Pete Neubig's story is an inspiring one for anyone interested in real estate or entrepreneurship. Starting with modest investments in affordable homes, he built a property management empire that eventually sold for $4.6 million. But his journey was far from smooth, filled with valuable lessons learned along the way.
The Rise of a Property Manager
Neubig's path began unconventionally. He started by purchasing $35,000 houses, gradually building a portfolio of 60 properties. Realizing the challenges of managing his growing investments, he transitioned into property management, a move suggested by his CPA. This led to the creation of his own company, a venture he initially thought was unique, only to discover later that the field was already established.
Challenges and Growth
Building a successful business always comes with obstacles. Neubig and his partner, Steve, faced their share. Early on, they operated under separate LLCs and even commingled funds, practices they quickly learned were industry no-nos. Joining the National Association of Residential Property Managers proved invaluable, providing them with essential knowledge and best practices.
As their portfolio grew to over 1,000 homes, they faced the complexities of scaling operations. Neubig stresses the importance of reinvesting in the business and hiring the right people. Developing robust processes was also critical. He emphasizes the need to involve the entire team in this process to ensure buy-in and streamline operations.
The Exit Strategy
Selling the company was a significant milestone, but it came with its own set of challenges. Neubig cautions against accepting stock as part of the sale, having experienced a significant drop in stock value post-sale. He advocates for securing full payment upfront to avoid the stress and uncertainty of extended pay-outs.
The sale also brought to light the importance of cultural alignment. Neubig experienced a clash with the acquiring company's VC-backed, growth-focused culture. This ultimately led to his departure just 18 months later. He advises entrepreneurs to carefully consider the acquiring company's culture and management style before finalizing a sale.
Vision Misalignment
Perhaps one of the most significant challenges Neubig faced was the divergence of vision with his partner. While they initially shared the goal of owning 500 homes, their aspirations shifted over time. This misalignment eventually led to the decision to sell the business.
Key Takeaways
Neubig's journey offers invaluable lessons for aspiring entrepreneurs:
Pete Neubig's story is a testament to the power of perseverance, adaptability, and continuous learning. His experiences provide valuable insights for anyone navigating the complexities of building and selling a business, particularly in the property management industry.
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