Based in Lubbock, Texas, Minnix Property Management has seen their portfolio of multifamily and single family homes grow from 450 units to upwards of 3,000 in less than a decade. Much of their growth is thanks to forward-looking leadership from CEO, Krickett Alexander. They plan to continue their rapid expansion with an ambitious goal of doubling by 2023 — and have already embraced online property management technology to adapt their strategy to the COVID-19 situation.
In a conversation with our Sales Strategy Director Tim McInerney, Krickett shared how her constant focus on implementing innovative property management technology has not only allowed her and the team at Minnix to pull off such impressive growth, but has also uniquely prepared them to weather the challenging conditions caused by COVID-19.
Here are some memorable takeaways from Krickett’s interview:
- “We’ve been able to be human beings and really have a heart of service during this time… and just be present for all of those who are struggling in our community.”
Krickett and her team have done an excellent job of using the tools and technology available to serve the needs of owners, staff members, and residents during social distancing. For example, they pivoted quickly to online leasing and self-guided tours to keep new leases flowing.
- “We are right where we normally are in terms of rent collections. We anticipate, however, that next month will be different.”
At the time of this interview, Minnix was on track for April rent collection. During May, they will see whether that remains consistent.
- “Because of Lisa, which is the artificial intelligence brought to us by AppFolio, we’ve been able to transition to self-guided tours. And we still have full schedules.”
AppFolio’s AI leasing assistant, Lisa, can automatically reply to inquiries and allow prospective residents to book their own showings at a convenient time. Minnix invites them to complete a self-guided tour and apply online, allowing leasing to continue despite the need for social distancing.
- “[The industry has] bought into this idea that you have to have an office, that you can’t work from home, that self showing options won’t work for multifamily or they won’t work in this particular market… those limiting beliefs have created challenges in transitioning during this current climate.”
At Minnix, Krickett encourages her team to think beyond the status quo. Both before and during the COVID-19 situation, they’ve proven themselves willing to experiment with new technology and approaches. According to Krickett, their forward-thinking focus had already prepared them to make the shift to online property management when it became a necessity.
- “It’s so important that we keep the momentum in maintaining this virtual environment because it will allow us to focus more on the things that really matter.”
To adapt to the significant challenges posed by the COVID-19 situation, many property management companies have been pushed online, accelerating a trend that was already unfolding. Krickett anticipates that the industry will continue to leverage this technology even after the need for social distancing subsides.
In this ongoing series we’ll share how real estate industry experts are adapting to the new normal of COVID-19, taking steps to protect their business now and paving the way for future growth. You can listen to our first episode here, and don’t forget to check back for new interviews soon.
Tim: Well, hello Krickett. Thank you so much for joining me. I’m excited to have you on today and talk a little bit about what you’re doing at Minnix during these new times.
Krickett: Thanks for having me.
Tim: For folks listening, could you introduce yourself and Minnix as a company?
Krickett: Sure. My name is Krickett Alexander. I’m a licensed realtor in the state of Texas. I’ve been with Minnix Property Management for almost 10 years now. I serve in the capacity of CEO. Minnix has been in business now for almost two decades.
The broker and owner of our company and his business partner started really with humble beginnings. They started buying up properties for themselves and at that time they were agents at Keller Williams and Keller Williams was not allowing property management services. So they went out on their own and just started getting referrals and really have just grown from there.
They’ve had very steady growth. When I came on board about 10 years ago they had about 450 units and we’re upwards of 3000 now, and we are now serving multiple communities. So that’s very exciting. We have some big growth goals. We’d like to be at seven to 10,000 units by 2023 so we’ve got some work to do.
Tim: Where’s that portfolio mostly located?
Krickett: It’s in West Texas currently — that’s Amarillo Canyon, which is up north of us in the panhandle. We’re in Midland Odessa, which is a very oil-centric location. We’re in Abilene, San Angelo Ballinger, a small property in San Antonio. We’re probably interested in the Houston, San Antonio, Dallas markets, eventually El Paso potentially.
Tim: Okay, great, a lot of growth ahead of you. Obviously we’re here today to talk a little bit about what you’ve been doing at Minnix to weather this storm, if you will, and to pull on past experiences and maybe even get into what the future might look like. So, I really want to open it up and look at some impacts of COVID-19 today. How has your business been impacted as a whole?
Krickett: Well, that’s an interesting question because I think that as a whole, it has really made us fast forward into the place that we were already going. We were already engaged in the virtual, digital, artificial intelligence world and were slow-playing a lot of our decisions. I think that [COVID-19] has allowed us to fast forward that, so that’s one way in which it’s impacted our business.
I think also too, it’s allowed us to show up differently. We’ve been able to be human beings, really have a heart of service during this time, and take off that fiduciary cap a little bit and just be present for all of those who are struggling in our community.
Tim: That’s so great. Thank you for sharing that. As a whole, how are you seeing rent week going?
