Mat Zalk is the President and Property Manager at Keyrenter Property Management which has offices in Tulsa, Oklahoma City, and Arkansas. He focuses on the acquisition and management of single and multi-family residential properties on behalf of himself and a small network of investors.
Before founding Keyrenter Tulsa, Mat was a Strategy Director at The Property Finder Group, where he worked closely with the CEO and senior management team on various international acquisitions, scaled local teams in the group’s Saudi Arabia and Egypt offices, and executed a number of strategic projects in the business’ core market of Dubai. Mat has been an active investor since 2014 and is a licensed real estate agent in Oklahoma.
Here’s a glimpse of what you’ll learn:
- How Keyrenter Property Management collaborates with real estate agents
- Mat Zalk’s tips for real estate agents working with clients to rent and buy properties
- Keyrenter’s process for advising clients on purchasing rental properties
- Why potential property buyers should consult a property manager
In this episode…
Buying, selling, and renting properties is a methodical process with many factors to consider, including transactions, loans, and comparable sales (comps). What are some actions you can take to streamline operations?
As a property manager, Mat Zalk builds valuable partnerships with both real estate agents and clients to assist with consultations, pricing, and referrals. These collaborations give each stakeholder the opportunity to share knowledge and leverage profitable opportunities. With a supportive approach to real estate, you can mitigate strife between parties.
In today’s episode of The Same Day Podcast, Chad Franzen of Rise25 is joined by Mat Zalk, President and Property Manager at Keyrenter Property Management, to discuss the importance of collaboration in the real estate industry. Mat shares how Keyrenter Property Management collaborates with real estate agents, tips for real estate agents working with clients to buy and rent properties, and why potential property buyers should consult with a property manager.
Resources mentioned in this episode:
- Mat Zalk on LinkedIn
- Keyrenter Property Management
- Keyrenter Property Management Tulsa
- Keyrenter Property Management Oklahoma City
- Keyrenter Property Management Arkansas
- Keyrenter Property Management email address: [email protected]
- “Why You Should Confer With a Mortgage Lender” with Marc Marroquin on The Same Day Podcast
- “Exploring New Possibilities in Entrepreneurship” with Chip Gaberino on The Same Day Podcast
- Chad Franzen on LinkedIn
Sponsor for this episode…
This episode is brought to you by Keyrenter Property Management.
Keyrenter Property Management is a full-service property management company who helps their clients buy, renovate, and operate real estate assets.
They help clients build wealth while taking the headache out of property management.
That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.
Welcome to The Same Day Podcast where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.
Mat Zalk 0:20
Mat Zalk I’m the host of The Same Day Podcast where I connect with top business leaders and real estate experts. The past guests that we’ve had on The Same Day Podcast include Marc Marroquin, one of Supreme Lending, and mortgage lender doing great things in our community for people that buy primary residences, residences, but also investment homes. We’ve also had Chip Gaberino on recently he’s a local entrepreneur, and owner of Topeca Coffee Hodges Bend, bar and restaurant Saturn Room, which is a bar and low, great restaurant among other projects that he’s working on in the real estate world. Today, I’ve got Chad Franzen here of Rise25, who has done hundreds of interviews with successful entrepreneurs, investors and CEOs. And we’ve flipped the script and he’s going to be interviewing me today, Chad, take it away.
Chad Franzen 1:05
Hey, thanks a lot, Mat. Great to be here. Looking forward to talking with you. Before we get started, I’ll let everybody know that this episode is brought to them by Keyrenter Property Management. Keyrenter Property Management is a full service property management company, helping their clients buy, renovate and operate real estate assets. They help their clients build wealth while taking the headache out of property management. No matter what rental you have single family homes, condos, townhomes or apartments, Keyrenter Property Management has the management solutions you need. Go to keyrenterpmc.com, or you can email them at [email protected] Hey, Mat, thanks so much for having me. How are you doing today?
Mat Zalk 1:42
I’m great. Thank you appreciate you being here.
Chad Franzen 1:44
Hey, let’s talk today about kind of you as a rental, rental management companies, relationships with real estate brokers. What’s kind of like, as you guys kind of stand next to each other? What’s kind of your, your view of each other? Would you say?
