Impulse Property Management: Transforming Business Operations with Buildium

Impulse Property Management, led by Bobby Russo, is a property management company based in Florence, Arizona. The company manages 122 buildings with a total of 136 units. Bobby Russo, a seasoned businessman with a background in sales and management, took over the company in early 2013 after relocating his family to the Phoenix area. The company employs 7 real estate agents, 2 property managers, and is co-owned by the Russos. Russo's decision to take over the business was influenced by his desire to spend more time with his family and reduce his extensive travel schedule. The company was in a state of disarray when Russo took over, with issues such as stolen deposits, unpaid owner payments, and a lack of proper tracking and management systems. Despite these challenges, Russo saw potential in the property management market, which is the fastest-growing segment of the real estate industry. He aimed to turn the company around and provide better service to owners and tenants by implementing a more efficient and transparent management system.

In sales for nearly a quarter century, Bobby Russo was the quintessential road warrior. Then he got remarried to a woman who wanted to start a family. Settling in Hershey, Pennsylvania, they had two boys — Caleb (now almost 4) and Cory (now almost 2). Something had to give. “I travelled roughly 165,000 miles per year, 235 hotel nights per year,” Russo recalls. “Four years ago, I remarried. And I married a younger woman who wanted children.” In October 2012, Russo came home from another long stint on the road. A successful businessman, Russo had built up a sporting goods company, sold it in 2000 after eight years, and retired at age 36. He was lured out of retirement in 2002 to become North American sales manager for a large multinational electronics company, a position he held for a decade. When Russo came back home for a few days in late 2012, his wife sat him down and asked him two questions that changed his life for the better. “’What are you doing?’” he recalls her asking him. “‘You’ve got two beautiful kids. You don’t need to do this. Why don’t you retire and spend more time with your family?’” Russo did just that. “Caleb, who was three, was saying, ‘Daddy come home. Daddy, come home,’ and every time we’d pass a black Lincoln Town Car, he’d say, ‘Daddy, don’t go to the airport,’ because that’s what would come to the house to take me to the airport. And every time he saw one, he’d go, ‘Daddy, don’t leave.’ And then we’d see an airplane, and he’d say, ‘Daddy, don’t leave.’ So that was tough.” He planned to relocate his young family to Charleston, South Carolina, putting down an offer on a house, and planning to take the next decade off until his boys began high school. Then Russo’s father got wind of his son’s plans. “’You’re really retiring? What’s the big issue?’” he recalled his father asking him. “I told him it was travel,” Russo says. “There are only about 35 weeknights a year when I’m in my own bed, at home with my family. I don’t want to do what I did with Nikki [his 22 year-old daughter] and not be around all the time.” His father replied, “‘Well if the only issue’s travel, I need your help with this property management company I have out here [in Florence, Arizona]. We can run the business together.’” Russo had a short retirement. He and his family relocated to the Phoenix area in early 2013. Impulse Property Management, the company he took over, has 7 real estate agents, 2 property managers, and then the Russos as owners. They manage 122 buildings with 136 total units. In early 2013, however, his father had shoulder surgery and left the day-to-day operations of the property management business to the two property managers on staff. By April 1, when Bobby Russo was due to take over the property management side of the business, it was a mess. “I inherited a company with ticked off tenants because their deposits had been stolen. We had owners ticked off because we had property managers who weren’t paying owner payments, and we had no way of tracking payments if the owners called in. Our property managers were so confused, they blew off the owners. When I started on April 1, there were four messages on the voicemail from customers looking for information. In all, there were 25 messages going back two months. Checks were on the floor. Checks were piled on desks. Who’s current? We couldn’t get a rent roll to save our lives. No work orders were being used, so vendors were coming in and dropping off invoices, and an audit we did showed at least one vendor who had billed us for work he’d never done.” “We needed to completely turn around how people looked at this company,” Russo recalls. “Here we were, two basically retired guys with a business that’s worth something that maybe I can give to my kids someday, and a market (property management) that’s growing — it’s the fastest growing segment of the real estate business. Owners and tenants needed 24/7 access to their accounts, to be able to list vacant houses, owners should be able to see the houses are listed right away, how we market them and what we’re doing, and they should be able to see the rental applications. They need to have full visibility into our activities.” When Russo took over the business on April 1, he knew he needed to clean house. “I looked at the accounting in our legacy property management software program, and it was a disaster. I called them up. I saw $700,000 in security deposits, $800,000 in income, leases with no expiration dates.There was no double entry bookkeeping going on. The legacy property management software company said we’d need to do a complete reset of the software, wipe out all the data, and start out as if we were a brand new company. I said to them, ‘If I’m going to do that, I’m going to do it with another company.’” “So I started calling around to other property management software companies,” Russo recalls. He even called Salesforce.com, which his previous company had used as an early adopter since 2005, to see if they could help him manage the property management side of the business. “On the real estate side of the business, they’d be perfect,” he says, “but for property management, all they could really provide is a cloud background, and creating as custom solution for us would have cost at least $50,000.”

