#DoorGrowShow - Property Management Growth

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Transcript

Jason: Welcome DoorGrow Hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others impact lives and you are interested in growing your business and life and you're open to doing things a bit differently, then you are a DoorGrow Hacker.

DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it, you think they're crazy for not, because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income.

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change the perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.

My guests today are Zee Bhimji and Asif Hussain. I got everyone's names right, right?

Zee: You really throw up my name though.

Jason: Perfect. Let everybody know who you are and what your role is. I want to get into your background and how you got connected to the property management industry. We'll start with you, Zee.

Zee: Yeah, absolutely. Zee Bhimji. I am the co-founder of ShowingHero. I have actually been in the industry for about 10 years now. I tell people this a lot of times. I couldn't spell property management where I started. I have a property management company also (Real Property Management) in the Chicagoland area. We've been around 10 years now.

Like I said, I still couldn't spell property management when I started. I'm a finance and accounting major. It was a process. That's where ShowingHero came around, where we saw that there is a void in the market.I decided to work with my very good friend here, Asif. We decided to take down this very big challenge and a very fun project.

Jason: Cool. Asif, why don't you tell everybody about yourself?

Asif: Yeah. My background a little unique. I'm not a property manager, but I was a landlord and do-it-yourself landlord. I have managed a few properties and doors on my own. I was familiar with some of the issues and some of the pain points in the property management world—dealing with tenants, leasing, maintenance, the whole nine yards.

My background is actually in marketing and finance. I worked for Discover Financial Services. I actually went ahead and got my Masters in Education in London. I went over to mentorship and educational leadership.

Zee and I had actually met together. We were talking about some of the struggles. I actually just went up to Zee to figure out, "Hey. Either some of the struggles that I'm having with my landlords and with my tenants, what are some things that we could do?"

In exchanging ideas and learning from each other, this is where the idea of ShowingHero came from. There wasn't a solution in the market that was available to us, so that's where that spirit and that’s where it started, the beginning of our journey actually from.

Jason: Got it. Gentlemen, why don't you explain to everyone what is ShowingHero?

Zee: ShowingHero is an automation of the entire leasing process. It's the easiest way to put it. What we would say is from lead to lease. One of the biggest challenges that I face as a property manager, we managed over a thousand doors, and it's a very good problem to have. Well it’s a problem and it's hard to do. We actually received an award from the Chicago Association of Realtors back in 2015 where we were the platinum leaders in the entire Chicago land market. It's definitely something we're very proud of.

That's the time we started realizing we're facing a lot of problems and there are no solutions for them. There are piecemeal solutions. You guys have seen that. Jason, you've seen so many piecemeal solutions. I've seen that you are putting together a full solution because everyone has noticed piecemeal solutions are hard to do and customers don't prefer that.

As a property manager, one of the biggest things that I had was I don't want my employees to go to five different software to get their work done. That's where ShowingHero comes in. ShowingHero comes in and helps from the time a lead comes in to closing out the entire lease. What you want to do is you want to eliminate days in market. You want to make it more profitable. You want to avoid all the redundant stuff, all the administrative stuff. That's where ShowingHero comes in.

It will contact the lead. It'll scheduled the showing. It will use artificial intelligence or machine learning to contact people that are interested in the property, get them to schedule a showing as quickly as possible. This is something that's really cool. You can get a price drop on your property. Instead of having to go and communicate this to so many people, five minutes after you drop your price, you have people scheduled showings. That's incredible when it comes to automation coming in and doing their job. That's where ShowingHero comes in. It helps get everything done.

We come into self showings, which I would like us to talk about because that's something I'm very, very excited about. We do it differently and we do it more encompassing. Asif, I'm going to let you take the stage.

Jason: Before you get into that, I wanted to touch on this. People are really looking for a result. They're not looking for pieces. When they're looking for pieces, they're hoping to magically put together a solution to get to a result. You really focus your tool on delivering front to end the result of automating the whole leasing process. You said from lead to lease.

Most people listening to this have some solution in place. They may be using Tenant Turner. They're using Rently. I've seen Knock rentals on their ShowMojo. There's all these different tools out there. Maybe for the listeners, I'd love to hear about your processes, what you guys do, maybe how you stand out, or how you're different. Everybody listening is wondering how do you guys fit in the marketplace.

Asif: I wanted to add one thing. One of the things that separates us from the market is that the idea of customizations and the full access on the platform. One of the things that Zee had mentioned is when you look at piecemeal solutions, you're looking at being able to solve something. People don't realize the amount of hours that are dedicated into doing that.

The example that Zee had mentioned in terms of price-reduced setting. You can manually go ahead and text or email, and say, "Hey look. That's a solution that works." People aren't realizing that for those smaller solutions that they're thinking that just works, they're not just being efficient. Not being efficient had the opportunity cost that you need to be able to understand that it's not necessarily in terms of dollars but its terms of hours. That adds up, which eventually does translate to dollars.

Jason: This piecemeal idea you've mentioned a few times. Give us an example of a piecemeal process that you feel like has these gaps or is broken. Just so people are really clear on this.

Asif: I've had clients that have said, "Look. I just use Calendly to schedule my showings. It works. I put out my show times there and I'll get notified." What they're not doing is, what does the reporting look like? Do you understand how many days your properties have been on the market? Are you getting the data that you need in terms of where the lead is coming from? What happens to the lead? Has a lead been able to provide you any feedback either if it's the assisted showing? Have they been able to provide you feedback on the agent or on the property? Are you able to see have they applied on? They clicked on the application link. What is the life cycle of that prospect? Are you able to understand those different points?

You could use Calendly. You might say, "Okay. I'm able to schedule," but you're missing out on those other solutions. You might say, "Hey, look. I'm using a lockbox and I'm allowing people to enter the property." But do you understand who's entering your property? When they've entered? If they've left the property? Are you able to follow-up on all of those different missing pieces?

Sometimes these piecemeal solutions work. I had one client who said that they just text message (mass text message) to confirm a showing, which is great, but that does take an amount of time for someone to go get all those text messages, send that, see who replied, see who that person is. Those solutions work but they're not a one-stop solution. That's where ShowingHero tries to differentiate itself and say, "Look. We want you to be efficient and running on all gears."

Jason: Cool. Explain the process of how the showing side work.

Zee: One of the things to add to what Asif was saying and to clarify, we have piecemeal. The idea of piecemeal is just simply the fact that when a lead is interested in a property (we call our property management terms one, two, three, example stream), the first thing we're doing is we're saying, "Let's contact the lead." It's as simple as that. We just need to respond to them. Communicate, speak to them, pre-screen them, try to schedule time.

Schedule time really takes three or four attempts. You're going back and forth. You're leaving voicemails, you're sending emails. From there, you're scheduling your time next week, Wednesday, 1:00 PM. Sounds good. Everything is great. From there, the next thing is a diligent agent or property manager is going to call in again and remind them about their showing the day before. Then, they're going to try and confirm the showing on the day about four hours prior.

Jason: The goal behind that is to eliminate no-shows, to not waste time, to make sure that you're doing your best to get these people engaged so they show up, so you can get the property lease as quick as possible. The whole goal is just to get the place rented.

Zee: Right. All you want to do is reduce the days in market and make it profitable. Yes, you can have ten agents for ten properties. You're not going to be profitable. That's what we had. We had four agents showing eighty properties. Yes, it worked for us. It made a lot of money but it was tough.

I had a call center with three people full-time taking calls all the time. All they're doing is taking calls. That was 8:30-5:30. That's all I was making available and it wasn't enough. We're still getting a lot of calls, a lot of voicemails, a lot of emails outside of business hours. We were making it work. It was working. We pre-screen them on the phone, schedule a showing. We tried to be a little smart about it. We tried to be a little efficient about it.

That's where ShowingHero comes in. ShowingHero takes 90% of all that administrative work. All you're doing is like going to your assistant and saying, "Hey. I want to show properties in the north side of town on Mondays, Wednesdays, and Fridays from 9:00-1:00. Can you please schedule a whole bunch of showings for me, but make sure that the people are pre-qualified? Then, make sure you follow-up with every single person to find out if they're going to show up on time. Remind them and confirm the showing." That's ShowingHero. ShowingHero is your personal assistant that is doing all those things but you don't have to remind them.

Jason: Okay. The situation you're describing sounds like pretty normal. The problem situation, it sounds pretty normal. Most management companies, if they're smaller, the property managers are the one handling this. They're leveraging maybe one or two tools to try and systemize things. They've got one system that's putting the properties out to the market and feed allowing the system that's handling some of the showing stuff.

That sounds pretty normal. They're going to have a handful of people that are going out or maybe themselves. They're trying to do this. At your level of scale, you started to see gaps and the problem. It sounds like for smaller guys, something like ShowingHero could allow them some freedom from the leasing side of the business that they're tied up in.

Zee: Yeah. I want to put up the 100 emoji right now because that's what it is. It's all about having a bold solution.

Jason: Okay. Let me point this out. My listeners have heard this multiple times. The most expensive thing in business is staff. It's the most expensive operational cost that we have. It is people. We're spending thousands, tens of thousands of dollars even on a team every month. If you can reduce that even slightly through some automation, through technology, through some process, through systems, through less communication needing to happen, then even eliminating phone calls being necessary between two people, or any step that is reduced adds up to a lot of cost savings. It scales once you get to 1000 doors like your size.

It's pretty obvious. It's really obvious. it's difficult for people that are at a smaller door account to pay attention to all these little leaks that exist in their business. The challenge ends up being they just feel like they're spinning their wheels and they're not moving forward. They feel like they're just living paycheck-to-paycheck. They feel like the business isn't progressing. It's because they're not dedicating time towards strategic time in working on the business. They're focused on all the tactical things they need to do in the business.

They have the business that they can do instead of the business that they should be doing, the business that they really want to have in which they're able to focus on strategic time, focus on planning on the future, on growth, on ideas. Instead they're handling leasing, maintenance, phone calls, their team, managing, trying to do accounting, and like all these kind of stuff.

The less tactical work they have on their plate, the better. If you can free up tactical work by leveraging a technology tool or system, you're going to dramatically reduce your cost. It doesn't matter if a tool is hundreds and hundreds of dollars a month. Team members are thousands of dollars a month. That's where people miss the boat.

I hear people so often they say, "Oh that software is so expensive." They're starting out and they're like, "I can't get the better property management accounting solution because it's hundreds of dollars a month." I'm like, "Are you kidding?" Your first team member is going to be thousands of dollars a month. Start with the solution you can live with forever because it's gonna be painful to switch. I wanted to point that out.

Asif: Absolutely. What you were mentioning is key. People don't realize that payroll is expensive. It's one of the largest expense items out there. Doing it manually and not looking at a software solution because you think, "Oh. This upfront cost might be too much," you're not realizing how much you're spending in paying someone to do that manual because the work has to get done. It's not that you're not reaching out to these individuals. It's not that you're not following-up if somebody’s doing this and you're not realizing the cost. The other thing that's also important to think about is the prospect experience. Most prospects that we've looked at are scheduling during weeknights or weekends.

Jason: Right. That's when they're not working.

Asif: Exactly. How are you able to respond to them? I just read a stat somewhere that said when most prospects are looking at homes, they're not only looking at your listings. They're looking at multiple listings in that area. If they don't get a response within a few minutes, a few hours, or a few days, and you don't get back to them, they're going to move on to the next one. They're not waiting for somebody in your office to respond back to them.

That's what's ShowingHero does. With our tenant portal, we create a richer experience. The moment that somebody is interested in a property, they get information about the property that the property management company puts out. There's the picture, the details, what schools are nearby, what's the walk score. What are the important factors that allow me to make a decision about this property and then be able to have a response to instantly say, "Hey, this is when I can schedule a showing and that am I qualified?" The pre-screening also allows us to gather more information and that creates a richer experience on both ends. Making sure that the prospect feels that they're getting responded to and that allows them to hopefully sign that lease and sign on the dotted line quicker.

Jason: You mentioned experience and you mentioned the service level that people expect. The customer experience is what I'm talking about. You get two camps of property managers. You get some that fear automation. They're like, "Oh. I can never use this AI tool or I can never use this automation because you're cutting out people." They pride themselves. It's like this badge of honor that they wear on their shirt sleeve that they're so personal. They do everything themselves. They think that that means they're providing a higher level of service.

"Oh well, I'm going to deal with every tenant directly. I want to see them, know them, taste them, and smell them. I'm doing the best thing for my owners. I'm so connected." They wear this badge of honor. It's not scalable. There's this myth that that means it's better that they're able to provide better experience.

Asif: It's not consistent. Automation doesn't take away the personal touch right. ShowingHero allows you to customize everything. I'm going to let Zee talk about how it helped his company grow with that because that was an issue that him and I discussed in detail and saying, "Are we taking away the human touch?"

Both of us thought that automation doesn't take it. It allows you to standardize and make that process simpler and more efficient. You're not going to know how your agent goes and respond to every message and email. You can't control that. You can create culture, obviously, and that takes time. But what about if I can be able to put that in an email or in a message or in my branding that then gets the same process goes out to every prospect every time?

Jason: [...]. I know that every renter that's rented at least a handful of times or even maybe once has had a bad experience in renting. They've had difficulties with showings. They've had people not calling them back. They've had difficulties and maintenance. They've all had bad experiences.

When I moved to a new area and I asked around, it's pretty obvious when you ask people. They know which management companies are good and bad. They talk about them. I don't think people realize that the tenants are screening management companies as well. A lot of them will look for a good management company because they dealt directly with an owner that was terrible, wasn't attentive, was busy working, not available, wasn't following laws, wasn't on the up-and-up on things, or was shady.

A good management company provide consistency. They follow the law. They do things in a timely fashion if they're healthy. They have good a good service experience. I know from my own experience, I appreciated not having to talk to a person in order to get things done that I wanted to do. I just wanted it done. I wanted it quick. I wanted to get in and see the property quickly. I wanted to get maintenance requests done quickly. I didn't need to talk to somebody, do all the niceties, and go through these. I just wanted stuff taken care of.

Sometimes we may focus a little bit too much on customer experience when really the experience they want is just to get [...] done fast. That's it. Get it done and let me get on with my day. "I don't need a friend right now. I need my toilet fixed. I need to see this probably because I need to find a place."

Zee: Jason, I especially agree with that because we have multiple things happening at the same time. One of the big items is if you can exaggerate something. Many people who wear this badge of honor are saying that we care about customer service. I fully agree. I don't call myself a property management company. ShowingHero doesn't call itself a tech company. We call ourselves a customer service company. It's where the customer service is required.

I'm not going to call you, Jason, and say, "Hey. I'm so sorry about your toilet not working. This is so upsetting. You want to talk about it?" No. That's not when you need a call. When you need a call is when you're frustrated. When the property owner is saying, "Hey, listen. I need to replace my sub-zero fridge. That's going to cost me $13,000. Can you guys give me a good option? Tell me something that's important." Not when it's $200, not when we need to schedule a showing. When you're trying to schedule a showing you want to automate that. Then you can focus on the things that really matter.

Customer service is where when it matters. That's what ShowingHero is allowing you to do. Just like you had mentioned, you want to scale. One thing that I got lucky (and I say this very many times) is that I was fortunate. I was able to hear from people like you, Jason, who said, "Zee, don't work in your business, work on it." That made a really big difference because at that time I was a fresh graduate. I just got out of school and I said, "I'm going to start a business."

I did really well in school and I was like, "You know what? I'm gonna try and listen to people because I know nothing about property management." I didn't come in with any of my old ways of doing things. I was like, "I just need a try." From day one.

I got to hear people like you, Jason, who said, "Listen, skill. Focus on growth. Don't focus on saving a few dollars by going and doing showings. One of the first things I did when nobody was doing it was I got epayments. I got esignatures for leasing. Many prospects would be confused and then they would call in. We would get reviews that, "Last time I signed a lease, I had to meet the person there, and we were there for three hours. This time it took 30 seconds." Now, esignatures are commonplace. Everyone is doing it.

But the guy who wears that badge that says, "Hey, listen. You know I want customer service. I want to sit there and explain the lease." No, that's not what you need. You need to be able to answer the questions that they have. Figure it out. Get the maintenance done in a timely manner. That's what's showing here does.

What we have done is also with cost. We've made it very customizable. One thing our clients do is they're saying that, “Hey. All the automation really helps us because then when we go to a showing we can focus and say, ‘Hey, which one?’ We have open houses. The prospect is going to go with it. We're going to get multiple prospects coined for one showing.” If you have six or seven people at the same time, you want to pick who is the correct person. That's where customer service comes in. I feel like that's where you should spend time.

Jason: Going back to my earlier question (because everybody listening is wondering), how does this compare or how is it different than Tenant Turner, ShowMojo, or Rently? These are the three tools that have been in the marketplace for a while. A lot of people are using it. I've heard the most about those. What do you feel is different about ShowingHero?

Asif: Zee, feel free to jump in. One of the things that I feel that we have, that is the most unique is building on our founders experience and those on our board. Zee, we also have Sean, who's also on the board, bring over almost two decades of property management experience.

Both of them have been very successful. Zee have been able to scale from where we were. I was in the beginning a few doors to 1000–1500 plus doors. I went in as part of the largest franchisee and has been able to establish himself. To be able to use that knowledge and expertise, we can all appreciate that that value is innumerable.

Using his experience allows us to understand the pain points for scalability. That's one of the leverages. Because of his network, we've been able to look at different integrations. We've been able to look at different features that we've launched and to really figure out what's the next trend. Luckily (or unluckily) for him, we also do a lot of testing on his property management company. We're like," Hey. We have this view feature. Let's push it out to him."

Jason: Zee's the guinea pig.

Zee: Yeah. In this scenario, it's a happy guinea pig because these are things that many people will come up to us and say, "Hey, we need to do this. Is this something that you guys can do?" We're looking at it and we say, "That sounds amazing." We can vet a proposal much faster because I'm looking and I'm like, "That makes perfect sense. I've dealt with that." Property managers deal with that every day. We're not fixing things. It's not a novelty solution. When we look at a problem, we're looking at it from the property manager’s eyes.

Many of our clients say that they appreciate the fact that we're a property management software that's built by property managers. We feel their pain. We understand their pain fully. I have been in the trenches (I'm still in the trenches). It makes a really big difference. One of the things that we have is the fact that we try to build a system that's customizable. We have vendor portals. We have very many features, Jason. A lot of our customers are ecstatic about the fact that we're feature-rich, but we're agile. We're an agile software which means that we can move quickly.

One of the things that I thought was a major disadvantage for us is it's obviously an advantage also but we were the new shiny product out there. How can people trust it if they have no one else that has tried it. That's where we got a little lucky. We got a little fortunate because my network of people were like, "Zee, you know what? If you've built something, we're happy to see what it's about."

Sean Kingman said, "Hey. Let's try this," and that's how it caught on fire. We just started. We're a 2017-2018 product. We've only been around for a very short time. The reason why we're many times being added to conversations is because our customers see it as client success is very important to us and we know property management. That's a very big differentiator. When it comes to features, Asif could talk for like six hours. Jason, you might get a little bored. You might think some of these things are really cool but six hours, I don't think we have.

Jason: Maybe we'll get into a few features that Asif thinks are really cool. Before we do that, I just want to touch on what you said that there's fundamentally the intention from the ground up of what a company is involved in significantly changes all of the outcomes and the product that they create. If people start a product because they think, "Hey. We're really nerdy and we're really cool tech people. Let's make something really nerdy and see if we can make some money off these property managers." That's very different than having an intention from the ground-up saying, "Hey, we need to solve this problem for ourselves. Let's see if we can do this towards scaling the business."

Your focus from the ground-up was, “How can we focus on scaling this? How can we lower operational costs? How can we systemize things and reduce time? How can we speed up the process? How can we focus on the customer service aspect so that we're getting a high level of positivity throughout the experience for the customer?” That's a very different focus than I'm just focusing on being really tech-savvy and making something really nerdy and cool, and throwing a bunch of features at it. The whole goal to grow in scale is significant.

Just like in DoorGrow, our intention, our fundamental mission (like client-centric mission statement) is that we want to change and transform this industry, and have an impact. We get to do that through hundreds of clients that we have and create that ripple effect. I really do believe that good property management can change the world.

You can have a significant impact on hundreds of thousands of families lives, home, money, property, and investments. This is fundamental to your owners and the tenants lives. That drives our mission and our vision, and we want to have a real impact with our clients. We've done things that, probably from a business standpoint, makes sense for us but it was towards our vision and our purpose. It's not always about the bottom line or about the dollar.

I'm sure with you guys, you've made little changes and little differences between what you do. Maybe some of the others isn't on squeezing a dollar out of a person or just implementing some cool piece of technology. It's just like driving down the road. It's the little adjustments that you make to the steering wheel. You end up in a very different place. You stay on the road. But if the steering was just slightly off from the very beginning and you don't adjust it or if you're flying an airplane, you will end up in a very different place. You'll be off the road. You'll be in a different city if you're flying. It's the little things that end up making a big difference especially later on down the road.

Vision and purpose is what keeps a business in alignment and keeps it moving towards benefiting the consumer and benefiting the target audience that you want to serve. You are your own target audience which is interesting.

Asif: That really does help. I was just going to add. Zee and I both agree with you on this point. one of the most important things that I've learned in this journey is to listen. To listen and understand.

Zee and I had a vision and said, "Okay, look. These are the problems that we're facing. Let's understand and how do we solve them." We've solved a solution and I said, "Look, I want to make sure that customer service is really important to me." Perhaps, it's a millennial thing. I want to get something, get it done fast, and I want to be treated well while doing it.

For Zee, it was customizations that were really important. He said, "Look. I need this but I know that someone in my network has a different profile and might not want this. I want to customize this for myself." Even though we have both of those pillars to guide us, we listen to each of our clients to understand, "What is it that you need?"

While we're driving to this destination in the car, for example, are we checking to make sure that we're headed towards that way? Are we checking our blind spots? Are we checking our biases to understand where that is? Then also, looking ahead 5-10 years, what are the integrations and technologies that we want to start implementing today to make sure that we collectively push property management to the next level?

Whether that's looking at virtual reality, whether that's looking at AI, looking at learning, looking at voice, what are these tools that we can start leveraging and using to help push property management to the next level while also understanding the realities of today? And then learning from the best practices. That's both from Zee and then from our clients. That's where that mixture has to happen and that's where that perfect blend is.

Jason: You also said you have two camps when it comes to software creation. You have those that are more of the camp of, "We're going to create things the best way and everybody else needs to do it our way. Our way is the way they need to fit their business into our model or we're just not a fit for you." Then you've got, "We're going to allow this to be flexible for their business and listen to our consumers and we're going to make adjustments for this."

I'm not saying either one is better than the other. They're just different. Somebody may create the ultimate solution and somebody may create something. It sounds like your focus is on customization. It's something that can be adapted to their business model. Can you explain some of the differences between some of your customers that might show up in your software, feature-wise?

Zee: One of the things that I could be able to say is just like you said. We have this idea of saying that we have a product it's going to help you in many ways. But we want to customize it. People run their businesses differently. We're still going to provide best practices.

We have our client success team. We have our senior consultants who are saying, "Here's how many of our customers are doing this but here are options." When we're doing customer check-ins our customers are like, "I'm thinking about doing something like this. How can you help me?"

I'll give you an example of a feature that really differentiates us but it makes us proud. I'll tell you this that many times our customers are saying, "You're giving me a lot of good data." Once you have over 300 listings, 300 properties under your portfolio, you need data to run your business, so getting a lot of data. But sometimes it's not actionable data. You want to say, "Okay. Yes, cool. I'm getting a lot of showings. I'm getting a lot of leads."

What we've started doing is because our customer came up to us, we did a beta across around 30 different customers, and said, "Is this something that you guys care for?" We were looking at and we said this is something important and it's simply performance alerts. Something that comes in, gives you actionable data, and says, "Don't tell me how many showings I have. Tell me how many properties are not getting showings."

"Instead of me going through 70 of my active listings, tell me what's actionable data." They tell me, "Here's where my problems are. This is a list of problems."

You can ask that you receive this performance alerts on a weekly basis, on a daily basis, on a monthly basis. You're getting this information that says, "Here are all your listings that have less than X number of photos. Here are all your properties that have had less than five showings." This is such simple stuff and we looked at it and we're like, "This is a no-brainer but this helps a company."

Now, we get reviews. We get thank you emails. Asif was just showing me a thank you email yesterday. He was like, "This is a customer saying that this has made their life easy because the leasing manager in the office says, “Now I don't have to go in and look for the needle in the haystack. You guys are making the needle have a halo all around it."

Jason: Yeah. It's helping them see gaps. It's helping them see blind spots in these properties that they're leasing because the more properties you have, the more common those blind spots and leaks probably occur. "Oh, no. We didn't get enough photos on this one." "These small handful of properties are not renting very quickly over in this market." These challenges. It helps you make different business decisions. You may decide not to take on properties in a certain geographic area. They're just not leasing or whatever.

Zee: Actionable insight is very important. It helps you run your business the correct way. When we're looking at something like the number of leads, yeah the number of leads are great. On average, our customers receive around 2700 leads on a monthly basis. It just might be something that you know and it's very common, but many small customers don't know this. They don't know how many leads they receive on it together because they contact the 15 leads they receive during the day. But how about the leads that came in on the weekends? How about the leads that came in via voicemail? Or missed calls? 2700 leads is a lot of leads.

The problem is that even though you're getting 2700 leads, where's the actionable insight? How do I know which property is not getting the leads? I don't need to work on all the properties and getting a lot of leads. I want to know which property I should be focusing on. That's where ShowingHero comes in.

We have a tenant portal which makes a very big difference because like Asif and you were both talking about, you want a rich experience for the customer. We want to go get prospects to move through the lead pipeline faster and make it easy for them to do this. At the same time, you don't want to have too much work for your leasing staff, calling, making phone calls, asking.

We have the prospect scheduling your showing, going and seeing the property within an hour of scheduling the showing, of submitting a lead on Zillow. That's how quick our turnaround can be. They can just go to the property, validate themselves, securely validate themselves. They're not sending a picture of themselves. They're going through a validation process. This is something that our customers find very important. They're like, "Listen. I don't want to just send pictures. I don't want to receive pictures. How do I know whose picture I received? How is that going to help me?" That's one more step.

For us, what we're doing is we're going through the validation process. The prospect goes to see the property and once they're done with the showing we're going through more validation to go and say, "Did the person leave?"

If everything is working, you're good. If the person doesn't confirm that they have left the property, we inform someone. The most important thing for a large company is to provide actionable data, actionable insight, so that people can move when they need to move. Otherwise, they can focus on other things. That's something that you know helps our clients and is our mantra for us.

Jason: Instead of people having to dig and react—they're always having to go to the data and find, they have to question, ask things, and figure it out, then they're gonna react to these things—your tool will say, “This needs to be dealt with. Somebody checked in this property. They never checked out somebody should go figure this out.” It's letting them know actionable things that they need to be doing instead of expecting the leasing manager to just dig, dig, dig, dig, dig.

Asif: Right. There is data that you can pull and then there's data that's being pushed out. To be honest, we're continuously working on that. It's an ongoing journey for us in being able to understand which data is important, when should it be sent out, how much is too much data, and which one is the most valuable.

As Zee mentioned, 2,700 leads means nothing unless you put it into context. How many properties? Where are these leads coming from? How many are qualified? How many are actually showing up to the property? How many are following through? What are my percentage over application over leads that came in? Is it coming from Zillow? Is it coming from voicemail? Is it coming through another third-party site? Data without context doesn't help. That's what Zee was trying to infer to is providing those actionable items in a context that's valuable to the end-user.

Jason: Perfect. Maybe we should start wrapping this up. Are there any features and frequently asked questions that clients ask that you want to showcase here while we have you about ShowingHero?

Asif: One of the things I do want to mention is that we have a special promotion going on where you can test out the software. I left to look at the marketing team a bit and there's like three or five active listings.

Probably, property management companies that are thinking, "I might not be able to do this," or "I'm not sure this is what it is." I understand that a switch or trying something new is difficult. I understand that there are a hundred questions that you have until we've made it where our first package is entirely free, where you get to test out the software, all of its features, and be able to see that power in being able to make sure that it's the right fit for you.

That's one of the things that we pride ourselves and saying, "We're going to make sure that ShowingHero works for you. If not, we'll try to make sure that we can try to get it there and figure out a solution." There is always a solution to be had. Let's have that conversation to figure it out. That's one thing I wanted your listeners to know that there is a free understanding of that which is low risk for them.

Also, keep in touch with ShowingHero. We're going to be launching some really, really, cool features and integrations, looking at some technology in the AI and the voice space, looking at more creative self solutions that are out there, and all of this should hopefully come to us by the end of this, or Q4, or early Q1 next year. We're continuously trying to grow and listen to the market, and hopefully, we'll be able to respond with some really great integrations.

Jason: It sounds really cool. Someday we'll have to have you come back and [...] what some of these things are.

Zee: We have some cool announcements coming up. I'm gonna add one thing to what Asif was saying. A big thing our customers are saying, customers who have signed up with us around 90 days in, we try to get some feedback and say, "How are things going? What's going on?" One thing that we're hearing from a lot of our customers is that we wish we had pulled the trigger a little earlier and that's why Asif came up with this idea of saying, "Listen. Let's make it a little easier. Let's make it a no-brainer for them."

If a customer is having a hard time making a decision because they don't know the value right away, let them try it. That's where our free tier is. We're 100% okay with, "Hey, come on in." I don't mean to brag, Jason, but I will tell you that as the new shiny product—I say this is pride, I'm going to put up the humble brags hashtag, but I will say this—one thing we're seeing is that when we're bringing these shiny objects out, setting a little bit of a trend in the industry where some of the other people you've mentioned are also adding those, we're really proud of the fact that competition is making the current product base.

I have to put my property management hat on every once in a while and I have to say, "Just when a new product comes around, that means my other offerings become better because they need to compete." I'll give you a very, very simple example, very, very simple stuff. Our pricing model is being copied across many. I don't want to say copied, but I want to say that I feel that people are noticing that property managers respond to our pricing model. Maybe we should offer a similar pricing model.

We have our property pages. We're showing extra data that may not be very easy to pull but we're pulling in the walk score, the bike score, the neighborhood score, neighborhood schools. This is all important information to prospects. Maybe it's not very easy to pull but we're doing it because we feel it's important.

Now, I have noticed that others are also trying to pull a little more information. Maybe not getting as much information as we provide, but it's cool and I like the fact that maybe we're making a little bit of an impact to the industry.

Jason: Perfect. It is fun and it's nice to be able to see the impact. At DoorGrow, I feel like we get to have an impact. I get to have it through the podcast, I get to have it indirectly through my clients, and I can see the industry changing in ways that I didn't expect, but it was our goal. I didn't expect it to happen this soon. The momentum is building and it's really exciting to see your vision come to life. I'll take a tiny bit of credit to that and you can, too, so humble brag for both of us.

Zee: Jason, I'll say this. One of your customers had come by us on in Nashville. They were just crazy about you. They're crazy about [...]. I just have to put this out there that you guys are providing information and help that is very beneficial. I would tell you guys, everyone listening is probably already a customer of yours, but when they're not, they should start talking to you very soon.

Jason: I appreciate that a lot. We have thousands of listeners. I doubt that they're all customers. We have hundreds of customers but 1000. If you're listening, listen to Zee and come talk to me.

Zee: Talk to Jason.

Jason: I love it. Alright. I appreciate you plugging my business and coming on the show. Anyway, it sounds really cool you guys are doing. I resonate with your your ideology and your philosophy behind what you're doing. I'm excited to hear feedback from some of my customers and listeners on your tool. You people can check it out for free, which is bold of you guys.

If somebody has something they can say to their leasing coordinator or to themselves, they can say, "Let's just try out one or two doors. Let’s try a handful of properties on this. Let's just see how it differs. Let's see how it works." That's where maybe you'll start to see some brilliance and maybe get really excited about working with ShowingHero. I look forward to hearing some feedback.

Those of you who are you listening, make sure you're inside the DoorGrow Club Facebook group, our community for the podcast. You get to by going to doorgrowclub.com. People post really real and raw feedback in there about different services and tools. I'd love to hear it. Cool. I appreciate you guys coming on the show. How can people get in touch with ShowingHero and try this out?

Asif: We have a demo page that you can just request a demo out there and then I can share my information to you as well. They can get in touch with me directly in that way through our contact page. What I'm showing here, there's a couple of ways that you can get in touch with us. You can get through our chat box, emailing us, just checking out our website. There's a couple of mediums that you can look at.

Jason: And the website is showinghero.com?

Asif: Yup.

Jason: All right, real simple. Everybody check out showinghero.com. Asif and Zee, I appreciate you guys coming on the DoorGrow Show and contributing to our property management community.

Zee: Thank you for having us.

Asif: Thanks for the chat, appreciate it.

Jason: All right, we'll let you guys go.

There you go. Check out showinghero.com. If you guys are interested in growing your business, if you feel like you are doing it all on your own as an entrepreneur, you feel like you don't have support, you feel like nobody's in your corner, who's in your corner? Sometimes it's not even our spouse. Who's in your corner? Who do you feel is challenging you and helping you level up in what you're doing?

If you feel like you want some support like that, you want to be part of something, you are aligned with our vision of changing and transforming this industry, then connect with DoorGrow. Reach out. We would love to help you see some of the blind spots that may exist in your sales pipeline.

Our vision and purpose at DoorGrow, what we really do is we help align your business towards warm lead generation. We help align your business towards greater trust by shoring up the trust leaks that exist in your front end of your business, the sales pipeline. Because trust is what closes deals. Trust is what gets you contracts. People aren't looking to buy property management. What they buy is safety and certainty. What they're buying is trust.

We can help you showcase trust throughout your sales pipeline and we can eliminate the leaks that scare them off, or that create a lack of trust, or create less trust than maybe one of your competitors, then we can facilitate you growing and adding more doors without even changing your lead sources a lot of times.

Reach out to us. We would love to see if we could help you out show you some of the leaks that may exist in your business. If you reach out, we'll send you access to a 1 hour and 45 minute training called DoorGrow Secrets that will help you see the gaps and the problems that exist in your business. You can to that by going to doorgrow.com/opt-in. That will take you to a page, it gives you a bunch of case studies, testimonials, and it will allow you to get access to that training. Maybe you'll be a client of ours if you get really excited about what we have to offer.

Hopefully we'll be talking soon. Until next time, everybody. To our mutual growth. Bye, everyone.

You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com.

Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. At DoorGrow, we solve your biggest challenge getting deals and growing your business. Find out more at doorgrow.com.

Find any show notes or links from today’s episode on our blog at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow hacking your business and your life.

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Dec 24, 2019

Entrepreneurs dream about starting their own business, but they can’t afford it. How can they reach their financial goals and objectives to fund and grow their business? Most of them borrow money from their friends, parents, and/or credit cards.

Today, I am talking to Bruce Mack of Platinum Trust Group. Bruce is an avid real estate investor and licensed financial advisor. He shares seven options to fund your business and take it to the next level.

You’ll Learn...

[03:54] Option 1: Revolving Lines of Credit Program is easy to qualify for with 700+ FICO score and more than one open lines of credit; no business plan, collateral needed.

[08:55] Option 2: Installment-based Lending Platform features 25 lenders offering $1,000 to $50,000 with lower FICO score, but provable income.

[12:25] Option 3: Business Directed Retirement Account (BDRA) is rollable IRA or 401(k) where funds from previous employers are accessible for specific transactions.

[18:28] Option 4: Transactional Funding for A2B, B2C transactions, such as funds for wholesale flips.

[20:07] Option 5: Platinum Trust Group/Division offers bulletproof asset protection and ability to save passive income money to repurpose.

[24:48] Option 6: Private and Hard Money Solutions with low annual percentage rates (APRs) and 1-2 points to cash out rental property income to deploy on new projects.

[26:42] Option 7: Plug-and-Play Scenario is relationship-oriented opportunity to connect and network with partners and sponsors.

[29:17] Where to start? Typically, it takes about $75,000 to get your business started.

[32:56] Funding Mindset: If you don’t want to go into debt to do anything, it may hold you back from growing your business and generating revenue.

[35:35] Constant Lawsuits: Property managers/management companies that aren’t real estate investors are in high-risk business.

Tweetables

Donuts to Dollars: Entrepreneurs start businesses thanks to friends, family, and credit cards.

Plug-and-Play Option: You never know, who you know. Get your project going.

You’re in the wrong business, if you don’t want to go into debt to grow your business and generate revenue.

Protect your assets! Property managers/management companies that aren’t real estate investors face constant lawsuits.

Resources

Platinum Trust Group

Platinum Financing Group

Real Estate Investor Association (REIA)

DGS 109: Scaling Operations for Property Managers with Tallyfy 0

Transcript

Jason: Welcome to DoorGrow Hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others impact lives and you are interested in growing your business and life and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunity, daily variety, unique challenges and freedom that property management brings. Many in real estate think you're crazy for doing it, you think they're crazy for not, because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships and the residual income.

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.

Today's guest, who I'm hanging out with, is Bruce Mack of Platinum Trust Group. Bruce, welcome to the show.

Bruce: Thank you so much. I really appreciate it and you definitely are unbelievable at your opening.

Jason: Thank you. It's built around all the challenges that we've heard in the industry and what our client-centric mission is as a company. I wanted to fold all that into our intro and I appreciate you giving us some positive feedback on it. Bruce, I'm really interested in getting into this.

Today's topic is seven options to fund your business. This is a common challenge of people not being able to afford to do work with us, being able to afford to do the things they need to do to grow their business. This is a common challenge. There's a lot of entrepreneurs that are just trying to operate just paycheck to paycheck.

In order to get ahead and grow the business, they need to find some funding, or get some money, or figure out how to make it work, or save something in order to make that work. Before we get into that, could you give everybody a bit of a background? Let's qualify you, help them understand how you got into what you're doing? Tell us, who is Bruce?

Bruce: Well, in a couple of sentences or at least a short paragraph, I am an avid real estate investor, have been in a three-year period of time. I was able to buy rehab and flipped out over 160 properties. I've been involved with over $92 million worth of real estate transactions, SFR’s, as well as commercial. I'm a licensed financial advisor, prior owner and operator of a credit repair company that was also a licensed and bonded.

I've been around the block. I love working with real estate investors. I speak to them all over the world, as well as nationally and have been at countless events helping folks just like the folks that are on this podcast, to be able to reach their financial goals and objectives, through getting them the rudimentary financing that they need so they can take their business to the next level.

Jason: Okay, great. Let's get into the seven options. I guess we're starting with number one.

Bruce: Okay, let's start with number one. One of our premiere programs that we use on a daily basis is what I call our revolving lines of credit program. Now, the nice thing is with this particular program, is that there are a lot of no's, but these are no’s that you want to hear, not no’s that you don't want to hear.

Bruce: One of the no’s is that you don't have to have a business plan. Another no is that you don't have to have collateral pledged to be able to qualify for this, so if you don't have any collateral, i.e. properties, what have you, or other hard assets, there are no collateral pledges. Another no is that you don't have to have an income verification because it's a stated program. Without a business plan, without having a stated income, without having to go through a bunch of hoops, this makes it an easy qualify program.

The key qualifiers are having a FICO score, ideally north of 700 or 700 when we put you through the program, and having more than one (ideally) open lines of credit with a credit card that would be at least $6000, $7000, $7500 worth of credit limit, and at the time that we put you through, you're ideally at 30% or lower on your utilization.

Let's just say you have a $10,000 credit card. Let's say you have a $7000 balance currently, that would be at %70 utilization. What I'm saying is that we’d like to see that that $10,000 credit card has no more than %30 utilization or that you're not currently carrying more than a $30,000 balance. Now, if you are, because there's too much month, not enough money and therefore you have higher balances, we do have a solution. We do have another funding division that will likely take a look at those balances and work with you to actually pay them down for you, so that therefore your scores will skyrocket to where we need them to be, your utilization ratios will plummet to where we need them to be, so that we get the maximum results.

The maximum results is our average client on a first round funding gets $75,000 worth of revolving lines of credit as much as $150,000 on a first round fund. When done properly and if we have a client that comes to us with longevity of accounts, no derogatory, so on and so forth, of course, that's going to get us all a better net result for the client on the back-end. Again these lines of credit are all at 0% APR for up to 21 months.

Jason: Okay, but the cruz behind this is that they've got to have good credit in place in order to do this one.

Bruce: Well, there's a couple of other if’s, and’s, and but’s, so let's talk about them briefly. Number one, because of that high utilization, we have taken people with scores as low as 620 and just by paying down those balances, they've shot their scores up within a several week period of time to well over 700 and then we can put them through. Today's present credit score may qualify you even if you're not knocking on the 700 door or higher, we need to do a consultation and see if the net effect of paying down those cards is going to get you to where we need you to be.

Secondarily, we do have a secondary program, in as much as if the client can't qualify, but they have what we call a credit partner—maybe it's a partner in their business, maybe it's a relative, a friend—we can use a credit partner to get the same results, thus being able to put them through the program and that could be a win-win. There's a number of different ways we can literally skin the cat to get to the desired result, which is to get the client funded on that program.

Jason: All right. You’re going to help them the pay down process, they can use a credit partner, there's a couple of options there. That's number one, the revolving lines of credit program.

Bruce: Number two, one of our other core programs is we have 25 lenders. We have a platform for the 25 lenders and they are offering on the platform anywhere from $1000 to $50,000. We can stack those offers, so if you were to get two $50,000 offers, obviously you pony those up and parlay them into $100,000. Now, we can take more credit-challenged folks. We have gotten people some funding with FICO’s as low as 580. The key here is that there needs to be provable income, where the income on the revolving lines of credit is stated. These will need to be proved up through either showing the last couple of pay stubs and/or from their doing account validation by showing bank statements, 1099s, a year's tax return or what have you.

Jason: Okay.

Bruce: Very, very simple program, 12 questions asked and answered online, a soft pool with instantaneous pre-approvals and funding within usually a week or a week-and-a-half. This is a secondary program that can be used. We use it all the time and it's very, very effective.

Jason: With these 25 lenders, these would be people like maybe Fundbox and some of the services out there. Would it be like those kinds of companies?

Bruce: Could be, yes. We have our own lender pool that we work with. The nice thing is, there are a number of lenders that you can apply to on the net today, tomorrow, yesterday, what have you, but that's problematic. Every time you apply, you're going to be getting an inquiry. Every inquiry's going to be anywhere from two to several points and it starts to drag down your profile. Worse than that, other creditors that your applying with, see than you’ve been applying.

The way we do it is when you access our platform with one soft inquiry, so it doesn't even show on your report, you're getting one or multiple preapprovals from multiple lenders at multiple options in terms of length anywhere from 12 months out to as long as 60 months or five years. This is an ideal way where you have no FICO hit, no negatives, only positives and you can get the pre approvals before you even press the accept button and go into what we call the final underwriting or the hard underwriting.

Jason: Got it. Anything else to know about this second option? What would you call this second option? You're 25 lenders platform or?

Bruce: Our 25 letters platform or our installment-based lending platform.

Jason: Got it, installment-based. All right, so we’re on the number three now.

Bruce: Number three. Let's talk about what we call our BDRA. Our BDRA stands for Business Directed Retirement Account. Now, many of the people that are on the podcast have a rollable IRA or 401(k). Maybe, they're even working and are aware that they have a roll-able IRA or 401(k) amount. Let's just say that you're currently working at an employer. You may have $100,000 there and your employers told you, “Well, you can't touch that, it's not rollable.” They’re may be half correct, because prior to coming to the existing employer, you worked at another employer. When you're at that other employer, guess what? You had a $50,000 IRA, which you’ve been rolled over to your present employer.

Well, I'm here to tell you some really great news. You can do what's called a carve-out, so you can take those moneys and move them from your present employer, because those were moneys that came from a previous employer and you can automatically put them into what we call our BDRA. That BDRA is a wonderful opportunity for you to be able to access those funds to do what you want and what you want with them.

Jason: That’s called what again?

Bruce: Business Directed Retirement Account.

Jason: Okay, got it.

Bruce: Now, it's not a very, very different than a self-directed normal account. Some self-directed retirement accounts have the ability to give you checkbook capability, which is great. The BDRA coincidentally also does, but many of the self-directed accounts are accounts that once you moved on from your old employer, you've moved them into a self-directed environment so that you can tell your money what you want it to do. The problem with the traditional IRA or 401(k) in a self-directed environment (which many administrators that are out there and offer these types of accounts) is that you cannot use these but for very specific types of transactions.

Let's just take a typical real estate transaction, a house costs $200,000, you have $100,000 in the self-directed retirement account. You need to come up with $100,000. Now, unfortunately, you cannot obligate a self-directed retirement account, a traditional type, not ours, but a traditional type and you cannot take on a recourse loan, because one of the exemptions is you cannot sign and obligate your IRA or your 401(k) to an external obligation.

If you can't do that whole deal inside your IRA, you're pooched. You can't do the deal. Now, there is the possibility of taking on what's called a non recourse loan where you wouldn't sign. However, there are very few and far between. They never go more than 50% of LTV and they're usually a couple of points higher for all the right reasons. You’re only having a collateralized value of the loan. With a BDRA, I've got great news, you can take recourse loans on and it's not a violation of the BDRA precepts.

Secondarily, when you have a normal IRA or 401(k), unfortunately, you're exempt from being able to do what we call inter familiar transactions because they're called a prohibited transaction. Meaning, father-sister, mother-brother, siblings what have you, you plain and simple are not allowed to invest with them because it's prohibited. That is not the case with the self-directed that we have in the BDRA environment.

Third, you can put up to $53,000 of your annual salary into this tax deferred vehicle where you cannot with a traditional IRA or 401(k) that’s self-directed. Fourth, you can use the money for any business purpose. Now, you mentioned earlier that you've got coaching programs sometimes that are $10, $20, $30, $40, $50 whatever the amount is, it makes no difference, but the flexibility of the BDRA is a beautiful thing because BDRA funds can be used for any business purpose whatsoever.

When you talk about a traditional IRA or 401(k), they're very finite, they're very linear, real estate being one of them, stocks and bonds being another, and there's a couple of others, and pretty much after that, you're out of luck. The flexibility that the BDRA brings to the table is phenomenal, and it is a great way to resource funds for enhancing your real estate business not only from the buying of the doors perspective, but from doing rehabs, for potentially using it for marketing money, to expand your net. There's many, many different ways that these moneys can be used that are all in conformity.

Jason: Okay. Alright, BDRA is number three. Number four?

Bruce: We have transactional funding. With our transactional funding, I'm sure a number of folks that are on this podcast are engaged with wholesale flips, where you're doing an A to B and B to C transaction. Well, we have transactional funding. We have $1 million on the sidelines at all time. You let us know, give us a couple of days notice. I mean, give us more notice than that, but within a couple of days, we can get the funds prepared, move them electronically to your escrow so that you can close and not have to be out of pocket if you're the wholesaler, and get the job done.

The fee cost for that is the most reasonable that I've seen in the industry. The cost for funds is only 1.75% and a $495 transaction fee or our processing fee. Call it what you will. That’s another win-win strategy if you're a wholesaler, and you don't have the funds, and you're going to a traditional escrow. This is a perfect, perfect way to make everything come together so that you can get your property sold to that new buyer.

Jason: Is that everything about transactional funding?

Bruce: That's everything about transactional funding. Short and sweet.

Jason: All right, let's look at number five.

Bruce: Let's talk about number five. Now this is an esoteric way of getting funding, but saving the dollar obviously gives you $1 as I put it, redeploy or repurpose and I'm sure we all agree with that, and saving tens of thousands of dollars or more starts to become very, very interesting, let’s tell you how.

On the other side of our business, we have our trust division. It's called platinum trust group. Platinum trust group is dedicated to bulletproof asset protection. I'll touch on that in a moment, but let me talk about the money aspect where you can redeploy. Real estate investors by the nature of who they are and what they're [...] are involved with two types in multiple streams of what we call passive income. The passive income that we're talking about would either be long or short term capital gains and/or lease and/or rental income. That is the sum and substance of what it's all about. One or the other.

With our proprietary trust which we have 58 copyrights on, we've had the trust for over 20 years, we have over 31,000 clients on this program. As a real estate investor, when the properties are sold or the rents are collected, money goes into the corpus of the trust. However, the good news is, you can use the trust for any trust-related activities which would be anything other than what we call food, fun, or fashion. Now you're doing all your business out of the trust.

Don't get me wrong. That doesn't mean you can't buy properties, you can't buy cars, that doesn't mean that you can't act in a fiduciary capacity as a trustee to do everything you would normally be doing on a daily basis. The good news is, that moneys, that long- and short-term capital gains which could be 20%, 30% depending, and/or the income from the lease and rental income, the fact that it goes into corpus and stays in the corpus, and that it’s deferred in perpetuity means you're not going to have the tax bill at the end of the year.

Now, we have many investors who have tax bills in the $50,000, $100,000, $200,000 a year and are paying quarterlies that are enough to choke a horse. We're able to defer up to 97% of that annual tax liability, including the quarterlies, and deferred out in perpetuity, which means in 21 years, after the last of the beneficiary heir’s deceased, i.e., 100, 200, 300 years from now, we now have a vehicle that nobody in your family tree is going to have the tax consequence and certainly not you, and now we've got all of this additional liquidity that we can be using for investment purposes and is a huge win for our real estate investors.

That's only one piece of the coin because the other side of that coin is the bulletproof asset protection, because you can never have a lien or judgment executed against you. It can't happen, let alone your properties because your properties are in the titanium vault of the trust. This is huge and this is a great, great income opportunity and/or savings opportunity for you. I think we're at number six or are we in number five?

Jason: We’re at number six.

Bruce: All right.

Jason: That was number five. Basically. we will call that your trust division.

Bruce: Okay, number six. We have a number of private money solutions and hard money solutions. Solutions that start as low as 4.9% on the APR and 1-2 points. Solutions for clients who have rental income properties and they want to do some cash out. We had even a blanket loan program which is available in 43 states. Again, if you've got properties, we have a solution for you to be able to access a ton of money that you are currently not able to access so that you can redeploy it on new projects. This could be huge for you by our hard end or private money funding.

Should you have ground-up projects that you're looking to get underway, these are other ways that we can access funds for you depending upon what the project looks like. There's just so many different machinations without knowing more. We would really need to sit and talk, but not only can we get you the blanket loans, not only can we get you the cash out refis, we can do multifamily, we can do SFRs, ground-up projects. It just depends on what it is that you're looking for.

Jason: Okay, great and that's number six.

Bruce: That’s number six.

Jason: Private and hard money lending solutions. Let's get into number seven.

Bruce: Number seven is really a relationship-oriented proposition. Because I lecture on a nationwide basis and know so many people, I am constantly sourcing and/or resourcing and putting folks together. I speak. I meet sponsors. Sponsors are always looking for people to act as general partners for with other people who are newer and/or what I would call green peas and vice-versa. I have green peas that are looking for sponsors. Just by nature, the fact that I love to network, love to help people out, and if people are looking for a connection, I'll give you an example.

Yesterday, I had a guy come to me in the Seattle area. He is looking to do a conversion. He’s got 93 apartments that he wants to build in one structure. He’s looking for general partners and money partners and he's got everything ready to go. He’s got the water. He’s got the utilities. He’s got all the zoning. He’s looking for money partners and he's also looking for some management help. Well, we have the perfect fit for him because we have people who are right up in the Seattle area because I've spoken recently up in the Seattle area to 800 people at one event. That’s an easy plug-and-play scenario.

Oftentimes, you just never know. I don't know where you're calling in from on a nationwide basis because I know you have callers all over the place. I'm California-centric but I travel. I was just in Boston speaking to 1000 people. You never know who you know and tell me about the situation, and if there's a possibility that we can help, we certainly can try and plug to good ends into one another so that you can make a whole and get your project going, so you can take it to the next level.

Jason: Perfect. Looking at all these different methods, let’s say I get a client that comes to me and they want to hire staff. They want us folks on marketing, maybe they want to do some coaching stuff with us, they need to get office space, these typical things to get their business going. Which channel would you push them towards first? What would be the best situation for them first?

Bruce: Well, if the need is an average of, say, $75,000 roughly, somewhere between $50,000-$150,000. I’ll kind of use that $100,000 spread. invariably, our revolving line of credit program is the sweet spot and we utilize that at promoter events all the time for that $20,000, that $30,000, $40,000 to get them off the home plate, to get them the coaching program that they need to get them also the initial marketing moneys that they need so that they can really start to get traction and move forward in the marketplace. It's very easy and they don't need to have any collateral. Again, it's a state of program. If the person fits the parameters, it's by far and away, the easiest, fastest, most effective, and cost-effective solution.

Jason: Now, what if they just wanted something smaller? They're just getting started, they're bootstrapping. Maybe they're looking for maybe $3000-$20,000, something in there. They just need to get some additional funds to get some things going in the business. Would the recommendation still be the same vehicle?

Bruce: Depending. Let's just say today the need is $3000-$20,000. Let's just say they've got $100,000 locked up at the old employer that they used to work for, General Dynamics, let's just say. They're taking that money and they're turning it in the stock market, they're getting a horrible return, and they want to take control of it. I would move all of that to self-directed environment and then parse out where you've got total control over it. Then, I would parse out whatever that amount is that you need to deploy for whatever business purpose. If they only needed $3000, $7000, or $10,000 of that $100,000, they get immediately deployed because they have total discretionary use over the funds once it's in their dominion.

Likewise, another one of our programs might be for them to engage with the 25 lender platform. In a request, only request $3000 or only request $10,000, if that's what it is they're looking for. That could be another way to go.

We really need to have a discussion. It's my best suggestion to the folks that are listening because sometimes during the course of discussion, we find a $3000, $7000, or $10,000, may not actually be the sum and substance of what you're looking for depending upon where you are, and where you want to go. Maybe it is. We will come up with based upon your credit what you bring to the table, what's going to be the most cost effective way to get you there.

Jason: Let's address the mindset of funding. I'm sure there's people listening and they want to bootstrap everything. They're thinking, "I don't want to go into debt to do anything." What would you say to that? Maybe that mindset is holding them back from being able to grow their businesses quickly and generate more revenue as fast.

Bruce: I don't mean to be pragmatic but I would say they might be thinking about being in the wrong business if they don't want to go into debt. I bought houses utilizing credit cards before. If you go to any REIA, anywhere in the United States—if you're not familiar with the term REIA, that's Real Estate Investors Association meeting—if you go to any Real Estate Investors Association meeting anywhere in the United States and you interview, take them out for coffee, talk to them after the meeting, what have you, you ask them how do they get the funds to buy some of their first properties, I can guarantee you, dollars to donuts, that they borrowed money from a friend, borrowed money from their parents, or borrowed money from their credit cards, to get their first property. Or a combination of all three coupled together to make it happen. They didn't have the money and their checking account. It was a little devoid or little depleted at that time.

Guys, this is truly a leverage play, and an arbitrage play, when you're borrowing money at X because you can make lie times X equally that new number which is the ability to compound on the amount of money that you're using to be able to get you that much bigger amount of money at the backend.

I'm a firm believer in making the right decisions and not getting these moneys for a C shed or man cave. Forget it, you don't [...] it. If that's your ultimate goal, that's not leverage. That's just sheer stupidity, a waste of time, and a waste of money. If you're looking to get these moneys to be able to deploy them in an efficacious way and to utilize them to gain the leverage to be able to get a much bigger payday down the road when you exercise your exit strategy, let's go. Let's make it happen. We're here to help and get you to your financial goal.

Jason: Plant some of these things. I know there's some property managers listening that are like, "I'm not a real estate investor." Some property managers that are running property management companies are not real estate investors. I think many of them are involved but they're thinking, "What about my business? Maybe I need funding for the business." I think the same principle applies. The idea that I want to point out is mindset-wise, I think a business is probably one of the most effective (if you do this well) investments you can invest in a period. Very few things give a return on an investment that a business can. I don't think even real estate, I think a lot of things cannot yield as high of a return as a business that is profitable, and highly effective.

If the investment is moving the business towards those things, I would imagine that it's going to far outplay a 401(k) or any other sort of investment. They might be throwing them dollars towards in the long run. An effective business can yield a huge return especially once they sell it. Or it can just be an ATM machine feeding them once they systemize the business and they step out of being involved in it.

If you're going to that, I think it's wise to say, make sure it's going towards the right thing. It's going to yield the ROI you're looking to get.

Bruce: May I ask a brief question?

Jason: Go ahead.

Bruce: About your audience. I just heard or maybe I misheard, I heard you keying in on property management, and property management companies. Is there a broad segment of your listenership that are in that space?

Jason: Yes. Most of the listeners listening are people that run property management companies. They manage properties for and on behalf of investors.

Bruce: Okay. Let me just say this about that. I'm going to go back to, I think, it was number six. It might've been number five but it was right in there. We talked and drilled down a little bit about our proprietary trust. Guys, I'm going to say it just like it is, you are in an uber high risk business. Property managers and property management companies, they play it simple, they get sued. Facts are one in three Americans get sued. Two in three, 66% of all surgeons get sued. Property managers, I don't know what the numbers are, but everytime I talk to a property management company, they're constantly getting sued.

Just recently, we put on several property management companies who have gotten the trust. Their prime motivating reason was to have the trust be the owner of the property management company so that they would not have liens or judgments that could be affixed to the company. Guys, this is something you definitely want to explore further. It's very important for you because of the high risk nature of the business that you're in.

Jason: Yeah. I agree. I have an asset protection attorney. I think it's a wise choice for everybody who has some asset protection struff going on with things in the trust and make sure the business is protected. Very cool.

We've got several people that I've spoken to even recently. They're like, "I don't have the funds to work with, Jason, but I want to work with you. We're trying to get money." Or they're trying to get their business started. Or they know there's some things they need to do and they can't just afford to do it. How can they get in touch with you? How can they reach out? What's the best way to connect with you and what you've got going on?

Bruce: If you're looking for funding, I'm going to give you a web address. That web address would be platinumfinancinggroup.com. There's a calendar on there. We will get you a complimentary consult. Please, we'll ask you, make sure that you've mentioned that you came from Jason. We always want to know where clients came from.

Jason: Mention DoorGrow and the DoorGrow Show.

Bruce: Please. Please, please, please. That'll get you the complimentary consultation now for financing. When Jason's got great programs which I've heard nothing but fabulous things about, that can be the genesis, give you the capital to be able to move your business forward, and get his programs.

Secondarily, another way to access the programs, as I've said, from the savings from the tax deferral, from the trust program, and/or talking about the trust as well as an asset protection vehicle. Because if you get wiped out, you're done. You know that. This is one way to ensure that you're not going to get wiped out. I would go to platinumtrustgroup.com. We have another calendar there.

The difference between the two, other than the information that you're going to find and the calendars that you're going to find is that the calendar times that you're going to get blocked out for are quite different. If you go to platinumtrustgroup.com, we're going to block you out for an hour. We can talk about trust. Likewise, we can also talk about funding should you have an interest in both.

If you strictly go to platinumfinancinggroup.com, you'll be directed to a calendar for 15 minute blockout. Just be aware of that. When you make the choices to where's the best entry point to get in touch with us.

Jason: If they're really looking at everything and they want to get the full kit, the best place to probably to go the platinumtrustgroup.com. You can also help them with the financing side of things as well.

Bruce: Absolutely.

Jason: Perfect. Bruce, it's been fabulous having you on the show. Thanks for taking us through all the different options. I wasn't aware that there were so many different options for funding. I appreciate all the info that you're able to share with us today.

Bruce: I certainly appreciate you're allowing me to come on your show. It's been a pleasure. I look forward to chatting with you guys. We'll get you taken care of. We'll get you the funding so that you can take your business to the next level and protected as well at the same time.

Jason: Fantastic. One thing I just thought off. A lot of our listeners run property management companies. They're all connected to investors. Do you have a sort of program or a relationship that you can make with these entrepreneurs that are working and dealing with lots of investors trying to get them into multiple properties and new properties?

Bruce: Absolutely. Not only that, we need to talk because we have an affiliate program. Give me a call, let's have that discussion. That's a whole other discussion and another income stream, potentially, for you. I'm glad you mentioned that, Jason. That was a great heads up.

Jason: Perfect. Bruce, it's great to connect and I will let you go.

Bruce: Thank you so much for the opportunity again. Have a great day, have a great weekend.

Jason: If you're a property management entrepreneur, who wants to grow your business, who wants to add doors, you're looking, you're feeling a little bit stuck, you're dealing with some of the typical challenges, you're trying to do SEO, pay-per-click, content marketing, and social media marketing, you're just not getting the ROI, you're not adding the doors you're wanting to. There might be something different. There might be some things that you're missing. You might have some leaks in your business that you can't see. Reach out to DoorGrow. We'll help you shore those leaks up. We'll help you get on a trajectory of growth. I will be honored to be able to coach you through that stuff. We can certainly help you redesign your website.

If you need to go and test your shiny new website or your old website, go to doorgrow.com/quiz. See if it's got some leaks there. You could be losing tens or hundreds of thousand dollars in future ROI every month depending on how many leads or deals you are missing out on because your website isn’t upgraded. I want you to have an A+. Talk to DoorGrow and let's see if we can help you get that taken care of.

Until next time, everybody. To our mutual growth. Bye everyone.

Download this Episode

Dec 17, 2019

Wouldn’t it be wonderful to sleep at night, knowing things are done right and no tasks are falling through the cracks? Unfortunately, many businesses don't have the tools, know-how, or means to document and scale their workflows.

Today, I am talking to Amit Kothari, co-founder and CEO of Tallyfy. Small- and medium-sized property management businesses use Tallyfy to easily scale operations and document their standard operating procedures (SOPs) to improve workflow and mapping processes.

You’ll Learn...

[03:29] Purpose of Tallyfy: Pain point that had to be fixed. Tool was built to help companies document, scale, and run processes.

[05:32] Process vs. Project: A process isn’t a process unless it repeats. A project is unique every time.

[05:50] Do you have processes? What are they? Document them in a structured form.

[06:10] Collaboration for Continuous Improvement: Who looks at the processes? How are they updated? What needs to be done beyond creating a static document?

[08:10] Forget Flowcharts: Too complicated and too big. Switch to simple checklists focusing on next step in the process for specific team members.

[15:38] What’s next for Tallyfy? Chat-based interactions and plug-in for Slack.

[16:48] Property managers can sign up for a free 14-day trial. Tenant/landlord screening, onboarding, eviction, and maintenance workflow templates are available.

[18:05] Suggest Improvement/Idea: Tallyfy prompts and incentivizes documenting, reading, and making changes to improve processes.

[23:54] One interruption can cost 18 minutes of money and productivity.

Tweetables

Tallyfy: Sleep at night, knowing things are done right and no tasks are falling through the cracks.

Customer Experience: Awesome for everyone, including tenants and property managers.

To reliably and scalably grow your company, you need processes, not projects.

Functional is fine, but easy, fun, and engaging Tallyfy app makes workflow even better.

Resources

Tallyfy

Process Street

Slack

DGS 108: Reporting Rental Payments to Credit Bureaus with CredHub 0

Transcript

Jason: Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.

DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not, because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income.

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

My guest today, I'm hanging out here with Amit of Tallyfy. Amit, welcome to the show.

Amit: It's great to be here. Thanks for having me, Jason.

Jason: Glad to have you. I'm going to share with the audience your intro here. Amit is the CEO of Tallyfy, a workflow software product that specializes in helping small- and medium-sized businesses scale their operations. Tallyfy enables anyone to document their process or SOP (standard operating procedures) and to launch/run it in a team of people while also being able to assign tasks to clients and people outside the company.

Amit founded Tallyfy after decades of experience and mapping processes as flowcharts and noticed that while everyone makes flowcharts, nobody actually follows them while they are working. Very true. Tallyfy is being used by various property management companies to run operations like on-boarding and off-boarding tenants and also handling complex, repeatable real estate sales processes. This sounds really cool, I had not yet heard of this. Our topic today is scaling operations for property managers. Amit, tell us how you got started with this, give us some background on you.

Amit: Yeah, sure. I'm British, first of all. I came to the US four or five years ago and I spent a while, basically, helping people improve workflows, mapping processes, things like that. It tended to be mid-sized companies, large companies. It turns out that many small companies don't really have the tools, or know-how, or the means to actually go and stop documenting and scaling all their workflows.

That's where I noticed the opportunity that what if the rest of us who were not large companies actually had a simple tool that let us go in and just document a process, scale it, run it, and basically sleep at night so that we know things are done right, none of the tasks are falling through the cracks, and the client experience, ultimately, is completely awesome for your tenants, for your clients, whatever you want. It was just that vision that it doesn't have to suck that much.

We founded Tallyfy five years ago and raised some funding from Silicon Valley so we went through a bunch of Silicon Valley accelerators, we're now based in St. Louis in Missouri and it's just growing crazy right now. It sounded like other people agreed with our vision that they want to document and scale their operations, too, so here we are. Now, we're still figuring things out but that's how we go here, that's a fairly simple story. There was a real pain, we had to fix it, so we built a product that fixed it.

Jason: Got it. Take us through how this is different than some of the other tools that might be on the market, what people are using. Let's get into the problem that exists which was mentioned in your intro, that you create these complicated processes, or maybe have none, or maybe it's just a Word doc, or you've got a flowchart, but people look at it once, maybe a few times when they first on-boarded, then they think they know it, and then they ignore it.

Amit: Let's start with the problem that's really the problem. The first problem is that you don't have any process whatsoever. That's not great. It's probably worse just sitting down for a minute and just saying, “What is it that I do? How do I do this thing? Does it vary a lot every time I do it?” because remember, a process isn’t a process unless it repeats, otherwise, it's just a project. A project is something that's just unique every time. To really grow your company reliably and scalably, what you need are processes, not projects.

The first step is, do you have processes and what are they? The problem is if you haven’t written them down, we're a great tool to begin to just start writing them down in a structured form. If you have a process which is either a Word document or a flowchart, say you have one and it looks like that, the problem is, again, like you said, who looks at it? How do you update it if you keep improving it? There are things like collaboration and so on which you need to do beyond just having a static document because the document is always changing.

For example, when I do a process, I might spot an idea like, “Hey, next time let's do it this way instead.” Now, if I don't remember that or put it down into my main process, when the next time comes around, it will be forgotten. There's this thing about documenting processes which is a problem, but there's also this problem around continuously improving and that's something that often people don’t do because once it's written, it just lies there like in a safe. It's like in a cabinet, it just sits there, dust gathers on top of it. and no one ever looks at it. Really, that's a wasted investment.

We needed you to do both, but now, here's where the problem gets really, really big. That stuff is a problem, that's great. If you're a property entrepreneur and you're on your own, you could start that way, but imagine you hired an intern, you went into business with another property entrepreneur, or you have a team of people who do things for you. Now, the problem compounds about tenfold because whatever's in your head has to be in a place, otherwise, someone else is not going to be able to read your mind, especially if they’re new.

It helps new employees see how you do things, which onboards them much faster. It makes sure that lots of people, as you hire more people and you grow or you partner with folks, they know how you do things successfully as well. The reason we don't like flowcharts is because they're just way too complicated. I've seen flowcharts that are so big that if you try to print them out, they would actually print on an A2 size paper. It's so big, it doesn't even fit on my screen right now.

Jason: I've seen some print out there of a property management flowchart processes and they had multiple sheets of paper and they taped them together.

Amit: I admire people who have the tenacity to document an amazing process like that. The trouble is are you really going to look at that seriously? If it doesn't fit on a picture frame, who's going to use it? Often, we found that just having like simple looking checklist-type things is a lot easier for people to follow. It works on phones because a lot of people are out there in the field. They're showing people houses or doing stuff like that, so it’s got to work on a phone or a tablet. A flowchart doesn't fit on a phone. It doesn't even fit on a piece of paper, so how is it going to fit on a phone?

Devices that are small require checklist and things like that. We were the first app initially that launched this. A bunch of other people came out, but we initially create the idea of conditional branching, so if-this-then-that. In other words, if the tenant is this kind of tenant, then show this task, otherwise, show this other task. You can automate all your decisions. too, which means that there's no guesswork that people are doing. It's just like, “Hey, here's a question, we hit the answer for the question,” and the next question pops up just like magic. It handles that real-time workflow for people who are bigger teams like 3 people, 5 people, and even 50 people. In fact, the more people that turn up, the more useful the app becomes.

Jason: Interesting. This is really popular right now in the property management industry, we've had Process Street on the show before, which sounds similar, there are some things that you guys have in common. What do you see is the difference between these two platforms or systems?

Amit: It's left up to whoever's listening to judge the difference there. We don't know how they work, we don't really know that much about them, to be honest. One thing we did start the company believing in and having real experience in is improving workflows and mapping workflows. I spent a decade in London just mapping workflows. That was my actual job, mapping workflows and this is not a get-rich-quick scheme. This is a pain I actually had for 10 years. I think having real experience in the area is probably a really beneficial thing if you're trying to build a tool for that. If you try to build a tool for property entrepreneurs but you've never been a property entrepreneur or a landlord, it's going to be really difficult. That's one thing the whole team has right now in the space.

Then, a real UX focus. I do think that functional is fine but an app that's like Slack—we love Slack because this is such an easy app to use and it's cool and it works—we love some of the UX pieces around making things easy and just making it fun. There are a lot of checklist apps, but they look really boring, so what things can we do that does make it engaging, fun to think about the design, the experience of somebody using the app. We’re thinking very hard about that and I'd like to think we're probably at the edge when it comes to really making that happen, making it an engaging experience, if you will.

Jason: One of the biggest challenges with software is adoption, getting people to use it. Me personally, I'm a visual guy, so if the software is ugly and gross, I don't want to use it. It's a thing for me because I'm going to be living in that software and working with that software, I want it to be aesthetically pleasing and intuitive. It's a big crux of user interface and user experience design and that’s something I pay attention to.

Amit: I'll give you one example of how it's different. We don't use checklists. In the actual user interface for Tallyfy, you won't see a checklist. You're probably wondering why like, “Does that make sense?” It does make sense because if you think about it, the first thing people see when they look at a checklist is a boring bunch of tasks that they're not going to think about, they're just going to mark them done even if they didn't do them. Seriously, I’m not kidding you, a lot of people just mark a task done even though they haven't done it.

Jason: Yeah, it happens a lot. Then you have to build in these weird checks and balances to make them prove that they've completed it, put in their names or put in details so that step that you’re just created.

Amit: Exactly. To answer your question what's different about our app, we've thought through these things because we've watched people do workflows for 10 years. One of the things we do is what we call a card. A card is a rectangular shaped thing and it invites collaboration. It's not just like, “Oh, I'll just mark stuff done,” but, “Maybe I have an idea to improve it. Maybe I need to chat to my friend, Jane, about something I don't understand about this task. Or maybe I have to collect some information of that task.” It encourages more engagement, we're seeing more engagement on our app with actually doing workflows.

Honestly, if you want a checklist, you wouldn't need an app. You could just use any to-do app. It's only when you're in a team when you need to track between people where these kinds of apps become really useful. It's little touches like that which honestly needs a lot of experience to think about, things like that, those experiences that make us a little bit different from some of the others. It's just like we experience in the field of watching people do this and design thinking. That's what makes Tallyfy different.

Jason: In Tallyfy, would you say that instead of seeing a checklist, they see what is the next step that they need to be focused on? Is that the focus design-wise?

Amit: Yeah. We often found that people don't want to see anything but the one thing that they need to do right now.

Jason: What do I need to do right now. Right, yeah, what's next?

Amit: What do I need right now, yeah. Imagine if you saw a list of 55 tasks, wouldn’t that be scary? That’s just like, “Oh, my God, it’s so boring, I'm just going to mark everything done even though I haven't done it.” It's things like that that are so important that no one really thinks hard about them. They think that they can just roll out some app and like, “Oh, everyone's going to use it.” How did you know everyone did what they said they would do? These things with other things that helped solve it.

There are some other things, too, which we're adding down the road which are seriously awesome, especially chat-based interactions which we’re adding with chat tool soon. So, instead of doing tasks, you're actually talking. You’re actually speaking to people on chat while also doing tasks at the same time.

Actually, I might as well announce on your show today, we just got approved by Slack, which is like a chat application that a lot of people use. We just launched our plugin for Slack two days ago. It works beautifully with Slack, with a whole bunch of chat tools. You don't want to see a boring line of checkboxes, I don't think that's going to work out for anyone. We try to think. We're trying to move across the realm of possibility here and make it engaging, make it better for people, so that people actually love doing those workflows.

Jason: Awesome. What else should property managers know about this app?

Amit: It's free to sign up to. We have a bunch of templates which we can help you with, but we often find that most property managers already have processes or things that they already have written down. It's super easy to just move them across to Tallyfy. We could help you with that, too, but there is a bunch of sample workflows that we can also provide. Things like tenant screening, tenant onboarding, tenant eviction, maybe screening landlords, or onboarding new landlords, or even just apartment building maintenance checklists or just things like that.

We have a bunch of samples we can help with, but the thing to really start doing is just go to tallyfy.com, hit the free sign up, it's free for 14 days, and then to reach out to us if you need help because maybe you’ll need help, maybe it's that simple. There's nothing to lose by just giving us a try and we're here to help you if you need it.

Jason: Now you had mentioned that one of the things that's important is to update processes, as somebody moves through a process inside of Tallyfy, is there some prompt? How do you incentivize them, making changes to improve the process?

Amit: Firstly, there’s collaboration. If who owns the process, say it's your manager that owns it, you can just notify them using @ replies saying, “Hey, here's an idea to improve it.” Now, we’re enhancing that around down the road. What we're doing is, as you're doing a process, even if you're not tracking it, you can hit a button that says “Suggest improvement,” (that's actually coming in a couple of months) a real simple button that just says, “I'm just reading this thing, I have an idea, here's the idea.” There's a proper thing that tracks the idea all the way through to the owner and that way, you can do continuous improvement because the person doing the process often has the best idea how to improve it as well. For them, it’s super simple.

Also, I feel like people ignore this question but the reason people have Word documents now is because they don't want to literally launch a process every time, they just want to read documentation like, “This is how I do things.”

Jason: Because it's fast.

Amit: Because it's fast. You don't have to actually track every task, that's just boring. We're launching a plan. By the way, people listening to the show, if you want to trial this plan, we're happy to talk to you about it. We're launching a very cheap plan that's literally less than half the price of all the competitors on the market right now, that literally lets you document and read a process but also improve it.

Take your Word document, which you might have already right now or your Google Doc. Now, think of all the features that you wished it had but it doesn't, like this improvement button, all sorts of other things which are not there right now. Package that in a simple thing that literally costs $5 a month per user. That's what we're launching soon, the ability to just document and read while also improving workflows at the same time. That's actually something no one has really seen so far because so far, all the apps out there make you start an actual process and make you mark every tasks done.

Jason: Yeah, I’ve noticed there's a really fine balance that needs to be achieved between making every single, little, tiny step have to be done, documented, and check marked and allowing the process to be out of the way, allowing the employee or team member to just get work done. I don't go through a huge checklist every time I drive my car but I probably did the very first time I drove it. I was a little nervous, I want to make sure I was doing it right, but once you know how to drive a car, you want to get in, go, and you want to make sure things are right. But you want to get things done and you don't want to hinder your team members’ ability to get work done quickly by making the process overly cumbersome more than it needs to be.