Mat Zalk 2:00
Yeah, so we look at agents in our market as as collaborative partners, right? They are the ones that are often selling real estate into the market right into our investor pool into our client base. And if they refer Keyrenter, as they often do, we’re the ones that take it from the point of you know, the owner signing the deed or signing the mortgage, or paying cash or whatever it is, and the deed transferring through to the rental, the leasing of that property. So we do everything that comes after the owner kind of signing on the on the bottom line. So we love, we love our real estate agents, we have a ton that our clients actually and we have a ton that refer their investors to us.
Chad Franzen 2:40
Okay, so how would you, let’s say, let’s say some that don’t know, you, or some in general, like a rental management company? Are they as a real estate agents ever threatened by rental management companies? And vice versa?
Mat Zalk 2:52
Yeah, good question they, they often are because they think that we’re going to develop a relationship with the client and then steal them and sell them more real estate. The truth of the matter is, we don’t sell a lot of real estate, we we mostly manage properties. I mean, we manage 2500, properties, 1600, as of the end of June 2022, we manage 1600, in the Tulsa market. And so we’re we think of ourselves much more as, as collaborative partners, in a transaction helping an owner or a client than we do as somebody that’s going to steal their business, where we send the business back, we say, you know, if you want to buy more properties, go back to XYZ agent, they’re the ones that sold you the property introduce you to us, and they can help sell you more properties. In fact, you know, we’d love to work collaboratively with the agents because there comes a point when an agent is working with a buyer, the buyer likes the property, the agent then says, Cool, let me figure out what this property might rent for if the agent is doing it themselves. And they’re not really they’re not experts in leasing, right, they could be experts in doing the transaction, they know what to look for in terms of inspections, they know all the relationships in terms of getting work done. Perhaps they know that the work side more from you know, end users, right residential end users, but they certainly know how to get things done, help a transaction pass through progress, they know mortgage lenders etc. But when it comes to running rental Comstor, they often don’t have the tools that we have, they go to the MLS and frankly, the vast majority of people are not putting their stuff on the MLS. People should be putting it on but there’s not. So the comps there are, are a weak sample size, a weak comp set. We have on the other hand, you know, as I said 1600 property so there’s a huge chance that the rental property that you’re buying in Oklahoma City in Tulsa, in Northwest Arkansas, we’re going to have something that’s very close to it so we can compact much, much better and we know pushing rents, we know the general market, the sentiment, the feel. And so when it comes time for the for the for the client to ask us, what do I rent this for? We don’t get into a situation where they say well, my agent told me it would rent for 1700 and we tell him Look, here are the comps here are five properties nearby that are almost identical that are renting for 1500. At that point we’re forced to say either your agent didn’t serve you well. We’re or we’re idiots, and we don’t know our market. Well, I’m a firm believer that we know our market pretty well in the leasing space. And so, you know, I don’t want to get into that situation. If an agent will come to us first and say my clients looking at this property, can you give me some rental comps, I can share it with a client, we’re in a much better position in terms of just having an accurate number. And then we all look good when we actually rent it for 1500 bucks, because the owner made a decision, an informed decision based on that rental market based on that rental analysis. We then maybe rented for 1525 or 1550, everybody’s happy. If the client ends up happy at the end of the day, that real estate agent is much more likely to sell them another property. And that’s our end goal is that real estate agents able to sell another property, they look great because they refer the client to the renter, we look great for doing the management and making it easy and hassle free and headache free for the client. And then it just becomes a virtuous circle.
Chad Franzen 5:49
So what’s your recommendation? You kind of alluded to it? But what’s your what’s your recommendation, then to real estate agents who are working with clients who know that they’re buying properties that they’re looking looking to rent out, maybe just to keep things as smooth as possible.
