PURE Property Management
Making Property Management Better for Everyone
By Carole VanSickle Ellis
At the beginning of 2024, roughly 10 million individuals in the United States owned rental properties. Of those 10 million, 51% work with a property manager to manage those investments, and those property management firms take between 8% and 12% of monthly rents, generating nearly $100 billion in annual revenue for these valuable services.
Despite this professional management, in 2023, only about one-third of investors reported being “happy” with their cash flow, and many professed to a general dissatisfaction with their property management strategies and managers. This, said Joe Polverari, general partner and co-founder at boutique proptech property management company PURE Property Management, is something that must change.
“Property management has historically been something of a ‘walled garden’ where companies have focused on keeping customers rather than actually making them happy,” Polverari explained. “The interesting thing about property management that made us want to get involved in the space is that there are very few innovation-focused participants in the industry. We could see if we had the right level of innovation, technology focus, talent, and the capital to back those things up, we could change the way the industry works for the better.”
Polverari, who founded the company with longtime friend Mike Catalano in 2020, has spent the majority of his career buying, selling, and operating tech companies.
“Mike is the one with real estate experience, and I am the one with experience looking at industries that are big and ‘suboptimal’ and figuring out ways to improve them,” Polverari explained. “After I sold my last business, we realized the time had come to bring our talents together and start a business that would benefit the massive asset class of single-family rentals.”
Catalano has been active in real estate investing, sales, and property management for more than two decades. As a result of this long-term immersion in the industry, he had a close-up view of how technology and property management could be combined to create a better experience for real estate investors and residents of SFR properties.
“Property management is a highly fragmented industry,” Polverari said. “There are about 40,000 property management companies in the United States that focus largely on local SFR management, and most SFR assets are owned by small investor-owners who own 10 properties or fewer. When you see a market that is fragmented, it naturally speaks to the question: Can it be consolidated, and would that make the industry better for customers and more valuable economically?”
In the case of property management, Catalano and Polverari ultimately decided the answer to this question was a resounding, “Yes!” The result was PURE Property Management, a comprehensive property management platform that handles every element of SFR investing and management from acquisitions and market analysis to leasing, rent collection, and maintenance.
“When we got started, there were no formal ‘best practices’ in place in the property management space,” observed Jennifer Stoops, PURE’s vice president of industry relations. “The property management industry is extremely disjointed. Everyone is doing pretty much the same thing, but they are all doing it slightly differently and using, in most cases, about a dozen distinct software tools in order to manage assets. PURE is taking what has been historically a very reactive industry and trying to change it into a proactive industry that is focused and simple.”
Bringing a Positive Light to Renting & Rental Ownership
When Catalano and Polverari first began examining the possibility of a proptech property management company, they knew they needed what Stoops calls “a fresh set of eyes” to truly effect change in the industry. The two brought in several leading property management companies and a team of technology experts in order to achieve this perspective, ultimately starting PURE with four property management companies willing to implement the newly developed processes and solutions.
While this may sound complicated, PURE employees and the company’s leadership team explain the entire process is one based in simplification of existing practices. “We want to improve the property management experience, simplify it, and make it satisfying for everyone involved,” Stoops said. “We are not just serving owners; we are serving the residents, too.”
The company started out with its team of four property management companies in 2020, debuting just after the global COVID-19 pandemic shut down much of the United States in the spring of that year. However, in October 2020 when PURE officially launched, it had become evident that the consistency and technology touted by the founders and initial members would be exactly what many investors were desperately seeking at a time when every state was enacting different regulations to keep their populations at home.
“When we first got started, there was a lot of capital being deployed [into rental real estate] because of the [pandemic-related] stimulus and low interest rates, and there was a strong and obvious need for technology-driven business models,” Polverari recalled. He continued, “Ultimately, that led to a mindset shift in property management and real estate that there is a need for the ability to conduct business and commerce with less friction. That has created an environment where innovation can really start to flourish.”
A People-First Strategy for Acquisitions
Since October 2020, PURE has acquired more than 70 property management companies using what the company describes as a “people-first strategy” that is highly flexible and designed to fit many types of sellers in the property management space. This has enabled the company to acquire and establish anchor presences in Los Angeles and Orange Counties in California, as well as in Albuquerque, New Mexico; Dallas-Fort Worth, Texas; Denver, Colorado; Nashville, Tennessee; Portland, Oregon; and Tacoma, Washington.
As of the end of 2023, PURE also had expanded existing services’ reach in Arizona, California, North Carolina, and Washington, the company reported.
The accelerated pace of growth resulted in Catalano being named a HousingWire (HW) 2022 Vanguard for “outstanding leadership, vital contributions to [his company], and the dynamic way [he] is changing the industry.”
“Because PURE is high-tech, high-growth, and, operationally, high-profit, we have continued to accelerate, remaining attractive to growth capital partners when needed,” Polverari noted.
PURE’s acquisition model is deliberately flexible, enabling the company to work with desirable property management companies to make the process appealing to owners and employees.
PURE may offer cash-up-front transactions, the option to convert a portion of the purchase price into preferred equity in PURE itself, and the option for the seller to leave the business once the initial acquisition is concluded.
Once a company has been acquired, PURE gets to work helping teams scale operations and incorporate technology while automating workflows and standardizing software.