Amit: Yes, because you get that muscle memory, you get into the habit, and you already know how to do this stuff. The last thing you need is now to update some other place to say you've done it even though you know you've done it. I think no one's really addressing that, it's a real issue. We are launching this next month or so.

We're very excited about that because it's also a lot cheaper, it's also a lot faster because you're not expecting people to literally go to their phones and go check, check, check, check, check. They're just reading stuff and as they read, if they need help, they can ask for help. Sometimes, you get stuck. In your example, you're going to start your car. But one day, your car doesn't start and you're like, “Oh, gee. I wonder why. I need help from my mechanic,” or something.

It's at that point when you need actual help because you're stuck at that task right now or you have an idea to improve it. Either one of those things. But that's the only time you have to interact. When you need help or you have an idea to improve it. That's what's coming. That is transformational because it means that you as a property manager or your staff don't sit there getting bored, seeing a boring checklist of things they have to do every day because honestly, some of your people are actually really experienced. You don't need to offend them by making them check a box every time they do some tiny thing.

Jason: Let’s connect it to money. A business owner also doesn't want to pay twice as much for a team member to do a bunch of tasks simply because they're slowing them down at half speed because they have to do something overly cumbersome.

Amit: Right, isn't that completely insane? You buy an app to speed you up and it's actually slowing you down.

Jason: Very possible.

Amit: That could be possible and if you misuse some of these apps including ours, by the way. You could actually have that scenario.

Jason: One of the biggest challenges I've noticed with slowing down team members in my own business in the past was interruptions. For example, we used Slack for a while but I found that Slack was causing so many interruptions with team members because everybody was messaging everybody constantly. The challenge also then becomes avoiding interruptions because one interruption, according to some, costs 18 minutes of productivity. If you have two team members interrupting each other, it's like 30 minutes of labor that is blowing out the door. If somebody's being interrupted once every 18 minutes, they almost feel they're spinning their wheels, so reducing interruptions is also important.

Amit: Right, and the average professional services hourly rate, fully-loaded in the US is $44 an hour. So, you've literally just thrown, was it $20, you say 30 minutes every hour, something like that?

Jason: If members interrupt each other every 18 minutes, yeah, that's almost about 30 minutes of work like you double that because [...] people, you're losing 18 minutes for each interruption. My business is built around eliminating interruptions. This is a focus that we have because the less interruptions, that means the team members need to be able to get the answers that quickly, we want to reduce them asking the same thing more than once, we want to make sure things are documented so that they don't have to keep coming back. If somebody has to say something and I have to tell them how to do it, I make sure they document it, I say, “Here's how to do it, document it, put that into our process.”

Amit: Yeah. Let me tell you one thing about chat, and then Slack, for example, is a chat tool. Chat tells you what has happened, chat doesn't tell you what's going to happen or what should be happening next, chat just tells you what's going on right now, not what's going to happen next or what should be happening next. They're two completely different worlds.

Tarryfy and processes, and Slack and chat, these are completely different things altogether. You could have the best of both worlds, we have an integration to Slack but we're doing it in a non-interrupted way the integration that I'm talking to you about. We're very conscious of that design experience because it is annoying, because everyone feels like checking their chat all day long like what messages they got and things like that.

Jason: I’ve got 20 notifications, am I going to read all of them?

Amit: Right, yeah. We don't use Slack to advertise Tallyfy, I want to put it that way. A lot of people build integrations, but they get those integrations to make people go back to their apps because they're like, “Oh, well just use Slack to make people come back to our app.” You just compounded the problem by interrupting someone every five minutes with some notification. We're definitely not going to do that.

What we're doing with Slack is quite different and chat in general. I'm really excited about our future. A lot of it is shaping up right now. If any of these interests you, especially if you're looking to get your operations into one place as a property manager, just be in touch. We're really excited to speak to you folks right now.

Jason: Very cool. I appreciate you coming on and sharing this with everybody. How can they get in touch with Tallyfy and learn more?

Amit: Visit tallyfy.com. The best thing to do is just sign-up. There's a big sign-up button on the home page. Just feel free to check it out, you have nothing to lose, it's free of cost. Once you're in and you get the basic picture of how things work, feel free to reach out, that's when we’ll be most useful to you personally. I'm the CEO and the founder and most times, I often take calls. It’s not like I’m hiding in a corner. I take calls with customers directly. It’s a pretty flat company, we love what we do, and we like being honest with you.

One thing you won't find about us is that we won't try and sell you. If we think this is not going to work for you, we'll just say it's not going to work for you. That’s the kind of fresh honesty many of these product vendors need to have. It's not just a case of pushing you a subscription plan to sell you stuff. It's got to work for you, it's got to deliver benefits, and that's what we’re interested in.

Jason: I agree. We're very similar. I had a phone call today and it was a startup property manager. I just asked, “Do you want me to convince you you should do property management or not?.” I said, “I can go either way, I'll explain to you either one,” [...] an accurate picture and don't jump into something that you’ll regret later.

I’ll wrap this up, I want to tell everybody I believe every business should have a [...]. This is one of the major systems that every business should have. They need a support system, they need an accounting system, they need several different systems. One of the systems they need is a process documentation system. You need some system to make sure the processes are also being done correctly. It's so simple. I recommend everybody check it out and I'm excited to hear feedback. Amit, I appreciate you coming on the show. I will let you go.

Amit: Yeah, thanks for the time, Jason. Much appreciated.

Jason: You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com.

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Dec 10, 2019

Is there a way for property managers to reduce delinquent rent payments by more than 50 percent? How can residents positively or negatively impact their credit score by 20-70 points?

Today, I am talking to President Dave Haldi and CEO Steve Jarvis of CredHub, which helps property managers report on every resident, including those considered a credit risk. It reports the positive and negative, incentivising tenants to make paying on time their top priority.

You’ll Learn...

[01:47] CredHub: Name change, funding, continued growth, and creating transparency.

[02:06] CredHub’s Competition: Most companies only process and record positive payments, not negative payments on individual's credit score.

[02:28] Bolt-on Technology: CredHub connects and bolts onto rental software systems to validate positive and negative payments via rent roll system.

[02:52] How it works: Provides property managers access to an individual's credit score information reported to credit bureaus and pass-through revenue opportunity.

[03:27] RentCredit Plus includes identity theft resolution services and rental payment reporting to credit bureaus for $3.50 each month.

[04:20] Customer Support: Resolution Services as Customer Support: If there is a credit issue, CredHub takes on responsibility to work with credit bureaus.

[05:35] Doing Good Things: CredHub helps people get back their financial health and credit for payments.

[06:42] Recapitalization: Report all data at scale to achieve goal of growing CredHub.

[07:58] Lease vs. Mortgage: What’s the difference? Educate managers and residents.

[09:13] Audit Proof: Information given to credit bureaus via CreditHub must be correct.

[11:25] Collections: CredHub has credentials to create trade line for property managers.

[11:54] Implementation Process: After CredHub has signed agreement, implementation takes about six weeks.

Tweetables

Increase credit score by 20–70 points; make paying rent on time a top priority.

CredHub: Bolt-on, backend, rent roll, data pole cleansing and reporting at scale.

CredHub: Gets property managers out of credit business, and puts them in property management business.

CredHub reports the positive and negative, incentivizing tenants to pay on time.

Resources

CredHub

CredHub’s YouTube Channel

Fair Credit Reporting Act

DGS 107: Automating and Screening Rental Leads with Cliff Hayden of Show Me The Rental 0

Transcript

Dave: ...opportunity for property managers to help reduce their delinquency because we figured out a way to report the negative or late payments. The program can then help increase an individual's credit score 20–70 points on a positive perspective but it will also impact their score negatively and help reduce delinquency by over 50% encouraging an individual to pay on time and making rent their priority to pay.

It started four years ago, validated the idea, worked with some property management companies locally. We changed the name to CredHub a little about a year ago, got funded, we've had continued growth, and built an automated technology with a dashboard to create transparency of what we had learned from the marketplace. That's what created CredHub and that's where we are today.

Jason: Perfect. There's other companies in the space they that do this. Is that correct?

Dave: There are a few companies but we're a bolt-on technology. Most of the companies that we have come across are payment processors and they may process payments only allowing to record positive payments on an individual's credit score.

Our technology connects and bolts on to the back-end of rental software systems—Yardi, RealPage, Rent Manager, ResMan, et cetera. Therefore, we validate the payment that has been made because it comes out of the back-end of the rent roll system allowing us to report positive and negative.

It also gives the property manager, on-site resident manager transparency to see what information was reported to the credit bureaus once it's been uploaded and helps affect the individual's credit score. So, we're different. We also create a pass-through revenue opportunity for the property manager to make some additional revenue for their bottom line through our program.

Jason: Okay, explain how that works.

Dave: So, we have RentCredit Plus, which also includes an identity theft resolution services because identity theft is such an issue today, especially in larger properties with mail rooms, et cetera. With that, we charge $3.50 for this program that is identity theft resolution services as well as reporting the rental payments to the credit bureaus, both positive and negative, on a monthly basis.

It would be our best results or best practices or we make this program mandatory for all residents. We charge $3.50 per person on the lease including the co-signer and most of our clients charge $7. So, they make a 50% increase of what we charge for the product and for the services that we provide.

In addition to that, we also provide the resolution services, making sure that if they do have a credit issue, we take on all the responsibility to work with the credit bureaus to make sure if something was reported incorrectly, we will fix it. So, we provide that customer support from a third party's perspective, not eliminating the burden to the on-site resident manager and getting them out of the credit business because they're in the property management business.

Jason: Got it, okay. So, Steve, what's your role at CredHub then?

Steve: Yeah. So, I came in to the company about a year ago when we recapitalized the company as Dave said and renamed it to CredHub and that recapitalization was really meant to build this platform so that we could do this back-end, rent roll, data pole cleansing and reporting at scale.

My career was always in automation and travel. I worked for the likes of Expedia and built alaskaair.com for Alaska Airlines and had retired from travel, and was looking for an interesting new project that really had an element of doing good things for people that needed it which, I believe, we're doing it at CredHub. The folks that are now going to be able to get credit for their Rogers payment or are young folks that are credit-invisible or folks that need to get back in financial health back on their feet. It feels really good to be working in this market.

I'm CEO, so primarily looking at business development and strategy finance. The goal here is to really do this at scale nationally. You mentioned what makes us different and David had mentioned that the element of negative reporting of late and skipped payments and its impact on getting residents to pay on time for property managers. No one's really done that at scale.

Like Dave has said, others in the market that are doing reporting are doing almost entirely positive reporting which it's pretty easy. The hard part is this is what we do is getting all of the data reported and doing it at scale. I came in with the recapitalization, with an element to really growing this thing nationally and doing it in a big way.

Jason: Perfect. So, what questions do property managers typically want to know about CredHub?

Steve: Well, one of the things, for me, especially coming into the property management space having been to trade shows, travel, and technology, the core of what we do is really, really easy to understand, which is really compelling. When we talk to property managers, it's pretty easy to get what we do in 90 seconds. Like really, wow, you can report positive and negative to credit bureaus, reduce my delinquency, I can add a revenue stream, and my residents will like it because I'm helping them.

There aren't a lot of questions there. We do get some questions as we roll through closing clients on the legal side. We'll get a legal department and a property management company worrying about disputes from their residents but it's a fairly easy question to answer because the residents have a financial obligation. They have a contract called a lease. It's not that different than a mortgage. Property management companies who aren't being paid by the residents have every right to report that to the credit bureaus. There's an education process that I think we need to go through on that side of the sales process with property managers.

Oftentimes, we'll get questions on whether this is optional. Property management company may want to have this be an opt-in for their residents. That's not how we work. We report the entire file to the entire resident population to the credit bureaus which is what they want. Our program really only works for property managers if everybody's being reported including those that are credit risk.

Dave, do you have any other?

Dave: Yeah. I think a couple of analogies would be and it really creates this carrot with the stick, encouraging people to pay on time and because they require everybody, all of the residents to be reported the messaging is consistent for everyone. It also has helped us because of our platform being so audit-proof because the information that needs to go to the credit bureaus has to be right.

We found that we've really helped clean up the data that we're pulling out of the system because it has to be correct. We provide an error submission report and that report can go back so it's something that maybe the on-site resident manager or assistant manager can help clean up as they're going through their lease renewals or new residency. We found errors or mistakes when maybe a check has come in, it got incorrectly posted.

Because ours is third party, it helps to create checks and balances and the system is audit-proof. It provided an additional layer but easy for people to log into and make the changes. And we support them seven days a week, 24/7 if they have an issue.

I think the other questions that may come up is, "Well, how does this work?" One of the things for a property management firm who works with us, we create a trade line at the credit bureaus. We have credentials and privileges with TransUnion and Equifax so we credential them and create a trade line with the bureaus.

Therefore, if we are working with somebody and we pick a date that we report on the 10th of the month, rent is late at 30 days because we pay rent in advance. If an individual is delinquent or pays late after the 10th or they don't pay, Fair Credit Reporting Act says, "It can't be turned to collections until 90 days." If we report on the 10th, we're going to be 50 days ahead when that person can go to collections affecting their credit score, encouraging them to pay the property manager in full and not having to lose that income that could be the cost of going through collections.

That's a piece that becomes critical in what we do and a lot of questions get surrounded about that but we have all the credentials to create the trade line necessary for the property manager.

Jason: How difficult is this for a property management business owner to implement? Maybe you could talk a little bit about the process.

Dave: The process is we meet with them, we work with them on the pricing, and figure out when it would work for them to implement. Once we have a signed agreement, we try to implement it within six weeks if that works for them.

Once we've got credentials with the bureaus, then our data team connects with somebody in their office. It usually takes an hour, but once we pull the data to get it out of the system, then we go through some testing on our end making sure that the data is correct. Once we've confirmed that, we give them four weeks or a month. Let's just say, we signed a contract in August. We would give them the month of September, lay out a timeline that we work with them to educate their on-site resident managers, create a lease addendum because we know that our best practices if they sign, if they put the addendum in the lease, it gets explained to them helping that education of why it's important to pay your rent on time. Then, they sign the leases with the addendum. We have a template, but we can make changes to the addendum depending on how they want to implement it. And then we would begin reporting on the 10th of the following month or on a mutually-agreed date they want to pull it.

In some states like Washington, with just changing the 3-day evict or 14-day evict, we used to report some property management firms on the 15th but because of that change, they have asked us to report on the 5th. So, we can change the pull date and the report date helping encourage the protection of the property management company for these individuals who are playing the system or gaming the system and not paying their rent on time.

Jason: Okay. Cool. It sounds pretty simple, sounds like a really good idea, really good service. Now, can landlords listen to this, besides property managers, also implement this, or homeowner?

Dave: Yes. We work with any property type or size. If they don't have a rent roll system, we just create a spreadsheet for them, collect the necessary information, and then they can upload the spreadsheet themselves through our portal. We have a variety of ways we can connect and help very managed.

Jason: Very cool. All right. The CredHub sounds like a brilliant idea. It reports the positive, it also reports the negative, incentivizing the tenants to make sure they're paying on time. It gives them the benefit of building some credits so there's a carrot and a stick connected to this. You also have identity theft resolution they can be tied to this that can be a profit center. Ultimately, how much does this cost the homeowner or property manager? Or do they just make money doing this?

Steve: Pass-through revenue model, they make money doing this. We bolt onto their existing system, we help them do the lease addendum with the residents and they actually make money. We like to think of it as a win-win-win. It's good for the residents, it’s great for the property manager, and obviously, we're in business for profit as well.

Jason: Win, win, win. All right. Anything else that anybody should know? How can they get in touch with CredHub if somebody's listening to this and they wanted to get started, they wanted to check you guys out? How can they connect?

Steve: credhub.com would be the best place to go. We have a YouTube channel that has some really simple videos on it, you can link to those from the CredHub website. In fact, our animated “what we do” video is in the hero image right on the homepage. We have a Contact Us section and a there's a form there that property managers can sign up with the number of units they have and we'll follow-up. That's probably the best way to do it is just to come visit us at credhub.com.

Jason: Perfect. Sounds like a no-brainer, it makes sense. I think what you guys are doing is going to help out a lot of people which I resonate with and I appreciate you guys coming out on the DoorGrow Show.

Dave: Thanks for having us.

Jason: All right, we'll let you guys go. So, checkout CredHub at credhub.com. For those that are new to watching or listening to the DoorGrow Show, be sure to like and subscribe. Leave us a review somewhere that would really make a difference and check us out at doorgrow.com.

If you're wanting to grow your property management business, or you're in need of a new website, or you're just wanting to make sure that your business is growing as effectively as it could, reach out. We'd love to talk to you. Until next time, to our mutual growth. Bye everyone.

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Dec 3, 2019

Is pre-screening tenant leads the most time-consuming part of your business? What you need is an online system that advertises, generates and pre-screens leads, automates showings, and turns leads into applications at a reasonable price.

Today, I am talking to Cliff Hayden of ShowMeTheRental, a time-saving tool for automating and screening rental leads. ShowMeTheRental handles the B.S. part of management between prospective tenants and property managers/owners.

You’ll Learn...

[03:05] From Lineman to Realtor: Longest suspension in AT&T history to do real estate.

[04:00] Poor Priorities: Money was goal. Financial success wrecked family/homelife.

[05:15] ShowMeTheRental: System put in place to automate lead screening for tenants.

[06:12] Fulfilling Family Priorities: Money is a tool, now; not a goal.

[07:25] Happy vs. Frustrated Customers: Set expectations of what you expect from them and what they expect from you via questions that filter qualified leads.

[11:25] Where is ShowMeTheRental advertised? All major Websites, including Zillow, Facebook Marketplace, and HotPads.

[15:18] See something you like? Try ShowMeTheRental today to save time and money.

Tweetables

Working all the time costs you family and friends.

Money is a tool, not the goal.

You can buy time, but you can’t get your time back.

Resources

Cliff Hayden’s Email

Cliff Hayden’s Phone: 502-641-8781

ShowMeTheRental

Rich Dad, Poor Dad by Robert Kiyosaki

CASHFLOW Game

Kentuckiana Real Estate Investors Association (KREIA)

DGS 106: Streamlining Business Operations with Jo-Anne Oliveri of ireviloution 0

Transcript

Jason: Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors and expand your rent roll, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.

At DoorGrow, we are on a mission to grow property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, expand the market, and help the best property managers win. So, if you enjoy this episode, do me a favor. Open up iTunes, find the DoorGrowShow, subscribe, and then give us a real review. Thank you for helping us with that vision. I’m your host, property management growth hacker, Jason Hull, the founder of OpenPotion, GatherKudos, ThunderLocal, and of course DoorGrow. Now, let’s get into the show.

My guest today is, Cliff Hayden. Cliff is from a tool called... what's your tool called, Cliff?

Cliff: showmetherental.com

Jason: ShowMeTheRental. All right Cliff, let's get into your background. Tell us a little bit about how you got into this so people get familiar with you a little bit.

Cliff: I got into ShowMeTheRental to save my marriage, actually, and my family life. I worked at AT&T, my real job, when I first started this business. I was an outside plant technician, which is a fancy word for a line man. [...] bucket trucks and put up telephone lines everywhere.

I always wanted something more, so,I got into real estate. You've heard of Robert Kiyosaki? Rich Dad, Poor Dad. My brother-in-law was in, and my sister came back from Iraq. They brought home a game called CASHFLOW. I can remember sitting at the dining room table playing CASHFLOW. I didn't understand that you can buy assets and buy rental houses, and people will pay you and you can make money off of it. That's how green I was when I first started. I knew absolutely nothing.

From playing that game, I actually signed up for a mentorship through Robert Kiyosaki. They helped me buy my first duplex. End up being a horrible deal, it was bad, but it all worked out because in that whole process of getting a loan on it and learning what I was doing, I found our local real estate club called Cria.

I started going to local meetings and I met a mentor, a guy named Mike Butler. He took me under his wing, showed me the road to real estate, and made sure I didn't fall on my face. He was a big part of my success. From there, I worked a full time job and started buying rentals on the side. Long story short, I just started making enough money to quit my job.

Now, cool story that I like to tell is, I do hold the longest suspension in AT&T history. I come from a lower middle class family. I didn't want to quit my job and do real estate full-time. It was a very high paying job for us and a very good job for my family. I just didn't want to up and quit, so got suspended on purpose.

As a lineman, you have to have a CDL license, and they random drug test you. They did pop me a random drug test. I decided I wouldn't take it, which is an automatic fail. Then they suspended me. I took that suspension and turned it into four-and-a-half months.

In the meantime, in the first month of my suspension, I made my whole salary at AT&T doing real estate full-time. I kind of drag it out and then I decided to quit my job and do real estate full-time, which was awesome, because I was my own boss. I had a lot of fun in the beginning, but my priorities were all mixed up. When I first started, my priority was money was the goal. The problems that I had was all I focused on was money, buying houses, and doing everything I could to get money because I thought that was going to make me happy.

What it did is, I became financially successful, but my home life was a wreck. I'm happily married with five children. I would work all day, come home, and continue to work. I couldn't turn it off and it's causing a lot of problems at home. The biggest problems at home is, when I would come home and eat dinner, I would get text messages, phone calls, emails, because at any given time we would have three or four empty rental houses.

All these leads would start coming in and my wife would just get, I call it superman vision. She had that look on me where she could shoot lasers out of her eyes. She would. It caused a lot of friction at home and a lot of problems. I decided there’s got to be a system I could start putting in place to make this more fun, to make this job smoother, and to get my life back, because I was just working all the time. I didn't see my family, I didn't see my friends, I didn't have anymore friends because I was doing nothing but working all the time.

I went out and started putting systems together. One of the systems I wanted was lead screening for tenants because it was our biggest headache. When we get empty houses in our town, nothing to get a hundred phone calls and emails a day. There's no possible way to keep up with those without a system in place. When I tried to find a system, I couldn't find anything I like or anything with a good price point that I like. That's where we created ShowMeTheRental.

What we did with ShowMeTheRental is we took all the problems we were having, created a system for it, and then automated it. What ShowMeTheRental does is, it's an online system that advertises, generates leads, prescreens those leads, automates the showings, and turns those leads into applications. We do all these automatically, with a few clicks of a button, and at a price point that I think is incredible. For $49, you can put it in our system and it's on there until it's rented.

That's how I got into real estate. Over the last six or seven years, I started changing my priorities to live a more abundant life. Now, money is a tool and not the goal. That's the biggest change I've had over the last several years. Now, I don’t miss any field trips. We switched our whole business around and put systems in place so I can be mobile.

That's our new goal now. With the technology that's out there now, and the systems in place, if you just take the time to do it, it's not very hard to do. Now, with all our kids, we travel every summer. This year we went to Colorado for a month, then stopped to St. Louis from Branson, Missouri, and we just get back from Pigeon Forge. We have systems in place now to run our company, so we can be mobile and I can do what's important, which is making sure my kids are good, happy, and productive citizens. That's my quick story.

Jason: Tell us more about ShowMeTheRental. It sounds like a lot of your clients are individual investors. A lot of investors can use this. They can put in their one property when they need to make sure it gets rented. It deals with all these tenant leads, help systemize the process so they're not overwhelmed in it, and filters out some of the riff-raff and time wasting.

Cliff: Correct.

Jason: Maybe you could explain the process of once somebody gets into your system, they sign up. Take us through what's going to happen.

Cliff: I'll tell you our situation. Our situation was, when we would have leads coming in, we would always find ourselves asking the same questions over and over, which were, “Are you on Section 8? Will you sign a three-year lease? How much money is in your bank account? How long have you been on your job?” Simple questions we wanted answered to qualify, to go see our houses, or to rent our houses.

What we did is, we generated a list of around 40 questions that we use and that we think other property managers like you all would use to kind of this thing about big funnel. Take a big funnel people and just get them down to that. Take that 100 or 200, get it down to that 15 or 20 really qualified leads that get access to view your house, so you're not wasting your time.

More importantly, what we learned is tenants get pretty upset going to look at houses they're not qualified to go see. They fall in love with the house, only to find out they don't qualify income-wise. “You don't take Section 8. They don't want to sign a three-year lease.” We set it up for them also, so they'll have a system where they know that if they don't lie on their question and tell the truth, they’ll have a great opportunity to get this house. It could be theirs. We mesh that together so everybody can be happy.

Jason: So really, it reverses the issue. A lot of times, what happens is tenants apply for a bunch of properties, renters will apply for a bunch of properties, and hope that they'll get one. They aren't taking a look at the income requirements. None of these things were filtered when you're looking at Zillow rentals or wherever they're looking to find a property. They're just going, “Oh, I like this one. This looks great.” They're not really aware of what they would qualify for. They're getting frustrated. They're wasting a lot of time. Really, it doesn't take a whole lot for somebody to get frustrated. You see, you go look at a couple of properties that you like, and find out you don't qualify. You'll start to get pretty upset and annoyed, I'm sure as a renter. It would be really challenging.

Cliff: Yes, and there are customers. I call them customers. Just like any business, you want your customers to be happy. You don't want to start them off on the wrong foot. I want to set the expectations upfront about our policies and procedures, so we go into what we expect from them and what they expect from us. It just streamed on that system so much better than what we did before. This way, we're not wasting our time and we're collecting all their information. We can go into that. It's hard to go over on a podcast, but we can.

For guests who want to check out showmetherental.com, it shows you we collect all the lead information and we actually have a cross-reference database, that if they don't qualify for my property but you're in our system, they qualify for your property, Jason, it will send them over to you. We have a system where, when properties pop in our system that they qualify for, it will automatically send it to them. I know based on their profile they filled out and the prescreening questions they answered, that they're qualified to go see that house.

I think that's important and the tenants really like it, because you said it best, it's just such a headache to go to 20 houses and know you're only qualified to rent two of them. I think a lot of people miss that because I think we need to take care of our customers because they're our business. If we don't take care of them, we don't really have a business. If we can get those good customers in there, spread that word of mouth, and get them to know about us, it makes our lives a lot easier.

Jason: What are some of the common questions that a homeowner, or an investor, or maybe even a property manager usually ask you about ShowMeTheRental?

Cliff: I don't know the common questions. The biggest one we get is what websites do we advertise on? We do all the major websites. Zillow, which is always number one, Facebook Marketplace, we just syndicated with Zumper, Trulia, HotPads, Rent Leads, all the major websites. We advertise on every major website.

How this system works is, when you put in on the website through our system, it goes into our system. Instead of them contacting you, they're going to contact our system. They can contact us via phone, via email, and via phone number. Each specific city has their own phone number and how will they contact us. Usually, 90% is through email.

When they go in Zillow and to your property, when they look at it, they'll inquire about it and then we will send them, through ShowMeTheRental, a link to your prescreening questions. From there, they'll answer those questions and if they answer those questions correctly, we will then send them showing instructions based on your preference.

We have five different ways to show the property. Once they looked at the property, we will send them a link for an online application. We provide one, but we recommend if you have your own, you can just put your own application link in our system and it will send them to your application. We use a software company called Buildium. I want everything in Buildium, so I'll have all the stuff already entered. From there, we have our screening service. We screen, we don't offer the service we have in our in-house. We then screen the tenant, get all the information we need from them, and we take it from there.

Jason: Okay. You're not just helping prescreening, but you're also fielding the phone calls. You really are this barrier between the prospective tenants and the homeowner property manager.

Cliff: To me, we're the BS part. We help fix the problem, the BS part of management which is prescreening and leads. I think that is the most cumbersome, time consuming part of our business.

Jason: Yeah. It's a huge time waste.

Cliff: Yes, A huge time waste.

Jason: It just cost a business money. It doesn't make an investor or property manager money. In general, it’s the garbage of phone calls. “How many square feet are on this property that I'm looking at right now?” where it says the square feet on the property. You know, these kind of calls. You guys will handle the phone calls?

Cliff: The system does, correct.

Jason: Or emails, or all that kind of stuff?

Cliff: Everything, yes. It's all automated.

Jason: Okay, cool. You do it on a per property basis. What bout a property manager that has a lot of properties, or an investor that has a lot of properties?

Cliff: What do you consider a lot? To me, a lot is a couple of hundred. If you have multiple properties, we’ll work out discount prices for you. I guess there's no grey area. There is no setup fee, but if you have multiple properties on there, multiple times we’ll work out deals with you. Most of the time it's people like me, who have 30 something properties. We have pretty nice properties. We sold off all our pain in the ass houses. We might have, out of those properties, every year we have two, maybe three turnovers.

I like it. This is more built towards smaller amount of pop we do. Of course, we do take on all the bigger ones, but it's more of, you got two or three rentals a year. If you do have multiple ones, then we'll work with you on prices and make sure everybody is happy. My big goal is to get people their time back. I know it changed my life when I started living life more and stopped worrying about all the money all the time and just started being home and being present with my family, with my kids, and being more involved. That's our big goal, is just to help. You can't get your time back. That's what I tell everybody.

Jason: Right. You can buy time thought.

Cliff: You can.

Jason: The residents experience going through this, what's their experience?

Cliff: What they'll do when they log on to the site, their view is a map of whatever city they're in, it will show different properties. What we try to do, when we market, when they go in, they got to sign up with their phone number, email, and name. Then, we're going to try to get them a profile filled out before they even go into a house. We're going to get a profile filled out of all the questions we have and then we're going to match it up the properties. If they don't go that route and say, they find it on Zillow like I said earlier, then from there, they'll just get on Zillow, find a house, inquire about, and they'll answer the prescreening questions from there. If they qualify, they get to see the house. If they don't, it just tells them they're not qualified to go see the house.

Jason: Got it. So just kind of kills it there.

Cliff: It kills it there so you don’t have to talk to them. You seem like a nice guy like I am. I don't know how many times you've been on the phone and you have to tell them, talk to them for 15 or 20 minutes and they go on for 15 or 20 minutes, and you don't want to hang up because you want to be nice. It’s just a headache. It takes care of that headache. Managers had that conversation, I know all of them have. All those conversations are gone, which is a big blessing.

Jason: One phone call is probably 10-15 minutes, because you have a nice intro on the call, you have to be cordial, they're going to have some questions, you want to answer those questions, and then you need to figure out how to end and get off this call in a nice fashion. Yeah, it eats up a huge chunk of time.

Cliff: Yeah, huge chunk.

Jason: If it's a nice property, it's in a nice area, and it's priced appropriately, you're going to get a lot of these phone calls. It can be pretty cumbersome and overwhelming if you're trying to just enjoy your day, have a day job, or do something. Besides, I have this part time business of managing a property.

Cliff: Yes, correct.

Jason: This one property. If you have multiple, it becomes even more crazy real quickly. This is something that maybe property managers could use. I mean really, it’s a piecemeal service. It's like “Hey, I need it for this property, maybe not for this one.” They can use it as needed, maybe something supplemental to the other stuff they have going on, like through Buildium or [...].

Cliff: Correct. Definitely.

Jason: Ok cool. Cliff, is there anything else people should know about ShowMeTheRental before I let you go? If not, tell us how everybody can get in touch with you and find out more.

Cliff: The only thing I ask is just give it a try. Check it out. Hopefully, you’ll like it. It's been a huge game changer for us. Like I said earlier, when I come home from work, I'm actually home now, I'm not working all the time, I'm not answering phone calls. I just say, give it a try to see if you'll like it. I think you will.

As far as contacting me, you can reach me anytime. My email is cliff@showmetherental.com and you call me if you have any questions, if I can help you. I do answer my phone only between 12:00 and 1:00, and 4:00 and 5:00. If you call outside of that, I’ll try to call you back the next day. You can reach me at (502) 641-8781.

Jason: Perfect. Cliff, I appreciate you coming on the DoorGrow Show, it's great to have you, and everybody, check out showmetherental.com

Cliff: Jason, I appreciate your help. Thank you, sir. Thanks for the opportunity.

Jason: Alright, cool. I appreciate Cliff coming on the show. If you are a property management entrepreneur that wants to grow your business, one thing you may want to take a look at, that I will mention a little bit is take a look at your website. If your website has been around for 2-3 years or longer, that's the typical lifespan of a website or a design. It maybe starting to look stale, which creates a perception about your business. Once it's get about 5 years old, it starts to get a little bit painful. It's a little bit embarrassing. It looks probably outdated.

The reality is, most of our competitors, when it comes to website design, a lot of their designs were designed 2-3 years ago. The challenge is, you're getting websites, sometimes out of the box, that's already design-wise, behind and outdated. So make sure to go and test out your website by going to doorgrow.com/quiz. You go to doorgrow.com/quiz, test your property management website, take the quiz. It will help you see how effective it is at creating leads, generating business, capturing and creating trust, and capturing and converting people that are visiting on the site. It's really all about trust, instead of just trying to manipulate Google and get to the top of Google.

I'll just point out that the reality that search volume for property management according to Google Trends—you can go to trends.google.com and put in property management, back date it, filter it for the US, back date it to 2004 to the present—is low. It's small. You can compare it to any other term and see this. It really hasn't grown since 2004. In fact, it slightly peaked in 2011, around July, the summer, when property management search volume peaks each summer, but it's been on a steady decline since 2011. There's less people searching. Not only that, but competition has gone through the roof since 2011. Competition has been increasing. Everybody’s pushing everyone to do. This was the game everybody’s playing. It's trying to manipulate SEO, Search Engine Marketing, Pay-per click, and Google Ads.

The reality is, search volume has been on a decline. It's going down, while competition is going up. It created this false scarcity in the industry. I'd love for you to escape that. There's no scarcity in property management, 70% are self-managing their own properties right now. There’s tons of blue ocean. They have problems, they have stress, but they're not looking on Google, in general. If you can identify them, capture them, you have a website that creates and builds trust, and your sales processes optimize for trust, you are going to be the company that they work with.

We want to help you optimize trust in your business, clean up, and short all the leaks in your sales pipeline. Reach out to DoorGrow. We can help you with the website and we can help you with your sales process, your pricing strategy, all the things that affects your ability to close deals. We can help you clean all that up and make your business far more effective at capturing business and going after that blue ocean where 70% are self-managing. Check us out at doorgrow.com. So, until next time everybody to our mutual growth. Bye everybody.

You've just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com.

Download this Episode

Nov 26, 2019

Whether you’re flying a plane or dealing with property management, manual processes based on your own way of interpreting a task doesn’t always represent your brand.

Today, I am talking to Jo-Anne Oliveri, founder and managing director of ireviloution. Jo is a leading authority on property management and author of Find Your Property Manager Now. In this episode, she describes how to streamline business operations.

You’ll Learn...

[05:00] Find your passion, and change your life.

[07:05] Crusade for Courage: Understand property management and real estate from investors’ point of view to pursue your dreams.

[08:15] Build business using deliberate methods, not desperate measures.

[10:35] Singing and Standing in Line: Businesses built on foundation of consistent processes and systems decrease frustration and anxiety.

[17:55] Scalability and Serviceability Platform: Streamline business operations by identifying tasks, each with its own timeline and priority plus corresponding tasks.

[21:28] Brand Culture, Business Vision: Brand relationship is greater than individuals.

[22:18] Selecting Process Software: Depends on your business, but needs to work for your budget, growth plans, and how you want to build your business.

[28:37] Streamlining System Components: Processes, resources, and training.

[33:51] Vision for Success: Every business needs to start with a plan.

[34:24] Default vs. Design: Desperate to make changes due to shiny object syndrome.

[35:20] Task Tracker: Require and verify accountability, responsibility, and transparency via consistency, compliance, and completion.

[40:03] Which is worse: Losing a client or team member?

[44:25] Step-by-Step Process: How to get started streamlining business operations.

Tweetables

How can you run a business when no one is doing a job the same way?

Career by Design: Empower owners with courage to take control of their businesses.

Passionate about crusade of creating positive change in property management.

Businesses built on processes create a foundation, not frustration.

Resources

ireviloution

Jo-Anne Oliveri on LinkedIn

Jo-Anne Oliveri’s Email

Jo-Anne Oliveri’s Phone: 917-969-4066

Jo-Anne Oliveri on Facebook

Find Your Property Manager Now: Hire the Right Agent and Make More Money

Awaken the Giant Within: How to Take Immediate Control of Your Mental, Emotional, Physical and Financial Destiny! by Tony Robbins

DGS 80: Automating Your Business with Process Street with Vinay Patankar

DGS 105: VIP Paradigm: Vision, Infrastructure, and Process with Mark Dolfini of Landlord Coach 0

Transcript

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

Today, I'm hanging out with lovely Jo Oliveri from the ireviloution.

Jo: Hi there.

Jason: Hi, welcome.

Jo: Thank you. Thanks for having me.

Jason: Glad to have you. We're going to get into your background first, but before we do that, I'm going to read your bio here for the audience, for the listeners, so they have a little bit of understanding. The topic we're going to be talking about is streamlining business operations, is that right?

Jo: Correct.

Jason: Okay. I'm sure everybody here, everyone listening—clients, friends, property managers—they all could use a little bit of streamlining in the business operations. That's something close to you and to my heart as well. Let me tell me people a little bit about you here. Do you go by Jo or Jo-Anne?

Jo: Jo.

Jason: Okay. Jo is the Founder and Managing Director of ireviloution and PM Leadership Summit Vice-President, First Team Property Management with over 20 years of real estate experience. I don't know what the CIPS or TRC are. What are those?

Jo: CIPS is a National Association of Realtors designations. It’s Certified International Property Specialist. The TRC is Transnational Referral Certification, the very handy ones we have specially in property management we're dealing with people from all around the world.

Jason: Okay. Jo is a leading authority on all things property management and an inspiring force within the industry. As Founder and Managing Director of ireviloution and the Property Management Leadership Summit and Vice-President of First Team Property Management based in the USA, she's an international real estate identity who has trained over 500 agencies, thousands of agency owners, and property managers worldwide. She is seen as a leading authority in all things property management and regularly speaks at the industry's top Australian and North American conferences.

She's also author of the real estate books, Find Your Property Manager Now: Hire the Right Agent and Make More Money. As well, she was selected as an Industry Thought Leader of the Year finalist for 2015, 2016, and 2017 Real Estate Business Awards, and is an Industry Influencer for the Elite Agent 2017 Awards.

Jo is a big deal. Jo, welcome to the show again. Tell me, how did you get into this property management stuff? For those who are watching, I'm hanging out in my son's room. It was the only quiet place today. I've got pug posters behind me for those that can't see. How cool is this kid here?

Jo: All the room.

Jason: Yeah. He likes pugs. Jo, tell everybody, how did you get into this?

Jo: Actually, I came from a business background. We had a family business in grocery stores and convenience stores. We were involved in the 80s down turning businesses. We had very high interest rates, we were paying for our business loan and our home loan, and we lost everything, we have bankrupted. What I discovered is the business I was working in was my husband's passion, it was not my passion. I wanted to find something I was passionate about.

I'm a mom, I had three small children, and I read this book by Anthony Robbins called Awaken The Giant Within. It's an excellent book, it changed my life. I did all of the exercises and at the end of that, it was steering me towards real estate. I was a tenant at the time because we've lost our property and property management is where I landed.

What was really interesting is because I came from a business background, I ended up getting a job with a company in Perth, Western Australia where I originally come from. I thought, "This is an awesome business." There were three other property managers and I was asking them, "What do I do?" They're all telling me different things. I thought, "How do you run a business like this where no one is doing the same job the same way?" They were talking to clients differently, giving different advice. It set me on a path of understanding the business of property management because I saw that there are enormous opportunities to grow a business through property management rather than grow a business through sales.

Hence, I started off on a journey of career by design and I thought, "One day, I want to be able to empower business owners with the courage to take control of their business." Have a business that represents their vision, their brand, and their personality, but for me to do that, I had to understand everything, not just property management but the business of real estate.

Hence, my journey started and I've worked in all areas of real estate with large franchise groups and small boutique agencies, wealth companies to understand how the investor feels. I've purposely invested in real estate myself to understand what it's like from an investor's point of view. It's all brought me to this point here today.

Like you, I'm passionate, I'm on a crusade to empower positive change in the property management industry by infusing business leaders with the courage to pursue their dream.

Jason: Love it. It's very similar to my why or our business why which is the transform property management businesses and their owners. Let's get in to this. Streamlining business operations. Maybe we should start with why this is important.

Jo: Well, this is very important because if you don't streamline business operations, you become what I call, a business built on desperate measures instead of deliberate methods. Everything becomes by default, every decision is by default, recruiting new staff is by default, service promises is by default. You start to become another “me too” property management company where we all start to look the same. You lose sight of your vision and your why. You start to offer property management services in the beginning.

When I was learning everything I could about what’s so good about property management business operations and what goes wrong, I started to see that streamlining systems was a major cause of why things go wrong in property management. That actually made me go on a search and discovery tour of other industries. They had systems and processes and it actually brought me here, to where I'm living right now in Orange County, California.

In 2007, I went to the Disney Institute to learn how Disney creates all their processes and streamlines everything that they do and discover why people will spend. If you're like me and had to travel from Australia to go to Disneyland, you can spend a few tens of thousands of dollars going there taking your family, all the privilege of standing in a line to get on a ride for up to two hours.

I discovered people don't complain. They actually stand in these lines and they whistle and they talk to each other. Yet people call a property management company and if they're not responded to within a matter of minutes they become very frustrated. My discovery was it's because they don't know the process either.

If a company is built on processes then you know everyone who work within the guidelines of those processes including the clients that you're dealing with. That becomes a very, very strong foundation in creating success in any property management business. It’s just critical.

If you look at the other businesses or other industries like Starbucks, it’s all built on processes, it's all built on how do we create maximum efficiency right down to measuring how long does it take for the barista to get the scoop of coffee beans out of the sack and put them into the machine that makes the coffee. If we move the coffee bag 2 inches closer, that's going to save over a period of time, 100 hours every month. It also reduces the loss of coffee beans spillage.

I started to understand the concept of time efficiency through processes and streamlining with systems and related it all back to how do we do it in property management.

Jason: I love it. I love the idea. I mean, essentially what you're saying is that processes just like the example you give with lines of Disney which I don't want to stand in those, by the way, but it disarms people by them knowing that there's process and I think it creates some safety for them.

They really have two choices at that point is to choose into the process that exists or not. But if a process isn't there then what naturally ends up happening is people try to implement or push their own agenda or their own process onto the property manager. "Hey I need this done by here. I need this done at this time. I need them to show up now or this time." They'll try to push their agenda and process onto the property manager because there isn't a clear one for them to see.

Jo: Exactly. Hence, the business starts to become a very reactive thing. You will hear the shock horror stories where a property manager says, "We just lost an owner. They terminated their management with us." We thought they're really happy because we never hear from them. You never hear from them and you never had that contact with them. They're thinking like, "What are they doing? Where's the value that I pay?" So, whatever you do it's got to be consistent across every client.

Again, I'll relate this back to Disney where the people who run the rides, I mean a lot of them are just young kids, they're college kids, and they don't start to get reactive when they can see that the line is two, three, four hours long on Independence Day for the Incredibles ride last year. Everyone stood in a hot sun for four hours. Their Disney cast, as they call them, they just did their job and kept smiling, just pushing the people through and offering alternatives with single rider and things like that. We can learn a lot from Disney.

Jason: I like the idea of what you were saying about just making sure that the process is visible. Something I noticed that you spark the memory. In the past, I had jobs working in IT. When you work in IT at a company, it doesn't matter how good of a job you do. You still are the lowest person on the totem pole when it comes to there being an emergency.

If there's a problem with the server, something goes down in the middle of the night you're on call, it doesn't matter if you're like one of the top executives in the business or you paint really well. If you do everything perfect, nobody would notice and never going to say, "Why do I even pay you?" If there's a problem, they notice and then, they would say, "Why do we even pay you?"

I'm a little bit smart, just a little bit. What I realize is if I was just noisy about what I was doing, my bosses or my superiors would now see that I was doing stuff. I'm like, "Hey, I just upgraded this. Hey, I just took care of this. Hey, there hasn't been any problems with this because I did this." I just started being noisy about the things that I was doing.

I worked at HP for a while as well and I had a boss in Texas while I was in Boise. It was the same thing. He was like, "What are you guys doing? Are you doing this?" He would ask each person on my team, "Is the other one doing their job?"

I just started updating my instant messenger status with what I was working on just so he could see, to reduce that anxiety that he had that we weren't doing anything. Then, he started thinking, "I was the only one on the team doing stuff." So, I think maybe there's the little secret and what you'd mentioned that the property managers need to be a little bit more visible in what they're doing to maintain these properties in letting people know that, "Hey, we did something here," and keeping the owners informed so that they go, "Okay. That's why I pay you."

Jo: Exactly. It's like evidence defeats doubt and you got to share the value to the clients and remind them, "Hey, over the past year, we've managed to increase your rent by 10% and it's 5% above the average in the area. This means [...] your asset value has increased this much. Now, we're here to help you to maximize returns and optimize growth. This is what we've done so far with you. What are your goals for the future? Perhaps you might consider buying another property because you've built equity in this property and you've built income in this property."

It's about planting the seeds of thought in your clients mind and always having that connection. Property management can be as frustrating for the rental property owners as it is for property managers but it need not be. It all comes down to your systems. When you've got systems, it then articulates your value and worth, and your service promise as well to the clients.

Jason: We're talking about streamlining business operations, we're talking about implementing systems, making sure there's processes. How would you how would you define streamlining business operations? What really is it? It sounds like a nebulous, all-encompassing sort of thing, I think.

Jo: It truly is. You're quite correct. A lot of people don't understand how do I streamline my processes. I've got different systems for this and different systems for that. We do a lot of I'm diagnostic reporting on business operations to see where things might be falling through the cracks or things are not working together. The thing with property management is we have a multitude of things going on at any given time. Every task that we do has its own timeline and has its own priority. For every task that we do, it has a plethora of tasks involved within that one task and it could have several team members involved in that one task as well.

For instance, if we’re bringing on a new management, then there is a lot of admin work involved in that. When we bring on a new management, that then moves on to leasing that property, finding a tenant for that property, and it's not always the same person involved. What you need is a business that's built on a platform of scalability and a business that's built on a platform of serviceability so that we can always service the client, scale our business growth. To do that means that we need to make sure we're streamlining systems.

Streamlining systems in property management is about identifying every task that we do in property management and almost seeing your business like it's a series of all these cogs that all work together. Those cogs need [...] or turn in perfect sync so that we're just moving on to the next task, next team member that needs to be done. There is nothing that creates what they call “the bushfire is starting” because something has fallen through the cracks or something as you know stopped another process from being completed.

Creating systems, to me, is something that needs to be engineered. You can't look at one system and say, "We're going to do this for onboarding new management." We're going to use this other system for looking after the property once we've got it occupied and things like that. All of those systems all have to work as one.

The only way to do this is to engineer, to architectural design how your systems work together so that as your business grows and you bring in new team members or new roles, you can seamlessly move one task to a new role and know that it's not going to fall through the cracks, or know that you don't have a team member who says," I got this relationship with the client. I'll just do it all and whilst they're focusing on that, other things are falling through the cracks.

Like a good point there is, whenever you've got team members who say, "I've got a relationship with the client." You've got a problem because the relationship is with your brand. Your team represent your brand and your vision. If you've infused your team with your brand culture, personality, promise and standards, then all the team are representing exactly what your vision is for your business.

Jason: I love that. The brand relationship is greater than the people, individual person relationship that should be in the company and everybody should have that mindset on your team.

You mentioned a lot about platform, systems, scalability. I know a lot of property managers out there are a little bit more nerdy than the average real estate person. They're listening to this and they're thinking, “What system should I be using? What is the ultimate software for doing all these processes and systemized in my business.” Do you have a favorite?

Jo: In my role, I do get to look at a lot of different software. I do due diligence. I think my best answer to that is it depends on your business. And it truly does. When you look at software, it's got to work for you. It's got to work for, (1) your budget, (2) your growth plans, and (3) how you got to build your business and what you want that software to represent about your business.

Currently, the company that I'm working for here in California is using rent manager and that's been very good. For us, we've got over 30 branches spread out from South LA to San Diego. That's a huge area that we cover and our home office is in the middle, it's somewhere in the middle, in Orange County. Through that, we've been able to customize that software so it suits our scalability and the way we service our clients and our agents. We've got over 3000 agents in first team, so we want to make sure that we have a way of measuring the referrals that our agents come in and keeping them connected to that client.

Rent manager works for this company. If there's other great ones like [...]. It's very, very good. That started out small- to medium-businesses and I think it fits really well in that marketplace, but I know that they've been doing a lot of work on how can they build a platform that is useful for bigger businesses as well .

And then, of course, there's appFolio and there's a lot of popular ones out there. I encourage people, when they're choosing software, choose software based on a due diligence that they do in accordance with what they're looking for in the software. The other thing to remember with software is it's not your system. Your software is the platform if you like that you store all your data and generate your reports. Your system is your manual operations.

A great analogy are pilots because pilots have these massive computer systems that fly the planes, but pilots have to go through a manual process of check-listing that everything is working, that three people agree that everything is working before that plane will take off. There is a manual process to flying a plane and property management is the same. It's these manual processes where a lot of companies are going wrong because everyone is doing it their own way, that they interpret a task, and it doesn't represent the brand.

Jason: Right. This is a problem with processes. For those listening, I'm a big fan of the software process tree. It allows you to have a process system that is outside of whatever accounting or back office you're using free property management company and you can really dial in. For those listening, check out the previous episode that I did with Process Street. I think you'd be really interested in hearing that.

I think the challenge with most process systems or systems out there where they have some process documentation in the business is that once a team member has read the process document and they've done it a couple times, they think they know it. It's in their head. They're not going to go back and check it. They're not checking against the process if the process gets documented, gets updated, or the process gets changed, or that person makes changes to the process, they're probably not updating that.

There's always this gap between what the process is and what's documented, if it even is at all. Think about all of us that drive cars. We don't check the manual for the car or read the DMV booklet on how to drive the car, all the rules of driving every time we get into the car. The first time, we probably checked every mirror and made sure everything was okay, but now we just drive it it's like an extension of our body. That's how team members feel. They may simplify things, they make short-cut, they may cut things out, they may forget about things, they maybe weren't onboarded properly, they weren't trained properly. I'm a big fan of having a process that they have to use each time where they have to check something off. There's some manual input that says I did this and I followed these steps.

Jo: Exactly. I totally agree. I was at a conference where one of the doctors from one of the busiest hospitals in Australia—he works in the emergency section—said, regardless of the level of emergency, they still have to follow a checklist where everything is ticked off. That's where we're going wrong in property management is because property managers keep it in their head and they make a slight change to a process which has sometimes devastating results to the overall business.

My own company, ireviloution, we've designed those manual processes which are architecturally designed, but every manual process you have, you've got to have a way of measuring so you've also got your management leadership that locks into that, so that we know that we're being efficient and compliant, consistent and complete everything that we're doing.

To me, when you have a system, there's three different components when it comes to streamlining. One is your processes. You've identified what all the processes are for every task that we do in property management that then we'd lock in and we can measure the efficiency, effectiveness, profitability, performance, productivity, everything shows that process. Then, what locks into that is your resources.

Jason: This is number two?

Jo: Yes. P plus R resources is that resources have to be designed. If there is a tweak in those resources, which we find a lot of property managers say, “But I want to put this step in,” that step might be somewhere else in the process. By tweaking it, it can actually break something down.

The third step which is really, really critical is T, P plus R plus T, equals training. Your training is a vital importance and what we discovered in property management is to become a property manager, we're really learning theory—the theory of property management. If you look at doctors to go through university and college for seven years learning how to be a doctor, it's still all theory. Once they've graduated they've got to go into the learning hospitals to learn the practice of being a doctor, the practice of what happens when a patient does present themselves with an emergency or with some kind of condition. It's ongoing training for them.

The training that we have in property management needs to be something where if you're putting your team through training, it's got to be consistent as well. If they're going off to all these different training courses, then they're not learning the process and the resource. So, there's a breakdown. All three elements of the P plus R plus T are critical in streamlining business operations.

Jason: Alright. I'm gonna recap this. So, you're saying everyone gets that they need processes and it's helpful to make sure that the processes are very well-defined and people know how long it's going to take. Explained resources because I think that's a little bit less clear. What is a resource?

Jo: Resources are your paper documents. When we put information into software, there's still a way that we gather that information or the data that is then put into the software to make sure that we've got all the information we need. I call it your intel and your insight into everything that we do.

The resources are just like what I mentioned before with the emergency doctors or the pilots where their resources are checklist. Then, your resources are also the way that the business owner can measure productivity, performance. it's how they measure, monitor, and manage what's going on.

So, resources are things like one checklist to the different forms that you use for some legal forms and some just best practice forms like getting a tenant to sign a disclaimer that they know that they're not allowed to disconnect smoke detectors for instance. We know that we didn't just tell them, we actually got them to sign a form and they understand the consequences in different forms. Your productivity trackers are manual forms so we can measure productivity against what's going into your software. So, that's all your resources.

The resources that we've developed, we've got over 500 resources there and that's the enormity of the resources that you need to manage your property management business depending on the size, of course, and team structure.

The training speaks for itself.

Jason: Yeah. You need to make sure that they're actually leveraging these things and they understand. I like what you said. There needs to be consistency because a lot of people just want to send the team off to these property management conferences and they come back with a whole different set of ideas, "Well, this company's doing this."

I had one client that didn't even talk to me but came back and said, "I decided to change my whole structure from departmental to another structure." He was changing his entire company and then everything fell apart. I was like, "How did you know that that was right for you?" He's like, "Well, all the cool people are doing it,” was basically the answer. All the cool people were changing their whole business and I said, "Your business was working and now, it's not."

Jo: Yeah. You hear that a lot and that's why I think that they haven't got a plan to start off with. Every business has to be built upon a plan. It's not a financial plan, it's an operational business plan. So, what they've done is they've created their vision for success and they've mapped it out. It's like creating the way that you're going to get from LA to Brisbane in Australia. You've got a plan, you've got a timeline, you've got a budget, you've got all of that. But you know, a lot of them become very reactionary, their business becomes default instead of design, and that's where they start to be desperate. It's like, "Oh, this is not working. Let's change something else." They lose the deliberation around their business because they don't have a plan in the first place. A killer of business growth is when you keep changing what you're doing because someone else is doing it.

Jason: Shiny object syndrome.

Jo: Exactly. That's right. That's a term we use a lot because business owners are like, "Oh, if that's happening over there, let's try that." That's why we all become clones of each other. When you talk to consumers, the people that we serve, they all see us as the same. So, very important.

Jason: Okay. So, you have processes resources training and I think anytime there's a process, somebody needs to be responsible for it, there needs to be clear accountability, there needs to be process documentation and there needs to be a clear definition of done, like how this does this need to be done? How can we verify that it's done? There needs to be accountability. There needs to be some transparency there as well like some scoreboard or some way to know that they've won, or completed, or finished, and there needs to be that accountability or responsibility. If we have all these things in place, then is that everything that they need?

Jo: Yes and no because the other thing is that the business leader or if they appoint someone to manage that business, they got to keep their finger on the pulse because accountability is just king when it comes to property management. One of the problems I have in property management is they're not profitable. They've got property managers who keep saying, "I'm so busy, I can't get this done. I need someone else." And because they don't have the data and the statistics about how long it takes to do a job because they're not using processes and resources, then they start to react to that team member saying, "I can't do this anymore. I'm too busy, I'm stressed out, I'm going to leave." I know you can't leave because if you leave I'm going to lose all my clients. Well, comes back to there's no point in having processes and resources if you don't have accountability.

That's what I was mentioning before, you've got to be able to manage it so you've got to have the ability to say, "We know exactly what's going on with the business. We know when we've got peaks and when there's pressure on the team because of those peaks. We also know when we need to bring in new resources in terms of new team and what that role will be and what we're prepared to pay and offer that new team member." For every task that we do, the objective is to be consistent, to be compliant and to complete within the timeline and priority of that task and then to be able to measure how many tasks a property manager is doing daily, weekly, monthly. The only way you do that is with the business resources.

We've got something that we call a task tracker so we can measure many things with that. One thing is the number of tasks our property manager is doing weekly, monthly. The other thing is every number tells a story. You can see that if we've done this then this should generate a job new tasks over here. What's that done? Do the numbers all add up? Are we doing that? We start to then create that historical data about our business so that we know we've got peak times, we've got risk associated with this time of the year with our business. The business leader has what we call finger on the pulse. They can make those decisions, added deliberation not desperation.

Jason: I think one of the things that's really helpful in tracking just about anything that you care about in the business, whatever it might be, the one thing that's super helpful is just it gives you context. Even just having two data points like we did this much this last month and we did this much this month, you can tell if it's gone up or down and that allows you to understand where you keep your finger on the pulse, as you say, or to have an idea of whether these things are improving or getting worse, or whether business is changing.

Property management certainly ebbs and flows during certain times of the year. It helps you to see, "Okay, these are the trends that we see during the summer when kids are getting out of school and these are the trends that we're seeing through the winter months when things have cooled down." It gives them some context and that allows them to plan and prepare for the future and understand, "All right. We're ahead of where we were last year or we're behind. We should be concerned like we can make changes, let's make adjustments." It allows you to feel safer as an entrepreneur, it lowers your pressure and noise it makes you less reactive. I'm sure there's other benefits to come from that.

Jo: Exactly. Well, it takes away what we said at the start up is that they fear losing a client more than they feel losing a team member because they've got control of their business. If their team member is not performing then, they know how to manage them to perform better. Sometimes, team members do have a use by date and it might be good to let them go but let them go with respect and honor rather than like, "Oh my gosh. I'm losing them in a one lose business." We should never, ever have that fear about our business. Our business is about us, it's about our vision.

Jason: Right. So, team members may have an expiration date.

Jo: I think some of them do.

Jason: Fair enough, probably true. So, wouldn't be great if they just had that stamp on their forehead when they came to us at the beginning? Then we would know.We can keep their replacements ready, we'd get everything documented really clearly but that's the nice thing about having things documented.

My assistant that I just had just recently took another job, but we had everything documented I wasn't freaking out like in the past I might have been freaking out. Losing a team member that was critical to operations would be really a big deal but we've got things documented. There's this safety that comes with having things documented and if it's documented well enough, that's the question you ask yourself, those listening, "Do you feel like if any certain member of your team left that you have you have their knowledge documented so that the next person could step into that without having to be trained by them directly?" If you don't, then that's where business owners have a lot of fear. They have a lot of fear in that, "Oh no, if I lost this person, it would be so detrimental."

Here's the thing I've noticed anytime somebody said, "Oh, it would be the worst thing ever if I lost this one team or if I lost Susy or whoever this person might be in my whole business. It would be terrible, it would be the worst thing ever." That's like the best person for them to lose. I notice every time it's because they don't understand what that person is doing, that person is usually doing a lot of things that maybe are redundant or unnecessary or not done the way you have them done. When they do leave, you have to step in, you have to figure these things out. You realize, "Why were they doing it that way?" Because we didn't have that transparency into what was really going on. We weren't able to manage it, we weren't able to help improve it and it wasn't very effective in a lot of situations.

I had one assistant that I had for like three years and I thought, "Oh, if I lost her it would be the worst thing ever." Really, when I lost that person, it was one of the best things that happened to our business. We changed so many things, I realize a lot of things could be done more efficiently and it's never as bad as our brains make it out to be.

Jo: You're absolutely right. Property managers love to be loved, but we need to change that thinking because we want people to love the brand and respect the team that represent the branch. Out of respect comes love. Property managers need to let go and know that clients will respect them if they're delivering on the service promises and results. They'll feel good about themselves. I think every owner needs to work their business as if when a team member leaves, this is what happens.

Everything that we've got in our business is all built upon generic names. It's not a person's name. It's not a person's phone number. Everything is associated with a role, so I move the team around within the roles and to the client, it's seamless. It's still first team servicing them.

Jason: Right. It's maintenance, it's not Fred.

Jo: Exactly. The team has that personality. They're friendly, they want to help the clients.

Jason: Yeah, love it. Cool. So, we've talked about the who, the what, the why. So, how do people get started with streamlining their business operations? Maybe we could just dig into the actual process of getting their processes and their resources and their training all dialed in.

Jo: Yeah. That's a really good question, Jason. The thing is when you're implementing processes, there's a whole process around them as well. What you want to do is you want to get everyone engaged in it. You need to get your team engaged, you need to get your clients engaged so they understand what's going on as well. You need to create a step-by-step process of, at this step, we're going to implement this new process and we'll introduce that to the clients because there might be new policy around that as well. Articulate and communicate that to the clients.

They get to buy in with what we're doing and they've got the opportunity to voice any concerns or misunderstandings. The best thing is, know that when you are implementing new processes, then you have to muddy the waters for a bit. You're going to find all these things that start rising to the surface moving up like, "What's going on here? I've got team that are unhappy. I'm losing team." Normally, that will happen because you haven't started with the process. So, muddy the waters and have a look at what you need to do first.

It could be restructuring the team to start off with. It could be redefining, and reassigning, and realigning roles, but whatever the step is, you need to look at it like a building lego blocks, one by one by one. This one means that this is going to happen. Once that happens, then this next step is going to happen. My best advice is don't do it all at once, have a plan of implementation, a plan of communication as well, and a plan of education. It really is a step-by-step process.

Jason: Yeah, I think when we're leading a team, when we're leading a company, our job really is to inspire everybody to be excited about what we're going to be doing rather than control them. I like to say, whenever we failed to inspire, we always control by default.

If you can inspire your team and get them excited, "Hey, we're going to be doing this. Here's why, here's how this will benefit you, here's how this will benefit the business. Everything will be better off," and you can get them on board and get them in alignment, then they will help you do it. But if you are trying to control them and force them and say, "Hey, we're going to be doing this," you're going to churn some people. You're going to lose some people Especially if you're making changes and they're used to doing things being done a certain way, that shakes them up and makes them feel insecure, makes them feel uncomfortable. You start documenting their processes and, “Why we didn't document these before?” They're going to thinking, “Is my job okay? Why are you having me to document this now? I'm doing a good job, aren't I?” We need to really be careful and inspire our team members to take care of these things and help us.

I think, as entrepreneurs, we also try to shoulder everything on our own a lot of times. Our team members are the ones that are doing these processes. A lot of times they know it better than us and that they should be the ones helping us do it. We have the insight to be able to look at those ones they're documented and help them figure out, "Hey, maybe we can improve this. We can make this better. Let's see if we can make this easier for you and make this faster for you. Or what would help you move this forward quicker?"

Jo: Exactly. One of the things I learned at Disney is Disney has a wonderful way like everyone who works at Disney wants to be there. If Disney makes changes, they have a lovely way of making sure that the cast are all on board and involved. The way that they do that is they have this program where they all sit around, it's like brainstorming to a degree but everyone has a say and they build on what they're saying. It's never like that's not going to work, it's like yes and they build on that idea. They bring it around to something that is a way that the business leader can drive their business in a way that they want to. The team all have that understanding.

When we go in and we work with businesses, we talk about infusing the team not just like, "This is what we're doing." It's like if you actually infuse them with the vision and how it's all going to be for everyone, then they will have that encouragement and that willingness to like, "I want to be a part of this." And that's what you want for the team. And your clients, too.

Jason: Yeah. Ultimately, we have two types of people in our team. We either have believers or we have hiders. The hiders are just there to get a paycheck, probably do as little as possible and complain about us on the weekends.

The believers, we get their discretionary time. They're thinking about us after hours, they're thinking about their job, they want to be better, they want to improve and they're looking for solutions. It's a very different mindset. But they can't be a believer unless they have something to believe in and you're relating that to them. So, we have to give them the chance to be able to believe in us.

Jo: Yeah. It's so true. You're talking before when we mentioned about the use by date. Sometimes, we can have insight into that as well because when we bring on our new recruits and then we do our monthly 1on1s with them or however often you do it, that's a way to gain insight into what they're thinking what they're short and long-term dreams are.

You will know that at some point, your company might not be able to offer them the future that they're seeking. You don't have the next role for them in their career. That's okay because while they've been with your company, they've helped you to grow your company and you're still in control of your company if you've got all of the systems and processes, that person will go off still having respect for your company and you have respect for them. That's the way I would love it to be in the industry if we all understand it's okay to say bye-bye to team for the right reasons.

Jason: Right. Any relationship can be ended amicably.

Jo: Absolutely.

Jason: Any relationship. I mean life's all about relationships and relationships can be ended poorly and very negatively and it can cause a lot of drama or they can be ended amicably. We should always look for that route first. That's the best

Jo, is there anything else that our listeners should hear or should know about streamlining business operations before we wrap this up?

Jo: I think, Jason, we just encourage them to not go it alone because creating a process and then the resources around it, it does take a lot of work. It's like engineering mindset and I see a lot of property management business owners make the mistake of letting their property managers do it. They say, "You bring in the systems and you create the systems." They can't do that. They're employing that person to look after their clients and bring in new clients. Whilst they're doing something that they're not entirely skilled to do, then it's impacting the business and quite often there is no goal and you'll say, "Well, where are the systems they created?"

I say invest in systems, invest in people that really know what they're doing when it comes to designing systems because all system should be customized to [...] their business is well. When you implement, do it in stages, do it in a process so everyone feels good about the changes that have been made.

Jason: Jo, how can people get in touch with you if they're wanting some help on their systems and on some of the things we talked about?

Jo: Well, thank you. They can email and I'll spell this out because I've got a very confusing business name, but as I was explaining to Jason before, my business name, ireviloution, is my surname backwards, Oliveri. I always said I'd create a revolution in the industry, so it kind of went together. So, my email is jo@ireviloution.com or you can call my cell here in the US. I'm living in California so Pacific time and it's (917) 969-4066 or even look me up on Facebook or LinkedIn.

Jason: Perfect. Alright, cool. Well, Jo, it's been fun connecting with you. I think we share a lot of alignment and I look forward to seeing what you do in the future.

Jo: Definitely, as I do look forward to watching you. I love what you're doing.

Jason: Thank you, I appreciate it. All right, we'll let you go.

Jo: Thanks, Jason. Bye.

Jason: If you are property management entrepreneur that wants to have doors and make a difference as we talked about in the intro, please reach out to DoorGrow. We would love to help and see if we can help you grow your company and be sure to check out Jo, really cool stuff that she was talking about today. I hope you got a lot of value from this episode and until next time to our mutual growth. Bye, everyone.

Download this Episode

Nov 19, 2019

Do you want to grow your single-family portfolio, but not sure how? Don’t think you’re smart enough to be successful in real estate? Invest in yourself, get an education, and hire a coach.

Today, I am talking to Mark Dolfini, founder of Landlord Coach and author of three real estate books. Mark shares how he ventured into real estate, property management, and landlord coach. He follows the VIP Paradigm: Vision, Infrastructure, and Process.

You’ll Learn...

[04:40] Real Estate Education: You can learn, if you want to; even if you’re not smart.

[07:21] Hospitality Industry: How to treat people, customers, and residents like guests.

[10:37] Set up sustainable business by shifting to VIP Paradigm.

[14:35] Landlord Coach’s favorite catch phrases focus on valuing your time and money.

[19:30] Better Business Owner: It’s not about the number of doors, but what you’re trying to accomplish in revenue and lifestyle.

[26:40] Cycle of Suck and 4 Ds to Revenue (doors, deals, duration, and dollars).

[29:10] Being time wealthy is more of a decision than a destination.

[31:37] Bad communication is a symptom of the problem, not the problem. The problem is a bad infrastructure and/or process.

[36:35] Product to Produce: Consistency; sloppiness is your only competition.

[37:35] Negative Feedback Loop: If you put something in place, make sure it gets done.

[39:04] Company’s Compass: Define/develop core values to make business decisions.

[41:55] Being your own boss is great, but get a coach to take you where you want to go.

[44:10] Difference between mentor and coach: Invest in yourself by paying a coach to hold you accountable.

Tweetables

Real Estate Education: It’s about the want to; not the intelligence.

Don’t do it all. Learn to fire yourself!

There is no amount of money that will make time irrelevant.

If you don’t place a value on your free time, someone else will.

Resources

Mark Dolfini on Facebook

Landlord Coach

The Time-Wealthy Investor 2.0

Marriott

DGS104: Virtual Tour Technologies with James Barrett of Tenant Turner 0

Transcript

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

Today I’m hanging out with Mark Dolfini of Landlord Coach. Mark, welcome to the show.

Mark: Hey, it’s great to be here. That’s a heck of an intro.

Jason: It’s our manifesto, I call it.

Mark: I love it. That speaks directly to my heart when we’re talking about people who want to grow their single family portfolios. That gets me fired up.

Jason: So Mark, I want to introduce you. I’m really excited to have you on the show. We’re talking before show a little bit and we have a lot of alignment. We both believe in coaching, we both believe in having coaches.

It says Mark Dolfini is a veteran of the US marines—thank you for your service—and the author of three real estate books. He was first published in 2017, second book released in early 2018, and his third book, The Time-Wealthy Investor 2.0, came out in March of 2019. He received a Bachelor of Science in Accounting at Purdue University, worked for Marriott International before venturing out full time into the world of real estate investing.

He’s a managing broker for property management company based out of Lafayette, the founder of Landlord Coach, sits on numerous boards, including the Better Business Bureau of Central Indiana, the National Federation of Independent Business, and is a training director for the Central Indiana BNI Franchise and Networking Organization. He spends his free time pistol shooting and kayaking, and lives in Lafayette where he and his wife, Jennifer, are raising their two sons, Leland and Logan.

All right, so we got through your bio. Mark, let’s start out with you and I want to hear about your background. How did you get into the space of real estate, property management, landlord coach, all of this. How did this all come about? Give us a little backstory.

Mark: Sure. Well, I’d love to say it was a straight line trajectory, but you know there’s your plan and God’s plan, right? That doesn’t and usually don’t always match up.

Jason: [...] and then there’s reality.

Mark: Exactly.

Jason: [...] winds. Always.

Mark: Right. I’d always wanted to do something entrepreneurial. I didn’t know exactly what that was. I mean, this is back me being seven or eight years old, I started with a vegetable stand, the vegetable that I grew in Upstate New York and sold them at a vegetable stand that I built out of out of wood. So I always started back from there.

My first go at real estate was when I was actually in the marine corps still and I bought 40 acres of property that was in Northern Arizona. I paid a couple of hundred bucks an acre for it and that was really it. It was just a desert in the middle of nowhere that no one seemed to want, but I knew at $200 an acre was a pretty good deal. I ended up buying it for capital appreciation at that point in time. But having a piece of land that doesn’t generate income doesn’t generate revenue. I learned pretty quickly is not the way to wealth. Getting someone else to pay for it was really what I wanted to do.

I was getting near the end of my time in the marine corps. Had a great time, it was good for me in a lot of ways. It was tough, but I’m glad I did it. I also knew I needed to get an education. So, I got out. Now, let me just frame this because I went to school in Upstate New York and graduated 352nd out of 354. Let that sink in, everybody. I was at the bottom of the class.

Jason: Right [...] the class by any means.

Mark: Right. Not even close. The reason I’m saying that is because people who are out there think that they have to have this high-level of intelligence and high-level of intellect to make this business work. If you know anything and you’re doing real estate, it’s about the want to, it’s not about the intelligence. Let me just put that to bed right away.

Now, that doesn’t give you an excuse to not go out and say, “Well, I need to learn things and therefore it’s just too hard.” There are lots of things are difficult. Walking when you were two years old was probably difficult. Or 18 months when learning how to talk was difficult at one point. It’s the same thing. You can learn this if you have the right intention.

Anyway, getting out of the marine corps and getting into college was a little tricky because with my “stellar” high school career. I had to figure out how to how to do that. I hadn’t sat for an SAT. I had to learn in high school all that stuff. When I got out of the marine corps, I actually got accepted to Purdue. I got a high-enough score on my SAT. While I was at Purdue, I started buying some rental real estate. By the time I got out of Purdue, I had about a dozen rental units altogether, which is roughly half a million dollars for the real estate. That really how I got started and that’s really where my real estate education really got started.

Jason: Right, so you cut your teeth on in the real world with your own real estate deals dealing with tenants, toilets, and termites, I’m sure. Fast forward to now. Help us understand. We’re going to be talking about the VIP paradigm: vision, infrastructure, and process the acronym. Let’s get into it.

Mark: Sure. Before I get into that, it’s important to know that the rest of the story, as Paul Harvey might say. As I was getting out of college and I was buying more rental units, there’s lots of property managers out there who are also investors, so now I’m speaking to them as well.

As I was growing this side of the portfolio, I was working as an accountant—I have a degree in accounting—for the Marriott. Wonderful, wonderful company. I learned an awful lot from the hospitality industry in terms of how to treat people, how to treat customers, and really treat my residents like I would be treating hotel guests. There’s a lot to learn out there from the hospitality industry in terms of what they do right. It’s just a different approach.

It’s almost like the paradigm shift that happened with the banks maybe about 20 years ago. It used to be you run into the bank almost when you were in trouble. Now, you walk into a bank and everyone greets you, throws bottles of water at you, says hello and they give you this. That wasn’t always the way. The old school guys may remember that. Now, it’s a different paradigm because now they’re welcoming customers. They want you to come into the bank. They want you to have that transaction at their location.

I would love to see that shift continue into the property management side because now it almost seems like the residents are the enemy rather than they’re the ones who pay the bills. As I continue to evolve and I loved what I learned from the hospitality industry, eventually I got to a point where I was able to get out and start to do that full-time just managing my own portfolio.

Unfortunately, I got very, very overleveraged, not only in money but in time. What was happening is every time a task would come on, rather than looking for someone to hand that task to, I just took it on and kept it. There’s lots of property managers out there that are doing this. They’re not valuing their time highly enough.

What ends up happening is they end up taking on this job, they don’t factor in opportunity cost where they’re going to take every job that’s out there and they’re going to do it. Even though they may be worth realistically $20–$50 an hour, they’re still doing $10 an hour jobs. In essence, every time they’re doing a $10 an hour job, they’re costing their business $40 an hour or $30 an hour and they don’t look at in that paradigm.

Learning to fire yourself is one of the biggest things and I’m sure we can get in that little bit later, but really where my transition in the property management occurred was almost out of necessity. That seems to happen for a lot of people and certainly I was no exception.

Going into 2009, I had about $6 million worth of real estate in my own portfolio. I was working 16–17 hours a day just trying to keep all the balls in the air. When the economy fell apart, that’s when things really, really got bad for me. Of course I started working 20 and 22 hour days and kept catching naps wherever I could. I was doing it all and I was doing it all very, very poorly.

Finally, where the camel’s back broke was I got sick and I almost died in the hospital from double pneumonia. From all that, is really where I really got very intentional about setting up a business that was sustainable and I started delivering to my cash flow by doing some property management for other people.

I got my broker’s license, started doing some property management on the side, and that’s really where I also got very, very intentional about how I want my business to look, the infrastructure that I needed it, and also the processes that needed to run on that infrastructure. That’s the vision infrastructure process paradigm that you’re alluding to earlier is you’re getting a vision where I wanted to go, setting up the proper infrastructure for it, and then putting the processes in place on top of that.

