talking business
We Are Family
by Emily Landes
For Michelle Horneff-Cohen, it all started with free rent. She was living in a rental in the outer Sunset. When the resident manager moved out, she asked her landlord if she could take over the job. After a few heart-to-heart talks with the owner (and even a phone call between the owner and her mother), she got the job. At the time, all Horneff-Cohen could think about was scoring a free apartment.
Soon, that love of a deal had morphed into a love for property management, which led to the formation of her company, Property Management Systems.
Horneff-Cohen considers her company’s opening day to be the SFAA’s annual trade show in 1998. Since she had a background in running trade shows, she agreed to help out in exchange for a free booth at the event. At the time, Horneff-Cohen was considering a career in professional organization, with a concentration in organizing property owners. But when she unveiled her new company to SFAA members, she recalls the response as being a bit tepid. “What I found out was that owners did not want to be organized,” she recalls. “They’re frugal and they think they can do it all themselves.”
Horneff-Cohen may not have gotten many clients out of that first trade show, but she did get some good advice. Fellow SFAA members encouraged her to concentrate on a la carte services, particularly passthroughs, since there were so few vendors for those services in the city. Doing landlords’ passthroughs ended up being the entrée into managing their properties. In the first year, she went from managing 30 units to managing 300.
The growing responsibilities meant growth in other ways as well. Horneff-Cohen had to move out of her home office and into an office on Valencia Street where the company still operates today. She also had to expand her staff, which in the beginning consisted of just her and her mom. Today, Property Management Systems manages around 400 units and has about 10 full-time employees, which Horneff-Cohen describes as a family.
Because the staff is so close, the hiring process is a full-office affair. Potential employees don’t just interview with the boss, they interview with the entire staff. “We’re really looking for somebody who will fit in,” Horneff-Cohen explains. “It’s a special dynamic in our office.” The staff also has a special dynamic with their owner-clients. Horneff-Cohen describes their work with owners as a “partnership,” and says she has had to stop working with certain owners who weren’t on the same wavelength as her and her staff.
These partnerships may be what led Property Management Systems to win the 2008 Trophy Award for Property Manager of the Year (in the 1-500-unit category). Although Horneff-Cohen was happy and surprised to take home the 2008 Industry Partner of the Year Award as well, she says the property management award was the one she really wanted. When the company’s name was called, she brought her entire staff up on stage to accept the award. In the weeks after the awards ceremony, she received several congratulatory calls from her clients. She believes that the win just reinforces these partnerships and that her owners feel validated that they’ve chosen Property Management Systems for their buildings.
Even though the business may have shifted toward all-encompassing property management, it still provides passthrough services for many owners whose buildings it does not manage. This passthrough program is largely the provenance of Elizabeth Miller, a longtime Property Management Systems employee. Miller believes that owners can often be scared off by the passthrough process and that fear stops them from getting the money that they are owed. “A lot of owners are very, very intimidated about going to the Rent Board and having a hearing,” she posits. “A lot of them have been to a different kind of hearing, a tenant complaint hearing, and they think it’s going to be like that. It stops a lot of people.”
But with a more than 95% success rate, there’s nothing owners have to fear with Property Management Systems on their side. Miller explains that the company vets owners’ passthrough claims before taking on the job. If the passthrough isn’t valid, they’ll say so and end their involvement. If it is valid, it’s usually just a matter of documentation, documentation, documentation. The passthrough guru advises all owners to get several bids on jobs before they begin. She also advises new owners to make sure that getting all the paperwork from the previous owner is required upon escrow.
Even with years of experience, Miller says every hearing is still unique and she can never be sure which way it’s going to go. “We think we’ve seen it all. But you’ve never seen it all,” she comments. The company has been involved with passthroughs that had a two-minute hearing and passthroughs that required a two-day hearing. The staff has seen some landscaping passthroughs go through and others fail, some dryrot ruled a repair (and thus not applicable for a passthrough) and other dryrot ruled a structural problem (and covered for passthroughs).
Learning what’s allowed and what isn’t is one of the reasons Horneff-Cohen was so enthralled by property management to begin with. She remembers attending SFAA’s monthly member meetings and “sitting in the front row, wide-eyed.” Her mind was opened even further by attending classes for what is now called the CCRM designation, classes that she now teaches herself and requires every new employee to take as well. “Education is key,” she says. “We live in such a regulated industry. We need to know what the laws are.”
With the importance Horneff-Cohen places on education, integrity and nurturing long-term relationships with her staff and her clients, there’s only one real answer she could give when asked what her future goals are for the company she began more than 10 years ago: “to be the best property management company we can possibly be.”
Well, maybe there are one or two other things she wants: “to win the 2009 Trophy Awards for Industry Partner and Property Management Firm of the Year.” Challengers, consider yourselves warned.
The opinions expressed in this article are those of the author, and do not necessarily reflect the viewpoint of the SFAA or the SF Apartment Magazine. Emily Landes is the Managing Editor of SF Apartment Magazine. Copyright © 2009 by Black Point Press. All rights reserved.