Introduction to Collections

Will. Greetings. My name is Robert Locke and this series that we're gonna do is called Post Move Out Collections, a new revenue stream. We've got about 10 of these on our website. You can kind of watch 'em as you need to and then, sign up for a drip campaign and it'll be on our website.

We'll tell you at the end of this video how to do it. One of the things I wanna make a note, they're all gonna be five to seven minutes long. We know you don't have a lot of time to watch a 15 or 20 minute video, so we're gonna cut 'em way down. That means there's gonna be a little jerking and a little pausing and some, you know, it's gonna look kind of funny as we edit out and cut down things

Property Management Lifecycle

that don't need to be set so that as a warning, our first, conversation we're gonna have is this collections is a natural extension of your management business. It's amazing to me how little the idea of receivables or collecting on your receivables is talked about in the nrpa world or on the property management community. But really it is a natural extension of what you do. Here's what I mean. A decade or two ago, I came up with the idea of a property management life cycle.

Kind of a natural sequence of events that you, go through in the property management arena and you'll see how it makes sense. First thing you do is you market to owners. When an owner says yes, there's a whole process called setting up the owner. Once you've set up the owner, you begin marketing the property. Once the tenant is in the prop made application, you kind of move on to resident signups.

This is a great way to organize your office, organize your documents, okay? Once the tenant has moved in, you've got this ongoing management. It might last for a year, it might last for 15 or 20 years. It's called managing the money, managing the owner, managing the tenant, and managing the physical condition of the property. The next stage in the process is manage the move-outs.

When the tenant gives notice, then it's managing the separation. And look at what the last one is. A couple of decades ago, we're gonna realize that when tenants move out, often they leave owing a bunch of money. And we didn't do very well with that in the first couple of decades of our business. We were too, too, you know, too much of a steep learning curve on the property management arena.

But we're gonna kind of talk through that.

Enforcing Lease Terms

This collections idea collections is really the wrong term. We ought to call it something different because the word collections has kind of a negative bent to it. Nobody wants to talk to a debt collector. You want to get rid of the conversation telling you're with the IRS or you're a debt collector that'll, that'll make your, that'll make 'em go away. It's wrong term.

It's really enforcing the terms of the lease. Now, when you're in property management and the tenant is in the house, you know how to enforce the terms of the lease. You've kind of got your thumb over their, over their occupancy. It's called an eviction. So you can kind of snap 'em into shape a little bit, kind of force 'em to obey the rules.

And so while before move out, you know what to do. The problem is, I faced it back in 1980 and 1990. Once they've moved out, after they've moved out, it's kinda like, okay, I don't have any power over 'em anymore. I have nothing to really enforce. How do I collect the money that I'm due?

And that's what this whole series is about.

Post Move Out Collections

Now, most people, I'm including us for the first couple of decades. Most people ignore it. And there's a very important reason why we ignored it. And the reason is cuz there's no money in it. When you collect from a tenant after move out and you collect $3,000, most of it belongs to the owner.

It's unpaid rent. It's damages above the security deposit and the amount left over unpaid late fees or renewal fee or bounced check charges, chump change. And even if you're really successful today at post move out collections, no reason to do it cuz there's no money in it. Well, we figured it out. We figured out how to make lease enforcement member Alice, not call it collections, okay?

We figured out how to make lease enforcement that is post move out a big revenue stream. I mean a giant revenue stream. I mean millions, hundreds of thousands of dollars. We figured it out over time. Took us a while.

Now here's what most of you are doing. Here's what really most property managers are doing. They are sitting on a pile of money and they're trying to make ends meet. You know, we all know property management is a penny anti business. There's not a huge amount of money in it, but, and, and we're kind of poor and we're breathing the financial fumes, so to speak, of property management.

And there's no, you know, there's no really big money. There's no extra money that you can take home and pay off houses and fund retirement programs and such things. Well, there is, it's just that the property management community up to now has kind of avoided it. And it's called receivables. You even go to the, the people who teach us NPA standards and NPA accounting standards.

They never give any attention to the balance sheet and this thing called receivables. And yet the property management industry has got gobs of money sitting on the sidelines. We just don't have a way of, of cashing in on it. Well, we do. And collections, collections is a natural extension of the property management business.

It's just foreign to most of us cuz nobody really has figured out how to do it. Well, we have, and we're gonna go through this series and tell you how we'll do it for you, how we did it, who's involved, you know, how does the whole system work? And we're gonna do it in a little tiny five to seven minute chunks. Okay? This one might be a little long cause I had the introduction.

Now the next one in the vi in the series of videos, next video, we're gonna talk about our experience with post move out collections. Before you do business with somebody and a new id, you wanna make sure they've done it and not just they've done it, but have done it really, really well. Not a single or a double, but a real home run. So we wanna show you what that looks like so that you can kind of make this, will help you make a decision as to whether or not you do any business with us. Now here, if you're on a social media or somewhere out on, on the internet, you might want to, watch these videos.

You can go to rent recovery.com/video, video or videos. We got it set up both ways. So if you want to kind of hook into this and see what this is all about, that's where you go. If you want to reach out to us, do it at [email protected]. Thanks for listening.

Let's move the conversation forward.