Jason: I want to point this out because this is a milestone that I’m wondering if every entrepreneur eventually go through it. It’s like a crisis of health where we finally realize that we are not invincible, that it’s not sustainable to just do the hustle and grind that’s trumped up, and it made to look beautiful and exciting to just work, endless work weeks and crazy amounts of hours.

Looking back, I had my own crisis like this. I remember I was literally at the end of a sales call laying on the floor because I had slipped a disk in my back or something because I wasn’t eating. I was just working, I thought I had to work harder and harder, I was just do-do-do, and then I couldn’t work for two weeks. I was laying on the floor and it was ridiculous. That gets really expensive trying to recover from that.

5That was when I had this shift and this epiphany came to me that our health and self-care is the foundation for my ability to provide, to do everything in the business, and you need to have a business that serves your needs and be sustainable instead of becoming this robot slave that is going to wear your body out on the business.

Mark: Right To that point, you have to understand that we work so we can live, not the other way around. There’s so many people who are out there living to work and property managers, you get that one or two critical pieces, or one or two critical people that are doing 80%–90% of the work, and then you get everybody else who just shows up and cares or doesn’t care, whatever. I know it’s a typical 80/20 rule where you get 20% of people doing 80% of the work. In property management, it’s more like 1% doing 99% of the work. Then you got those critical pieces and you cannot build a sustainable business on that.

Lots of property managers are very small. They’re under 500 units and they’re one- or two-man shops. In the property management company that I have, definitely is a weird hybrid between management company, maintenance company, but it works and it works really, really well. We can get into that later, but I agree with you. You have to almost get to that crisis. You either get to that crisis and you make a decision or you just have enough for you to just walk away. In either one, I don’t think is good. A lot of people get to that point because they don’t value their free time. That’s fundamentally it. They’re just not buying their time.

Rob: Yup. Time is worth more than money to me now. If people approached it from that standpoint at the beginning, that’s why you hire somebody. You’re buying time. That’s why you build the business. You’re buying time. Every dollar I spend should be hopefully moving towards buying me some additional time or collapsing time. That’s why I get coaches. It collapses time. I’m buying time.

I love what you’re saying. A lot of times, we start out building the business we can have instead of the business that we want, and they’re two very different things. One you’re serving and the other one serves us.

Mark: That’s exactly right. There are two catch phrases I use all the time. One of those is, “There is no amount of money that will make time irrelevant.” When you get your head around that, then all of a sudden you say, “Okay.” The other phrase I use quite often, especially when I’m signing-off on a live event or something like that is, “Not only is there no amount of money that will make time irrelevant, but if you don’t place a value on your free time, someone else will.” Usually the amount of value that they’re going to place on your free time is far less than what you're worth, and they know it. That’s why they’re calling you with that, right?

Jason: Yeah. The, “You got a minute?” and, “Hey, can I just take you out to lunch?” these kind of things.

Mark: Absolutely right. That’s exactly right.

Jason: You need to value your time. I don’t know how you tell people to value your time, but I usually say, “Take your gross revenue of the company if you’re the entrepreneur and divide that by 20-, 80-, or a 40-hour work week. That’s a pretty good estimate of what you should, at least, value your time as a dollar if you were looking at it on a dollar per hour basis.”

Mark: Yeah, and if you did it on a 40-hour work week, you’d be surprised that most property managers I know are working way more than that. When you come back into it just from that simple math, that’s a perfect calculation. In fact, that’s exactly how I would tell people how to put just a rough number on your time. Or even people that are doing property management on the side. There’s lots of property managers are also estate brokers. They all have to be brokers, but they’re also doing real estate transactions on the side where they’re showing properties and they’re selling properties.

That’s all revenue and that’s where you need to determine your opportunity cost. I would say all of your revenue that’s coming in, divide that by coming up with an hourly rate in terms of a 40-hour work week or even a 50-hour work week, to be fair. If you’re coming up with the $50–$60 an hour rate and you’re doing a $12 an hour work, you’ve got to replace yourself from doing that task as soon as you possibly can.

I have a driver that I hire when I go to Indianapolis. I go to Indianapolis a couple of times a week and people are like, “Oh, you’re mister big time,” and I’m like, “No, it’s not about that. It’s not about because I feel super important. It’s because I get three hours of windshield time that literally is purposeless. I might listen on audio book. I still like to drive, but it’s not about that. It’s so I can get that time back.”

So when I’m done at the end of the day, I’m not completely wiped out and spent. I don’t have to spend an extra three hours at the office that I should be spending with my wife, even if just sitting on the couch with her. Or just sitting at home being with her, or being around my kids, or just being home, where I want to be.

There’s lots of people who don’t understand that and I’m like, “Okay, I pay this guy maybe $50, $75, $100 to drive me there and back. That’s easily worth it because my time is several hundred dollars an hour. Someone wants to call me and coach with me, I’m like, “Yeah, that's what I’m going to charge you,” so why would it cost myself that money driving? Sometimes, I still do because I want the solitude and I want to listen to an audio book and just enjoy it. Sometimes, I just want road time. But lots of times, if it’s purposeless, I really want to try to eliminate those bottlenecks as quickly as I possibly can, so I can stay focused on what I’m really trying to accomplish.

Jason: Yeah. It’s funny. You’ll see entrepreneurs, they say they have $1 million business. Their time is probably worth about $480 an hour by that calculation, say $500 bucks an hour, and they’re still doing stuff like sometimes you’ll see them doing their yard. If they love doing those things, great, but sometimes we’ll be so focused on one area that we lose sight. For example, there was a time period where I hired a house manager and a nanny because all the fake dad stuff was being done. [...] care about laundry. They don’t care who makes the mills. They want time. So if I can offload those thing to somebody and I’m not paying them $500 an hour to offload those things, then I can spend time. Ultimately, were buying time and that’s a critical piece to growing and scaling business.

Mark: Yes. That’s 100% vision. A lot of times, especially whether I’m working with an individual investor or I’m working with a property manager, door count is really where a lot of people say that and I stop them. I know.

For example, I got the moniker, Landlord Coach, but my goal is to make people not landlords. If I was going to be a property management coach, my goal would not to make them better property managers. My goal for them is to be better business owners. Even though a lot of times they say, “Oh, all I want,” if it’s an investor, “are 100 units,” or if it’s a property manager, “I want 1000 doors.” I’m like, “Okay, so 999 wouldn’t do it?” and they go, “Well, yeah maybe.” “Okay 997 wouldn’t do it?” I’ll go down this until they finally get that, “Well, okay Mark, what’s your point?” I said, “Look, it’s not the number of doors. It’s really about...”

Jason: It’s not an ego number, not an ego goal.

Mark: Right. It’s not about that at all. It’s about what you are trying to accomplish in terms of your revenue goals. It’s really about that. If this is about ego, I respect that, but that’s not toward your vision. A lot of times they say, “Okay, well let’s get towards a vision that’s really actually purposeful and usually after I beat him up a little bit and I go, “Okay, 997. How about 995?” After they go, “Okay, what’s your point?”

A lot of times I would say, “Okay, so in other words, you’re saying to me that you need to get to a revenue or you need to get to 1000 doors at, say, $1000 apiece. That’s what you need, but you couldn’t get there with 500 doors at $2000 apiece? Obviously the math is the same and a lot less work,” and they go, “Well, yeah. Okay.” “So, is it really about door count? Because I can get you 1000 doors. There are not going to be anything in the world that you or anybody else going to want to manage, but you really want 1000 doors?”

Jason: [...] ridiculously low, that you can get a lot of doors really quickly.

Mark: And that’s what a friend of mine did. He’s in the area of the state that I wouldn’t go to for love or money, and it’s terrible. I feel bad for him because I see him, watching him get into a leaky lifeboat in shark-infested waters, and I’m just like, “Oh, my God.” And he’s a good dude. He grew overnight from zero to, I don’t even know he’s pumping maybe 150–200 now, but they’re units that I wouldn’t take for any amount. I literally go, “Well, the rent amount isn’t enough to cover my management fees,” because they still wouldn’t be enough.

Jason: Ultimately, people really need to ask themselves the question, “What do you really want? What do I really want out of the business?” If it’s an ego goal, great, but maybe what you really want is usually some lifestyle or maybe you want to have some amount of time, you want to spend time with your kids. What do you really want? And maybe you can create that and have that without having 1000 doors or without it having to look a certain way that you may have thought. [...] really matter? Why [...] matter?

Mark: Right. It’s really not about door count as much as people want to focus on that now to a certain degree. It depends on your business structure. Again, investors are a little bit different than property managers. In my case, we do a lot of our own maintenance. We have an in-house maintenance department. A significant amount of revenues come in from that. Having more doors enables us to have more opportunities to maintenance. So in that particular case, it does really matter, but we still want to manage higher-end properties.

We don’t do a lot of low-end stuff anymore just because of the amount of banging your head against around. It just increases exponentially when you get a certain lower market. It’s just not a market that we want to court anymore. We got out of that probably maybe six years ago and never looked back. The level of drama that has decreased in my life has just been exponential.

Not saying that’s bad. There’s other people who want to court that market and do well in that market. That’s certainly fine if that’s a strategy that’s working for you. I’m not telling you about to change it. But for me, I would really invite you to really focus on not even so much as a revenue goal, because then the revenue goal, it’s funny because people go, “Well, yeah. I would like to have $50,000 a month coming in free cash flow, Mike.” And then, I go back to my normal argument and go, “Well, okay. So you want $50,000 a month coming in. $49,990 won’t do it?”

So, you have to tie it to a life output goal. That’s why I say to them, “What is this even about? What are you trying to accomplish?” When they say, “Well, okay. What I’m really trying to do,” and usually it’s after they start to fight back some tears, “honestly I just want to spend more time with my kids.” “Okay, does more time mean?” “Honestly, I would love to be able to homeschool them.” “Awesome. Now we’re getting to a vision that really frigging matters. Not some nebulous 1000 doors, or $50,000 a month, or whatever it is. That’s what you want and we can tie a number to that. We can tie a revenue number to that.”

Or, “I want to move my aging mother into a house that’s just close by.” “Okay, what’s it going to take to buy your mom a house? Do you even need to buy it? Can you rent one? The next 10 years, your mom’s 80 now. Is she going to live another 10 years or you can budget 10 years worth of rent payments for that sort of thing?”

Whatever that is, you can actually get a quantifiable life output goal that’s tied to that and that’s really what vision really needs to be. It needs to come from the limbic system of our brain. The problem with the limbic system is it doesn’t have a capacity for language. It can’t explain why you love your wife. It can’t explain why you love your grandmother. We come up with platitudes like, “Well, she bakes me cookies,” but that’s a thing. You just say, “I don’t know. It’s just the way she makes me feel,” and you get teary-eyed.

That’s the limbic system activating your brain and that’s how when you get to that point of your vision and you start to think that way, feel that when you get the goose bumps on your on your arms, that’s when you’re close. And that’s when you know you’re starting to get to a vision that really, really matters.

Jason: I like it. I like it a lot. You touched on a couple things. Some of the concepts that I share is the cycle suck. It’s like if you take on bad owners, you’ll have bad tenants or bad properties. If you have bad properties, you get bad tenants. If you get bad tenants, then you all have a bad reputation, and then you’ll attract more bad owners. By taking up on the crappy properties, you end up caught in property management hell, the cycle of suck.

Another concept that resonates with what you’re talking about that I the shares the four Ds to revenue. It’s not just about doors. The four Ds, the first one could be doors, but the next one is how many deals. Deals is usually what I share first. You get number of deals you get in, how many doors per deal? It’s not just about the doors. One deal being worth one door, that’s the ratio, then you don’t have as much leverage. It’s not as easy, but if on average your deals have two doors, you double your revenue. It’s these four numbers that multiply.

Then, you’ve got duration. How long can you keep the door on? A 1-year accidental investor versus a 10-year buy and hold, in your property management business there’s 10 times difference. That’s pretty significant.

Then, there’s dollars. It’s just what your fee structure is like. Are your fees good? It’s not just about doors. There’s all these other variables that can create that.

I love shifting it towards the life goal because the life goal is what really matters. I would imagine you found this with coaching clients. Sometimes the life goal and all the stuff they had trumped up in their mind, or built up, or that they felt they needed in order to have the life that they want, sometimes you can just jump right to life goal.

You can just create that like, “I want to spend an extra hour with my kids.” “Okay, block out an extra hour,” and they’re like, “Oh, I didn’t think I could do that.” Sometimes it’s really that simple. We can just jump right to the life goal and the business will still be there and it will still function.

Mark: Yup, that is true. One of the things I talk about in The Time-Wealthy Investor 2.0 is really about making that decision. A buddy of mine who’s got multiple units is just nauseatingly wealthy in terms of real estate. He’s a great guy and said to me, “You know? I read your book the other day.” He’s a guy who doesn’t read and he’s such a snarky friend. His name is Randy and he says, “I would never admit this to your face, but I feel I have to,” he goes, “I really got a lot out of that book.”

I was like, “Okay. What’s the punchline?” He’s like, “No, there’s really no punchline. I feel I am time-wealthy,” he goes, “and funny, I could probably retire based on the life output that I want to define right now.” He’s like, “Really, time-wealth is really more of a decision that it is a destination.”

I was like, “Yeah, it really is because right now I have all the time-weath that I want. I work about maybe two hours a week. Sometimes I’m working more, like right now, I’m pitching in more in the office just because we’re down a person,” but it gets me re-engage in the business and it makes me go, “Hey guys, why are we doing it this way?” and then they go, “Oh, because this this and this.” I’m like, “Okay, cool,” and I let them define the process.

If they’re the ones that normally work the process, my job is really to come in, look and see what maybe needs tinkering with, maybe new or adjusting, giving them coaching, that’s the sort of thing. Working 2 hours a week, sometimes 4–5 hours a month in the property management business, but I have all this time-wealth to do other things like coaching, writing books, and things that I really, really enjoy. It really is just a decision.

When you hire good people, you bring them in, you set up a solid infrastructure for your business, set up solid processes, and you let them run it. Stay the hell out of the way. When I’m coaching property managers, that’s where I see a lot of problems. They don’t have an established vision for themselves, they don’t have proper infrastructure, they’re trying to run on really lean infrastructure or none at all, so the process has to pick it up. What I’m talking about infrastructure, say property management software, or website, or things like that, when you have a weak infrastructure, it has to be picked up by a stronger process, which means people. A person has to pick up that extra process.

Let’s just go from the really sublime to ridiculous level. Say you don’t have property management software. You’re running everything on Excel spreadsheets. That’s the extreme, but there are property managers out there doing that, so that means they have to have a lot of people managing that poor infrastructure.

Here’s the thing. Here’s the one thing I hear all the time is that, “Oh, my property manager doesn’t communicate. They don’t communicate with me. They don’t tell me.” When you have bad communication, that is a symptom of the problem, not the problem. Let me say that again. When you have bad communication, that’s a symptom of the problem, not the problem.

The problem is you have bad infrastructure, you have bad process. That’s where communication issues are going to show up. Let’s just use a very obscure example. We’ve all been to a restaurant where you had bad service. You’re sitting down and you can see that that waiter has nine tables and that waiter has one table. You’re trying to communicate to someone to take your order. You can see the problem because you’re sitting on the outside. You can see the problem, but you’re going, “Well, that waiter’s got nine tables, that one’s got one. Why isn’t the manager stepping in?” Bad process. “Why does that person have nine tables?” That’s bad infrastructure. That never should have happened that way. That’s just one very obscure example.

Let me use another quick example here real fast. Have you ever walked up to a McDonald’s at a truck stop, where there’s basically four cashiers ready to take your order. You walk up, you look left and right, and everybody’s standing back away from the registers. the customers. You’re trying to figure out who’s next in line. You’re like, “Can I go? Are you next?” Because there’s no infrastructure, the customers have to decide who’s next in line.

What’s a simple piece of infrastructure that you could put in place to manage that? Well, a simple queue, a simple rope line. That’s a piece of infrastructure that you could put in place that would manage the customer flow. Then, you don’t have to worry about that.

Another example would be a bad process. Let’s pretend you go back to the same McDonald’s. This time it’s really busy and the customers are four and five deep at each line at each of the four registers. This time what ends up happening is you get a manager that opens the fifth register and says, “I can help the next person.” Then, you get somebody who goes from the bend of one line and then jumps in front of everybody else. Now you just base and created a brawl. It’s this mad rush towards this fifth line. That’s a process problem.

What should have happened is, “Hey, I’m the assistant manager. I’m going to have you open that line over there but I’m going to direct some people over there. I’m going to go out to the crowd and direct some people over there first before you say anything.” Then you can manage the process. That’s process. That’s a broken process when they do it the other way.

That’s why I’m saying infrastructure and process shows up in bad communication all the time. This means they’re not communicating work orders when they come in. They’re not communicating when a resident doesn’t pay rent. Owners need to know that. They need to know if they’re expecting the revenue to come in on a certain month and they don’t get communicated that. “Oh, by the way, the resident never paid rent,” and, “Oh, yeah. By the way, we’re going to go ahead and evict them.” They need to know these things and when you don’t have an infrastructure or a process in place to let them know that, that’s when communication falls. That’s when the bad communication issue show up.

Jason: Yeah, it’s interesting. It’s really tempting for entrepreneurs to start blaming their team. This is like early entrepreneurs that they’re transitioning away from being a solopreneur, that having a team, they usually build the team around them as if they’re just the solopreneur still, and they try to micromanage them. They’re always complaining about the communication. They’re always complaining about people not doing things, “Why can’t they just do what I tell them?” and that sort of thing.

I like what you’re saying is they have bad infrastructure and bad process. Things are not defined, there isn’t clarity, and that leads to challenges in communication. [...] built into the process. They can be part of the process. [...] you need the right tools to facilitate communication. I run a virtual company. If we didn’t have the tools that facilitate communication, there wouldn’t be any. We’re in different states, some of us different countries.

Mark: That’s exactly right and they need to think about their business, about the product that they produce. I used somewhat as a nebulous example, but the product that they need to produce should be consistency. That’s the product that they need to be shooting for. When consistency is your product, the only competitor you’re going to have a sloppiness. When consistency is your product, sloppiness is your only competition.

That’s the thing that is really hard for me to convey to lots of managers because we’ve got all sorts of products. We sell properties. We buy properties. We do all these different things. I don’t care what you’re doing. I don’t care if you’re making razor blades. You need to have a consistent product and I will not allow us to do anything in the business unless we can do it consistently.

If they come to me and say, “Hey, you know what we should do? We should send out birthday cards to all of our residents.” “Okay, great. How are you going to do that consistently? And you need to tell me. Who’s going to manage it? Who’s going to do it? What’s the negative feedback loop if that doesn’t happen?”

Let me talk about negative feedback loop for second. You put something in place, it’s like I send you an email expecting you to do something. What’s the negative feedback loop I’m going to put in place if that doesn’t happen? I’m not talking a negative feedback loop like someone complains, which is often what happens if something doesn’t get done.

You go, “Oh, man. I don’t know. I sent that email off two weeks ago. I forgot about it. I just assume that they would do it.” What’s the negative feedback that you’re going to put in place to make sure it actually gets done? Are you going to list that [...]? Are you going to put a task? Are you’re going to put something in some task management software? What’s the negative feedback loop that you’re going to have to make sure that stuff gets done? That’s all part of process.

Let me just boil this down into an example because I keep saying vision, infrastructure, and process. Think of vision as your map. Infrastructure would be the train tracks, and then the process should be the train that runs on those tracks that all stays in alignment with your vision for the future.

Now, for property managers, they’re saying, “Well, why would my employees care about my vision?” They’re not going to care about your vision. They’re only going to work so hard, but they’re not going to work that hard to put a boat in your driveway, or a pool in your backyard.

This is an extra step to goes in with property managers is once you have that vision for your future, then you go into developing core values for your business. The core values are just the things that you value. You may value justice, You may value efficiency, you may value lots of different things that are core to you, but now you get to identify what those things are and that becomes your compass for all decisions that you’re making. Once you have those core values defined, if you’re making improvement, you say, “Okay, is this in line with my core values?”

If I’m going to make a hiring decision or a firing decision, are they acting in line with my core values? When I do my employee evaluations, I’m going to say, “Hey, when you did this, this was really in alignment with our core values and I really like what you did,” or, “Hey, when you did this, I was really upset because it wasn’t in line with our core values. I’m [...] say you. I’m just upset that your behavior because this isn’t in alignment with our core values.”

One of the things I’ll coach them through, some are three, four, five, no more than six. A lot of people sometimes want to get, “Oh, we value all the stuff,” but usually it’s something that’s inherent to them as an individual and they value these things. They value justice, they value equity, they value fairness, and they can value profitability. There’s nothing wrong with that. It doesn’t mean you’re a bad person because we all need profits to grow, get better, and be a better company.

Once you get those core values defined, then it’s easier to put infrastructure and process improvements in place. The infrastructure of the things I’m talking about there are websites, software, even the desks and chairs in your office. The process pieces are really about how you operate. It’s the rules of how much you operate, it’s your SRP, it’s your FAQs. Those things that really helped define how things are done in your office based on it that infrastructure that you have in place.

Jason: A lot of alignment between what you’re doing and what I do with clients as well. I mean, 3–4 core values for their business, you’re helping them figure out their purpose, their why as a business owner. These things sound like woo woo and fluff to a lot of people until they implement them. Then, they’re usually pretty astounded because, like I tell my clients, “You’re the sun at the center of the solar system. If you don’t like what’s going on inside the solar system, you change the sun, everything changes.” Usually as business owners, we try to externalize everything and tackle everything farthest away from ourselves. If we work on ourselves. everything changes by default.

Mark: That’s so good. I love that. That is so true.

Jason: So, we talked about vision, we talked about the infrastructure, we talked about the process. Is there anything else that you want to touch on while we’re hanging out here?

Mark: Yeah. I see a lot of people out there that are just working themselves. They’ve created a job for themselves and they’re not ever trying to transition themselves out. They think that there’s no end in sight.

Jason: They’ve succumbed. They [...] to their fate.

Mark: Yeah. I’m not saying I’m the coach for everybody and you would probably say the same thing, that you’re not the coach for everybody, but for God’s sake, get a coach. Get somebody that can help you get to where you want to go so much faster. Yeah, it’s great being your own boss because you didn’t want to be held accountable to anybody. But now you’re not accountable to anybody, know your life sucks. It didn’t turn out the way you want it. If you’re living the dream, your life is great, and you have everything that you want, that’s great. I don’t know that I can help you get much better, but get somebody to help you.

We talked earlier about each of us having coaches. I spend a lot of money each month on coaches to help me in areas where I have blind spots and just to challenge me, just to say, “Hey, Mark. You said you were going to do XYZ by a certain period of time. That’s not done, so now what?” They already know how they’re going to hold me accountable and I pay a fair sum to these people, so it hurts when I show up. I know I’m going to be ready when the bell rings.

It’s not about paying them the money just for the sake of paying them the money so that they can call and yell at me. They are a softer touch, but the thing is, I want to make sure that I’m being held accountable because we don’t have anybody that’s holding us accountable. That’s the danger of being an entrepreneur.

I would really encourage people to look at that. It doesn’t necessarily need to be real estate-focused although it probably would make more sense. I have one that helps me in sales. I have one that helps me in marketing. I have one that helps me as a national speaker. I go and I speak at a lot of different places, so I have one that help coach me in that. And of course different masterminds of things like. I would really, highly encourage people that if they are looking or just flirting with the idea, get somebody.

I am going to say this. The difference between a coach and a mentor, I would say a mentor is probably someone that you’re not paying, probably a friend. They are not going to hold you accountable to the level that you need. I say that this is someone you need to pay, it needs to hurt a little bit, and you need to have some skin in the game. You really need to be committed and you really need to be paying somebody to do that. Like I said, it doesn’t need to be me, it doesn’t need to be you. I’m just saying it’s someone they knew paying someone.

Jason: Yeah. There’s some magic I’ve noticed, just psychologically, that happens in shifts inside of my clients or that shifts inside of myself when I am paying a coach and I’m investing in myself. It just shifts psychologically how we value ourselves and energetically it allows us to convince others to invest in us as well.

It’s a hard sell to go out even as a property management business owner and if you’re doing the sales in your company, you’re the BDM and say, “Hey, you should spend money with us. You should invest. You should have us manage your rental property,” but I don’t even invest in myself. I don’t care enough about myself or my business to invest in that. I’m just trying to make money, then you’re going to ask others to invest in you.

Psychologically, when you invest in yourself, I’ve noticed revenue goes up for me, lifestyle shifts. There’s something that happens energetically and psychologically when you are subconsciously investing in yourself. It shifts things. I love what you’re saying, everybody really deserves to have a coach, they deserve to be working with consultants, they deserve to have people above them.

If you’re at the top of the org chart, there’s a problem. There’s a problem because everybody below in the org chart is hopefully being fed, getting some input, growing, and evolving, but if you’re at the top of the org chart and there’s nobody above you, it’s a scary place to be. [...] The Emperor With No Clothes, unless you get some input, unless you get somebody that you can place above you in that org chart like a coach, or mentor, or something that will feed you.

Mark: I look at it exactly the way you’re looking at it except I flip your chart upside down. I look at those people as the direct supports for everybody above them because they’re carrying the weight of everybody above them. If you get somebody that’s not doing what they’re supposed to be doing—they’re coming in late, they’re wiggling around at the top, and you’re trying the keep the org chart balanced—it’s tough.

Maybe it’s so far up that you can’t see what’s going on up there, but you have a coach that can stand back and go, “Yeah, that guy’s playing Galaga on his computer and you don’t even see it,” because you don’t want to see it or you just can’t see it. That’s where it gets tricky and a lot of times, you get too close to the problem and you can’t see it. It’s like you sitting back watching the waiter who’s got nine tables. You can see the problem instantly.

Jason: [...] you can’t sometimes. They’re too close to the fire, they’re dealing with what they’re dealing with right at that moment, that’s us as entrepreneurs all the time. I can’t tell you how many times I’ve had a coach, I’ve sat down with coach or talk to one of my coaches and said, “Hey, here’s what I’m dealing with,” and they point, they say something to me, and I feel really stupid, then I say back to them, “That’s exactly what I would’ve told one of my clients.”

We’re just too close to the fire. We don’t have somebody outside of ourselves because we are the one that created the problem. We’re at the helm. We are the problem. We are the biggest bottleneck in our company. We are the one holding everything back. We’re the one preventing growth. Us trying to solve the problem on our own is like trying to look at the back of our own head.

Mark: Yeah. It’s like trying to put sunscreen on your own back and that’s the thing. If you don’t see yourself as part of the problem, you cannot see yourself as part of the solution. A lot of times when it’s educating them to say, “Look, your company has a very real culture problem. That one is not respectful, that one is treating customers anyway that they want. As a result, they’re treating each other very poorly and blah-blah-blah.” That’s because when you got ill-defined core values, you’re going to run into that. You’re going to run into culture problems.

There’s a client that I really didn’t feel like I could help him as much as I wanted to, but he had a real culture problem is at his office. He didn’t really see it until he started letting some people go that were really some of the major problems. He had a live event that we don’t work together anymore, but I’d love to get him back on just to say, “Hey, how are you doing? How did things evolve for you in terms of getting those core values more well-defined?” and really start holding people accountable to them.

One of the things that I do is we have an 8:07 meeting every day. The reason it’s 8:07 is people are rarely late to a meeting that’s got an oddball time to it. They always get there early. There’s not much I don’t do without purpose, but every meeting, we pick one of our five core values and we review it.

They’re hearing these core values every single day. That way at their 90-day evaluation, guess what they get to roll over again? Guess what they’re hearing again? Our core values. They’re getting graded against those core values. It’s not just a shock like, “Oh, yeah. Okay, yeah. I never heard that core value before.” These are things that need to be repeated over and over.

Jason: Yeah. I think we run our businesses probably somewhat similar [...]. Everything gravitates towards truth. We do our daily huddle at 8:45 every morning. I always have appointments starting at 9:00, so it has to be short and that allows our team to see each other because we’re virtual, but yeah, it’s an oddball time which does work, to make sure people show up.

Mark: Absolutely.

Jason: Cool. Mark, it’s really great to connect with you, to get [...]. How can people get in touch with you? Now, I want to point out like we were talking before the show, your area of genius, what you really can help probably our listeners with, is on the delivery, the fulfillment side, building out this portion of their business where they may be struggling, especially those that are graduating maybe from solopreneur to trying to build a team. That’s where they’re getting the systems and processes. They’re not the guy doing every single thing or the gal doing every single thing anymore and that’s a painful transition. How can people get in touch with the Mark and Landlord Coach?

Mark: My website’s landlordcoach.com. I’m on Facebook @mylandlordcoach. You can find me easily. You can see the moniker in the back. I think where you and I differ is that I helped create capacity in the world. I helped create white space on our calendar. What they do with that white space is up to them. If they want to use that white space to grow their company from 300 doors to 800 doors, that’s fine. I don’t help them with the growth side. I just help them create capacity on their calendar, help create white space, so they can do whatever they want.

Now, some people go, “Yeah. I’m happy with the white space and I’m making enough money now and I’ve gotten time on my calendar. I’m cool. I got everything I want.” Some people get to that point in their like, “No, we’re ready to grow.” I’m not the growth guy. It’s not what I do. I’m not from that piece of it. I [...] turn it over to someone you and say, “Now that you got this increased capacity, that’s the person that’s going to help you take your business from 1000 doors to 2000 or whatever.” That that’s not what I do. What I do is I help them create capacity on the calendar.

To that aspect I just want to make sure I delineate myself there because I do work with a lot of individual investors. I also work with property managers and just helping them get their life back. That’s one of the biggest things that I do.

Jason: Love it. Mark, I appreciate you being on the show. Thanks for being here.

Mark: This has been great. Thanks so much and my best wishes to all your listeners.

Jason: Thank you. All right, we’ll let Mark go. If you enjoyed the show, be sure to like and subscribe on whichever channel we’re on. We’re on YouTube, we are no iTunes, and make sure that you subscribe to our email newsletter. If you are property management entrepreneur that’s wanting to grow your business, add doors, and increase your revenue, then please reach out to us over at DoorGrow. We’d be happy to have a conversation and see if you are a good fit for what we might be able to do for you. Of course, check out Mark and his business over at Landlord Coach. That’s it for today. Until next time, to our mutual growth, everyone. Bye.

Download this Episode

Nov 12, 2019

How can you reduce the number of times you show a property? Virtual tours. It’s time to weed out unnecessary in-person showings with time wasters and tire kickers.

Today, I am talking to James Barrett of Tenant Turner, a leading property management tool and resource that lets property managers manage tenant leads, schedule showings, and automate the leasing process.

You’ll Learn...

[02:59] Goal of Virtual Tours: Educate potential tenants before choosing to visit property.

[03:27] Customer-Centric Concept: Virtual tours evolved from quality images to videos.

[04:20] ROI: Reduced costs for video camera equipment make virtual tours possible.

[07:40] Lack of competition makes virtual tours core to growth and promotion.

[08:28] Direct correlation between virtual tours, time on market, vacancy, and showings.

[08:53] Quality over Quantity: Maximize exposure to increase good-fit tenant leads.

[13:37] Virtual tours take time and money. Are they worth it? Promoted? Required?

[16:29] Record moves, maintenance, and inspections for marketing and leasing metrics.

[21:08] Options and Recommendations: Zillow’s 3D Home, zInspector, and Ricoh; or outsource and offload to PlanOmatic, VirtuallyinCredible, and HomeJab.

Tweetables

Listings with virtual tours increase interest by 250% and generate 49% more leads.

One-third of Tenant Turner’s customers do virtual tours; 11% of its listings include them.

Do virtual tours. If you do, you’ll be different, reduce vacancy, and make more money.

About 45% of millennial renters seek virtual tour technology before making a decision.

Resources

Tenant Turner

James Barrett’s Email

National Association of Residential Property Managers (NARPM)

PlanOmatic

HomeJab

DGS 45: Automate Tenant Lead Management with James Barrett and Calvin Davis of Tenant Turner

DGS 78: Automating Property Showings with Michael Sanz of Neesh Property

DGS 103: Growth via Propertyware with Inaas Arabi 0

Transcript

Jason: Welcome DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow Hacker.

DoorGrow Hackers love the opportunities, daily variety, unique challenges and freedom that property management brings. Many in real estate think you're crazy for doing it, you think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income.

James: Doing well, sir. Good to be back on the show.

Jason: James and I were just in Nashville, at the Southern States Conference. We got to hang out afterwards and we went dancing. We went out on the town and it was crazy, wasn't it?

James: It was a great time.

Jason: It was a great time.

James: Dance floors everywhere.

Jason: The musicians and the talent. Yeah, it was crazy. It was a lot of fun.

James: That’s what I tell people about Nashville all the time, the worst musician in Nashville is better than every musician everywhere else, it seems like.

Jason: I'm doing open mic night tomorrow night and everyone in Nashville’s better than me, that's for sure. I'm taking the risk, I'm getting on stage.

James: That’s right, go out there. You can get a lot of practice behind the mic doing this podcast so it'll…

Jason: I don't know if that's the same as singing with the guitar, but yeah.

James: We'll see.

Jason: We'll see. James, you've been on the show before, welcome back. I'm glad to have you here. In case anybody who’s listening doesn't know James and they can't see his shirt because they're listening, he is part of a company called Tenant Turner, which consistently has been one of the top performing companies for vendors. In our Facebook group, we get a lot of positive feedback from clients on Tenant Turner. I'm glad to have you back on the show. Today, we’re going to be talking about virtual tour technologies, what is that?

James: For those of you who might be questioning, “Why is James from a scheduling software, where they do lock boxes and in person showing, why is he talking about virtual tours?” With virtual tours, the real goal is how can you reduce the number of showings that are happening because people are being educated before physically having to go to the property. Jason, as you alluded to with how highly we’re rated within the Facebook group and what not, we are a very customer centric, customer driven organization.

It is something that's come up, particularly more recently, is just the concept of virtual tours. Seeing the evolution of quality images, which was kind of the norm 5-10 years ago. Making sure you have quality, high definition images on your listings, to then moving more to a model of video tours, which is a form of virtual tours but really just the gateway of virtual tours where you're taking a video walking through the home.

Now, more and more, we see customers who are adopting these 3D virtual tours like those that are provided by like Matterport. It's becoming very important within the industry because people are investing in this amount of time and effort into these virtual tours and they need to make sure they're seeing an ROI on that.

Jason: Are they always seeing an ROI or is that a problem?

James: It's been a problem largely because of the investment has always been so high, because one of the big companies that really got into the real estate market was Matterport, one that's very highly rated, but their cameras are $4000. Every property management company in the world might want to do a virtual tour, but at that price point, it's limited.

What we’ve seen more recently is there's now lower cost 360 cameras that are used by not only Matterport, but companies like zInspector which are used by a lot of property managers for inspection software. Really, I think one of the big tipping points is Zillow, who recently came out with their own app that allows you to take a 360 virtual tours utilizing just an iPhone. You're starting to see that barrier to entry drop down pretty significantly but it's still early on in its adoption phases here.

Jason: We've had some really great episodes for those listening, if they look at like that so we do with Michael Sanz. He talked a lot about how he's leveraged some of these cheaper cameras and took to offload and to reduce the number of showing significantly. Let's dig in, so how does this apply to Tenant Turner?

James: One of the things we have is we have a nice, unique data set that tells us how many people are starting to adopt these types of virtual tours and put them in their listings. We started to see a nice little increase of such tours to date. Right now, it's only about 11% of our active listings, but just a couple years ago, sub 1%, sub 2%. It was really just in its infancy. We started to see faster adoption of virtual tours and one of the things that's also really interesting is 11% of our active rentals have virtual tours associated with them, but now a full third of our customers had at least one virtual tour. Companies in general are starting to adopt more and more of the virtual tours and basically building it to their process.

Jason: Let's point this out, people that are using Tenant Turner are probably the more tech savvy, maybe more forthcoming property manager, I mean they're a little more forward thinking, is what I mean. They're early adopters and using your technology. You may have 11% and maybe 33% or whatever a third or have at least one but I would imagine outside Tenant Turner, the number has got to be way lower.

This is still a huge differentiating factor for a management company that say, “Hey, we do these tours.” It's probably really rare that people are going to bump into any competitors that are doing this yet. Even the people that are savvy enough to be using a scheduling software and showing software like Tenant Turner, only 11% of the properties it’s really being used for.

James: Yeah, and I think where there's a huge opportunity within the property management space, is now that some of these barriers have been brought down, making it core to your growth model being able to promote the fact that you do this. You actually have an artifact that is created that you can then share with the property owner, that's part of the whole thing, it's part of the inspection process. It's part of your now marketing material where you can say, “Look at these beautiful virtual tours that we're providing,” that really nobody else in your market may be doing.

Jason: Yeah and I'm sure there's a direct correlation between virtual tours, and time on the market, and vacancy, and not having to do showings and all of this.

James: It's really interesting, there's a lot of similarities between Tenant Turner and our goals and what virtual tours do. With Tenant Turner, we want to make the process as streamlined as possible. On one hand we're generating more leads because we want to make sure we maximize our customer’s exposure, but on the other hand, we want to eliminate anyone who's not a good fit. On the one side, we’re a 24/7 service that can respond to the leads instantly, but on the other side, we have a pre qualification scoring tool that weeds out people who aren’t a good fit.

These virtual tours are kind of the same thing but for the other side of the market. With virtual tours, because you have a virtual tour on your listing, statistically it's going to get more page views. It's going to get more clicks.

Apartments.com, they actually did a nice little study on this and it's something that they've started offering through their website is highlighting listings that have virtual tours. There's a 250% increase in time on page for a listing that has a virtual tour versus one that does not

Jason: Okay, you said 250%?

James: 250%, yep. You got to think too, a lot of these listing sites, they're very vanilla, you can go to Zillow or HotPads or apartments.com and it's pretty cookie cutter in a lot of ways. If you are able to provide a virtual tour and it gets pushed out to those different sites and they can put a little tag or icon next to it, it can go a long way into generating more clicks. Similar to Tenant Turner, they're trying to increase leads with virtual tours and we see more time on page. They’ve also seen a 49% increase in the number of leads. That's one of the goals of virtual tours is how can we get more leads into the top end of the funnel.

At the same time, just like Tenant Turner, how we like to weed out people who aren’t a good fit, the virtual tours are helping prospective tenants weed themselves out if they think that the place is a good fit for them.

Jason: Right. Yeah, makes sense.

James: More leads on one hand but at the same time better fit leads, so that way when it does get time for a showing, you'll ultimately have fewer showings at a particular property but it will be more people who are qualified…

Jason: More relevant.

James:…exactly, exactly. It's a quality over quantity type solution.

Jason: Yeah, I mean relevancy is the crux of everything. It doesn't matter how great the property is or how many tenants you have going through it, if the showings aren't relevant or they're not interested. It allows them to filter it out. They can see the kitchen and say, “No, that's too small,” or they can see the backyard, “That's not what I was hoping for.” They just get a better feel for what it would like to be in it without having actually go and do it. If there is a virtual tour and somebody scheduled to showing they're probably fairly legit interested. They’re probably seriously considering putting an application in on this place. They're probably ready to move. Whereas, instead of getting a whole host of tire kickers and time wasters.

James: That's right. What we’re seeing, the big thing right now in our industry is the movement to support self access viewings and whatnot. Within Tenant Turner, only a third of our properties are enabled for self access, because if you have an occupied property, if the owner won’t allow self access to the particular property, if the price point’s too low, you're still going to show and if the price points too high, you're still going to show it. This is a huge tool to help weed out unnecessary in-person showings.

If you have your showing agent, like you said, driving around town interacting with all these different tire kickers who would’ve weeded themselves out of the process if they actually saw what it looked like from the curb, if they actually had an opportunity to see the size of the backyard and wouldn’t fit their two or three dogs. If they saw the layout of it and they know they want an open floor plan, but then as soon as they walk in they see it's not an open floor plan, they're going to walk right back out.

It is a huge opportunity to generate more leads because you've got people who are going to be more engaged with your listing, but then also allow them to self identify that it's really not a good fit for them based upon what they're seeing in the virtual tour.

Jason: Yeah, I mean it's really difficult when you're just looking at a bunch of photos where you’re just seeing an angle from one corner of a room, and that's all you see of each room. It's really hard to get perspective as a renter and you have no idea how these rooms kind of fit together, how that works and what the flow of the place would be like, so all that makes sense. How is Tenant Turner allowing people to get the virtual showings into the listings?

James: Yeah, it was kind of a surprising thing that we saw come through our enhancements requests and whatnot, it was just really people—they're spending a lot of money. Whether they own their own Matterport camera or they're putting a lot of time into it and these virtual tours can take anywhere from 20 minutes to an hour to record. Some people like to go in at Matterport and do video editing or maybe they pay a service like VirtuallyinCredible to do virtual tour, where they stitch together the images for you and stuff like that. They're either putting in a lot of time or putting in a lot of money or effort or both.

One of the downsides with a lot of these listing sites,and even with Tenant Turner for awhile was that you couldn't really put links in the description that were clickable that enabled that to be highlighted element. They came through in our enhancement request, just making sure that those things are being promoted appropriately that got Tenant Turner now their own section where people can watch tours. It highlights the fact that that particular listing has a tour versus the ones that do not.

The links are in the descriptions, hyperlinks and clickable, which then engages a new window for them to be able to watch the tours before they go through and schedule a showing. Some of our customers, they even have custom questions built into the Tenant Turner Questionnaire that asks if they have viewed the tour.

Jason: I was going to say, can they require in order to schedule a showing or even to do a self access, can you require them to confirm that they have seen the virtual tour so no time’s wasted?

James: Yeah and that's a huge thing. We've seen that in past questions that customers created. It was really like, “Have you driven through the neighborhood?” was kind of the beginning part of it, because they didn’t want to meet somebody at a home that the person has no idea what the neighborhood is like, if it’s going to be a good fit for them, have they driven by and seen the outside. Now we’re starting to see more people do that with the virtual tours and say, “Have you watched the virtual tour?” If not, draw attention to it before they schedule an appointment, because if they're not satisfied with the virtual tour, they're not going to be satisfied with an in-person tour once they get to the property.

Jason; Right. Very clever. What are some other ways that people are leveraging these or making sure that it's all tied together? You're at the forefront of seeing how people are reaching this stuff. I think that's a clever hack to require the virtual tour in some way or fashion. Are there any other things like that that you're noticing people are doing to facilitate this?

James: Yes. I think one thing that's really interesting and really smart is particularly the cost of these cameras is dropping and there are more options for property managers than there's ever been before. As you're doing your move outs and some of the homes obviously, they're going to need some maintenance as you turn them over, and maybe a new coat of paint, a new carpet, whatever, but as you do your next move-in inspection, if you have a 360 camera for using the Zillow 3D Home app, if you're using your own iPhone in order to record your pictures and whatnot, use that next move-in inspection as an opportunity to not only record what the status of the home is before the new tenant moves in, but then use that as an opportunity for your marketing material too.

A lot of these tools like Matterport for example if you use one of their cameras, it'll take all the pictures panoramic pictures for you, and then you can even take out specific 2D images and use those for your marketing materials too. Basically, if you have the right equipment and your budget allows for it, put the camera on the tripod, put it inside each room, it'll take stance of the entire room, it’ll create a 3D floor plan, it'll create a dollhouse view of the home, and it will create all the individual images that you would need for your listings and for your inspection. Take that as an opportunity to combine the maintenance and loop-in element with the marketing elements so that you can have that 3D tour for that home in the future.

Jason: Right. Then when your tenant puts a notice, you can start marketing the property right away, you can put it out there, you can put out the tour and everything else before, and you may be able to get the place rented before it's even vacant.

James: Absolutely. That's another big benefit that some property managers are realizing with high quality virtual tours is that they can get the properties rented, sight unseen. If the virtual tour is good enough whether the person lives in town or not, if the property’s occupied and they want to put it out there in the market, there's a higher likelihood that they'll have the home rented sight unseen with a high quality virtual tour. I think that's the goal.

With Tenant Turner, we're trying to manage the leads and schedule the appointments to get people into the home, but ultimately what we're trying to do is streamline the leasing process. If we can help minimize the number of showings to help minimize the amount of back and forth that goes on with these virtual tours, maybe even prevent somebody from going to a property altogether, it's a win-win.

Jason: The property managers that are not doing this stuff, if they're tracking their metrics, and they're tracking their average time to get things rented out, their time on market, some of these variables, and then they start using maybe Tenant Turner to start using maybe self access, maybe start using virtual 360 cameras and tours, and all this, they probably will see a dramatic difference.

To be able to say in a sales presentation to a prospective owner, “Hey, this is where we were before, like all the companies out there, and here's where we're at now, and what we've noticed,” it's such a huge differentiator in selling point. Even a month of vacancy, even a couple weeks of vacancy can be pretty expensive. In some markets, that could be thousands of dollars depending on the property.

James: Yeah. It’s just another kind of tool in the tool belt. I think a big thing is some of the concepts from virtual tours and I think something like Matterport too, just because the cost has been so high, you can get into doing virtual tours relatively easier now because of the Zillow’s 3D home app, you can do it now just with the quality of phones being able to take your own panoramic pictures. I know a lot of people out there, they're using tools like zInspector already for their home inspections, but they also offer a virtual tour tool.

There's a lot more out there now than there's ever been before and I think the property managers who are willing to take that leap into putting a little bit of extra effort into it, and putting a little bit of extra time in it, they're going to be the ones to receive the biggest returns by reducing their vacancy, reducing their rent loss to vacancy, but then also like you said, being able to inject those core metrics back into their value prop to their customers.

Jason: Between you and me, because it's just you and me right now, just us, if you're hanging out with one of your buddies that runs a property management company and they're like, “Hey, what should I use? What camera should I get? I've got your system Tenant Turner.” What would your go to recommendation be right now?

James: I think the Zillow thing is really intriguing because it's free, but for all of us in the industry, Zillow, they're kind of a…

Jason: It makes everyone scared. We’re all afraid of Zillow.

James: Exactly.

Jason: We’re all watching Zillow, but we’re all a little bit afraid.

James: With Zillow, I mean they own and control your data because you're recording it in their app, you're uploading it to their servers, and I know a lot of people in this industry, they're thinking at the back of their mind, “It's just a matter of time before I've uploaded this to their servers for free and then they're going to take me out of the process completely because now they have my virtual tour.”

I would say, the Zillow one is appealing because of the cost, it costs nothing to do it, but I do think for property managers who are a bit more sophisticated and a bit more in the know in the industry, and maybe have some fears of Zillow and for good reason, there's a couple of hundred dollar camera, a RICOH camera which is a reputable brand. It works with zInspector, it works with Matterport, you can use it with either one of those products and probably a couple of others, and that's a great place to be able to create these beautiful 360 panoramic vantage points of the rental property.

This is what we saw in the data that we looked at, a third of our customers are doing virtual tours, but only 11% of our listings have virtual tours. The higher end properties or maybe some of your smaller multifamily that you can reuse the layout or use a virtual tour across multiple units, that's where you're also going to get the most bang for your buck.

I think as time goes on, maybe we're not quite there yet where this is going to be a ubiquitous part of everybody's process, you can use it as an upsell to an owner, you can use it as something particular for those higher end listings. You tell somebody and say, “Hey, you have a top tier property, you have a beautiful space, and I want to be the property manager for you, and this is how I'm going to do it.” That's part of a way you can help win that management agreement.

I don't think it has to be something that's used all the time by every property out there. I think that's a good way to overcome it. If you don't have a camera and you want to test the waters, the RICOH cameras, and there are a couple of them out there, but they're more like $400 versus the Matterport’s $4000. It's a good way to test it out and see if it's a good fit for your organization.

To your point earlier is it going to positively impact your key metrics, are you going to see a reduction in your days vacant, are you going to see a reduction of your time on market, are you going to see an increase in either maybe an additional fee or more management contracts because you offer this, and nobody else in your market does.

Jason: Say you've got a $20 an hour employee that's helping do some of this stuff, whatever. If it's a $400 camera and if it saves you 20 hours ever at $20 an hour, you’ve broken even on the camera. I would imagine, what is that, 20 showings maybe, or trips out to a place, or whatever. I think it's a no brainer. You could probably justify the $4000 camera if you needed two guys or gals, but $400 is pretty easy to start with.

James: Exactly. We have seen with some of the bigger groups, particularly property managers who are tied into larger real estate offices that primarily focus on sales, they tend to have access to the Matterport cameras because these Matterport cameras have taken off more on the for sale side. That's another thing. Whether it's within the NARPM world or within your just local real estate group, you may have a friend that has one. Whether or not they let you borrow their $4000 camera...

Jason: Rent it.

James: Rent it, that's an option. There are services too, depending upon what you think your choke point is, but there's tools out there or services out there. PlanOmatic is one, Zillow also offers their own network of professional photographers that have access to the 3D tour technology. PlanOmatic is in partnership with Matterport. HomeJab is another new one that has 50 offices nationwide. If your issue is getting somebody to go to the property, take pictures and do the editing, PlanOmatic, HomeJab, those tools are in place. Those services are offered.

Jason: You can offload it.

James: Exactly. Think about what's the most appropriate part of the process to potentially outsource. VirtuallyinCredible, they do a good job in creating virtual tours that can then be promoted through your various listings, and websites, and whatnot. If you have an editing, if that's where your constraint is, you don't feel like you have the time or talent to do it, there's another place where you can offload and outsource that component to it. You should be doing it, and if you do it, you will differentiate yourself to make more money and reduce your days vacant, so it makes sense to do it, but if you have hesitancies around buying a camera, then borrow one, or use one of these services, or go the Zillow route.

If you can overcome that hurdle and your concern is really around editing, and formatting, and getting it to the appropriate level, you can use another one of those services like VirtuallyinCredible who can piece it all together for you, but any stage of the game where you think you have hesitancy or you're resistant to taking it on, there are opportunities to buy equipment or utilize an existing service who’s an expert in it.

Jason: Perfect. I think you’ve sold people on the idea of virtual tour technologies. Anything else that that they should know about this that you're seeing from your 30-foot view with all the different property management companies that you're helping them with the leasing side?

James: Yeah. I would say one thing to add is that some people might be listening to this saying, “We don't really need to do that, the technology is not there yet,” at least be thinking about this, whether you look at strategic components every quarter, or every year, or whatever, because one of the big statistics that came out of some of the research done by apartments.com and Zillow is, about 45% of millennial renters are really leaning into virtual tours before they make a decision.

If you don't think the stats are compelling, if you don't want to try it, just know that the largest group of renters that continues to expand within the markets that we serve, they are looking for this type of technology. Again, it's something that you can use to help sell to your owners, but as you look at quality tenants, this is something that those folks are going to be looking for, and they'll look past your listings eventually if this is not going to be there. Be ready.

Jason: I would wager to say there might be a correlation between the most tech savvy of renters and the safest ones to be placing into properties. It might help you attract better tenants. Maybe.

James: Yeah, I agree.

Jason: Psychologically, it seems sound to me, but who knows. James, it was really cool to have you here again. I don't know when the next conference is but we'll have to go dancing again.

James: That's right.

Jason: With all our homies. To be clear, it’s not just Jason and I dancing.

Jason: No, we’re not dancing together.

James: Good times.

Jason: You're married, but I'm single again, so I can pick up…

James: I could be your wingman.

Jason: You’ll be my wingman, I could use a wingman.

James: I got you covered.

Jason: Alright, well hey, it's really good to see you again. James, it’s really good to see you again. I love what you guys are doing at Tenant Turner. I appreciate you coming on the show and how could people get in touch with Tenant Turner?

James: Yeah, if you guys ever need any help with your showings, software, lock boxes, or locks, or ever just a resource to chat with as you can tell, we're really into the data, we’re really into the industry, and we want to be of service to folks. You can reach me at james@tenantturner.com. Definitely come to our website. We’ve got a live chat feature. Anytime you want to speak with somebody, we have folks standing by all US based who would love to hear from you. Come on through.

Jason: I saw your Instagram. I'm going to let you get another quick plug here. You have some new lock boxes that you guys are doing now?

James: That's right, yes. One of the big and exciting things that we've been rolling out, we've been doing it in a slow launch and actually Calvin, he owns his own property management company, Keyrenter Richmond. He was one of our guinea pig customers. We put new lock boxes on his property. They're SentriLock lock boxes, SentriLock’s a wholly owned subsidiary of the National Association of Realtors. It is an extremely high quality lock box with the six year warranty. For anybody who has had a desire to experiment with self access but maybe was hesitant because of the lock boxes, what we have now is top tier and will last you a good long time and help prevent you from having to go to those properties showings yourself.

Jason: Perfect, awesome. Alright, cool. Well James, thanks again for coming on and I will let you go.

James: Cool, thank you, Jason, it was a pleasure.

Jason: Alright, so great to see him again and have him on the show. Check out Tenant Turner at tenantturner.com and if you are [...] business feel free to reach out. Test your website at doorgrow.com/quiz. Test your website out. See if it's effective, and if not, you maybe want to talk with us and that might help you realize there's that leak, but you probably have several other leaks that we can help you with in your sales pipeline. Our goal is to show up trust, show up those leaks because trust is the speed in which you're able to get clients on close deals and grow your company. That's what we specialize in is helping maximize trust and organic growth and we’re on lead generation at DoorGrow. With that I will let everybody have an awesome day, let everybody go and until next time, to our mutual growth. Bye everyone.

Download this Episode

Nov 5, 2019

Property management businesses always want and need products and services to be profitable and grow doors. That’s why many of them choose the user-friendly residential rental property management software for single-family properties called, Propertyware.

Today, I am talking to Inaas Arabi, Vice President (VP) of Single Family Rental and General Manager (GM) of Propertyware. He understands the importance of developing new and innovative ways to help property managers attain profitability and growth.

You’ll Learn...

[04:37] Past and Present Perception of Propertyware: Before becoming GM, Inaas was a customer because of ability to customize system based on business models.

[06:38] Who uses Propertyware? Typically, larger companies wanting to scale and grow.

[07:45] Room to Grow: Never buy a solution for where your business is today; always buy a solution for where you want it to be.

[09:50] Directions for Growth:

Add units by differentiating services via customization and special offers.
Increase revenue per door by offering add-on products and services.
Reduce expenses via automation for manual and repetitive tasks.

[20:33] Propertyware stands behind its platform; serves as business advisor, not only technology provider, to solve pain points.

[23:54] Facilitating Future Integrations: Freedom to connect with third-party tools, vendors, and services.

[27:40] API Connections and Challenges: Propertyware provides two-way data exchange that’s maintained in one system.

[34:50] Status of Property Management Industry: Advocate, educate, and train others on legislation and awareness to protect tenants and landlords.

[45:38] Should you switch software? Break up dysfunctional system to experience freedom by having good data, building relationships, and improving processes.

Tweetables

Never buy software for where you’re at today; always buy software for where you want to be.

Pick property management software that you can live with for the long-term to grow.

Automate mundane tasks performed by property managers via software.

Kiss of death is double entry and manual input.

Resources

Inaas Arabi on LinkedIn

DGS 102: The Key to Debunking the Rent Roll Paradox with Tony LeBlanc 0

Transcript

DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it, you think they're crazy for not because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners.

We want to transform the industry, eliminate the BS, build awareness, change the perception, expand the market and help the best property management entrepreneurs win. I'm your host property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show. Today's guest, I'm hanging out with, Inaas Arabi.

Inaas: Yes.

Jason: Did I say it right?

Inaas: Yes, you sure did. Thank you.

Jason: All right. Inaas, I'm excited to have you on the show. We have not yet had Propertyware on the show and Inaas is from Propertyware.

Inaas: Yes I am.

Jason: Tell us a little bit about your background and how you got into the space of property manager first and then let's get into maybe Propertyware a bit and talk about growth.

Inaas: Awesome. I do want to first of all say that I'm a door hacker as well, so thank you for having me on, I'm excited. I came in mostly from the operational background. I started a company from scratch, operated and built it a little bit to over 1700 doors and then I sold it to a national player, then I went to work for the second largest owner and operator in the single family industry, American Homes for Rent. I worked for them for a while. I was their Midwest regional director of ops. We've done a lot of great things there. We took the company public.

I left that and went to work for a company called the Altisource, which deals with banks and REITs and does a very similar thing to third party property management or property managers but on a different scale mostly for the banks and the financial industry. Operated a very large portfolio over 35 states and after that I got recruited by RealPage to be able to become the single family vice-president for them as well as general manager for Propertyware. Now, the reason why I think Propertyware would be a great choice for somebody like me and for a lot of operators is because you're able to take somebody like me with my experience and put him into the seats where we can make decisions that would actually help the property managers with their day-to-day lives.

That's the difference that we're trying to go after compared to some of the other systems, is that we really want to build things that would be usable and would make an impact for people's businesses. I know we are going to talk about growth here in a little bit, but that is really the approach that we're going with Propertyware since I came in. We are building enhancements that allows people to grow in multiple different ways. They grow by adding units, which is what you talked about as far as being a door hacker. Number two, you grow by increasing your revenue by making more money per door. Then number three, you also went to grow financially by reducing expenses while keeping everything the same, so that would allow you to be able to have a much better financials or higher NOI’s for your property, since you're an owner or operator.

That's really the goal. That's the approach that we're taking upon with Propertyware since I've started to them. I started Propertyware late January of this year.

Jason: Okay. This is kind of new for you, the Propertyware thing.

Inaas: Yes, it is. I mean, you can say it's new. I've been there since January so depending on how you take a look at it.

Jason: You're halfway through…

Inaas: Yeah, you're right. I'm definitely halfway through a year, yes, but I'm not new…

Jason: You're 0.5 years at Propertyware right now.

Inaas: Yes, it is.

Jason: I mean that's two quarters. That's enough time to…

Inaas: Make a change, yes.

Jason: Make some changes. So, what was your perception of Propertyware before you came in versus now?

Inaas: I was a customer of Propertyware when I was working with Altisource. We ran a set of very complicated and very large portfolio, a little over 10,000 units over 35 states, and we did it through Propertyware. One thing that I always appreciated about Propertyware was the ability to customize and the ability to be able to build unique or redo the system around your uniqueness as a business model. Now, I think that also causes people to be more afraid of the technology because there is not a very easy systematic streamlined way of doing things on Propertyware. You have multiple ways of doing things.

It's built as such to be able to allow people the ability to customize based on the business model. Having that I've been working for Propertyware, before I found it to be a very interesting point as a customer, it was very good for me, but when I moved in to being in the seat of making changes, I didn't realize that this is an intentional thing that we're doing where we are able to keep the business and keep the platform customizable by the business model. Now, I would also say that that will make some people be very hesitant into looking into Propertyware because they're afraid of how customizable the system could be.

That could also take you into a lot of what I would call rabbit holes, meaning, if you've got 20 ways to be able to do something, sometimes you give way too many options for some people that would allow you to take out the simplicity aspect of it or the easiness aspect of it. Overall, really what I appreciate the most as customization, if I want to have to sum it up down to one thing.

Jason: The perception that I've always had about Propertyware is I've noticed that a lot of the larger companies, the companies that really are folks on scale, that they tend to use Propertyware. Propertyware seems to be very scalable. It seems much more of an enterprise solution than a lot of the other property management software out there. That's kind of the perception that I've noticed. I have lots of clients that have used Propertyware. I noticed usually the guys with thousands of doors are using Propertyware.

Inaas: We do have people from different levels of where they're at. Now, to your point, sometimes it's very difficult and I struggle with this myself as well, it's really very difficult to be able to equate the number of units for your business to how complicated of a process you’re running. We come across some people that they maybe only running 200 units, but they have some of the most complex processes that I've seen and the opposite is very true. It's really more about how customizable are you ready to look in to be able to build for your business. The one thing that I would always say, you never buy software for where you at today, you should always be buying software to where you want to be.

It's almost like when you're talking to trainers that they always say, “You don't want to be the guy or the person who's playing today. You really want to be playing to what you want yourself to look like after you win or at the winning table,” and that's really where it comes in to be. If you're thinking you want to grow and you want to have a system that grows with you, scales with you, that allows you to be able to do different things in many different ways, Propertyware certainly will be it. Now, I would also say, you do have to be willing to take on this opportunity to be able to build things that will be customizable for you, so you can get the best advantage.

Jason: This is the feedback that I've noticed about Propertyware. What he says is absolutely true. If you're going to pick a property management software solution or any solution for your business, you want to pick a solution that is going to give you room to grow into for whatever size you imagine because it's not easy to switch property management software. Anybody that's done it that switched from one to the other because they thought the grass would be greener on the other side, usually regrets it and it's not been so comfortable. I agree, pick a software that you feel like you can live with in the long term.

Inaas: What you're saying is absolutely true. It’s really about jumping from one system to the next is not an easy task. I do recognize that you do have to put in a lot of effort into that, but you do need to find something that would scale with you for the long term, not for where you are today. That's the beauty about finding that system and being able to grow with it as you go. We've seen a lot of great companies have grown with us over the years and have done wonderful things as far as that goes.

Jason:: Let's get into growth. The topic is growth via Propertyware. How does Propertyware help somebody grow or what are we chatting about here?

Inaas: Like I said, the approach for us since I've got into Propertyware is the fact that we're building enhancements that would allow people to grow in all of those three directions. I'm going to give you specific examples because I know you like that. Number one. Growth, in my opinion, is adding units. How do you add units? You help PMCs differentiate their services and do things where they can go out there and put themselves in front of the right people that they're looking for their services.

As an example, I know you guys offer wonderful websites offering, which is great. One way that we can help is we do provide our clients what we call a listing widget that they can plug in anywhere on the website. This way, you as a website provider don't have to build it for them. It defeats all the information directly from the Propertyware property management software. All of the vacancies, the rent price, the number of bedrooms, bathrooms, pictures and all that are all within that listing widget. Then we make it so customizable to the point where people are able to do some awesome things with it.

An awesome thing would be, for example, you can add on banners at their specific workflow. For example, you can put in a banner that says, “Only make that banner available over the weekend to make a weekend offer,” so you can say, “Come take a look at my house that I have for rent and you're going to get $100 off if you look at it between Friday and Sunday,” or “If you look at it between the 1st and the 15th.”

You can do things like, “We're looking for awesome owners like yourselves. Click on this link to be able to see our offering.” You could do things like the workflow, like once a property has an approved applicant for it, then you would automatically take it off the listing so this way you don't have to do anything with that manually. You could also do it where you can add a lot of information in the description for that property and one thing I teach people to do and I'm sure you’d like that, Jason, is the fact that for every listing that you put in out there for rent at the bottom of the description for that listing, you should take a couple of lines and you should type in information about your services with the link to the website that will take people on to a full offering of those services.

Because we know when people go out to look for properties, rental properties on the market, majority of them will be renters, but some are not necessarily renters. Some of them might be owners that they're looking to comp out their property to figure out what the other properties in the area are renting for or they might be asset managers that [...] ability to put yourself in front of those guys while they're searching for properties. It's very unique. It doesn't cost you any extra. It's part of the listing widget that allows you to plug and play and do it as you go.

This is one example of an enhancement that does help for the unit growth. There is plenty more, I don't think I have enough time to be able to share all of them because I want to talk about other items that are important.

The second element we talked about, which is adding revenue or increasing your revenue, making it where instead of making $1000 per door, you go up to $1500 per door, you go up to $2000, $3000, whatever you feel like it's the right level that you want to go to. How do we do that? We do that by offering ancillary products that could make sense for the property managers but they're also integrated within the system so this way, they don't have to do anything offsite the system.

The beauty about that is you get the beauty of getting something that is offered, make some money on it without adding too much expenses on your end from an HR or an employee perspective. Some examples with that would be asset protection or our renter's insurance. I know some other software do offer that. The reason why I mentioned it is because between Propertyware and some of the other systems is the fact that we really want to make sure that it’s fully integrated within our system. The tenant will have a very seamless experience when they're selecting the process or selecting the product and they were going through it, and then also the PMC will have a very seamless experience. Last but not the least, if there is an owner involved, that owner will also have a very seamless experience.

As an example of the asset protection, it's a checkbox and then you can select whether it's paid for by the owner or paid for by the tenant. You can put in whatever extra fee that you would want to add on as a PMC as your profit margin, and then you can apply either to a tenant ledger or to an owner ledger depending on who's paying for it, and you do all of that very seamlessly with a couple of clicks.

If you do enough of those, you start seeing a little bit of an increase of revenue in per door that you're having. Some of the other products that were also migrating or integrating within our system would be things like utility management which is I think we're one of the only system that I know of that offer something like that. Utility management in single family has not been a revenue center for a long time, but I think that is changing with all of the legalities where it's forcing either the owner or the property management company to keep a lot of utilities in their names so you don't have any off and on for all the tenants when they leave or when you have a new tenant moving in.

If you are a PMC and you're going to have to manage that for the owner, we believe you do it with ease, but you should charge a fee to be able to do that and you can apply for that again either on the tenant ledger or on the owner ledger—depending on who's paying for it—and you make a little bit of money on it. That's the examples of how do we help increase revenue for our PMCs.

The last type of growth that I want to talk about which is very near and dear to my heart is the profit growth by reducing your expenses. In my opinion, you reduce your expenses by doing automation. Now automation, certainly I'm not suggesting that you exchange relationships or conversations with owners and tenants with technology, but what you do, if you take a look at a lot of repetitive elements that we do every day in property management, you should automate those or you should look into making them systematic, so this way you're not spending a lot of time doing what [...] specific example here.

Since I came in to Propertyware, we sat down and we looked at all the processes that our PMCs go through. From renewals, to leasing, to signing of a lease, to maintenance, to all of the big processes. Our goal was to be able to build or educate our PMCs on the best automated way to be able to do a process from A-Z, for the best results, for the cheapest cost as far as HR, and for the highest profit margin.

I can tell you, we've gotten rave reviews from our clients when they've seen what we've put together. We have what we call road shows which is more of events that we put out in some certain cities in the United States and we invite our clients and prospects to come out to see us and see what we have going and what we're working on. We share with them for example the renewal process that we build together for them. Now, the beauty about why this is important, why I talk about it, we actually talk about both sides of the spectrum here. We talk about the setup, how you can setup Propertyware for full automation, as well as the actual process of how you run it from a systematic perspective and from an operational perspective.

By the time you leave, if you have been a little bit hesitant about how do I work Propertyware to my advantage, you already know how you set it up, and you already know how to work the process itself. We've had customers where they came back and they reported that their renewal rate was at 60%-70%, now they are close to 80%. As a matter of fact, I was talking to a client a little bit earlier today and they quoted 79.83% renewal rate from, I think it was close to 71% or 72%. That's a huge movement.

Now, why that's important for PMCs, that's a differentiator for you as well as a service. When you go talk to owners and you say, “I am able to get 80% of people to renew, that speaks volumes to the owners and allows them to see the benefit of working with you compared to working with somebody else who does not have a high renewal rate. Did I explain it to you well as far as all the different types of growth and how we calculate what kind of enhancements we use for each one of them?

Jason: Yeah, absolutely. All of these things make sense and I love the idea that you're taking a look at the challenges that the property managers are facing internally when it comes to their operations to facilitate that with the software, to make that faster, to make that more simple versus all the manual stuff. Property managers do a lot of manual stuff.

Inaas: They sure do.

Jason: The more that you can pull into that software, the better. A lot of people a lot of times, they're turning to lots of different systems to try and systemize their business outside of their accounting solution and that can get cumbersome at times.

Inaas: Yeah and the renewal process that we put together for full automation, we've got a little over 20 contact steps, where if you're doing this manually, you would need about 20, a little bit over 20 steps to be able to go through the entire process. We're talking steps from talking to the tenants and making sure that they want to renew, then again talking to the owner is making sure you agree on pricing, making sure you come back and you talk to the tenant and you send them a lease and you follow up on the lease and you do all of that back and forth. We changed that down to the point where we're able to do the entire thing with about six or seven touches. Six to seven touches in my opinion compared to over 20, does saves you so much time and so much effort that allows you to really concentrate on building the relationship instead of losing the time doing mundane task that you should be automating.

In my opinion, that's how you grow, you grow by taking all of those mundane tasks, automate them, take those out of your way, and then concentrate on building the relationship, whether it's with the owners or with tenants themselves.

Jason: Yeah, makes sense. All right, cool. Is there anything else that you want people to know about Propertyware while I've got you here?

Inaas: Absolutely. There is a lot of things that I want to people to know about Propertyware but few things come to mind right off the bat. One, that we do stand behind all of our clients and we do appreciate the relationships that we have with them. Also, if you can imagine, we're taking a different approach by becoming more of our business advisors to our PMCs, not just a technology provider. A lot of times, you come across a lot of great technologies, but if you don't know how to take that technology and apply it into your day-to-day operations, that technology really failed because it's not really allowing you to get what you’d want out of it.

Think about text messaging when it came out, for example. If people didn't try it, didn’t perfected it, didn’t figure out what to do with it, we wouldn't have had such a great success with it today. The same effort would be with our platform. We wanted to educate people. We want to make a business partnership with them, to be able to tell him how to do it, what do they do with it, and how they can use it to be able to get best results from all the aspects that we talked about. That's one.

Number two, I also want them to know that we are property managers, building stuff for property managers. We’re not technologists, we're just building things in a vacuum, and really building it from the perspective of we know where their pain points are, we've been through it, whether it's myself or somebody on my staff, we know what your folks, the people that’s hearing us today are going through and because of that, my goal is to be able to build things to solve those issues for them, to solve those pain points.

Now, sometimes we have to take them in steps, but at the end of the day we are solving those pain points. For example, we rolled out our text messaging feature earlier this year and for fairness sake it was what I would call the basic features of being able to communicate back and forth via text messaging. In order for us to take that to the next level, we're also working on enhancements now that would allow us to do the multi-level, the multimedia, as well as the group texting, and things like categorize station for all of the text. This way, our PMCs could take a text and apply it toward somebody specific, whether it's an owner or tenant.

They can also do group texting. They can also do multimedia, so they can send a picture, send a file, and do all of that all within one centralized communication command, if you call it that, within the system, so it's not anywhere off the system.

Then, last but not least, I think we’ve talked very greatly about growth, but what I really want people to know, your listeners, is that if you're looking for a scalable system that has a lot of potential for you, that would allow you to be able to do a lot of customization for your business based on your business needs, then you should look into Propertyware and you should evaluate it as an opportunity as an option for you. Now, it may fit then that's fantastic, it may not and that's okay, but at the end of the day you should really evaluate it to figure out if it's a good fit for you or not.

Jason: You're talking about what you guys are doing internally. One of the big questions I know a lot of my clients have, a lot of listeners have that's really hot on the tip of the tongue of most property managers nowadays is integrations. That’s freedom to connect with third party tools, vendors, different services. Maybe you can touch on an API, what you guys have maybe going on there, and how you guys are kind of facilitating integrations with third parties.

Inaas: Yeah. That's such a fantastic point, I'm so glad that you actually brought that up. Propertyware’s current approach is that we are offering a two-way data exchange [...] an API that allows people to be able to connect to their property management software. They can connect almost anything and everything that they would like to do.

In my view, we want to provide people the opportunities to make a choice or pick the right option that fits for their business model. There is a lot of great things that we offer. If it fits your business model, if it fits your needs fantastic, use it. If you have something else that you'd like to use, connect it to property management software so you don't have to double entry anything.

To me, the kiss of death is double entry and the kiss of death is any manual input that you put into either your staff or yourself, because somebody's going to make a mistake with that manual entry and somebody's going to cause you havoc later, even if it's not happening today. That's as far as the API. Now, I know on other webcast, Jason, you did ask about things like I think the place was, remind me again, was HubSpot or something like that, where you're able to connect Propertyware to everything else that it's out there as far as softwares…

Jason: That was Zapier.

Inaas: …yes, Zapier, thank you. I appreciate that. We actually looked into that and we're talking to them now about getting our platform on their site to be able to have full integrations with everything that they've done. You could do this yourself today, meaning if you have access to the API, you can take API, you can plug it into whatever other software that you'd want to plug it into, whether it’s CRM, whether it's an inspection product, whether it's a [...] product, typically anything and everything that has got API, you can connect it to do.

Jason: If you're nerdy enough or you pay enough money to get somebody nerdy enough to do it.

Inaas: True. I mean, you do have to have a developer to be able to take a look at it. This is not something that's geared toward a property manager to be doing it themselves, that's for sure.

Jason: That’s why there's Zapier. The Zapier is very cool because it allows a somewhat normal person—you have to be a little bit nerdy, let's be honest—to do it without having to know code. You can create connections between tools and systems, so if you guys are working on that, I'll be really excited to hear when you guys have that ready.

Inaas: Yeah, absolutely. You're definitely correct, it does need a little bit of development resources to be able to do the API, that's for sure, but remember though, Jason, once you do it once, you've got it, meaning you don’t have…

Jason: You don’t have to do it over again.

Inaas: Exactly. You don't have to go do connection every day, meaning if you've got five products that you're working on plus your property management software, you connect them all at once and you're done.

You may have to do maintenance every once in awhile like if something is changed on your property management software or if you change your business model, if you do different things, you make maintenance changes, but it's not as big of a change once you've done it once. It's really more of an initial step and once you go through that initial step, you're good to go.

However, I would also say, we're also one of the very few systems that offer two-way data exchange. Some other systems would offer data out and they call that API, but that's really not an API. An API should be a two-way data exchange, where you can take data out of your system and you can put data back into your system. If you can't do that, you can't really call it API but that's again [...] view at this point.

I have seen some of our customers do some awesome things with the API connections. Those API's might have where they take information out of Propertyware, they go do something else with it and then go back and feed it back into Propertyware to be able to have one system through which is Propertyware for them. At the end of the day, you would want to connect everything you're working on with your property management software, so you're not having to enter anything manually.

Jason: One of the challenges with API's is that you've got two pieces a software there communicating and if either one of them makes changes it can break that connection like something happens, that's what's I think is really important for the different vendors and property management software to create relationships where somebody's maintaining this.

For example, if Tenant Turner was working with Propertyware or if Property Meld was working the Propertyware, if one of these vendors a lot of people are really enjoying, if they're helping to maintain that connection, then the business owner doesn't have to keep that working or make sure that it’s working.

Inaas: It’s also fair and I'm again [...] and we have a list of companies that we’re actually working with to be able to have direct integrations with, you've mentioned Property Meld for example, that's one of our success stories with the API. We have a full integration with them, they'll tell you the same thing as well.

The beauty about that is somebody could do the maintenance within Property Meld and then they can make the payment out of their Propertyware system with ease without any complications. It also allows you to do back and forth between the two systems, so if you have a work order that came in from a tenant, you can feed into Property Meld and vice versa as well.

Having that we have the API, that's what allowed us to be able to do that. There is a list of companies that we're going through to be able to do direct integration with. I think RentersInc is one of the people here, they're putting in chats. We've been working with them on a direct integration of the API. I think they're almost there, they're about 95% there to it. To me, it's all about providing opportunities for our PMCs to be able to take advantage of what the technology could do for them. That's what we're embarking upon. That's what we are going to do. And if you stay tuned, you’re going to get a lot of great news about us connected with a lot of different vendors that does different things for our PMCs.

