] MF: Yeah, you think because of the change or the evolution in technology, that has kind of allowed you to scale quicker than say, your predecessors who might have started a PMC company, a PMC maybe pre-2010?
[0:10:57.2] CD: That's pretty possible. I think the technology has definitely allowed us to scale, knowing that we wanted to scale, focusing our efforts on making sure all of our systems could handle that. It would have been a lot harder if every 75 doors, we had to get another person on staff, right? We're able to stretch staff a little further because of technology.
It takes a lot of those manual processes off the table. Yeah, definitely, that's a lot for us to scale quicker and not knowing anything different might have been an advantage, it might have been a disadvantage, I don't know but knowing is like, "Oh, great, well, to add more doors, I just go into
property management software and click add more doors and hire another maintenance guy every so many doors and then we've got a maintenance coordinator and he can handle our whole portfolio." No big deal.
[0:11:45.8] ANNOUNCER: Interested in being a guest on Sync or Swim? Or have a really great idea for an episode? Email us at podcast@rentsync.com.
[0:11:54.4] MF: Let's talk a little bit, you brought up renting, kind of back in the day, let's bring up kind of marketing and advertising. Obviously, COVID has impacted how people have spent their marketing dollars or just market it in general. How has that impacted the way you've marketed or advertised your rental properties for clients, say over the last year and a half?
[0:12:15.7] CD: It hasn't.
[0:12:16.4] MF: Okay, that was the short answer.
[0:12:18.6] CD: Short answer. It is the short answer, it hasn't. I mean, our leasing agent showed properties in person all through COVID, showed properties before COVID, still showing properties in-person now. We are starting to look at some self-showing technology for owners that are receptive to that. Some owners still like having a person meet the tenant and that little bit of tactile-ness. There is some relationships on like a – obviously, the tenant if they are approved, you know, we're going to follow the laws but there is also some got like, "This person might not be the best fit" or some stuff to the in-person.
I also trust that if somebody is there, something is not going to get stolen because they've got a lockbox code or whatever. COVID and everything hasn't really affected the way we've shown and leased properties, we've still syndicated all the ads out to the different rental websites as well as you know, we've leaned heavily on Facebook as well.
[0:13:13.1] MF: In our research, we found that there was a – during the kind of peak of COVID, there was this shift from kind of primary markets to secondary markets overall from a macro level. How did Kansas City fit into that? Do you feel like there was a bit of demand coming into it at Kansas City or kind of going away?
[0:13:33.3] CD: Definitely a demand coming into Kansas City and we actually have a pretty heavy footprint outside of what we'll call metro Kansas City and some of these tertiary markets that aren't a direct part of the contiguous metropolitan area where they might be a five-mile gap before you are out into this next town and the next town might be 20,000 people, it might be 5,000 people. I started my investing in one of those small towns because that is where I lived.
Our offices in one of the suburbs in Kansas City, so I drive into the city and what we found really heavy, we could have continually heavy demand in some of these smaller tertiary markets because people did kind of wanting to get away from the city when it was this time last year during COVID in the summer of 2020. People are like, "I want to get away from the people. I don't have to – I can tele-commute now" so yeah, we did see a push out there outside of Kansas City but our demand throughout the whole city stayed strong the entire time.
[0:14:26.5] MF: Got you, so kind of a follow up to kind of the marketing question. When it comes to say, reporting back into your clients, besides the kind of traditional, "Here is where our occupancy is" or those type of metrics, are there any other kind of metrics that customers or clients are wanting beyond that or is it just been the – is it the typical?
[0:14:48.9] CD: Rent roll and PNL are generally what we're wanting to see and we're starting to work with more institutional level of customers, so they are starting to dig into the financials a little bit more. We are going to start tracking unit downtime more and that is one of the reasons to why we're switching out fully as well as it's enhanced reporting so that we can provide higher quality information to our owners and tracking unit downtime, days on market.
Frankly, it is one of the reasons that we are starting to work with Rentsync as well because we want to be able to track our lead sources, where they're coming from, what's getting us the most bang for our buck, where are we really capturing the most leads from and maybe should we focus more effort on certain avenues.
[0:15:27.4] MF: You mentioned institutional customers, what's your sense for why they're looking at maybe more granular data? I've got my own opinion but I am curious to know and the answer could simply be because no one else has time or that's kind of their job but is there – do you think there is anything else beyond that in terms of like market factors that are pushing institutional customers to kind of want to know that information?