Krickett: For us, we’re not seeing it hit us yet. We are right where we normally are in terms of rent collections. We anticipate, however, that next month will be different. We are accustomed to closing our books with less than 1% delinquent, but I suspect that’s going to be much higher in May.
We are recording why people are entering into payment arrangements currently. A portion of those who are needing payment arrangements are saying it’s a result of COVID-19. However, thus far, out of the 6% who are delinquent currently, there are very few that are actually saying they can’t pay.
Tim: And they’re mostly just trying to get the payment plan to pay a little bit later in the month. Is that it?
Krickett: Right, right. So they’re maybe needing to pay half now, half at the end of the month, just needing a little bit more payment flexibility. They’re going, maybe some, from a two income household to a one income household, and so they’re just having to make some budgetary adjustments.
Tim: So we’ll keep an eye on it, I guess. See how next month goes?
Krickett: There will be an impact. We know there’ll be an impact. It just has not happened in April.
Tim: Well, let’s talk about new leasing. There have been indications that the well’s run dry in a lot of places and people aren’t touring, people aren’t leasing. Has that been your experience?
Krickett: Not our experience at all. As I shared with you, we’ve got two different sides of our business, multifamily and single family.
On the multifamily side, I had one property manager here in Lubbock who since this has started, has leased five apartments. Now, she’s not done it in the traditional way. They’ve done a self guided tour so they’ve been allowed to go in and look at the apartment by themselves. And then she’s just walked them through the application process on the phone, answered any questions they have, they’ve applied online, signed their leases online and she’s had keys available for them. They’re basically coordinating, when are you coming? And she’s got it unlocked, keys there for them. And that’s been really great.
And then on our corporate side, the single family side, we’ve been able to transition to self guided tours because of Lisa, which is the artificial intelligence brought to us through Appfolio. And we still have full schedules. We’re pre-leasing, and I think we screened probably 30 applications just in a couple of days.
I don’t see that it’s a drastic slow down, enough for us to be concerned. And yet we are obviously mindful that there’s an impact. And so we’re just going to have to monitor it.
Tim: Well, it makes sense that you said this challenge has made you just speed up to where you wanted to go in your business anyway.
Krickett: Well, too often, I think we’re restricted by our limiting beliefs, right? So [the industry has] bought into this idea that you have to have an office, that you can’t work from home, that self showing options won’t work for multifamily or they won’t work in this particular market. And for many people, I think those limiting beliefs have created challenges in transitioning their operations during this current climate.
I’ll be honest, about four years ago we had started talking about self showing options in Dallas… [but] we had our own limiting beliefs, and so I think we slow-played all of this. We thought, “Oh, this is not the market for it. Nobody’s going to buy into that.” But we’ve been slowly pushing past those limiting beliefs. So we were a little ahead of the curve than most in our area I think.
Tim: Well, I mean that’s just a great testament to how you’re going to be able to hit your growth goals in the future. Right? By you staying ahead of it, thinking ahead, and not being challenged by limiting beliefs.
Tim: I appreciate you sharing. Yes, Lisa, AppFolio’s AI leasing assistant can help automate a lot of that responding and booking showings. I know a lot of people in the industry are talking about renewals. How are you doing from the renewal perspective? Have you made any shifts or any changes in this time?
Krickett: We’ve been tracking our renewal numbers for years. Typically for several years in a row, we’re about 55%. Then last year, we brought that up to about 59, 60%. What we found in that shift was that it was really about the followup. All you’ve got to do is pick up the phone and call them. You don’t have to offer them anything. You just need to get them to sign it. Right? And so what you focus on expands. Then, taking that lesson [further] this first quarter of the year, we’re at 72% renewals.
That’s really just a testament to the individual on our team who picks up that phone and stays in relationship and if there are any issues that they want resolved, they’re resolving them immediately and they’re getting them to sign that lease contract.
I definitely believe that now is not the time to lose people. You do not want to lose people. It is in our best interest to keep them. Where I do think that maybe we are going to have to make a shift is in the rental increases. We had a standard rental increase across the board in most of our markets, 50 to a hundred dollars. And then in other markets, like the Midland Odessa, it’s a little higher. I don’t think that we’re going to be able to do that right now, you know? We’re going to navigate through that the best we can and represent our owner’s best interest at the same time that we are representing our tenants’ best interest. But the goal is to keep them there.
Tim: Keep them there. Make sure that in this time that you have revenue coming in. So an interesting question comes to my mind. If you’re passing off a flat or maybe slightly lower than normal adjustment in the renewal time, are you trying to do anything with flexible lease terms or getting them to stay longer, giving them additional flexibility? How are you thinking through your lease terms?
Krickett: You know, for us, because we do have a high student population here, we’re always thinking about lease expirations, and when is the most opportune time for those to expire, because we know when the school year starts….
Having that said, I think in times like this you have to be flexible with everything. You have to be flexible with your payment terms. I’m really interested to see what happens in the multifamily world or in the property management industry.
