Today we’d like to introduce you to Pete Neubig.
Empire Industries is owned by Pete Neubig and Steve Rozenberg. Pete and Steve met in 2005 and after a year of flipping properties together they decided, instead of giving all that equity away, they should purchase instead of flipping the homes they were finding. Pete and Steve purchased 31 homes from 2006 through 2010.
Pete – please share your story with us.
Empire Industries was born out of a necessity, not as a way to get into real estate to make a profit. We quickly found that the systems you put in place for 5 units do not work for 25 units. We started having management nightmares. We created our systems and partnerships based on our own needs.
We discovered just running our existing properties were more than a full time job. For example, finding and managing reliable maintenance people was challenging. It was hit or miss whether the maintenance person would show up for an appointment with the resident. Many times we would be charged more hours than they actually worked.
The next hurdle was finding and retaining top quality tenants. Screening and leasing to the correct resident is paramount. Problem tenants cause damage, time and money to a landlord. We were putting in bad tenants whom we had to evict, caused damage to our properties and created a much higher cost for our make readies. This too, becomes a full time job. When you are under economic pressure to get properties rented, it’s awfully tempting to take the first person who shows up.
Now add in all the administrative tasks necessary in running a property investment business, book keeping, eviction processing, property tax protesting, rent collections, paying invoices and tax preparations, and now you have a third full time job. Both of us were already working full time, the last thing we wanted was another full time job. For a passive investment strategy, this was turning out to be active income.
We were in a bad loop. So what was the answer? Robert Kiyosaki, who wrote “Rich Dad Poor Dad”, stated that “you need to build your team.” We took that to heart and aligned ourselves with partners that are business owners themselves and understand the success of our business is the success of their business. The systems we created were not created with a management company in mind, but the management company became a by-product of our systems.
We’ve learned that whether you own one house or fifty houses you own a business. If you do not treat your properties like a true business with a team consisting of at least, a property manager, accountant and a maintenance technician to run the day-to-day affairs of your business, you will not have the time or money to invest in expanding your business. We provide that team for you, freeing your time and resources to expand your investment business.
Our management company will free up your time, give you reliable and cost effective service and allow you to spend time with your loved ones, do the things you love in your free time, increase your business by finding and purchasing deals instead of managing headaches, and have peace of mind!
Has it been a smooth road?
I have yet to meet anyone who runs a business, no matter how big or successful, that has told me it was a smooth road.
When we first started we did not know anything about running a business. We believed that any business was good business. In the early days our biggest challenge was that we were taking bad business. We were taking clients that were not a match and we were managing properties in rough areas. We made a difficult decision to change our business model and we fired half of our clients. Early on we had no idea how to hire people. We also did not understand environment. Our first office was out of an apartment complex that we owned in Kashmere Gardens in the fifth ward. We had numerous candidates not show up to the interviews. The people that did show up were not a high caliber employee but we hired them anyway. After 10 months we moved to a nice building near the heights and started hiring quality people. We had a huge growth spurt in the number of properties we signed on to manage. This was great news but we realized the systems we created to manage 250 properties broke when we were trying to manage 450 properties. There was lots of stress for the team and we lost some good people because of it. As you gain experience in business the stress and the struggles do not go away but you deal with them much better. As the CEO, what used to be a struggle 4 years ago, 2 years ago or even last year is not a struggle this year. New and exciting “opportunities” always come your way when you are running a business.
So let’s switch gears a bit and go into the Empire Industries Property Management & Realty Services story. Tell us more about the business.
We are a property management company that manages single family homes to four-plexes in the Houston and surrounding areas. We mainly work with investors but also work with folks who are moving but do not want to sell their home instead they want to lease it out until they can move back.
As a property management company no two days are alike. We list and lease properties, get the property rent ready, perform background screenings, handle the 3am maintenance phone calls, collect rent, maintain reporting and overall make sure the asset is performing.
We manage over 650 assets worth over $99,000,000!
What sets us apart from other management companies is that the owners (Pete and Steve) created the business from an investor’s point of view not a realtors or property manager’s point of view. As seasoned investors we are able to help our clients purchase good solid properties that will help them achieve their goals. We understand the main challenges that an investor has and we have guarantees that reduce the investor’s risk. We are a professional property management company. We perform property management first and foremost. We are not realtors that perform sales transactions first and then perform management on the side. All of our managers are members of the national association of residential property managers (NARPM), take continuing education and hold leasing and management designations.
How do you think the industry will change over the next decade?
The single family property management industry has been a “mom and pop” industry forever. Over the last few years the industry has seen some franchises enter the industry. Over the next 5 – 10 years I would expect consolidation in the business. More companies purchasing one another to get more market share. More franchises will move into the market. Companies with big pockets and backing from Wall Street will move into the industry.
I would also expect to see more government constraints on landlords. This will create more opportunity for property managers as the self-manager will no longer want to or be able to manage his own property. Currently only about 20% of all non-owner occupied properties are being professionally managed.
It is exciting times (for some) and scary times (for some) to be in this industry.
Contact Info:
- Address: 5225 Katy Freeway
Suite 202
Houston, TX 77007 - Website: empireindustriesllc.com
- Phone: 713.987.3948
- Email: info@empireindustriesllc.com
- Facebook: https://www.facebook.com/empireindustriesllc/
- Twitter: https://twitter.com/empirepropmgt
- Yelp: https://www.yelp.com/biz/empire-industries-houston
- Other: https://plus.google.com/+EmpireIndustriesLLCHouston
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