The idea is, again to your point, we maintain the connection, so the PMC doesn't have to. If they wanted to go elsewhere like for example somebody wants to go to a different maintenance provider Property Meld is not what they want to use, they can still use the API to be able to make the exact same connection the Property Meld is made with Propertyware, if they have an access to the API.

Jason: Yeah, makes sense. I love the idea of direct integrations. I love the idea of having an open API. I love the idea of you helping them to systemize your business internally, leveraging your software. These are all powerful tools for them.

One of the main things you have mentioned at the beginning, is to lower expenses and all of these things is going to lower the level of communication, which lessens the amount of time in man-hours and manual stuff that has to happen. That's the biggest expense in property management is staff, it's people, it's those resources and that allows them greater leverage so that they can get more done without having to throw money at bodies constantly in order to get everything done. Property management is not a cheap business to run for a lot of people, so margins matter quite a bit.

Inaas: It was quite interesting to me once I came on to work for Propertyware because I went out and talked to a lot of clients and again I'm an operator, so I understand what people are going through and I remember when I ran my own company, it was really more throwing bodies at it all the time. The difference though in today's world that is very different than when I ran my own company, is today you have options for technologies that could fulfill those tasks that people were doing for you before.

Back when I ran my own company, those options were not even available. For example, if you recall back in the day when we were doing inspections on pen and paper or via pen and paper, everybody would take a piece of paper and a list of items or questions and you just fill amount while you're going through the property doing inspection.

Today, you do most of your inspections via mobile technology on mobile devices and with mobile templates. The beauty about that is that saved you the ability or the need to have someone that is actually sitting down and writing down information on a piece of paper and they're transcribing them back into your property management software.

If you have the integration correctly, you go from mobile inspection tool to the inspection report directly into your property management. We're working on something that we're just actually going to roll out here tomorrow, which is enhancements for our evaluation module. It allows people to be able to do multiple inspections and then match them column by column for every time you've done inspection.

Think of when you go out and you do a move in inspection, you do a midyear inspection, you do a move out inspection, and then you're seeing all of those inspections in front of you matched line item by line item, so you know what the kitchen looked like when you did the move-in, you know what the kitchen looks like when you did a midyear inspection and you absolutely you know what the kitchen looks like when somebody moved out

If you can show some damages that the tenant have caused that home, there is never a question anymore about who caused it because you have such an access to data and information that is beyond anyone's ability to be able to dispute it in court. Again, that's the beauty about the technology and the use of technology in today's market compared to what was before.

Jason: Yeah. Technology certainly is changing quite a bit. I think here in the US, we’re in the forefront of what's happening technologically in property management, even if we are maybe behind other countries in terms of how well-developed or how familiar people are with property management. It's exciting to see what you guys are doing. Before we wrap this up is there anything else anybody should know about Propertyware and how can they get in touch with you guys?

Inaas: I appreciate that. What I would like to do though is I do want to talk a little bit about the industry in general because I want to take this platform as a way for us to be able to educate and train. I do believe that our industry and to your point earlier some other countries have this property management business defined a little bit better and it's a little bit more integrated within day in and day out lives of people, so it's looked at a very different.

Jason: There's probably two things, maybe just more legislation surrounding it and maybe just more awareness in those markets.

Inaas: Awareness is really a good word. Thank you. The reason why I mentioned that is I truly believe that our industry has been under attack this year and is probably going to be continuing on ongoing under attack from almost everywhere. Whether it states that they're changing the rules, whether it's businesses that they're changing the rules, whether it's somebody else is changing the rules.

The problem with it is I think we're so defragmented to the point that we lost the ability to stand up for ourselves as an industry. [...] I can give you of states changing the rules on the fly and make it miserable for our PMCs to be able to operate. Not to single them out, but I'm going to make an example of the State of New York. They just rolled out a brand new law about that the tenant protection law, that's what they call it. The effect of those things that they put into the…

Jason: Protecting the tenants from the big bad evil landlord.

Inaas: Yes, exactly. Part of it, for example, you can't charge more than $20 for application fee. You can't even call it an application fee, you have to call it something else. If the customer or if the tenant brings you a copy of an old credit report, you typically have to accept it and not charge him anything if you're going to go screen them through your ways. You can imagine the complexity that this is putting on our PMCs in the State of New York and they're not the only state. I know some other states and they're changing things, changing rules. The reason why I say all of this is I do have an ask for all of us as property managers and the ask is, let's really get together. Let's support the organizations that support us.

I don’t want to make this a pitch for any specific organizations that are very well known in our industry, that are usually a couple, two or three, but let's support them to be able to have a voice, so they can stand on our behalf against some of these things that are happening to our industry. Let's really truly do a good job making sure that we're providing the utmost best customer experience, the best customer service that we can provide, because that is the only savior for us to where the public is going to realize that we have value and what we do has value and they're going to continue on working with us and our business is going to continue to grow.

That's as far as the industry. I really wanted to make sure that I put that plug in there. You asked me about Propertyware, I think we've talked…

Jason: To touch on that I want to agree with you on that. Property management is really in its infancy I think here in the US in terms of awareness and perception. Every property management business owner is either an advocate for the industry or they're hurting the industry. We all need to be advocates for the industry and we also need to educate. We need to educate because I think if a lot of these laws wouldn’t exist or they would be very different if property managers had input, because they know what works in the real world. They know what needs to happen. They do want to protect the interests of the tenant and the owner.

When things get skewed, when the pendulum swings all the way away from the owner’s interests or the landlord’s interest just towards what serves the needs and interests of the tenants, eventually it's not really going to end up serving the needs of the tenants. It creates some sort of imbalance that is going to hurt tenants in the long run. That's generally just always going to be true when something isn't right, or isn't fair, or isn’t just.

Inaas: I totally agree 100% and I think you hit the nail on its head with the education. I do also feel that we should educate everybody that we come across with. Whether it's our tenants, whether it's our owners, whether it's somebody else that we're dealing with our vendors.

One thing that I was very advocate for when I ran either of my company or other companies, is the fact that you have to have an onboarding experience for everybody you’re dealing with. An onboarding experience with your tenant, an onboarding experience with your owner, an onboarding experience for your vendor. And guess what? Also an onboarding experience for the HOAs that you're dealing with, an onboarding experience for the politicians that are responsible for your area as well because if you don't educate all of those people on what we and how we do it well, there is also not going to be something you're going to like.

To your point, Jason, I think if the property managers were involved in some of these laws that they were written, I'm sure they would have been written differently. It's not because we don't want to protect the public. We actually have the utmost respect for the public, but we know what works, and we know what works well.

If the idea is to make sure that a tenant has the opportunity to not being overly charged for a particular application fee or something like that, you could have written that in as a rule but a little bit differently than just making it where it’s mandated, it's one fee, and you're minimizing the ability for somebody to be able to do the right screening for their tenant and putting the right people in place.

Jason: Even in contracts and everything else, we need a little bit of educated language to explain the why behind things.

Inaas: Yes, absolutely, 100%.

Jason: It’s like that spoonful of sugar that Mary Poppins says makes the medicine go down. There needs to be a little bit of education added to some of the stuff rather than just throwing out, “This is how we're going to do it,” and you have to just take it.

Inaas: Agreed. Now, you did ask me about property. I do want to say a couple things here. It is a system that I'd like people to take a look into as an opportunity for them to understand what the system could do for them, what are we doing as far as these processes, these automations, the opportunities for the two-way API for them to be able to connect their system to everything else that they're working on.

We understand that people have to have options and we're supporting that and we’re going to go with it. I just want people to take a look at what we've got to offer and if it's fitting to what they need and what their business model is, fantastic. We can work together. If it's not, it's no big deal. We will continue on staying part of the same industry and we’ll support each other, but I do feel that people are missing quite a lot by not checking out what the opportunities look like and what the options are with Propertyware.

As far as connecting with us what I would recommend, if people go on to our website Propertyware.com, we've just finalized a new experience for what I'm going to call here the free trial where you can go in, login, take a look at a little bit of the system, figure out what's going on. You're certainly not going to be able to do every single thing in the system. I'm not going to allow you to be able to take a payment in the system or put a tenant in there and kind of have them pay you through it, but the beauty of that is at least, it gives you an insider look of what we have available to you. I would also invite you to have a conversation with our sales staff to really truly understand what we have to offer and then go through a demo. If it works, great. If it doesn't, no big deal.

Jason: I want to point this out because I'm an advocate for the industry. I'm not a property manager. I want to see the industry shift towards more openness, more freedom. I love what you're saying. We've had other property management software on the past and the general message of one of the big players out there who I won't mention by name was just, we're going to just create everything internally. We're going to just try and give our customers everything that they need rather than giving them what they really are asking for.

The general feedback I hear from everybody is they want freedom. They want freaking freedom to be able to make choices, to make the best choices for the business, to choose the best tools and vendors. They want freedom. As entrepreneurs, that's why we are doing what we are doing. We don't give up the 9-5 job so that we can work even more hours a lot of times initially and have a lot more stress and a lot more pain just because we're crazy. We do it because we want more freedom. We want to be choosing what we're doing.

What you're saying I think is in alignment with entrepreneurs. It’s in alignment with entrepreneurs that are running these property management businesses. They want the freedom to be able to choose the vendors, choose the third party tools that they're going to be using, and they want that stuff to work with their property management software. I appreciate that that is a focus of what Propertyware is doing. I wanted to point that out because I think it's important to highlight those in the industry that are doing that. I see you guys doing it. I see Rent Manager doing that, the open API thing.

One thing I've also always appreciated about Propertyware since we started doing websites at DoorGrow back in the day, the very first website I did were websites for Propertyware clients and customers. I've always had that really good integration for the widget. In the first, I have a JavaScript widget, it would populate the data, it wasn't just a cheesy iframe thing that we were putting into the page, and that's always been nice. It's always been nice to have that reduced double data entry. People are putting in their properties into their websites and then doing that just back in the day.

We've come a long way since then, every everybody has. Now they're using tools like maybe Tenant Turner, ShowMojo, or Rently, and some of these sorts of integrations. I've always appreciated those aspects of Propertyware.

Question. Most people have a property management software. I would imagine most people listening to this show are not just startups that are like, “Which software should I pick?” Say they're using AppFolio, they're using Buildium, they're using Rent Manager, they're using Rentec Direct, they're using something already. What would you say as far as switching? We mentioned already. It’s painful usually to switch. How do you help facilitate this if you're going to get customers on? They're going to have to make the switch. Right now, they're probably not even listening because they're like, “There's no way I can switch. I'm married and I'm married for eternity.” I'm going to give you an opportunity to help them break up that marriage if it's dysfunctional.

Inaas: I am so appreciative of you bringing this on as well. I do want to go back though. Freedom, I love that. I'm actually going to use it because you are correct in making sure that you highlight the fact that it's all about freedom. Yes, we do have offerings. Yes, we do have products, but at the same token, I am personally a believer. In Propertyware, we're believing that we have to provide options for people. You pick whatever makes sense for you as a property management company, if you have a different vendor that is offering something that is more unique to your business model and you like to use that versus using something that we have, great. Go for it.

Now as far as the implementation—obviously you can use the API two-way data exchange to be able to connect them so you don't have to double entry anything—the implementation is such an important piece. When you talk to technologist and you talk to them about implementation, they just don't realize the amount of hassles that a PMC will have to go through when they're jumping from one system to another system. To them, it's more of a 1+1=2. Once I came in to Propertyware, the first thing that I have to tackle was our implementation. What we did with it is a couple of folds.

One, we broke it down to where we provide now tools for ability to be able to have clean data that gets into your system. Having clean data is half the battle for your implementation because if you have a good, clean data coming into your system, it makes your life so much easier to be able to operate.

What we found, a lot of PMCs may not have realized some of the, I'm going to use the word “garbage” that they may have had in their systems. When we go through our checks, we come back to our PMCs and we say, “You told us you managed 200, 300, 1000 doors but when we're looking at your data here, we're seeing 1033, so what's going on with those additional 33 units? Are they truly for rent? Are they truly something you don't use? What's going on with them?” and they're coming back saying, “You know what? You're right. Those are people that we lost two years ago and the person who was working on the system never deactivated the units.” Having good data is half the battle.

Second is the partnership between the PMCs as well as a good implementation team that allows them to go through the experience one step at a time. What that means, when they're coming in to us to be able to work with Propertyware, they're going to be assigned a particular team with one project manager who is driving the entire implementation from A-Z. They have calls, they have specific asks, there is a specific journey that they're going through step-by-step.

Data is usually number one issue that we all come across. Number two would be all your accounting setups. Number three would be all you process setups. Number four would be more of your training and your customization. Number five kind of bringing it all together with KPIs, reports, and dashboards.

Now, after you've done all of this implementation, then you're also going to get the training team to come in and do full training with you for all these processes. That training is part of the implementation. It's not something specific that you got to pay for. It also allows you to be able to customize to what your business model needs.

Let's say you have a specific way of doing move-ins, that trainer is going to learn that from you before they come out to train you and your staff. When they come out to train you and your staff, they're training you on the system to the best business model, to the best business process that you told him you want to do for that move-in. They're not going to tell you, “Propertyware does it this way,” they're going to say, “This is how you told me you want to do move-ins and this is how you could do the same thing in Propertyware for the best of all the results, whether it's for you or for us.”

Last but not the least, what I would also mention is the fact that we provide our PMCs timelines for their integration. We point it out. We basically say you have, I think the timeline is about 90 days for you to be able to be integrated. You’re not paying for the systems during those 90 days until you fully integrated. Once you are fully integrated, then you start paying for it. That allows us to both be on the same footing saying, “We're going to work with you to be able to get you implemented because you're not paying us, so we're not making any money. At the same token, it's in our best interest to help you through this process so we can get you to that finalized implementation piece so you can start using your system.”

Now, what we've seen is a huge reduction in the days of implementation for Propertyware in particular. We've also seen a very high number of what I would say happy customers that they came on our new plan for implementation. We’ve also seen a lot less issues with data when data comes in through the system and we're finding a lot of ahas from our clients similar to what I described to you saying, “Hey, I didn’t know that I had 1033 units. I thought I was only managing 1000 so now I got to deal with those 33 units,” or, “I didn't know that I could do move-ins this way or move-outs that way, or do a process of secure deposit, and refunds this way to be able to make it easier for me and more streamlined.” It's less touches, less communications, less points of friction between the teams, and then obviously what gives you the best results at the end of the day. We've seen very good results from our new approach with the implementation.

Jason: People are a little frustrated with their existing property management software. It sounds like you guys have made a lot of changes, as well as the API stuff you’ve been talking about, direct integrations. It's probably worth to them to take a new fresh look at Propertyware.

Inaas: Absolutely, yes. If you looked at it before, I do invite you to take a look at it again. I promise you, we've made a lot of changes. And we are continually making changes. We do this every day. When I say changes, it's really more of enhancements that really makes sense for all of what we talked about. You've mentioned the listing, how easy it is. One thing we just rolled out recently is the watermarking for photos in listing widget. It's a small thing but it's an awesome thing to have.

Jason: It protects the photos.

Inaas: It protects the photos. Especially if you're in areas where you're hit a lot by scams. When I went operating, I'm not singling them out but just a case of the matter. Florida was one of those states that had a lot of scams. By watermarking your photos at ease without a lot of work, it helps you to be able to protect them and making sure that no one is going to steal those photos to be able to scam you or your owners out of the property. Again, we're making enhancements that make sense and we're making enhancements that is allowing people to grow. Either by adding units, increasing their revenue, and/or reducing their expenses, and increasing their profits.

Jason: Cool. Inaas, I appreciate you coming on the show and sharing some ideas about Propertyware, letting us know where everything's at with it. Again, people can get in touch by going to propertyware.com and check you guys out.

Inaas: I appreciate that. Thank you very much, Jason. I'm really glad that I got a chance to be on the webcast with you. Thank you very much. You guys do a fine job. Please continue on these webcasts. Please continue educating our PMCs and just know that we're going to be supporting you all the way. If there is anything we can do for you and your listeners to be able to support them in their businesses, and in their endeavors, please reach out to us. We’d love to be your business partners.

Jason: Awesome. Yeah, I would love to. That would be great. It would be cool. Maybe we'll do something to your audience at some point. That will be fun.

Inaas: Absolutely. We welcome that.

Jason: All right, cool. I love sharing the message that we share. I'll let you go Inaas. Thanks again for being on the show.

Inaas: Thank you very much. I appreciate it. Thank you.

Jason: As everybody knows, I love sharing the message that I think property management, there is a bigger vision for property managers than just getting mired in toilets, tenants, and termites. I do believe good property management can change the world. There is a massive ripple effect. There are thousands and thousands of families that can be affected by good management. There's a lot of situations in which families should be underneath good management instead of a crappy landlord situation.

I do believe good property management can have a massive ripple effect that can change the world and hopefully that all of you get a little bit inspired or excited about that. You are having an impact. You get to make a difference. I am honored that through you my listeners, through our clients that we get to work with, that we’re able to get that message out, and that we’re able to have some small impact in the industry and have a ripple effect. I appreciate Inaas pointing that out.

If you are a property management entrepreneur that wants to add doors, make a difference, then please reach out. We’d love to have you and maybe work with you, and see if you’d be a good fit for the type of client that we're looking to work with, and make a difference in this industry. Check us out at doorgrow.com. Until next time everybody, to our mutual growth. Bye everyone.

Download this Episode

Oct 29, 2019

Usually, paying attention to your body, mind, and health is the last thing you do when it comes to your business. It’s time to focus on yourself first!

Today, I am talking to Tony LeBlanc, second-generation property manager and author of The Doorpreneur: Property Management Beyond the Rent Roll. Tony shares the keys to debunking the rent roll paradox when chasing doors to grow.

You’ll Learn...

[03:00] Software Engineer Stint: Tech geek at heart that brings love of technology into property management space.

[04:30] What is rent roll paradox? Property management companies that constantly rely on getting new doors to grow their business.

[05:42] Chasing doors creates havoc and stress due to inefficiencies.

[08:45] Expanding Territories/Locations: The bigger and more geographically dispersed a business gets, the more opportunities arise that aren’t taken advantage of.

[10:56] Would you want two doors making the same amount, or one door making same amount as two? One door, if the goal is revenue/profit, it's not just about adding doors.

[12:30] Premature Expansion: Go-to once a company reaches a certain size; anything premature is generally not a good thing.

[14:13] Entrepreneur’s Journey: Everyone hits stagnation or desire for more. They get distracted by opportunity.

[15:11] Opportunities vs. Expansion: Think it through, be disciplined, and follow good habits before making the jump and knowing where you’re going.

[17:40] Cycle of Suck: Bad owners, properties, reputation, and false scarcity.

[18:15] Property management is changing. It’s future is a foundation full of opportunities.

[21:50] Dinosaur Dictators vs. Millennials Seeking Meaning and Purpose: Good property management can change the world.

[22:45] Tony’s Aha Moment: We matter and play an important role in thousands of people’s day-to-day life.

[28:30] Target on Back: How to deal with being overwhelmed as a property manager.

[32:14] When we create and have constraints, when we're limited in our time and attention, we innovate.

Tweetables

Growth doesn't happen by accident. Personal growth is gateway to business growth.

Chasing Doors: Is all you care about being introduced to new people, close deals, and get more doors?

Property management’s growth is defined by doors that it turns down, not doors it gets.

Focus is power. Cut something out in your life to achieve something.

Resources

The Doorpreneur by Tony LeBlanc

Ground Floor Property Management

National Association of Residential Property Managers (NARPM)

Cycle of Suck

DGS 101: Take Confusion Out of Property Management with the Proper App 0

Transcript

DoorGrow hackers are those that love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not, because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income.

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

My guest today is Tony LeBlanc from Canada. Welcome Tony, how are you doing?

Tony: Hey man, I'm doing great, Jason. Thanks for having me.

Jason: I'm really excited to have you on the show. You've been on before a long time ago and I was telling you in the green room before the show, but I think we resonate with a lot of similar values. I think we're both growth-minded people. I read your Doorpreneur book, which everybody should take a look at. And I think we have a similar mindset that growth doesn't happen by accident and personal growth is the gateway to business growth. I think we probably would both agree.

Tony: Absolutely.

Jason: I posted about this just the other day. I think it's the last thing that everybody wants to pay attention to in their business, is themselves. They’ll focus on everything external. “I need more leads. I need this. I need this.” Ironically, if I could change the person or get them clear on themselves, then all of those things end up changing by default, everything. Website marketing, everything into changing by default if you focus on yourself first.

Tony give people a little bit of background. Maybe those that had heard you before, bring them up-to-date. Tell us a little bit about who Tony is.

Tony: Sure, thanks Jason. I said my name's Tony LeBlanc from eastern Canada. Born and raised out here. I am a second generation property manager. It wasn't my first career of choice. I actually got into it as my second career. My first career was a 15-year stint as a software engineer with IBM which provided me an amazing experience visiting the world and working with a lot of great people in that domain.

I'm a tech geek at heart. I love technology and I don't think that'll ever go away. It’s been interesting to bring that into the property management world, because as everybody knows, technology in the property management space is still not, in my opinion, where it should be. I still think we’re 5-10 years behind some of the stuff that we should have out there available to us. I still find it very difficult to run my business with the standard property management software that they have out there.

After I left IBM, I started my management company which had been running out for about 10 years, called Ground Floor Property Management. We have been very well-received in our community. We now have three locations and I am now an author. I've basically taken everything that I've learnt from IBM, from life, and from the last 10 years of growing my property management company as well as the spin offs that we've created over the years, and that's where I am today, introducing the doorpreneur way.

Jason: Perfect. The title of the show is the Keys to Debunking the Rent Roll Paradox. What is the rent roll paradox?

Tony: The rent roll paradox is the fact that most, if not all property management companies out there, are constantly relying on getting new doors to grow their business. I believe there's a different way. I believe there is a much better way than doing that. And I say that from experience. For the first five years of running Ground Floor, my property management company, I was nothing but a door chaser. I just wanted to grow, grow, grow, grow. That's all I cared about. I just wanted to be introduced to new people, close deals, and get more doors.

We got to the point to where we reached almost 2000 doors in five years. That’s across three locations. It was fast, it was intense, and it was incredibly painful. Incredibly painful. Now that I've gotten into the second five-year phase of the management journey, I've learned a lot looking back, and I realized that as I was going through that growth phase, I'm just adding more doors, and more doors, and more doors. I was causing a lot of havoc and stress on myself and my staff, but I was leaving an incredible amount of money on the table because of inefficiencies.

If anybody's growing a property management company, when you're getting doors pouring in—we do multi-rise mostly, not just single family—it's a lot of work. We've onboarded 50, 60, 124 unit buildings, and it consumes you for a period of time. If you don't give the proper amount of space in between those growth, it becomes rough, but you don't want to take your foot off the gas if you're like me.

Jason: Yeah, so let's touch on this real quick. I tell people this all the time. If somebody calls me and they say, “I am thinking of starting a property management business,” I say, “Do you want me to talk you into it or out of it?” because I get to see inside hundreds of companies. They usually laugh, but they usually stay into it. The thing is, this property management is easily death by a thousand cuts.

Tony: Absolutely.

Jason: If you have one little problem with one door and then you have a thousand doors, you have thousands of those problems over and over again. That's why it's so critical to shore up some of these leaks early on, because if you're having problems now and you feel like it's stressful now, just adding more doors is throwing gasoline on whatever fire you have. If that fire is a bad fire, then it's just going to explode. It’s going to be worse. Customer service goes down. You have more complaints and it compounds.

Usually, they have to make significant changes just to go from 50-60 units under management to break past that first sand trap—I call 50-60 door the solopreneur sand trap—to break 100 doors. Just to do that, they have to change everything. Ironically, I’ll real estate companies that are doing property management on the side, break past that barrier artificially without making the necessary changes. They don't get technology in place, they don’t get systems in place, and it will pass it.

One of my case studies was a client that had 600 units under management, single family, and was making $0 in this business. I said, “How are you doing that?” he’s like, “I've $3 million a month in real estate every month or whatever. I'm doing real estate.” Property management can be death by a thousand cuts.

You have this pain, but you have growth and I'm sure a lot of people are like, “I would love that problem. I would love the problem to deal with, to figure out how to get 2000 doors and quit crying,” so tell us a little bit about your experience after that.

Tony: One of the big things was expanding into different territories. Our headquarters, which is my main office, we’re doing extremely well. We then split off to another city within an hour-and-a-half away, and that ended up going well. The third location came in and that started off really well, but then about a year later, we started looking at all three locations individually, and we started seeing a lot of gaps, and a lot of issues that we're struggling with.

We made a conscious effort to obviously fix a lot of those things and it made us really pull the curtain back and look at the overall business as it sat. The bigger we got and the more geographically dispersed that we became, we started seeing a lot of opportunities that we were just not taking advantage of. When I started the management company 10 years ago, I had maintenance as part of the division. That's the way my mother did it and that's the way I wanted to do it.

I always wanted to have my own maintenance guys on my payroll so that I can control that and we still do that to this day. What really became evident as we're studying and looking at our rent rolls across all three locations, was the amount of money that was being spent outside in terms of different trades, different services that were required on all these properties. To be quite honest with you, I was getting tired of chasing doors. It wasn't as enticing anymore. Don't get me wrong, we still grow, we still love getting new doors, but something had changed in me.

Then we were really started looking at what can we do beyond just getting more doors and that's really when the whole doorpreneur philosophy was born. Our first pivot into a new business that serviced our portfolios was landscaping [...] and that's where everything grew from there.

Jason: Here's an obvious question. Would you rather have two doors that are making the same amount or one door that's making the same amount as two?

Tony: Definitely one. Absolutely.

Jason: Absolutely. If the goal is revenue, the goal is profit, and it's not just about adding doors. Everyone focuses on that one multiplier, it is doors. Everyone's trying to get a deal and it's like one deal per door. What if you can get multiple doors per deal? What if you can get multiple years per door? What about duration? There's all these other factors they’re not paying attention to. There are some property managers out there that are replacing every door every year. They're usually about 50-60 units, they're getting on an accidental investor that leaves every year, they have to replace every damn door every year, and they're like, “We’re adding doors, why aren’t we growing?” It seems so obvious.

Tony: The major shift for us has been quality over quantity. I say no to more doors today than I ever have in my 10-year career running this company. It's really all about where can we take this? Where can we take that door and what can it do in the long term?

Jason: Yeah. I think a property management company’s growth will always be defined by the doors that they're willing to turn down, not the doors they're able to get on for sure. I think another thing going back to your rent roll paradox, you talked about expanding into locations. I think that's a go-to once a company hits a certain size, they're like, “We did it here, let's go here.” They just had me speak on this at the Ironman conference on a panel and I call that, premature expansion. Anything premature is generally not a good thing.

A lot of people think, “Well, we did this here, we're hitting a cap in our door account, so instead of expanding our revenue opportunities with those doors, or here, or figuring out other ways to hit different parts of the market here, let's just go find a new market. We’ll do it all over again,” they don't realize it's worse than being twice as hard in starting a new location.

Tony: 100%. The stories that I can tell you about the two locations that we can open. It all comes back to a fundamental need of chasing doors. It’s like that's all you're able to see. We got this tunnel vision. It's like, “Okay, I've grown here and I think I'm as big as I can get. Where else can I go and chase more doors?” It's fulfilling for the first little while. It's fun, it’s exciting, but there's an emptiness to it in the end.

I think I'm a little bit different than maybe probably a lot of traditional type property managers. I knew when I started Ground Floor that it was going to be something much bigger than just a property management company. I had that vision 10-15 years ago and just running after doors, it lasted for 3-4 years and then I was like, “Okay, what's next? Is this it? What else can I do in here?” That's when a lot of other things started coming along.

Jason: I think that's common for every entrepreneur in the entrepreneurial journey. If they really are an entrepreneurial-minded person, they're going to hit this stagnation or this desire for more. The desire to do more. Sometimes that goes south and they do it in negative or dysfunctional ways. I started out just doing websites. Then I go like, “Hey, I could make residual income if I'm doing the hosting for these websites. I could do this. They also need the service.”

I think as entrepreneurs, we also get distracted by opportunity. We see it everywhere and it keeps us sometimes from even achieving the goal we're working on right now. How do you find that balance between seeing all the opportunity and expanding into new areas, but making sure that you're actually getting stuff done?

Tony: I'll be honest with you. The first couple of years, I was so focused. I had my head down so bad in terms of just getting the doors and growing my local office, that it was so busy and it was all so fast that I didn't have time to look at anything else. It's when I get a little bit of breathing room that I started looking at the different locations. I don't necessarily regret it, but I probably would have thought about it a little bit longer before I need the jump.

If I look at myself now, it really comes down to being disciplined and a lot of good habits. Like I said, I say no to more business today than I ever have. I am 100% focused. Property management is my life. If it's not in property management or in my sphere, I'm not interested. I don't have time for it, I don't make time for it, and I'm very blunt with that. I have an extremely tough schedule that I follow. I do a lot of stuff for myself personally, and then that translates over to the business side. I know where I'm going.

It's kind of fun to where you'll have other guys or people that'll come in and say, “I got these cool opportunities, I got this, I got this,” I'm like, “Cool, good for you. I hope it works.” Me? I'm not interested. I got my path and I know what I'm doing.

Jason: Yeah. I did hit up for opportunities all the time. Different property management there's like, “Hey, we could do this cool thing together.” I’m like, “No, we can't.” Focus is power like with anything. You could be a flood light or you could be a laser and actually cut something out in your life and achieve something.

All right. Can we touch on your book a little bit? I read through it. I think there's some interesting ideas in there. I don't know where we should start, but you've got this book, you call it The Doorpreneur: Property Management Beyond the Rent Roll. It's a quick read. I think it's a good read. You share a little bit of your journey and some of the things you've gone through. I think we've done some similar things. I'm going to quote a part of it. It says, “We are the problem and we are the solution.”

You were talking about how property management had a bad rep because we're allowing it to. I think that's the case. Everyone who’s heard of me, if they listen to my show at all, talk about the cycle of suck. If you haven't, just google “Property Management Cycle of Suck” and you'll find an old video I did on it. I think that the industry as a whole is that's where they are. It's caught in the cycle of suck. It has a bad reputation because everyone's taking on bad owners, and they're taking on bad properties, and they're not being picky, and they feel all the scarcity. Everybody's trying to do the same stuff that's not working which creates false scarcity in the industry and there's no scarcity in property management.

You said that you believe the industry's time has come. What do you see for this industry? You say it's on the brink of change. I feel that, too. I feel like there's a shift going on right now. I'm hoping that DoorGrow is helping to push that forward. What do you see for the future of property management?

Tony: Just over the last few years, I would say probably in the last 4-5 years, I will say that you’ve had a part in this in terms of, you're starting to see a lot more people get together and talk about property management, and not just NARPM. I know that’s a big organization in the States, but in order for an industry to really take over, I believe it's got to go beyond just the regulation of the groups that are that are like that.

It's exciting to see a lot of that happening, whether if it's groups online or different organizations, all sorts of cool stuff. But I'm also seeing that the opportunities that are becoming present in all these different places are becoming much more attractive to different people. It's like you're seeing the density being built in a lot of different cities—the rise of renting out in this whole generation of millennials—in terms of it being a renter's nation. That is providing a good foundation for a lot of required property managers to come out here and start managing these properties.

The tools are getting better. They're not amazing yet, and I'm speaking in terms of technology. Those things are getting better over time. But more and more, I'm seeing the property management is getting away from the old school that started in the business 30, 40, 50 years ago, and you're seeing a new breed of property management come into the picture, which is they’re a lot more professional, they're running real businesses, it's not just a side gig from a realtor, or it's not just this big owner that owns a big portfolio and he decided to manage a few places on the side so he can make a few bucks and pay for him running his own stuff.

They're seeing legitimate people, business people coming into the space and making a run at it, and that's what we need. We need professionals coming in and we need professionally-run businesses. More than ever today, I'm seeing and talking to a lot of people that are running greater businesses and it's exciting, because I think the opportunity is huge.

But it's also at the same time somewhat limited because I know I've done this long enough. I've been around it my entire life. This business is tough. It is not for everybody. We're going to have the turnover that's going to come through and hopefully the good will stick and make the business better for everybody. Better first impression of the business, better for us working in the industry, being able to grow together, and making it all better together.

Jason: Yeah. I think that the way to change the industry is obviously to have healthy businesses. Healthy business owners in this industry, leading the way, and they have to be profitable. I think also there's a huge opportunity right now in that, millennials are the workforce largely. I think a lot of people, they’ve gotten a bad rep. A lot of people think they're lazy, they’re unmotivated, and I find that to be patently false. I think millennials are our new generation of workers that don't want to do menial work.

They don't want to do something without meaning. I think this is a huge opportunity for business owners that are not acting like dinosaurs saying, “I'm paying you to do something so just freaking do it.” Those are the dinosaur dictators that think, “Well, I give them money. Why don't they just do everything amazingly?” Millennials want purpose and I think there's an opportunity now for business owners that believe they have a purpose, that there's a greater vision for what they do.

You touched on that in your book. I talked quite a bit about that as well. People have heard me say, “I believe good property management can change the world. It can have a significant impact. We’re affecting families. We’re affecting lives.” I could have that impact through my clients, which is what gets me excited about showing up helping property management business owners lead the way and do good work. They can't do that if they're struggling.

Tony: Yeah. The biggest aha moment I've had in my career with Ground Floor, my management company, was four years ago. We had an offsite meeting with all my staff. We’re about 50 people with all 3-4 different companies. I was looking at the rent roll, I showed it to everybody on the big screen, and I'm like, “We've got 2000 apartments,” roughly it was right around there, that we're almost full all the time, “and if I take an average, we’ll probably have around 3000-3500 people that live in properties that we take care of. Guys, we matter. You cannot not look at that and how important of a role we play in day-to-day life for close to 4000 people.” I'm like, “That's pretty special.”

Like I explained in the book, we’re a part of all sorts of experiences for these people. We've seen deaths, we've seen births, we've seen marriages, we've seen plenty of divorces, we've seen it all. It happens underneath our roofs. Again, I grew up in the business, I've seen it all from a personal standpoint, and now I've seen it all from running a business. There are no ifs or ands about it. It's a special business.

Jason: All of those different situations require some activity or involvement with the property manager. I mean, even if it's just maintaining the property and doing some maintenance, it's affecting these families lives, and it's affecting these sometimes challenging moments that they're going through. Those interactions can be positive, helpful interactions, or it can deepen their words, they can cause more pain, and the ripple effect property managers have is huge. Property management is death by a thousand cuts. It also can be a ripple effect of a thousand possible positive interactions on a regular basis.

I know property management can be tough. I hear about it all the time. I know how difficult it can be to run a business. I know that. Every entrepreneur knows that. It doesn't get easier the bigger you get, often. It can sometimes get more challenging. But it makes it worth it when you have somebody that comes to you and says, “Hey, you made my life better,” or, “You had an impact,” and those little moments we don't always hear about them, but when they do come through, they do. That’s why we do what we do.

Tony: Yeah. I think a lot of property managers will be able to agree with me, that there's an old saying that the phone never rings with good news in our business. If someone’s calling, it's usually something bad on the other line. It’s either a complaint, or an issue, or something. It’s almost like you have to come into the office each day knowing that you may not get a million praises from the outside, and that's why the office environment is sacred for you and your staff, for the people running the business.

I just hired a new girl a few weeks ago and I'm very honest and transparent during our interview. I was like, “You're new to this industry and you are going to struggle. It’s going to be really tough. It’s going to test you emotionally. It’s going to test your ability to deal with a million things going on at the same time, it's going to test you in every way possible.” I asked her the other day, she’s going on her third week and she's like, “I knew it was going to be tough, but I didn't think there would be so much that I had to learn,” but the office environment is such a way that we're very much a team, we help each other out, we have each other's backs. If there's a difficult situation, other people step in. You really have to have that environment because it can really help the overall business. If not, it can get in get a little lonely.

Jason: Yeah. The turnover in property management businesses regarding staff can be pretty high. I think one way to mitigate that is what you're talking about, it's creating a really positive culture, a safe place within the business, a place in which your team members are allowed to make mistakes, they're allowed to screw up, and they're allowed to figure things out. Otherwise, they start hiding stuff.

Tony: And start costing you money. Bad mistake.

Jason: I think it's important to realize, a lot of times in any business, the people that are really attacking or really causing you grief, are hurt people. They're hurting on the inside. It's not even really usually about you. We were talking about before the show how I've been really attacked lately in some forums and some groups. I have several people messaging me privately and lots of people that message me like, “Hey Jason, you don’t deserve this, you’ve done a lot for us,” and it's ironic because in property management, we deal with this.

Everybody gets these negative reviews. They feel unjust and unfair, they didn’t give the deposit back which rightly so probably, you're being attacked, and these people have nothing better to do than just try to destroy your business. That's just part of being in business, I think. In general, you're always going to have haters. The bigger you get, the bigger the target is on your back. You just have more people that you're dealing with.

I definitely got a target. You dealing with 4000 maybe potential constituents connected to your business that you're impacting, all the owners, all the renters, everything, you have a big target, Tony, on your back.

Tony: Yeah. It's overwhelming in the best of days. That’s probably one of the, I would say, either the first or the second biggest problem overall arching in this industry is how do you deal with the overwhelm of dealing with so many different things. If we were to count all the different balls that we’re juggling in the area at any given time as an owner even as a property manager, it's a lot. That's why I've gone to the depths that I did with the book in terms of putting the importance on lifestyle, in terms of installing good habits, in terms of being healthy, working out, just simple things because if you're going to go in this industry and you're going to make a run at it, you got to be firing on all cylinders.

A big part of that is your body, your relationships at home, your relationships with your kids. You got to go into the office with a clear mindset. If not, it's going to be rough. I've walked in the holes in my office on many days after either having an argument with one of my kids or having an argument with my queen and that's like, “I can't do anything in here. I have zero patience and I just want everybody to stay away from me.” That's not a way to run a business.

Jason: That's how I would feel if I'm hungry. That's how I would feel if I didn't get enough sleep the night before. We tend to start externalizing these challenges. That's why even people coming to my program they're like, “Well, I wanted to grow my business, why are you having me focus on some of the silly stuff like drinking water?” I get picked on about some of those things but I know the impact that it's had on my own life to get the basics in place and have that foundation so that you can tackle the world. We have one vehicle in which we approach everything in life and that's our body.

Tony: Yeah, absolutely.

Jason: Our current ability distinct cognitively, to function, to be able to deal with stress, be able to see objectively, to be able to handle all the stuff that gets thrown out as a business, to be able to see alternatives and ideas, all of it has to do with our brain and being able to function on all four cylinders or however many you might have.

Tony: Absolutely. I'm a true believer. I've always been an athletic guy. 2019, I've taken it up a notch and done some other things.

Jason: I've noticed.

Tony: Yeah. It's funny because 8½ months getting ready for an Ironman, I made more money in that eight months than I probably did in the last two years by just condensing the amount of time that I had and the focus that was required to do it, and to pull it off. I still look back at it and like, “How did I do that?” and I'm still digesting it all because it’s still fairly new, but it's taught me so many lessons that I'm going to be able to take forth with the new stuff that I'm doing.

The very first video that I made to get ready for my Ironman training and it was January or February, it's like I'm doing this because I need to become somebody different in order to launch this book, to write this book, to finish this book, and to grow beyond the book. It was amazing. It was a journey like I can't explain

Jason: I’ll point out one thing that's very obvious to me because I've seen it in you, I've seen it in a hundreds of entrepreneurs. When we create constraints, when we have constraints, when we're limited in our time or limited in our attention, we innovate. That's when our brain starts to really fire and we get really, really creative.

It's the same thing with our team members. If you give them unlimited time to do something and unlimited resources and money to do something, they're going to do it in the most costly, time-sucky way possible. But when you create constraints and having a goal of doing something big like an Ironman, where you're going to put your body to some massive stress, you have to be prepared for that, and you know what it's actually going to take, then it gets really difficult and it creates constraint.

I'll point out to everybody. I've seen this in lots and lots of businesses and I've seen in my own life when we have constraints. You don’t notice, you come up with ideas when money get scarce. When you have a team member leave, all of a sudden, you're changing things that they've been doing a status quo forever. A lot of these challenges that we perceive as challenges really are opportunities for us to innovate and to grow and to change.

I'm not sure if Tony will make it back here, but I'm sure Tony would love for you guys to reach out. Tony, I'm going to plug you. He's got his book, Doorpreneur, and I recommend you check that out. You can go to doorpreneur.com You can preorder it now. Make sure you get his book. Check it out. I think there's some really great value. It's a quick read, it’s only 125 pages, and I think you'll really enjoy it. He's got some previews of the first four chapters on his site doorpreneur.com and it looks like you'll be able to get it on Amazon and in some other places.

We'll go ahead and wrap this up. So if you are property management entrepreneur, and you are wanting to add doors, and you are wanting to get your business in alignment, and you are wanting to create that space for yourself, you feel like you're the hamster on the treadmill, then reach out. You can check us out at doorgrow.com.

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Oct 22, 2019

From surfing waves to making waves by fixing exploding toilets for tenants—how an entrepreneur and creative technologist leveraged design to streamline simple solutions.

Today, I am talking to Mark Rojas, CEO and founder of the Proper app that streamlines the building repairs process. Mark has spent his career creating positive user experiences and adding value by solving problems related to efficiency and human connectivity.

You’ll Learn...

[04:40] Definition of Design: Viewing how something works in the real world and creating a corresponding experience to make your life easier and more enjoyable.

[05:34] Proper app idea originated with possibility of becoming an accidental landllord.

[07:13] Maintenance is the bain of their existence. There’s got to be a better way to fix building repairs process and problems.

[09:30] Maintenance is more than one issue. It involves many problems for many people.

[10:10] Lack of Communication: Leverage “chat room” to create efficient and effective dialogue between contractors, property managers, and tenants.

[13:07] What makes Proper different? Visibility and shared platform for centralized communication between all participating people and places.

[14:50] Building Repairs Process: Submit image, describe problem, create work order, send notifications, add contractors, diagnosis issue, complete fix, submit/pay invoice.

[19:50] Property Management Platforms: Proper’s integration and import/export plans for increased visibility for systematic way to save time and money while simplifying lives.

[22:42] Common Questions and Concerns: Is Proper app intuitive? Is training provided?

[28:15] Future Feature: Email integration and aggregation to avoid duplicate data.

Tweetables

Every elegant solution involves some element of intelligent design.

Design isn’t all about pixels. It’s applied via various mediums by viewing how something works in the real world.

Maintenance is the bain of a property manager’s existence.

First Step with Proper App: A picture is worth a 1,000 words, so describe the problem succinctly.

Resources

Proper

Mark Rojas on LinkedIn

DGS 100: Jason Hull on the Cashflow Diary 0

Transcript

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

Today’s guest, I’m hanging out with Mark Rojas. Mark, welcome to the show.

Mark: Hey, it’s good to see you again.

Jason: Mark is coming to us from a company called Proper Chat, correct?

Mark: That’s correct.

Jason: Mark, I’ll read a little bit of your bio. It says you are the CEO and founder and it says, “While you might not think of hiring a designer to fix an exploding toilet, Mark Rojas still might be the man for the job. From starting his own surfboard manufacturing company at 16 to founding multiple tech companies focused on creating positive user experiences, Mark has spent his career working to add value by solving problems of efficiency, and human connectivity.

An entrepreneur and creative technologist from Queens, Mark is the founder and CEO of Proper, an app designed to streamline the building repairs process.

He first began befriending property managers while producing the Venice Art Crawl, a passion project that transformed vacant properties into temporary art showrooms (aka fun, free open houses). Shortly thereafter while subletting his apartment in 2017, Mark was blessed with the invigorating experience of needing to manage repairs for a bathroom explosion involving multiple tenants.”

Why don’t you take us from there?

Mark: That’s a good intro.

Jason: I’ll let you tell the rest of the story. How did you get into this from surfboards?

Mark: Surfboards was a little I went to when I was 16 years old, but that did throw me into design and ultimately product design. Right after college, my career quickly became into web development, app development, and working with a lot of startups here in the Bay Area, which is where we’re based out of, to leverage design to solve water problems. It came with the advent of mobile, really becoming this fast-growing platform, where your everyday user now is expecting this very seamless experience that is solving various problems we’re on.

That transitioned from building a product, starting a company, and then continuing to wanting to build products for others. I think one of those things that continues to be a passion of mine is finding a problem and leveraging design to simplify, streamline it, and make everyone’s life better.

Jason: I love it. That’s entrepreneurism in a nutshell. We see a problem and we’re crazy enough to think we can solve that problem. We can make money solving that problem and create a win-win. You love that you say that you focus on doing it through design because really, every elegant solution involves some sort of intelligent design, whether it’s a system, whether it’s something visual. People think design, they think it’s like graphic design or something creative.

Mark: Yeah. I don’t think of design as just pixels. There’s various mediums through which one can apply design. It’s really viewing how something works in the real world and seeing how can you create a corresponding experience that can streamline it, that can make it simpler, that can make it more delightful, more efficient, and really give you a lot of your life back, whether that’s time or even just joy.

Jason: What problem then did you really see that you’re like, “I’m going to create Proper”? Let’s try to build this problem up.

Mark: I’ve seen a lot of different thoughts to my life in being a tenant, but it really became a problem for me when I almost became an accidental landlord. I was traveling for an extended period of time, I have known my landlord for a while, and she was happy to actually let me sublet it. It’s like, “It’s okay. Go off, I trust you, and when you come back, it’s all good.”

But there’s still a level of responsibility that was pressed upon me. As I rented out my apartment, I quickly realized that I have become a landlord. So, two days into it, the subtenant called me to let me know that there was a major problem. I was like, “What? What’s going on?” It turned out that the pipe above our ceiling under our neighbor’s bathroom had burst.

To say the least, it’s quite a mess. This set up a flurry of emails, phone calls, text messages between the tenant and myself, the property owner, neighbors, contractors, plumbers, et cetera, and it was happening over phone calls, emails, text messages, WhatsApp calls, FaceTime calls. At some point, I was like, “Wow, this is rather ridiculous,” and my design mind immediately started thinking...

Jason: Broken. This is flawed. There’s got to be a better way than this.

Mark: Yeah. My wheels are just spinning and spinning and spinning, and I started designing it in my brain. Then, one day I just whipped it out of my computer, I just mocked it up, and I was like, “I’m going to build this.”

I started building it and I think one thing that’s true then and now, and even more true now, is we spend a lot of time talking to our users and our customers, and really dissecting their problems or processes. I immediately started doing calls with property managers that I already knew.

As you saw in my bio, I knew a lot of property managers. When I started the Venice Art Crawl, which is a crowd-sourced art event, we have 40 different art shows going on at the same time in Venice beach. The way I did it was I found vacant spaces, [...] the property managers and basically said, “I know I can bring high net worth individuals to these empty spaces and we can treat it almost as an open house.”

That worked not only well—I was creating value for them—they all basically love me. When I started working on this idea, they were happy to talk to me for hours at a time. What I found is that maintenance is almost the bane of their existence.

Jason: Oh yeah. We did a survey inside the DoorGrow Club Facebook group—property managers listening, you should be in there if you have a property management business—and we asked—just an informal poll in the Facebook group—“What’s your number one challenge in your business?”

There were two or three items at the top of the list that were connected to maintenance. It was sourcing vendors, it was maintenance coordination. Maintenance is the biggest headache or challenge in property management.

Mark: Yeah. It’s very painful to the point that I actually thought that I was becoming a therapist. Sometimes, they would talk to me for three hours at a time just talking about it, and I was like, “Wow, this is a very real problem.”

I was able to take those learnings and turned it into a product that corresponded with it. What started off was really just a project. I didn’t think, “Oh, I’m going to become a billionaire off of this. This is my next big thing.” This is more, I was traveling, I wanted to start building a product, and I wanted it to not be something that I built in bane, but rather, to possibly solve someone’s problem.

Initially, it was my problem, and when I talked to property managers, they actually laughed at me because I was building an app already and only dealing with a monthly maintenance issue, while they’re dealing with hundreds a month, if not more.

Jason: Right. You’re building an app for one maintenance issue.

Mark: Yeah, so talking to them totally validated that this is something worth pursuing. Then, I just went deeper. I kept talking to them. I started talking to the contractors, the tenants, and I realized that this is a problem on all sides of the equation and set out to start building a solution that could solve a lot of the issues with it.

I think a lot of my history in design has been focused on communication, really making it richer and removing barriers. Essentially, a lot of friction and a lot of time wasted happens when poor communication happens. That’s why it’s proper.chat and leveraging chat as a platform to remove a lot of the bottlenecks that happen, like playing Whac-A-Mole between an email for this contractor, phone call for that tenant, and really starting to centralize everything where we could remove those bottlenecks and with the oversight of the property manager, the contractor and the tenant can speak with each other. Anything from scheduling, updates, “Hey, I got to go to Home Depot and get this part. I’ll be back tomorrow.”

In the world today, the tenant would know. Three days could pass and that creates frustration and friction for the tenant because they don’t know what’s going on, and that means another phone call to the property manager.

Jason: Right. Communication in a business, for any business, causes a challenge; internal communication. For a while, as I was growing from solopreneur to building a team, I have freelancers. I thought this was so great because I only have to pay them when there’s work. “Here’s the job, do this work.” But the challenge with that is the communication level was just not strong enough. I didn’t realize that until I started getting full-time employees. The communication level is dramatically different when you have somebody that’s dedicated because you’re reducing the number of people that you need. That person is giving more of their time.

Two people that are doing 10 hours a week versus 1 person that’s doing 20 hours a week, I would take the one person any day of the week, especially if those two have to communicate. The communication back-and-forth wastes so much time, and there’s always a percentage of loss when there’s any sort of communication. If there’s communication between two parties, there are gaps. There just always is. It could be a misread and body language. It could be somebody doesn’t understand something. Somebody’s a poor communicator. There’s some sort of flaw. The more you can reduce that, the less friction there is.

One of my recent hires was one of these unicorns that can do web development and design. The communication level is way shorter. He can get things done in such a short time. Normally, I want a specialist, but he’s able to create something so much quicker because he’s not having the communicate and negotiate between another party that doesn’t understand what they do. A developer and a designer are two different universes, right?

Mark: Absolutely, yeah.

Jason: [...] crazy guys setting you both. So, I get it. Explain how this helps reduce the communication and why is this better than the other stuff that’s out there, what other people have been doing? What’s unique about Proper that you’re noticing?

Mark: A lot of it comes down to visibility and a shared placed for everyone involved with the maintenance, to communicate with each other. Where we really differentiate is that we started on mobile. We’re a mobile-first solution. We do have a desktop and a web experience for the property manager.

In terms of being able to report, what we notice from a lot of property managers, whether they have Yardi, AppFolio, you’re still getting these maintenance requests from many different places. You’re getting from phone calls, emails, text messages. What we set out to build and we’re building right now is one place I can centralize all that. Not only centralize it but make it a more useful format. When someone writes you a three-paragraph email, a lot of it is frustration.

Jason: Right. There’s all this emotion and they want you to understand their pain. They’re like, “I got to relate this. I got to paint this picture.”

Mark: Exactly, and part of it is because they’ve waited too long to write this email. This frustration has built up and they want to write this email. With our application, which is native, you as a tenant are able to create a work order very quickly, and it’s very visual.

An image is worth a thousand words and it really is in this area. Often, these emails don’t even include images, so a tenant is able to quickly snap a photo, almost like Snapchat or Instagram. You don’t train anyone. There’s literally billions of users on these apps who know how to use this and they’re able to create a work order in under 30 seconds.

The format is not to write paragraphs and paragraphs. It’s to be succinct, 140–200 characters max and you choose a category. This gets fired off to the property manager, you get a notification on your phone or on your desktop, and then from there you have your contractors that you can add this this conversation.

The idea is that it turns into a group chat at this point, with the property manager still being involved. Instead of trying to get back and forth between scheduling, instead of the contractor having to ask questions to the property manager to then go ask the tenant to further diagnose what’s broken, the contractor’s able to immediately see what’s broken because there’s always going to be a picture. We pretty much make that almost mandatory for the tenants.

What we’ve seen from contractors is that they’re able to save time and cost by more quickly able to diagnose where the problem is, what tools to bring, what materials to bring. Everything just happens there. The property manager is still part of the process, but they don’t need to insert themselves. When they insert themselves now, it really takes up a lot of their time. Not only because they have to go back and forth, but often they’re fielding phone calls, they’re fielding emails, and then this really, really adds up.

Jason: I love that it’s prompting them to take a picture.

Mark: Yeah. The first step is to create a work order, take a picture. That’s the first thing.

Jason: And a picture’s worth a thousand words. They’re not going to have to write a thousand words in order to get it across. You can see it and you go, “Okay, you can fluff it up or make it more dramatic, but I can see it. Here it is.” Or they might do the opposite. They might say, “Hey, there’s a problem with the faucet and it’s flooding the whole bathroom.” So, you can see it. They send you a picture.

In a lot of apps, a picture’s an afterthought. They have to do some serious extra work in order to get a photo into something or to do it. I’ve had maintenance companies ask me, “Could you email me a photo?” or, “Can you take a picture so we know what to look for or what type of fixture we need?” whatever. It slows down the communication significantly.

Mark: Totally and I think there are these added benefits that currently property managers don’t have the bandwidth to do. Because of the contractors there, they can easily provide updates themselves like, “Hey, I have this question.” “Hey I have to come back.” Right now, that has to go to the property manager, the property manager then has to tell the tenant, and then often this doesn’t happen. So, you have this built-in benefits of transparency that you have with the tenant that really builds trust, but also stops them from calling you, which once again takes up a lot of your time.

The very nice thing is that at the end, the contractor is able to close up the job by providing proof that they’ve done it. So, they have to take pictures of it. Then, you have these records of the conversations that you have with everyone, the images at the beginning of the job, the images at the end, and it just creates a ton of transparency and documentation that you can have, that’s very easily searchable, filterable later on.

One thing we’re starting to work on is really reporting. You can start to really understand the volume of workers that you’re getting, the stages that they’re at, the amount of time it took to complete it, and really how much time it’s taking up for you.

Jason: It makes a lot of sense. If you can cut out one phone call, you’re probably saving your team, at a minimum, 15–18 minutes of productivity, simply because one interruption in a team member’s day, typically they say, cost about 18 minutes of productivity. Even [...] take 18 minutes, they got to rebuild the house of cards they were working on or go back to whatever project they’re trying to figure out. So, if you can cut down the phone calls significantly, even if you don’t have that large of a portfolio, it’s almost like getting a new team member on your team. It’s that significant. People are really expensive in property management businesses. It’s the highest cost in the PM business.

I know what property managers listening to this are going to be thinking. They’re going to be thinking, “Well, that sounds great, but another piece of technology. How is it going to work with my Buildium, or my AppFolio, or my Propertyware? I got these, they’ve got maintenance requests built into them. How will this work?”

Mark: In terms of the different platforms, there are ones that permit direct integrations and we’re starting to work with building some of those. Then, we’re also building a way for you to be able to easily export, search, and import this data at the end. I think the difference really is that the maintenance offerings that they have don’t create the same level of visibility and don’t save you the amount of time. Even if their integration is not there, the amount of time that we’re currently saving you and that we’re going to continue to increase, really starts to outweigh some of the cons of doing that. That’s the way we’re moving through with all these things.

Jason: Can you tell us who you’re working to start integrating with yet?

Mark: We have a couple of partners, mostly in the Los Angeles area. One has about 1000 units, another 2000 units, and we’re working with both of them. They’re both on different platforms and seeing what’s going to be the most efficient way. It’s not just integration of the maintenance, but also I think what’s really important here is their accounting.

We’re really looking at accounting and how we can start to streamline with that because there is one of the things that we’ve seen with the contractors is a lot of them don’t have a systematic way of not just keeping track of their work orders or invoices, but even just generating invoices, so it takes up a lot of their time. On the property management side, you’re getting all these different types of invoices coming in, totally different formats, and then you’re manually doing double data entry into all these different systems. It’s kind of a pain because it’s like, “Why is it formatted this way?” You have this hurdle that you’re dealing with all these messed-up invoices.

One thing that we’re seeing is there’s the ease of use of our invoice. A lot of the maintenance techs and workers are actually enjoying using it and starting to use it as a way to create a uniform way of generating invoices for their property managers. What we want to do is actually make that very easy to export so you can import so that you can import it into your accounting system.

Jason: Cool. What are the big questions that people ask about this? What are their frequently asked questions, concerns? What are the big questions that they’re asking so that we cover all the bases here?

Mark: There’s quite a few, but I think there’s this very chat-focused, very simple, clean design. There isn’t a lot of other platforms that we’ve seen in the space yet. They’re starting to show up, but really there’s very few. I think a lot of people are like, “Hey, do you provide training? How much is training going to cost?”

Jason: You’re like, “Do you know how to use instant message?”

Mark: No. We don’t want to be sending that at all. We really care about our users, so we offer like, “We’ll train you,” and then the funny thing here is that we do a demo and not for a minute we train them.

Jason: And by the way that demo was the training.

Mark: Yeah. If you know how to use iMessage or any of those things, it’s very intuitive. That’s really the core principle of the company is designing something that is not only beautiful, but it’s extremely easy to use because we don’t think that we should be paying and send somebody out to train you or that you need to hire some expert to use the software.

Jason: All right. I’m going to go to the devil’s advocate on the other side here. It’s so easy, it’s just chat, it’s so simple, why don’t I just sign-up with Intercom or Help Scout and get a chat tool and take tickets? What’s different between those solutions and something like Proper?

Mark: Proper is really geared towards maintenance. Even just the terminology, the flow, the understanding of the whole workflow of maintenance getting done, is what is unique to us. You could theoretically use text messaging to do. The reality is you can start to use that, but then very quickly it breaks down and it becomes cumbersome.

For example, Intercom. There’s no mobile app. There’s no way to really add photos into what’s going on. There’s no way to categorize it into the type of problem that might be related to maintenance. For us, we provide all those things but then, you’re also able to search, filter, and zoom in on a property and be like, “Okay, these are all the work orders. This is how we spent maintenance on this property.” As we move forward and we start to integrate with other systems, that’s something that Intercom would probably not do.

Jason: They’re going to put this chat tool probably on their website, so people coming there if they have maintenance requests, do they hide it like, “Go here for maintenance and then the chat is there”? Or is it [...] and if so, the maintenance coordination is one side, but they also have lead gen that they’re trying to do. They have sales. They’re trying to target owners and capture people with their live chat tools. How do you usually recommend they segregate that or can Proper help up with that other challenge as well?

Mark: Good question. The way the application is working right now is that the live chatting or website, if you’re using something like Intercom, that is something that we’re not providing right now. Essentially, what happens is that property managers will announce that they’re using Proper to their network, share the app, then they’re able to install it, and then start reporting through there. It comes into our web app and mobile app. As a property manager, you can use the app from anywhere, but you could also use it at your desktop. From there, is where to start to field everything.

Jason: So, Proper works more like an internal tool. When you onboard your new tenants, you can say, “Hey, get this. This is how you can communicate with us.” It’s probably not just functioning as the live chat tool that’s capturing leads on the front-end of your business, but you could always take that tool and put links into it or pre-written messages to say, “Oh, it’s a maintenance request. Go here.” [...] Intercom a button that they click, that I’m here for maintenance and it takes them to Proper to take care of that.

Mark: Yeah and one of the really interesting things is that we’re starting to build email integrations, so the initial one that we built is that if you receive an email that’s coming in from a tenant and it’s maintenance-related, we build the Chrome extension where very easily just sends it to Proper and then it turns it into actual work orders. You’re not actually trying to do double data entry there.

The next step of that is making it so that your tenants and contractors don’t have to join Proper. They can submit things via email, but then you have one place where it’s starting to aggregate everything, whether it’s submitted directly to Proper or through another channel like email. That’s one of the really exciting features for these next two months that we’re working on should be out.

Jason: So, that will be similar to Intercom, which you can have a certain email address like maintenance@businessname.com and have that forward those emails into Proper?

Mark: Yeah, it all vacuums it right up and then as it comes in, you’re able to categorize it and make it something that is not mixed with thousands of other’s emails but rather centralized and easy to find just like any of the other maintenance tickets.

Jason: It sounds like it would make sense for them to have some sort of support solution and still use Proper for the maintenance portion for the back-end, and internally with tenants. Very cool. What other questions then do people tend to ask?

Mark: One of the big ones is really that email integration that I just mentioned. That’s essentially what we’ve been doing is tons of user research and starting to find what are the biggest problems. Using that is like having it bubble up to the top and turning it into features that are usable to them.

Jason: One of the challenges in maintenance is the communication between vendor and owner is getting paid, payouts. What if the vendor starts messaging and they’re like, “Hey, property manager, when do I get paid? Here’s my invoice,” and the tenants are seeing this stuff. How do you deal with that?

Mark: I’m glad you asked that because that’s literally the feature we’re rolling out right now. We’re waiting for the upstart to approve and by the way, we’re on iOS, Android, and web. The next thing I told you, we make it really easy for your maintenance staff or techs to create invoices and generate them. We’re actually about to roll out payments where they’re able to get to pay through ACH and really it’s cut out a lot of time for the contractors to generate those invoices or even for the property managers to [...] and all these things which I still see very frequently happening.

Jason: In the app, the contractor maybe see something a little different and they can submit invoice or something like this?

Mark: Yeah. Basically, when the contractor closes up the job, they provide proof that they did it and they’re prompted to create an invoice.

Jason: And one proof would be another photo, something along these lines?

Mark: Yeah. You’re able to add multiple photos as the contractor. This then generates an invoice that the property manager receives. This is a separate view where the tenant is not part of it. They’re not anything around cost, they’re not seeing this. The property manager is actually able to pay via ACH directly to the contractor through the app. There’s no need to go elsewhere and try to cut a check, having anyone pick it up, or mail it, or anything like that.

Jason: So again, it’s reducing a lot of the friction and communication challenges between the property manager or maintenance coordinator and the vendors.

Mark: Yeah. That’s one thing that we’ve seen on both sides of the equation. A lot of property managers are still spending a lot of time just doing payments. On the contractor side, they are spending a lot of time generating invoices. They have a good support, so at the end of the week, they’re tying up all the work that they did. They don’t even necessarily have the good system to keep track of all the jobs that they did.

So, they’re often once again spending this admin time where they’re not actually getting paid to do that. What happens now is that with the invoicing feature, although it’s simple and very intuitive, it actually reduces the amount of time that they’re doing this stuff, they’re able to get paid faster, and they’re able to spend a lot less time worrying about the stuff and actually getting more work done, which means your maintenance is getting done faster, which means your tenants are happier, which means you’re happier as a property manager because you’re hearing less from them.

It’s really an interesting problem because you have these three different groups of people and you’re trying to design the simplest solution that takes into account their unique set of problems.

Jason: If you imagine, what would be the ideal situation so that all three parties could communicate the most efficiently? You would just have all three of them sitting in a room face-to-face talking like, “Hey, you’ll do this. I’ll do this.” “Okay, I’ll pay you then. I’ll do this.” “Okay, team. Ready? Great.” Everybody’s there, it would be fast, but that’s not reality, right?

Mark: Yeah.

Jason: You’re trying to run a business and so is the vendor. The tenant should hopefully has a job and making some money to pay rent. There’s all this stuff going on, we can’t just all hang out, but Proper really creates a room that they can all hang out in and communicate.

Mark: It’s great that you actually put it that way because that’s very much how I think about solving this problem. When you’re in person with sometime, it is the richest form of communication. If it’s a group of people, then the bottlenecks or the walls that exist, that is created through distance, creates all these inefficiencies.

Essentially, that is actually how we think. That is what we want to be able to create these rooms and make this very efficient, yet rich way to communicate with each other, to eliminate a lot of these barriers that are currently costing a lot of time, which includes money, and often just frustration.

One thing that I didn’t mention here is that I spent a whole year working out of a property manager’s office. You can call it extreme customer development and I really understood a lot of their operations and just so much of their time is spent on communication, but because they don’t have good tools for it, it just generates a lot of frustration on each side of it. Assuming that it’s hard to measure, the quality of life when you’re constantly doing frustration just really goes down.

Jason: Yeah. Plus there’s a lot of turn-over. Among the property managers that are working for a property management business owner, it’s very difficult.

Mark: What’s true of us as a company is to improve that quality of life because we know how gruesome the job can be, how hard it can be, how taxing it can be. If you use our app, it’s very colorful. We kind of joke around in the copy and we try to make it not just extremely efficient but fun. We want to make it [...] inject a little bit of fun into it. I don’t think that I see that very much in the space yet, which is one of the things I’m very excited about is that I want to bring that to the space.

Jason: Some of the things I’ve seen in some apps lately that people have been doing to gamify things, which is really funny, that once you complete something or you finish something, you get confetti and balloon noises and stuff like this, like this is a little celebration. So, I’m just going to throw this is a feature request that after a maintenance is completed and somebody marks complete to get […] and they get this little celebration thing. It gives them that dopamine boost to get things done and they feel good about it.

Mark: Oh yeah. That’s actually something that now that we’re starting to mature as a company and we’re getting ahead with the feature set and the road map, that’s something that we actually can bring into it. So, given my part of design background, I also know a lot of animators and illustrators. As you can see, we have a lot of illustrations. We very much want to use those opportunities. When you’ve succeeded at doing something, really just letting you know.

Jason: Even rewarding a tenant for using the system. Instead of calling you, like they submit a ticket and you’re like, “You’ve done it! Good job!” All these little things just create positivity and they add a positive feel to the property management company. The tenants are usually pretty upset if there’s a maintenance request. The vendors are having to deal with that, the property manager. Anywhere you can add a little bit of fun and gamification into an app, I think is [...] world a little bit more fun.

Mark: Yeah. There’s no reason you can’t have fun doing this job. I want to save you time, but like in this, get you to crack a smile a couple of times a day. It’s not just about saving time but it’s about being able to continue to do that job and be happy doing it.

Jason: All right, cool. Mark, I really enjoy having you on the show. One thing that might be cool, it would be after a maintenance request is submitted, if we did an integration with GatherKudos, real super easy, super simple. [...] whether they’re happy or sad.

Mark: I’m totally happy to talk about that.

Jason: All right. That would be cool. It’s really great to have you on. How can people get in touch with Proper? How can do a demo? How can they find out more?

Mark: We actually created a unique link for the show, so if you go to proper.chat/doorgrow, you can definitely learn a little bit about our products and then very easily set-up a demo with us. Again the tool is super easy to use, so we are happy to set-up a demo with you. It shouldn’t take more than five minutes. Once you start seeing the product it becomes very quickly evident how this can start saving you time and also maybe make you smile.

Jason: Awesome. All right, everybody check that out. I appreciate you setting up that link. That’s awesome. Go to proper.chat/doorgrow and check it out. You get a little special perk for being a DoorGrow Show listener. Mark, really grateful for you coming on the show. I love hearing about new technology. I think this sounds really innovative and I think it solves a problem. I think that it will really be beneficial and I’m really excited to see what you guys do in this space and start hearing some feedback from my clients on what they think.

Mark: Yeah. Thanks for giving me time and always a pleasure to talk. I look forward to checking in again soon.

Jason: Cool. Yeah, we’ll be talking again soon. All right, I’ll let Mark out. If you are a property management entrepreneur and you’re looking to add doors, you’ve been struggling, you’re wondering why does it feel like there’s scarcity in an industry and 70% are self-managing. There’s no scarcity in property management right now. There just isn’t, but they’re not looking on Google. You’re going to have some trouble if your whole goal is you have people find you through Google. There are ways to go out and create business and we’re focusing on that.

So, stay tuned with DoorGrow, keep an eye on us, and if you’re wanting to grow your business, if you want to short some of the leaks in your sales pipeline, you want to dial in trust engine, have generate more warm leads and warm business, it’s easier to close and have less conversations about price, price sensitivity, and comparison to other companies, that’s what we do. Reach out and talk to DoorGrow. We’ll be happy to help you add doors to your business, figure out how you can optimize your business for growth and creating trust.

Again, I’m Jason Hull with DoorGrow here on the DoorGrow Show. I appreciate you tuning in. Please like and subscribe on whichever channel your hearing this on, whether it’s YouTube, iTunes, Facebook, whatever. Stay plugged in and make sure you get inside our DoorGrow Club Facebook group where we are putting out discontent. We have an awesome community of DoorGrow hackers like you. So, check it out doorgrowclub.com. That’s all for today, everybody. Thanks for tuning in. Until next time, to our mutual growth. Bye everyone.

Download this Episode

Oct 15, 2019

To celebrate the 100th episode of the DoorGrowShow, I’m doing something a bit different. Instead of me interviewing someone, I’m the one being asked the questions.

Today, I am featuring my appearance as a guest on the Cashflow Diary (CFD) podcast hosted by J. Massey. We discuss my journey into property management and how to optimize a business through organic growth to achieve success.

You’ll Learn...

[05:00] Today’s entrepreneurs are like yesterday’s superheroes. They save lives.

[06:01] Who is Jason Hull? Someone who has never managed a property, but helps others grow and scale their property management business.

[06:48] Being an entrepreneur is in his DNA: Grew up with an entrepreneurial mother, who taught him to make more money and beat the competition.

[08:16] Failed Marriage and “Disney” Dad: Jason needed a job that offered freedom and autonomy to spend time with his kids and create clients.

[10:13] Website Design, Marketing,and Branding: How to win when competing with Goliaths and make it to the top of Google.

[11:53] Financial Decisions: Entrepreneurs like to make money, not lose it.

[15:25] Conventional to Comfortable Confidence: Do what works for you, not others, to lower pressure noise.

[20:15] Curiosity: See what others don’t and causes businesses to lose leads and deals.

[21:55] Still struggling with imposter syndrome? Hire a business coach who believes in you to rebuild confidence and effective communication to make a difference.

[28:55] Why choose property management and deal with tenants, toilets, and termites?

[32:53] Why choose Jason and DoorGrow? He helps create positive awareness and address negative perception surrounding property management.

[40:00] Cold vs. Warm Leads: Prospecting pipeline plugs leaks to grow business and get people to know, like, and trust you.

[44:56] How do good property owners find good property managers? Avoid sandtraps of solopreneurs with few doors; add doors to build a property portfolio.

[49:10] Short-term Rental Success: Get a property manager to solve revenue issues.

[52:32] Precipice of Decision: Believe in yourself, make it happen, and decide to be different by listening to your truest voice.

Tweetables

Today’s entrepreneurs and yesterday’s superheroes save lives and make the world a better place.

Entrepreneurism: Insatiable desire to learn and explore opportunities.

Entrepreneurs: Allow yourself to do what you need to do to lower the pressure noise.

Entrepreneurs create positive, uncomfortable change wherever they go.

Resources

CFD 542 – Jason Hull On How Property Management Can Change The World

Jason Hull on Facebook

Steve Jobs

6 Non-QWERTY Keyboard Layouts

Alex Charfen (Business Coach)

Momentum Podcast

DGS 99: Implementing EOS/Traction and Process Improvement at EZ Repair Hotline with Andy Shinn 0

Transcript

Jason: This is a special episode because this is our 100th episode. What I wanted to do was share something different. I've been on a lot of other people's podcasts recently and this was one that I really enjoyed, this was with J. Massey of the Cash Flow Diary podcast. He was a really great interviewer, I really enjoyed being on the show. He asked a lot of questions and it really dug into me. I'm not used to somebody really digging into hearing about me as much. I'm usually the one digging in and hearing about other people. I thought my listeners would enjoy this podcast so I asked J. Massey if we could have permission to put this on our podcast and he was glad to let us do so. You get to hear this interview of me being on this episode of the Cash Flow Diary with J. Massey. Enjoy the show.

Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

J: All right, ladies and gentlemen. Welcome to another episode of the Cash Flow Diary podcast. I'm your host, J. Massey. I'm glad that you are here today because we are going to talk about something that I know, and my guest knows, is one of the most, if not the most, critical piece for your success, not only in business but specifically, the real estate world. I know that many of us were out there. We're trying to grow our cash flow. We're trying to make things happen. Build a bigger, better business, and you're doing it and you're succeeding, and that's great.

Also at the same time, many of you are like, “Man, if I could just figure out how to take what I'm doing in business and do it in real estate too, that would be great.” Some of you are like, “Man, I just want to grow that real estate portfolio and make it a little bit bigger and better, but I'm still having some challenges in these specific areas because I can't find any good help. I can't make anybody do what I think is common sense. There's just not enough common best practices out there. How on earth, J, can I find that particular property manager?” Or maybe you are that property manager and you're going, “You know what? How on earth can I find that owner that actually knows what's up and won't drive me nuts?” I believe we have solutions for you today.

I have with me today none other than CEO, Jason Hull of DoorGrow, doorgrow.com. Some of you may actually know him from his podcast, the DoorGrow Show. What's going to be interesting today is that Jason wasn't always a property manager. We're going to get to find out the story, the journey, and most importantly, learn the lessons around entrepreneurship along the way that have allowed us the world to be able to know and love Jason the way that he is.

Here's what we're going to do, ladies and gentlemen. We're going to pay attention, we're going to make sure that, yes, I know you're walking the dog and doing the dishes, but you're going to hit that mark, you're going to bookmark those spots so that you can come back and listen to the gems that he's going to drop. Most importantly right now though, let's just welcome Jason Hull.

Jason, how are you doing?

Jason: Wow, that's a great intro. I really appreciate that.

J: Thank you. I'm glad that you were here. I'm also excited because we're going to be talking about something that I'm passionate about. Real estate's really important, but more importantly, it's the people and the teams that you hire that tend to make things go well, and sometimes, not go so well. I'm looking forward to that, but before I get down there, I have to ask you the same question I didn't ask everybody else the first time that they're here, are you ready?

Jason: Do it.

J: All right. I tend to look at today's entrepreneurs a lot like yesterday's superheroes—Batman, Robin, Hulk, Wonder Woman, you get the idea—because I think entrepreneurs and superheroes have a ton of things in common. For example, as an entrepreneur, occasionally, I can envision myself using our products and services, flying around town, and saving customers one sale at a time. Also, like a superhero, an entrepreneur has a beginning.

If you think about Spider-Man, for example, there was a time where he's just a kid going to school, doing his own thing, taking some photos, and then one day gets bit by a spider, discovers he's got a superhuman ability, and now he has to choose, “Will I use my newfound talents for good or for evil?” My question to you is as follows. Before DoorGrow, before your podcast, before your degree in marketing, your website design, before being a property manager, before everything we know you for today, what we want to know is who is Jason Hull?

Jason: That's a deep question. Let's sum up a whole person really quickly here.

J: No pressure.

Jason: Yeah, no pressure. First thing, let me just correct something real quick, I had never managed property in my life, yet I somehow am attracting property management entrepreneurs from all over the US and beyond, asking for help in growing and scaling their businesses. I'm more of a nerd that used to be secretly in the background, helping them and had to push myself out into the limelight to make a difference in an industry that I could see there was an obvious change needed to be made.

But my background growing up, I grew up with an entrepreneur mother. She is this amazing, loving, charismatic woman that is a real estate agent. She's just had hustle in her since she was a little kid. She's told me stories of she saw the other boys mowing lawns and she was doing babysitting when she was young, she was like, “They're making way more money than me.” She went around and she figured, “I could undercut them by a dollar, go door-to-door, and steal their business, and start offering to mow lawn.” She started mowing lawns to make more money. She just had that bite in her to accomplish and do things.

