by David Deitz
Some—myself included—might have thought it was a bit ambitious launching a new company amidst a pandemic. Others might have used a more colorful term to describe my pursuit.
But more than a year-and-a-half after launching Birchstone Residential in August 2020, it’s fair to say the timing strangely worked out wonderfully. That doesn’t mean it hasn’t been a learning experience, however. I thought I had seen it all in my 30 previous years in the apartment industry, but I certainly couldn’t have anticipated all the surprises I’d encounter—both of the positive and challenging variety.
Part of the challenge of starting up at the height of the pandemic was the uncertainty surrounding ever-wavering local and national jurisdictions. But one advantage we had as a startup was that while everyone else was adapting new business models, we were building from the ground up.
The primary objectives of the first few months were clear: to establish the type of culture we wanted to serve as our North Star and to make the crucial initial hires that would ultimately help shape the organization.
With regard to culture, we asked ourselves whether we wanted to model ourselves after a certain organization or if we wanted to entirely break the mold. Our overall mantra was “people serving people,” but we had to figure out what that equated to in practical terms. It would ultimately determine the purpose of the business and make us distinguishable from any other company in the industry. It would also serve as our guidepost for hiring, choosing vendors and selecting software systems.
As we started to build that culture from the ground up, it was equally important to hire the right people for the right seats—particularly the key initial roles. For me it was about hiring strong executors—individuals who could not only craft a robust business plan, but also successfully execute that business plan. One of the ways we broke the mold with initial hires was by immediately adding roles that usually came later, including a digital marketing director and a special projects director.
These hires were designed to connect us with relevant vendors, software solution providers, contractors and other key third parties as we aimed to build out the platform in seven months. While we knew it would be a large undertaking, one of the initial challenges was not only completing the initial hires, but doing so with who we believed were precisely the right people.
To get it right, we outsourced to headhunters and national search specialists, because we didn’t yet have a recruiting department and we weren’t blessed with an abundance of time. We needed assistance from those who knew how to source and get the word out about the unique opportunities at our company. We also posted ads on Indeed in hopes of securing a resume or two.
Looking back now, the early hiring process worked remarkably well. Of all the hires we made in the first seven months, all but two are still with the company. Establishing the team early aided in the culture-building component, as well, as it has fostered collaboration and camaraderie.
Once we had the team in place and our desired culture was rapidly taking form, we had to build out an entire property management platform in seven months to support a 7,500-unit portfolio. That included crafting policies, procedures and processes; putting together an entire accounting department; and making additional hires for operations at properties we were about to take over. We also made certain to hire the industry’s best regional managers in our target markets in advance. Additionally, we had to further cement our hiring practices, build a human resources department (we refer to it as our people support department), outline our world-class employee benefits model and decide on multiple software solution providers to support our platform.
Undertaking all of that on the fly definitely left little time to exhale.
Another of the initial efforts in which we couldn’t afford to fail was the selection of a property management software provider. We had to choose one that was scalable for us and featured a high investment in technology. When we decided on that ideal partner, it then became a matter of building out our platforms from scratch. Anyone in the apartment sector can speak to the level of energy and expertise required in that effort.
How did we make it all work during a pandemic? Regardless of the extenuating 2020 factors, our vibe was just to roll up our sleeves and get to work. We navigated through any setbacks and kept on pace with our goal to build out an entire company in seven months. We didn’t know how long the pandemic was going to last, but we didn’t let it dictate how or when we’d get started. If anything, it became a propellant to help build the company rapidly.
We first started acquiring assets in February 2021 and haven’t stopped, even though we were still in the fine-tuning process as we brought assets on board. From that initial acquisition through the remainder of 2021, we took over 30 assets, over 10,000 units and hired more than 300 employees. In 10 months, we corralled $1.8 billion in assets, which created huge momentum.
While things have started as well as we could have hoped, we understand that it takes three or four years to really develop an established company. That’s when you completely have everything in place that can support an entire operation and its growth. We continue to fine-tune many policies and procedures at both the site and corporate level. We understand that it’s fast and furious and it’s not going to slow down, as we project to double the size of the company in 2022 and then again in 2023 with a target of $5 to $6 billion in assets under management in the first three to four years.
The challenge now is to continually improve and enhance the platform amidst astonishing growth. Fortunately we can lean on that stellar leadership that was hired in the early stages of the company.
My large-scale recommendations for anyone starting a property management company is to avoid taking shortcuts, particularly on the items that matter most—culture, key initial hires and selecting the best third-party providers. If you can build the most important infrastructure of the ship first, it will float that much better when you eventually put it in the water. And while you’ll undoubtedly be aware of all the t’s you’ll have to cross, it can be a heavier task load than you anticipate. Make certain to have a quality-control approach to each of the early initiatives rather than rushing through them or compromising in any way.
With this diligent approach, you’ll reap the benefits sooner than later.