BP Podcast 026: Building a Scalable Real Estate Business and Tenant Management Tips with Chris Clothier

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Successful real estate investing involves a lot more than just tenants, toilets, and trouble. Successful investors have learned to manage their investing like a business and not a hobby by creating systems to scale their efforts and build wealth faster and more securely. To get a better idea on just how to do this, on the show today we talk with real estate pro Chris Clothier of Memphis Invest, who shares his story and his view on how to start working on your business and not in your business. If you are looking to take your investing to the next level while maintaining more control – don’t miss this episode. Chris also has some awesome tips on getting your properties rented quicker and dealing with difficult tenants so be sure to take notes!

Read the transcript to episode 26 with Chris Clothier here.

Listen to The Show on iTunes (Preferred Method!)

Click here to listen on iTunes.

Listen to the Podcast Here

In Today’s Show, We Cover

BiggerPockets Podcast _ Real Estate Investing and Wealth Building 9.42.11 AM

  • Student housing: a good idea or a bad idea?
  • When NOT to use partnerships – and the perfect kind of partner.
  • What comes first: hiring employees or ramping up your marketing.
  • What true marketing really is… and why it costs nothing.
  • Tips for outsourcing parts of your business that don’t excite you.
  • Why Chris didn’t use a formal business plan but you probably should.
  • How to hire people and guarantee you can always pay their salary.
  • Chris’ unique “game” for filling vacant units.
  • The one tenant trait that is an automatic denial.
  • Specific questions to ask a property manager before hiring them.

Links from Today’s Show:

BP Podcast 009: Using Hard Money Lenders to Grow Your Business with Ann Bellamy
Keyword alerts
Do You Feel Like You Are Drowning In Your Business? Start Outsourcing!

Books Mentioned in the Show

Make it Big by Frank McKinney
Rework by Jason Fried and David Heinemeier Hansson

Tweetable Topics

“The best marketing you could ever do is simply talking to other people.” (Tweet This!)

“If you are going to start a business… why not go all in?” (Tweet This!)

“To scale your business, you gotta bring in the highest quality people.” (Tweet This!)

“Surround yourself with people who believe in your vision and are up for the challenge.” (Tweet This!)

“Don’t be scared to share in the wealth of what you are doing.” (Tweet This!)

Connect with Chris

Chris’ Company Website MemphisInvest.com
Chris’ BiggerPockets Profile

About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners -- without the non-stop pitch prevalent around the industry. With over 80,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!

30 Comments

  1. karen rittenhouse

    Another great podcast. Chris has so much success and who doesn’t want to listen to success?

    We also started investing thanks to a Carlton Sheets infomercial. I wonder if he has any idea how many investors he’s responsible for. And I, too, still have his product sitting on my office bookshelf. Too bad for Brandon that he missed it….

    Thanks for the podcast, guys.

    • Chris Clothier

      I appreciate that Karen! Hopefully I gave enough of the credit to everyone around us in the podcast. We’ve had lots of great people who have helped us along the way and still help us today.

      I agree too…anyone who never saw the original Carlton Sheets program should go back and take a look because it really was simple and effective and probably elementary, but it worked.

      All the best to you –

      Chris

  2. I thought it was a great podcast.

    Even with my assistant it makes we want to think about automating even more things that are below my pay grade capability.

    I think it is so true that in many cases property managers DO NOT like the job. They do it as a force to make money to survive. I get tons of calls from investors with nightmare stories about their houses where it was great at first and then turned into huge losses and they cannot get ahold of the person.

    I would add not to just use an agent to manage who mainly sells and they are using your property to make a quick buck. The investors say it goes well but then they hear nothing from that agent and when they do the agent says they hadn’t had much time as they were closing out a big sale to manager their property. I hear this a lot. So use a company that has systems in place and enjoys what they do and does it at a very high level. If you use mediocre people you will get mediocre results with your investments for managing or helping you purchase and sell. Those people that are superstars expect to get paid above average for the service they provide to their clients as they are giving them a level of service the mediocre servicers are not.