Mat Zalk 6:03
I think realistically, when they get something under contract or near their near getting something under contract, I now just say caveat today in today’s market, in renting the rental property space, you might write 15 or 20 contracts before you get something right, you might read 20 all cash contracts, and you just lose them for various reasons. It’s just it’s been so crazy. But in a normal market, pre pre COVID You could write an offer that was all cash and and have a 5050 chance of getting it. So what I would say is when you’re in the final stages of kind of getting your offer accepted when you’re in this final stages of doing diligence, just reach out to somebody on our team, [email protected] great. [email protected], I was wondering if it was OKC, or Oakland City, it’s the full spelling of Oklahoma City. And then [email protected] Is, is how you can get a fair and representative sample of market comps, we’re happy to provide those, and then you can share those with your client. And then they’ll make the decision I like $1,500 on $160,000 property, or I don’t. But what I what we don’t want to happen is somebody to say the rents gonna be $2,000 on $160,000 property. And that’s just not the case, right? You can just look at 10 other properties and go, they’re just not gonna rent there. I’ll start it there. If a client says to me, I want $2,000. And I say to them, it’s gonna rent for 1500 bucks, I recommend we started at 16 and see if there’s somebody that you know, will just jump on it because they’ve been, again, tenants have also been trying to applying for 15 properties and getting rejected. So maybe somebody just says screw it, I know that the market is that 1500 bucks, but I’ll pay $1,600 No problem. If you want me to start at $2,000 Mr. or Mrs. Owner, I don’t have any problem, but it’s gonna sit there. And I don’t want it to sit there. Because there’s a natural, you can do the math and determine if it sits there $2,000 For for, for 15 days, that’s $1,000 lost, or if it really should be at $1,500 That’s 750 lost, you might as well just put it at 750 and not and not try to get you know that that that extra little money. It’s just doesn’t there’s an inflection point beyond which it doesn’t make sense to do that. Mathematically.
Chad Franzen 8:02
Do you ever have? Do you ever have renters? I’m sorry, people who are renting out properties or looking to rent out a property that they’re looking to buy come to you before ever speaking to a real estate agent? Yeah, we do. And we
Mat Zalk 8:15
refer them back to some of our agents, some of our some of the people that we work closely with, again, we’ve got plenty of clients that that, you know, both own real estate and are also real estate agents, some prominent folks here in Tulsa that have 30 and 40 units. So we talk to them often. It’s not our core business, our core business is not buying and selling properties for owners. So realistically, you know, we do a great job of leasing properties, we do a great job of managing properties. But you know, we don’t we’re not set up to to be a a full brokerage business. And so I generally refer that business out. Have You Ever
Chad Franzen 8:51
Have you ever talked to a person out of buying a potential rental property? Oh, yeah, their expectations are unreasonable.
Mat Zalk 8:58
Oh, my God. We had actually so we spoke on the multifamily side, it happens frequently. We spoke to a this is probably going back three or four years. Six years in Peoria is is a not so friendly part of part of town here in Tulsa. So we had a client or potential client come to us and ask us about management. We told them, Look, you’re in a really rough spot. I can see what you paid for this on the assessor site. I think you overpaid. We can certainly it’s 50%, occupied 50% boarded up the people that are still living in a property, multifamily property. I think it was, I don’t know, 60 or 70 units, that people that are living in a property where half the units are boarded up are people that cannot go anywhere else. So I said to them, Look, we can manage the property and be realistic with you. It’s going to cost a lot of money. The first thing is we need security. Right. And we generally use Joe balcom over at Empire security. He’s awesome. He does a great job and does a ton of stuff in that neighborhood, along with other neighborhoods that we’ve managed properties in and I said you need Joe to run security. That’s first and foremost, it’s going to cost you five $600 a month. And then in addition to that, we’re going to need a great contractor crew that goes in and does all the work to make them nice, and flips his property over turns his property over so that we have we can We can put good quality tenants in. And we generally don’t do crappy work that is, you know, we’re not going to do base level stuff. Because when you do base level stuff in a bad neighborhood, you get bad tenants, you get, you know, plenty of petty crime, get people breaking in and other stuff. So I said, we’re not going to do that. Anyways, I proposed to them a management fee, and the structure that we wanted to run, and they ended up saying, Look, we’re just doing this thing, but I’ll have to do it myself. Because I don’t have enough free cash flow to make this work with management. Cool, no problem. They went and tried to sell the property. as they as they attempted to sell the property and got people interested, they would send them my phone number, and they would say, talk to Mat, he’s got a good idea for how we can manage the property, people would call me. And I would say, I don’t know what they’re telling you. But you should not buy this property, I didn’t recommend that they buy it, they were already they owned it by the time they contacted me, but I wouldn’t recommend that you buy this property. And they probably sent me like three or four potential buyers. And at some point, they must have realized that all the deals are falling through that they sent to me, because I was just giving them an honest opinion of like, you should not buy this property. It’s Oh, it was overpriced when the previous owners bought it, it’s gonna be overpriced. Now I have no idea about the specific numbers of this transaction. But it’s not a good property to buy. It’s not a good neighborhood. So certainly, there are a bunch of neighborhoods in Tulsa. And you can go back and look on our YouTube channel where I talked about not buying stuff, or talking about the kind of investment, the average kind of investment areas and where you should steer clear up, but we have tons of people from out of town that come in and think these numbers look great. You know, I think the return should be strong. Even if I have 12 or 15%, non payment. And, and, and vacancy, the numbers still look strong. And I say to those people, try 25 or 30%, nonpayment vacancies, it’s a really bad neighborhood. And I just don’t think you should buy in those neighborhoods. So we work everywhere and we’re happy to we will serve as any client, any client that can that can pay the bills that has cash to do the work. And that understands that this property in the in the case of bad properties is going to cost a lot of money before it’s stabilized. We’ll work with we don’t shy away ever from doing the hard work just like we talked about a little while ago on the management or on the on the maintenance on the maintenance and construction side. We don’t shy away from the work, we’ll do the hard work, but somebody has to pay for it. And if those numbers go go upside down, often owners look at us. And I don’t want to be ever accused of saying you didn’t tell me this.