I didn't see myself as an entrepreneur, I didn't really know what an entrepreneur was, yet, I think it was just in my DNA. I was the guy in college that decided, “Hey, I want a band so I'm going to start one. I'm going to write all the music.” I was a guy going door-to-door, pre-selling CDs at girls’ dorms with a guitar in hand and a clipboard for an album that didn't exist so that I could pay for the recording time so I could fund an album, but I wasn't an entrepreneur.

J: Yeah. No, that’s not entrepreneurial at all.

Jason: I was thinking I needed to go get a job. I was like, “I'm going to finish college and I got to then find a job.” What thrust me into entrepreneurism is I had gotten married really young and the marriage fell apart. I had two kids and I needed to be able to have time that I could spend with them. I didn't want to just be Disney-dad. I had to create a situation in which I had freedom and autonomy. The other factor that played into it is my employer at the time got hit by the whole financial mess back in 2006–2007, I guess, and could no longer pay me. I was just doing nerdy stuff for them at the time. Then I realized, they were now a client. I started reaching out and creating clients.

One of the earliest people I had helped was my brother who was just getting started in the property management business. He had just bought a property management franchise, he was fresh out of college with his business partner, they had no doors under management, and they had this terrible website they got from corporate. He was like, “Can you just help me figure this out because you're smart? What do I need to do?” I'm like, “Add some phases to it. That'll increase conversion rates. Let's do this and that.” He's like, “Can you just do it for me? Can you please just build me a site?” I'm like, “Sure, but you're going to pay for it.” He's like, “Okay, no problem.”

I built him a website and then suddenly, all of his fellow franchisees—this franchise had maybe 200–300 franchisees in it—and I started attracting these people that had thousands of doors. They wanted what he had. They're like, “Hey, what he has is better. I want that.” Really quickly, here's me, a freelancer, web designer, starting to do websites for people with thousands of doors. Some of these are probably million-dollar-plus businesses. They had really great backlinks, so I was at the top of Google pretty quickly and started getting clients around the US within a short time. I was competing against Goliaths, just me. There we go, now then I'm an entrepreneur. I think I just have an insatiable desire to learn, I just always have, and entrepreneurship allows me to really explore and it's really exciting.

J: Got it. Now I see how I got confused about the difference between understanding what it is you do versus being a property manager. It's more you help property managers, is what it sounds like, become better versions of themselves with their marketing and advertising. Am I close?

Jason: Yeah. Over the years, I've shifted more into coaching and consulting, but we still do websites, we clean up branding. What I tell property management entrepreneurs in short when they come and ask me what I do, I’d say, “I'm not going to teach you how to do property management. I'm hoping you already know that and you're good at it. I’m going to teach you how to win, that's it.”

Basically, what we do in short is we rehab property management companies so that they cash flow effectively, so that they have revenue, they have growth. We optimize their business more for organic. We're cleaning up their branding. Probably 60% or 70% of my clients that come to me, I change their business name, which is ridiculous if you consider how painful, challenging, or scary it is for somebody to do that, but I'm really good at helping them see the principles that impact their decisions about what's going to make money or cost them money. Then it becomes just a financial decision. One thing I know about entrepreneurs is that they usually like to make money.

J: Yes, definitely, but what I like about what you've shared with us here is to some degree, you're in what I would call the reluctant entrepreneur category because you weren't even considering like, “I'm not one of those. That's not what I do,” and then over time, you start displaying these traits. Now I'm curious, did your mom ever suggest that, “Hey, son, you might be…” and you have this conversation with her like, “No, no, no, I just need to go get a job?” was that ever a thing?

Jason: I don't know if I was reluctant. It just wasn't something that anyone had ever explained to me. I don't even know if I really was clear on what technically an entrepreneur was. I think I'd always had an entrepreneurial spirit. I had a paper out as a kid, my mom would have us fold flyers to canvass neighborhoods for real estate as little kids. She would pay us a penny per fold, if we folded a piece of paper twice, we get two cents. I would fold hundreds and then she would have us go around either on roller skates, scooters, or whatever, go around neighborhoods and just canvas and put those out. She'd keep an eye on us, walk around a bit with us, and we would just canvas neighborhoods. I think I was just raised with it and no one had ever put a label on it.

J: Oh, man, this is great. I'm sure some people right now are listening like, “A penny a fold? That's nothing.” I'm sure that happens in somebody's head, but the principle was clearly laid down for you in such a way that you're like, “I'll do it. Okay, let's go,” and you didn't care, and spending time with mom is always awesome. But at the same time, this desire gets left behind and you just keep finding ways to create opportunity. That's what I hear when you talk is you just find ways to create opportunity relative to something that you're currently enjoying. I am curious though did you ever actually get the concert CD album sold? How'd that work out?

Jason: I did. We did create the album, we created the CD, I wrote all the music for it, I sang every song on it, and yeah, we got it recorded. It's a pretty decent little album for being self-produced. I was very into the Beatles at the time.

J: Okay, yes. There's something else that you're also mentioning, the thing that thrust you, I would say is the correct word, into considering something in entrepreneurship in a more realistic fashion was the combination of kids and your employer not being able to employ you, but most importantly, I hear of a deep-seated value. You’re just like, “You know what? Working for someone else can be fine, but I have two kids now and I value spending more time with them, so I'm going to become or do whatever it takes to make sure that I can do that.” I'm curious to know where that comes from.

Jason: I think at the core of people that are really entrepreneurial, they know deep down that they're unemployable. Let's be honest. I worked at HP, I worked at Verizon, I was in call centers, I did a lot of nerdy jobs, I was a nerd, and tech support, stuff like that. In every situation I was in, I think something about me is I create positive uncomfortable change everywhere I go. It's just how I'm wired. I cannot be somewhere and leave things as the status quo. I don't do anything normally. If you could see the keyboard sitting on my desk right now, it's not even in QWERTY order, I pop all the keys off and rearrange them when I get a new computer and keyboard.

J: I want a picture now that you said that, but okay.

Jason: Yes, somebody can just Google if they want to see a different keyboard layout.

J: Dvorak?

Jason: Dvorak, yeah.

J: Yeah, that's the only other thing. I was like, “What else could it be?” The only other thing I was thinking was Dvorak. But okay, that makes sense.

Jason: Yeah, because I'm the guy that my brain just says, “Why is everybody doing it this way? Is this the best way? If it's not, I don't care.” Conventional standards mean very little to me. There's a lot of quirky things about me, and I think entrepreneurs are quirky. You look at Steve Jobs or you look at different entrepreneurs, they have weird habits. Like Steve Jobs, I wear the same clothes every day. I have black t-shirts, I have black pants, I have a whole closet full of black pants and black t-shirts. I just want it simple. I don't want to have to make decisions about that. I wear black hoodies, and I put on a conference, I've been around lots of people in business suits, that's what I wear because I don't care. I just want to be comfortable and that's what I wear. I think ultimately, as entrepreneurs, we need to allow ourselves to do what we need to do to lower the pressure noise instead of trying to play everybody else's game.

For example, with the keyboard, I realized my wrists were hurting. I was typing a lot. I was getting my degree online at the time, I was also working, and I was typing a lot. I was like, “This seems stupid, this is really dumb. Why are my wrists hurting?” I did what I like to do, which is nerd out, and do some research in Google and I realized, “Oh, Dvorak has 50% less movement, it would cut my movement in half.” The home row on the left hand is all the most commonly-used vowels and the home row on the right hand is all the most commonly used consonants, so there's more back and forth between the two hands.

QWERTY’s history was that it was designed and developed to slow down typist. The keys used to be in alphabetical order and they wanted to screw them up because they were typing too fast and the typewriters couldn't handle the speed. I'm like, “Okay, why am I doing this?” It took me, maybe about a month to get used to typing in a different format. My wrist issues went away and I was a lot more comfortable.

J: I like you a lot, I like this. It’s like, “Hey, this doesn't work for me. We're going to figure out what does.” I now have this question. What was that transition moment? There's usually a moment at which, like I said earlier, the superhero recognizes. “I have something special here, and now I get to choose what I'm going to do with it.” You clearly had that moment, but that moment is often, we'll call it rocky, not as smooth, or there's usually some strong emotions around it in some way, shape, or form, or some pivotal conversation. What was it like when you realize, “My employer can't pay me. I guess they'll become a client,” and then you go, “Huh, maybe what I need to do is develop a surface around this whole thing and do my own thing?” What was that like?

Jason: I think really for me, it's been a longer journey than just right in the beginning. A lot of people see me is a really confident guy, but I really have a strong introverted side. I wasn't that confident guy. In school, I did a lot of performing, I did music, stuff like that, but I still had a strong introverted side.

I think that confidence level, part of it happened early on working with entrepreneurs and just recognizing that they couldn't see things I could see. I was like, “You can't see that this is a problem, that you’re branded as a real estate company and it's causing you to lose probably 50% of the deals and leads you should be because you're a property management business, but on the tenants as real estate. There were just things they didn't see that seems so obvious to me.

The other thing is I'm really curious. With each client I would work with, just to do a website, I would probably spend on average about six hours doing a planning and discovery process over, maybe a period of a week or two with them. Multiple sessions, getting clear on their target audience, their avatar, what needs to be included in the website, what their avatar’s pain is, what they want.

It became really clear to me that most of the websites were focused on tenants, yet they're not hunting for tenants, they don't have problems getting tenants, they want more owners to manage properties for. It just seemed obvious to me that everything was off on the websites that existed at the time.

I think I just grew in confidence that I could help people, but I still stayed heavily in the background. I was also in a rough marriage, my second marriage. I was in a marriage in which I didn't really have belief. I didn't have somebody that believed in me and that didn't help the confidence thing going.

Eventually, I signed up with a business coach. I went through several different coaches. Some I was a bad fit for, honestly, I just wasn't ready for them. Some, they were a bad fit. Some maybe were really great marketers and terrible coaches.

I eventually got a really great business coach that I've been working with for a couple of years now. I remember going down to meet with him in Austin. He has a fantastic podcast, by the way, called The Momentum Podcast. His name is Alex Charfen; a really brilliant guy. I went down and met with him and some other entrepreneurs down in Austin.

My business was struggling, we're maybe about $300,000 in revenue annually at the time. I felt like an ant in the room. I was around entrepreneurs that had multi-million dollar companies, I felt completely unworthy, my confidence just wasn't really strong, and yet when he would open up for dialogue, I would end up captivating everyone else in the room, and that was weird for me that I was able to communicate in a way that all of them wanted to know more and they were really fascinated about what I was talking about.

I had learned a lot, I just didn't have the confidence yet to put it out there. I hadn't said, “Hey, I'm going to change this entire industry. I'm the one to do it.” I was like, “Somebody else should do it. Somebody that's been a property manager. Maybe somebody that runs a big, huge property management franchise should be the one.”

My business coach was like, “Who else could do it? You're the one that you care about it, you're the one who can see what needs to change, and they’re everybody else’s competition. Why would they help everybody?” I'm like, ‘That's a good point,” but I had wicked impostor syndrome. I think that's a challenge for entrepreneurs that we have to kill is that impostor syndrome in which we don't feel like we're enough, or we're good enough, or that we qualify, or we’re worthy. We sometimes think we need to find that external validation to say that we're okay.

I think that came just in working with clients. I grew in confidence in situations in which I was able to finally place myself around other entrepreneurs because one of the most damaging things we do as entrepreneurs is that we spend too much time around non-preneurs.

J: Yeah, I believe you.

Jason: It's painful and it's difficult because we see opportunity everywhere. We see how we can change and impact the world. We want to make a difference, we want to contribute, and the rest of the world looks at us like we're crazy, we're making them uncomfortable. “Why can't you leave good enough alone?”

They hear the struggles we go through as an entrepreneur and they say, “Why don't you just get a job?” They look at us like we're crazy and then we look at them like, “Why don't I just slit my wrists now? How can you just sit there and tolerate, complaining about your boss and your job, and living for the weekend? Don't you want something bigger?” We don't understand them, but I think if we’re around non-preneurs too much, it wears us down. It breaks us a little bit. It's really hard and I hadn't really yet been around entrepreneurs.

I think as entrepreneurs are starting out in our early development when we're in the early stages of being an entrepreneur, one of the biggest things that hold us back is being lonely. That's it. We're just not around other people like us to say, “You're normal. You, as an entrepreneur, are awesome, amazing, and you can change the world. You don't have to live by everybody else's rules.”

J: Agreed. There's something that you said that I often have thought about myself. I know that there are people who are listening have had that same thought at least once. You mentioned that yes, we desire to make a difference, we want to see change, and we're not happy with the, ‘That's just not the way you do it, it should be this way.” That's just how we roll, and yet we're the ones who can see the problem.

Like your business coach is saying, why aren't we the ones who can resolve it? But more importantly or said a different way, does that come across to you when you can see an issue? Does it come across to you—I know it does for me—as a responsibility like, “Okay, it’s me, obviously. I'm the one who sees it, this is my thing. So, let me go solve this problem”? That's how it feels to me when I notice opportunity or something that's just not right that could be better.

Jason: Yeah. I think there are two sides to this. I think one, opportunity. On the negative side, I think opportunity also can kill us as entrepreneurs because we do see it everywhere. It can be incredibly distracting. There's that opportunist in all of us, and if we focus on too many opportunities, we don't really get to make any headway in anyone. That's a temptation and a challenge entrepreneurs deal with early on is struggle to focus and to niche down.

On the positive side, we see that the world can be better. We can see it. We are the change-makers. We are the people throughout history, throughout time eternal probably, that were the ones that would move society forward. We would make everyone uncomfortable, we would change something, and we would move people towards a higher and better ideal.

J: Now, let me ask you this question. You could have chosen any industry to serve. Why property managers? I've spent so much time as the one owning the property. This may sound funny to you, but I never considered that property managers had a problem finding owners. That never occurred to me because it just never occurred to me that they had that as a business problem. Obviously, it's there because you're saying it, but as an entrepreneur, you could choose to serve anybody. You could have taken this skill to any industry, so to speak, because believe me, they're not the only one with a problem. Why property management?

Jason: That's a really good point. I don't think there was a time in my life as a child that I woke up and said, “I want to help property management business owners when I grow up. I want to get into this industry that's focused on toilets, tenants, and termites, that sounds exciting to me.”

J: It's right after firemen, I understand.

Jason: Yeah, I'll either be a superhero or I will be a property management coach.

J: Yeah, absolutely, totally right.

Jason: No, that's a great question. I think I resisted it, to be honest, in the beginning. It came to me like I just started attracting them, I tried to just help every type of business though, still, I didn't niche out. It took me a while. I started my corporation, my company back in 2008, but DoorGrow as a brand was maybe only four or five years ago. It took me a little while to, I guess, choose into that niche fully. I think it was imposter syndrome like, “I've never done this so I feel like I'm not the person to do it.” For a lot of people, it's not the sexiest industry.

Here's how you fall in love with property management.If you're an entrepreneur that's a little bit nerdy, property management is like the systemizable, more tech-savvy version of the real estate industry. It's residual income instead of the hunt and the chase for the next deal as a realtor. It's a business that can be optimized over time. It's a business that can follow the theory of constraints and you can make processes around. All of that appealed to me.

What I really fell in love with was not property management. It's the people that are property managers. Do you want to talk about resilient, innovative entrepreneurs? Property management entrepreneurs. You cannot imagine the level of challenges, difficulty, and negotiating. I don't think there's any industry like it because in terms of customer interaction, it's rated third behind retail and hospitality; it's heavily a people business. In retail and hospitality, you're not negotiating really difficult situations not unlike a lawyer between two opposed parties as the middle person, but in property management that's what you end up doing.

These are really some of the sharpest people. They're just amazing entrepreneurs to be around and honestly, I just chose into doing it because I wanted to be around people that are like me. Entrepreneurs. I love my clients. I love being able to spend time with them. I do not feel weird and I really enjoy that. I have a nerdy background and a lot of the clients that are attracted to me, they like figuring out processes, systems, technology, and that sort of thing. There's just a strong resonance in the type of entrepreneur that is in that industry.

J: For the person that's listening right now that happens to be a property manager or maybe it's an owner who's currently doing his own property management in some way, shape, or form, what would you say are the top three things you tend to assist a new client with from day one? How do they know, how can they recognize, “Oh, I need Jason”? What is it that you end up doing over there at DoorGrow for them typically in that first appointment or the first solutions you guys come to the table with?

Jason: Let's go back to the question you asked me earlier about the surprising problem that exists in property management.

J: Yeah, that is still a thing in my head like, “Wow, I didn't know they had problems finding me? I didn't know that.”

Jason: Yeah, every business exists to solve a problem. If a business is not solving a problem, they're stealing money. The problem that exists in the property management industry that I could see, property management has two major challenges. The biggest challenge first is awareness, there are a lot of people that have property. In the US, in single-family residential rental properties, only about 30% are professionally managed, 70% are self managing. The first biggest hurdle is awareness, there's just a lot of people that are not aware of what a property management company would do for them. The average Joe on the street if you said, “Hey, I'm a property manager,” they would say, “Great, I guess you manage a property.” They don't really know what that means. There's a strong lack of awareness to the point where property management really is relatively, in the US, in its infancy.

Let's contrast that with Australia. In Australia, 80% of single-family residential rentals are professionally managed. There are reasons for that. There's steeper legislation there, it's more consumer-focused and a lot of that, but the word on the street is that it grew 25% in a decade, it grew massively. But in the US, property management still is this ugly cousin of real estate, it has this negative perception, especially among real estate.

The other challenge is property management is the number one source of property management-related issues like fair housing challenges, mismanagement of trust funds, or leases, all this stuff, property management is the number one source of complaints at most any board of real estate. Not real estate, property management is. So, everything property management. This is why it's perpetuated heavily among the real estate industry. Realtors say, “Oh, property management. That's gross. Don't touch that. How could you do that?”

The second hurdle that takes the next big portion of potential market share away is perception. Property management has a very negative perception among investors, among people that are aware of it. There's a negative perception that takes away the next big chunk of potential market share.

After perception takes a hit, those that are aware and they think they have a decent enough perception to think, “At least, I have to have one or I need one,” or maybe they are okay—there are some good ones—then word-of-mouth captures what's leftover. Word-of-mouth captures the best clients that property management might get.

After word-of-mouth, the scraps that fall off my client’s table, that fall off the word-of-mouth table, the coldest, crappiest, worst leads that are the most price-sensitive, that view all property managers as the same and is a commodity, that are the worst owners and properties to build a portfolio on, in which you're going to have probably an operational cost in your property management company of 10 times higher than that of having healthy good doors and owners, those are the people searching on Google. That's what's leftover.

Most property management business owners are trying to build their business on the back of Google. I'm wearing a t-shirt right now, you can't see, but it says, “SEO won't save you.” It has a hand reaching up out of the water, trying to grab a life preserver, a black t-shirt with white lettering.

This is a message I put out to the industry that they don't need to be playing the SEO lottery because, really, search volume in the property management industry has actually been on a steady decline. According to Google Trends in the US, it's been a steady decline since July of 2011. It's been going down, yet every marketer targeting the industry, every service provider, every web design company, they're shoving and pushing the concept that SEO is going to save them.

They just need the top spot on Google. They're playing into this myth, so all these property managers are spending marketing dollars, their hard-earned money, they’re trying to run Google Ads, everything to be at the top of Google, and they're not getting an ROI. They're not getting a return on that investment. It's an incredibly expensive game that has many potential points of failure.

You have to be a property management business, usually, at about 200 to 400 doors, with a business development manager. You have to be making sure that all of your phone calls are answered and you're following up on every lead within the first 10 minutes to really play that marketing game.

I found most property management business owners were not at that level. I wanted to create them, get them to that level. Originally, I was the guy doing that stuff, I was a marketing company, I was a guy helping with those type of things, and I realized really quickly that it wasn't working. They weren't even answering their phones. Why would I send them a lead that's only good for maybe about 10 minutes—that's how long an internet lead’s probably good for, maybe 15—and then 80% drop off in conversion rates if they're not going to answer their phones?

I just pivoted this company and I was thinking, “What would I do if I were going to start a property management business? What are all the most common problems that I can see even in the largest companies? Where are the biggest leaks in their sales pipeline?”

Just like the theory of constraints, I just went from the beginning of the sales pipeline, which is that awareness. It's branding. Branding was costing some of them half the amount of deals and leads they could or should be getting. Some companies do real estate and property management. By eliminating real estate from the branding, I helped double their real estate commissions, ironically, because property management is a great front-end product. Real estate is a better back-end product.

People don't wake up in the morning and say, “I want to find a realtor today. That sounds exciting to me.” No. They want property, they want to find buyers, they try to for sale by owner, but eventually, they list with an agent. The property management, if you have a constant influx of owners, investors that may get into additional properties, constant influx of renters and tenants, you have buyers and sellers. You have bodies constantly flowing into the business and this is the dream of a real estate company.

We just started addressing these big leaks from branding, reputation, which is word-of-mouth, their website wasn't built around conversions and targeting the audience, their sales process, pricing strategy played into this heavily, they were not priced effectively, they were taking too many deals at too low of a price point. Psychologically, for example, there are three types of buyers. Most of them just had one fee, serving one type of buyer, and there was no price anchoring. I just started to see all these different leaks that we could shore up through the pipeline so that we could optimize their business for organic growth.

Then the big secret is at the front end of this. Once we get all of these leaks dialed in, their sales process, they have follow-up, all these things are in place, what spigot should we turn on through this pipeline? They could go back and do cold-lead marketing, but cold leads are terrible. Conversion rates are low even if they're a bad A. I don't know what the rating is on your podcast so I'll be careful. If they're a bad A in sales, they’ll only get maybe about 30% conversion rate or close rate, but most people, say 1 out of 10 cold leads, they'll convert.

The hidden killer with cold leads in any industry or business—the secret the marketers don't want to tell you—is they can't give you contracts. Marketers cannot give you contracts. You can't hand dollars to a marketer and they will hand you written signed contracts or clients. What they can hand you at best, usually, the furthest they can push it along is usually a really cold lead. That's it. That's typically what they can give you is they give you a cold lead and this cold lead then has to be nurtured. You have to warm it up. You have to get them to know you, trust you, and like you.

Cold leads convert really poorly, usually, you'll get maybe 1 out of 10. The hidden killer though with cold leads is time. This is the hidden killer with cold leads that small business owners don't realize. Time on a cold lead is at least twice as much time as a warm lead or maybe three times as much. I found clients when I would ask them, “How much time do you spend warming these people up, calling them, meeting them at the property?” They say in total, in my sale-cycle time, three to six hours to close the deal. “How long does it take you a warm lead?” I was getting answers like 15 minutes, maybe an hour, it was like half, at least, half the amount of time.

These small business owners, if you give them 10 leads in a week and it's going to take them 2 to 3 hours to do all the follow-up necessary and they're going to get maybe 1 or 2 deals out of it, that's a full-time job. They don't have the time, as small business owners, to do that if they're also the main person doing the selling. They just didn't have the bandwidth to do it. It wasn't even possible for me to give cold leads to clients and have them win that game. They didn't have the time. They really work part-time crappy salespeople that had maybe about 10 hours a week to focus on that piece.

I had to create a system that will allow them more warm leads. Instead of the front-end of this pipeline, what I teach clients to do is to go to prospecting. There's 70% self-managing. There's so much blue ocean in property management and yet everyone's fighting over the coldest, crappiest, worst leads that fall off the word-of-mouth table, that are searching on Google in the bloody red water. It's created this false sense of scarcity that's so strong in the industry that everybody feels like the industry is scarce, yet there’s 70% self-managing and none of them are really happy doing it.

J: I have been doing real estate for over a decade and I have never even considered this concept from the property manager’s perspective in this way. I've always considered them partners. I've never wanted the lowest guy, they’re such a critical piece. Some of the things that you said, I was like, “Why would somebody bargain-basement shop for a property manager? That's just silly, you don't understand, you can't do that. That's not going to work long term,” but I've never thought about the fact that they would have trouble finding the quality owners. Just hearing you describe their world, it's like, “Oh, wow, yeah. I can see why that would be a challenge.”

I'm curious, though, when a property manager is out there and trying to make it work—I'm just going to throw it out there—how can the good owners let the good property managers know that, “Hey, yeah, I would love to have you”?

Jason: I think the biggest challenge I usually hear is that there aren't any good property managers. How do you find one that's good? Those owners feel completely unsafe. The industry has a really bad reputation as a whole. One of the concepts I teach—all these principles apply to really any industry, in any industry—branding has an impact, reputation has impact, pricing strategy has an impact. There's nothing I'm doing for this industry that is only related to this industry. I think the challenge the industry has, though, is it just has a lot less awareness, but I think that also means there's a lot more opportunity. There's a huge opportunity in property management.

If we were to grow even remotely close to how Australia's grown in a decade, that would mean the industry in the US would double. I think property management could be as big as the real estate industry here in the US. There's much potential. I don't think it's been tapped. I think property management in the US has artificially been kept small and it is really a business category that's in its infancy.

If you look at business categories that are relatively new in the US, you've got marijuana, vaping, and stuff like this, maybe Bitcoin or cryptocurrency, there's these fledgling industries. Property management's been around a long time, but it's still in its infancy. There's a huge potential there to grow.

There are a lot of bad owners. That's true, too. The accidental investors didn't really want to have a rental property, but they needed it, and they just want to get rid of it after a year. If a property manager builds their portfolio on those type of doors, which some do, they have to replace every single client every single year.

J: Yeah, that's an untenable situation that would go with that.

Jason: Yeah. You'll find property managers fall into this first sand trap of 50 units or so. One question you can ask them is, “How many doors do you have under management?” If they're in the 50 or 60 door category, then I call that the first sand trap. That's one of my key avatars that I want to help is to get them out of that first sand trap.

I call that the solopreneur sand trap where they're doing everything in the business, they've taken on too many clients at too low of a price point. And this applies to any industry. As a small business owner, you take on too many clients at too low of a price point, you back yourself into a financial corner, and you take on the worst clients because you're needy, and your operational costs with bad clients are 10 times higher than that of having good clients, easily.

One bad property or a bad owner that tries to micromanage you is easily 10 times the operational cost, time and attention, and stress as one good door or one good owner, easily. If you build a portfolio of that, you're stuck. You're backed into a financial corner, you can't afford to hire anybody, and you're losing as many doors as you’re getting on in a year. You're stuck. Sometimes, I have to tell them to do really painful stuff like fire customers in order to create space.

J: Yeah, that makes 100% sense. For those that have listened to this far and want to find out more about what you've got going on, what's going to be the best way for them to track you down?

Jason: I love connecting with other entrepreneurs and a really easy way for them to connect with me, I'm on every social channel—probably—that exists, because I'm nerdy, as @KingJasonHull. They can connect with me as @KingJasonHull on any social channel, especially Facebook. Then if they're in real estate and they're really considering getting into property management, they've managed rental properties, they feel like they know how to do it, but they want to grow that side of the business and maybe feed their real estate side, or they’re a property management entrepreneur that's been struggling at doors and they want to make a difference and grow, then they can just reach out to us at doorgrow.com.

J: Okay, I've got a question I just got to ask now. I wasn't going to do this, but I got to ask. My entire world when it comes to real estate, is all around the whole world of short-term rentals. It's what we do, it's what we teach, it's how our students have achieved success. One of the interesting things is that when we're interfacing with individuals, we often get the question, “Why don't I just get a property manager?” I'm like, “You don't understand. What we are talking about is completely different than what a property manager would typically do.”

I'm just curious if the whole idea of short-term rentals or things of that nature, because being able to add that, if property managers took that on, they'd be able to solve some of their revenue issues for sure. Is that something you're seeing happening and in any way with your clients?

Jason: Yeah, I think there is a trend of short-term rentals coming into the space. If long-term rental property management is in its infancy, I think that's even younger. There are property managers, especially in more resort-like areas where vacation rentals are more popular, I think all of them have some, they get into that, especially the larger management companies, just by nature of having a larger business and lots of different investors, they're going to have some short-term rentals. Short-term rentals make a lot of sense for them. It's a lot of turnovers, it's a lot more work, but it also can be a lot more payout for them. There is a trend shifting towards that.

J: Yeah. I just asked because, in order to do it effectively, there's just specialization that's required. That's why we just stepped up and started doing it because we can’t find the property manager that could do a good a job as we have learned to do and now teach others to do. It’s just like, “You know what? We'll just do it ourselves.” That's what's happening, but at the same time, in the back of my head, I'm like, “Man, they're missing an opportunity. If they would just understand some of these things that we're doing, I think it would work well.” I was just curious, it's been in the back of my head, I'm like, “I wonder, considering you're helping them put their services together.”

Jason: Yeah, J, be careful because that is the story that almost all of my clients tell me. You may end up in this industry. That's what they all tell me. They all come to me and they’re like, “I started this business X number of years ago and it was because we were investors and we couldn't find a property manager that was good enough to do things the way that we needed it done, so we started one. They're all bad and we're good,” I hear that almost every day.

J: Oh, man, I love it. Okay, as we wind down, I've got a final question for you because I'm really curious to hear your answer. Here's what I know. I know that individuals started the call on one spot, and now, as we’re ending, they're in a different spot. They're at what I like to call the precipice of decision. It's where they go, “You know what? That's it. I can do this. I can make this happen.” Maybe they are a property manager and, “Yeah, I should call Jason. That's exactly what I need to do. I need to track him down, figure this out.” They're drawing that proverbial line in the sand, they're saying that's it, and now they're going to be different.

Now, Jason, you know like I know that when we make those types of decisions, we often have a companion, and it's a companion that comes in the form of a voice that says things like, “You? Now, you know good and well last time you tried anything, it didn't really work out. What on earth are you thinking about? Oh, my gosh, no one's going to buy anything from you. You're not going to be able to get any clients, whatsoever, so why don't you just go back to your job?” For some people, they're related to that voice.

My question to you is as follows. Let's pretend that this time it's going to be different. This time they're going to do exactly what you suggest and they're going to do so in the next 24 to 48 hours. What would you suggest that they do?

Jason: If somebody has a voice, especially if it's an external voice, saying, “You don't have what it takes. You can't do this. You need to play it safe,” they need to find another voice. The truest voice that we all have is the voice deep down. That's never the voice that we have deep down. When somebody says, “Oh, deep down I knew it would be like this,” or, “Deep down I knew I should have done this,” or, “Deep down, I just knew it was the right move.” The voice deep down—you can call that the voice of God, you can call that your intuition, you can call it your gut—is the truest voice and that's the only voice we really should be listening to.

Let me close an open loop I left open earlier. I mentioned how I was down in Austin, I'd met with my business coach for the first time down there, I was around all the other entrepreneurs, I felt like an ant in the room, but I was sharing ideas, they were resonating with it. My business coach asked me to describe what I did and he said, “Oh, that'll never work.”

Then, I explained to how much money I was making and what I was doing, so he understood it, he looked at me and he said, “Jason, you have a $20 million company and you don't even know it.” Do you want to know what I started doing? I started crying. I had had little validation, I had much resistance from spouse, I just had no support around me in terms of being connected to entrepreneurs, I started crying in front of a room of other entrepreneurs. I needed that in that moment, badly.

Fast forward. In a year, I had 300% growth. We were a million-dollar company in about a year. I was crying and it was like a cathartic thing that somebody could see what I felt deep down and they believed in me. I don't know if there's anything more powerful than that to be seen for who you really are and I think that is the love or energy that we all need as entrepreneurs in order to grow. We need that belief.

J: 100%. I definitely appreciate the journey that you have been on. I thank you for taking the time to distill your knowledge down in such a way that you could then share it, become the person that's capable of sharing it, and influencing an industry that's very close to my own heart. At the end of the day, it's where it's been at for us for quite some time, it's where we're going to stay, but the more that you enable property managers to do what they do and find the customers that they need, the better I think it all gets for everyone. Just let me be the first to say thanks for taking the time to share your knowledge, wisdom, and insight here with us today at the Cash Flow Diary.

Jason: J, it's been an absolute pleasure. In line with what you just said, I really do believe deep down that good property management can change the world. The impact that they can have in that industry is massive. They're affecting homes, families, on the tenant and the owner’s side. They're affecting people's cash flow. They're affecting their finances. They're affecting real estate investors that got into the real estate investing with the myth that it could be turnkey. The impact is massive and I think that's what gets me excited about the industry. We're contribution-focused banks as entrepreneurs, we want to have an impact. I appreciate you allowing me to share that message and to be here on your show.

J: All right, ladies and gentlemen, you know what time it is? It's time for you to move at the speed of instruction. What does that mean? That means get over to doorgrow.com. That means go listen to his podcast. That also means connect with him. He said he wants to talk to you, it's very simple, ladies and gentlemen.

One of the things that I hope you learn from today's episode is when you see a need, it's probably your responsibility to go fill it and just figure it out along the way. You don't need to understand everything at the beginning, but over time, you can get there. But most importantly as you heard and I heard, you want to follow that path, follow that voice that is telling you there's greatness inside.

Ladies and gentlemen, it's been fun talking to you today. I look forward to talking to you soon. Until next time.

Jason: You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com.

Download this Episode

Oct 8, 2019

Property managers may not know about or haven’t tried maintenance coordination. But they are quickly discovering its value in making their jobs easier, manageable, and understandable.

Today, I am talking to Andy Shinn of EZ Repair Hotline about implementing an Entrepreneurial Operating System (EOS), Traction, and process improvement.

You’ll Learn...

[02:40] Maintenance Coordination: Define world-class process to run for property managers to address issues and inconsistency with performance.

[03:49] Growing and gaining Traction to create a structured operating model and take business to the next level.

[04:32] Systems that every business needs: Operating, planning, support, and phone.

[06:00] EOS predicts and creates future through annual planning for quarterly goals broken down into monthly and weekly commitments.

[08:38] Constraints around Crazy: Don’t get distracted; you can’t do everything; force yourself to limit your focus to inspire, not control your team.

[13:18] Fundamental Flaws:Take things that work well for you with Traction and EOS; leave out the other stuff.

[16:28] Accountability Chart: Visionary, integrator, leader, doer, and other roles and responsibilities depend on strengths and weaknesses. Overlap occurs until roles are filled by others.

[22:43] EZ Repair Hotline establishes values: What are we doing now? What are we aspiring toward?

[25:28] Do they share my values? If the answer is “no,” they have to go. They’re team members hurting your business, momentum, and results.

[26:18] Two Different Businesses: Do you want a business that you can have vs. a business that you want and love?

[30:08] Change people's mindset to move beyond minimum standards by motivating those who want to step up and make things happen.

[37:42] Process Piece: One of the six components of Traction by documenting processes to improve them and help others reach goals.

[40:03] Planning System Solves Internal Problems: One of three things must be missing—accountability, transparency, or clarity on outcomes.

[43:19] Property Managers: A structure helps you avoid working 80 hours a week; figure out how to handle work without having to be available all the time.

Tweetables

Every business needs an operating system.

EOS: What are you going to do with your business in the next 90 days?

EOS makes things doable, not overwhelming when growing a business.

When businesses predict and create the future through planning, that’s magic!

Resources

EZ Repair Hotline

DGS 15: EZ Repair Hotline with Andy Shinn

Traction by Gino Wickman

DGS 98: New Paradigms in Property Management with Lisa Wise of Nest DC 0

Transcript

Jason: All right, and we are live. Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

Today’s guest, I am hanging out with Andy. Andy, welcome to the show. This is Andy Shinn of EZ Repair Hotline. Andy, you’ve been on the show before. Welcome back.

Andy: Great. Thanks for having me back. It’s good to be here.

Jason: [...] and you’ve made a lot of changes since then and grown. I would imagine quite a bit. I’ve seen you at several conferences that we’ve both been vendors at. Tell us what’s been going on with EZ Repair Hotline.

Andy: Last time we talked we were pretty much brand new. We were maybe a couple years in, but we really hadn’t had much momentum, and we were just getting started in the industry. We’ve grown a lot over the last couple of years. We’ve learned a lot in terms of process. I hope to talk to you about some of that today and some of what we’re doing. It’s been an exciting couple of years.

I think this is an industry, maintenance coordination, that’s just taking off in the property management space. A lot of property managers don’t even maybe know this is available or some haven’t tried it yet. It’s definitely a wide open industry and we’re excited to work with a lot of property management companies who I think are seeing value with what we do.

Jason: Great. Well, let’s get into it. Where should we start? Today’s topic is implementing EOS, Traction, and process improvement at EZ Repair Hotline. Let’s get into it. Where do we start?

Andy: I guess, maybe just a little bit of history. Over the last year, we have really been working on defining a process and what our product needs to look like. Before that year, we were very customizable. As a property manager, you come in and you’d inform the process as much as we did and I think that was causing us issues, inconsistency in performance.

About a year ago, we said, “We got to define a process that’s best in class, that’s world-class, that we can run for the property manager. They’re not just buying us like a virtual assistant, they’re buying our whole process. They’re getting that whole package of what we do.” That was really important for us over the last year and we’ve made some strides in that direction. Not exactly to the end of where we want to be, but we’re moving in that direction.

Anyway, about January or so, I’d heard about Traction probably on the DoorGrow site. A lot of property managers are implementing Traction. I decided to read it but I did an audio book which I do sometimes. I read about a business book a week. Usually, I read them but for whatever reason I did this on audio. It just didn’t catch with me, so I just went on and I kept doing my thing but then I was hearing more and more about Traction. I decided to go to Barnes & Noble and pick up the physical book and see if that made a difference, and it did. It’s a kind of book you need to sit down, open up with a notepad, and really use it almost like a workbook.

I knew a few chapters into it that it was going to be that was going to be really exciting for EZ Repair because it creates a really structured operating model which is what we needed. There’s a lot of different books that’ll help you do that but I think Traction for a small–medium-sized business is the perfect way to do it. Certainly is the perfect fit for us. We’re only a couple months into that Traction piece, coming off, like I said, where we started a year ago, but Traction’s taking us to that next level. It’s really exciting.

Jason: Cool. I believe every business needs an operating system. There’s different systems that every business needs. Initially, the entrepreneur is every system when you’re first starting out, but there needs to be a planning system which is what we’re talking about. There needs to be a support system for most business. If you have customers that needs to be supported, there needs to be a support system in place. There needs to be a phone system for most business so there’s phone communication.

I think there’s five or six, maybe seven different systems that every business needs and one of the key systems is a planning system. In most business planning systems I’ve studied, the Traction and EOS stuff, scaling up—I’ve worked with Allen Scharfen who’s a brilliant operations mind—there’s a lot of different planning systems out there.

One common thread that seems to be through all of them is annual planning, having quarterly goals, being broken down into quarterly and then having goals broken down into 30 days, and then maybe even something broken down into weekly commitments that the team are working on. We don’t use EOS. In our business, I use a different system but it’s similar to what you might find in other systems, which I think all good business planning systems incorporate at least those basic elements.

Andy: It does and you mentioned taking the goals, like the quarterly goals. What EOS really tries to do is take your business into 90-day chunks. You’re really running a 90-day cycle of, “What am I going to do with the business in the next 90 days?” You’re setting longer term goals like, “Here’s what’s out here that I need to be able to hit. Here’s my stretch goal, my 5- or 10-year goal of what this company’s really going to be like.”

Then, what it does is it takes it down to just 90-day blocks where you’re setting targets that the enterprise owns but then individuals on the leadership team own. Here’s what I own for the next 90-days, what they call rocks. At the end of that 90 days, you’ve taken your business that next step and now, you plan out your next 90 days.

It really helps businesses put things in a very doable context because it can get overwhelming, as an entrepreneur, when you’ve got a lot of stuff going on, especially in a growing business—this industry is really growing—and to be able to say, “Here’s what’s going to happen in the next 90 days. Here’s what we have to do in the next 90 days. Here’s the goal for the next 90 days.” That’s a very easy way to take the business forward, rather than thinking, “Where are we going to be three years from now,” and trying to plan off of that. That’s fully difficult.

EOS for our business has been fantastic and in just about 90 days in, in taking the business into those 90-day chunks. I have a feeling, for property managers, they’d see the same kind of value. When I was a property manager, I would have seen a lot of value in this. Like you mentioned, there’s other systems, too, but being able to select a system like this is really important for companies to be successful.

Jason: I think most businesses have no planning system. They’re just winging it. The entrepreneur’s winging it. When you do implement a really sub-planning system, then what happens is you become able to predict the future. You’re creating the future in the present and eventually, it’s happening and that’s magic. That’s magic for businesses to be able to predict and create the future.

Most entrepreneurs come up with these big goals, big dreams, and these endless to-do lists. If you look back at all those things—we’ve all been there as entrepreneurs—very few of them ever end up coming to fruition, very few end up getting done. We always bite off more than we can chew. We overestimate our ability to get things done. We get distracted because we take on too many different goals and too many different things.

What I’ve noticed in having a planning system in the business is it forces me to limit the things I focus on. I’ve been doing this for several years, not just 90 days. I’ve been doing this for years and it forces me to limit the pressure that I put on my team as well because a lot of time, as entrepreneurs, we get really pumped up and excited, right?

We go to an event, conference, something. We come back to our team and we’re like, “We’re going to do all this stuff. I just got all these great ideas.” And then we get super excited, we throw out some big goal where we heard some coach or somebody say, “Write a number down that you want to make. Add a zero to it. Add another zero. Go big.” You hear these old phrases like, “It’s better to aim for the stars and miss than a pile of manure and hit.” Entrepreneurs love that. They’re like, “Yes, the stars.”

We get so pumped up and excited, then we walked out of the room and we think, “Man, my team must be pumped up.” What they see is a grenade sitting in the middle of the floor with the pin pulled. That’s their perception. They’re like, “What are we going to do with this? How are we going to that? My life’s already hard. Doesn’t he know how hard I’m already working?” They look at us like we’re kind of crazy.

I think the biggest thing I’ve noticed with planning is that it allows us to get buy in from our team because ultimately, I can’t do it all on my own. I just don’t have that capacity. You don’t as well. You cannot do everything in your business. You cannot answer every phone call at EZ Repair Hotline personally.

We really rely on our team and if we don’t get their buy-in, if there isn’t adoption into any system, or into any goal, or any outcome that we have, then we end up trying to control people. Controlling as an entrepreneur is not a very comfortable place for us to be, to be controlling our team instead of inspiring them.

Andy: That’s a great point, though, because entrepreneurs have different personalities. It is a different mindset. Most people, they want more structure. You and I are probably really comfortable just working without structure and getting things done.

Jason: I can totally live in chaos. I can totally do it because to me, it’s giving me new ideas, I have to adapt, I’m exploring. That’s fun and exciting for me. I’ve had team members quit because of that, because it makes them feel really uncomfortable and unsafe because most people [...] crazy, you have to be smart, maybe a C on the DISC profile. They want stability, they want things to be okay, they want a job where everything stays similar each day. I would probably get really bored in a situation like that. It wraps some constraints around my crazy.

An upside of constraints is that it forces innovation. It allows my team also to innovate because they have an outcome. I don’t care how they get there, as long as they live within our value system, but I don’t care what specific actions they take to do it or to get there and they can create, innovate, and come up with ideas that I never would have thought of.

Andy: That’s exactly right. You’re training structure for your team so they know what to do, what to expect, and what the goals are. Goals that they can imagine because I can imagine a five-year goal but my typical employee is not imagining a five-year goal. They want to know, “What are we doing this year? What are we doing the next three months?” It gives them something very tangible to hold on to. “What do we need to accomplish in these next three months?”

At the same time, the whole operating system relies on employees and leadership at all levels to be able to bring ideas to the table, bring process improvements to the table, and to do things to try and achieve those goals. How are we going to get there? Well, we’re not going to get there by just running the show. We’re going to get there because we’ve set these 90-day targets, what specific activities do we need to do or what do we need to change to get to these targets? It creates structure but at the same time, almost counterintuitively, it does create that innovation from employees thinking about, “How do we hit these targets?” I think it’s very effective.

I think the cool thing, too, about Traction that I like, it creates what they call a visionary role. That allows for somebody like me to still have a place in the operating model. I’m not just trying to fit into this operating model and be more structured. It allows a place for the entrepreneur to be that visionary, to be that person who’s got the ideas, and maybe he’s got the crazy goals but it tells you, “Here’s how you operate within that model as that person.” That’s been a personal help for me as well.

Jason: I’ve been really outspoken online. I don’t know if you’ve seen some of my posts but I’ve been really outspoken online somewhat against Traction and EOS. I do see the value and important pieces of it but I also think there’s a couple of fundamental flaws. Everybody I’ve talked to that does EOS, they don’t do everything. I think that’s the benefit of taking a system is you can take the things that really work well for you and leave out the other stuff.

Ultimately, if we’re really honest, EOS was built as a system to create a really nice business for the people that created EOS. You have to go hire integrators from them, you need the integrator, and the integrator is the magical, golden key to the whole puzzle.

They take on this glorified role that replaces a COO or operations manager. They take on the executive assistant role which is a critical role for an entrepreneur. They squeeze all of that as this layer in between in their accountability chart, which is an org chart, between the visionary, which is the entrepreneur, and the entire team. Which in reality would be probably the most dangerous thing to ever do with your company, ever, to give somebody that much power and control because they don’t even need you anymore. They can just chop that top piece off and the whole org chart works fine without you.

What that means, they can charge whatever they freaking want. They’ll come back to you after a year, after they know and run everything in the business, and everybody’s loyal to them and say, “I want $500,000 a year. I want a percentage of the company.” What are you going to do? Replace them? I think, ultimately, the best way to foundationally build every business is around the entrepreneur because we’re not all the quintessential or perfect visionary.

I’ve noticed in property management, there’s different roles. I’ve noticed there are some property management business owners, some entrepreneurs are more accountants. They’re more accounting-minded, they’re more on the financial side, they’re more doing things by the book. You got some that are more relationship-oriented. They’re more about people, relationships, they love. Some are more sales-oriented. Some may be should keep and retain some of the property manager type of role. Some may be should be the sales or BDM person in the business. That might be the last thing they give up. Some may be the operations person and doing systems and coordinating things.

Ultimately, the great thing about having a business is instead of building it to somebody else’s system, we can build it around ourselves and make ourselves feel like Ironman with our supersuit. We can have the business that makes us feel amazing, supported, and fulfilled that we love doing everyday. Ultimately, that’s the one fundamental, foundational piece that I would change in that system to build around it. I think everything would extend out from that.

Andy: That makes total sense. I’ll tell you how we’re doing for the accountability chart.

Jason: Yeah, I wonder how you’re using it.

Andy: First of all, we’re self-implementing so there’s nobody else in the picture but it’s working out well for us. Maybe this is probably just advantageous to us. It just so happens to be that I’m in this business with Michael, my stepson. He is the perfect integrator. He’s the perfect operations.

Jason: He’s an operations guy.

Andy: Exactly, that’s what he does. I’ve done those things but I’m not as good at that as he is. I’m more of the visionary. We’ve taken ourselves and each of us has taken that role. So, I’m the visionary, he’s the integrator. There’s still a lot of overlap so it’s maybe not as clean as what it would look like at the end of that accountability chart. It’s not like there’s one person reporting to the visionary. That’s the only contact the visionary has as you might look at it visually.

Jason: This isn’t as it perfectly claims.

Andy: No, exactly. We’re growing and in our current size, I’m actually filling a couple of the boxes that would be on the next level down like some of the financial and the CFO type roles. I’m filling that as well. I’m filling a couple of the boxes. That’s how we’re using the accountability charts, to make sure that somebody’s in each of those boxes. Even if that’s Michael or me overlapping.

As part of the process, we also added a couple of folks to our leadership team. We had one operations lead. We brought that up to three to give them very specific responsibilities within the organization. When you look at our accountability chart, you will see that visionary and integrator but it’s not quite what you described. It’s a lot different.

Then next level down, we’ve got our operations leads and then you’ve got me on a couple of the boxes at that next level down, filling those roles until we’re large enough to fill those roles with other folks. That’s how we’re using that chart. I think the risk that you brought out are very real but I think for us, and maybe it is a little unique with me and Michael being in a partnership in the business, those roles actually worked out really well for us.

Jason: Yeah. I think every visionary entrepreneur does need an operationally-minded person. They’re just the yin to the yang. They’re the opposite that we need to wrap some constraints and some managerial prowess towards what we as visionaries would not be good at. We need that person and that role in the business, so it makes a lot of sense.

I think ultimately, another key takeaway for the listeners is that it is important to have an org chart. There’s a lot of people saying, “Do away with org charts,” or they’re saying that no org chart that has to exist and you need to build towards it. I don’t believe there’s an ideal org chart or an ideal situation but I do believe that it is important to have clear levels of responsibility to understand who reports to who.

You can’t serve two masters. You can’t have somebody reporting to two people, everybody will be confused as to who their supervisor is and who they report to, and have a company that runs well. It just doesn’t tend to happen in reality. Even if you don’t create it, it starts to exist organically. People have people they trust as an authority, people that they go to, and to make it actually clear and say, “This is how it is,” makes everyone feel more at ease, makes it a lot more comfortable, and then attaching to that, their roles. What is their job description?

I think that’s where it gets really specific is everytime we add a new team member, our role changes if they are doing anything that impacts us in any way. Most of our initial hires impact us directly. Any executive team members, any assistants, they’re taking something off our plate. Our job description changes, so we need to update that. Their job description changes everytime we bring on somebody else that works with them on that team.

Businesses are a fluid thing. Everytime you hire somebody, and if you’re growing and scaling, these are always happening. That top level team is going to be in flux, initially, until that’s somewhat stable. Then the lower levels are going to have that flux and that change, all those variations, and their job descriptions need to be updated and tight.

Over time, what I’ve noticed also is every single team member, as the company grows in scales, starts to do less, not more if it’s being done well. Because as the company scales and grows, my job description gets narrower. Like my head of fulfillment, his job description gets narrower. He used to be doing all the content, content gathering, client communication, and everything. His job gets narrower and narrower as we slice pieces off and give them to new people so that he has leverage.

That’s how that pyramid grows and scales, is everyone slicing pieces off and doing less and less, but they get better at it and they’re able to focus more on what they really enjoy if you’re doing it right. Then, they’re even better at it and more excited. Over time, they get better and improve. A lot of people think you just pop somebody into a role if you got the processes documented. But I think there’s something to be said about long-term employees and keeping people as long as you possibly can. I don’t think you can beat that in a business.

Andy: Absolutely. I’ll tell you though, as you’re growing, what you just said is exactly why you want to have an operating system in place as you’re growing. It’s because you do have those changing roles. If you don’t have that built, you said something like it’s going to happen anyway, it is. It’s going to happen by itself but it’s not going to happen the way you want it to and that’s true.

If the processes is through the job roles, is through the culture in your organization, all of that stuff is happening. The only question is, are you directing it? We’ve really been trying to direct it over the years and finally, with Traction, we’ve found a way that we’ve said, “This really organizes what we’re trying to do and it’s been very helpful.”

I’ll talk a little bit about our values, if I can, which is one piece of Traction that we had a head start on. We were already working on our values. We had set up an initial set of values a few years ago when we started the company. They were just me and Michael, put them together. They were just about having fun in the workplace. That sort of thing.

I’d say they were lightweight values. They didn’t have a lot of meaning behind them and since we just put them together. The employees that had come on since didn’t have any stake in them, so to speak. Last year, last December, we brought in a team of three employees and we had them work as a committee to put together our values as an organization. We wanted them to focus on two things: (1) What are we doing now? Because we felt like we had a pretty healthy culture, and (2) What are we aspiring towards? What are we aspiring our culture to look like?

Those three went out and talked to all of our existing employees. Over the course of several months, ended up putting together our values which fit in perfectly, timing-wise, with Traction because we had that in place at the same time we’re implementing Traction. That’s so important for any company to do. Even if you're a small company, put together those values because now we’re able to look at how we deal with customers, how we interact with employees, how we do our job, how we set up processes. We can look at all of those and the context of our values. Is this consistent with what we’re trying to be as an organization, with the culture we’re trying to put together? So, that’s been really helpful. That’s a part of Traction we were sure to working on. You can do it without doing Traction, but it’s a big part of what Traction brings to the table as well. So, very important.

Jason: Touching on values, I think it’s important to have values in the business because without those, you can’t even have team members that believe what you believe, which I think is the most foundational thing in building a team. If you don’t have believers, then you have people that are just there to get paid. If they’re just there to get paid, they’re going to be B players. They’re not going to care about quality the way that you do. They’re not going to care about the results. They just care about getting the paycheck. I think it’s a very dangerous thing to not really ensure that you have values set and that your team members are aware of what those are.

I think it’s very easy once you get clarity on your own values as a company. This is one of the exercises I take clients through when we take them on, is to get clear on their values. But if you don’t have clarity in your values, then it’s impossible to have a company that displays them. It just won’t happen. Once you get that clarity, it’s very easy to look at every single team member and just ask a very simple question, “Do they share my values?”

It becomes really obvious, it’s a yes or no, you know. If you know these team members at all, you know. Do they value integrity? Do they value being on time or whatever it may be that you care about as an entrepreneur? And if the answer is a no, they have to go because they’re hurting your business, they’re hurting your momentum, and they’re hurting your results in the business.

I know when I got clear of some of my values as an organization, what my purpose was as a human being and my purpose for my businesses, over a very short period of time, I think I fired half of my team. I just let them go. I let go of contractors. I brought in new people and the entire temperature of the company leveled up because I think what we do as entrepreneurs is we often trade the business we really deep down want for the business we can have.

We have this business. We take on the properties we can, anything we can. We go out to far areas and manage properties too far where we can. We take on team members that can fill a role instead of what we really want. We’re doing the business that can be used instead of the business that we should or the business that we deserve. That’s a huge difference. Having a business that you can have versus a business that you really love are two completely different businesses.

Most businesses, especially when they get into the 200–400 door category, a lot of them at that stage had built a team, a system, and everything around them, I’ve noticed that is still with the old mindset that they had as a solopreneur and it’s painful. This is probably the most painful stage I’ve seen for entrepreneurs in the property management industry, is that 200–400 door category. Fifty–sixty door category can be quite painful, too, but they’re usually solopreneurs at that point, so the pain isn’t as widespread.

Andy: That’s right. The thing about this too, Jason, whether you’re talking about Traction, E Myth, Clockwork, or other books that’ll talk to you about, how do you pull yourself out of the business all the time? Because when you’re an entrepreneur and you’re growing, if you don’t have a structure for how that growth is going to happen and what’s your business model needs to look like, you’re going to drive yourself crazy. You’re going to be working 90 hours a week and you’re going to be on-call 24/7. You’re going to be answering the phones all the time.

That’s just part of what a lot of entrepreneurs do as they grow. If you get a system like Traction, I think that helps you pull yourself away, be the real leader of the company and not the doer of everything within the company. I think Traction’s a good way to do that. For me, I’ve been able to create this role that I think is comfortable for me, that’s not overwhelming, that it’s something that I can do, it’s the kinds of things I like to do, and at the same time, Michael’s got something he likes to do in our operations leads. They’re in roles, they’re very comfortable, and they like to do that. I think you take that all the way down your organization and if you structure that, you give everybody a piece that they’re good at, that they can do, they have the ability to do, and that they want to do, that’s going to make them very effective. That’s a lot about what Traction and other operating systems are really about.

The other thing, though, I wanted to touch on something you said a little bit about we can set minimum standards for people who work for us. A lot of people get into that mindset of, “Oh, well you’ve got to hit this minimum. If you’re not hitting it, you’re in trouble. You got to hit this minimum.” No matter what happens is people hit that minimum. But what you don’t understand is that you’re losing an extraordinary amount of discretionary effort that you could have had from that employee if they were on board with your values, if they understood the goals. They were buying to those goals, and they wanted to reach them. Now, their performance isn’t the minimum. Their performance is up here. They're not even worried about managing the minimum because everybody's onboard with their culture, everybody's onboard with their goals. Nobody's around here. It's just a matter of how much discretionary effort they're providing.

I worked in call centers for a large organization before I became a property manager, before I started EZ Repair. Call centers are the worst at this because it's about setting up these metrics around handle times or compliance.

Jason: [...] tickets, check time between how long it takes to write notes, everything.

Andy: When you took your break, you're supposed to take a 7-14 but you took a 7-17, so you're only 98% compliant. All this stuff, all you're doing is managing somebody that hit a minimum standard. That's what you're going to get.

When I came into some centers, we were able to change their whole mindset, saying, "Yeah. We've got to measure on the outside of those things, but what we really need to do is to motivate our team towards a common goal." We were able to improve service levels immediately at a very large contact center, immediately. That contact center, people thought it was understaffed, that we weren’t answering the phone quick enough, going and almost immediately just by setting targets, getting away from this minimum standards, changing people's mindset, and getting people to step up. People will give you discretionary effort if they're buying the way you're doing it. They're onboard with it.

As a small business owner, I think a lot of us missed that. We do get into the, "Okay, we've got to hit these standards," or, "It's busy. We're not getting everything done. We've got to up our standard to how many X number of widgets we're going to make or whatever our performance metrics is," and that's fine. You have to have goals and standards.

What we really need to do is to motivate people who want to step up, add a little work, and be a part of your company because they buy into your company. They decided to get up on Monday and go to work because they like what they're doing. They like what they're trying to accomplish. That's a big part of this.

Traction help us do this. I think there's a lot of other ways you can implement those types of things. Traction gives you a way to show each employee on a 90-day basis, something that is very relatable to everybody, "Here's what we're trying to accomplish over 90 days. Can you help us do that?" To a person, our teams told me in small meetings with everybody on our teams, “Yeah, we can do that. We will do that. We'll step up if we have to. We'll do that and we'll make that happen.”

I think you'd be surprised how people will respond to you when you can bring them a real visual, structured, account of what we're trying to do with the company, and get it out of the framework that we're talking about earlier where it's in my head, that I know what I want my company to do, and I got this pie in the sky.

Jason: Which [...] everyday.

Andy: Exactly. It didn't help anybody because it does seem a little scattered, it does change sometimes, and nobody can really related to these ideas I've got in my head about where business is going. Traction brings it to a level where everybody in the organization can understand the buy-in and get excited about it.

They can also put the pieces together. They can see in our five year goal, "Okay. This is what we need to do in this next 90 day chunk. If we do this and we keep doing our 90 day chunk, we're going to hit that five year target." Even though it seems like it's way out there, we're going to hit that, and we're going to hit it 90 days at a time.

If I were looking at Traction and say, "What's the biggest single thing we've got out of this?" there's a lot of things in there. It's the ability to chunk that business in 90 days, and have a very good and very solid structure.

Jason: Yeah, and really any business planning system, that is one of the most basic things. I've done Wake Up Warrior, there's a 90 day year which is a system out there that's scaling up, the Rockefeller Habits, that system. There's EOS, Traction. All of these things.

My [...], internally we call DoorGrow OS. It's our Operating System. I've taken what I feel like is the best of all the systems out there. It may, in the future—I don't want to be the vaporware guy—be the system that we share with property managers. I do have an intention to help create the ultimate system out there, but I think what you're saying is very valid.

I don't know if you know this, you and I have a little bit of a similar background. I don't have the scale that you had at AAA, but I was the head. I did all the hiring, I was the lead supervisor and head of a call center for the largest private broadband internet service provider in California. Then, I left there as a big fish in a small pond to work at Verizon in their Business and Tech Support Center for DSL and was the low guy on the totem pole, but I got paid a lot more when I went there.

I've been in the call center environment. I've been the supervisor doing the hiring. I've taken the supervisor calls as well. I've done all the low level work. The funny thing I noticed is when you have a system and you geared it towards those metrics, people figure out how to game the system. I figured out how to manipulate the system because it was all about speed in getting things done faster. I used a piece of software that could do macros that would prepopulate tickets. I noticed we're only getting about three types of tickets. We had to fill up this horrible piece of software in Verizon that was detailing everything that we did, what we said, and how to be done.

They really made four types of problems so I created this macroscript thing. It would just prepopulate the tickets. I have my tickets done and I was back on a call right away. I got really good at closing out tickets legitimately, so that we were helping people.

I then started sharing with other people that were struggling. If you're not making your metrics, you get nervous. They're afraid that you're going to get axed. Here's the funny thing. Supervisors don't like [...] people messing with the system or doing things differently, especially if it wasn't their idea. I had supervisors that wanted to challenge that or felt threatened by the fact that I optimized and make things better.

As entrepreneurs, this is what we do. We're always looking for ways to support our team or looking for ways to improve speed, improve accuracy, help them be better. If we give our team members that ability to feel entrepreneurial which is where instead of micromanaging them, we give them our values, we give them our outcomes. We give them outcomes to work towards and we let them see what they could do.

I've been really amazed when we've gone into planning sessions with my team. I say, "Here's the things that I want, what [...] you have to help us get there." My graphic designer has a completely different view and perspective from her angle of the business than I have from my top down. My head of fulfillment and the content person has a completely different view and perspective from that side than I do from the top down. Their ideas are great. I'm always amazed. We have all these brainstormed ideas. I'm like, "Yes. I didn't even think of that."

I think we also as entrepreneurs, we become the emperor with no clothes if we don't have a planning system because they're all just saying, "Yes," and they're just getting their paychecks, they're just doing what they're told. They're not innovating, they're not feeling alive, and they're not really enjoying being part of that organization. You're the boss that everyone is complaining about. On the weekend, they just leave for the weekend.

What you said earlier about discretionary time, I want team members that even on the weekends, they're thinking about how they could be better. They're thinking about the job. They're excited about what they're doing. They're studying and learning new stuff because they're excited about what they get to do in the business and they feel passionate about being able to be part of something bigger. They like that feeling and camaraderie of being on a team, and having a culture. It's a very different thing.

Andy: I’ll tell you a quick story along those lines. We're doing a lot of the process piece. One of the six components of Traction, one of those is process. We've been spending a lot of time on that. I mentioned a year ago, we want to really formalize our process where it’s consistent the same way every time for every company. You can customize things like that.

Your [...] criteria can be customized, but you couldn't customize when we follow up with the tenant after repair. We're not going to do the same for everybody. There's things in our process where we don't do the same. When we started Traction, we're also used to email then The Checklist Manifesto was a great book, as well. We talked about how we are going to document our processes in a way that our team has all the support that they need for the process.

We did that. We put some really cool documentation for our seven key processes all in checklist style but visual checklist. You don't have to fill anything up. Any team member, even new team members can immediately walk into a process and these steps to do for that, for example.

When we roll that out, almost immediately, one of the team members who does most of the work on one of our frontend processes—part of the dispatch processes—that was able to come in and say, "Look, I’ve been doing this process. It's working fine. If we did this, we've been quicker. We can get to these work-overs dispatch even quicker." We made these small changes.

Because we had a checklist listed down, he can even see what's the next stage in the process and what are they doing. He was able to put that altogether and say, "Here's the fix. Here's something that we can improve." We implemented it the same day. It definitely drives people to be more engaged in the operations. They're not just there to do your ABC work that you asked them to do. They're vying into the goals they were trying to accomplish. They're vying into the process you're rolling out. They're trying to be a part of that.

We've seen a lot of that. A lot of folks at the very frontline and in this particular case. This is an employee that has only been enlisted for a couple of months. People feeling really comfortable to be able to help us towards these goals. Now that they understand what we're trying to do and that really put an understandable 90-day blocks. Here’s what we’re trying to do and everybody's going to be more likely to be onboard, jump up, and say, "Hey, let's do this differently because that’s going to improve our operation."

Jason: Yeah. If you look at any problem internally in a business, there's one of three things that must be missing. Either there isn't a clear outcome, which a planning system help solve, there isn't accountability, it wasn't clear who was supposed to be doing it or who was responsible for the outcome, and there isn't transparency. Nobody can see who's doing what or see that people are or are not getting things done. Nobody has clarity on where the business is at financially or how it’s working.

I think having a planning system, having regular meetings, it creates this culture that allows accountability, allows transparency, allows responsibility, allows to be a clear drive towards outcomes.

Most businesses have no clear outcome. They're not working towards a clear outcome. They're just managing day to day fires and they're just shooting in the dark. That's how most small businesses operate. It financially looks that way in their business, too. There is a consistency in the financial side as well. Also, it's a financial system which is a part of planning. I'll just throw that out there which I'm a big fan of Profit First.

Andy: First of all, big plug to Profit First. Big plug to Profit First. It changed my business two years ago. Absolutely a big fan of Profit First and in Clockwork thesis. He’s written several great books for profit entrepreneurs.

For me, you were talking about how most small business owners don't do these things. I was in that same boat. Even though I come from a very structured environment from AAA, when I was a property manager, that's all I [...] property management company. I joked but it's not really a joke. I didn't make any money in my property management company until I sold it. That was the company I ran.

When we started EZ Repair, we sort of forgot to do this a little differently. We started getting into the systems and reading different books about structuring, about how to have an operating model, how to profitability. It wasn't really until, like I said, two years ago, we were at Profit First. That just transformed our finances completely. It's was amazing. And then here, I feel like Traction for us is going to be the next turning point, but a couple of years from now, I'll be talking about how we found Traction a couple of years ago.

I think it's an evolution of a small business. You learn different things as you go. But for any small business owner, even if you're just starting up, whether it's Traction or another system, you need to have an operating system in place. This would've been so much easier for us a couple of years ago if we did implement it, but that’s okay. We’re implementing it now and it's never too early. I don't care how small you are. Maybe you don't have employees yet but you plan on growing. Get it in place.

Jason: Yeah. For those listening, what do you want them to take away from this?

Andy: Hopefully, some learnings from me. What I just said from my own property management experience when I was a property manager. Hopefully, you can make some money before you decide to sell your [...] business. Hopefully, you can make money along the way. There's a lot of property managers who are. The ones who are have that structure. They have that operating system. They have that financial plan in place.

What I'm advocating for is to do that as a property manager. Implement, whether it's Traction or another operating system. Implement it. Definitely read Profit First. It will change your life, absolutely. Do that going forward. Even if you're small, even if you don't think you're there yet, even if you think, "Well, I'm just a one person show," or whatever, one or two person show, it doesn't matter. The structure is going to help you so much and it’s going to keep you from working those 80 hours a week.

I know there are PMs out there working 80 hours weeks because that was what I was doing when I was a PM. You don't need to. Even if you're not ready to hire right now, these operating systems are going to help you structure in a way that you won't be working 80 hour weeks anymore. They'll figure out how to handle the work without actually having to just be available all the time.

Hopefully, you'll determine too that there's some self-showing work that you can do, maybe some maintenance work coordination, work duty. You can do some other things. You can outsource, but you're definitely even without doing any of that, just by structuring your work and system like Traction, you're going to find your job becomes easier or manageable, and you're going to understand exactly what you need to be doing in the business everyday.

Jason: One thing I want everybody to take away from this, too, is that this is rare in businesses in the US or everywhere, really. This is rare that a business will implement a planning system, implement profit first, have these pieces in place. I think every listener should feel a lot safer with using a company if they hear that they have these pieces in place.

Andy, props to you for getting these pieces in place over EZ Repair Hotline. I'm sure those listening will feel a lot safer with using these services if they haven't considered these before. It creates more consistency in the outcomes of the business. It creates more reliability. Really, that's what people are vying from all of us—safety and uncertainty. That's what they want. They want results. It's far easier to deliver results when you have a predictable system to create that magic and to create a future.

Andy, I appreciate you coming on the show. How can they check you out?

Andy: Thanks for having me. Our website is probably the best way to start to take a look at us. It's ezrepairhotlinellc.com. They can see all our products and the easy way to set up a meeting with me or just to send us a note in the contact form. I'd love to have people follow up with us.

Jason: Perfect. I appreciate you, Andy, coming on the show. Hopefully, you have an awesome rest of your day.

Andy: Thanks, Jason. That was great. I appreciate it.

Jason: You can check them out. It is ezrepairhotlinellc.com, so check them out.

If you are a property management entrepreneur, you're feeling stressed out, you’re feeling overwhelmed, you're not getting the results that you want, you don't feel like you have consistency, you feel like things are crazy, you feel like you're on a financial rollercoaster, you may just need to start with getting clarity on yourself. This is where I start clients out when we start working with them, when we start coaching and consulting property management business. We start them with figuring themselves out first.

Andy is the center of the solar system. I'm the center of my business. If you change and help them get clarity on what they love doing, on what they should be doing, or where their time is being drained, or where their energy is being drained, we align the business around the entrepreneur.

Every business will be very different from each other. Every business will be unique. It will support you, you will feel alive, and you will feel the momentum which is what we crave as entrepreneurs. The rest of the world wants to be happy or sad. They're focused on that. We want momentum. We want to feel alive. If we don't have that, we feel unconstrained, we feel overwhelmed, we feel frustrated, we feel stressed, we feel stuck. That's hell for us as entrepreneurs. If you're stuck in a little bit of hell, maybe reach out, and we'll see if we can get you unstuck.

I'm Jason Hull, from DoorGrow. Check us out at doorgrow.com. Make sure you join our Facebook community, our Facebook group. You can get to that by going to doorgrowclub.com.

If you feel like your property management website is a little bit outdated, it's older than 2-3 years, maybe it's 5 years old or older, it might be time to test that website, see how much money is really leaking and costing you. You can go to doorgrow.com/quiz and take our website quiz. Most websites that go through it get an F grade in terms of conversion which means you are losing deals and money right now. It's probably costing you tens of thousands or maybe hundreds of thousands of dollars, annually, in lost deals and lost business. So, check that out.

Again, I'm Jason Hull with the DoorGrow Show. I appreciate you guys tuning in. Be sure to check us out on iTunes or on YouTube. Like and subscribe. Where it's possible, leave us a testimonial or review. We'll really appreciate that. That is it. I am out.

Bye, everyone. To our mutual growth. Until next time.

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Oct 1, 2019

Everybody needs and deserves a place to live that is clean, maintained, and safe. Better yet, It makes perfect sense to get someone else to pay your mortgage by giving them a great space at a great rate and share some resources.

Today, I am talking to Lisa Wise, co-founder of Nest DC, which manages residential units throughout Washington, DC. The company is committed to customer service, quality spaces, and excellent living experiences.

You’ll Learn...

[02:23] Nest continues to experience exceptional growth and measures success by revenue and number of jobs it’s created.

[02:34] Fun Spaces: Fixing an Adobe duplex where nothing’s square and everything’s made of dirt led Lisa to love her accidental landlord role in property management.

[04:09] Non-profit Dedication: Do what you can for the community, in terms of what you want to do professionally, due to ability to manage and maintain properties.

[05:04] Origin of Nest DC: Grow one property at a time, and focus on service forward to take care of tenants, spaces, and places.

[05:56] Property managers can make a meaningful impact by helping people and families preserve a better quality of life in their homes.

[11:00] Bad Strategies for Building Relationships: Ignoring problems, letting things fall into disrepair, not paying expenses for repairing things—none of those are good..

[11:23] Property Manager Opportunities: Daily variety, unique challenges, freedom, and direct impact.

[13:32] Cycle of Suck: Bad managers control costs and fail to maintain property; if people are unhappy with where they’re living, they’re less likely to be great tenants.

[19:20] Onboarding Process: Set expectations on maintenance costs and educate them on why they need to maintain the property at the highest level to take care of tenants.

[21:28] Ways to strategically grow through painful stages: Evaluate technology, be nimble, and cherish staff.

Tweetables

Grow one property at a time, and focus on service forward to take care of tenants, spaces, and places.

It’s truly an act of trust and intimacy to be invited to manage someone’s home and personal space.

Property managers can make a meaningful and powerful impact by helping people.

If people are happy where they live, then they’re just better neighbors.

Resources

Nest DC

AppFolio

National Association of Residential Property Managers (NARPM)

Shark Tank

Upwork

Fiverr

DGS 97: Innovative Financial Products with John Higgins of Steady Marketplace 0

Transcript

Jason: Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you’re open to doing things a bit differently, then you are a DoorGrow hacker.

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change the perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

We’re here with Lisa Wise of Nest DC in Washington, DC. Lisa, welcome to the show.

Lisa: Thanks for having me.

Jason: Glad to have you hear. Lisa, I’m going to read a little bit of your bio. It says that you’re the co-founder of two companies—both anchored in the real estate management company, both entirely unique in their contribution to the housing landscape. Nest DC was co-founded by Lisa Wise and Jim Pollack at the start of the “Great Recession” in 2009.

Nest manages residential units throughout Washington, DC with a commitment to customer service and an emphasis on quality spaces and excellent living experiences. From 2011-2015, Nest DC was voted a top property management company in the Washington City Paper’s “Best of DC” issue. In August 2016, Nest placed in the Inc 5000 list of America’s fastest-growing companies. That is a reflection of an investment in the workplace. In 2013, Nest DC was named a “Small Business Gem” in Washingtonian Magazine’s “Top 50 Places to Work” issue.

Year over year, Nest enjoys exceptional growth, measuring success not just in revenue, but in the number of good jobs that have been created since inception. I’ll stop there, but why don’t you tell us a little bit about your background and how you go into property management?

Lisa: I lived in Tucson, Arizona. I was going to graduate school there and had an 1893 Adobe duplex which was one of the coolest spaces I’ve ever lived in. I got a nice degree in Political Economy and enjoyed a long background doing political consulting basically, but I liked working with my hands and having an Adobe duplex is the best place in the world to get comfortable working with your hands because nothing’s square and everything’s made of dirt. There was no stem wall and it was actually pretty easy having […].

I liked the idea of being able to do a thing and then turn around and having adding proof to the space. I had worked on the plumbing to patching the roof to doing paint. I feel like I’ve painted, many, many, many square miles at this point. It was something that I think came really naturally to me and I enjoyed that process and working with my hands. I had grown up in an environment where working with your hands is definitely something that was what you did.

The great thing about that duplex when I asked my landlord if I could buy it and he said yes was it was a duplex. I automatically became a landlord and I loved that. It made perfect sense to have someone else pay my mortgage. It made perfect sense to give someone a great space at a great rate and share some resources including a backyard, dog care, and all those kinds of things.

I fell into being, I think what you might consider an accidental landlord, but really loved it. I have had an instinct that I would love it but I had always had this non-profit draw to do what I can for the community so there’s a little bit of tension and conflict there in terms of what I want to do professionally.

If we fast forward many years, and we did bump up against that recession and I was in the non-profit environment, doing a lot of fundraising and felt like I wasn’t changing the world very quickly with my non-profit work. I was actually really ready to do a thing and get paid for it. At that point, I had a few more rentals that I had acquired over time and still really enjoyed that work.

It was really originated as a side hustle. It was a great way of bringing in that extra revenue. I was good at managing and maintaining those spaces. I kept telling people, “You should start property management company. I think it’d be a really great business model.” Until one day I thought, “Maybe I should do that. It seems to be something I have an aptitude for, and interest, and enthusiasm, and a passion for.”

Around 2009, we decided to launch Nest and the idea was just to grow one property at a time, very organic, focus on being very service forward and taking great care of tenants, spaces, and places. It worked, especially in DC where service doesn’t always tend to be stellar and where a lot of the management companies were high volume and not really building relationships one tenant at a time or one owner at a time. We came up with a really refreshing approach to the business. A really refreshing approach in terms of our relationship to community. The city was clearly ready for us. That’s the origin story of Nest DC.

