Radical. Progressive. Tranformative. These bold ideas are associated with revolution the world over. For Kevin Ortner, president and CEO of Renters Warehouse, they also describe the new movement he is leading in real estate, one that is empowering everyday Americans to seize control of their financial futures and create secure wealth in an uncertain world. He calls it the “Rent Estate Revolution,” and he is looking for new recruits.
Renters Warehouse is one of the fastest growing residential property management companies in the nation. Its success began with identifying problems common to real estate management and creating consistent and cost-efficient solutions, making them available to Everyman (and woman), as well as the savvy investor. Ortner first joined the company as a franchisee in 2009, and since the retirement of founder Brenton Hayden in 2015, he has led Renters Warehouse through a metamorphosis that has increased the company’s managed assets to more than $3 billion and close to 20,000 properties under management in 42 markets in 25 states … and counting.
This isn’t your Aunt Fannie’s real estate company. This is a young organization with attitude, from it’s hot pink and blue logo to its quick-witted advertising spots. This is a community of revolutionaries united by a common cause – helping their clients break free from the woes of poor property management and declare their financial independence by building real estate wealth.
Ortner is a native Minnesotan whose father earned his living as a police officer and sometimes homebuilder. A lifelong aviation enthusiast, Ortner earned his pilot’s license while he was still in high school. He then ventured west to attend college at Arizona State University and bought his first piece of real estate in a joint venture with his dad. That investment allowed him to live rentfree through college. Aft er he completed his business degree with an emphasis in aviation management, he went on to a successful first career as a corporate pilot. He also obtained his real estate license and dabbled in real estate investment, a move that led him to open Renters Warehouse’ first franchise in Phoenix.
Eventually, Ortner was offered a pilot position based in Minneapolis, so he and his wife packed up, purchased a home in Minnesota and made the transition. Aft er they arrived, however, they learned that Ortner’s new employer was bankrupt. At the height of the Great Recession, they had a few problems on their hands – a new house, no jobs and a hazy future. Ortner did something that was, well, revolutionary. When most of the country was drowning in bad debt and foreclosing on real estate investments, he decided to get out of aviation and go into real estate full time, taking a position at the Renters Warehouse corporate office.
It turns out the recession was good for the property management business. “People couldn’t sell their homes, and they couldn’t afford to live in them,” Ortner explained. “We said, ‘We can help save you from foreclosure. We’ll show you how to rent it out.’ We got a lot of clients that way, and it was one of the early reasons we were able to grow so fast. We provided a service to people who didn’t even know this was an option for them.”
With an early focus on the small investor, Ortner was instrumental in increasing the company’s portfolio of managed properties to 9,000 individual clients with 10,000 doors. “The purpose of focusing on the individual investor was to get our systems down. We had to have a better process of communication in place than if we had had one owner with thousands of doors. We became great at dealing with the small owner and walking them through all the processes.”
That proficiency opened the way for the company’s next stage of growth. In 2015, Ortner took over as CEO and began transforming the business from a franchise model to a corporate model. In 2016, Ortner launched the portfolio services division for large investors. “We sold a majority stake to a private equity firm, Northern Pacific Group, which provided the growth capital we needed. The franchise model was an efficient way to expand across the country initially, but to take on large portfolio investors, we needed to control the consistency and quality of service by centralizing call center functions and back office services like rent collection, maintenance coordination and accounting. We created a more efficient business model that allows us to scale faster and enter new markets with fewer personnel. This makes us unique in the industry.”
Although operations are centralized, one of the reasons Renters Warehouse has been so successful is because it retains dedicated staff in every local market. “A big component of property management is leasing homes. Other companies rely on Realtors who are independent contractors, and their interests are not fully aligned. Contract Realtors are also out selling homes and will naturally spend their time where it’s most valuable. We are a licensed broker in every state where we do business. Our Rent Estate Advisors are licensed Realtors who work exclusively with us.”
He stressed, however, that Rent Estate Advisors act only as leasing agents. They do not compete with local Realtors for business. “Most property managers buy or sell. I closed that side of our business so Realtors know they can send us their clients’ management business, and we won’t compete. When a client is ready to buy or sell, we send them back to their original Realtor.”
In 2015, Renters Warehouse trademarked the term “Rent Estate” as part of its bid to redefine the entire single family rental (SFR) industry. This year, Ortner released his book entitled “Rent Estate Revolution.” Ortner synopsized his manifesto. “The book discusses how ordinary Americans can change their retirement trajectory by investing in single family homes. We want to convey to the everyday American that they can do this. People know that wealthy, successful people generally own real estate, but they think it’s for the elite. We’re trying to make it less intimidating by pulling back the curtain. It’s real estate for the rest of us. Leveraging someone else’s time and money to buy and manage real estate makes it less intimidating. It goes to my personal ‘why’ around the American retirement crisis. We are becoming less prepared for retirement. Social Security is less stable, and pensions are gone. It’s up to the individual, and frankly, I think it’s a good thing. But our country isn’t cultured for that. As a company, we don’t advocate getting rid of other investments, but diversifying. Real estate is the only asset that allows you to go into a bank and borrow the money to purchase. This isn’t a get-rich-quick scheme. It’s not sexy. It’s about long-term security.”
Ortner offered some free advice for the 20-year-old you: “Your first home should be a duplex. Live in one side, and rent out the other. Then buy another home. Get in early, and hang on.”
Ortner’s future vision for the company includes building out its technology platform to facilitate a seamless process by which investors may identify desirable, tenanted properties in lucrative markets across the country, and then arrange financing and close the purchase, all online and in record time. “We’re really starting to see the opportunity to become more than just a property manager, and more of advisory service model, like an E-Trade for real estate. We think real estate should be a part of everyone’s retirement portfolio, and we want to make it easy.”
Advancing this unconventional approach to real estate investment and management requires that everyone in his organization rally to a shared conviction. Ortner stressed that the company’s dizzying recent growth would not have been possible without the right team. “My main role as CEO is recruiting, hiring and retaining the best talent, then ensuring that they’re collaborating together. The next thing is to get out of the way. I’m here to support whatever I hired them to do. From a leadership perspective, I’m always thinking a couple years ahead about where we’re going and how to stay on the cutting edge. We’re trying to create an industry.”
Renters Warehouse has been honored time and again as a best place to work, and Ortner attributes this, in part, to the company’s culture of giving. Employees bond while supporting a variety of causes, from pets to veterans.
This is also a group that celebrates together. “Jobs here can be stressful, since our inbound phone calls are generally an issue. Effective conflict management takes a certain kind of personality. We try to keep it light, and we do a lot of staff activities. We try to celebrate success and make sure people are recognized for how they are contributing.”
Ortner said he is gratified to be back in his home town and at the forefront of a movement that is creating opportunities not just locally, but for families across the country. “We’re challenging the status quo of our business and changing the perception of our industry. Historically, this has been something nobody is really good at, something investors have to deal with if they don’t want to do it for themselves. We understand that there are two parties in every transaction, a homeowner and a tenant, and they often want opposite things. It’s someone’s biggest investment versus where somebody lives. It’s a tough business, but we provide transparency for our clients and keep the fun in our office so people enjoy coming back to work. We’re raising the bar on residential property management, and we deliver on our promises.”
Say, what’s that in the sky? Oh, it’s Kevin Ortner, leading his squadron of rent estate revolutionaries. …