Topic: How do you get an owner to say yes!

I have worked at my current company for 4 years and the owner is very hands on, which is not always a bad thing, but he does make the final decision on what he wants money spent on. Now, that we are in our busy leasing season and I am 100% leased up it seems he doesn't want to spend the money on marketing tools that will help us later when the busy season isn't here anymore. I'm not saying the answer is always a "no" but in most cases it is if it doesn't seem to be a necessity. When we have the money he doesn't want to spend it because he feels we don't need it but when we are struggling with some vacancy problems in the winter months he says we don't have the money... catch 22... any ideas?!?

I simply explain the value and the consequences. If they don't agree, then I wait for the consequeces to roll out and wait for the phone call telling me to step up the marketing.
E!

Best way is to do your (1) do your homework, and (2) show how it can increase NOI. Don't just say it can, show in real numbers how something can make a difference in the cash flow. As an example, I teach a principle called "CBA," or Cost Benefit Analysis. Sometimes asking a question you already know the answer to can get you what you want. "Mr or Mrs Owner, if I can find a way to improve NOI and get you an income return over expense that is 6 to 1, will you consider it?" I had an owner one time that did not like to spend money, even when it could increase income. Only if you could show him the result and had strong analysis to back it up did you get what you wanted. We wanted to expand marketing and add a national advertising Internet site. His first questions was, "Is it free?" We called competitive sites within the primary market that were using the source and found they were getting an average of 5-7 leases per month from this site. Their occupancy was about 3% higher, and we had very similar product and our closing was about the same. The numbers we presented were from our comps, including closing and the leases from marketing mediums. The primary difference in 4 of the 5 competitors was the increased traffic and leases from this internet site. At an average of $800 per month, per lease, this provided for an average of $4,800 per month or $57,600 per year in increased revenue. Cost per month was $325 per month, or $3,900 per year with an NOI expected improvement of $53,700. Divide that by a 6% cap rate and you get a property value improvement of $895,000. Now you have their attention. We not only made the estimate but increased occupancy and from that point on had an easier time in getting what we asked for...especially at budget time. Good luck.

Best way is to do your (1) do your homework, and (2) show how it can increase NOI. Don't just say it can, show in real numbers how something can make a difference in the cash flow. As an example, I teach a principle called "CBA," or Cost Benefit Analysis. Sometimes asking a question you already know the answer to can get you what you want. "Mr or Mrs Owner, if I can find a way to improve NOI and get you an income return over expense that is 6 to 1, will you consider it?" I had an owner one time that did not like to spend money, even when it could increase income. Only if you could show him the result and had strong analysis to back it up did you get what you wanted. We wanted to expand marketing and add a national advertising Internet site. His first questions was, "Is it free?" We called competitive sites within the primary market that were using the source and found they were getting an average of 5-7 leases per month from this site. Their occupancy was about 3% higher, and we had very similar product and our closing was about the same. The numbers we presented were from our comps, including closing and the leases from marketing mediums. The primary difference in 4 of the 5 competitors was the increased traffic and leases from this internet site. At an average of $800 per month, per lease, this provided for an average of $4,800 per month or $57,600 per year in increased revenue. Cost per month was $325 per month, or $3,900 per year with an NOI expected improvement of $53,700. Divide that by a 6% cap rate and you get a property value improvement of $895,000. Now you have their attention. We not only made the estimate but increased occupancy and from that point on had an easier time in getting what we asked for...especially at budget time. Good luck.

Hi Larry
You made a very interesting case! By qualifying the issue and palcing it into a case study with positive proven results, this is one way to convince an Owner to move and say Yes. We need to understand the motives and get to a solution.

What do you kow about Real Page and One Site Products? Have you any experience wit them? If so, what was the experince like? Thanks

Pete Pierangeli
610-574-6390 (M)

Thanks Pete. Hope you are doing well. Real Page has a variety of products and support of product lines including management software (Onesite), insurance, and even resident screening. I believe when I was at NAA in New Orleans I heard they have a faily new line related to expense controls. I have been familiar with them over the years and believe they are a very good company.

Back to the topic, getting an owner to say yes may also involve looking at new vendors and products. Part of the issue with suppliers and vendors is everyone says, "We have the best product." While owners and management companies have heard this countless times. I believe the key is not just saying it, but proving it through both referrals as well as getting in the door of the decision makers so they can "prove" and "show" how they can benefit the owner. As I stated earlier, it all boils down to the bottom line. It also has to do with the emotions of owners and upper level managers, with the primary emotion being NOI improvement and cash flow. "Show me the money," is as important as "show me the product." After the sale maintaining and building on the relationship is critical, just as it is with owners in building on what we tell them we will do when we ask for something. We have gotten so dependent on electronic communication, I personally believe we have forgotten one of the basic foundation principles and that is direct communciation and contact are still essential. This is true with owners as well as service providers (in which it goes both ways to formulate and build an effective relationship).