Jason: Love it. You’ve got sort of an activist built into you it sounds like. In property management, I wanted to touch on this, I think a lot of times we get so caught up on business, but I think property management can have a really big impact—on families, on people. Maybe you could touch on that a little bit because I get a sense that that’s something you’re passionate about. What impact you feel like you get to have or ripple effect you get to have as a property manager? Why is that interesting or inspiring to you?

Lisa: That’s a great question. It’s truly an act of trust and intimacy to be invited to manage someone’s home and personal space. Doing it well is really an opportunity for us to create meaningful impact in people’s lives every single day. Everybody needs to live someplace. Everybody deserves a place to live that is clean, well-maintained, and safe and we get the chance to make that happen. We get the chance to be responsive and make people feel that their home base is that safe space for their family.

It’s been pretty intriguing to feel that I can make more impact on people’s day-to-day lives in this business than I did in a lot of the healthcare and environmental work I did in my previous professional career. Because I do think that we give people a chance to have a better quality of life from them living in one of our spaces. We do get a chance to take good care of these properties. A lot of our properties are older and older as in historic. There is really a lot to be said for the fact that we’re stewards of these legacy places and historical buildings, we’re preserving them, and we’re making sure that the landscape of our city, which is architecturally really significant, is in good repair and well-maintained.

That’s an important contribution we get to make as well. That’s part of our whole value-space philosophy for us to be around management, but at the core, we’re being invited to help people have better quality of life in their homes and that’s a pretty important role to play.

Jason: You’ve really discovered something that I think was really significant. You said that you’re able to have a bigger impact by being a property manager than by the environmental work that you’ve done and other non-profit stuff that you’ve done.

Lisa: Yeah.

Jason: Just to explain that a little bit because I don’t think people realize the impact that they can have as property managers. I think we can paint a bigger picture for the industry of that inspirational aspect. I think we would attract better property managers into the industry. I think there would be a better perception of the industry out there. I think tenants would have a better experience. I think families’ lives would be better.

People that are living in these different units underneath the property manager would have a better experience. The owners would be happier. I think the industry could use a little taste of this so explain that a little bit because you have experience with this. Paint a little bit of the contrast there? I think that’s fascinating for me.

Lisa: When you’re in a non-profit environment, you’re sometimes very far removed from the outcome. If you’re working in healthcare policy or if you’re creating new systems for people to green their procurement supply chain, you’re very distant from the end user, you’re very distant from there being a positive outcome and this is in high contrast to that.

We’re working with clients and we had a flash flood this week. We had probably 55, 60 affected buildings and units. We were able to pick up the phone every single time and help people walk through something that was very stressful for them. They’re worried about their things; they’re worried about mold, they’re worried about their safety, they’re not sure whether or not they’re going to experience damages.

That comes down to protecting the actual space, helping tenants and residents navigate how to deal with a threat to their belongings and their own quality of life in that day, and then owners making that someone’s responsive in an emergency. That’s all about building relationships, being a trusted partner, and helping people make sure that, again, their quality of life is preserved and someone’s honoring that. It’s every single day when you get to see the person who is that end user, recipient, or benefactor of how we do our work differently.

That’s not always a luxury that people get in their day-to-day work. In fact, I’d say it’s probably pretty rare unless you’re a provider. Let’s say you’re an ER doctor. Someone comes in and they’re hurt, or they’re scared, and you can help them. That’s a pretty powerful place to be. We’re in similar situations often when someone’s been—maybe they had a fire in their unit, maybe they have no hot water and they’ve got a baby—all these things that can impact the livability of a unit that isn’t just about inconvenience. It’s truly about making sure that people are safe and protected in their spaces and we want to solve those problems cheerfully. We want to take care of those people and want them to feel like we’re a good partner in making that that part of their life is taken care of.

Ignoring problems, letting things fall into a state of disrepair, not caring about style, not caring about the building, avoiding paying for the actual expense of repairing things—none of those are good strategies to building solid relationships that help people feel that it’s a good partnership. We like to emphasize partnership as one of our key strategies for doing the work well and to success.

Jason: Lisa, something that I think is probably really appealing to property managers, I mentioned in the intro some of the things that I’ve noticed clients mentioned to me that they resonate with. They love the opportunities, daily variety, unique challenges, freedom that property management brings. I think there’s quite a few property managers or maybe most that really do love that direct impact that they get to have. As the company scale, they lose the ability as the business owner to maybe have that experience of having the direct impact, but they still get to have that ripple through their chains. How many doors does Nest manage or units does Nest manage presently?

Lisa: We manage about 1000 doors.

Jason: That’s a lot.

Lisa: Yeah, it’s a lot and all in the district proper. We’re very focused on managing condos and buildings that will be like associations or single-family homes. We have a lot of townhouses. It’s probably a 70/30 split. Anything in the suburbs, it’s easy to get around the District of Columbia. We have a high-density portfolio and we really focus on an urban landscape for our work. That’s become our specialty.

Jason: DC has some of the highest rent, probably in the nation, right?

Lisa: Yes.

Jason: Okay, we’re not going to talk about fees, but I would imagine if you charge anything, you probably do alright in DC as a property manager.

Lisa: Honestly, it’s a good environment from that perspective but at the same time, all of our cost of living as a business…

Jason: Is really high.

Lisa: …so, I’m going to pay more in salaries. I’m going to pay more in occupancy. I’m going to pay more for insurance. Certainly, the cost of doing business is much higher in this environment.

Jason: Got it. Why do you think it’s such a challenge in some of the inner cities or the larger city markets for there to be good property managers? Is it because the costs are high for the management companies or they’re just not charging enough? What’s your perception because it does seem like in some markets, there are some bad manager. It gets really difficult and it’s not that small-town feel, especially when you get into large multi-unit. What’s your take on that?

Lisa: I think if you are trying to control costs and you’re unwilling to maintain the spaces at the highest possible standard and keep them in good repair and not wait until something is just broken, but you’re upgrading on a schedule or you’re making sure that these properties perform really well so that people are having a good experience in them. I understand that people don’t want to spend a lot of cash in making sure that these units are well-maintained, but not doing so means that you’re going to start renting spaces that are not comfortable, not attractive, not appealing. When people aren’t happy where they’re living, they’re a lot less likely to be great tenants.

For us, if you have a great product, you’re going to attract great tenants. If you have people that you enjoy working with, you’re going to have a better reputation, better relationships, and better outcomes but you have to start with a great product. For us, we’re very choosy about managing spaces that we think meet particular standards for us. We’re not going to be the owner’s beard and make bad maintenance decisions and undercut the needs of the space because somebody wants to save money. If we have an owner that is insisting that we not keep that space in good repair, then that’s not a relationship that we’ll keep. That’s a boundary that we’ve set, and we set it early.

Every time we’ve been stressed from a business perspective and we’ve got to increase doors because we need to grow faster and we’ve compromised on those values, it’s never […] out. It really works—great property attracts great tenants, when people are happy where they live, they make better neighbors, better neighbors equal better neighborhoods. It’s the same formula we’ve had from the very beginning. When we’ve strayed, we’ve definitely suffered from that. I hate when people manage crappy properties. They’re making excuses for why it’s crappy. They’re having to explain bad decisions. That’s a bad relationship float to get started on.

Jason: I’ve talked quite a bit and people for me talk about the “cycle of suck” but I think this is an interesting ingredient that’s overlooked is as a property manager, in order to stay out of that “cycle of suck” of having bad properties, bad tenants, and bad reputation in the market, one of those ingredients is to have a philosophy of maintaining the properties at the highest level because that is going to dictate the types of tenants, that’s going to dictate the type of situations that you’re going to have to deal with.

Something you mentioned that I think is really key is the importance of having a proactive strategy towards maintaining these properties rather than a reactive strategy towards maintaining these properties. I think there’s probably a little gradient scale. You should draw on a piece of paper, “Am I reactive or are we proactive?” I think most property managers could figure out where on this continuum they sit.

If you’re off of middle towards reactive, they’re probably a company that’s dealing with pain and problems that are unnecessary, and it’s because they didn’t maintain that boundary like you’ve talked about with the client from the beginning, and they haven’t continued to maintain that when those problems arise with an existing client.

Lisa: We’ve had owners who say, “I can’t believe I have to replace this hot water here. It’s been working perfectly for 25 years.” You’ve been rolling the dice and getting lucky but just because it’s now a rental and it worked fine for you doesn’t mean these things doesn’t have an actual lifespan. Sometimes there’s a tension between owners who just truly don’t see the value of maintaining things to the highest possible standard, but the cost of dealing with the flood is much higher than replacing the hot water heater in the first place. Sometimes you can’t explain to simple math and logic and people if they’re emotionally attached to the idea that you shouldn’t spend any money on it.

We’re actually in the opposite position where, say, it’s a rental, take great care of it, it’ll take great care of you. Someone’s paying for your mortgage. You can capture depreciation. You’re probably saving some money, substantially, on taxes. You’re going to build an asset and make money basically on the interest rates of a mortgage and I think replacing a water heater is not that big of a deal in the grand scheme of things.

They look at it transactional instead of looking at the big picture which is too bad. I think it’s on the part of the property manager, we have to educate our owners on what it means to be engaged with that property and keep it in good repair. We give them estimated costs for maintenance over the course of the year and what they should expect. We have them sign off on that, being the expectation over the course of the relationship, that they will spend money on the properties.

We make the counterpoint that properties that are in great shape and well-managed tend to keep tenants in them for longer periods of time which means that the turnover costs—the things that you don’t necessarily have to do annually like painting. If people hold over as tenants, you’re going to have to do it. If you’re having a high turnover, you’re going to have to pay a leasing fee. There’s a lot of advantage to having the nicest possible property and taking great care of it, but it can be hard to walk owners through that.

If you’re a proxy for owners, and management company has not given the resources to adequately take care of the space, then they’re really truly not able to take good care of the tenant and then you’re stuck being the bad guy. I think a lot of property managers have been in that position. It’s hard to explain that to a tenant. They don’t care who owns the property. They just want it to operate really well.

Jason: All of this really starts with your onboarding process with new perspective clients, it sounds like. You’re throwing little things out there that I think people are missing. You are taking people through an estimated maintenance cost and you’re giving it to them upfront, so they have an expectation to spend money to take care of these things. You’re talking about educating them. You have some sort of verbiage, process, or something. You’re taking them through to educate them on why they need to maintain this property at the highest level.

You’re shifting their mindset away from trying to keep cost low and charge rent high and over the life of the property, make sure it’s a good investment. You’re also helping educate them on the importance of keeping in it long-term, and there’s probably other things that you guys do as a company to shift towards this. It sounds like you’ve really worked backwards from the idea of, “How can we have really great properties and how can we make sure that we have owners that will allow us to keep them really great?” I’m guessing based on your background, what really seems to drive this, what I’m hearing is that you really want to take care of the tenants.

Lisa: Oh, absolutely. A happy tenant is going to take great care of that space. If they’re feeling well taken care of, then it’s truly in the best interest of the owner and property to do so. Again, people are happy where they live then they’re just better neighbors. That’s what we’re all about.

We live next door to a lot of our properties. We’re around our tenants all the time. We’re part of this community. We want them to have a happy living experience. We want that to not be a stressful thing for them because life is stressful enough. When they have a maintenance request, we can respond to it and take care of them quickly and swiftly and they know that we were on top of it for them.

Jason: Lisa, for those that are listening, they’re like, “Lisa’s got 1000 doors.” You’re like one of the whales in the industry. You’re one of the unicorns that’s made it magically to this place, that every property manager maybe dreams of, or they think would be incredibly painful to get to and doesn’t dream of.

What things do you think you did early on that allowed you to grow through some of those really difficult, painful stages? There are painful stages in property management in terms of growth. How did you weather through those while other companies get so stuck?

Lisa: I’d say technology, being nimble, and staffing are the three top things that we do. Being nimble is the first one. We stop all the time and evaluate our systems and strategies for how we do our work. We’re very open to the idea of changing the way we do things for the better. That is something that I think over time we all know that you’ll hit a certain number of doors and all of these systems that worked great for under 200 doors suddenly, it’s just the house of cards at 300. We had to get really deliberate about stopping and pausing long enough to study the work and reconfigure it so that it was working well for us.

That led to us being really thoughtful about using technology really effectively. Our property management software, we kept using these workarounds for different tasks that had to be done. We weren’t pausing often enough to go back and see if the tool had changed enough to accommodate our needs where in fact, it had. We get a lot more focused on making sure that—AppFolio is the software that we use—that it was meeting our needs. We keep […] just in terms of how we relate to that company. We’re asking for the change that we wanted and needed. We started relying even more heavily on it. We started creating, really tried and true conventions around how we work with the software, the tools, and the processes.

Lastly, and definitely not least and the most important thing we did, was really honor and cherish the staff that we have that comes in everyday to deliver on this promise—that we’re going to provide exceptional places for great people. The talent, the staff, and the commitment has been extraordinary to me and something I think I’m most proud of in the work. If you’re not taking good care of your team, then you cannot be an exceptional service-based company.

Making sure to profit share, being as generous and thoughtful about benefits and any other extra that you can be, working as a team member, not taking people for granted, giving people a lot of time off and flexibility—basically, anything we can do to underscore a culture that makes this a great workplace will lead to better outcomes for management as well. It’s the staff, it’s hard work, and it’s technology, all of that is the secret sauce, but it has worked to get by in and get people to get very invested in the work that we’re doing. I think the tenure of our team really indicates that we’ve nailed that one.

Jason: I think everybody knows they need really good staff. I think everybody goes, “Yes, we need really good technology.” I think you mentioning being nimble is not something you typically would hear. I think a lot of property managers are like, “What?” I love this idea.

How do you actually go about being nimble? How do you maintain that? I think every company likes to believe or hope that they can stay young, stay fresh, and not get stuck in their ways, but it happens. Over time, they start, “This is how we do things,” and they […]. Do you have a process? Is this something you tactically sit down and do on a regular basis? How do you guys actually become nimble?

Lisa: We actually spend a lot of time retreating and having conversations about our systems. We commit a lot of energy to those conversations. We’ll do a quarterly all-staff, all-day retreat. Often times, those retreats are about how can we streamline and be better at our work and we’ll break into different teams. We did a really fun thing that I actually picked up from someone that had presented in NARPM where we had people do a shark tank session. We had teams get together and proposed different ways of engaging with our clients that would accelerate the client experience. We implemented every single one of them.

When you’re asking for everybody to contribute, to revisiting and focusing on how our systems can be more improved, from the plumber to the CEO, we have everybody participate in those all-day meetings and coming up with ideas for how we can be even better at what we do. They see that the fruits of that time. We did something with those ideas. I think everybody’s really motivated to make sure that we take that time away from our work to revisit how we’re doing it.

To be honest, everybody will hate a certain aspect of their job, they’ll dislike something, or something will get tedious and I invite people everyday day, like, “Stop and steady it. Ask yourself, do you have to do that task? Can you do it differently? Can someone else do it? Is there a faster, better, smarter way of doing it?” If you’re inviting everybody to ask themselves whether they have to do something that they don’t like doing, that’s pretty motivating.

Like, “I really hate doing this data entry or this workaround on managing the utilities or something.” I’m like, “Should we be doing utilities at all? Is this something that we have to be doing the same way?” I think everyone is being invited to find better ways of doing their job and enjoy their job more. That’s the investment. When that’s the incentive, then I think people are a lot more engaged in being nimble.

Jason: I love it. We do that as a company as well and that’s built into our cadence of planning system that we do as a company. It’s amazing when you allow your team members to give you feedback, the ideas that they come up with. Because our perspective as CEO or entrepreneur as the head of the company, we have what we think we need from the top view but my graphic designer, she’s going to have a different perspective from what her standpoint, what we could do differently in our process when we get into that piece.

I imagine it’s the same in property management businesses. There are so many moving parts, especially when you get into to your size and scale, everybody sees things from a different perspective, and they see things that bother them. They see things that could be improved. They have ideas to innovate and when you allow them the space.

I think the magical thing that you’re doing is you’re allowing your entire company to shift at a tactical day-to-day operation for a short period of time into strategic planning. You’re allowing this step and strategic time in a business is the time that grows companies. Companies that only are doing tactical work, maintenance requests, leasing, tactical day-to-day, emails, phone calls, sales, whatever, if you’re only doing tactical work, the business can’t grow. It just doesn’t seem to grow. It’s the strategic work that helps you trim the tree so that it can grow. It’s the strategic work that help you plan and figure out what you can do next to innovate and create. You built that in as part of your process that you do every quarter.

Lisa: Yeah. 100%.

Jason: Okay, very cool. I love the idea of the idea of the shark tank sessions and you said you implemented every idea.

Lisa: I did. It was really fun. People thought about infographics that we could use to describe what happens you become a tenant and who you’re interacting with. We were able to use different Upwork tools and Fiverr tools to get access to talent that before we had thought was out of reach and being really thoughtful about how we used different modern-day side hustle economies to capture talent, and skill sets that we don’t have inhouse so that we can some of these big dreams come true for our team. It’s been awesome.

Jason: Okay, I love it. Is there anything else in the new paradigms in property management, or topic at hand, that you think we should bring up? Because that a really good one, maybe even one to end on. I love that idea.

Lisa: I think you ask varied questions and I really appreciate your patience with my technology snafus.

Jason: Okay. That’s alright. Everybody has technology snafus that has technology. It’s just part of what happens with technology, right? Lisa, really appreciate you for being in the show. Thank you for sharing those insights. I think there were some really practical takeaways for people watching that they could implement.

Lisa: Awesome. Thank you, so much and great luck, with all of your work.

Jason: Okay, thank you. All right. A little bit of delays and lags but that’s the internet. I’m at a remote location and doing things a bit differently. Hopefully, you guys can hear me okay today. I appreciate you guys tuning into the DoorGrow Show.

If you could take a moment, if you’re listening to this later on iTunes, be sure to subscribe in iTunes to the podcast. You’ll get notified when episodes come out. You can listen to them while you’re driving around, get insights. Be sure to leave us a review on iTunes. We really appreciate that. As a team, that really makes a difference for us.

If you are a property management entrepreneur that wants to add doors and make a difference, we would love to have you inside of our Facebook group, the DoorGrow Club. You can join that. It is free. It’s for business owners of property management companies. Go to doorgrowclub.com.

If you are wanting a more effective website, you are wanting to optimize the frontend of your business, dial in your pricing, dial in sales, dial in […] age of your business, that is what we are experts at DoorGrow. Please reach out to us. You can check us out at doorgrow.com. All right, everybody until next time. To our mutual growth. Bye, everyone.

Download this Episode

Sep 24, 2019

Are you a property manager or owner who wants to recoup financial losses when stuck with a bad tenant who stops paying rent or needs to be evicted? Lower your risk? Trust somebody else to manage your properties? Protect all parties involved?

Today, I am talking to John Higgins, co-founder and CEO of Steady Marketplace, a leading technology platform for property owners and managers. Steady’s subsidiaries offer financial products, including rent default insurance.

You’ll Learn...

[02:00] Background of Big Financial Numbers: Starting with event-driven, distressed, and activist hedge fund managers with billions in assets.

[06:37] Steady’s products protect property owners/managers from bad tenant outcomes.

[07:40] Rent Default Insurance: Protection against rental income loss due to tenant’s failure to pay.

[10:15] Rent Default Insurance is widely available and adopted around the world. About 70% are renters and 30% are owners.

[12:38] Collaboration Over Competition: Don’t simply copy-and-paste products and policies; leads to lack of innovation.

[13:55] Automate It All: Learn from online lending space using technology to streamline processes, operations, and pricing.

[15:05] Perfect Businesses are Out of Business: Entrepreneurs think they've got something perfect, only to realize they need to make it better.

[16:15] By the Book: Take regulatory issues seriously, and make sure to do it right.

[17:00] Adoption is #1 challenge with any solution, software, or service.

[17:55] Competitive Advantage: Education, awareness, and understanding of product.

[20:53] FAQs: How does it work? Why does this exist? What’s the catch?

[21:55] Renter’s Insurance vs. Rent Default Insurance: What’s the difference?

Tweetables

Every entrepreneur should make a difference. Otherwise, they're just causing problems.

When there’s a loss of rental income due to tenant default, there is no protection.

Automate everything: Go slow to go fast.

That's how the process works. It's constant iteration to get better, and better, and better.

Resources

John Higgins’ Email

Steady Marketplace

Steady Marketplace FAQ

John Higgins on LinkedIn

SureVestor

Rent Rescue

National Association of Residential Property Managers (NARPM)

DGS 96: Freedom of Time and Money Through Better Business Practices with Steve Welty of Good Life Property Management 0

Transcript

Jason: Welcome DoorGrow Hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you're open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it, you think they're crazy for not, because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income.

At DoorGrow, we are on a mission to transform property management businesses and their owners, we want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.

Today, I am hanging out with John Higgins of Steady Marketplace. John, welcome to the DoorGrow Show.

John: It's great to be here, Jason. Thanks for having me.

Jason: John, you've got a really big bio and you're really impressive. Do you want me to read all of it?

John: You can read whatever you want to read. I'm not that impressive. I'll say you're more impressive hosting this show and with your following in the space. I'm just a guy trying to make a difference.

Jason: I appreciate it. That's what every good entrepreneur is trying to do is make a difference, at least I hope. Otherwise, they're just causing problems.

I'll read a little bit here. It says you are the co-founder and CEO of Steady Technologies Inc., a leading technology platform for property owners and property managers. Steady, through subsidiaries, offers financial products that benefit property owners and managers. Their first product is rent default insurance, offered in partnership with the top US insurance carrier that is a Fortune 100 company, rated A+ by AM Best, and S&P.

Prior to co-founding Steady, Mr. Higgins founded Nobadeer Advisors which provided business development and capital market expertise to technology-enabled lending platforms across the variety of consumers and business, lending verticals, and backed by top venture capital firms globally.

Prior to Nobadeer, Mr. Higgins spent 2.5 years at Prosper Marketplace, Inc. where he helped build the institutional loan program growing it from $0 to over $5 billion over his tenure and help scale Prosper's monthly origination volumes over 4000% during his time at the firm.

Mr. Higgins also previously served as a director at Topwater Capital, now owned by Leucadia, where he made investments between $5-$100 million to hedge fund managers across a variety of strategies via structured managed accounts.

Prior to Topwater, Mr. Higgins spent five years working for event-driven, distressed, and activist hedge fund managers with assets as large as $1.85 billion.

There's a lot of big financial numbers here, John. A lot of big financial numbers.

John: Want me to dive a bit deeper on it and summarize for you?

Jason: Yeah. Let's dive into that and then tell us how you got into all of these.

John: Sure. I can start from how I got into the hedge funds space which led me through here. I started and talk my way into an internship my junior college, totally unqualified, at the University of New Hampshire versus people that are top of their class from top business schools. Got a shot to join big hedge fund on my way up. I worked my tail off that summer and got a full time offer. I joined that firm full time after I graduated college. I was really lucky. I worked for the really brilliant entrepreneur there who would start this business with $500,000. Four years later, he grew it to almost $2 billion.

Then, left that company and went to Topwater where I was invested in hedge fund strategies via structured managed accounts, kind of cross the bench of the long, short, and distressed credit. That company was acquired by Leucadia which is now Jefferies Investment Bank; the two merged. Leucadia was at a big stake and Jefferies a long story anyway. As that transaction was transpiring, I was approached by the former management team across the marketplace who've I known from the hedge fund industry. They had great entrepreneurs that built and sold the company that served hedge funds called Merlin Securities. They're backed by Sequoia. Sold that business to Wells Fargo and decided they were going to take over Prosper.

They reached out and said, "We're looking for someone to help us build out this business as we take it over and turn it around." Really fortunate to work with tremendous entrepreneurs and the tremendous team there. During my time there, we went from about 50 employees up to about 600+ when I left. That was my first foray into more pure play technology.

We're a financial technology platform. We're offering unsecured personal loans online to end consumers. If you're thinking about going online, applying for a personal loan, no human interaction, [...] pricing, I can get you a loan in a matter of days as opposed to having to leave your house, go to a bank, et cetera, and fill up paper forms.

After leaving Prosper, I was consulting for various lending platforms as you touched on in the intro. I got to work again with tremendous entrepreneurs across a bunch of different verticals. One of the people I've got to work with was doing some lending into the small landlord space. It's fix and flip lending and also rental lending. I started looking at the opportunities. I said, "This is really interesting. I know all of these products that helped multifamily owners protect them against bad tenant outcomes."

There's a lot of companies that pop up doing that, but no one's really going after single family. I started looking at the space and opportunity. As you and everyone else in the space realizes, it's actually bigger than the multifamily space.

When you live in New York, everyone thinks rental properties are the big highrise. In fact, there's roughly more than 16 million single family rental units in the US, then another 8 million duplexes, triplex quads. All in all, you have about 20 million rental units in the US owned by individual investors that owned less than 10 units.

These owners actually can't solve for this risk which is if the tenant goes bad. The smart owners are getting professional property managers or actually better at picking tenants at the established processes and procedures. They're getting bad tenants out. It can help manage those properties and have better outcomes. But still, when there’s a loss of rental income due to tenant default, there is no protection.

In fact, my business partner and co-founder, Viken, had a property in New York City that he was renting. Person just skips town in the middle of the night. He was left with close to $20,000. It actually might have been north of $20,000 loss because the tenant just left the unit and didn't say anything. It took awhile to get it rerented. He had no coverage. If he had, it had no protection against that. If you had Steady or some of these other providers that are popping up, they could've indemnify themselves from that loss, and could've been made whole for a modest premium.

Long story short, there's a big need in the market to this type of product. What we're really excited about is working with all the property managers across the country to help ensure this is product underlying landlords and finding ways for everyone to win.

Jason: Cool. Let's talk about the product specifically. Explain this to somebody that's never heard of this. They might even be an unseasoned property manager. Describe the problem that exists, that this solves for.

John: Sure. When you look at it, if the tenant goes bad whether it's professionally managed or not—let’s suppose it’s some professionally managed properties; that's really who we're serving here in this podcast, and who we speak to—if their tenants goes bad, the owner's mad at them. They might've lose that door because guess what? They probably picked the tenant. They were entrusted by the landlord or the owner to find the tenant, to select the right tenant, and now the tenant's bad. So, the owner's mad, they might lose every relationship. The owner's also rental income. As a result, property managers also lost their property management fee income. Generally, they're charging based on the property management fee.

If you look globally, across Australia, New Zealand, and Europe, this type of insurance product, rent default insurance, is widely available and widely adopted. The reason is that, if you look in other jurisdictions, primarily Europe, it's flipped from the US. It's about 70% renter 30% owner. As we know, post financial crisis, more and more US consumers are now choosing to rent instead of own. So, the property management space is going to be larger and the rental property market is getting larger.

As this is occuring, we think that more and more people will be in need of this insurance because we have a growing market. The insurance itself indemnifies and there's different flavors. We'll speak generally about rent default insurance and what's out there as opposed to Steady, specifically. What we want to do is educate the market on the availability of these types of products.

Rent default insurance, generally speaking, indemnifies the owner against losses as a result of the bad tenant outcome. It could be eviction, tenant skips, et cetera; different programs to different coverages. What this does is it allows the owner who can't self-insure due to the diversification to recoup losses if they are unfortunately stuck with the bad tenant that stops paying rent or needs to get evicted.

Different people had different approaches to it. Us at Steady, we've taken a lot of the learnings from the online lending space using technology to streamline processes, operations, and try to deliver a great product that are at a reasonable price to the end market.

A lot of property managers are saying, "Hey, this is great. This is a huge concern that my underlying owners have. What happens if the tenant doesn't pay rent?" They see property management companies out there that have eviction protection plans or other plans. You've got the SureVestors, the Rent Rescues, and a bunch of other great companies out here, all serving for these types of risks and helping solve these pain points.

The reason for that is this huge market is a huge concern. If you've got one property, say you own a home and you move for work across the country. You can't sell your home or whatever reason you have. You put it with the professional property manager. They're managing that, but you're relying on that cash flow for maintenance, upkeep, taxes, et cetera. In many cases, to pay the mortgage.

If that tenant goes bad, all of a sudden, you're break even or your cash flowing property gone upside down and now you're coming out of pocket. You now have a liability that you have to come out of the pocket for every month. That's a big pain point, a big concern, and what these types of products do is solve for those types of risk, help landlords have peace of mind, and protect against bad tenant outcomes.

Jason: You name dropped some of your own competitors, which is very generous of you. How does Steady standout or differ? How do you compare, standout, or differ in the space?

John: We've taken a bit of a different approach on how we can structure our products and policy. A lot of other competitors, not just in space but in insurance generally, what they do is copy and paste what other products work on their markets or other products that other people have launched, and there's not a lot of innovation. As a result, we haven't seen a huge take rate for these types of product in the US.

What we found—you might feel differently—my business partner, Viken, grew up in Paris. What works in Europe doesn't necessarily work in the US. What works in Australia doesn't necessarily work for the US. What Viken and I did when we came together is we deconstructed how these programs work globally. We took a lot of the learning from online lending to build what we believe is a better program here in the US.

One differentiation is automation. Our entire process is fully automated. We just set an email prior to this event saying, "We are now in 20 states." We've got the ability to be in all 50 states. The reason we're not in all 50 states right now is because we want to automate everything. It is going slow to go fast. As we start to take it off here and ramp because the updates have been very strong, it's continuing to go stronger daily, everything will be automated. What that will result in is more efficient processes, procedures, and better pricing.

Jason: Explain what that means so everyone understands. You're saying that automation is a differentiator and that it's fully automated. What's automated?

John: A property manager or a property owner can go online to the website, inquire about rent default insurance on their own, and complete the entire process in less than two minutes. There's no human interaction necessary and they could do everything themselves. Now, newer company, newer brand, we’re lucky to be aligned with the very strong brand in the insurance space, but nothing's perfect. As you know, as an entrepreneur, you think you've got something perfect and they realize you need to make it better. That's how the process works. It's constant iteration to get better, and better, and better.

Jason: The perfect businesses are out of business.

John: Right. We continue to constantly push new development releases and streamlining things. What we believe is that, if you can make the process as easy as buying, say for instance, travel insurance when you're buying a flight and make it that easy, that will be a great outcome for us and for this market. The way which you can do that is through API integrations, the right product structures, the right creativity, the right business development strategies, et cetera.

If you look at our product, where our technology is our technology, our product is our product, the two weren't built separately. They're built together. They work very closely together and in tandem. Because of that, it allows us to deliver a great customer experience, a frictionless process, high scalability, and keep headcount well.

Right now, our biggest expenses have been legal and engineering, as you can imagine. It's a technology company, but legal because we invest heavily in making sure that we do everything right and by the book. Also, that our partners do things right by the book.

As you know, the property management space has some instances where people have more of a cavalier or cowboy type approach that works until it doesn't. For us, we have ambitions to be a very large company and we operate in a highly regulated space. It's non negotiable for us to run into issues on the regulatory front or have our partners run into those issues. We take that very seriously and focus on in making sure everything is done the right way.

Jason: That makes sense. The number one challenge when it comes to any solution or software or third party service is adoption. It's how easy is it for them to adopt this and use. If adoption is a challenge, then it's not going to work. It's not going to grow. People are not going to use it or it's going to be confusing or frustrating.

I'm a big Apple fan. Apple made adoption very easy. My AirPods, I just hold them out, open them up, my phone just show them on the screen, and they connect. It was magic, it's easy, I didn’t have to fill around weird Bluetooth settings or hold down buttons. What you're saying makes a lot of sense.

You've mentioned that it's easy for the consumer or for the property manager. One challenge that I see a lot of firms run into is when you're servicing an audience that's servicing that same audience. You almost can become competitors with them. How do you negotiate that? How does the property manager still have a competitive advantage against them just working with you directly?

John: I guess, education, awareness, and understanding. People [...] this in massive market. People don't even know about this product. One parallel I draw frequently is pet insurance. I’ve got a pet, I’ve got a dog who's five now. I have pet insurance that I pay $70 or $80 a month. They haven’t got a good plan because the vet at the time said, "Hey, you should consider pet insurance if there's ever an issue."

To me, the asset there is the pet. A little bit different than a rental property, maybe not as emotional as a rental property would be. They said, "Maybe you should look at this." It's a similar thing as what you're seeing happening in the property management space. Property managers are the fiduciary, the trusted advisor to the asset and the asset owner, which is the landlord or the small rental property owner who's contracted the property manager for their services. If they can be introduced to this product, it's for their benefit.

We don't have a big direct push. We're not looking to go after single family rental landlords directly. Our entire business model is predicated on partnerships. Based on our analysis, there's roughly eight million rental units in the US managed professionally. We've love to see that grow larger. Those are also, for us, we believe the best risk. As I touched on earlier, we believe strongly that property managers are better at picking tenants, have an established processes and procedures in getting bad tenants out, and they can get units rented more quickly.

Jason: Which lowers your risk as an insurance provider.

John: Correct, which results in better outcomes from the underwriting perspective.

Jason: Okay, makes sense. Your interests are aligned directly with property managers. They're your focus.

John: Yes. They are our focus. We just did a giveaway today to property management conference for people that could enter. We view property managers as our partners. Again, the reason I mentioned some of our competitors earlier because the rising tide lifts all boats. We want to see everyone do well, we want to see landlords have access to the solution so they get better outcomes, and we want to see property managers to be able to benefit from this as well.

Jason: Yeah, I love it. I believe that too. I have said before, rising tide raises all ships, but sometimes the bar is so low in property management in some areas and in some markets, that I don't think every ship's going to rise. Some have too many holes and are going to sink, but that's okay.

John: That's right. That's Darwinism.

Jason: Right, survival of the fittest. What are some of the most frequently asked questions or concerns that property managers are asking you or have been asking in sales conversations? So that we can make sure we address them here on this show.

John: A lot of things that a lot of property managers ask is simply how it work. We have an FAQ section on our website and we can share the link on it. "How does it work?" "Why does this exist?" "How can no one else is doing is?"

As I catch on, this is the third time I'll mention SureVestor, Rent Rescue, and others. The awareness is growing and that's what the biggest challenge is for all of us in this space is awareness that these types of solutions are available. This isn't like rental insurance or pet insurance. Pet insurance, I guess, is now becoming widely adopted, but people don't know about it and don't understand it. Most of the reactions we got is, "Wow, this exists? This is great. How does it work?" "Wow, that's inexpensive. This makes a lot of sense." It all depends on the property address, the rent amount, and the pricing.

Jason: For anyone that's confused, let's just explain the difference between renter's insurance and rent default insurance.

John: Renter's insurance covers the renter's possessions and liability to the landlord, generally speaking. It's paid for by the renter and they're doing it, so if there's a fire in the unit, they're not covered from the landlord's policy. Their possessions are gone. The landlord gets the unit rebuild, the house rebuilt, but they don’t receive anything. Now with renter's insurance, then we get some coverage for that.

From the landlord's perspective, if the renter has renter's insurance, they have a guest over, they slip and fall, and break their leg, it protects the liability to the landlord for them getting sued from that slip and fall. That's renter's insurance.

Rent default insurance, it depends on the program. Different people, different features. Generally speaking, it covers loss of rent due to tenant skips, eviction, and tenant nonpayment for whatever reason.

Jason: Sometimes, we have to make sure things are at an 8 year old level so that everybody gets it.

John: I generally need things at an 8 year old level to understand.

Jason: Right. Most entrepreneurs do because we're just so damn impatient at paying attention to things sometimes.

All right. We talked about how it works, why is anyone doing this. Any other frequently asked questions that people are concerned about?

John: "What's the catch?" generally. Insurance companies, for better or for worse, generally don't always have the best reputation for making it easy to make claims, et cetera. That's another thing. Some people want to see the policies and see things in that nature.

Again, the big thing is people just don't understand these types of products exists. That's why we're out there educating the market and letting people know that there are these types of coverages available and you can get the coverage to these types of risks.

Jason: Let's touch on the benefits for a property management business in having this in their repertoire of services and how this can help them sell and close more deals, give them the competitive advantage, maybe.

John: What do you see is property managers are now looking at this and some are saying, "I'm just going to include it in all my plans," and say, "This makes a lot of sense.” Now, we've got a differentiator. All of my property management packages include three months of rent default insurance if the tenant goes bad. They're out there marketing and saying that it includes it.

Others are saying, "This is interesting. How can we offer this and earn some B revenue?" The only way it works, as I touched on earlier with compliance, is you can't get paid for the sales, solicitation, negotiation of insurance, unless you're an insurance producer. You can do other things such as marketing fees, et cetera, but you can't make conditions on the sale, solicitation, negotiation, and insurance.

That's why we spend so much to make sure that anything we do, anything our partners do in partnership with us, is fully vetted and above board. We make sure everyone stays on the right side of the rules.

Jason: Do they become somewhat of an insurance agent? Or you're just laying that all together?

John: No. They do not become insurance agents in any way, shape, or form unless they've got an insurance agent license. Then, they could be an insurance agent, obviously.

Jason: Okay. John, it's great to see an entrepreneur doing something that's impacting the industry. I believe these products are going to have massive ripple effect in the industry. They're going to create a lot more safety and certainty in the property management space. It's going to lower the risk. It's going to lower the pain threshold for landlords to trust somebody else to manage their properties. It's going to protect all the parties involved and that means it's going to help the industry grow.

If Australians, somebody said their markets are any indicator, it seems like these types of products help these markets grow significantly in a relatively short period of time, over a decade. They've grown phenomenally. I heard stats like Australia's grown through 25% in a decade. Largely, they claimed that it was connected to that. I don't know if that's accurately or true, but if that were true and the industry—single family residential—were maybe about 30% are professionally managed, that almost be our industry doubling here in the US. I don't know that there's enough companies here in the US right now to handle that level of growth. That would mean we need to double the amount of companies or we need to double the size of every company that exists. Something in between that.

John: Or let's double the size of every company that exists. That'll be a good outcome for everyone.

Jason: Yeah. Regardless, I want to make sure that we've got the best. Let's raise the tide. I appreciate that you're seeking to raise the tide. I think collaboration over competition is what builds market, it's what builds the category. It's always important to build the category before you try to build the individual brand. That's Marketing 101, everybody.

Property management is in the same boat. Property management has very low awareness, in general, here in the US and right now, we've got a lot of people going around something in their chest, trying to fill their individual brand. We need to build the category first. There's a lesson for the industry to take away from what you've mentioned and what's going on in what you're doing, so I appreciate that.

John: NARPM’s done a good job trying to get the industry moving in the right direction. People like you and a lot of others that are trying to educate and build awareness are very helpful as well. It's great to see everyone working together in some way, shape, or form.

Jason: There's no scarcity in property management. There just really isn't. There's 70% in single family residential that are self-managing right now. That does not indicate scarcity. In certain channels of marketing, there is a lot of scarcity because everybody's doing the same stuff, there is scarcity.

John, I appreciate you coming in the show. How can people get in touch with Steady and learn more about this?

John: They can go to the website www.steadymarketplace.com or shoot me an email john@steadymarketplace.com.

Jason: Perfect. John, I appreciate you coming on the show, I appreciate what you're doing, and I wish Steady success.

John: Thank you, Jason. Thanks for having me.

Jason: Check them out at steadymarketplace.com. If you are, for some reason, not getting the growth that you want, you're growth is good, but you want to pour a little gasoline on that fire, if you find that you're getting a lot of your business lately from word of mouth, and from the trust that you built in the marketplace, I would love to pour gasoline on that fire.

That's what DoorGrow specializes in, optimizing your warmly funnel and optimizing your business for more organic growth, which is a lot less expensive than showing up tens of thousands of dollars a year towards pay per click, SEO, and everything that everybody is competing and already doing.

Like I said, I don't believe there's scarcity in the industry, but I believe there's false scarcity that's been created by marketers, and you can avoid that. For those who can't see, I'm wearing my "SEO won't save you" shirt. A lot of people are relying on SEO to save you.

Don't get me wrong, SEO is great. If you have the top spot in Google, that's great to have search engine optimization. But there are things that are better than having the top spot in Google like being the most trusted company in your market. Our whole system is focused on building trust for your brand, for your business, and helping you to go after that blue ocean where there's all that business available; that 70%.

I appreciate John being on the show. Until next time, to our mutual growth. Bye, everyone.

Download this Episode

Sep 17, 2019

Freedom of time, money, relationships, and purpose is what we all want. Property managers, realtors, and investors help clients build wealth through real estate.

Today, I am talking to Steve Welty, owner of Good Life Property Management business and podcast. He enjoys meeting amazing people and indoctrinating listeners with his philosophies.

You’ll Learn...

[03:23] Stop whining about solvable issues, such as online reviews to get warm leads.

[04:41] Steve surfs to success with Good Life Property Management.

[06:43] Podcast Passion Project: Do content for content's sake; add value to people's lives for opportunities and connections to come your way.

[10:19] Don’t lose focus on why and what fires you up; limit time and effort spent on your business to achieve outcomes.

[15:00] Purpose of Business: Not to make money; build a business that makes money.

[16:25] How to be happy: Create momentum for other people to gain momentum. If you wish to become great, learn to become the servant of many.

[18:12] Zig when they Zag: Success outside outsource sandbox to reduce costs.

[18:55] Results-based Biz: Hire young, smart, motivated people and leave them alone.

[19:31] Big Issues, Big Success: More people can lead to more problems; paint a compelling vision to keep good people and let them do what they want to do.

[20:10] Move Out and Outwork Others: Create freedom of time and money by hiring CFO or profit first coach/accountant to offer advice, not control over finances.

[26:10] Value-add Revenue Sources: If you don't charge for it, you're doing it poorly.

[28:25] Opportunities in Other States/Markets: Pop-up shops to buy cash flow property.

[29:05] To Die List and Time Study: Procrastination problem property managers and owners experience.

[35:00] Barriers/Protections: Teach team and customers how to treat and reach you.

[37:35] Opinions vs. Observations: Co-creation/coaching is transformational and transactional superpower that changes lives.

[46:45] Give up control and allow people to fail, or you create an unsafe business.

[52:30] What Matters: Million ways to get to end results and outcomes.

[54:05] Hire and Fire: Center on core values; be reliable, positive, and go-giver (RPG).

[57:10] Epiphany: Everything worthwhile lives on the other side of fear.

[1:03:05] Money is one side of it. Easiest decision to make is to be a different person.

Tweetables

Do content for content's sake.

Limit time in your business; achieve outcomes with least amount of effort.

Add limitations or constraints to create a necessity for innovation.

First key to greater time, money, and purpose is to create space for yourself.

Resources

Steve Welty’s Email

Good Life Property Management

Good Life Property Management Podcast

Steve Welty on Spotify

Steve Welty on Apple

PM Grow

Orange Tree Property Management

GatherKudos

National Association of Residential Property Managers (NARPM)

Brad Larson

Gary Vaynerchuk

The 4-hour Workweek by Tim Ferriss

Todd Breen

Making Money is Killing Your Business by Chuck Blakeman

How I Built This with Guy Raz

Let My People Go Surfing by Yvon Chouinard

Voxer

Jason Goldberg (Strategic Coach)

Extreme Ownership Book

E-Myth Book

The Go-Giver

KingJasonHull’s Whimple on SoundCloud

DGS 95: 5 Characteristics of Successful Property Management Companies with Marc Cunningham 0

Transcript

Jason: Welcome DoorGrow Hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you're open to doing things a little bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it, you think they're crazy for not, because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income.

At DoorGrow, we are on a mission to transform property management businesses and their owners, we want to change the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull. The founder and CEO of DoorGrow. Now, let's get into the show.

Today's guest, I’m really excited, we’re hanging out with Steve Welty. Steve, welcome to the DoorGrow show.

Steve: What’s up Jason? Good to be here.

Jason: Steve and I were reminiscing. I saw Steve at a broker owner conference, the very first one I went to several years ago and we were sitting at the same table and I guess I said hi to you and we were chatting it up.

Steve: Yeah. It's funny, I remember that day very vividly and it's interesting because I have a very poor memory. You were the mysterious man behind me and you were dressed really nice.

Jason: I don't dress nice anymore. I'm too lazy now.

Steve: Yeah, you're just soaking it all, but we were talking before the show, was that really one of your first conferences?

Jason: That was the first conference I'd gone to, yeah. My dad had just started property management business. He's got maybe about 200 doors now, but he had just started a property management business. He had been a hospital administrator for 30 years or something and he said, “I'm going to do what Bryan’s doing and start a property management business.” My brother has got maybe 1000 doors or something like that and he is out of Orange County. Not too far from you down San Diego. He thought, “Bryan’s doing it, maybe I could do this too.” He decided to become an entrepreneur.

Caught the bug. It's been fun to watch that, but I was like, “Dad, let's go do this. I want to see what happens there. The only way I can go is if I'm with you, you're a broker owner.” I was his director of marketing and I was just the fly on the wall for Orange Tree Property Management, just checking out what goes on a broker owner. I just want to see what happened there.

It was challenging for me though because the entire time I'm hearing people talk about problems, and challenges, and I'm just biting my tongue the whole time. I’m like, “I could solve that challenge. I can help with that.” I just had to sit there and be quiet. I've even got a text message from one of my clients that was sitting in the room and he said, “I'll bet this is just killing you right now,” I texted him back, “You have no idea.” It was just really funny to hear people whining about stuff that I think is solvable.

Steve: What was something out of all those issues you're biting your tongue about that you can reflect on today.

Jason: Now you’re interviewing me.

Steve: I'm interested to hear that.

Jason: I remember one of the things that really killed me was people were like, “How do you deal with your online reviews? How do you get more positive online reviews?” We have our system GatherKudos, and we have coaching material around that that we’d go through with clients to figure out how to identify peak happiness, leverage a lot of reciprocity, how to get more reviews, how to build a system in your business as part of your onboarding process with new tenants so you get more reviews. I think that's a better system to have than even most marketing systems, because that creates warm leads. I was just sitting there listening to them talk and some of the ideas were, “We're okay, we're good,” but I was like, “This is so solvable.”

Steve: Reviews are still a big issue, six years later or whatever it is.

Jason: Correct.

Steve: People still can’t figure it out. It’s tough. I still try to figure it out on a daily basis.

Jason. Yeah. Cool. Steve, you've got an awesome property management business. You've got your own podcast that you do. You've got a lot of stuff going on. Help my audience understand who you are and give us a little bit of background on Steve, your adventures in property management, and how you got into it.

Steve: For sure. I graduated from San Diego State 2005 and stayed in construction for a little while. I was working with constructions in college, just bumming around, surfing, and doing whatever I was doing. Got my real estate license finally and did some deals 2006-2007. I hear a lot of stories like this, it’s like 2006-2007 sales, all of our sales, we should start a Facebook group for sales guys that flamed out, well I think it is, it’s probably called than NARPM of Facebook group. It seemed like everyone has that story.

I made some nice checks in sales and I thought I was great, and then I became broke very fast. I was 26-27 and I was broke. I was applying for any job that I could get and I went to work for a French entrepreneur in Carlsbad as a personal assistant. He wanted someone to manage his property manager that had a real estate license because he didn't trust his property manager.

Jason: Okay, so you were the spy that was going to monitor whether he was doing his job or not.

Steve: Yeah, most managers hate it when the owner micromanages you. Imagine a realtor micromanaging you. I was like, “Yeah, I can do that,” I never managed anything in my life, but I figured it out and worked with him. He actually taught me some great business lessons looking back, but two years in, it was very stressful working for him. He was not the nicest guy, but he did teach me a lot and then I went out on my own with a business partner at the time. We decided, “Hey, let's start our own management company and just got it enough off the ground to allow me to quit my job, be on property management with my partner I think in 2008. We grew that until about 2012 and then we decided to part ways. I started Good Life in 2013 and then been doing Good Life ever since.

I started the Good Life Property Management podcast which has nothing to do with clients, nothing to do with getting new customers. It was really a passion project and something I learned out of that was that I encourage people to do content for content's sake if their heart tells them to do that. A lot of times we try to figure out, “Well, how am I going to monetize that?”

I remember when I asked Brad Larson, I think he was one of the first people to do a podcast that was a property manager. I was like, “What are you doing this for?” and he was like, “Oh, it's fun,” I was like, “It didn’t make any sense, you're wasting time.” When you add value, like Gary V—a lot of people have really put this in the forefront—when you add value to people's lives, opportunities come your way, connections come your way.

I have so much fun doing the Good Life Property Management podcast and we serve the same community you serve which is property management entrepreneurs. I don't run ads. I have ran ads in the past, but I don't anymore. I don't necessarily get anything out of it other than just meeting cool people and getting to indoctrinate my listeners with my philosophies which are really along the same lines in a lot of ways as you, Jason. I really resonate with your manifesto in a lot of ways, so that's cool. That's it.

I'm big into music. I do a lot of music. Steve Welty, I’m on Spotify and Apple, and that's my passion. I'm going more and more into that. Also, we have tried mastermind for property management entrepreneurs to max out their business and life. That's what's up for me.

Jason: Cool stuff. I think we have a lot in common. Not only are we both California guys. A lot of people listening may not know this, but I had a band in college. I wrote all the music, I played guitar. I didn’t know I was an entrepreneur then. I didn't know that was in my blood, but I was the guy going door-to-door with a guitar and a clipboard pre selling CDs at girl’s dorms that I could fund to self-produce an album, and I was playing music.

Steve: That’s [...].

Jason: I know, it was pretty crazy. The album is on SoundCloud if people are searching for it.

Steve: Let’s check it out, what’s it called, how can we find it?

Jason: My username on SoundCloud is my username everywhere, which is KingJasonHull, and the album is called Whimple, that was the name of my band.

Steve: I love it. I think you told me that a while back, but I forgot, but I'm really fascinated with that because that was my story, too. I was a songwriter. That was hustle. I give you street credit like going dorm-to-dorm, playing for chicks, that's pretty cool. I thought I was going to be a rock star. That was my deal, but it's so funny looking back. I didn’t even practice. I just thought I have the natural talent and I used to drink a lot so I was probably delusional.

I had this moment, this crossroads where I was like, “Okay, you're not going make it,” I'm not going to be okay being older and broke, so I'm going to go on a business route. I just gave up music completely, and then I was in a strategic coach workshop. I have given it up five or six years and I met this entrepreneur. I was telling him about my story. I was like, “I don't really play music anymore,” and he's like, “Oh, that sucks.” I’m like, “Yeah, it does suck.” Then he’s like, “Well, you have a guitar in your office don’t you?” and I was like, “No.” He’s like, “Well you’re the boss, aren’t you?”

Jason: I can see it right behind you.

Steve: Yeah, right now I do it. He’s like, “You’re the boss.” I’m like, “Yeah.” He’s like, “Well, why don’t you try this, try just putting a guitar in your office. Just make a commitment to picking it up once a day even if it's for one second.” It really resonated with me because I had given up a part of myself that was really important because I think a lot of time as business owners, we just get so focused on like, “We got to make this company work,” and we’d lose focus of why and what fires us up on an internal level.

I did that and that about two years ago, fast forward to today, I'm putting many hours a day into music, into song writing, into recording, into building my audience and it's helped my business so much because when you limit the amount of time that you're in your business, you can only do the things that you're really good at and so that's what I'm really passionate about, is figuring out how can I achieve an outcome with the least amount of effort possible.

Jason: Yeah, because when we add limitation or constraint, it creates the byproduct of limitation or creating a constraint is it creates a necessity for innovation. If you have unlimited amounts of time, unlimited amounts of money, unlimited whatever, there's no innovation because it's so easy to be lazy. It's so easy to just let things unfold in a different way, but when we have some time constraints or we have some financial constraints, we have to get creative and that's where the genius starts to come out, that's where new ideas start to come out.

I've noticed that even with team members, if I say “I need this done by this time,” they get creative or if I need this done under this budget, they get creative, then they start to innovate. If I say, “Yeah, do it whenever, take as much time as you want, spend as much money as you want,” there's no innovation. They're just going to go towards whatever seems easiest, which is the status quo.

Steve: Yeah, you nailed it. I've been really interested in constraints. I had a son, my first child, he’s six months old, Myles, and I was encouraged by a friend of mine. He said “Take 30 days off, Steve,” he's like “It'll be the best thing you ever did for your business. Don't check in, don't do anything. Take 30 days off. Be with your son.” It was in December, so it was like the perfect time and so I did that, and man he was right. It really levelled up my business, my team got way better. They were already good, but just putting these things into place that force you to grow. That 30 days off was huge.

Next year I'm planning a 60-day trip to another country that I’m really passionate about using that. I even got my operations manager. He doesn't work out of the office anymore. I moved out of my office a long time ago because when you're in the office, you are often the bottleneck for your company and everyone comes to you for the answers and the solutions. I really grabbed on to that concept and constantly looking for new ways to use constraints to my advantage.

Jason: I love it. It's been awhile since I've told the client to do this, but a lot of clients will ask questions like, “How do I become a business owner instead of my own best employee?” I would tell them, “You just start doing it. You take a vacation.” If you schedule a week-long vacation, if you're not taking vacations, for those listening, you schedule week long vacation and you can't take off a week, you're going to have to figure out how to make everything not fall apart for that week. To go 30 days, that's incredible, 60 days is ridiculous, that's pretty awesome. At that point, you've arrived as owner of the company instead of being your own best employee.

I noticed when I would take off time or vacation, I would be surprised by how my team would step up. I'd be surprised by the things leading up to that vacation, more would get done than would get done sometimes in months. There are so many little things that you need to get dialed in. “Oh my gosh, they’re going to be gone for a week. How are we going to live without Jason? We got to get this.” My team would say, “Hey Jason, I need this,” or, “I need to access to this,” or, “I need to know how to do this.” Suddenly everybody's rallying around this idea of taking some stuff off your plate because they need to be able to make sure things don't break and it creates the possibility for you to do that more or forever.

Steve: Yeah, and I think its baby steps. I remember when I first read the four-hour work week. I thought Tim Ferriss was a god. I was like, that makes no sense.

Jason: Did you almost move to Thailand?

Steve: Close, but no, it was just really interesting. I guess from a personal level, having time was even more appealing than being a billionaire I guess to me personally. When I see people like Todd Breen and other people talk at NARPM that would talk about running your business from the beach or not is just very appealing to me. I wanted to grow a self-managing company and it was baby steps.

There's this book called Making Money is Killing Your Business and they say it really why. It says the purpose of the business is not to make money, it's to build a business that makes money, like time and money equals wealth. Your business should throw off time and money. Now, if you want to then use that extra time to just pour more time in your business, doesn't mean you got to go live on a beach. You could do other adventures. For me, what's really worked and what I'm super blessed to have now is that it's created space in my life to actually start cultivating the other things that light me up, like music, other things. It gives you those options, but that's what I think in our industry especially in a lot of industries, we want to help people, help them anyway we can to experience that.

Jason: They say, “What the world needs is people that are alive” I think as entrepreneurs that's where we feel. We want momentum. That's what we crave. The rest of the world, they're just trying to figure out how to be happy. “If I could just be happy then everything would be great.” It's whether they're happy or sad, depressed or excited, but for entrepreneurs, I feel like our two speeds are momentum or stuck, that's it. It’s momentum or overwhelm. We either feel like we're in complete overwhelm, we’re stuck, we can't move forward or we’re frustrated, or were on fire and alive. That's my version of happy or sad. I want to feel like I'm in momentum and I feel like as entrepreneurs, we get momentum when we give it away. When we create momentum for other people, whether it's our clients or the people in our family, the people around us, when we're creating momentum for other people, we get that sense of momentum, too.

Steve: Yeah, and that's something I resonate with and I’ve heard you talk about it Jason. I love that message. I really think that the blue ocean is caring about people more than anyone else, like proactively putting the people in your life in the forefront, figuring out, “Who do I want to be a hero to?” and being a hero is usually used in a reactive way.

Jason: Right, like there's a crisis or a problem, now you're going to be a hero.

Steve: Right, as opposed to being a proactive hero like spending time and saying, “Okay, who are the most essential people or buckets or groups of people in my life and how can I serve them more deeply and impactfully today,” because the best quote of success I've ever heard is something like become a servant of many. If you wish to become great, learn to become the servant of many.

I sometimes get a little jaded in certain groups because you constantly hear the feedbacks, the reduce the cost, the get it all out sourced. I use VAs, I look to reduce cost, I look to get fair fees, so I'm not knocking that, but everyone's playing in that sandbox. I'm very interested in seeing what is everyone else doing and how can I do the opposite because that's one of the ways to become successful that I've learned is that you go zig when they zag. That’s cliché.

You can't do that when you're buried in tenant complaints and one-star reviews and a team you have to micromanage. I'm a big believer in hiring young, smart, motivated people and leaving them alone. We're a results-based company at Good Life. You can work from home, you could bring your dog, although actually our manager of our building said we can't anymore. I don't really care, with the exception of a couple like the front desk needs to be there in case someone walks in and things like that, but do your thing. There's a great podcast I heard yesterday on how I built this with Guy Raz where the owner of Patagonia wrote this book called “Let Them Go Surfing” and it's all about that.

I think our biggest issues once we get to a certain size is people problems, and then we don't know why we can't keep good people, it’s because we don't paint it in a compelling vision. We micromanage. We don't let them do what they want to do. We try to fit corporate bureaucracies into the more entrepreneurial company that people want to be a part of these days. Would you rather follow just checklists and not have a future or would you rather be able to create your own future? Like I tell my team, “You can become anything with me. The sky's the limit wherever you want to go.” So, I think those are big parts of success.

Jason: That's really what we're talking about today. The topic is freedom of time, money, and relationships through better business practices. What are some of the practices that you've implemented at Good Life that you feel like you've created more freedom of time and money?

Steve: It starts with the business owner and probably a series of game changers. The first was moving out of my office. I had this epiphany and I was taught this by someone and I told the team, we had a meeting, I said, “I apologize. I've stood in the way of you guy’s future and I apologize for it. When I'm here, I'm the bottle neck. I'm stunting your growth. You can come to me for all the answers,” and the fact is as entrepreneurs if you serve 100 people and say, “Where do you do your best work?” nobody says at their office, who does the best work at their office? Why are we working out of our offices? It's just because that's how it's always been done.

I kicked myself out. I don't have a desk at my office on purpose. I used to have the stereotypical nicest office in the corner with the best view, and then it freed up so much space, it helped my team grow. Once I created that space, now I work out of my home, and the first key to greater time, money, and purpose is to create space I believe, for yourself. I came from a place where three or four years ago, my dad always taught me outwork everyone else. I remember one time he came to visit me at a college and he asked me how much I was working, I said about 60 hours a week. He’s like, “60 hours? I work 60 hours, I'm retired. What the hell is wrong with you?”

Jason: Step it up Steve.

Steve: Yeah, and it's great. I love my dad. His work ethic was the reason I'm here today, because it got me to that. There are seasons of life. I knew there had to be a better way, so when I'd made that decision to move out of my office, I said, “Hey, you guys are going to have a bigger opportunity to move up now.” Some of the other things we did was hiring an operations manager. That was huge. That created space and that was something I look forward, and it took me probably eight or nine months to pull the trigger on that, but the operations manager was huge.

Slowly but surely, I went from just being stressed out all the time, not having any space in my life. An over-scheduled entrepreneur has no time to transform. I said, “Alright, I'm going to create some space,” and then all the ideas and all the answers start bubbling to the surface because spiritually we all have all the answers inside of us, just we’re so distracted and so just going that we don't allow it.

Jason: We’re preloaded, we're in fight or flight, we're up in our monkey brain, and all the great things, our greatest geniuses as an entrepreneur can't bubble up or can't come through when we're in that state.

Steve: Exactly, and so that's time that just forced me to get more time because as an entrepreneur, you can make that decision.

Jason: We’re buying time. Every person that we pay on our team, we’re buying time. That's what we're buying. I think the mistake we make as entrepreneurs, a lot of entrepreneurs I see, they go hire based on an org chart. They don't hire based on what they personally need in order to off load or get themselves out of the things that they don't really energetically enjoy. You getting an operations manager if you're a visionary entrepreneur is brilliant, because that's like the yin to the yang. It's the exact opposite personality type of the driven entrepreneur is to have somebody that is systems-minded, process-minded, and that can make sure everything's running. Generally, us entrepreneurs, we’re terrible managers. We think we're great at everything, but we're really terrible managers and usually the operations manager is much better at making sure everything runs smoothly.

Steve: It's hard to take off or get more time initially if you don't have the money. The money component is important. I went on a Mastermind trip to Mexico a few years back with a handful of people and we looked at everyone's P&L and that was one of the biggest game changers for me was not only understanding my numbers. I think everyone needs a CFO at least part time or at least some outside eyes on the business is so important.

Jason: I have a profit first coach and accountant. I'm not really a big fan of having a CFO in a business. Usually, my take on it is every story I've heard of embezzlement or of challenges it's always like the CFOs, and so they're also the crusher of all hopes and dreams. I don't want somebody making too big of decisions there personally, but I want to be coached, and I want to have input and I want to have insight from a third-party perspective, but I don't want them to have control over my stuff.

Steve: Totally. I get that. I don't have a CFO, we use a profit coach.

Jason: Yeah, similar thing.

Steve: Right, but I found that I wasn't going to build a business I thought I was going to build because I'm a feel guy. Like I learn by doing. Does this feel right and I’ll make a decision, but I make decisions very quickly. I'm a high quick start, so I'll make 10 decisions, eight will be bad, two will be great but in the same time that someone else makes one decision. I sometimes can stay a step ahead, but I had to add some revenues and I wanted them to be value-added revenue sources where everyone was a win-win-win, so things like doing inspections better in charging for them. When you don't charge for something, you usually do them poorly. Every manager that doesn't charge for inspections, I guarantee 90% of you are behind on your inspections.

Jason: Let's say that again. I like that concept. If you don't charge for it, you're probably doing it poorly.

Steve: Right. I'm a believer in this. Just take inspections for example. You go survey people around NARPM or any property management group and everyone's behind on their inspections so they don't do them right. We send a letter to our clients. We said, “Hey, inspections are actually really important. This is when we identify how well the tenant is taking care of the place is when we get out in front of preventive maintenance and it needs to be done well, so we need to hire someone to do this full time and we want to invest in this X amount we charge. It’s going to probably save you three times at least that amount by getting out in front of some of this stuff,” so that was a win-win and our clients loved it.

Maybe they didn't want to get charged initially, but once they saw the improved inspection, once they saw the improved communication and results, that was a big win. Then just some other ones that we added in. I think you got to keep the investor fees-friendly. The worst thing we can do as managers is fee our owners to death and they’d get out of the business.

Ultimately, the freedom of time, money, relationships, and purpose is what we want, but it's a human need. It's what your clients want, too. So, we have a unique position as property managers, realtors, and investors ourselves in a lot of cases to help people build wealth through real estate. You're a manager and you make it easy, because if you don't make it easy, they burn out and they sell, but if they hold that house specially in San Diego for 30 years, that’s all you have to do and you've set your family up for life. They burn out, so we have a big position, a big part to play here.

Jason: I love it, and I love that it’s like a mantra, having others build through real estate, and ultimately what property managers could be allowed towards doing. It’s not just managing a property. If your interests are in line with theirs, which that's their goal. Their goal is to build some wealth, otherwise, why would they be holding on to that property.

Steve: Exactly. There's different ways to do that. Right now, we're looking at some other states to buy cash flow property and figure out how to have our owners follow us into some of these other markets. I think with technology these days, that's what all the venture people are doing, how to just pop up shops anywhere. That's something that's exciting to me right now because in San Diego it doesn't make sense to buy an $800,000 house that rents for $2800. We're sitting on some stuff when the market turns for San Diego, but yeah, there's different opportunities out there.

Jason: Alright, cool. What should we talk about next?

Steve: You know what I'm interested in? I actually thought of this today, and there's some things I've been thinking about doing that I procrastinate on. You know the saying…

Jason: I think every business owner can say that.

Steve: I know right?

Jason: I call it the to-die list. We all have to do list of stuff. Just last week, I have my weekly commitments and I realized I was carrying all of these things over from week-to-week. I'm the guy that says to my clients, “If there's anything on your to do list for more than two weeks, you're not the person that should be doing it.” That's the problem. Yes, we all tend to do that as entrepreneurs. We tend to hold on to things instead of finding the right person to do them or giving it up somebody else.

Steve: That’s so true.

Jason: Talk about the to die list.

Steve: Yeah, the to die list. I was thinking about this today. Two examples of things I have been procrastinating on. One, I don't want to answer email, anymore. I literally want to have email leave my life. I have gotten email down to just like 10 minutes a day at the end of the day, have an assistant, but literally that is still bugging me. I once got this really inspiring auto responder from this really smart cool guy, let’s see if I can find it.

Jason: I don't deal with email anymore?

Steve: He said, “Thank you for your message. Perhaps you are overwhelmed by email. In fact, last year I sent 43,742 emails, read and review countless more so in order to serve our stakeholders much more efficiently, I have asked my highly capable assistant that’s in New York to review, assign and reply all my email request moving forward,” and then it says some other stuff.

That's something I want to do, but it's big and scary, and yeah, I know I'll probably have to respond to some emails, but I'm talking about eliminating it more. I'm like, “Why don’t I just try that? Why do I have to make this decision I procrastinate on forever? Why don't I just try that?” I think it comes back to we don't want to fail like that, we're always raised with, “There is no try, it's to do or die,” or whatever. You don't try, you either do it or you don't, but it's like, “Why can't I just try that? I have an assistant. Why don’t I run that for two or three weeks and see how it goes?”

The other thing and I'm sure you've probably thought of this, Jason, is like Gary V, having maybe a semi full-time person doing vlogs, recording not just every few days, like every day. I'm just sitting on that and I'm like, “Well, why don't I just try it for like a freaking month?” I think there's so much possibility with that and I wanted to see what you thought because I'm like, “I don't have to commit to it.” There's so much stuff. Even hiring someone. I was thinking about hiring a GM or an operations manager for eight or nine months. What if I just said, “Hey, let's try it.” I mean this isn’t Canada or some other places where I don't think you can fire people. Try it, hire the person, and if it doesn't work out, let them go.

Jason: Yeah. Let's go back to the email and then we can go the other thing. Here's how I identify stuff. I mentioned this on the previous episode, but I personally will do a time study probably about once a quarter and if I bring on a new team member that takes something off my plate, because how I identify what I need to get off my plate is by doing a time study. I have to be accountable. Where's my time actually going and which things are low dollar an hour work, which things are things that I don't enjoy.

I actually write a plus or minus sign next to each thing that I'm doing, whether it energizes me or it drains me, and then identify the things that are tactical or strategic, things that are self-care versus family time. I have a whole system, I take clients through for doing time studies. When I do this, that helps me get clarity for what I need to get rid of.

I gave up email a long time ago because I hated email. It was always a minus sign, it was always tactical, it was never like my hopes and dreams were coming true when I was writing an email. I don't even look at my email. So, if you've emailed me, I'm sorry, I don't look at it. My assistant will take care of the email. She reads it. If she has any questions, she sends me a message through a walkie talkie app, because I don't want to type to her. She'll send me a voice message through Voxer.

We use Voxer and I use it with coaching clients, she will send me a Voxer voice message and say “Jason, what do you think, how should we respond to this email. They're asking this.” I say, “Just tell them this, this and this, but say it nicer than I just said.” Then she’ll take care of it, and she's asking me questions throughout the day.

We also do daily huddles as a team and that's usually where she gets most of her questions in. I say, “Is anybody stuck on anything?” She's like, “Yeah, did you get my message about this?” “No, I wasn't paying attention.” “Okay, what do you need?” I answer it and she can respond to the email for me. She's gotten really good at understanding over time, she gets better and better at knowing my voice, knowing what I would say and she takes care of more and more and more. Every day she'll give me a short list, “Here are the emails I don't know what to do with. You need to take care of these,” and I begrudgingly will deal with them within a day or two.

That's how it works. [...] then I’ll talk with them and move them forward, but outside of that, usually she hands it off to my team or has somebody else in the team deal with it. If it's support-related, I think most of my clients have learned that they're not getting a fast response by coming to me directly. They get their best response by emailing our support email address or system and so I think every property manager needs to do the same. Initially, when you're small you're the guy. They probably have your cell phone number.

Tenants owners, everybody, and eventually you change your phone number and you create some barriers and protections, you have to educate and teach people how you want them to treat you, and you’re going to teach your customers what are the right channels and you have to teach your team what are the right channels. My days are pretty quiet.

Steve: I love that. That's super inspiring. You fired me up even more and I love how you said it's tactical. It's very transactional-tactical. I want to be playing in the sandbox of transformational. I feel like I'm retired now because I do what I want and I'm blessed to say that. There's been a lot of hard work behind that, but I'm to the point to where I'm not going to do stuff that doesn't light me up and there's a small subset of tasks like creating content—podcast is one of them—that I could do all day and I have endless energy for. That's where I add the most value.

So, the bigger the impact on people that I can have is going to be when I'm fired up and passionate and not dragging off of email, but I think we don't give ourselves permission to do that. You saying that, I'm all in now. I was 80% in, Jason, now I'm all in. I hope some listeners are all in to move forward.

That's what I love about podcasts and other things with so much being shared these days. A lot of times we think things, or we know things internally, or we feel things a certain way, but we don't give ourselves permission to actually say that or feel that in public because sometimes we just need someone else to say it to give us the courage.

I've noticed that happening so much lately that I finally got pissed, and I'm like, “You know what? I'm making a list of everything that I believe in whole-heartedly, that I think is a little off mainstream maybe.” That way I can have it in writing and I'm just going to start saying these things because I'm tired of being, “Oh yeah, and I felt that way, too,” but I never said anything.

Jason: I mention this on the previous episode, too, that I've been really opinionated in the past and I've realized that I think I'm a little more humble now that I realized my way isn't always the exact right way for everyone, so I'm learning. I was just in Columbus for a week and one of the things that really hit me hard is that I've been really opinionated and I think it's important to put out things more as observations rather than gospel truth. Somebody may love email or somebody may hate doing podcast stuff.

Everybody is different and I think everybody's perception is different, everybody's experiences as to what works or doesn't work in marketing could be different, their market might be different. There are so many variables involved, so I think moving forward, my content is a lot more observational because I've realized I was attracting clients or creating monsters in the industry that are hyper-opinionated and the hyper-opinionated people become like, “Oh my God, [...],” but the problem is they create a lot of negativity in the industry. They become the rampant [...] guys that are heartless, that want to crush all the hopes and dreams of every tenant on the planet. We need to be careful in any business or any industry in being too opinionated because what ends up happening is we end up attracting most opinionated people. Those are the people that turn on you. Those are the owners you don't want eventually. Those are the people that give you the negative reviews when one little thing goes wrong.

I want open minded people, and these are the clients that I’ve loved the most, but I was attracting less of them per capita because of the message that was so in your face. “This is the [...], do this,” and I was just so strong willed that way and I realize now that that creates its own monster. I think it's important to share though, honestly, these little things that we have, that are weird about is or that are woo-woo that we feel like the rest of the world will judge. To say. “This is me, this is how I am, this is my experience,” and yeah I think you when we let our freak flag fly, so to speak, there are people that run with it. As long as we're not, “Hey, this is the gospel truth. This is the only way to do it,” we're not going to turn off so much so many of the people that don't resonate. They might go, “You know, Jason, that’s cool that you're into that weird stuff, but I'm more of a practical guy and I don’t resonate with that, but I like a lot of the stuff you say.” If I say, “This is the only way to do it,” I'm forcing them to make a choice to go all in and do everything my way or the highway.

Steve: Your coach helped you nail that idea. I had that opposite issue. I think the issue for me was that I didn't want to ever come off as opinionated. I'm scared almost having an opinion because I'm like, “Do your thing, man,” so I’m always quick to anything I believe in. I'm quick to say, “Do what works for you. This is just my journey. Do what works for you.” I think like attracts like and that's a really cool observation that you started attracting all these opinionated people. The coaching thing, I love that you have coaches and you’re a coach yourself because the power of coaching has changed my life.

Strategic coach, I work with Jason Goldberg. Every time I have a call with him, I transform. It's really crazy. If there's one thing I'm super high on right now, it's co-creation. Co-creation is the super power that nobody's talking about and I've experienced it in many ways. First through music. Although I normally do music on my own and I'll just write songs. When I get in the room with the right people, they don't even have to be a great musician, it's just that the energy. If we’re vibrating on the same frequency, things just come out so great.

I played with this rapper the other day. Two of our new songs are two of my favorite songs I've recorded in the past year. Back when I had a casual mastermind that we used to do, helping each other co-create, kick this process back to you, now you kick it back to me and blah, blah, blah, everything just accelerated. So, I think outside eyes on the business, coaches, casual masterminds, paid masterminds, whatever it is, I think the more we're interacting with others and having a sounding board, the faster we're going to get to where we're going and the more transformative the experience will be.

Jason: I agree. To touch on that, every single person you'll notice, everybody listening will know this is true. You can talk about it in terms of inner energy or spirituality or whatever, but every single person that you’re around brings out a different side of you. There are people that when I'm around them, I feel I'm freaking hilarious, I’m the funniest guy on the planet. They’re laughing at everything I say. It's awesome. Then there's people that I'm around that I feel I'm super mental, analytical, and logical. That's how they perceive me and that's what they bring out in me. And there are people that feel I'm this emotional sensitive person. My kids would probably say, “No, he’s Mr. Analytical.”

There are different people that bring out a different side to us. This is also why I have a strong introverted side. I need space away from people to reconnect with who I am and to make I'm me. I feel when we're around other people, part of it is how they perceive and see us, brings that out in us, it allows us to be [...] energy and yes absolutely there's this connection and a certain combination of different people, or different energies, or different whatever that will create a different music.

You've got the Beatles, for example. These four guys came together and they created all kinds of interesting sounds and music that had a really strong impact and all them wrote songs [...], but on their own, none of them really created as strong of a situation without the others. Just the energy between Paul McCartney and John Lennon was pretty magical.

Steve: Totally, and country artists or country songwriters write typically with at least two but usually three or four people in the same room. I think there's parallels because I can speak from experience. I was constantly, with the exception of going to maybe two conferences a year, I was at the desk in my office, head down, genius with 1000 helpers, although I wasn't a genius that is just a saying I’ve heard by any stretch of the imagination.

Jason: The emperor with no clothes.

Steve: Right, the fool with too much control, and that’s the thing now. I'm in charge, but I'm not in control and that’s self-freeing. It's the people, my people that are awesome are in control and the cool thing now to get to the impact or the purpose part that is super firing me up these days is that I've gotten to a point now to where my job with Good Life is to take care of my team. It's to figure out how can I make their lives better. How can I figure out, what are their dangers, their opportunities, their strengths?

Where do they want to be in three years? How can I cultivate that? How can I make it so all of them would run through a wall for me and take a bullet for me because if they would do that, they will treat my money like their money, my company like their company. The reason I started really researching how, I was like how does the military sail hundreds of 18-year-olds across the sea and set up forward military bases. It's just mind boggling, and I read Extreme Ownership. It’s a great book, some other books, but you talk about decentralized command. The top gives them the mission and then that leader gives them the mission and then the lieutenant, I’m butchering correct words.