    The biggest mistake is investors not factoring in management cost upfront. They will have a job doing it themselves and then if they ever get tired they try to go with the cheapest pricing as they overpaid when they bought. Now they end up paying more in a sub par manager.

    I would say doing property management is easy. Now doing property management EFFECTIVELY is hard. I see very few companies or people that can do it really, really well. This is where investors mess up in not seeing that quality in the long run for management ADDS to the bottom line and does not take it away.

    I like the part about knowing what you are passionate about and are not. For me and most people know this I will never do property management and I do not like residential. I enjoy the commercial real estate world and transacting sales and my own investments.

    I managed up to 20 units of my own properties with a manager that was a friend. Never will do that again. Full time management companies and I do nothing but review the report every month. Anything else there are alternative investments that do not have the tenants, toilets, termites to deal with.

    • Chris Clothier

      Hey Joel –

      Thank so much for listening and leaving your comments. One thing I keyed in on was your statement relating the old adage “you get what you pay for”. I could not agree more and I think that applies to everything. When you hire – hire great people. When you do business with someone – choose great companies. It seems pretty simple.

      Lastly, I know what you are passionate about from reading your stuff on BP! Keep it up – you provide such great info. on the site!

      Chris

  3. I’m glad Brandon made sure Josh didn’t take all the credit for having the baby! ha Congratulations Josh!

    Happy belated burfday B! So many happy things in the beginning of the podcast!

    “Find out what you’re good at and focus on that.” If you aren’t good at something then don’t try to do it. So good.

    I think I might actually take all my post-its and notepads and put it all together into one solid business plan now… It’s some what unorganized when the plan is written in segments all over the place.

    “Step away from your business and find out what you need to be working on” Sometimes you’ve got to take a moment and slow down so that you can speed up, yea?

    Your competitive rental agent strategy is hilarious, but genius! I love it.

    “If you set everyone up for success then when you do your business will grow.” That’s great ethics.

    FiRE ROuND! It’s a good addition. Glad you are keeping it.

    Luck – “When preparation meets opportunity”!

    Great podcast. Thanks Chris! It sounds like you are the business scaling master. If you haven’t written an article on it yet, please consider it!

    • Joshua Dorkin

      Thanks Taylor. I certainly appreciate the congrats, and I’m happy you’ve found so much value from the show.

      The fire round was Brandon’s idea and was probably one of the best additions to the podcast — I agree!

      Thanks again for the comments.

    • Chris Clothier

      Hey Taylor –

      Thanks for the great and well-thought out comments! I will absolutely go to work on an article like that and see if I can’t put something together. You pointed out some quotes from the show. I have one quote that everyone in my office has been giving me grief about all day:

      Josh Dorkin – “I know this show is a little longer than usual…”

      Anyone who knows me, knows that what I am “good at” is talking! So it has been kind of funny all day that I am getting grief for being long-winded, but it was a lot of fun. Truth be told, I love talking about real estate and could have gone on for hours had Josh and Brandon not corralled me in.

      Thanks again for listening – Chris

  4. Sharon Vornholt

    Well guys, after 3 tries I finally got to listen to this podcast all the way through, and it was awesome. Great content Chris. Also great job Josh and Brandon.

    One tip I especially liked was using the length of stay for the tenants as a way to gauge the effectiveness of the property manager. I love that idea. The story of how you use 4 signs in the yard for your rental agents is really thinking outside the box.

    I also loved hearing about your first hire Carol. Saying that you really had no idea what she would be doing to her is pretty much what I said to my VA, and I have to say that I’m still figuring it out. The reason I went through that whole exercise of making my great big whiteboard was so that I could get some clarity on those issues. And I have to say, it really helped.

    That is also a great point you make about paying folks out of the deal especially when you first get started. I think that is a great idea. It really makes them accountable for producing results.

    When you were talking about networking, I had to admit that I fall in that group that has pushed some of my networking down the list because of other things. I do that even though I know I shouldn’t do it. I get caught up in working in the business instead of “on the business”.