[0:15:53.2] CD: Well, one of them, we're working with a really large nationwide fund right now and we'll be managing the multiple markets for them. Their thing is, they have it tracked down to each day of occupancy or vacancy isn't worth so many dollars. Each day of occupancy for them is worth $50 of topline revenue, so that little metric right there if you add that across the ten to 15,000 homes they're going to buy that really starts to add up.
Tightening those timelines up on some of them is good additionally, you know, just the enhanced reporting on the PNL, really digging into that. If they're a syndicator, they really want to make sure that they're segregating their CapEx versus their normal income because they want to push that NOI as high as possible for a refinance because then the syndicators get their kickers and all their incentives all.
[0:16:43.5] MF: Yeah, I mean at the end of the day it's obviously because they want to optimize that NOI and that return. I find my theory is because there's a lot of investors through the institutional entities that are maybe new to the multifamily space, they are used to seeing that data or more data or they're looking to see how those other leading indicators, so it's been interesting as a result of that.
Okay, so I mean, kind of as we – before we get into my favorite part of the conversation, which is the quick fire round, I guess my last question is what's next for Atlas and in general? What do you see kind of in the future for the property management industry?
[0:17:24.2] CD: Yes, so for us right now, we're in Kansas City. We are going to St. Louise and Ohio this year. We've got customers real estate funds that are wanting us to manage all of Missouri for them, so it's Kansas City and St. Louise and the Kansas side of the state line and then Ohio as well. We'll be opening up branch offices there, looking at some other tertiary markets. You know, long-term for Atlas, continue to grow and scale and we're putting in leaders in place to allow the next step in expansion and professionalism for our company.
[0:17:58.4] MF: Great. Okay, so Colin, I am going to ask you five questions and you'll have about 30 seconds to answer. Are you ready?
[0:18:07.0] CD: Let's do it.
[0:18:07.6] MF: All right, so first question, what's one thing you wish your phone could do? [0:18:11.4] CD: Oh geez, what is one thing I wish my phone could do? Not ring so much.
[0:18:18.4] MF: Got you, okay. That was an easy one. Second question is, your favorite app or tool and why?
[0:18:24.3] CD: Despite the fact that we're starting to go away from it, the whole Gmail Suite. I really like that and why because it's allowed us to centralized everything, very economical price when we got started. As we implement enhanced the IT services and I'm not the IT guy anymore, we are going over to the Office 365 Suite and all of that because it is easier to deal with the security in the backend administration on that for those guys but the Google workspace has been great for us.
[0:18:49.5] MF: Okay, great. What do you believe that others might disbelieve?
[0:18:53.8] CD: There is more than one pie to look at, so everybody is fighting, thinking limited mindset. There is only so much of a piece of pie that a company can grab. They got plenty of beliefs and we're over here and saying, "There is a whole other pie where everybody missing over here." I don't need to fight with you guys for the scraps. We're just going to focus over here on this pie.
[0:19:12.1] MF: Great. What have you changed your mind about lately?
[0:19:14.7] CD: Hey, keep it property management related. What have I changed my mind about lately?
[0:19:18.3] MF: It doesn't have to be, it can be anything.
[0:19:19.8] CD: Well, what I've changed my mind about recently is that a little bit on that being more selective about your customers, right? I'd always heard that, you know you read it in the business books but having experience to being willing to say no to a business opportunity is sometimes a good thing.
[0:19:35.0] MF: Agreed and lastly, where can people find you on the interweb?
[0:19:39.7] CD: Yeah, they can find us at www.atlast.rentals or they can find me on LinkedIn, just Colin Douthit.
[0:19:47.1] MF: Great. Anything I've left out?
[0:19:50.3] CD: No, I don't think so. This has been good, property management has been good to us. We look forward to continuing to grow and partner with great companies to help take us to the next level.
[0:19:59.2] MF: Okay. Well, Colin thank you so much for joining me. It's been great and until next time, keep swimming.
[0:20:06.2] CD: Thanks, I enjoyed it.
[END OF INTERVIEW]
[0:20:08.3] ANNOUNCER: You've reached the end of another episode of Sync or Swim. Make sure to visit us at rentsync.com/podcast to access shownotes, key takeaways and where you can sign up to our newsletter to receive free bonus content. If you found value in the show, please also remember to rate, review and subscribe. Don't forget to join us next week for another episode. Thanks for listening.
[END]
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