Jason: The hierarchy?

Steve: Yeah, the hierarchy, but they are allowed to come up with the game plan and the battle plan. One of my jobs at Good Life is to make it okay to fail. To be okay to test things and screw things up and get beat up over it.

Jason: Because if they're afraid to fail, guess what happens? They start hiding crap from you. Then there's all the secret stuff going on then there’s interoffice politics, there’s backbiting. People have to be allowed to fail and not feel they're going to have their head chopped off. Otherwise, you have a business that’s unsafe for you.

I love the idea of you giving up control, I've given up control over my email. I don't even know what's getting sent out half the time, but I've created trust and I trust her. She's very cautious in how she does it. I've given up my schedule. I was in Vegas last week, the week before that I think it was in Columbus, a week before that I was I think in Phoenix. I don't choose anymore. My assistant, she's like, “Here’s a speaking opportunity. You're going to go speak here.” She sets up these podcast episodes, everything I've given up autonomy on my time, but I still blackout Mondays and Fridays so I can do some of the things I want and then I have my weekends, but you give up control.

The higher you move up in your business, the less control you have and the more you give to the people around you. I just do what they tell me to do. I show up. My job is to support them. I love what you were saying that you've transitioned because I think as we start out as entrepreneurs and we get our first few team members. We’re always asking the question and frustrated why can't my team just do what I say. Then eventually we transition and we transform and evolve and realizing they are some of our best assets, they're supporting us, they're better at us in things that they do, they love their areas of expertise and now it's, how can I support them? How can I help them get ahead? How can I make it easier? How can I help them avoid burnout?

You also threw out the words transformational and transactional, and I think those are two very different leadership styles that I think are important to point out. I think what you’ve just been describing is you're trying to create a team that is transformational. Transformational leadership is where you give them an outcome and say, “That's where I want to go,” and they say, “Great,. We'll figure it out, we'll help you get there.” Transactional leadership is, “We're going to go here and here's exactly how we’re going to do it and we’ll do it my way,” and then there's no buy-in, there’s no ownership, they don't get to fail because if they do what you tell them to do and it doesn't work, whose fault is it?

It’s mine, but that means they can't win too. If they can't fail, they can never win, and you're never going to keep A players on your team that never get to win. This is why people get so frustrated by millennials, because they're dinosaur business owners, they're running their business like assholes, they're tyrants, they're trying to micromanage their team, tell everybody to do it, and it’s transactional. They're saying, “I'm giving you money, just do what I tell you to do. I paid you, do it.”

Millennials don't stand for that. They value themselves more. They want something beyond just being told what to do and getting a paycheck. Believe me, I have team members on my team that would just be there to show up and [...] and get their check. They don't believe in you, they don’t believe in the company, they're hypers, and they go home and complain about you, and the job, and they live for the weekends. But if team members enjoy the work and they feel they have freedom and they have autonomy, you have their discretionary time. They're thinking about you after work. “How can we make this better?” They’re thinking about you on the weekends. They do extra stuff because they're in love with what they're doing.

Steve: Totally. Now, you said that really well and I think what comes up for me as the EMyth, which was a very transformational book to use that word for me. Checklist, at certain points at Good Life, we are a results based company, but a lot of times I get pulled to these meetings it’s like this person is not… they checked the box and they didn't do it or they didn't check the box and they should have, you know I mean? What's the results? Is the days on market good? Where is his KPIs? Although they’re good, we have this back and forth. So, here's something that I want to stick my flag in the sand as something that's not conventional and goes away from my instinct which is let them figure it out. I don't care about the checklist.

We're not all going to be McDonald's. Honestly, I'm not trying to scale my business across the whole country, if I was, I probably would have to make sure everybody checks that box, but I'm really interested in the small giants approach, where it's going deep with the smaller amount of people, still having a big business that makes a big impact. I say, “Hey, look at the results. Make it a results-based company because they can own it. They have more ownership in that regard.” Something else that comes to mind was, I remember I used to walk into the office when I used to go to the office every day and people would be on YouTube and I would freaking be so mad.

They're watching some videos, I would stew about, I wouldn’t say anything right away. I would go in my office and fume. Then I remember I talked to a friend about it, someone I respect, a mentor. He's like, “Man, you got to let that go. If they get the results, who cares how many cat videos they're watching. You want a fun environment. If you go lay the hammer down on that, you're going to not have the team that you need to have to make your dreams come true.” Someone I respected telling me that was me letting go of a helium balloon. All this weight was just lifted and I was free. I didn't have to micromanage.

Jason: I think it's interesting because sometimes usually the person or the team that gets really caught up on the checklist and everything being done a certain way, that's usually the operations person. They love that stuff, and it needs to be done this way, but I think that's our job as the visionaries to remind them it's the outcome that matters. It's the end result that matters. The end result is making sure we have a profitable business. The end result is to make sure that we're honoring our customers and we're treating people well. These sort of things, if we want to get to the outcome.

How we get to that outcome, there's probably a million ways we can do it, and whether a certain box wasn't checked or certain thing didn't end up happening. Well, maybe that process is too cumbersome. Maybe it needs to be supplied, as long as getting a result. There’s always this balance. You can have a 30-point checklist that somebody has to complete, but if you can get it down to 10 steps and they can actually do it every time and it doesn't feel it’s in the way, then you're better off than the people that are operating without looking at a process document because most people don’t. They'll do it once and then just skip it. You need something that they can live with on an ongoing basis.

I think that's really important to point out what you said is that it's the results, that results don't lie, it's the outcome that really matters. So, I think if you take a step back and say, “Well, what outcome are we going to achieve? Somebody's talking about checklist not being done well. What was the outcome we were trying to achieve? What's the outcome? Okay, did we achieve it? Who was responsible for it and how do we know whether it got done or not? Okay great, well then we're good, maybe we should change the process.”

Steve: Exactly. Those are some things, but the exciting part is having freedom of time, money, relationships, the people you work with, the people you get to do business with, I know you talk a lot about firing the bad clients. That was an amazing experience, our profit went way up when we fired the wrong types of clients and getting really centered on our core values because then it's easy to hire and fire people and hire clients based on your core values.

Ours are really simple. It’s RPG: be reliable, be positive, and be a go giver. It's based off that book, The Go Giver, and it's just simple. We used to have seven or eight, but then I couldn't even remember what they were and they felt weird, so we made it really simple. Now, my business development manager just goes down the list, like, “Are they reliable? Were they at the appointment on time? Did they send you the thing they said they were going to send you?” It just makes this compass of how to do business with the type of people that are going to make you successful.

Jason: That's one of the things that coach clients through is to get clear on their three, maybe four core values because you can have a list to 10, you can have 20, but really your team aren’t going to remember all of those and you can usually boil it down to three core things. For us, ours are a little bit different. One of my core values is just transparency.

That's originally why I call my company Open Potion and in just creating transparency I think in the industry has created some various significant shifts. I think also for [...] just how I operate. That's a value that is central to me and I want my team to espouse and really our companies are just extensions of us. It's my Iron Man suit that I get the strap on every day, that's my team and everything around me. It increases my capacity. It makes me feel a super human. I'm getting more done. I've got India handling my email and Adam handing fulfillment. I feel like I’m a superhuman.

Steve: He’s awesome, by the way.

Jason: Thank you. I think of other things I'm really big on is just eliminating constraints and looking for the big constraints that are preventing momentum, so that I can create momentum. It’s all about creating momentum for my clients and for myself. I think it's going to be different for everybody. With all the different things that we are inspired or that resonates with us and I think every business owner needs to get clear on really what their values are because you can't have it.

There are only two types of team members. There are hiders we talked about that are hiding and they are living for the weekend and they show up for paycheck or there's believers. The only way you can have believers is if you have something for them to believe in. If you want believers on your team and you want clients that believe in you, you have to have values that you make transparent or clear to the marketplace or to your team so that they can they can buy in to them. It's amazing to see companies get to a large size without even having that in place. Once you get it in place, I imagine the shift is traumatic for the culture.

Steve: And if there's one last thing I would leave the listeners with that’s going to be probably the most impactful thing for me in the last 24 months was, I had this epiphany that everything worthwhile lives on the other side of fear. I knew that instinctually and I've been told that before.

You know how you can read a book, that's why they say re-read the books that you love because you read it four times and then you'll start to actually really get it. I knew that, but I didn't really get it and it hit me, it became crystal clear. I was like, “Okay, if I want my dreams to happen and be fulfilled and live a life that I want, I have to figure out what scares me and do that.”

I have a two-part test. Does it scare me, part one. Part two, does my heart tell me to do it? If the answer to both of those is yes, you do it. I even made a wristband that says, “What scares you, do that.” I don't have it on me right now, I took it off. Just to remind me and it goes back to the try thing.

All my biggest leaps came after I did something I wasn't prepared for and I was scared to do, like going to that mastermind. I couldn’t afford it, it was really expensive. Hiring my operations manager, hiring a marketing manager. I gave a talk recently at PM Grow that I thought I was going to be broke after I hired my marketing person because I didn't think I have the margin and we ended up having our best year ever.

It comes back to the try thing. Figure out what scares you, do that, try it, whatever it is. I think that's where we make our biggest leaps and that's what sets people apart from living a life that they intended to having regrets, which is the number one regrets of the dying is that they didn't live a life true to themselves, instead they lived a life other people expected them to live. That's the thing that scares me more than anything in the world and so I’m passionate about sharing that message.

Jason: Steve, it’s been awesome having you on the show. I'll second that. It really is that voice deep down that is that voice of truth, and also you can ask yourself deep down, “Do I really want to be doing this?” Deep down, “Should I be doing this thing?” Deep down, “Does this really resonates with me,” and if the answer isn't a, “Hell yes,” then there's a lack of congruency and I think that's where you're saying your heart is yes. I think [...] of something that isn't working is the death of something inside you. It means change, something has to die.

You want to know what's really interesting? I've noticed a lot of this on [...]. The scariest thing to kill or to allow to die is the fantasy of something great. I’ll explain this, I've noticed this a lot lately with business owners. They have this fantasy of having a really healthy business, or having a business that is growing, or a business that they contribute, or they get to do great things, and that fantasy is so exciting to them and juicy to them that they don't want to take action on it, because to take action on it means they have to kill it.

They have the brutally pull out the knife and slaughter their fantasy the second they start taking action towards it, because now reality sets in. Reality is never going to be at that level that the fantasy was, but it's better because it's real. I usually use the example of my friend in high school that wanted to be a rock star, which sounds like you. You had to eventually give up the fantasy of being a rock star or you have to choose into it fully. He had this fantasy of being a rock star and he would buy expensive guitars and amplifiers, and he wouldn't take guitar lessons.

He won’t love the fantasy of having this fantasy of being a rock star and as long as he can buy cool guitars and keep imagining this future that would never happen, he was happy, but he didn't want to go sleep in his car and do gigs, tour round, work his butt off, and practice nine hours a day. He didn’t want to do any of that. That's reality. Reality means some work.

Initially, if you're listening to this and you’re like, “This is great. Jason and Steve have these companies and making all this money, they've got their assistants. It must be so nice for them.” They're probably listening and going, “I don't get it. I'm not there.” You may have to be the person listening that you right now, it's time for you to double down. It's time for you to hustle. It's time for you to do stuff that scares you. It's time for you to get off of the fantasy of whatever you're hoping of doing or hoping of starting to really get out there and do the work, the hard work to make it happen and you listen to that voice, you get to that place. You get to that place eventually where you're now are able to focus on your team. You're able to be a coach and a mentor to people around you instead of the person trying to figure out how to get everybody to do everything.

I think that transition really involves taking those scary leaps. I think every coach that I've hired was a leap. None of them were cheap. Every coach I've hired, every program or training I bought into, some of them I couldn't even afford at the time. They were risks, but I knew deep down it was a yes. I just knew it was a yes and it terrified me.

I think for those that are really analytical and logical, they're like, “I don't get it Jason,” but for anybody else listening. If you have that voice deep down inside that is saying, “Hey, this is what's next for you. You've known it. You've been avoiding it and you're trying to figure out how to make it all feel safe, take the leap, and jump and do it. Worst case scenario, you're going to learn some powerful lessons.” I had lessons where I spent a lot of money and it didn't work out. A lot of money. I've probably lots of money making some bad choices, but I wouldn't trade those lessons and I've learned from them.

Steve: Yeah, and money is just one side of it. Making a decision to be a different person, or to take more time off, or to go into a completely different field, that's probably the easiest one to do is scratch a check for something. Sometimes our way of being is probably what gets in the way of most of our issues because you can't solve the problem with the same mind that created it.

Creating some space and getting clear always helps, getting clear on what you're trying to do and the life you're trying to live. At the end of the day, we’re the writer, director, producer of our own store and I love how you said, you kill off the fantasy because that's true. It's scary.

I think that's why a lot of people don't delegate it or it takes so long to delegate because it's scary. If you give that up, what are you going to do? Then you actually might have to sit with yourself and figure out what's next and nobody wants to be alone with themselves. That's a scary place. It's through the work, it's through conquering those demons slowly over time that I've seen good results, so it's a process. Take it easy on yourself and do what's doable. I beat myself up a lot over the years and it's I think we're all pretty ambitious. Don't kill yourself. Life's too short. Just have fun with. Do what’s doable.

Jason: Well, Steve, it’s been awesome having on the show. I'm sure we could jam over and over and over again about all kinds of cool things. I appreciate you being here. Fun having you and I think there's a lot of really good takeaways for people that are going to listen to this or relisten to this and thanks again for coming on.

Steve: Yeah, thanks for having me, Jason.

Jason: You're welcome. How can people get in touch with you or some of the stuff that you're doing?

Steve: If you have any questions you can always email me steve@goodlifemgmt.com. Then check out the podcast, Good Life Property Management Podcast, we love that, and then Tribe Mastermind Podcast with me and Jordan Muela. Those are two podcasts that are we have a lot of fun with, that are around business, mindset, and all that good stuff.

Jason: Cool. All right. Great. Thanks Steve. I appreciate you.

Steve: Thanks so much for having me, Jason.

Jason: All right. That was fun. If you are property management entrepreneur and you don't have a coach, I recommend that you find somebody. Find somebody, find the best that you feel you can afford at where you're at right now. Get some input from somebody else. Find a mentor, find another property manager in your state. If you need to, find somebody that you feel you can lean on as a resource.

Nobody has to be alone in business and I think one of the biggest pitfalls that I had early on I think most entrepreneurs have is that we feel alone. We feel we're weird, we’re different. We are, we're different than a lot of the world, but there's plenty of people us out there and so make sure you have somebody that you can look up to, that you can lean on, that can give value to you and it's never just one person. Keep going. Keep doing this. Keep feeding into yourself. That's always an investment that's going to pay off.

If we can help in any way with that, I would be honored. You can reach out to us at doorgrow.com and we would be glad to support you in the beginning of that journey towards your growth. As always, to our mutual growth. Until next time. Bye everybody.

Download this Episode

Sep 10, 2019

Property management is hard enough. As your business becomes successful, don’t always say “yes” or “no” to everything. Owners are coming to you to solve a problem. Step into potential opportunities without being pulled in multiple directions.

Today, I am talking to Marc Cunningham, President of Grace Property Management, who identifies five characteristics that define successful property management companies.

You’ll Learn...

[02:42] Entrepreneurial Footsteps: Marc grew up in real estate property management world working for his dad, who founded Grace Property Management in 1978.

[04:02] Doors in Denver: Grow slow and steady; from 110 to 1,000 doors.

[04:32] Mantra: Follow the opportunity.

[07:15] However you define success, companies follow some of these five standards.

[07:56] #1. Filter and Qualify Owners: Don’t take every owner that comes along.

[20:04] #2. Know your numbers to know how well your business is doing.

[31:43] #3. Focus on profit, not door count. People are willing to pay for additional value.

[37:20] #4. Have systems and processes in place, and follow them.

[43:50] #5. Recruit, develop, and retain talent.

[52:28] Marc’s Extra: #6. Hold weekly one-on-one meetings with each team member.

[53:15] DoorGrow Extra: #7. Invest consistently in your own development.

[56:27] DoorGrow Extra: #8. Get coaching to help grow your business.

Tweetables

The more successful you get, the more opportunities come your way.

Cycle of Suck: Taking on bad owners, you get bad properties, tenants, and reputation.

You won’t regret firing difficult clients, despite emotional and operational costs.

Track metrics regularly because numbers make a difference.

Resources

Grace Property Management

Marc Cunningham's Email

Business Health Check-up Form

DGS 25: Why Every Property Manager Should Implement Profit First

DGS 80: Automating Your Business with Process Street with Vinay Patankar

DoorGrown Cold Leads Calculator

DGS 94: Lead Gen and Growth with Robin Reed of Concept 360 Property Management 0

Transcript

Many in real estate think you're crazy for doing it, you think they're crazy for not, because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.

This guest that we have today is a fantastic gentleman named Marc Cunningham. Marc, you're not a stranger to most people probably listening to the show. Welcome to the show.

Marc: Thank you for having me, Jason.

Jason: I'm really excited to have you here. It's strange that you haven’t been on here yet. At the beginning of the show, I was like, “Have you been on here? You're like, “No.” I said, “It's long overdue.”

Marc: I’ve just been waiting for the invitation.

Jason: Okay, well I'm glad we finally got you invited. I’m glad you're here and today's topic is going to be the five characteristics of successful PM companies. Before we get into that, I want you to share a little bit of your background to qualify yourself to the audience, help them understand how you got into property management and what your connection is to these five characteristics of a successful company.

Marc: Absolutely. Let me start by asking you a question. What were you doing in 1978 Jason?

Jason: 1978?

Marc: Yeah.

Jason: I was probably pooping in a diaper and drinking breast milk.

Marc: Okay. That image there.

Jason: I was born in 1977.

Marc: Okay, so you’re one. I wasn't much older than that, but in 1978 my dad decided that he was going to quit teaching—he was a middle school teacher—and he was going to follow his entrepreneurial real estate dream. We opened up a real estate property management company Grace Property Management 1978 in Denver. I was employee number one because I was pre child labor, so my dad would have me doing all the things that kids probably shouldn’t do. He would have me showing properties, mowing lawns, collecting rents, and filling out lease, just anything that needed to be done. I grew up in that world, so it really gave me a unique view into real estate, into property management, and just in the business because that's all I knew. That’s all we did.

As I got older, I’d take my summers, I’d worked for him in the summers, and again just doing whatever needed done. If I get really lucky, if it gets too hot out, I’d work in the office. When it got over 110 degrees, the deal is I get to come into the office, otherwise I’m mowing lawns. I did that for many, many years. I went to Colorado State University, I studied finance and real estate there, and I was working in Cheyenne, Wyoming doing accounting work there. My dad called me one day and he said, “Hey, I need to hire a property manager, are you interested?” Well Cheyenne Wyoming, with all due respect, isn't the most fun place to live, so I jumped to that opportunity and that was about 20 years ago, 20 some odd years ago.

I joined the firm permanently at that point in time. At that time, we were relatively small, I think we had 110–120 doors and we have grown slowly and steadily over the years. Today, we do both residential and commercial. We've got just under a thousand doors that we manage. We do real estate sales, we do property management, we’re investors ourselves—I own some stuff—we flip. Our mantra is follow the opportunity. If there's an opportunity to real estate, we want to look at that, whatever that is. So, that's how we've gotten to where we are today.

Jason: I was just down in Vegas speaking to a group of property managers and they were bringing up like, “How do I avoid all this distraction and move the business forward?” What I said to them is opportunity is I've noticed is what kills entrepreneurs. How do you keep following the opportunity at all times but also keeping your focus narrow enough that you're actually moving forward.

Marc: That's a great question. That's a really good question and that's hard. It is really hard because we found that the bigger we get, the more successful we get, the more opportunities that are out there. At this point, we're of the belief that you've got to say no to almost everything. I think it was Steve Jobs that said, “The difference between successful people and really successful people are the really successful people say no to just about everything.”

Jason: Following the opportunity as a mantra doesn't mean saying yes to every opportunity.

Marc: It does not mean saying yes to everything. You need to consider everything. What I don’t like is people say, “No, we don't do that.” For many, many years, for example, we didn't do real estate sales. “Hey, will you help me sell my house?” “No, we don’t do that. We only do property management.” We didn't consider. Well then, one day we thought, “Maybe we should consider it,” and as we considered it, we realized, this is a really good opportunity that we should capitalize on.

Where when an owner says, “Gosh, I want to sell my house. Would you guys be interested in buying it?” “No, we don't do that.” Well, stop saying, “No, we don't do that.” At least think about it, consider it, and I think that's the way to step into some potential opportunities. But yes, you have to be cautious or else it will get you pulled to many directions.

Jason: Relevant to that, how many of these units are now in your own portfolio, are yours or your company's?

Marc: I don't have a real big portfolio. I'm a pretty conservative guy, so I'm a buy-it-pay-it-off kind of guy. I've got 10–12 rental properties in my portfolio.

Jason: Let's get into these five characteristics that you feel define a successful company, and you're obviously a successful company. You've helped keep it successful, right? Second generation, so let's get in number one.

Marc: Yeah. I don't pretend to be a guru. I can't stand the guys that stand there, beat their chest, and say, “Do it like me, I know what I’m doing.” This is just from our perspective. We worked with a lot of companies and I didn't get this, but I do a lot of PM coaching in business stuff on the side with PM companies helping them get better, basically. We know a lot of PM companies, we've worked a lot of PM companies and there seem to be some standards, some things companies that are successful, however you define success, are going to follow some of these aspects. This is not meant to be an exhaustive list by any means, but it's the way that we gauge ourselves.

Jason: This will be cool because I probably come from a very different perspective. You're in the industry, you do this in Denver and I don't have any rental properties. I don't manage. I'm not a property manager. I have largely been this nerdy fly on the wall that's been able to see inside of hundreds of companies. My perspective might be a little bit different, but I'm sure there's some alignment. Let's get into number one.

Marc: Number one is successful companies don't take every owner. They don't take every owner that comes along. So you agree with that one?

Jason: Totally. If anyone's heard my show, they've heard me talk about the cycle of suck, which is it starts with filtering owners. Like if take in bad owners, you have bad properties. It doesn't matter how amazing they are. If you have bad properties, you have bad tenants. It doesn't matter how much tenant screening you do. If you have bad tenants, you have a bad reputation because you have bad owners and bad tenants. Nobody's happy and this is where I think the entire industry as a whole in aggregate sits right now. It has a bad reputation because they're taking on any owner.

Marc: Yeah, I would agree. The concept is this. Any PM company knows that if a tenant, a prospective tenant walks in the door, an applicant comes in and says, “Hey, I want to rent your property,” every property manager is a little bit skeptical. They raise their eyebrow. They say, “Okay, well maybe. I’m going to qualify you.” We know industry-wide that whatever the number is, call it 25%-30%, depending on the market you're in, the 25%-30% of the applicants are not going to make good tenants. Everybody would agree upon that. Well, we really believe that probably that same percentage 25%, 30%, 35% of prospective owner-clients are not going to make good owner-clients. The challenge comes, how do we filter them? Because if it's an applicant to rent a property, we have them fill out a rental application. We go in deep.

That's the hardest part of the business is qualifying those folks. So, how do you qualify an owner? That’s where the challenge lies. If you called our office today as a prospective owner-client and you are talking to our new account specialist or one of our PM's, they would have a dock in front of them, a piece of paper, and a lot of this is just basic questionnaires—what's your email address, what’s the property address, tell me about the property—but at the end of that questionnaire, they have four questions. Yes or no questions that they have to check the box on yes or no. They have to discern this information during the conversation with you because it helps us qualify these owners.

For example, the first one says, “Is the owner financially stable?” If during this conversation you as my prospective owner say to me, “Hey Marc, if you can’t get this property rented next week, I can’t make my mortgage payment. I've got to get this thing ready quickly.” Well, you're not financially stable, right? That's going to be a no on that box, that's the first question.

Jason: “So, are you current on all your house payments?” One of my clients said that was a favorite question they would ask. If they say no, it's instant disqualification.

Marc: Absolutely. Then the second question we have to ask ourselves is, is the client emotionally stable? That can be a hard one to discern. I always tell people, “Don't ask them the question verbatim, okay?” It will get you in trouble.

Jason: “Are you sane?” Yeah.

Marc: Exactly, but we need to be able to discern that information from the conversation. Is this somebody who's going to be stable when things go bad because at some point in time it will.

Jason: Right. Sometimes, people will reveal their emotional instability pretty quickly, right?

Marc: Yes. I tell my PMs, “Look. Two quick keys. If they cry on the first conversation or if they own more than two cats, they are not emotionally stable. Run away from them.”

Jason: Might be a little biased against cat owners. What’s cat owners like?

Marc: I know. You just lost half of your audience because of my personal bias.

Jason: No, they’re cool.

Marc: I am as well. Then the third question we ask is, “Can I control the situation and the client? Are they willing to give me control?” Not in a puppet master, I'm going to be the mean guy, but they have to give me control. They have to be willing to do so. Then question number four is, are they realistic in expectations? Do they think that we should be able to get $2000 a month for property that's only going for $1000? Or do they think that we should call them before we ever spend a dime on maintenance? That's just not realistic. That’s not going to happen. If we can't check the yes box on all four of those, then my PM does not have permission to work with that client.

Jason: I love the idea of figuring out if they're willing to relinquish control. That's such a big thing because they're coming to you to solve a problem. I've noticed with clients that they're not willing to be strong enough of a fence for people to push against to elicit trust enough for people to relinquish that control. I think a lot of people will push. They might look like bad owners, they're trying to test the fence, and it's like in dating how girls will crap test the guy. They just want to see if they can handle them or if they're willing to be strong enough. I think a lot of times property managers will try to be nice and maybe don't have enough bite or drive and they’re really looking for somebody they can feel safe with, so they test us.

I think clients will test us and then they're willing to relinquish control at times. It’s just something I've noticed during the sales process because I deal with entrepreneurs. They’re driven people and I need the same thing. They need to be willing to relinquish a certain amount of control because I'm asking to do crazy stuff, like fire doors or change your business name.

I love that idea, and then are they realistic in their expectations. If somebody says, “Hey, I want to add 500 doors in the next quarter,'' then that's probably not going to be realistic. I want to make sure they're in touch with a reality that I feel I can give them or lead them towards and it's the same with our property management clients.

Marc: Yup, and if we set those filters on the front-end, that's just going to make things so much easier on bringing good clients on because our business is hard enough without having difficult owner-clients. I think there’s the second aspect of that is, “Well, gosh. That's great. I wish I would have heard that before I took on Mr. Crazy,” so, what do you do then? I think the other part of that—you alluded to this—is sometimes you do need to let those clients go, and sometimes that's the best thing, because we're talking about what successful companies do. Successful companies realize that, “Hey, if we made a mistake, we brought on a bad client, we need to let that client go, whatever that looks like.”

Jason: There's always going to be those mistakes. We cannot always know and perceive every person coming in and know that they are emotionally stable, or that you can control them, or that they will be realistic, but when they start to reveal those colors, we have to be willing to let them go.

I've made bad decisions in bringing people in as clients and I have had to let them go. Some of them were just really like verbally abusive to my team. You’d be really amazed at some of the types of people that that can somehow leak through even if you have pretty good qualifications at the beginning. I love what you're getting at here because really anybody that studies sales in any capacity knows that qualifying a prospect is at the outset. It's really mind boggling that people would not qualify their prospects in any regard.

Marc: I’m curious. You said you had to let clients go. How have you overcome the internal thought of, “Ooh, but that's money. That's a big chunk.” When do you decide? How do you decide? Is that an internal struggle for you?

Jason: Sometimes. There's always a negotiation and it's a balance. It's a balance between the money aspect and the cost with the team. Ultimately, my team I want to keep forever. I want to keep them long-term. If I keep that client on, I’m saying to my team, your feelings don't matter. I don't care about you. That sends a really painful message and I've noticed this in property management companies.

People wonder why there's so much turnover with their staff and I think one key reason is because you're allowing your staff, you're forcing your staff to tolerate too much. There are some of these owners that should be let go, and I've said many times to clients, “The hallmark of a seasoned property manager is that they fired some clients.” Some businesses have hundreds of doors and they've never fired a client. I know if they've never fired a client, they have some bad things in their portfolio. There's some pain in there and that's a difficult place to work. They’re not willing to let go of painful situations and there's always going to be painful situations.

Marc: Yeah, and I've never talk to a PM who did let a client go who regretted it.

Jason: Never.

Marc: It's hard, it's scary. We face that. I remember very vividly when we were small and we had 125 doors, maybe. We had a client and had like 12 properties. I remember the guy, could see the guys face. He wasn't a bad guy, but he was just difficult and it had to be his way. He would contact us all the time. He just drove us crazy. We finally decided we needed to let the guy go. Well that was like 10% of our portfolio. That was hard. We thought about it, we don’t know what to do, and even after we did it we thought, “Oh, is that the right decision or not?” But we quickly realized it's like a load that’s been lifted. When you get rid of those people that sucked that time and energy and life out of you, it is a positive thing.

Jason: The operational costs, the emotional cost when all of that falls by the wayside. I've never had a client fire something. I had one person fire half their portfolios like one big property. I had one person do that and they were terrified, but they did it. Two things happen almost every time. One, they replace the income really quickly. It always, it creates some vacuum in the universe, I don't know what you want to call it, but they always seem to replace the income really quickly with better doors. That always seems to happen. They just need to trust that's going to happen. The other thing is, is they always say to me, “I can't believe I didn’t do it sooner,” like they wished they had done it sooner. They were so afraid of doing it and then once they do it, they realize it wasn't so bad and they wish they were like, “Why didn't I do this sooner?”

Marc: If one of your clients is talking to you and you're saying, “Hey, you need to fire this owner,” how do you recommend they do that like? What should they say? Should they say, “You’re fired”?

Jason: You’re interviewing me now.

Marc: Yeah.

Jason: There's a few ways you can let them go. There are some creative ways. One of the best is just raise the fees. If [...] make it worth, just make it more expensive. Say, “Hey this property is difficult. You're a bit more challenging person to deal with, to be honest. We are willing to keep doing it, but it's going to cost X.” So, you just raise the rate, and if they keep being annoying and you feel like it's still not worth it, you keep raising the rate until they self-select themselves out. That's one easy way.

Another way is to just refer them to somebody else, and if you're going to refer you might as well get a nice referral fee out of it. Go to one of your buddies and one man's junk is another man's treasure. I mean they might know how to deal with this type of person. They might be a better personality fit for this type of person than you. Don't just instantly assume that because you can't tolerate them or their difficult for you, that everybody else will. Give them to somebody else and let somebody else have a shot.

Marc: I like it. We will rarely fire an owner, but we will as you just suggested bump fees up and up until they decide to fire us. I’d much rather have them fire us and leave on their terms.

Jason: Right, they’ll self-select out. Are we complete on number one?

Marc: I think so. Number two is successful companies know their numbers. I see this so often with PM companies. We get really good at the logistical side of we know how to lease, we know how to talk to owners, know how to collect rents, but when it comes to the numbers, the financials, we just don't know what we’re doing often times. I really am a big believer in that concept that if you don't know your numbers, you don't know your business. You don't know how well your business is doing.

One question I’ll often ask of coaching clients that I work with on that side of things is also, “Okay. Now, if you, Jason own a PM company, at what point in time do you close the books for your company? Let’s say the month of June ends, right? We’re here almost until the end of June. When June closes for you, how quickly will you have your June books closed so that you know how much money your company made in the month of June?” The answers always surprise me. They're all over the board. “Well, I'm currently 90 days behind. I’m trying to catch up,” or, “I'm not much further behind in that,” or, “I might get it towards the end of the following month.”

Jason: Yeah, how can they make business decisions if they’re 90 days in the rear-view mirror? Imagine trying to drive a car like that.

Marc: Like I said, I've been doing this for many, many years. While we were small. like anybody else, I was everything. I was the janitor, I was the accountant, and I was everything. My favorite day of the month was always the first. Not because we collect rents, but because on the first day of the month, I go online and print out our company bank statements for the last month. I get our paper checkbook out and I’d reconcile. I’d get our ending balance and I enter it all into QuickBooks. I can look at that piece of paper and say, “Hey, how much money did we make last month?” I love that. I would wake up early to do that.

I'm weird, I know, but that's how you know how well you're doing, I wouldn’t wait until the second, the third, the fourth, the twentieth, that's crazy. You can do it on the first. So, I'm a big believer in as soon as possible, which in this day and age it can be pretty much immediate. You get your books balanced, you run some numbers, you see how your company is doing it, and you’ve tracked some metrics, some internal metrics for your company to know how you're doing.

Jason: I think the challenge is when property managers are holding on to something that's not in their particular wheelhouse or area of genius, but if this isn't your thing, if you're not like Marc and you don't love doing this and this isn’t like what makes you thrilled and excited is to get in your bank statements and numbers, have somebody else get everything ready for you. I've got a profit-first coach and accountant. She meets with me and goes over everything with me. I get not only my perspective, but she says, “This is what it looks like to me, Jason,” so yeah, I think it's usually helpful to do a review every month and look at your numbers.

Marc: Yup, and like you just said, most folks aren’t as weird as I am as it comes to that stuff, and that's fine. But you need to find someone weird like me. You need to find someone who can go get excited about running your numbers, make sure they do it, and then you review those and you track a couple key metrics.

For example, some of the metrics that we always track, are door counts proportional to owner count? Because that’s a sign of a healthy business. So for example, if your company has 100 doors, if you’ve got 100 owners for those 100 doors, that is the sign of a very healthy business because it means that you don't have any one owner with too much control versus the guy the guy called me a couple of weeks ago and he wanted to know if I was interested in buying his business. I go, “Tell me a little bit about it.” I think he had like 75 doors, “I’ve got 75 doors, I’m here in Denver and interested in selling.” One of the first questions I always ask is how many owner-clients do you have? He had 75 doors and 4. I was like, “You know what? I don’t need to know anything else. I'm not interested.” Why? Because if we took those doors on, that's four owners. That’s a lot of control.

Jason: If it’s two of them, then what are you getting?

Marc: It's something that you can't control, but you need to track it, that's one of the things you want to track on a regular basis. Another metric we really like to track is the percentage of our overall income that we spend on employees. Because in our industry, that again can just be all over the map on companies. Do you have a number on that that you recommend to your folks on what that number should be?

Jason: It varies so wildly especially by market, but I know an owner that has 65% profit margin in his business.

Marc: Wow.

Jason: I know it's ridiculous.

Marc: It’s a good thing I’m sitting down.

Jason: I know. He has a couple of hundred doors. It varies so wildly and it depends largely on the type of owners they're taking on, the type of property, because—I’m talking about this in the cycle of suck idea very often—if you take one bad owner or one bad door property, can have 10 times, maybe even 100 times the operational cost as a good door. So, that can vary so wildly.

I've had a company come to me that had 500–600 units under management and wasn't making a dime. I said, “How is this possible?” They’re like, “Well, we're doing $3 million a month in real estate,” so there was a brokerage with a cancerous tumor on the side called property management. He had twice as much staff as he needed, no technology in place. Fast forward, he fired half his team, he fired about 200 doors, maybe 300 doors, and it's now a very profitable company.

So, it's not all about doors and staffing is always going to be the highest cost. If you can replace even a fraction of that or create some leverage for your team using technology, outsourcing, whatever, those are some big wins financially. A lot of times everyone's looking at, I got to get more revenue in and they're not looking at their expenses. That's why I'm a big fan of the profit-first system which says, “You take out a portion for profit and then what's left over is your expenses.” Most people are like expenses. You’re just revenue minus expenses and then whatever's left over, there's nothing left over typically in that situation.

Marc: Absolutely. We have that profit is almost like an expense item that we know we’re going to take out every month and put into a savings account. We've been doing that for a long, long time from that aspect. But yes, I agree 100% with that aspect of what you're saying there. The number that we coach folks around is you don't want to go over 50% of your total revenue to staffing costs regardless of your size. The bigger you get, the more that number's going to probably creep towards that, just because you get more overhead, you get more managers, and you have more red tape, so that's a natural part of that. But if you go over 50%, that's a red alert. Something's wrong from that standpoint, so that an important to track for every company.

Jason: Yeah, as a company scale, they're able to create a bit more leverage, but yeah, I could see how when you're really small and you're doing everything, your employee costs are a bit less per door because assuming your free labor or maybe if you work for your dad. Or sometimes it’s a spouse. They’ll have their spouse as their business partner, and you'll see them get to maybe 70-80 units, they’re tapped out, and they can't afford to hire their first person. Nobody's getting paid. That makes sense. All right, I like it. Anything else on number two, knowing the numbers?

Marc: The other things I would just add that's worth tracking that I often find companies don't track this well enough is how many doors they’re adding and how many doors they’re losing. It’s always a surprise to me is when you ask them that, they'll say, “Well, I can dig it up, but I don't know.” A lot of the software don't track that. If we’re old school, we’ve got the spreadsheet. Every time we lose a door, we go to our spreadsheet for the year, we put it in, and it's going to keep that auto tracking. Every time we sign a new one up, put those on the spreadsheet so we can pull that up and instantly see, “Okay. As of right now, we've lost X number of doors per year and we've added X number of doors.” So, track that. Don't make that something that you've got to go dig in your software and try to pull a report. That needs to be one of those metrics that you're tracking at least on a monthly basis.

Jason: Yeah. It's a pretty difficult situation and it’s a common one where you’ll see somebody adding a door and losing a door just as often. They wonder why they're not getting growth. Sometimes, the problem aren’t getting enough [...], it’s obtaining doors. They could be the type of target audience that they're going after, it could be that they are lacking some awareness around how to retain these clients or whatever it might be, but yeah, that's an important thing I think to pay attention to.

Marc: Yeah, and to track the percentage of doors lost. That's all over the map as well. If you can keep your losses on an annual basis in the single digits from a percentage standpoint, that's pretty good. If you can keep it 10% or below on doors that are leaving you every year, you're in the pretty rare group of PMs.

Jason: I created something for property managers called our cold leads calculator. One of the things I noticed with a lot of companies—this is more relevant to what I do—a lot of property managers are not paying attention to the amount of money that they're spending on cold lead marketing—pay per click, SCO, APM leads—all these different places at social media marketing, content marketing, that they're paying to generate business. A bulk of where most people get their deals and leads from I find in the industry is often word-of-mouth, so they just group everything together. All their warm leads from word-of-mouth, referrals, other cold lead marketing, and they're not paying attention.

When you look at the numbers alone of the cold lead marketing, which everyone can check it out by going to doorgrow.com/coldleads, they can take this little questionnaire and go through it, but it'll help you calculate your cost for cold lead marketing. It also calculates and factors in the time. Time is worth money and it calculates and ask what that time is worth, like what's your hourly wage or whoever is following up on these, how much time does it take to follow up on these, to create a real aggregate or at least close aggregate cost of what one cold lead is costing you.

I’ve seen numbers. I just had one come through the other day. One cold lead was costing them $5000. I've seen $11,000, I've seen a $1700 per lead or per acquisition per deal and what I love to ask them when I get them on the phone, I say, “Hey, I saw you fill out this cold lead thing. How long does it take you to recoup $5000 on a contract?” and they’re like, “Well, that's probably three years of free management or two years whatever.” Then their perspective starts to shift and we have to uncouple that. The transparency in numbers helps you make decisions as a business owner.

Marc: Yup, and then review them regularly. Don't just leave it your accounts. If you're a successful PM company, you're looking at those numbers because those numbers make a difference.

Jason: All right. We’re on to number three.

Marc: Number three is a good lead-in as you were just talking about there. Number three will be successful companies focus on profit, not door count. You've already talked about this. This comes up so often in our industry, what's the first question any PM ask another PM? How many doors do you have? What’s your door count? How many doors are you managing? That's the measuring stick and it’s the wrong measuring stick because I know companies that are smaller, they're very profitable, and I know companies that are very large that are not profitable at all.

Door count is irrelevant. The profit is what matters. What that means is practically speaking, if you've got 50 doors, I would say, “Before you say I another 50—that's fine—but you know what? Let's maximize the profit of the existing group you have.” That doesn't mean just go out and nickel-and-dime everybody, but it means what other services can you provide? What other things can you put in place to make sure that you're maximizing that income and that’ll have a dual impact in that you're going to increase your income on that 50? Then when you pick up your next 50, now you've already got some structures in place to ensure that they are profitable as well. You've got to focus on the profits, on the revenue streams to be successful.

Jason: Absolutely, I don't think there's ever been a property management company that I’ve seen that is not leaving some money on the table. There's always additional services that you can offer, even if it's something little like filter easier petscreening.com. There's always some additional value that you can offer and there's always a way that you can monetize that. People are willing to pay for additional value.

Marc: On the flip side of that as well, I think we need to pay attention to those expenses because what the industry right now is more difficult than it has been a long time and folks that have not been in the industry for too long, they’ll recognize this because this is normal to them, but it's a tough industry. This is a tough market to be running a property management company. When things get tough, you've got to be tight on expenses, and it’s too easy not to get tough on expenses.

That's one thing we encourage folks, is to go through that profit of loss, line by line, and if there are expense items on there that are not directly relational to income coming in, you have to figure out how to cut them. You have to get rid of those wasteful expenses. That is such a good exercise to sit down and start going through that stuff and say, “Well, gosh, I’ve just been paying for the subscription service every month and I don't even know what it does. I signed up for it two years ago. All right, let's get that cancelled.”

Jason: Yeah, and you’re like, “Why am I still on this?”

Marc: Exactly. This is beneficial as getting on a new door, is cutting those expenses.

Jason: This is why I love having a profit-first coach, because this really is built into the system. Every month is like, “Hey, what about these services you said you're going to cancel and you said you don't need this anymore?” Yes, so I think it's helpful. If you’re not like accounting-minded, I highly recommend you go back and watch my episode with Mike Michalowicz, who is the author of Profit First and check out that episode. I think it was a fantastic episode. Really cool guy, came and spoke at our conference. It covers that system like cutting down expenses, putting profit first, making sure that expenses are fitting within your existing budget and you're still getting a profit. Yeah, makes sense.

Marc: What I had to do, I realized that the biggest expense item, the biggest overhead we had was my ego. The thing is that, that I wanted for me, the big desk, the big office, the nice car, and that's something everyone needs to start there because if you drive, especially in the real estate sale side, you go to any real estate sales event and what is the parking lot filled with? A lot of very expensed leased vehicles. I'm not against nice vehicles, but that’s just a suck on the income side of things.

Jason: I think there's always this ratio between the amount of money that you’re going to take out of the business, and the amount of money that you're going to leave in to fund towards the growth. If we take out too much too quickly, the business growth is stagnated. I've seen some really aggressive companies put almost all of their money. I’ve seen owners try not to even take a paycheck. They’re really minimizing their take out of the business so that they could fund the growth, because they're delaying gratification for the future. They’re funding and creating a business that is growing and they’re putting their funds and their money towards that.

Sometimes, you have to double down as a business owner and to be willing to take a short-term hit because you want a long-term growth goal. And we can put too much towards growth to where it feels shaky, it feels unsafe. We're not holding anything back. There's no padding there. It really is this balance of how much I’m going to put towards growth be aggressive, how safe am I going to play it, and how stable and slow am I going to be at doing this. There's a balance there.

Marc: It is a balance, it’s an absolute balance because you need to leave some in, and you need to be pulling some out every month and putting it into that savings account so that you have opportunities. We’ve purchased several companies over the years and every one of those deals worked because we were able to in essence say, “We can write a check. We’ll write a check today. We’ll get this deal done.” Why? Because we have money put away. That savings account isn't just comforting, it's an opportunity fund for things when they come up in the future.

Jason: I like it. All right, is that three?

Marc: That's three.

Jason: All right, number four.

Marc: Number four is successful companies have systems and follow them. They have systems in place and they follow. In a word, system means different things to different people. Some people think, “Well, that's just so I need a good software. What’s the system?” I really believe that probably 75%-80% of what we do on a day-to-day basis in our industry can be systematized, meaning, simply documenting your process, documenting your routine, because it plays out in so many ways.

We learned this early on when we were growing and first there were two of us. My dad and I, we both did it all and we hired a third person, and then we all three did it all. Then we hired a fourth person, and by the time we hired that fourth person, we realized that, we can't all do it all. This isn't scalable, we can't all do everything. It works great at two people, it works great at three people, but when we had that number person and Mr. Tenant calls and says, “Hey, I called in with a maintenance request last week and I haven’t heard from anybody.” And I say, “Well do you know who you talked to?” “No, I don't remember.” “Well hold on, let me see if I can figure it out.” “Hey dad, did they talk to you?” “Hey, Bill did they talk to you?” “Sue did they talk to you?” “No.” “Well they talked to one of us, right?” That’s very ineffective.

You've got to start specializing in your processes. We realized at that point in time that if we're going to hire someone to be our leasing person, for example, we better have a documented process for them to follow. I mean specific detailed documented. Here's what time you get to the property before showing. You open the door, you turn on the lights. Here's where you stand when they come in. Here's how you greet them, here’s what you say, here’s what you don't say, here's how you process an application.

If we do that into our entire business and we break the business down into the smallest components, it simplifies things like nothing else because we’re in a complex business. If you think of a continuum in your mind, a long line going on both directions. On one side of the continuum, you have the words consistency and simplicity. On the other side, the far extreme opposite, you've got the words variation and complexity.

You have to ask yourself, where am I on that continuum? We're all different places, but we hopefully will always be moving forward towards consistency and simplicity. I don't think there's a better way of doing that than through documenting your process, your system and then following it, training on it, improving it, upgrading it. It's got to be written, it's got to be documented, and it is a process.

Jason: That needs to be used. People document it, they’ll give it to the team member, the team member will look at it at the first few times they do it, and then they're done. I have Process Street on as a guest once. We used Process Street internally, but it forces them to actually use the process on going. It's a checklist that has to be verified and completed.

Marc: Yes, checklists are huge. We couldn’t exist without the checklist. Its old school, but it works. We still have paper checklists on some things in our office here that people say, “That wouldn’t work.” I guess just too old school. I say, “Well , we’re pretty successful. It worked for a thousand doors; I can tell you that. Will it work beyond that? I don't know, but it works to get you to a thousand.”

Jason: There you go. I've noticed in businesses, I think there’s, at a minimum, probably seven systems that every business eventually has to have in a business. One, they have to have an internal communication system. For me and my team, it’s virtual, so we're using things like Basecamp, Voxer, stuff like that. But there needs to be an internal communication system that isn't just, “Hey Steve, did you do this?” So, internal communication.

There needs to be process documentation system. That could just be Google Sheets, Docs, and whatever, or it could be something more complicated or cooler like Process Street or whatever, but there needs to be a process documentation system.

There needs to be a billing system, of course. Property managers use maybe AppFolio or Rentec Direct, Buildium, but there needs to be some billing, accounting system.

Then there needs to be a support system. A lot of property managers are starting to gravitate towards setting up Help Scout, Intercom, Drift, or one of these, but internally we use Intercom. There needs to be a support system in the business so that you can track tickets and track things. Sometimes, you'll do that through your property management software a bit.

I find one system most property management businesses are lacking or missing is a planning system. You're hearing people move towards traction in some of this which I think has some fundamental flaws to be blunt, but it's a great system. It’s better than no system and there's a lot of systems out there for planning, but there needs to be a planning system in the business.

Another system that's necessary is a sales CRM. This is different than your existing customer database. This is for prospects. There needs to be a sales CRM in place. A lot of property managers use LeadSimple, for example.

If there were one other system you can throw in there probably be a phone system. We need some way to manage this big influx of calls or outbound calls with team members being able to be reached. These are some of the systems that I've paid attention to, that businesses need. Most businesses will have maybe two or three.

Marc: Yup, and we preach what we practice as well as preach to make on the systems for individual team members to make them position-specific. We have 20-some odd people our office and every role has a position-specific system manual, so our director of accounting has a director of accounting system manual. I'm the president of the organization. I have a president system manual. Why? Because I need to be replaceable. That's one of the benefits of it. That idea that now we become less dependent upon individuals and no individual can hold us hostage to be like, “They’ve got everything in their head. What are we going to do they leave? We can't lose them.” It's a terrible place to be. We don’t have to worry about that. You're going to lose everybody at some point in time. You’ll either lose them for a good reason or a bad reason, but they need to be replaceable. Now if you have a document, if you have documented their process, then they become replaceable.

I'm replaceable. If I get hit by the truck today, it’s alright. Hopefully, the company will take a little hit, hopefully they’ll need me a little bit, but we got a system manual, somebody can step in that role, and already says, “Hey, this is what Marc does.” Just do it and you'll be successful.

Jason: I like it. All right, so are we on to five?

Marc: Number five, the last one, successful companies recruit and develop talent. We just talked about systems and the concept that systems can make your people replaceable to some extent and they should. However, at the end of the day, the team with the best players usually wins. If you can go out there and if you can figure out how to recruit the best talent and then retain them, that is going to do more for your company than almost anything else out there. If I'm going to brag about something about our company, I’ll brag about that.

We get the best people around. We've gotten good at that. It makes it so much easier to do business. I don't work harder than my competitors, I'm not smarter than my competitors, I'm not technologically savvy more than my competitors, but what we do better than a lot of our competitors is we get really good people

Now that’s hard, and it’s hard to get really good people and that's why you got to recruit. It doesn't mean you put an ad on Craig's list and read a bunch of resumes of people that can't get jobs. I mean you go out and you find people that are really good at what they do and you got to get them, you have to recruit them. That's hard because successful people aren’t looking for jobs. They are already successful. If you want to be successful, you got to go out there.

I’ll tell a story and I'll give that the short version. We had to hire a leasing person not too long ago. Wwe were hiring, meaning we were just reviewing resumes and I thought this is ridiculous. We can't find anybody good. I better do what I tell myself what I should be doing. I got my car one day and I drove around to a lot of the multi-family class A properties in Denver, and I walked in as a prospect. “Hey, I’m Marc, I’m here. I just want to see what you have available. I’m looking for a buddy of mine to rent a property.” And I was usually met with the, “Okay, well here's a piece of paper. Tell your buddy to give us a call.” I say, “Okay” and left.

About the fourth place I came to, I came in and met a gal there behind the front and I said, “Hi, I’m Marc. I’m just looking for a place for a buddy of mine.” She said, “Well, me about your buddy. He’s looking for one bedroom. He’s tall dark and handsome, got a cat, probably crazy,” and she's like, “You know what? I know the perfect unit for your buddy. Do you have a couple minutes? I'd love to just have you tour this property.” “Yeah, sure. Okay.”

She tours me through and she's pointing out the feature benefits to offer. She was sharp. Her name is Lindsay. I said, “Lindsay, you are really good at your job. She goes, “I love leasing. I just love it. I love helping people. I love real estate. I love what I do.”

I said, “That's great. Coincidently, I happen to run a property management company and we're actually looking to hire a director of leasing for residential real estate. Have you thought about doing residential?” because she’s a multifamily. She was like, “Oh no. I could never leave. I'm not a job hopper. I'm really stable. Stability is a big deal for me once I get somewhere I like to stay.”

Now I'm drooling. I got to have her. I said, “Well is there anything you don't like about your job Lindsay? Well we work weekends.” I said, “Oh. That’s too bad. We don’t work weekends.” I said, “Tell you what. Why don't you come into my office sometime? Here’s my card. I'd love to just sit down and have a conversation with you. Who knows? Maybe something comes out of it, maybe something don’t, but I’d love to just connect and see if there's something there for the future.”

Well long story short, we got her. We got Lindsay. And we had to go after her, we had to get her because she didn't want to leave. She's been a rock star. She's been amazing. The things that she's helped our company to do, but we would not have found her if we were just hiring. We had to go recruit her, we had to go get her. That's what you have to do in every position in your company. You have to go find stuff.

I'm not saying go steal people away from your competitors, but you have to find those people out there that are successful and get them. Once you get them, you have to retain them. You have to train them well, you got to pay them well, which is one of the reasons you need to have good profit because good people aren’t cheap, but that's what's going to lead to a long-term success, and unless you take a step back out of the day-to-day stuff at the end of the day.

Jason: Yeah. I think it's important to point out what you're saying is not that people are easily replaceable, that you can pop somebody else in. You're not saying that at all, and I think every business owner knows that if you have a seasoned team member that you've invested in, that you've trained, that you've developed, there's nothing as good as that, like having somebody that's been with you for years. I have team members that has been on my team for maybe six years and he's a rock star.

I have a competitive advantage over most companies in that our teams are virtual, so I can source the best talent from anywhere pretty much in the world. But yeah, this can be challenging for property managers that are looking for somebody locally, they're looking for somebody nearby, they’re looking for a particular set of skills may be. But ultimately, if you find somebody good, you want to make sure you retain them and that you keep them happy. You can compare it to a wine, you can compare it to anything, but over time they just get better. If they’re good they get better, if they're not good, they get worse.

Marc: That's the other side of the coin. That's where just like we talked about earlier with owners. This is what we started this whole conversation with you get a bad owner, what do you do? You need to let them go. Well if you made a hiring mistake, you need to fix that and correct that as well and let that person go, because we're going to make hirings. We are very good at this, but we make a lot of hiring mistakes. We just do, it drives me crazy. But when we do that, we correct it quickly. We're going to move that person on very quickly when we make that mistake. Why? Because the longer they're sitting there, the longer the right person isn't there. You've got to make that correction when you made a hiring mistake.

Jason: I think it's amazing when you bring in a new team member, it changes the entire team. It either changes the entire team for the better or for the worse, especially if that team member that you just brought on is taking off of your plate everything. It changes your role as CEO. It changes your role as an entrepreneur, and it affects everything from you. It's pretty significant and it's important to make sure that they’re the right fit. We we're all going to make hiring mistakes. You have to kiss a few frogs and you have to suck a little bit at hiring in order to find the good people.

Marc: It's an art, and a skill set to hire someone in no way translates over to property management. It's not like, “I'm a good property manager. I’ll obviously be good at hiring.” No, there's no correlation there. It's completely different. The other unfortunate thing is, the smaller your company is, the more important it is to make that first good hire. Now we've got 20 people. If we make a bad hire, we got one in 20 then who's bad. They can fly under the radar a little bit, they're not going to stick to the company.

If we've got two people and then we make a bad hire for number three, so we never got 33% of our workforce that's a low performer. The smaller you are, the more important it is that you take the time to get the right person in. A lot of it is just time. You've got to slow down the hiring process. These ideas of we had a phone conversation and we interviewed him, it's not enough? Are you kidding me? No, you want to do multiple interviews. Anybody can come across as a positive person on that first interview. You want to have multiple interviews with multiple people. You have to dig, dig, dig on that before you make that job offer.

Jason: I think where I've made a lot of mistakes personally in the hiring process is I love to delegate and its delegating too quickly. Some people will micromanage, they’ll control too much, and I think some people will do the opposite. They'll bring somebody on and they won't give them all the training, all the tools, all the support they need to really be the rock star they could have been.

I've made both of those mistakes to be transparent. I think onboarding is a really important process to make sure you’re meeting with your new hires on a regular basis daily initially, then backing it up to weekly and so on, so that every day like where are you stuck? What do you need? What are you confused about? Often, they're not going to just volunteer all that information to you. But when you're meeting with them daily, they're going to feel supported, they're going to feel like they're invested in the team. I think onboarding is a really big deal. That's where I made mistakes.

Marc: We still do one-on-one meetings every single week with every one of our team members. It doesn't matter how long they've been. I'm a huge believer in that, I guess if you wanted number six, there is number six, right? Have one-on-ones every single week, sitting down with them, even if it’s for 5 or 10 minutes, touch base, see what issues are going. Those have been critical for our people in their success.

Jason: We have a bonus, number six.

Marc: You got a bonus, number six, because you’re so good. What did I leave out? I’m curious. You talk to a lot of PM companies. What do you think are characteristics of success may be that we didn’t hit on?

Jason: I wasn’t even thinking this, I was so into yours. I think all these things are really fantastic. I think if I were to add a seventh here that I think is absolutely critical, so imagine you have an orchard, you’re at the top, and this is like a reservoir of hopefully money and or water or whatever you want to call it. There's outflow, you're paying your team, you're spending money, things like this, and investing your team.

I think where most companies are flawed is there's no inflow at the top of the orchard. There's nothing above the entrepreneur feeding into them. I think this is why it's critical. I probably spent at least six figures annually just on coaches and mentors. I have three coaches right now affecting different areas of my business. I think it's that inflow that I'm able to get that allows me to consistently have value to offer to the marketplace and to benefit my clients.

It comes out in ways that I don't even expect, like a client will ask me a question or be stuck on something mindset-wise or be challenged with something, and I'm like, “I had that issue and I worked that through with my coach,” or, “I have done that in that training that I had done,” or whatever it might be. I think as entrepreneurs, we need to invest in ourselves if we're expecting other people to invest in us. When you go to prospects or clients and you say, “Hey, invest in me, spend money with my company,” and you aren't willing to invest in yourself or in your company in a similar fashion, I think there's a little lack of integrity. Energetically, something's off.

If there were a seventh, I would say that's a big one is make sure that you're investing consistently in your own development, not just your team so that you have something to give. I think that's the inflow. You don't want to be a dead sea, there needs to be in flow and there needs to be outflow and that's where there's life. That's where it’s a healthy business.

Marc: For the person that would say, “Hey, that sounds great, but I'm working 70 hours a week. I don't have time to invest in me. I'm just give, give, give.” What would you say to them?

Jason: I would say they’re ineffective, they’re inefficient because if we're doing, doing, doing we moved out of the mode of being affected. That means most of our time is tactical instead of strategic. Any business that lacks, the business owner lacks strategic time, the business isn’t growing. There's a direct relationship between the amount of strategic time, planning, looking towards the future, coming up with ideas, or getting trained or learning new things, versus their growth. If all their time is tactical, they're dealing with maintenance, fires, leases, managing their team, emails, phone calls, if all their time is tactical, their business can’t grow.

It will stay basically where it is. I think what I do with clients is I start them with a time study and we create time. Everybody is spending time doing stuff that's unnecessary, or low dollar an hour work, or silly, and it's pretty simple to start getting clarity on that first and then that helps them see what they need next. My entire foundation, my company really has been built on time studies.

That's where I think fundamentally there's a huge difference between how I would coach operationally a business to run versus something like traction or a rocket fuel or these other systems where they’re saying, “Here's the magic org chart and here's the roles that you have to have.” Ultimately, a business should be built around the entrepreneur and what they actually need. The only way to really see that is to know where your time is going.

Marc: Good stuff.

Jason: That's my two cents.

Marc: I like it.

Jason: All right, so that's number eight maybe. I don't know.

Marc: It’s number eight.

Jason: We’d better stop before we add anymore.

Marc: We’d better. I know. You’re making me think of too many things.

Jason: Marc, it was really awesome hanging out here with you. This is really fun. You're welcome back anytime. Before we go, how can people get in touch with you if they're curious about some stuff that you offer for property managers or they want to learn more about your business or whatever?

Marc: The best way to reach me is through our website which is propertymanagementsystem.org and we got a handful things on there, a lot of video resource things. We've got our system manuals, we talked a little bit about that, our actual system manuals, we offer those. You can download samples of those and we got packages on those.

We do ancillary business training, some coaching stuff from that aspect. One thing I'm pretty excited about, we're just putting in place, we actually just put in place and I'm happy to share with any of your folks if they're interested, they can drop me an email. We put a business health checkup form where you answer some questions and it spits out a number to let you do that business health checkup. If anybody is interested in that, drop me an email, go on the website, reach out to me from there, will be happy to send it to them.

Jason: Cool. All right, Marc, thanks so much for coming on the DoorGrow Show and excited to see what you do in the future.

Marc: Jason, thank you, it was fun.

Jason: All right ,so if you are property management entrepreneur and you are struggling, you are feeling challenged in growth, be sure to connect with us over Door Grow. I would be honored to help you out. As I said during this call, I'm a firm believer in getting coached, getting coaches, and even if it's not me, somebody like Marc, there's lots of other [...] there that can coach you. Get somebody that can give you some value, help you grow your business, help you achieve your goals, and figure things out. Until next time, everybody, to our mutual growth. Bye everyone.

Download this Episode

Sep 3, 2019

Do you want to build wealth through real estate investing and property management? Then, put in the work, trust the process, be open-minded, and get results that change your life.

Today, I am talking to Robin Reed, CEO of Concept 360 Property Management and a licensed California real estate broker. She helps clients reposition assets to maximize their value by decreasing expenses and increasing income.

You’ll Learn...

[04:29] Challenging Coworkers: Let them go, and try not to grow the company.

[05:07] Learn to appreciate employees who handle day-to-day tasks and tenants.

[05:45] Feast or Famine: Flip from brokerage income to property management.

[07:27] Completely Commit to Changes: Follow DoorGrow, and do whatever it takes.

[12:00] Then vs. Now: No Jerks Allowed policy to make everyone happy.

[17:05] Desperation and Disrespect: You get it, or you don’t.

[17:25] Value of Property Management: If working for peanuts...get what you pay for.

[18:20] Walk Away: Not everything, everyone is a perfect market/product fit.

[22:00] Feeding Funnel: What do you do? What’s property management?

[25:50] Retention: What works? Sells? Results and relationships with real estate agents.

[26:05] Growing from 65 to 200 doors; adding 2-5 doors/properties each month.

[30:15] Second Sandtrap: New challenges ahead for processes, teams, trust, and more.

Tweetables

I like working on the business, and not in the business.

Feast or Famine: Rollercoaster of brokerage income.

Be willing to change, take action, and make a difference.

What sells, what people want to buy are results.

Resources

Concept 360 Property Management

National Association of Residential Property Managers (NARPM)

LeadSimple

GatherKudos

DoorGrow Case Studies and Website Secrets

DGS 93: How I Almost Quit Then Found Joy in Property Management with Annemarie Sunde of Legacy Property Management LLC 0

Transcript

DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it, you think they’re crazy for not because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income.

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change the perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

Today's guest is Robin Reed of Concept 360 Property Management. Robin, welcome to the show.

Robin: Thank you, Jason.

Jason: It's really good to see you.

Robin: You too.

Jason: Robin has been a client. For long have you been a client?

Robin: Coming up to two years. I think we’re right around two years.

Jason: Maybe I should read a little bit of your bio because you’re really cool. It says, Robin Reed is a licensed California real estate broker and CEO of Concept 360 Property Management with a background in commercial real estate, finance, investment, and development. She's experienced in all real estate asset classes having secured over million in both debt and equity for her clients. She opened Concept 360 Property Management to share her true passion and combined experience as a broker and investor with her clients by helping them reposition their assets. They maximize their value by decreasing expenses and increasing income.

A passionate real estate investor herself. She enjoys helping her clients build wealth through real estate investing. Robin is actively involved in several real estate trade organizations including NARPM, the National Association of Residential Property Managers, and is always aware of the pulls of the current real estate market. An Orange County native, she holds a BA degree in English and Comparative Literature from Chapman University.

Robin, I actually saw you in person in Long Beach when I spoke at the NARPM chapter. It was awesome because you and your husband came up to me and gave me a big hug. I remember after that event you said some kind words to me. After that event, I was kind of high of the event, but afterwards in the parking lot, I started crying. Because as a coach and as a mentor to a lot of property management companies, I don't get to see clients in person very often because a lot are digital or remote. But occasionally, at a conference or something and somebody comes up to me and they say something in gratitude, that means a lot to me.

Robin: Right.

Jason: That was one of the moments I cherish. It was really nice being able to help you guys out. Why don't we start back at the beginning? Maybe a couple of years ago when you came to myself and to DoorGrow. What challenges were you dealing with then? What has been happening?

Robin: We had let an employee go. The company was something that at the beginning when it first started in 2004, it was pretty big and had a lot of multi-family and things like that. Then the recession hit, a lot of people sold their buildings, some lost them, things like that. We weren't really focused on the property management company. It was just sort of this thing over in the other office that was self-sustaining and it was really something we weren't paying attention to and we were really focused on brokerage. We did a lot of brokerages, sold a lot of REOs for banks and we were really involved in that.

I guess it was three years ago, that was right, it was about three years ago and we let an employee go and we looked and realized we were down from probably at the hay day close to 1800 doors, we are down to 65 doors. I said, "I don't even think we should keep this open. What's the point? It's a liability. I'm not into it. Let's just close it." So, we didn't, we kept it as a self-sustaining thing, but we didn't try to grow it. Then my remaining employee went to a maternity leave and I was doing her job for a couple of months which I learned that I hated doing her job. I'm glad I have employees. I like working on the business and not in the business.

Luckily, we were at the point where we were able to have employees and I don't really have to deal with day to day of tenants and all that. I did her job for a couple of months and during that period I thought to myself, "This is a good business. This is a good business to be in. This is viable." I was so used to the rollercoaster of brokerage income, it's feast or famine.

Jason: Yeah.

Robin: And the property management company had always been in the background if between commissions or something like that. I thought, "why don't I flip it? Why don't I flip the script and focus on the property management company and then put the brokerage on the side?" My husband saw you speak somewhere on the internet, came across you and your videos and said, "You got to check this out." Historically, there's been a lot of "check this out", "we got to try this system" so I'm skeptic with systems and coaches, I always have been. I saw one video of yours and I said, "Yes, I'm in."

Jason: That’s it. You have been super skeptic and one video was all you needed.

Robin: One video and I said, "I'm in. Let's check him out."

Jason: What did I do in that video?

Robin: I don't know. I wish I knew which one it was.

Jason: It's good. I got to do more of that video.

Robin: That one, yeah.

Jason: Yeah.

Robin: We joined up with you and we were willing because we wanted the property management to grow. It’s like, I have this company already and we already have clients, it's something that I can grow from. I was committed and I said, "Whatever needs to happen." We went through all of the training. If I needed to change the name, we ended up changing the logo for you guys. I would have changed the name. I would have done anything. I said, "I'm completely committed to this system. I'm willing to do whatever it takes. Let's go."

We did the website. I think before we even did the website or maybe in conjunction, I don't know how it works, but we did GatherKudos and that was huge.

Jason: Yeah, [...] on the reviews.

Robin: Yes, that was huge. That's been a huge help for us still. We have people that say, "Oh my god. I just saw your reviews." We started asking tenants and owners to review us. Sometimes you have to ask several times for people to review you. Dana, who works for me in the office, she's always trying. She's very good at getting people to review us. She's like a dog on a bone that she said, "You said you we're going to review us. Review us. Review us." So that's good.

Jason: Yeah, good. You started going through a process.

Robin: Yeah.

Jason: The one thing I really loved about you guys as clients is I made mistakes in the past in attracting clients that are really opinionated because I was being very opinionated to the marketplace.

Robin: Okay.

Jason: But somehow you guys came through and were amazing clients. You guys were the type of clients that I really wanted because you were open to doing things differently. You were open to trying stuff. That's the type of person that I am. I'm very much like an open-minded person and so I'm getting better at putting out more of an open-minded message to attract those types of clients because we attract really well what we put out there.

You guys came to me and you were willing to put in the work and you guys trusted the process. Those are the clients that get the biggest results and that's always really exciting to see a client get results, doing what you say that you asked them to do, I feel like when my clients come on, they are putting a lot of faith in us.

Robin: Right.

Jason: Whether you are a business owner or coaching client of mine and if they put that faith in you, that's a secret thing, I think, in business. I think that's why when your husband came to me—I don't even remember what he said off the top of my head—but he said something like, "You changed my life," or something like that.

Robin: I think it was something like that because it's true.

Jason: Yeah. I think as entrepreneurs—or at least the type of entrepreneurs I really like to work with—that's really the core of who we are. We want to make a difference. Some entrepreneurs, maybe you can call them entrepreneurs, they have business in which all they want to make money.

Robin: Right.

Jason: They are not really concerned about solving the problem, but real business exists to solve the problem. Property managers solve the real problem.

Robin: Right.

Jason: I think a lot of them are very much enjoy people who are contribution-focused. That really was great to watch you guys go through and trust that. You guys asked a lot of questions.

Robin: Yeah.

Jason: A lot of questions, good questions, then you guys took action. You guys did stuff. You did the things that I told you to do.

Robin: Yeah.

Jason: You did a lot of different things. You’ve gone from saying, "It's a liability. Let's just close it down," to saying, "Hey, maybe there's something here." To getting coaching, to going through a process, cleaning up your reputation, working on your website, working on your pricing model, working on your sales process, working on your prospecting methods. You've really gone through all of that and then we started getting on the operational things, figuring out your team a little bit, figuring how to get you in alignment with your business that wasn't so uncomfortable.

Robin: Right.

Jason: Because it was, it was uncomfortable for you at some times.

Robin: Yes. It was.

Jason: I think we've all been there. I remember some calls of you where you were like, "How do I get this one team member to do things the way that I want them to do?"

Robin: Right.

Jason: "I want things to be this way." Your perspective shifted really quickly after that.

Robin: Oh, I did. Yeah. I've learned a lot.

Jason: How do you feel like your business is now? How does it feel different now having gone through all that?

Robin: We have no jerk's policy. You were talking about the kind of clients that you want to attract and it's the same. Life's too short. We've had some clients that are just not great and we let them go. That takes some faith in the system because it'd be easy for me to say, "I have a staff. They can deal with this person. I don't have to deal with him. I'm just going to keep them because of the income." But that's not really the culture that I want. I don't want unhappy employees to hate me because I keep bad clients on.

We've attracted so many just really cool, nice people who get it. There's people that just don't. They don't get it. They don't see the value of property management. They maybe have self-managing for a long time and they don't see the value, but there are other people that do, and those are the people we want to work with. We've really streamlined our criteria about the kind of clientele we want, the kind of properties that we want to manage.

We manage several HOAs. We don't manage them anymore. They had their separate challenges that weren't really working for our business model and so we let all of them go. That's income, but it's been replaced. It’s come back around. You were talking about relationships. You said to us, "Your property management company will be a place where you get referrals for your brokerage." I've got one in escrow right now that we’ve managed for a couple of years. Another one that we managed that were evicting a tenant and putting on the market. It is true that the property management company has been an interesting gateway to the brokerage business which has sort of become my side hustle, if you will, not my main thing.

Jason: Yeah. It's a good side hustle.

Robin: Yeah.

Jason: One of the things that I point out to clients, and for those listening, I think it's very easy for us as business owners to fall into having the business that we can create or that we can have. Having the types of businesses that we can serve instead of having the business that we really want and the clients that we really want.

Robin: Right.

Jason: It's such a slight distinction and such an easy trap to fall into. It's similar to what I said outside of this is that, ultimately, I think what happens to clients is that we help them understand not just who they want to really work with, but who they don't want to work with. Then when they get that clarity and we then engineer the sales process and the reputation process, your pricing, and everything around who you really want then the message creates and attracts the right type of clients or tells the wrong type of clients, and so you are now attracting the right type of clients.

I think a lot of property managers are hearing you and they just don't believe it. They’re hearing you say, "Our clients are great. We love them. They are easy. "And they’re like, "She's smoking something." They don’t get it because they’re feeling, "I know. I talk to people every day." And they’re like, "I hate this business sometimes. It's crazy. I'm struggling. We are dealing with people who are like we have to replace one door every time we get a door on." Really, it’s that they’re putting out the wrong type of energy, message, or perception or they’re focusing on the wrong type of audience and they don't see that it's possible. This sounds like a pipe dream to them. How would you explain that to somebody that's sitting where you were two or three years ago?

Robin: It does sound like a pipe dream, doesn't it? It does sound a little bit scary to start trusting the process and that you will get new doors on if you let go of some. I'm a firm believer of that kind of energy anyway. You let go of some things and they are going to be replaced by something better anyway. I'm a firm believer in that kind of energy, but you might not be able to let go. Let's say you start doing the process and you start to GatherKudos and you start getting more clients. Then you'll be able to slowly maybe let go of the worst ones to replace it with better ones.

You've got to trust the process. That's the thing and it's an empty card. I think a lot of times in this business, I've seen it in brokerage, and I'm sure it happens in every business, people get desperate and they accept treatment from clients they don't really want to accept, but they get desperate. We've had people call us and other people will do it for less. [...]. I mean, go ahead. I saw somebody on one of the DoorGrow threads say, "If you want peanuts, you're going to get monkeys or something." It was essentially like.

Jason: If you’re working for peanuts, yeah.

Robin: Right because that's what you pay for.

Jason: [...] monkey if you’re working for peanuts.

Robin: Right. There's a lot of people that would do it for less, go ahead. If that's your main thing, is somebody who would, "What the price is?” I mean, I was telling my husband, I said, "I've never gone in the hair salon and said, okay, how much?" It's more of what can you do and then how much. Don't you want to know what the product is?

I have these people call me the other day and they had a litany of questions. I was being peppered with questions. I finally said, "It sounds like you guys have a lot of questions, maybe we can set up a meeting." They were just hammering me on pricing and I said, "Maybe we’re not a fit." It's okay to walk away, you are not going to fit with everyone.

Jason: Probably the people that ask endless litany of questions, they're usually really looking for an excuse not to work with you...

Robin: Right.

Jason: ...especially if they know that your pricing is higher. They're looking, "There's got to be a reason I want to work with these guys, give me an excuse. Oh, you guys don't do that one little thing? Hahaha. I have my excuse. Now, I can avoid this leap that I was going to take working with a coach, working with this business, or whatever. I can avoid that and I can stay in my mediocrity. I can stay in my stuff. I can stay in my dysfunction."

I mean, there might be people that call you up asking about your business and they really just want to self-manage. They're just looking for an excuse why is it too expensive or too bad of an idea, or why can't I not trust them so that I can hold onto this moldy peanuts and [...] a monkey and keep my hand in the monkey trap. They want to hold on to it. They don't want to let go and they are looking at you to give them a reason. I love when people play tug of war game with me.

Robin: Right.

Jason: My favorite thing in the tug of war game is to let go of the rope.

Robin: Right, exactly.

Jason: And watch them fall on their ass and then they are sitting there holding on going, "Why won’t you play with me? Why won’t you fight me on this?" "I don’t need to, I don’t need to play that game." Let’s get into the changes that you’ve made. Your business from where it is now in almost every way is different.

Robin: Right.

Jason: What changes did we go through? Did you mess with your branding?

Robin: The logo.

Jason: Okay. We did change something to do with branding. Then we go into the reputation stuff you mentioned. And you guys also have process now reaching out to people, and stuff like that. Or it’s gotten [...] for you?

Robin: We used LeadSimple. I tried so many different things just to make our systems better as you bring on more doors, you have a quality problem of how do you manage everything. The system of bringing them on board and all of that. I’ve actually just been working, finessing our onboarding process. Our BDM wouldn’t get all of the necessary information. The BDM just wants the signature on the contract.

Jason: Right. "Let’s get the deal, let’s close it."

Robin: I realized, "You go get that signature, I’ll get the rest of the stuff." I’ll send them a welcome email with all the things that we need, and that has really worked out well for us.

Jason: You’ve also revamped your pricing, right? You went through significant change there. You revamped your sales process, which you’re talking about right now.

Robin: Right.

Jason: Making significant changes there in optimizing that. How about the methods for feeding this funnel and prospecting methods?