Stoops, whose role with the company involves developing relationships with potential future acquisitions as well as maintaining and cultivating relationships with institutional clients, said working with PURE has been exciting in part because most companies in the space have few, if any, women in senior leadership executive roles. She noted this diversity at the executive level often helps sellers see clearly that PURE is dedicated to current employees’ success after acquisition. The company acquires property management services of all scopes and works with both individual and institutional SFR owners.
“Whether you are a client with hundreds or thousands of doors or you own one or two houses, we are equipped to work with you,” Stoops said.
PURE companies run two distinct teams: a private retail team works with smaller-scale investors, and an institutional division works with large-scale investors.
“Having the two divisions allows for our teams to be experts in their areas of focus,” Stoops explained. “Smaller-scale investors need a more individualized-focus level of service, while larger-scale investors require less individualized attention but more detailed reporting based in key performance indicators (KPIs).”
PURE serves investors and simplifies the property management process not only by placing all elements of that cycle in one platform accessed by a single portal, but also by helping investors analyze potential investments and monitor portfolio performance.
“Property management is complicated, and we learned over time that many investors were not really getting a clear picture from their property management companies about how their portfolios were performing, revenues per door, or general market conditions in the areas in which those assets are located,” Stoops said. “Our goal is simple: to bring a positive renting experience to residents while bringing knowledge to owners so they understand what is going on with their investments and can invest in more rental properties.”
One essential element often lacking in property management is passion, Polverari added, noting that PURE carefully cultivates property management companies that demonstrate passion for an industry that often is markedly dispassionate in nature.
“Where people live is generally what we consider a ‘top-three priority,’ meaning it is right up there with health and financial condition,” he explained. “We hire employees and bring companies into PURE that have a demonstrated passion for this thing for which not many people really have a passion. Our clients may not be passionate about property management, but we are passionate for them. We are fired up about it.”
Bringing Fresh Perspectives & Extensive Experience
While property management may be a “fragmented” industry in some regards, it is also an extremely longstanding one. Many historians date the dawn of property management to the start of the Second Industrial Revolution in the United States in the early 1800s, when textile mills first began to open in Rhode Island and attract thousands of workers and their families, all of whom needed housing since they were no longer living in traditional, rural settings and had left homesteads and farms
for factory work. Around this time, commercial property management emerged as an industry as well as property owners began leasing buildings and land to developers hoping to erect textile mills of their own.
Others cite the Great Depression of the early 20th century as the beginning of property management; when banks found themselves in possession of physical properties that needed leasing and maintenance in order to function as positive assets, property management was the solution. Around this time, banks began hiring individuals to serve as “caretaker managers” to help lease properties and handle the daily mechanics of owning and running real estate portfolios.
Regardless of where you fall on the property management timeline, understanding the history of the industry is important if a company wishes to navigate today’s property management space effectively, Polverari said. He added this is particularly true for companies like PURE that have a stated goal of incorporating new and improved technologies into the age-old industry.
“We are very aware of the history of the industry and respect it even while we are taking actions to improve it for everyone,” he said. “Every time we improve how the technology works in this space, we make it more accessible and attractive for investors and improve the SFR experience for everyone involved.”
Stoops said she thinks of PURE as an extension of investors’ financial planning and asset management strategies rather than just a property management provider.
“We are providing a physical act that enables investors to grow their wealth and improve their financial security,” she explained. “When you go see a financial planner, you entrust them with your money in the hopes they will help you make more of it. Hopefully, they do. We are doing the same thing, but our service is a physical act that has huge significance not just for our company or our industry, but for every investor and resident
we serve.”
SIDEBAR 1
What is Proptech?
The term “proptech” has grown increasingly prevalent in real estate in recent years, and most investors agree that this is probably a good thing. However, relatively few actually know precisely what the term implies. Proptech, short for “property technology,” encompasses the vast landscape of digital tools and technologies that may be used by real estate professionals to complete any aspect of a property transaction or management cycle. Proptech hinges on the digitalization of previously manual and hard-copy processes that historically involved physical, paper documentation.
“PURE Property Management companies use proptech to handle everything in a very transparent and educational way,” said Jennifer Stoops, vice president of industry relations at the company. She explained PURE works with investors from the very start of SFR ownership to prepare properties for rent, conducting walkthroughs, advertising the property, establishing a fair-market rental rate, analyzing the local market and competition, screening tenants, and handling all the logistics of getting a lease signed and keeping the property maintained during the tenancy.
“We place a heavy emphasis on documentation of the condition of the home and making sure that both the owner and the resident are on the same page at all times using our owner and resident portals,” Stoops said. “Proptech is what makes this complicated process painless and simple.”
SIDEBAR 2
By the Numbers
2,000 — cumulative years of property management and real estate experience among PURE Property Management employees
50 — Pure Property Management operates in more than 50 markets in the United States
25,000 — PURE manages more than 25,000 properties in the United States
22 — Number of states in which PURE operates
75% — PURE expects to operate in three-quarters of all states by the end of 2025
100% — PURE expects to operate in every state in the United States by the end of 2026
10,000 — PURE boasts more than 10,000 five-star reviews on Google as of July 2024
218 — PURE ranked 218 on the Forbes list of 2024’s 500 best startup employers based on employee satisfaction, employee retention, employer reputation, company growth and other factors
