Mynd Property Management co-founders Doug Brien, left, and Colin Wiel expect to do a lot of hiring in 2020, largely at the company’s Oakland headquarters and at its second office in Phoenix.
TODD JOHNSON | SAN FRANCISCO BUSINESS TIMES
By Mark Calvey – Senior Reporter, San Francisco Business Times Dec 23, 2019, 2:54pm PST
Oakland-based Mynd Property Management plans to boost its workforce by 80% in 2020 after tripling its number of rental units under management to more than 9,000 in 2019.
The company has about 250 workers and expects to grow to 450 by the end of 2020. Much of the hiring will occur at the company’s Oakland headquarters and a second office in Phoenix. While some startups have joined the Bay Area exodus, Mynd said it has no intention of shifting its headquarters to Phoenix, given the capital and tech talent available in the Bay Area.
“We’re bringing technology to the property management business in a way that’s never been done before, and the Bay Area is the technology center of the universe,” said Colin Wiel, Mynd’s co-founder and chief technology officer. “This industry has never been operated at scale. It’s one of the largest mom-and-pop industries remaining in America. But the technology now exists with cloud computing, mobile computing and AI to be able to scale the industry for the first time.”
Mynd, founded in 2016, is relying on its own software and other technology to improve the highly fragmented property management business that’s focused on small landlords who own apartment buildings with less than 50 units or mom-and-pop owners of single-family rentals. The company’s backers include Canaan Partners, Jackson Square Ventures and Lightspeed Venture Partners.
“There’s a large market opportunity and a lot of demand for our services,” said Mynd co-founder and CEO Doug Brien. “What’s most unique about what we’re doing is that we’re building our own software for small residential landlords that can scale.”
Building a property management company focused on thousands of small landlords comes with its own challenges and rewards.
“As you get into smaller owners and buildings, the monthly revenue you can drive per home per month is meaningfully higher than in larger apartments,” Brien said. “So yes, there’s complexity to managing smaller properties, but you get paid for it.”
Over the past year, the company has acquired eight real estate companies. Those deals included merging with RentVest in May, which doubled Mynd’s management footprint across the country. But Mynd’s co-founders don’t see it as a roll-up strategy.
“We call it a land and expand strategy,” Brien said. “To make this business work from a margin perspective, you need a lot of geographic concentration. Managing 100 units per market in 30 or 40 different markets doesn’t work. We’re going into markets where we think we can get 6,000 units under management.
“As a way to launch that geographic concentration, we go in and find the best property management company, looking at both the portfolio and their team,” Brien said. “There’s an interesting opportunity to buy these companies at reasonable valuations to accelerate our growth.”
The company has no market where it’s yet managing 6,000 units. Mynd’s markets include the Bay Area, which is its largest market, as well as Phoenix, Atlanta, Denver, Houston and Dallas, and Tucson, Arizona.
“We’re focused on the most ‘investable markets,’ where it makes the most sense for investors to deploy their capital,” Brien said
In 2019, the company debuted a fully digital leasing capability, including paying and maintenance requests online. The service also includes self-showings, which relies on facial-recognition technology and eliminates the need for real estate agents, the company said.
Mynd manages properties in 16 markets and offers small residential real estate for sale in 20 metro areas. Mynd said its direct sales crossed the $1 million mark in the third quarter. In July, Mynd acquired Irvine-based HomeUnion, a real estate investment company that helps small residential investors buy rentals using the company’s online home-valuation tool, Investimate.
Mynd’s hiring goal for 2020 doesn’t include employees coming on board through mergers and acquisitions. One of the company’s key hires was Alex Osenenko, who joined in August as Mynd’s chief growth officer.
Mynd, a name inspired by the peace of mind that it hopes to give landlords, also debuted a unique employee benefit in 2019. The company created and funded its Think Like an Investor Fund to help employees learn and profit from investing in rental properties.
“The best property managers know how to think like an investor,” Brien said. Mynd administers the fund, which focuses on Bay Area rental properties and is expected to have a four-year duration.
“We attract really interesting people to work at Mynd, who are passionate about investing in rental properties,” Wiel said in discussing the fund. “We believe that investing in residential properties is the best wealth creation vehicle in the United States on a risk-adjusted basis. It’s very low risk and it’s incredibly tax efficient, but it’s not easy to participate in.”
Brien and Wiel also co-founded Oakland-based Waypoint Homes, which focused on buying single-family homes in the wake of the 2008 foreclosure crisis, relying on technology to manage the properties. Waypoint eventually became part of Invitation Homes (NYSE: INVH). Waypoint’s third co-founder was Gary Beasley, who is co-founder and CEO of Roofstock, an Oakland startup that seeks to make investing in single-family rentals as easy as buying a share of stock. They’re part of a growing number of startups changing rental investing. That list includes San Francisco-based LendingHome, which recently expanded into financing single-family rentals.
All the interest in working with investors in rental properties doesn’t come as a surprise to Mynd’s Brien.
“It’s the last frontier. This year, more new tech-enabled property management companies are getting funded than we’ve ever seen before, with a whole bunch of new names,” Brien said. “The reasons are the massive market that’s super-highly-fragmented and technology averse.”