When you go buy a car, in large part, you get to say, when you want your payment due. Right? But in our industry, it’s due on the first. As a courtesy we give you until the third. If it’s not paid by the third, on the fourth you’re very expeditiously going to be served with a notice to vacate. Right? I think that rigidness that we have been so accustomed to is going to have to shift during this time. We are just going to have to hunker down and keep things in place and as strong as we possibly can until we can return to some sort of normal.
Tim: We’ve talked a little bit about how this is forcing your business to change and things that will stick, like self showings. That will stick. And [COVID-19] is just that forcing function. Do you think the idea of choosing your own rent payment day is something that will also come out of this and just become part of the industry as a way to better serve our clients?
Krickett: I think there is a chatter around that conversation. I think that it is out in the research that I’ve read and what I’ve seen online. Now, will it come to fruition? I don’t know. Again, I find that we get so stuck in our way of doing things that it would take, I think, a lot of persuasion to get our industry to shift that way. But it would be interesting, and I think it may be advantageous. You might have better collection rates.
Tim: So, where do you think we are in this? How long do you think it’s going to last and what does the other side look like?
Krickett: The biggest lesson I’ve learned thus far is that we’re not in control of anything…. you can have the most robust policy and procedure manual. You can have the best systems and processes, right? And indeed those things will help you navigate, like it has us, through situations such as this. Hopefully they are few and far between. Those things will help you navigate, but at the end of the day you’re not in control. If the government tells you no evictions, you don’t get to file evictions. I mean they can shut your whole cities down. So we’re not in control.
I cannot predict what will happen. I do think however, that there are going to be shifts in infrastructure, shifts in the way we commute and transportation and regulatory compliance and financing. I mean, I definitely think those are all going to be conversation pieces and potential shifts in our future for sure.
Tim: Interesting. Wow. Thank you. What I’m hearing from you is that this has not hit you maybe as hard as others and we’re thankful for that. And technology has aided in helping you pivot quickly to work in a remote environment and continue to fill those leases and fill the renewals. Is there anything else you would like to share with us today?
Krickett: Honestly, I really think that it’s super important for people to push past those limiting beliefs and mindsets. I think that in order for us to remain relevant, we have to be open minded and progressive and make sure that our partnerships are in alignment with that so that we’re set up for long term success. Then you can weather any storm that comes your way.
It doesn’t mean that you’re not going to have hardship, and it doesn’t mean that there’s not going to be chaos that ensues. It does not mean that it’s not going to be hard.
On our multifamily side, we’ve had a long struggle with our property managers because they have these age-old habits, fundamentals. I’ve got a lot of seasoned property managers who are still taking rent in the office, still answering the phone, and data entering the work order. And I think that the lesson to learn here and that we don’t need to return to that way of thinking, right? It’s going to be so important that we keep the momentum in maintaining this virtual environment because it will allow us to focus more on the 20%, the things that really matter and that will help you as a business sustain yourself for years to come.
Tim: And also help the P and L right? I mean, we can leverage technology in a remote environment. Office costs go down, paper use goes down, people’s time is better optimized. These are things that seem to me a natural benefit, especially if we are moving toward a downturn at some point. Right? To make sure that P and L is as strong as it can be.
Krickett: Oh, absolutely. Especially small multifamily investors, I mean there’s a large potential that they will not have the kind of financial resources to sustain them during this time.
When you buy a property, you typically have a five year pro forma and you have these projections. But you know, man, I’ll tell you what, these pro formas don’t make a hill of beans right now. Right? And so you need to be able to be mindful of what the bottom line is and be conservative and a good steward so that you can still have sustainability for these investors.
Tim: Wow. I love that. You keep mentioning having a good mindset. Sounds like you have thought a lot about this. Have there been any good books you’ve read or could recommend to people listening?
Krickett: We love John Maxwell. We’re going through the Leader Shift theories right now. I would recommend anybody to pick up the Leader Shift book.
Tim: Well, thank you so much for this. Your time is really appreciated. We really thank you so much for being an AppFolio client and supporter and we really hope you can continue to weather this storm.
Krickett: Absolutely, Tim. And I thank you for the opportunity to come on and share some thoughts. We are forever grateful for our partnership with AppFolio. We love you guys.
Krickett, how can people get a hold of you?
Krickett: We actually have a dedicated owner’s number — It’s (806) 785-7368. They can visit us on our website and there’s a free consultation button and so we’ll be getting their information and I’ll be happy to call and chat with them.
Tim: Thank you so much, Krickett.
Krickett: All right, thanks Tim.
Tim: I’ll talk with you soon. Good bye.
Krickett: Okay. Take care. Bye. Bye.
Here are a few links to check out the content and resources mentioned in this episode:
The post How COVID-19 Is Accelerating the Property Management Industry’s Inevitable Shift Online appeared first on The Official AppFolio Blog.