When entering the world of real estate investment and property management, having a ton of motivation is not enough. There must be processes in place, especially when it comes to working with vendors.
Samuel Beutler, co-owner of Apex Property Management, explained why during his session, “Collaborative Partnerships: Elevating Your Property Maintenance Operations Through Vendor Relationships,” at the MX Summit by Property Meld in September in Rapid City, S.D
“Stop keeping the vendors who are just ‘good enough,’ he said. “It’s OK to let them go.”
On the other hand, “Vendors will sense early on if you are not dialed in the way you manage your business,” Beutler said.
Beutler said it’s important to choose vendors that match the property management company’s portfolio size.
“A company that manages 600 units doesn’t want to use the biggest firm in town,” he said. “You don’t want companies that are too big or too small, you want your visions to align, otherwise it won’t work.”
He suggested either hiring a vendor relations coordinator or assigning those duties to one of your employees to improve vendor coordination.
Beutler said he insists that any vendor he chooses be 100% Property Melt certified. He said, once on board, to give them precise directions on everything that needs to be done, from work orders to priorities to invoicing.
He avoids any vendors that require deposits, such as “putting half down” on the payment before they begin the work, or to advance them the costs of materials.
Beutler uses a “preferred vendor” program and gives himself a 10% discount on their invoices, capped at a $500 discount.
“We do this, and the vendors like it, because we can guarantee that we’re going to give them a lot of work,” he said. “If they don’t understand why we do this, we show them our QuickBooks account and let them see how much work these preferred vendors receive.”
Preferred vendors also realize that, due to their status, they don’t have to pay nearly as much to advertise their services to generate more business.
The vetting process is key. Beutler insists that any vendor interested in doing business with Apex must apply through the Apex website. This creates consistency in the process.
“Management companies can learn a lot about these interested vendors, including what it’s going to be like to work with them, based on how they fill out their applications,” he said.
“It’s a chance for them to demonstrate their professionalism and ability to communicate clearly by providing details.”
Once they have applied, it’s essential to respond to them and let them know that they are now in the candidate system.
“When selected with care, vendors can be an extension of your brand,” Beutler said. “And always use the praise and feedback loop between residents, the management company, and vendors to maintain strong communication.”