Russo knew there must be a better way to manage his business — and that was when he found Buildium. “I didn’t call Buildium first. One other company had pretty reports, but they couldn’t answer any business questions. It wasn’t until I called Buildium that I found a solution. One of your sales reps took me right into a trial account and he spent I’m guessing three hours on the phone with me, answering a boatload of questions — and I had a ton of them. You guys have killer service. You really deliver.” “And you’ve got to remember my standard is Salesforce.com for cloud software,” Russo recalls of his first encounter with Buildium. “I’ve had lunch and dinner with the CEO of Salesforce because we joined them in 2005 when they were just Buildium lets Impulse Property Management operate like a well-oiled machine. getting started and became, probably after Federal Express, their biggest customer. I was on most of their committees for their Apex developer site.” After seeing Buildium in action, Russo became a Buildium customer, going live on May 1, 2013. “Once we made the conversion to Buildium,” Russo recalls, “I asked you guys a lot of questions because I knew if I had the right answers right off the bat, I’d be able to do it the right way every time and always have the right information in the system. How do I list a property? You guys gave me great guidance: First, get all your properties loaded. During the day I’d get yelled at by owners about why there was so much tenant turnover, and at night until 11 I’d enter in every property. Then I put in every owner. We were able to batch tenant listings and leases from our legacy system over to Buildium.” “On May 1, we put one property in there as a test property — we loaded it, we rented it, we inspected it, we did our first owner payout on just one property,” Russo notes. “We loaded it into the trial account you guys have and did our testing in there, and you guys walked us through it. By May 25, all the owners and tenants got an email sent from within Buildium that we switched over to the new system and rent was coming due, and when tenants came in to pay their May rent, they got notified about the new system. We told them they were going to start getting statements in the mail. We carried all the finances over from the legacy system, and you guys walked us through all that.”

• On-time rental payment rate went up to 98%. “On May 25, the statements went out,” Russo says. “All of a sudden tenants started coming in. Our rent box on the front door was full by May 29. By June 3, we were at 98% rent collected, which is amazing given our track record. We’ve also collected more late payments than ever before.” (Russo hopes to have his tenants, who mostly pay with money orders, converted to electronic payments by the fall of 2013.)
• Reduced tenant turnover by increased conversion to year-long leases. “We had leases from 2010 that had never been renewed and went over to month-to-month and were just trucking along,” Russo recalled. “So this conversion to Buildium helped us identify and then rectify these situations. Now we have secure, strong leases because we had much more visibility into the leases than we had ever had before. Our owners really appreciate the resulting decrease in tenant churn.”
• Better relationships with vendors due to setting higher business standards. “Now the vendors can get on Buildium just like an owner can,” Russo says. “One vendor found out what we were doing with Buildium, so he got on his vendor site, uploaded his work orders, and is now uploading pictures of the work he’s doing. When I pay owners, I upload his work orders to the owner accounts, and I can see a picture of the work.” Russo also says that using Buildium’s electronic paper trail prevents vendor fraud.
• Easier to convert property owners into customers. “We have a retail space in the biggest new shopping area,” Russo says. “Recently a guy came in and said, ‘I see you do property management. I have a house. Can you run me through your system?’ I ran him through the sales presentation you guys did for me. I set him up in the system — rent, property photo, description, etc. He asked what it would cost him to go with us, I told him, and he signed up as a client right then and there. I closed the deal just by walking him through Buildium.”
• More time to invest in business development. “The most important thing I told you guys is that we’re just a bunch of sales guys that own a property management company,” Russo says. “We’re not accountants. We don’t want to be accountants. I don’t want to spend any more time on my business accounting than I want to do on my personal checking account. I want to bring rents in, make sure the money’s accounted for, and I want to get my owners and vendors to be paid, and I want what’s left over to grow my business. That’s what Buildium does for us.”

• On-time rental payment rate increased to 98%.
• Managed 136 total units across 122 buildings.
• Reduced tenant turnover by converting to year-long leases.