NOVEMBER 11, 2020
Episode 5: Growing, Selling Your Property Management Company Experience with Sean Morrissey
“If you own a property management company, you own an asset.” Welcome to the Property Manager Broker Podcast with your hosts, Brad Larsen and Phil Mazur. Today’s guest is Sean Morrissey; he is an investor that uses his property management experience and systems to help scale his real estate investment portfolio. Listen as he discusses selling a property management company and the lessons he learned. His knowledge is endless, so tune in and see if you can walk away with some tidbits that you can use.
Listen as Sean shares why he didn’t use a business broker when he sold his company, how he came up with the value of his portfolio, and the responses he got when he put the price out to market. He discusses taking the cash offer he received even though it was significantly less because he didn’t want to be tied to the new owner for 3 to 5 years with a seller-financed offer.
Brad, Phil, and Sean discuss clawback provisions and who has the leverage with them. Sean speaks about how the operational handoff went after the sale and what he did with the funds. Sean says to remember that once you sell your portfolio, you should expect a certain level of involvement for 6 to 12 months, even if you sell for cash.
Listen, as Sean talks about his podcast and what he believes will be different in the property management industry ten years from now. Sean shares some advice for anyone who is thinking of selling and what he would do differently if he were back to when he first started.
In this episode:
[02:08] Sean shares his background and his journey to where he is today.
[05:18] Sean discusses why he sold his company.
[07:23] Sean believes that you need to reinvent your business systems every five years, or you will go out of business.
[09:22] Sean shares why he didn’t use a business broker when selling his company.
[11:46] Phil speaks about what he and Brad want to do in the industry with property management companies’ valuation.
[14:02] If you own a property management company, you own an asset.
[15:04] Sean discusses where he came up with his company’s value and what happened when he put that price out to market.
[18:56] Sean shares the price difference between seller financed offers and cash offers.
[20:03] He speaks about why he didn’t take the seller-financed offer.
[22:26] At the end of the day, he knew he didn’t want to be tied up for 3-5 years. He took the cash offer which was less, but he wasn’t tied to the new owner.
[25:06] Sean discusses the clawback provision and what it said.
[27:25] Phil speaks about who has leverage with a clawback provision.
[30:43] When you took the money from the sale, what did you do with the funds?
[33:10] Sean shares how the operational handoff worked out.
[35:57] If you are looking to sell your portfolio, expect a certain level of involvement for at least six to12 months, even if you sell for cash.
[37:53] Sean says to pay attention to the non-compete clause, especially if you plan on getting back into the business.
[39:08] Phil discusses non-competes and the levels of enforceability.
[40:41] Sean speaks about his podcast called Landlording for Life.
[41:44] If you looked ten years into the future in this industry, what’s one major thing you think will differ from today?
[43:16] Sean shares what he would do differently if he were back where he started.
[44:31] Sean gives one piece of advice for someone who is thinking of selling their property management company.
[45:25] Thank you so much for being on the show!
Find Sean Morrissey
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