    Once again, great info.

    • Hi Sharon !!

      I follow you on Google+ and read all of your material, .. EXCELLENT work !! Thanks for adding so much to my knowledge base.

      Curious if there is more info about you “big whiteboard” ? I am thinking about donating one entire wall of my home office to just that, .. a BIG whiteboard !! How did you make yours ?

      Jasper

      • Thanks for reading and listening Jasper. This was a great podcast by Chris and BP guys.

        I bought a piece of whiteboard 2’x4′ at Home Depot for under $10. If I were going to do a whole wall though (which I would love to have), I would get whiteboard or “dry erase” paint which you can get at Home Depot or Lowes too. You can actually get it in colors like taupe, beige etc. that you can use the dry erase markers on. You can just paint the wall if it starts to look bad over time.

        Sharon

  5. Great show, as usual. I liked the quick tip, because I use it daily. I was even going to incorporate it into a blog post or something. It saves SO MUCH time, especially with slow talking hosts. I can get away with 2x on some podcasts and its like time travelling while having content shoved into your dome with a firehose on full blast. Its how I do audiobooks now too.

  6. Al Williamson on

    I was pumped to see Chris’ head shot linked with the podcast.

    Chris, you’re a wealth of inspiration and insight.

    Cheers to the Dynamic Duo for pulling out so much good stuff from Da Man!

  7. It’s clear that you’ve applied proven business principles and strategies to REI, which is fairly unusual, at least among all of us small operators. I’m impressed.

    My question is about the competive environment you set up among your leasing agents. It strikes me as the “shark tank” style, which companies like Cisco have successfully used for many years. How do you incent these agents to properly qualify tenants since speed seems to be the priimary goal. Does your back office qualify? Or the agents? Is there tension here?

    Also, I’ve found your comments on partnership to be spot on. That partners shpould have different skills and interests that compliment one another. Similar to your team building philosophy. I also try to staff around my weaknesses and things I don’t like to do. This leads to a happier life.

    Congrats on your success.

  8. Chris,
    Great Podcast! Thanks for sharing and being another story for all the community that proves it
    possible to succeed in real estate investing.

    It really got to me how you said that one of the keys from those that succeed to those who don’t relies “on the people you spend time with, who you surround yourself with, and with who and how you spend your energy with”. This statement has so much power behind it
    thanks again!

    PD- It was pretty cool that you mentioned you used to work as a coach, I am also a soccer coach, and I’m working towards making coaching my career by supporting through my real estate business.

  9. Stephanie Dupuis on

    Great podcast – I particularly liked hiring help right away. I tend to think of doing this “when the business has grown” to a certain point. When in reality, you need to hire so that the business can grow.

    Also, wonderful insight on hiring PM. Well outlined and specific questions. I also was wondering about your screening – is this done by the agents or in the back office? Who does this – how do you ensure quality tenants with the pressure the agents have to get tenants in the unit?

    I took notes throughout the broadcast! Again, great job each of you!!

  10. Chris,

    I am not there yet, but I definitely look forward to listening to your podcast over and over as I get closer to growing my business with employees to get the momentum going even faster. Any tips on how to get to this point is always welcome.

  11. Great podcast! Chris, I like how you make everyone compete within the office. The environment itself would attract the ‘A’ players in the area. Best wish to your business

  12. Julie Marquez

    Great podcast Chris! As for the quick tip, how do I listen at a faster speed on Google Play? I haven’t figured it out yet.
    This is one of my favorite podcasts because I want to be a successful landlord. I thought it was interesting that Chris said that he regrets selling his first properties. I always wondered is any of these long term buy and hold investors ever sell or regret selling any property. I am just beginning and am making sure that the properties I buy now are places that I am going to hold forever. So my process is slow and deliberate, but I want to make the right choices in my long term investing. Again, awesome podcast, thanks for sharing! For anyone wanting to be a successful landlord, listen to this podcast twice! And interesting thoughts about gamifying real estate!

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