Peter Lohmann's Newsletter - Issue #194

I’ve Entered the Trough of Sorrow

I love this graphic from ProfitCoach. It shows, based on real data, the difficulty in scaling a property management company beyond 750 doors. They go on to explain:

• Below 500 doors: Management labor and overhead weight heavily on the business.

• Between 500-750 doors: Optimal place to sit. You’ve reached enough scale to be efficient, but not so much that complexity starts eroding performance.

• Between 750-1000 doors: Labor efficiency dips, creating a scaling valley. The trough of sorrow.

• 1000+ doors: Economies of scale begin to drive meaningful profitability.

The graphic and copy here is from their brand new 2026 State of Financial Performance in Property Management report. It’s short and sweet at only 8 pages, but packed with updates on how residential property management companies are actually doing. Not sponsored!

My property management company hit 750 doors this year, so I’ve just entered the trough of sorrow. I first read about this concept years ago in a great book called No Man’s Land. You should check it out. It’s filled with quotes that are pure gold, such as “Deciding what promises to make to which customers is strategic planning in its essence.”

Anyway, since we’ve just entered the trough I don’t have much to say about it yet. But here are 4 things that helped get me to 750 doors:

1. Financial and operational clarity to make good decisions. This becomes harder the larger your company gets. Make time for it and continuously refine the metrics you’re looking at on a weekly/monthly basis.

2. Becoming really great at hiring and managing managers. This is a totally different skill than hiring and managing front-line team members! On hiring: read Who by Geoff Smart. On management: read The Effective Manager by Mark Horstman. Note: I still wouldn’t consider myself a great manager. The better job you do at hiring, the less active managing you’ll need to do.

3. Saying no to almost everything. If it doesn’t hurt, you’re not saying no to enough things. You should be saying no to things that you know you could do and that would definitely be profitable. That’s the bar. Relentless focus on the main thing is required.

4. Organizing my company to be non-chaotic by identifying our constraint.

-Peter

Webinar Replay: The NARPM® Trust Chart of Accounts

On Wednesday, Brad Johnson, Wolfgang Croskey, and I hosted a webinar on the new NARPM Trust Chart of Accounts, covering the vision behind it, how it connects to the existing accounting standards, and what implementation actually looks like in practice. There’s even a walkthrough from Bri Leichliter, who handled the conversion for RL Property Management a couple weeks ago.

Thankfully, it's a much lighter lift than the corporate COA (aka NAS) conversion. You can get a copy of the standard right here or on NARPM’s website.

Property Management Companies For Sale This Week

• 40-year HOA and condo management company in Broward County, FL (asking $275k, 31 associations totaling 1,333 units under management)

• Absentee-run PM company serving San Jose, Sacramento, and Las Vegas (asking $120k, 12 properties under management, ~$270k annual sales)

• This established property management company in Los Angeles, CA is still available (asking $444k, ~$222k annual revenue)

• North Carolina STR management portfolio generating ~$1.26M annually (asking $2M)

• Turnkey property management firm in Redding, CA (asking $259k, 123 doors under management)

I’ve purchased 2 PM companies on my journey to grow RL. Next time, I’ll be using Live Oak Bank’s Property Management Lending Team to finance the deal. Not having to rely on seller financing will give me a huge advantage.

Industry News & Events

• PE firm New Mountain Capital has agreed to purchase MF property management juggernaut Asset Living for $2B.

• Entrata, which just filed for IPO, is facing a new class-action lawsuit related to their RentPlus credit-building tool.

• Findigs announced they have raised a $32M Series C round of financing.

• Another update from PetScreening on HUD’s recent ESA shift.

• Goodjuju Marketing (PM marketing firm) just released a new comprehensive report looking at where PM leads are actually coming from in 2026, including AI sources.

Closing Thought

A few quick things before you go…

• Last week’s issue went to 21,061 readers (72.2% opened, 2.6% clicked)

• The most popular link was the article “Republicans propose a plan to assist low-income renters, but tenant advocates are wary” (83 clicks)

• Property managers: Your professional trade association is NARPM. You need to join if you’re not already a member.

• Did someone forward you this email? Subscribe here.

Software helping me scale my 750+ door property management company:

Note: These are affiliate links, but I’ve been recommending all these companies long before any financial arrangements came into place.

The content of this newsletter is for informational purposes only and does not constitute professional advice. I may have consulting agreements with, or financial interests in, companies mentioned in this newsletter. Additionally, some of the links included in this newsletter are affiliate links, meaning I may earn a commission if you make a purchase through these links. Always perform your own due diligence before making any financial or business decisions.