Chad Franzen 12:13
Clients ever have kind of unreal, maybe maybe it is a good place and you’d love to work at this particular location. But the client has unrealistic expectations as to what rent is maybe they’re just not tuned in with the with the rental market, do they ever change their mind so that they still buy?
Mat Zalk 12:28
I think generally speaking, if they have if they have grossly been misled on rental rates, they would often not buy the property when you tell them what the real rental rate rate is. We don’t see like Realtors saying to clients, this one’s going to rent for 2000 when it actually rents for 1000 we see more like, you know, call it a 20% differential. So they think it’s gonna rent for 1800 and it rents for 1500, something like that. But that $300 can make the make the entirety of the difference, you know, make the deal work or not work, right, especially if people are still expecting as they once did the 1% rule to make sense, or if they want to rent to be 1% of the asset value that they purchase. So $1,000 on $100,000 property, that was certainly possible to do years ago, it may be possible in the future. But right now, it seems it seems to not be a real possibility, particularly if you’re buying stuff off the MLS more possible if you’re buying wholesale deals or buying tax auction deals or sheriff auction deals, and you’re going to do the work, right. So if you buy something, I recently did it for $28,000. And I’m putting in I think I just saw the numbers come through like 71, we’re doing all new electric, we’re new, all new electric service to do a 200 amp service, we’re doing new plumbing, we’re doing all new interior exterior paint, we cut down a whole bunch of trees, some new fencing, AC etc. And that should rent for you know, $1,100 When all said and done, we’ll be in it for what I just say 30 plus 70, more or less 100. So you can do it if you’re willing to do the work. And our team certainly does that I pass it over to Seth, I engage just like any client would set sends me a message every Monday that says here’s the progress that we sort of saw over the last week. Here’s the spreadsheet that tells us all of our numbers, are you okay with this, this and this and I engage the same way any client would. So you can do it there, but you likely can’t do it buying stuff off the MLS.
Chad Franzen 14:15
What’s your final question for you? What’s your recommendation for a potential property buyer who are looking looking to rent out this property? And they’re working with a realtor that they like, but they haven’t spoken to any rental management company yet? And they’re looking to use one? What’s your recommendation for somebody like that?
Mat Zalk 14:33
Yeah, so I will say go out and talk to your property manager, right. We will give you if you come to us and you just say hey, I’m thinking about buying this house, I’m under contract for this house, whatever the situation is. We’ll shoot you rental comps also right? We don’t shy away from doing the work before we have a signed contract. So we definitely will get you an idea of what the property should rent for. And again, oftentimes, if we think it will rent for $1,500 it will tell you that the range is 1450 to 15. We have no problem starting at 1550 or 1600 to see if we can get somebody quick that just is tired of looking and is willing to pay a little bit of a market for a nicer house. I also will say that if you have a house that you buy with a real estate agent and you want the work done we can we can tell you what work should be done to get maximum rent Seth has become very very good at identifying that a backsplash in the kitchen makes people go ooh and on they’re willing to pay a little bit more for it. Same thing with you know, tile in a bathroom, etc. So if you if you buy a property, you can do so in any condition, but I think it’s certainly a good idea to reach out to somebody on our sales team again [email protected] or directly to [email protected] [email protected] or [email protected] They can help you determine the value that it’s likely to rent for.
Chad Franzen 15:46
Okay, anything else we need to know?
Mat Zalk 15:49
No, I think that’s it, Chad. Yeah,
Chad Franzen 15:52
thank you. It’s great to talk to you, man. Take care someone everybody.
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