Poised for Growth, Corazon Real Estate

Ever since I started this blog it has been a goal of mine to feature local Reno businesses.  Naturally, I’ve decided to feature a businesses from the extraordinary people who I know.  This why I was pleased when my friend that owns Corazon Real Estate, a local property management business, let me interview him for my blog.  I’ve known Tony for 18 years now.  I’ve watched him morph from a carefree bachelor to a family man with two kids and the heavy responsibility of running and growing his own business.  He now has in his care not only himself and his family, but his employees and the owners and renters who are his clients.  This is no light burden.

Whenever I think of Tony, what jumps into my mind’s eye is always his constant and irrepressible sense of humor.  He is literally one of those people sporting a mischievous twinkle in his eye.  That is why it is always a shock when his demeanor changes abruptly from lighthearted to laser focused and serious when he talks about his business, and it is apparent that Tony really spends some time thinking about his business and the business environment.   I’m not normally easily caught up in real estate issues, it is not my field after all, but I found myself caught up in the passionate and intelligent discourse that Tony can engage in when speaking about political and legal trends and how they might impact renters, property owners, and business owners in the community.

For the interview we met at another local favorite, Great Basin Brewery here in Reno.  Over tea, salad and Shepard’s pie we talked about how Corazon came to be.

Tony did not really expect to be running his own property management company,

“Essentially there was no true vision at the beginning.  Initially I was the property manager for a company called REMCOR Real Estate. I was an independent contractor but the broker owned all the accounts there.  For the amount of work that I was doing I didn’t feel like I was being adequately compensated.  So I asked the broker for a raise in late 2004 and with little hesitation she said, “Well, why don’t I just sell it to you.”  So I purchased the property management accounts from her.  There was a note and deed of trust put in place secured against a house I owned at the time, along with the accounts themselves. Then we had to talk with every client to have them sign a new management agreement that made them assignable to a new brokerage.  All of the clients agreed to do that; I didn’t lose anybody.”

So, Tony ended up with his own business without that long period of planning that most of us would expect.  Maybe it is a little like having children, it is such a big scary adventure to embark on that if you keep waiting for the perfect plan, or the perfect time it will never happen.  For many small business owners they just have to…jump.

With that being said, Tony ended up with a small business and a few clients.  At that point, even though he was licensed and experienced at working in the business, he had no idea how to run a business.  That was a whole new skill set.  So to start, there was no vision per se, just the need to survive, learn and grow.  Over time though his business stabilized and grew.  He now operates out of a small house on Vassar Street and Wells here in Reno and employs a small staff consisting of a full and a part-time receptionist, two and a half additional licensed property managers, a maintenance coordinator and an accountant/office manager.

At this point in Corazon’s operations things are operating smoothly and Tony’s vision for the business has evolved,

“My original idea was to offer something that was as customized as possible to meet individual needs.  I believe now that in order to do something like that we need to move more towards a menu of services and convert our existing management accounts into a basic type of management package, if you will.  When people want extra things then we would add accordingly.  I still like the overall vision of our business as exclusively residential property management.  As a part of this menu of services there would be a  basic set of functions that we offer based on a percentage of the income from the property. Then we would charge separately for additions for things, such as mailing paper statements.  Right now there is a basic management  agreement (that covers everything) and it is very rare that I will make changes to that.”

One reason for this shift toward a menu of services is so that the customer service can be maintained at a high level while also starting to gain efficiencies through initiatives like a paperless office,

“The main initiative we have been working with over time has been to move toward a paperless office so that we can stay in the same workspace as long as possible”

As Corazon adds properties and continues to grow, Tony has started to think about how the office can offer high quality services but cut wasteful interactions so that he can keep costs down for clients. Cost go up significantly if he needs to move to a larger location or add more employees.  If however, clients can be encouraged to use services that truly add the most value to them, then there will be reduction of time not being used efficiently by the staff so that they can focus on becoming more efficient at the work that they do.  This point came up when I asked what might be holding his business back, when it comes to growth,

“So what ends up holding us back is when you get to the point where you need to add an employee you have a whole new set of expenses that’s hard to get a handle on.  And it would be nice to coast for a while, to work on reducing debt load, to be in position for another investment into the business of some kind in the future.

At this point it probably makes sense for us to catch our breath and add enough accounts to just accommodate attrition and to work on systematization.  I’m not satisfied with the amount of it that we have.  Part of what’s going on is that we split the position of the day-to-day property manager, the person that handles basic things that don’t need a lot of technical precision, and expertise, and imagination or someone who has to take the risk on a decision.”

We touched on many issues during our talk but this post would be very long if I wrote about them all.  The key message that I got out of our time was that the project for Corazon was to tune the operation so that it can handle growth.  The next question for Tony is then, how do you take a complex operation like a business and create effective systematization?  What changes can be made that would make the most impact?  Perhaps it is all of my recent forays into the Scrum methodology but I wonder if it could be adapted as a system for helping a small business reach its highest operating potential.  Any ideas?

To conclude I’d like to thank Tony Chinnici for taking the time to give me a peek into his experience with running his business.

I will leave you with this.  I asked Tony what value his business brings to the community and he responded,

“The way that all property managers fit into and serve the community is they, to a certain extent, will protect tenants from bad landlords by professionally responding to laws with common decency.  Every law on the books has to do with a response to something that a landlord did to a tenant.  Almost never has that had to do with what a tenant has done to a landlord. There are a lot of horrible landlords out there…we definitely create a fairer environment for tenants and keep them much safer.”

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