What Does Fiscally Responsible Growth Look Like? Twelve Markets and 4,000 Properties in 2.5 Years – How Benton Cotter Did It

On this episode of The Property Management Show, we’re talking to a guest about fiscally responsible growth after he emailed Alex a response to the podcast about Mynd.co and Doug Brien, who received a lot of venture-backed funding to grow a property management business. Benton Cotter remarked that it was a great interview, but thought our audience should know that it’s possible to grow a property management company quickly without raising funds. We thought that might interest you, so he’s here with us today, talking about how he went from 450 properties two and a half years ago to 4,000 properties today, in 12 markets. He has no venture capital backing him, and he calls his strategy fiscally responsible growth. What’s more – he wants to get to 10,000 doors in 20 markets by 2020. Benton is the co-founder of RentVest (rentvestpm.com), and he has a lot to teach us. Growth through Acquisitions vs. Organic Growth Initially, a big company fell into Benton’s lap in Phoenix, bringing 850 doors with it. So, the breakdown has been about 60 percent acquisitions to 40 percent organic growth for RentVest. The key to finding people who want to sell is simple: cold calling. Benton and his business partner, Jacob Ash, get lists of property management companies from NARPM and other sources, and they make a phone call and introduce themselves. It doesn’t take long to get an idea of whether there’s a deal to be made. If you want to grow this way, get connected. Talk about what you have to offer, and start building the relationship. It’s a hustle.  AdWords and Its Role in Organic Growth Growing by 700 units organically is some pretty incredible growth, and it was done in new markets. Benton admits he doesn’t have great SEO. But, he does have a firm grasp on how AdWords works, and it’s the cornerstone of his digital marketing efforts. AdWords delivers a benefit that others platforms cannot. It captures people who are searching and learning and visiting websites. By the time they pick up the phone to call you about your management services, the lead has really self-nurtured already. They are taking the initiative to call you. That gives you a tremendous advantage when it comes to closing business.    The approach to AdWords is strategic and includes: A projected customer acquisition cost for AdWords before opening a business in a new territory. An understanding of the search volume in an area. Researching search terms and average monthly rents and competition. Spending $1,000 or $2,000 just testing a market. This provides a good idea of what can be done and what it will cost to attract customers. When you know your cost per click, you can figure out your cost per lead and your cost per customer. All of this data helps Benton decide where his company has a chance to earn the most ROI. It’s hard to get it wrong when you have this data to work with. With a plan to move into more markets, adopting a system that’s easy to duplicate is critical. Benchmark the data, check the data, and study how it works in each market. There are always going to be variations, but when the system is easy to duplicate, growth is inevitable. Mailers as a Marketing Tool: How to Reach New Audiences Mailers have not worked particularly well for Benton because they results are so different in each market. He prefers the digital marketing strategies, where the leads he receives are prepared and already in the buying funnel.  But, if you’re growing your property management company, mailers can work. Five or six touches are usually required. It can be expensive, but not cost-prohibitive. You get a different set of people than you’ll get thr...