Robin: I’ll talk about a couple of things that have worked for us, and then something that haven’t worked for us because I’ve tried everything. Something that’s very, very simple is that when you have a business, whatever it is, you need people to know what you do. Especially in property management, my local area, there are people that sell products that can sell to a nationwide audience, that’s not what I do. I am managing properties in my local area. I think focusing on that type of local people that are local professionals that know what I do, and that can refer business to me.

We do a lot of speaking engagements. We have Dan [...] presentation and then we have one that we’re doing right now that we’ve done a couple of times that is some before and afters because we do a lot with clients that have maybe inherited a property or bought something at a discount that needs to completely be rehabbed. We’ve worked through a lot of those. We’ve some before and afters and we talk about the clients getting more money in their pocket every month now because of turning the units. We got a client that inherited a property that his mother had owned and she had kept the rents the same for years. One bedroom was getting a month. It’s now getting .

Jason: Wow.

Robin: How can you argue with that?

Jason: That’s what sells. What really sells, what people want to buy are results.

Robin: Exactly. That’s why that presentation has been so successful, it’s black and white, it’s the numbers, it’s the before and after pictures, it’s the before and after rent rolls. It shows clients, when we manage their properties, and we have a lot of guys that work for us that can do the turns. We do a lot of it. We can discuss a lot of business. We have a lot of vendors that give us great deals. It’s been really beneficial for our clients. Doing this speaking engagement gets us out there and has people see what we do. That’s been very beneficial.

I go to events, I’m really the only property management company there. There’s no other property management company that show up to these events that I go to. In general networking event, I don’t really seem to get much out of those. In our area, we have the realtor referral program on our website, we don’t get anything. I don’t know if it’s because the realtors in our area, they’re doing one-offs, kind of they’ve got one deal and that’s it, you never hear from them again or in LA County you make so make so much money on one deal that our little referral, they don’t care, they’re not interested.

Jason: Not as enticing. Ultimately, having a relationship with real estate agents is what works...

Robin: Right.

Jason: ...and nurturing relationship long term. That’s really what works there. You mentioned before and after and how effective that is. Let’s paint a picture of your before and after for your business that helps me out. Let’s look at this. Before, when you came to me, you were 50, 60 units?

Robin: I want to say it was 65 doors, 64 doors, right there.

Jason: Okay. And then where you guys at now?

Robin: Right around 200.

Jason: Oh my gosh. So, 200 doors. How many doors were you adding when you were at the 65? What was the sort of the challenge then? What was the typical growth rate?

Robin: Nothing. The growth rate was a negative. We were losing. We weren’t doing anything. The company was just in the other room on its own and we weren’t doing anything to try to grow it.

Jason: No growth. That’s 65 doors and now, if you guys were at about 200 doors under management, what sort of the growth rate still like? How many doors you add in typically in a month on average?

Robin: Typically, a month, 2-5.

Jason: Okay. Steadily. If that’s the case then you must be retaining doors a lot longer.

Robin: We always have. Our retention rate is really a lot longer I think than the stats I’ve heard in the industry. We’ve done well with that.

Jason: Which [...] targeting better owners, or owners that are not just accidentals that are going to fold after a year.

Robin: Right. I find the single family is what we like to target and the small multi-family. We do manage some properties, that’s why 2-5 a month, sometimes that’s not necessarily doors that’s properties, some of those properties might have 4 units.

Jason: Oh, okay.

Robin: We’ve taken on some larger multi-family. We actually started in multi-family.

Jason: [...] a year typically on average adding a month maybe is what, maybe about 10?

Robin: It may be. Depending. Sometimes it’s just five single family. It just depends on the month. A lot of times though because we’re doing so much prospecting, we have so many in the pipe that somebody I’ve been talking to for four months comes on, that kind of thing. That works well.

Jason: That [...] nurture process.

Robin: I just found that people that have the 25-unit buildings and things like that, they want you to run your business the way they want you to run it. I had a guy come and talk to us. We do all of our statements, there’s an owner portal, we email them, we don’t do a paper statement, and he wanted a bound paper statement every month, so his wife could read it. I said, "Too bad, we don’t do that."

Jason: Could you imagine if you had 20 of those to do a month?

Robin: Exactly.

Jason: 50 of those to do a month?

Robin: They seem to want special treatment so you really have to set your boundaries and know what you’re willing to accept. There’s always negotiation. It’s business. There’s always a bending. You might think, "Well, this is so worth it. You know what, I will lower my price on this or that, or I will do something out of the ordinary." But for the most part, you really have to stick to your guns and know what you’re willing to accept. That works for us.

Jason: Works for me too. I love hearing about you and your husband’s successes. It’s really great to see you. I appreciate you coming on the show and hanging out with me. It’s great to hear that you guys are 200 doors and having growth. You guys are headed into what I call the second [...]. That’s the 200-400 doors and this is where now you’re dealing with processes and staff, and building a team. You’ve got some new challenges ahead. Maybe we’ll be talking soon.

Robin: Okay, good.

Jason: [...] challenges. It’s really great to see your success. Shameless plug, for those that are considering maybe working with me, doing the seed program, maybe they’re skeptical, or they’ve heard mixed reviews. What would you say to them about me, what’s your perception of me and DoorGrow?

Robin: I can’t say enough positive things about you and DoorGrow. It has truly changed our business. If you have a property management company, if you’re starting a property management company, especially if you’re starting one, there’s not so much clean up that you’ll have to do. Do it right from the beginning. Jason is very genuine. He’s a good human being. That’s important. We trust you, we really care about you and you care about us, and we’ve had a two-year relationship with you and we know you’re there for us. We’ve seen the results. Not only that, for me, it was hard for me to trust the results, and trust that they were going to keep coming, and they have. You don’t just get a new DoorGrow website and have a seat and have everything come to you. That’s not how it works, but it’s all of these different pieces that starts to funnel business your way.

Jason: I tell potential clients or even clients, it’s the last 10% of dialling in things that give you 90% of the results.

Robin: That makes sense.

Jason: It’s that last 10%. For example, they’ll do the website, but they don’t get faces on there, they don’t get the social proof. They’re missing just a couple little pieces. I have the whole website, that’s 90%. But they’re missing the little pieces that create that trust or ticket to the next level. How I built my business, and how I built the entire program is built around the idea of trusts. Trust is what sells and the fact that you came on board and trusted me, allowed me to help you create a business that creates trust. It sounds like you’re putting out a lot of trust for the industry and property management industry in your market which I think is awesome as well. You’re changing the perception of property management. There’s a lack of trust.

For those that are listening, pay attention to this, people that are not signing up with you that you feel like should be, it’s not because they distrust you, it’s because you haven’t created enough trust for them to pick you over your competition. You just haven’t created enough trust. It’s not that they’re walking around just distrusting everybody. Maybe they are, maybe the property management industry has earned a bad reputation in some ways. But I think more than that, it’s that you haven’t created enough trust. It’s about creating that trust.

Anyway, I honor you for your growth. You did all of these. You did it. I just pointed, and you and your husband deserves all the props for making this happen.

Robin: Thank you.

Jason: Really, you guys have done some phenomenal things. Like you said earlier, “I tried everything.” You have the tenacity. And I gave you ideas, but you tried things, you tried everything out. You did, you trusted the process but you experimented and that’s really what entrepreneurs do. That’s how business works.

Robin: Yeah. We’re still tweaking. You mentioned the website.

Jason: Always.

Robin: I just took the website quiz again last week. I got a B. There’s a couple of things we need to tweak.

Jason: I have a new training called Website Secrets that you got to watch.

Robin: Right.

Jason: And we’re getting to an A.

Robin: Yeah, exactly! I know exactly what we need to do and it’s just getting with your team and making those tweaks.

Jason: Make sure you watch the training because some of my questions in DoorGrow secrets or in the DoorGrow score quiz.

Robin: I will.

Jason: If anyone wants to grade their website, you can go to doorgrow.com/quiz and take a test to grade your website, how effective it is to creating trust and getting conversions, but some of the questions are backwards. You think you’re saying, “Yes, I’m going to get this, and I need to add this for my website.” It’s a trick, it’s like the reverse. I didn’t really explain which ones are right and which ones are wrong, I’m just asking do you have this and then it gives you a grade in the end.

You’re on the inside. I’ve seen people go and implement a bunch of changes, thinking they could just go off the quiz and then it’s just [...] they can clear things up. Cool. Robin, really great to see you again. I’m excited to hear about your continuing success and what [...] big and brighter future with Concept 360 Property Management.

Robin: Thank you. Thank you so much.

Jason: Alright. I’ll let Robin go. Really great to connect with her. Always exciting to see and share in the winds with clients. Man, I would love to take all the credit, but my best clients, all the ones that are in my case studies that you guys can see back onto the doorgrow.com/case-studies, these are clients that they trusted the process, but they did the work. They did the work.

This is a secret, there’s no company that you can just go hand them money and they’re going to give you contracts. We don’t do that. Marketing agencies can’t do that. The best they can give you, most agencies with cold leads, we’re going to help you build system so that your business grows more organically, that it’s easier that we put gasoline on the fire that works in the sense you which is word of mouth and we optimize your business towards that.

If you are struggling to grow, if you are maybe what Robin was in the beginning saying, "It’s a liability, let’s just close it. I’m burnt out, I’m stressed out. I’m not getting any younger." I’ve heard these phrases from clients. Get on the phone with DoorGrow or start with our case studies, go to doorgrow.com/case-studies and just start there. If you go there, there is a free training—it really is the beginning of our program, I give it out for free. There is a link you can click on to watch free training about DoorGrow Secrets. It’s going to share with you concepts like the cycle of suck, the 4Ds to revenue, cold leads versus warm leads, the myth of SEO, so that you can be a more savvy educated person with marketing and growing your business.

If you decide that we can help you out, I would love to do that. If you feel like you are a right fit, you are open-minded, you’re the right type of client, I would love and be honored to be able to work with you and coach you and help you grow your company. Again, thanks Robin for coming on the show. Until next time, everybody to our mutual growth. Bye everyone.

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Aug 27, 2019

Toilets, tenants, and termites: Property management can be a tough business. Have you ever felt like giving up, only to find joy again?

Today, I am talking to Annemarie Sunde of Legacy Property Management. She paints a realistic and transparent turned pretty picture of property management.

You’ll Learn...

[03:00] Discovering Development Areas: Annemarie never wanted to be a realtor, but now has a real estate license.

[04:04] Dealing with the Scum of the Earth? Given an opportunity to get into property management, only to learn most property managers and tenants lack integrity.

[04:50] Origins of Legacy Property Management: Treating others with respect that leads to legacy with tenants, owners, and co-workers.

[06:10] DoorGrow’s Time Study: Doing things that cause you stress and headaches. [06:30] Strategic and Futuristic Strengths: Started having fun thinking 20 years ahead about being on a beach and the business naturally growing.

[06:55] Cycle of Suck: Vicious circle of not-great properties, tenants, and owners.

[08:40] Business Model and Breaking 100 Doors: Fewer but healthier and fun properties that pay bigger yield.

[09:45] Seeking Clarity: Biggest problem growing and scaling business is blaming everyone and everything else.

[10:47] Tactical vs. Strategic: Entrepreneurs are visionaries; why do the tactical crap?

[14:26] Accidental Perfect Landlords: Owners who take pride in their property.

[15:16] Prospecting Channels/Methods: Lead gen from realtor referrals via classes, podcast, and online reputation.

[16:30] Some clients don’t listen, follow the protocols, or get results. Do what you’re told!

[17:48] Door Envy: It’s not about doors, but whether you love your business and life.

[19:25] How do you turn your phone off at night? Do Not Disturb.

[20:35] Biggest Benefits of Seed Program: How to design a user-friendly Website, find clarity, ask for reviews, and create an online reputation.

[22:35] If you were to sell your business, what makes you valuable?

[25:07] Magical Mindshift: If you want people to invest in and spend money on you, be willing to do that for yourself.

[28:34] Memoirs of a Property Manager: What we go through managing owners.

Tweetables

Transparency of Property Management Industry: Toilets, tenants, and termites.

Cycle of Suck: Dealing with scummy owners and tenants sucking you dry.

Entrepreneurs assume everyone else is like them. Nobody’s like us. We’re weird.

Resources

Legacy Property Management

Tom Rath's StrengthsFinder

DiSC

DoorGrow Seed Program

Yelp

AppFolio

National Association of Residential Property Managers (NARPM)

OpenPotion

DGS 92: Property Maintenance with Liz Koser of Keepe 0

Transcript

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

Today, I’m hanging out with the fantastic Annemarie Sunde of Legacy Property Management. Annemarie, welcome to the show.

Annemarie: Thanks.

Jason: It’s been a while since we’ve chatted.

Annemarie: I’m having Jason withdrawals.

Jason: Yeah, you’ve mentioned that on the pre-show and I’m like, “You just show up. Show it to our weekly cult review, internally for our clients.” The topic for this episode is how I almost quit and then found joy in property management. Property management can be a tough business. It can be a tough industry. “Toilets, tenants, and termites,” as some of you say.

As business owners, we’re often in this promotion-sales mode. We’re just telling everyone how great our business is all the time. We start to almost believe it superficially, but then on the inside, sometimes it’s just not really how it is and there’s this disconnect. I would love to just give people just a taste of some reality and some transparency because business is not always great. Sometimes it’s just really not great.

I remember, way back, waking up when I was running my company as OpenPotion and realizing I hated my business. I didn’t like the clients that I was working with at the time. My team were out of alignment with my values. Everything was just off and I just want to stream Netflix today. That’s it.

Let’s go back to one of those early conversations you and I had. Give people a little bit of background, you and your business. You can give the pretty picture first. Tell everybody about you. Let’s qualify you.

Annemarie: I’m actually a degreed engineer by trade, worked 15 years in Oil and Gas in Denver. When I got married for the second time, I married a realtor, and I consulted to his business, actually growing his business. After a year of doing that, I said I never want to be a realtor. I never want a real estate license in my life, and now I have a real estate license. But I don’t do any of the buy-sell transactional selling, whatsoever. I’m not interested in that, I don’t have the patience for it, and you should know, I lack incredible patience. That’s part of my development that I’ve learned coaching with you.

Let’s fast forward a little. Just got into the opportunity to get into property management was offered to me, and I have always done flips, I’ve always had rentals my entire life with my father. I’m like, “Well now, I can be the boss of a tenant. This sounds fun. I can do this.” I did when we started our own business, I worked for a couple of property management companies. I felt they lacked integrity, a lot of what you talk about in DoorGrow. They’re just scummy, dealing with scummy owners, scummy tenants.

Jason: I talk about that?

Annemarie. Yeah, the Cycle of Suck.

Jason: Oh, the Cycle of Suck. Yes.

Annemarie: We had our own rentals and I was like, “You know, there’s got to be owners out there that actually want to be treated like something.” We created Legacy Property Management really to lead legacy with our tenants, with our owners, and with the people that we work with, that work for us. That’s where it was born. My husband stumbled across DoorGrow, and I was one of the first Seed Hackers 1.0.

Jason: Jeff, right?

Annemarie: Yes. I got into the Seed Hacker Program and then I got into coaching, but when I got into coaching with you, I was cooked. I hated my business. I was looking for anybody that wanted to offer me a good sum of money to buy my business. I did not want to be in it anymore. So, that’s where I was.

Jason: I remember this conversation. You were describing your business, you’re like “I want out,” and what did you want?

Annemarie: I wanted to be with my kids and I wanted to go sit on a beach.

Jason: You’re right. I want to spend time with my kids. I don’t want to do this anymore. I don’t want to deal with all these headaches and stress, and I’ve seen this. I’ve seen this a lot. And it doesn’t the business or the industry, it’s not even about the business or the industry. What did you realize it was about? I’ll ask you.

Annemarie: I was doing things that completely stressed me out. It started with a lot of the exercises you had us do on the coaching call, but one of the big things was the time study. The very first time I did a time study. I am not a tactical person, whatsoever. I am highly strategic. I’m the 50,000 foot. I actually did a Tom Rath StrenghtsFinders and I have strategic and futuristic in my strengths. I’m 20 years ahead of everybody, thinking about how I’m going to get myself onto a beach.

When I learned that, your comment to me was, “When you’re doing the tactical crap in your business, this is when you are grumpy. This is when you can’t handle it. This is when you’re stressed. This is when your kids are driving you crazy. This is when your phone’s going in the toilet. All of those things.” The minute I took that out of my job description and I was doing strategy, I started having so much fun, and the business was naturally growing because I was having fun.

Jason:We’ve thrown out a couple of terms that are insider terms here, right? So some people who are hearing this for the first time are like, “What are they talking about? They’re speaking some language only they know.” Let’s explain what the Cycle of Suck is. What is your perception of what the Cycle of Suck is?

Annemarie: It’s this vicious circle of not a great property, not a great owner yields crappy tenants, and it just keeps going round and round and round. You can’t get out of the circle.

Jason: The bad reputation and then you attract more bad owners, more bad properties. That’s where the whole industry sits in general, as a whole and aggregate in the industry has a negative reputation, and most businesses are taking on any owner. That’s something that the whole industry needs to shift.

Annemarie: I did that. When I first met you guys, that’s where I was. You’re hungry, you’re starting a business, you just take in anything you can take, and you’re realizing that the low-end people are sucking you dry, costing me more money because I’m using attorneys. It just wasn’t a fun thing.

So, I elevated our business model. We do know multi-family, for example. That’s our choice. We have fewer properties that pay a bigger yield so I’m sitting at about 110 doors, and I love it.

Jason: Amazing. You broke 100. I love it.

Annemarie: I did. Finally!

Jason: Did you throw a party? You should’ve throw a party.

Annemarie: We are going to throw a party. I think my senior property manager and I are going somewhere.

Jason: You deserve to throw a party. That’s awesome. They’re healthier properties than where you were.

Annemarie. Yes. They’re fun properties and we love representing them.

Jason: I remember that first conversation. You just want to spend time with your kids. You wanted out of the business, and I remember what I said to you. I said, “You’re just doing it wrong. We can bring this business into alignment around you,” but at that time you were serving the business. You were a slave to the business instead of the business fulfilling you and your needs, specifically. [...] an alignment with you.

Every business is different. What would work for you and fulfill you is different for me. We had a hard time even getting into this software, but I love the nerdy stuff. I would do technical stuff and I’d put that as part of my role in the business. You will hire someone up.

Everybody’s team looks different. If we build the right team around us, but the only way we can do that is if we’re clear on ourselves and that’s the biggest problem people have with growing and scaling companies or teams because they have no clarity on themselves. So, they’re externalizing everything and blaming the business, they’re blaming their team, they’re blaming their clients, and the problem is them. Once you get clear on you and we have clarity on what really fulfills you and energizes you and drains you.

You mentioned tactical versus strategic, right? Entrepreneurs, generally, we are strategic people. We’re the visionaries. That’s generally who all of us are as entrepreneurs. Some of us enjoy some of the tactical stuff. There are tactical things that I do enjoy, and you can hold onto those if you want to. But, in general, all the tactical things that we hold onto are the things that are holding us back. They’re holding an entire business back. The tactical things that drain us are the things that are keeping the entire company from growing and it makes us the biggest bottleneck in the company.

Annemarie: I figured everybody was like me. Why would they want to do the tactical crap? I actually have people that work for me and they can’t even see beyond their nose, and they’re fine doing the tactical day in, day out, day stuff. I can’t stand it.

Jason: That’s a big mistake we make as entrepreneurs. We assume everyone else are like us. Nobody’s like us. We’re weird. Raise the chair. My team members, they love doing the things that they love doing. I don’t love doing the things that they love doing.

Annemarie: Me neither.

Jason: That’s great. There’s seven billion people or whatever in the planet. There’s always people that love doing the stuff that you don’t love doing and that’s such an interesting mindset shift—to realize somebody would love doing this stuff. [...] that gift by giving it up,

Annmarie: You even taught me how to screen somebody if I’m going to hire them. They go through this whole process now that we have, including a DISC profile to see because I am High D and I am the bull in the China shop. If I’m always going to have to massage your feelings because I just let it fly, then you’re probably not the person to work for me.

Jason: You mentioned a few things that you did to go through this transition. As you shifted your business away from doing all the things that you felt like were draining you, that put you in a position where you wanted out, like you wanted to get rid of the business, what did you realize pretty quickly as you started to make these changes? You’ve already thrown out the word “fun” a few times, I’ve noticed.

Annemarie: If I have a week where I am doing tactical things, I put my mind into, “Okay, this is a week,” and I warn my family, “This is what I got on my plate. I could be nasty this week because I’m not having fun this week.” That happens a lot when I’m bringing on a new person and I’m training them on having to do the day-to-day again.

What I found to be the most exciting for me is I love to strategize on how we’re going to get properties. The way we get properties is hugely through realtor referrals because we don’t sell or buy any properties, so we’re a safeplace for them, and through my class that I teach. I’m teaching probably 2–3 a quarter now. I just did two and I have four properties from those two classes.

It’s people that I want to work with. It’s owners that take pride or we call them the accidental landlords that they bought in this market. We had so many people going in and out of the state right now, it’s crazy. They don’t want to lose the foothold in the Denver market. They’re petrified someone’s going to trash their house. That’s the perfect landlord for me. We talk a lot about that to realtors that have owners that they just sold a house to and now that’s where they go back to. What do I do with my house?

Jason: That was a significant piece. If you go back in your transition is getting clarity on what you really wanted.

Annemarie: And what I enjoyed doing.

Jason: Declare on your avatar in getting clear on what type of client you really were wanting to work with. I remember we had several conversations about that. Also, we talked quite a bit about different channels for prospecting and you found different methods that really worked for you. You were doing everything from podcasts.

Annemarie: I still do the podcasts. That’s on Thursday this week, and it’s with the investor. I get more leads out of that. The three places I get my leads are realtor referrals probably coming from my classes, my podcast, and my online reputation which is what people should not even be asking if they do the Seed Hacker Program because that blew my business right out of the water. I just got another house this week from a Yelp review.

Jason: So, those three channels, you didn’t really have a system or a process, you weren’t even really focused on those three channels before you had gone through the program.

Annemarie: I had no idea what to do.

Jason: Those were just three that worked for you. Somebody else could do three different things that might work for them. Help people understand. Some people are like, “I don’t know about Jason,” or they may be on the fence about working with me and they’re like, “I don’t know because I hear mixed reviews,” because I have clients that they don’t do stuff. They don’t listen to me. They don’t follow the protocols. They don’t get the results. You just did what I told you to do. You just did it.

Annemarie: And sometimes, I have the tendency to compare myself to somebody else. We just talked about, I broke 100 doors. I’m now entering my fourth year of business and I hit 100 doors. So, four years and I hit 100 doors. I have to say that if you don’t know the Denver market, for the last two years, houses have been selling and there’s no inventory. I probably bumped into 100 several times, but I’ve lost 12–20 out of my portfolio from sales that owners decided to sell.

That’s attrition in the business, but I got to say that I was constantly comparing myself. I’d passed two years and I can’t get to 100. Then I stopped focusing on it and I started focusing on getting rid of my crappy owners because those were crappy properties, and bringing on good owners that I wanted to work with and properties I wanted to. I marketed in those areas.

Jason: I remember. I remember this conversation. I remember you were having door envy. You were like, “I haven’t broken that 100-door barrier. I want to break 100 doors,” like it was this thing. Do you remember what I said to you?

Annemarie: Calm down.

Jason: Yeah. Don’t worry about it. It’s not about doors. It’s about, do you love your business? Are you enjoying yourself? Are you getting the life that you want to have? Are you getting to spend time with your kids? Do you enjoy your team members? Do you like the people that you work with. This is your life. Don’t get me wrong, I like when people go after a goal, but once you let go of it having to look a certain way and you focused on aligning the business with you, it just started to happen naturally for you.

Annemarie: What made me let go was setting critical numbers, another secret word in the secret club. I set critical numbers, and yes, one of my critical numbers was number of doors, but one of my top critical numbers was revenue coming in. What I found was, for the last two years, I’m making my critical revenue number despite being under 100 doors. That’s what proved to me, “Who cares?”

I can still go on vacation and literally shut it off. I don’t know a lot of property managers. I have to tell you, the funniest post was one in the Facebook group when someone posted, “How do you turn off your phone at night?” After I laughed for literally 10 minutes, I went in on probably a paragraph of crap on, “First of all,” and then ended with, “and you should call Jason,” because seriously, on my phone that was the most liberating thing. I shut my phone off at 8:15 every night and it’s silent, just Do Not Disturb until 7:15 the next morning. I don’t care what’s happening. There are professionals out there that can help them, not me.

Jason: All right. Great. No, I love this. Let’s go to the Seed Program, going through that portion which the coaching stuff that I took you through, we folded into our new version of the seed program, like majority of that stuff. So, it’s all one program now. Going through all of it, what do you feel were the biggest benefits and the biggest takeaways for you?

Annemarie: I had a website because I used that folio. That folio gives you this website. It’s just learning what things to draw people. I had no clue and quite frankly I really didn’t want to, and I love that there’s a whole team of your people that will make a website change in literally three seconds of my time. There’s that component of really designing a website that’s user-friendly, and I tweak it all the time based on what I see other people’s websites.

Why keep recreating the wheel? That was a big thing. Understanding what you wanted to focus on because when you get into property management, if you’re going to focus on multi-family like we do know multi-family, and from our owners, they love that we do know multi-family. That’s a different management than single-family luxury homes. That’s our niche. That’s where we focus.

The other thing, I had no clue. I just thought we had to be SEO be the first, blah, blah, blah. I had no clue what online reputation was. The first I remember two or three clients that came on because, “Wow, you have a great Yelp review. You have five stars on whatever,” and I’m like, “Wow. This stuff works!” So, I learned that this was important and to go and ask for the review. That is part of our workflow process. If from a tenant, contractor, realtor that’s referred us, or owner, we ask for referrals endlessly online and it has really helped us.

Jason: With that, we taught you how to build a process around that and how to leverage the law of reciprocity psychologically and all that.

Annemarie: I just learned really quickly at a recent NARPM chapter lunch, they had a really great speaker on, “If you were to sell your business, what makes you valuable?” Outside of number of doors, income or profit, the third thing is, “How involved are you in your business?” Because that means that it’s not translatable. If they’re going to buy it, they’re going to have to buy you to keep it going and some people don’t want to do that. I looked at my husband because he always think I got to be involved and I’m like, “I told you. I could be this much money if I would just go somewhere.” So, now he’s on board because he heard that.

I can easily go on vacation with my business. It’s much harder as a realtor to go on vacation, if you’ve got a buyer you got to be carting around. That’s how I look at it. I want to be able to come in and out of my business as I need to. That’s the part that I love.

Jason: Shameless plug. For those that are on the fence, there’s like, “Maybe I show up at DoorGrow, maybe not.” What would you tell them?

Annemarie: Don’t even think about it. Seriously. I realized that I was in the guinea pig stages of Seed Hacker, and I thought, “Oh, my gosh. How am I going to spend this money as a young company?” It’s paid for itself long ago, so it’s totally worth it.

Jason, you have an amazing staff that people will email you, you don’t even know who these people are and they got it. I love it. It’s great. Obviously, I was at the DoorGrowLive last year and we thought it was fantastic.

In terms of the resources that you have, with your coach and parlaying those or after listening to him speak, I looked at my husband and I’m like, “Guess what? I don’t have to pay that much because I paid Jason and he gives that to me!” I mean I learned so much.

Jason: I invest a lot in the coaches. I just signed up with another coach. I’ve got three coaches right now. If I mentioned how much money I spend on coaching annually, they would lose it because it’s probably more than most property managers’ annual salary. It’s pretty ridiculous, but that’s how I have value to offer to others and that’s the one thing I would tell everybody listening. If you want people to invest in you, you want people to spend money with you, you have to be willing to do that to yourself.

You have to be willing to invest in yourself and there’s a magical mindset shift that happened for me the second I decided to pay to invest in myself. Not just pay for a team member, not just pay for some marketing [...], when I paid to invest in myself and in my business, it changed my perception of my value and it changed how I sold. It changed my own confidence level in being able to pull in business. There’s an energetic shift that happens that when you invest in yourself, other people will invest in you, too.

Annemarie: I’m sitting here thinking about, I definitely have an entrepreneurial spirit, this isn’t the first business I’ve run. One could come in and say, “Okay, I did a few rentals here and there.” Now, when I hear people say, “I’m going to get into property management,” I just think, “Oh, my gosh. The guy just did a nine minute video on the four new Colorado laws impacting landlords and property management,” and I sent it to my owners. I spent two months on Capitol Hill trying to fight these bills and it’s just crazy. People are going to get themselves in so much trouble.

What I found is when I started coaching and going with DoorGrow is one could approach it, 10–20 properties, you could probably manage it. But when you start to get such a portfolio and you really don’t have processes, you really don’t know what you’re doing to be honest with you. I agree with you. Once you know where you’re really good at, and that’s why I said doing what you’re created to do and hiring people to do the other stuff. I still do listing appointments. I don’t do them all anymore. Remember you told me, “You need to give that up.” And I’m like, “You’re crazy. I’m the only one that could do a listing appointment.”

Jason: I’m like, “Let go of your ego,” right?

Annemarie: Right. It was like, “They can’t do it. They can’t do it. We can’t lose this,” and now, I don’t even want to go, but sometimes, I do. Sometimes it just keeps me in touch with this is what life is about and this is what they’re facing. I do them, but I have no problems handing that kind of stuff off. I like to be in teaching and doing the videos and doing the podcast. That’s my gig. That’s what I like.

Jason: And you’re enjoying it.

Annemarie: I am. I love that part.

Jason: It’s such a transition. This is one of the things that’s amazing for me as a coach, that I get to see the contrast. I remember that conversation. I remember you wanting out and not liking it, and you’re a passionate person when you talk. I felt it. Now, you can feel this, too. You’re like, “love” and “fun.” These are adjectives that you’re associating with your business which most property managers are like, “She’s high on something right now. I don’t know what Jason gave her, but this sounds like crazy talk.”

Annemarie: Having the right people, honestly, makes the job a lot more fun. My property manager’s been with me the longest. We literally wrote a coffee table book for our owners for Christmas. It’s Memoirs of a Property Manager. We can’t make this up. We were sitting in Starbucks, laughing to the point of how retarted are these people, and we manage them! She said, “We should put this in a book and give them to our owners just to remind them what we deal with.” So, we did and they are asking when’s the next volume coming. You got to have time for that.

Jason: You don’t want to anymore.

Annemarie: I tell them a lot of times, “If we can’t laugh about it, then certainly we will be in the fetal position crying about it.”

Jason: Laughter is the stage before fear. Annemarie, it’s so good to catch up with you. I really appreciate you. I appreciate your husband, Jeff. It’s been phenomenal watching you guys progress and feeling all the love back from you guys. I really appreciate that. I just get to work with the most awesome clients. This is the type of things that I love doing. This is my jam. I enjoy it. It’s been great being able to work with you and I appreciate you coming and hanging out here on the DoorGrow Show with me.

Annemarie: Yup. And I will say, if I have one piece of advice, if they do hire DoorGrow, the Seed Hacker, do what they say to do. It’s not take a pill and hope for the best. It’s you having to do the work. I was all in. If I was going to spend the money, I was all in. I was going to do what I was told to do and that’s my biggest advice. Don’t spend it if you’re not going to do it.

Jason: Right. And to be honest, those are the only clients that get great results. It’s that last 10% of doing the stuff that I tell people to do, that not everybody really wants to do. It’s that last little dialing and that last little 10% that gets you 90% of the results.

Annemarie: Yup. We appreciate you guys, for sure.

Jason: All right, Annemarie. Thanks so much. I will let you go. Bye.

Annemarie: Bye.

Jason: That’s super rewarding for me as a coach. I don’t know that there’s anything more fulfilling than being able to see a client progress. It’s like watching my children succeed in anything. It doesn’t even matter what it is, it just feels good because you’re seeing this. It’s really awesome to have her come on the show.

If you are property management entrepreneur, you feel like you need somebody in your corner. You want somebody that believes in you, somebody that can challenge you, somebody that can help you see something you can’t see because you’re in it, you’re too close to the fire, I need people to tell me the same stuff that I would tell myself to do because I’m too close to the fire in my own business. I would be honored to take on helping you in your business, being your coach, and helping you grow your company. Reach out to DoorGrow.

We’re really picky about the clients that we take on because I want clients like Annemarie. I want clients that are going to do what I tell them to do. I want clients that going to trust the process. I want clients that are going to go all in. If you feel like you’re that type of person, then reach out to us. You can check us out at doorgrow.com.

That is it for today. Goodbye everybody and until next time to your and our mutual growth. Bye, everyone.

Download this Episode

Aug 20, 2019

When property managers need a helping hand, where can they go to find the right handyman/maintenance contractor?

Today, I am talking to Liz Koser of Keepe, an on-demand marketplace that fills the supply-and-demand gap between contractors and property managers. Liz is a real estate investor and landlord with 10 properties, 15 doors.

You’ll Learn...

[01:40] Early Exposure to Property Management: Liz is following in her parents’ footsteps of real estate investing.

[01:54] Own vs. Rent: Liz’s first condo was her own home that turned into her first rental. Since then, she typically purchases 1–2 properties a year.

[02:07] Diversify Property Portfolio: First year for Liz to explore out-of-state investing.

[03:32] A lot like Uber: Based on location and availability, contractors go through a background check before picking up jobs via Keepe’s mobile app.

[04:00] Keepe Connecting through Techstars: Fast track program for startups to get feedback on product/market fit; network with others to quickly bring things to market.

[04:39] Future Growth Goals: Keepe’s on the West Coast and making its way to Denver and beyond.

[06:25] Why choose to use Keepe? Allows property managers to feel safe expanding, growing their business, and extend the reach or capability to get jobs done.

[08:55] Keepe Options as Seasons Change: When things heats up, it’s time to grow.

[10:07] Keepe’s Process: No monthly subscription fee, paid on-demand.

[11:08] Common Concerns and Questions: Keepe constantly collects data and feedback from customers and others to improve its network of contractors.

[12:25] Building Relationships and Referrals: Bring over or block contractors to join the network.

Tweetables

Diversify within the real estate investing realm.

Pick up out-of-state properties, and continue down that path.

When everything heats up, that’s the time to grow.

Keepe makes property managers feel safe expanding, growing their business to get jobs done.

Resources

DGS 91: Profitability Before More Doors with Shawn Johnson of Independence Capital Property Management 0

Transcript

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

And today, I’m hanging out with the fantastic Liz Koser of Keepe. Liz, welcome to the show.

Liz: Thanks for having me.

Jason: Liz, give us a little bit of a background. Who is Liz? The bio that I have says you’re a Seattle real estate investor, landlord, you have 10 of your own properties, 15 doors, alongside with your husband, your parents actively invest in rental property, and you were exposed to this early on. Tell us a little more about you and how you got into property management or into the space.

Liz: As you said, my parents were already investing in real estate and I have bought my first condo in 2009, which was my own home, and that eventually became my first rental. Then from 2012 to now, I steadily bought 1–2 properties a year. Last year, we didn’t get any, but this year we already have two and I think we’ll probably going to continue to add this year and continue to be aggressive about it.

That’s where I’m at on the investing side. Also, I think I mentioned this in my bio, but this is the first year where I’ve explored investing out-of-state. I picked up my first out-of-state property and have every intention of continuing down that path. With the Seattle market, it’s high and it just makes sense also to diversify. I know people diversify within the stock market. I actually think it’s somewhat important to diversify within the real estate investing realm as well.

Jason: Now, lead us towards Keepe. How did Keepe get started, what’s your role there, and give us a little background there.

Liz: Keepe got started because there is a supply and demand gap between having handymen available and property managers’ need for finding handymen, especially in the markets that we’re in today. Keepe got started as a way to address that gap. We are an on-demand marketplace, matching contractors and property managers.

It works a lot like Uber in that contractors pick up jobs on mobile app, based on location and availability. They go through a background check and so on. One of the Keepe founders does also own rental properties. I had known him previously and that is how I made the initial connection. Keepe went through Techstars in 2016.

Jason: What is Techstars?

Liz: Techstars is a startup incubator, which is a fast track program for startup companies to get feedback on product and market, the whole fit, top-end networking with lots of other entrepreneurs and investors to bring things to market more quickly.

Jason: Okay, So, that means it rapidly was getting ready faster. Where’s Keepe at now in terms of growth and penetration? How new is Keepe for those that are listening?

Liz: We’ve been in Seattle the longest, but actually Keepe is in the greater Seattle area, Portland, San Francisco Bay Area, San Diego, Phoenix, Arizona, and then most recently Los Angeles and Orange County.

Jason: You’ve hit a lot of the major markets here on the West Coast, right?

Liz: Yup.

Jason: What’s next, Denver?

Liz: Yeah. I think Denver is a very good candidate and I’m actually from Colorado, so Denver would be a good fit for me personally in terms of running the sales side of Keepe. Also, I think Austin, Texas or the Dallas Fort Worth area, but definitely we’re here to grow nationally. With that, the first step is getting off the West Coast, right?

Jason: Right. When you start shifting towards the east, it’s going to be Atlanta and Jacksonville. Those are big markets for us. They seem to attract a lot of businesses there. Certainly those.

Liz: It’s interesting. We’ve actually received a few phone calls from the Atlanta area, property managers asking if we’re there yet. That’s a good sign we’re getting preemptive calls.

Jason: All right. So the goal is expansion, you guys are growing, and eventually people will be listening to this because this episode will have been out for a while and you might already be in some of these new markets, right?

Liz: Right.

Jason: Explain to everybody why they should choose to use Keepe. I know a lot of property managers are like, “Well, we find our own people,” or, “I don’t trust this.” What are some of the typical things that you tell people to sell this to them?

Liz: One, starting now, a lot of property managers who use Keepe kind of slow go. Let’s say they start to send us a handful of jobs and then over time, we end up gaining a larger portion of maintenance from our customers. I know people have their trusty handyman, but I would say a big need comes up when people say, “Oh, no. My handyman retired or moved away,” and this happens all the time.

That is one area where if you’re counting on one or even two people, there’s a company in Arizona that said, “Oh, both our people retired at the same time.” It just doesn’t work in the long run. The other thing is when property managers are depending on those one or two handymen and they’re also a little bit geographically limited.

Some of our customers maybe were in a certain Bay Area city, let’s say San Jose, and they’re weren’t willing to pick up clients in San Mateo because they didn’t have a contractor in San Mateo. Using Keepe now opens the door to look at branching out into other geographies as well. We’ve had customers that have been able to expand their footprint because they have Keepe in their back pocket and they know they can handle maintenance in other areas.

Jason: So, having Keepe allows these property managers to feel safe expanding, growing their business, and allows them to extend the reach or capability as far as their challenges with getting jobs taken care of that they have.

If the handyman retires, moves, all these kinds of stuff, then they’re typically in pain. This is one when they typically would reach out to Keepe? Is this what you’re finding?

Liz: That is where they are like, “Oh, great. Now I get it.” We have a lot of property managers try us out before that point and we’ve had property managers that have said, “Oh, great. This helps me grow because I maybe had one on-staff handyman or two and I wasn’t sure about adding a third.”

Sometimes, they realize that there’s busy seasons and so seasons, so, “How do I keep our team busy throughout the year?” Well, you might be able to keep one person busy throughout the year and utilize Keepe instead of adding a second person. There’s a lot of options here.

Jason: That’s a little bit of flexibility to what they’ve got going on, which makes a lot of sense. Property management is a very seasonal sort of business. It really heats up in the summer and even if you look at Google Trends and look at search volume, you can see the year just spike through summer every single year in search volume for property management.

That’s when everything heats up and that’s the time to grow if they’re needing to expand during those seasonal times without bringing on staff because bringing on somebody long-term is a commitment. Nobody wants to lay somebody off if things gets a little lame. It allows them a little safer adjusting.

How does the process work with Keepe? How do they work with you?

Liz: We have a pretty easy sign-up process and we actually don’t have a monthly subscription fee. We are paid on-demand. Keepe is both a platform and in the [...] contractors. All the payments flow through us. Invoicing comes from Keepe and we pay out the contractors.

The sign-up process is pretty much getting set-up for billing terms. When property managers use us for a job, that’s when we make money. We actually don’t have a monthly subscription.

Jason: Interesting. So, it’s only when you need it.

Liz: Yeah, but our job is to earn a greater percentage of our customer’s business, which is good for our customers because that means that we are working to build a relationship in the long run.

Jason: Fantastic. What are some of the common questions or concerns that people will bring up when they call you? We got people listening right now. They probably have these questions. What are the typical concerns that they have in handing something over to Keepe?

Liz: We get questions about how do we find the contractors and what’s our process for getting contractors on board. Sometimes, people think that there’s somebody in the background dialing a list to find them a contractor. It’s just shifting the burden. We actually have a team that interviews contractors. We do criminal background checks and then from there, we are collecting ratings on the contractors, so tenants today are the ones that respond once a job is complete unless it’s a vacant unit and it’s a rental turn, then it would be the property manager.

We’re constantly collecting this feedback and we have contractors that have been in our network for multiple years. We do remove contractors at times. So, it’s all about the feedback loop and continuously improving the network.

Jason: Got it. Fantastic. Any other questions or concerns that they might have or that they bring up during the sales process?

Liz: One question we get is if they don’t like a contractor, can they block them? Yes, we do allow property managers to block certain contractors. It’s come up more recently is, “If we end up going with Keepe, can our handyman join Keepe’s network?” Yes, we are happy to take those referrals from property managers. They are probably some of the best referrals we can get because if one property manager likes the contractor, then that’s a good sign going forward.

Jason: It kind of like a timeshare.

Liz: Yeah, a little bit.

Jason: They’re like, “Can I share my contractor with some of the other people in your network, so I can keep them on?”

Liz: Yeah, definitely. Once question we get is can they request their contractor. When you think about how Uber and Lyft operate, where they’re matching you with the driver near that location when they’re available, that is essentially how our network works. Although you could have a preference for someone, if that person is not available at that scheduled time, then it’s not going to be an exact matching. That’s one thing to keep in mind with a fluid marketplace is that it doesn’t work with the on-demand model to request a specific person necessarily.

Jason: It’s optimized for efficiency. The trade-off in not getting to pick Steve is that you get the job done for faster and probably get a better review.

Liz: Yup.

Jason: This is very interesting, super helpful. I’m excited to see you guys expand into some more markets and grow. Anything else anybody should know about Keepe that we didn’t cover?

Liz: I am always interested in hearing from people in other markets, too. Like I mentioned, we had a few calls from the Atlanta area. I do make note when people come to us and I’m like, “Oh, there’s already a lot of demand there.” So, even if we’re not in your city today, I would recommend reaching out because I do track that. It’s very telling of demand and helps us in the decision-making as we move forward into new markets.

Jason: Liz, how can people get in touch with you to let you know they want you and your market or if they’re in one of the markets that you cover, how can they get in touch?

Liz: They can reach me at liz@keepe.com.

Jason: And they can check Keepe out at keepe.com, right?

Liz: Yes.

Jason: Perfect. All right. Liz, it’s great having you on the show. Excited to see Keepe grow and expand. It sounds like the service that helps feel that in-between gap between people’s in-house maintenance, people’s seasonal maintenance, some of these challenges that they’re dealing with. I look forward to seeing which markets you get into next.

Liz: All right. Thank you for having me on the show, Jason.

Jason: Yeah. Thanks for being here. So, check them out at keepe.com and see if it might fit. As always, I love getting feedback from you guys, so let me know what you think of these guys. And I appreciate Liz being here on the show.

If you are a property management entrepreneur that is wanting to add doors, you’re trying to figure things out, you’re struggling, and things just don’t seem to be working, I would love to have a conversation with you. Reach out to our team. Go to doorgrow.com, give us a call, connect with us, schedule an appointment, and check us out.

If you are a property management business that can handle adding 50 new doors at least, you want to add maybe 100 doors over the next year at least, then you can go to doorgrow.com/optin. Plug in your email address and that will get you access to some case studies. See if you can see other people that have done it. And they’ve done it without SEO, pay-per-click and content marketing, without social media marketing, without pay-per-lead.

They were able to grow their businesses organically, healthily, with warm leads to take away last time, have a much higher close rate. You’ll also see that they’re all really happy, which is not super normal sometimes in this industry. It’s a tough industry. I want you to notice that. So, check out those case studies.

On that case studies page, I have a link to free training called DoorGrow Secrets that really is the beginning of our training material that I give out for free. I’m going to share with you and add some concepts like The Cycle of Suck, The Four Ds to Revenue, Cold Leads Versus Warm Leads, The Myth of SEO, and some other cool stuff that’s going to help you see why growth has been challenging and what makes the most sense to help you grow your business.

Hopefully, everybody checks that out, doorgrow.com/optin is where you go to that; one word. So, until next time, everybody, to our mutual growth. Bye everyone.

Download this Episode

Aug 13, 2019

Why switch from a fun, high-flying job to a stressful one? Property management is the “Golden Ticket” to finding new properties and creating value to help others.

Today, I am talking to Shawn Johnson of Independence Capital Property Management about putting profitability before adding more doors. If your company isn’t profitable, than you can’t create value for the community it serves.

You’ll Learn...

[02:00] Property Manager with Spare Time: Shawn serves as an instructor pilot for San Juan County Sheriff’s Office.

[02:40] NARPM professional member, chapter president, and residential management professional (RMP).

[04:30] Passion for Property Management: Happiness comes not from avoiding problems, but finding fun challenges.

[06:02] Innovative Incentive: Competing for staff resources increases salaries, compensation, and revenue to successfully facilitate growth and manage the company.

[07:35] DiSC Personality Type: Motivated by money or recognition?

[10:15] What makes a business profitable? Finding perfect customer/market fit via value-ads and associated fees.

[13:42] Charge fees to compensate for extra time, energy, and effort without extra pay.

[14:57] Cost Savings: Implement less labor-intensive work (paper checklists) and more technology (videos).

[15:55] Tools and Software: Transition from a brick-n-mortar business to remote/virtual office using G Suite, Process Street, AppFolio, and RingCentral.

[18:35] Current Client Base: Push out and justify new fee structure; talk them through it.

[22:15] Sense of Scarcity: Feel safer and more comfortable raising fees and rates. [24:05] People are willing to pay for good service and experiences.

Tweetables

Golden Ticket: Finding new properties, and creating value for others.

Property management is never dull.

Some people aren’t motivated by money, but freedom.

Charge fees to compensate for extra time, energy, and effort.

Resources

Independence Capital Property Management

National Association of Residential Property Managers (NARPM)

DGS 7: Increasing Fees in Property Management with Darren Hunter - Part 1

DGS 8: Increasing Fees in Property Management with Darren Hunter - Part 2

DGS 9: Increasing Fees in Property Management with Darren Hunter - Part 3

DGS 80: Automating Your Business with Process Street with Vinay Patankar

DGS 82: Real Estate Revolution with Nat Kunes of AppFolio

DGS 90: Generating Leads with Ben Atkin from DoorsUp 0

Transcript

Jason: Welcome, DoorGrow hackers, to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker.

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to change the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show.

And today, my guest is Shawn Johnson of Independence Capital Property Management. Shawn, welcome to the show.

Shawn: Thanks, Jason. Thanks for having me.

Jason: Glad to have you. Shawn, we’re going to be getting into the topic today of profitability before more doors. When I mentioned that before the show, you’re like, “Yes, the cart before the horse.” Let’s get into that, but first, I want to give people a little bit of background on you. I’ve got your bio here and I’m going to read this and then maybe you can come and introduce yourself.

Shawn grew up in Aztec, Nex Mexico. After completion of his Associate’s Degree from Glendale Community College, Shawn began flight school in Scottsdale, Arizona. Shawn’s career as a helicopter pilot provided opportunities to fly internationally into Mexico, off-shore into the gulf of Mexico, and as an EMS helicopter pilot. Shawn currently flies for the San Juan County Sheriff’s Office as an instructor pilot in his spare time.

Shawn began his career in real estate in 2013 and has been investing in real estate since 2003. Shawn is currently a professional member of the National Association of Residential Property Managers and has earned his Residential Management Professional (RMP) designation. In 2017, he served as the NARPM Albuquerque Metro Chapter President and has been elected to serve at the 2020 Chapter President. Shawn enjoys golf, baseball, hunting, and fishing. He apparently is also connected with lots of really lengthy phrases and titles including his business name.

Shawn, give us a little bit of a background. Who’s Shawn and how did you get into property management, so people can understand why should they listen to this guy say anything.

Shawn: How did I get into property management? It’s kind of by default. My wife pulled me into it. She was a corporate paralegal for a large investment firm in California and in that process we moved, had kids, we moved to New Mexico, and she decided, “You know what? I think there is a need here.” There is definitely a need and we’ve started a management company. I was still flying helicopters at the time but she’s like, “You know what? I can’t do it alone. You’ve got to get out of the fun job and get into the stressful job.” So, I quit flying and here I am.

Jason: And you regretted it ever since, right?

Shawn: No, I actually really enjoy it.

Jason: Good.

Shawn: Your introduction to property management is spot on. I think there’s so much gold in it and it’s just really creating value for people. I really enjoy it. Really, it’s a nice “in” to investing in properties. I love investing in properties and this is like a golden ticket to find new properties.

Jason: Property managers and everyone in the industry love to joke about how hard the industry is, but there is this passion for it that everyone seems to develop. I think happiness comes not through avoiding problems and challenges. It comes through finding challenges that are exciting to work on and property management is never dull.

Shawn: Yeah, that’s a fact.

Jason: Never dull, right?

Shawn: No.

Jason: Let’s get into this topic. Why is it important to have profitability before focusing on getting more doors?

Shawn: For us, it was always a mission to be profitable right at the start. Back in the day, we’re just a management fee company. Because of that, we relented in the growth. We had to find ways to make money and compensate our employees appropriately. We live in a very blue collar town that is oil- and gas-driven and the salaries are very hard to compete with. We had to find ways to compensate them nice so that they weren’t pulled away from property management into oil and gas industry.

Those are the things that were important to us. If you’re not a profitable company, you can’t create value for the community that you serve. You just can’t. You have to have money to be able to grow and expand and introduce new programs into your business. That was our mission right at the beginning.

Jason: Because you’re competing with oil and gas for staff resources in your market, you’ve had to probably have a higher salary base than what would be typical for most management companies in most markets.

Shawn: Yeah, they sell.

Jason: In order to do that, you probably had to get a little bit innovative. Anytime we have a constraint as an entrepreneur, we have a challenge like that to overcome, we have to innovate. What were some of the steps you took to create a space that you could afford to have really good team members?

Shawn: One step was to create an incentivized comp plan. Our property managers are licensed real estate brokers, but we pay them off a percentage as the whole of the portfolio, not just a management fee. Anytime they bring in a late fee or an annual inspection that’s performed on the property, then they get a portion of that fee as well. That help us increase their annual revenue as well because it hurts when they lose a property and when we get a new property on, it actually helps them gain their salary as well.

Jason: Okay. You’ve basically created the natural incentive for them to help facilitate growth and help successfully manage the company. And if the company does better, they do better.

Shawn: Exactly.

Jason: I find that a lot of people, especially those that on a DISC profile that are not DI, they don’t have a high economic score. They’re not super motivated by additional money. As entrepreneurs, we tend to naturally think everyone’s like us; they love money. Those individuals that are not motivated by more money are more motivated by recognition. When you pick these team members and you have this comp plan, are you looking for people that also operate somewhat in a BDM role? Are they more of a sales-driven type of person? Are they a DI DISC personality type or more on the extroverted side?

Shawn: No, we actually don’t want to mix those two―BDM and a portfolio management. You’re right. A lot of people are not motivated financially like entrepreneurs are, but what we found is giving unlimited vacation time, some perks to the business, having the ability to work from home or wherever they are. Everything that we do is electronic and digital anyway, so those perks. A lot of them are young parents and if they need to pick up their kid at school at three o’clock, who am I to say? As long as your job is done and you’re doing it effectively, then we don’t put constraints on that. I think that pools in that attraction to the job.

Jason: I find those to be huge incentives, similar to running our virtual teams. Being able to work virtually and work from home, having flex time, being able to set your own schedule and as long as you’re getting work done, and being able to take vacations when you need to or want to, that’s huge. People want freedom. They want autonomy and that tends to attract the more entrepreneurial people we would like in our business.

To what you’re saying, yeah it makes sense. The BDM portfolio thing would be segregated. But also that allows you, in your market, to have compensation that is on par with maybe what they might be getting in the oil and gas industry or at least competitive, right?

Shawn: Absolutely. I would say that our salaries, once they have a full portfolio, they’re making as much, if not more, than what they would get comped in oil and gas industry which is good. That’s what we want.

Jason: Right, and in oil and gas industry, they probably don’t have some of those other perks, I would imagine?

Shawn: Oh, not at all.

Jason: You’ve made your business intentionally competitive to maintain good people. Let’s get deeper into the profitability aspect. Since you’re paying more money for people, how do you make sure this is profitable?

Shawn: We really evaluated the things that we did as a business beyond just the normal management stuff. What are the value-adds that we do every day? If they are a true value-add, can we add an associated value-add fee to it? We kind of looked at it that way.

We went through Darren Hunter’s program and it was phenomenal. It definitely revolutionized the way we thought about our fee structure, but it also helped us think about and be cautious of those clients that are cost-conscious. If they are and all they care about is the cost of the service, then they may not be the right fit. It naturally brings in that right type of clientele when you have a fee structure beyond just a flat fee and everybody else is doing the same flat fee or whatever percentage fee. So, that was huge for us.

As far as profitability goes, it varies in leasing season, but in our leasing season we’re about 44% profitability. Leasing fees and lease renewal fees, those things have to happen in the property management business. But to actually gain revenue from it is extremely important.

I could look at our business structure and see that we have a leasing fee and we have a lease renewal fee, but my competitors lease homes in twice the amount of time that we do and they don’t push for lease renewals.

So me as an investor, I’d be upset if they didn’t try to keep my tenants in a lease especially through the winter time. Such a cyclical business, we have seasons, and you don’t want it to go vacant in December. That little fee is nothing compared to having a vacant home in those times.

Jason: What other fees did you guys start to identify and add going through this process?

Shawn: We did a lease administration fee for our tenants. That was pretty big. The annual inspection fees—that’s a third party vendor that’s an actual inspector and he’ll come inspect the houses on an annual basis—there’s a little upcharge for that. A year-end statement fee. We found that our controller list just spinning a ton of time preparing for the year-end stuff and making sure everything was clear to send off to our clients’ accountants, so we incorporated a fee in that. Then a maintenance coordination fee. Our maintenance coordinators, we have one and we just hired a new one so we have two now, and they’re just super busy. Coordinating maintenance is a huge task and it’s such an important one here. We do have a small fee for that.

There’s probably a bunch more. I’m not in the day-to-day as much anymore, so I’m kind of not thinking of the big ones. Obviously the bulk ones were leasing fee and lease renewal. Those are big and they’re often overlooked.

Jason: One of the things you did then was you identified all the different situations in which it was taking extra time, extra energy, extra effort, you weren’t getting paid anything extra, and then just systematically saying, “Hey, can we add a fee to ensure that we’re getting compensated for this additional work?” to make sure that you business is profitable.

Shawn: Sure.

Jason: Okay. We’ve got somebody watching says, “Can you list the fees again?” I had down a leasing fee, a lease renewal fee, lease administration fee, annual inspection fee, year-end statement fee, and a maintenance coordination fee.

Shawn: Those are the big ones. Kelly, reach out to me. I will give you the list.

Jason: Slow down. Kelly you can rewatch this as many times. This is being recorded and it’s also on Facebook. Also for those watching this later, we have full transcription when this comes out on iTunes and you can check that out on our blog at doorgrow.com.

Let’s get into other ways in which you’ve made this profitable. So, obviously increasing fees. You weren’t able to decrease cost with staff. This allowed you to increase cost with staff. Were there any cost savings things that you were able to implement?

Shawn: Probably just technology and trying to not be super labor-intensive. I would say that doing things like move-in, move-out videos instead of running through an entire list on paper and whatnot. It takes a little bit less time than doing it on paper. Those types of things. It’s just efficiencies in the office. Then we set up our team literally to work from anywhere. If you’re on vacation, you want to check on a lease or whatever, it’s possible and super helpful. Those things help with driving cost down because you’re not focusing on the, “Hey, John. Are you back at the office? Can you reach me that file?” That’s just a waste of time.

Jason: What are some of the things you’ve done to enable and facilitate this transition from being a brick-and-mortar business that operates on sneakernet, where everybody is walking into each other’s offices saying, “Hey, do you have this?” to being a virtual team that they can work from basically anywhere?

Shawn: The big things are softwares that enable cloud access. Our general office is on G Suite. Everything operates through there and then our processes are through Process Street which is super helpful and can be accessed anywhere again. AppFolio for our software. They are super tech savvy as far as online stuff. I wish they’d open their API, that’s my shout out to them.

Jason: Yeah, I’ve heard that a lot.

Shawn: I imagine you have. And then RingCentral. We have a team in Mexico and I’ve got a team member in the Philippines, and they literally can call our office in Farmington, New Mexico. Then we have another Flagstaff office as well. It’s so easy because they can pick up their phone and it acts like they’re dialing from their desk. That was a key point we had to set up six years ago which was, back then, it wasn’t really heard of.

Jason: Cool. I use all of those software or have in the past except AppFolio.

Shawn: You don’t need that.

Jason: We’ve had Process Steet on the show. Great interview. For those listening, I recommend you check it out. G Suite were a Google Apps reseller, so if people need help with that we can certainly help you get set up. We used RingCentral for several years. We eventually switched to Talkroute because we found that most of our team weren’t doing a lot of calling on our team and if they did, they had unlimited cell phone minutes. Talkroute just allows you to auto attendant and the call routing and the extensions but they can dial through the Talkroute app out of their phone and then it just uses their cell phone minutes. It’s free basically for outbound calls. It can also receive text messages. We switched to Talkroute and probably saved ourselves about $400 or $500 a month.

Shawn: That’s big. I love it.

Jason: What are some other things you focused on then to facilitate profitability? You’ve got the fees. You’re paying your team well so you can compete. You’ve got your leveraging technology. You’ve set up your team to be more virtual which is scary for a lot of property managers who’ve been doing things a certain way. Anything else?

Shawn: What I would say is tap into your current client base. You probably have a ton of really loyal clients. Don’t forget to just really push out your new fee structure and justify those fees. Believe in what you’re charging to those current clients. When we switched over to a new fee structure, hardly anybody left. We had 12 clients leave on our first push. We found that those 12 clients were probably 12 good clients to leave.

Jason: Out of how many clients?

Shawn: We were at 614 at the time, 12 left. We had a second push and we did this in phases because you have to be really sensitive to homes that are vacant. You don’t want to increase fees on somebody that has a vacant home. That’s a stressful time already. We certainly don’t want to increase feels on a client that has not been in your portfolio for less than a year. They don’t really know and trust you yet. Then I haven’t built that loyalty for you. So don’t touch those yet.

Once you segment those out and you found the client base that you really want to go after, then do it. Don’t just send out an email and hope that they sign into an agreement. You have got to follow-up. If you don’t follow-up, they’re just not going to believe in what you’re trying to do. So, make sure that you follow through with all of that. I’ve heard of people, “Hey, I increased my fees and I sent out this email. I got no response,” and I’m like, “Well, did you do anything else besides that? Because you got to call them. You got to pick up the phone and just talk them through.” It’s a scary thing.

I just had a fee increase from one of the vendors that we use in our business and I was like, “What the heck?” My initial reaction was, “What the heck is going on?” Then, they talked me through and I was like, “You know what? It’s all good. We’re happy with you guys. We’re going to move forward. It’s all good.” I think that’s most people.

Jason:Yeah, have a conversation. If you’re looking for the process that you went through or that Darren Hunter could have outlined—we’ve had him on the show before a few times—check out the episodes with Darren Hunter. Great content. He gave a lot away here in the show. You can check that out. I just saw him actually in Phoenix.

So, 12 of out 614 that’s maybe 2%.

Shawn: That was the first push. We did lose more the second round. There was probably a total number of 65. I can’t remember exactly that left, but our profitability went up.

Jason: You lose 10% but you’re making more money, then not such a big deal, and usually those are the worst properties in your portfolio. What tends to happen then is you increase your revenue. You lose your profit. You lose a little bit of clientele, but you’re also losing the ones that take up the most amount of time, typically. Those particular doors probably have 10 times higher operational costs than a good door. By losing that pile in your portfolio, you’re gaining room to manage a lot more and you’re gaining a lot more leverage. Your profitability probably goes up even more because your operational costs go down significantly by cutting out the most challenging, most micromanagy, and most price sensitive owners that are the most challenging properties.

Hopefully, people are a little bit sold to this idea, “Hey, maybe I can increase my fees,” because I do believe that property management businesses in general are not charging enough. They really deserve to be paid well for what they do. They provide a really valuable service and I feel there’s been this false scarcity that’s been created by marketers. Focus on SEO, pay-per-click and these sort of things where it feels like it’s difficult to grow. It feels scarce but they’re 70% self-managing in single family residential. There’s tons of blue ocean, there’s tons of opportunity, the scarcity is false. It really doesn’t exist.

For those listening, if you feel like things are scarce, we should have a conversation because we can get you out of that mode of scarcity so that you feel safer and more comfortable raising your fees and rates. I believe that’s a false perception that doesn’t need to exist in the industry and it creates a problem for the entire industry—this sense of scarcity. It creates this competition that I don’t think really needs to be there. Really, the industry as a whole needs to be building each other up and helping each other out. You seen that being involved in NARPM.

Shawn: Yeah, that’s right. NARPM’s big on that.

Jason: Shawn, this has been really helpful. Any other other takeaways or things that you’ve explored your journey to make your business more profitable to grow your company?

Shawn: I think most people get a little scared because of the competition and they’re worried about raising their fees. Let me just tell you that our competitors don’t charge anything besides a tenant, whatever, management fee. I almost said the fees. I don’t know if that was against the rules or something like that.

Jason: I’m not a property manager so I guess you and I can talk about it. But someone else might hear it. We’re not colluding.

Shawn: We are not colluding. Just don’t be fearful of that. I think that if you’re truly creating a value for your customer and clients that that is irrelevant, that people are willing to pay for good service and good experiences. When you raise your fees, it has a natural thing that happens that you get rid of the lower-end properties. The lower end properties cost you more money, they cost you more time, they cost you more stress, and they cost you more employees. They will burn out on the low-end properties. Once you bring on nicer properties and you keep to a standard, they are willing to pay the higher fees and get better service, and it naturally increases your profits. That’s a big win for us.

Jason: Awesome. Well, Shawn it sounds like you’re doing great things in Farmington, New Mexico. Did you ever think that you would just end up in Farmington, New Mexico?

Shawn: That’s the thing about New Mexico. It’s the land of entrapment, but it just brings you back. I’ve lived all over the country and it’s a good place to raise a family.

Jason: Awesome. Shawn, I appreciate you coming onto the show. Thanks for being here. I appreciate your insight and I wish you continued success.

Shawn: Thank you, Jason. I appreciate your time.

Jason: If you are a property management entrepreneur that wants to add doors and make a difference then maybe we should have a conversation. So, reach out. There is a lot of opportunity in the industry to grow a property management business right now. I think we’re on the cusp of a wave. I think the industry is going to blossom and grow. There’s a lot of big and good things happening when it comes to technology, when it comes to software, when it comes to awareness. We would love to be a part of facilitating that journey with you and I would love the opportunity to be your coach in your business.

Reach out to DoorGrow, let’s start with a conversation, and I will give you a free training on some of the secrets and tips. I call it DoorGrow secrets on how you can avoid some of the most common pitfalls of preventing growth. Just reach out and say, “Hey, I want DoorGrow Secrets.” You might find it so interesting and get so excited, you’ll want to work with us. That’s my hope. So, we will talk with you all soon, to everyone’s mutual growth. Bye everyone.

Download this Episode

Aug 6, 2019

How does an aggressively-minded property management company grow quickly? Leads. But it’s impossible for property managers to pursue the blue ocean of 70% self-managed landlords. There's no way to contact them. Until now.

Today, I am talking to Ben Atkin of DoorsUp, a lead generation service for property management entrepreneurs.

You’ll Learn...

[02:30] Ben’s Background: Grew up surrounded by real estate, property management, and software.

[03:09] 50-unit Student Housing Apartment Complex: Managing students is difficult; Ben moved on to something less stressful and more lucrative.

[03:40] Bootstrap to the Core: Partnered with Coldwell Banker Premier and started property management company from scratch.

[04:10] Daily Pre-occupation: How do you grow doors? How do you increase the number of units under management?

[04:41] Database: How do you identify people who own rental property? Where do they hangout? How do you contact them?

[05:03] DoorsUp Prototype: Every person in market who owns rental properties and their contact information to track interactions and engagement.

[06:20] Secret Sauce: DoorsUp gets information and people ready to sign-up.

[07:37] Grow Doors: Use DoorsUp to pick an area to pursue to contact owners and acquire more properties to manage.

[14:20] Future for DoorsUp: Going to NARPM to add service areas.

[16:27] FAQ: Does this have all the data that I can find myself? Data is concise, filtered, and updated regularly to make your marketing more efficient and cost-effective.

[21:14] Bogged Down and Overwhelmed: Grew too fast and doesn’t want to be a property manager!

[22:15] My Thesis: Property management has a serious marketing problem. People cannot find a sustainable way to grow doors.

Tweetables

Bootstrap to the Core: Zero clients, zero connections, zero revenue, and zero Website.

We have a lot of data. Mining and handling data is our expertise.

We’re marketing strategy agnostic.

Property management has a serious marketing problem.

Resources

Ben Atkin's Personal Email

DoorsUp

Ben Atkin on LinkedIn

Google Street View

Grant Cardone

National Association of Residential Property Managers (NARPM)

Business Network International (BNI)

Cole Realty Resource

SmartZip

REDX

DGS 89: Strategic Social Media Marketing with Katie Lance of Katie Lance Consulting 0

Transcript

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. Today, I'm hanging out with Ben Atkin from a new startup, it sounds like, called DoorsUp. Ben, welcome.

Ben: Thanks, Jason. It's a pleasure to be on the show. I'm just going to go ahead and say this and geek out out of the way. I've watched literally every single one of your podcast and I can jive so much with that intro. It seems like it's changed a little bit in the last. Did I notice that? You changed that intro to include a couple more things recently?

Jason: I have made some subtle changes, yes.

Ben: Subtle changes, okay. I love that. I'm really excited to be on this show. I'm just stoked to be here.

Jason: Let's get into your background. You've got this startup called DoorsUp, which in my understanding is a lead gen service for property management entrepreneurs, so they can get more owners which sounds very in alignment with what we do to optimize companies so they can handle those leads, so they can effectively, organically, create that business. Tell us how did you get into this space? Give us some background on Ben. Who the heck are you?

Ben: Yeah. It's a long long road. I'm a second generation real estate person as well as second generation software developer and software person. My dad has a real estate company, was a real estate developer. The most inopportune time to be a real estate developer in 2006-2007. I grew up surrounded by real estates, surrounded by property management, and also surrounded by software.

Anyway, I got my start in actually having experiences in property management in college. I was managing a 50-unit student housing apartment complex. If anybody is familiar with student housing, they know that that is just a difficult job to manage students. 50 units is about 250 leases in student housing. I was looking for something a little bit more lucrative and a little less stressful. I found an opportunity in my local market with a Coldwell Banker property management franchise or Coldwell Banker Premier, partnered with that franchise, and started with a property management company from scratch. Zero clients, zero connections, zero revenue, and zero website—nothing; we just started from the ground.

Jason: Bootstrap.

Ben: Bootstrap. Yeah, absolute to the core. I have very little experience in property management at that time even though I did my best at pretending that I did. That was our major problem was how do you grow doors? How do you increase the number of units under management? That was my preoccupation daily because I wasn't being paid. You talk about bootstrap, I was living on savings trying to grow a property management company. That was my challenge. That was my problem.

I remember speaking to my broker at this franchise. I waited at his office for about an hour. I was brainstorming with him. I said, "How do you identify people who own rental property? Where do they hangout?" It's not like there's this big database of everybody who owns rental property and a way to contact them. That's really was the impetus for what we developed and what we started to pursue.

I leveraged a little bit of my connection with my dad and my brothers who were software engineers, I have a software engineering background a little bit, and we built the prototype of DoorsUp, which is exactly that. It's a database of every person in your market virtually who owns rental properties. A way to get their phone number, mailing address, and a way to track their interactions with them as you pursue them to engage with the property management services.

Jason: I love it. It sounds like this is almost the equivalent of somebody doing all the manual work to go and find an owner occupied list, then start trying to direct mail to them, and doing all this so manually which works, which can work great to help them grow their business. But it’s a long game. People will try it once and feel like, "I did a mailer, I didn't get anything." But then I hear people that have played this game and they’ll say, "I have clients walk in all the time." They're holding a postcard they did 10 years ago and saying, "Hey, I'm ready, so sign up." Explain how this works. Where are you getting the information? Let's start there.

Ben: Sure. I'm going to mention that it's a little bit part of our secret sauce. I don't know if I consider ourselves a big data company. That's kind of a word that people on software throw around to make themselves sound cool, in my opinion. But we have a lot of data. Hundreds of sources, public sources, that's really our expertise is in managing and handling data to be able to target these types of people.

Like what you mentioned, let me just make this quick point, mailing to absentee owners is, in some ways, inefficient. How many second home owners who aren't interested in property management are you mailing to? In a market like mine where it's a lot of retirees and it's almost a vacation area, that would be completely ineffective because you'd sent out a thousand mailers and 700 of those would go to people who really have no interest or their daughters' living in that home or whatever. I'm just going to make that point that what we're doing is quite a bit more targeted, and hopefully, should save on expenses, marketing wise and other things.

Jason: Explain how somebody could utilize the system growth in their business.

Ben: It's a web based application. The first thing that a user would see as they login is they would see a map and filters on the side. They can pick an area that they like to pursue in trying to acquire more properties to manage. Let's say, they've got a neighborhood that they really love, they draw a box on the map, and then they add a couple more filters. Maybe they want to manage only properties that are the 2000s and newer properties, so they don't have to deal with maintenance issues. They hit filter parcels. They'll just see a whole bunch of pins drop on the map, hundreds of pins of rental properties that are algorithms, are big data approach as identified as rental properties. Not just as absentees parcels, but as rental properties. It's really rigorous in deciding what we display as rentals.

That's the first step. They filter, they find the rental properties, they can view the properties from the street with Google Street View through our application. It's very easy to see if the property's run down. They can actually look at it from the satellite imagery. They click on the owners name and they click the lookup button. Our system does a whole bunch of secret sauce magic in the background, gives you a phone number, and the accurate mailing address of the owner. As well as information about if they own other rentals. That type of information that they can then pursue that person and try to engage them into a conversation about their property management services. That's the simplest way to explain it.

Jason: They sign up for your service, they markout their geographic area, they get some pintabs, they can street view the property, then your system will crawl the magical interweb, pull in phone numbers, email addresses, or mailing address. Then the next step for them would basically, probably be to do some sort of a direct mail campaign, cold calling.

Ben: Yeah. We're agnostic to whatever marketing strategy they want to take. We provide the information, we provide the data. They can be as creative as they need to in order to pursue that market. Call, mail, we don't have email addresses, that would be something that they get them on the phone and ask for an email address. Then start them in their sales funnel.

A great way to distribute their content, things that you've helped them create, or others who've helped them create, or even knocking on people's doors. That sounds ridiculous in my mind; it sounds ridiculously inefficient. But if you knew that someone had 10 rental properties and those rentals properties were exactly what you wanted to manage, you can see exactly where the homeowner or where the landlord lives or where the rental owner lives, it might be worth dropping off some fudge at the doorstep of their home. That sounds ridiculous, but that's actually something that one of our [...] has done in the past. It's very differentiating as opposed to just this search engine optimization, pay-per-click strategy. It's a little bit closer to a human connection.

Jason: Oh, yeah. Realtors still knock doors. Realtors still do this. Property managers have probably really tried to avoid doing that. I've got a client who's in commercial property management. One of the ways he would get clients is he would go bring a candle to their place. "I'm old fashioned here, so here's this candle." He would give a gift, a little gift. The secret is, he'll buy these at the dollar store. This isn't like an expensive thing. But some people are showing up with, I don't know, a bottle of wine or something. It's a dollar of candle and it probably meant something, it felt like something warm to them. I think it's all about connection.

Obviously, if they were really aggressive, they’ve listened to Grant Cardone's 10X, they're like gunho. They wanted to create some business. They just need the opportunities. They go into the system. They may have done a multichannel approach. They're like, "This is my dream list right here. I'm going to call them. I'm going to send them some material. I'm going to nail them on a regular basis. I'm going to go knock on their door." They will get the business.

Ben: Here's the thing, like I said, we're marketing strategy agnostic. People are already doing wonderful things to get more doors. They're doing great things. They're setting up landlords seminars, they've got great content, they're trying to push them to these distribution channels, but one of the things that we can provide is a way to reach more and more people. As part of your mailer, send out an invitation to your seminar. It fits really well into the things that people are already doing. If you've got a digital marketing strategy, get somebody on the phone, and say, "We would love to just send you an information in an email about what we do." Just enroll them in an email nurturing campaign that you've already developed, that you've already got going. It seems like organic traffic is a little bit harder to get in our industry for the smaller guys and for some of the companies that are just starting out. They've got to put a little bit of effort into it to start getting those doors, getting the traction that they've got.

Jason: Yeah. If we've got roughly 70% that are self-managing in the industry, there's tons of blue ocean. This just helps you to see where the fish are. If you can see them, you can go hunt. It's time. Love the idea. I think this is such a nice match-up between DoorGrow and what you do. I'll be really curious to give feedback to some of our clients on some of the strategies that we teach them if they have these opportunities that they can go after. It's really going to be cool. Ben, what’s sort of the future for DoorsUp?

Ben: Yeah, good question. Like you mentioned in the beginning, we're very recently coming out of stealth mode or development mode. We launched just short of a month and a half ago. We’re constrained geographically right now where we can service. Having just barely launched, we are currently servicing customers in Utah and Nevada. I live in Utah, I live right in between Las Vegas and South Lake City, which are two large markets that we wanted to initially, prove the concept of the product and establish a customer base. We are going to be in NARPM, at the NARPM convention conference in October in Arizona. Is that right? It's in Arizona.

Jason: Yeah. My assistant schedules it all for me. I just do what she tells me to do. I'll be there.

Ben: We'll be there and that's where we hope to add, geographically, another service area. We're going to be growing that way, kind of state by state as we go. That will be determined by the traction we're able to get in different states that we're able to start servicing. If we can grab a couple of customers in one state, that would be enticing enough for us to go through that state and start servicing that area.

There's an advantage for our customers right now. They're alone in these sea of data. They're the only people using it. That's a huge competitive advantage right now for the people using it, to be some of the first ones that are using it. As much as we're just coming out of beta and the user interface is not as polished as it should be or could be, but there's a huge advantage for those that are early customers that are starting to use the system and see some results.

Jason: What are some of the most common questions that people are asking you about this? I would imagine one question that comes to mind is, "Does this have all the data that I can go find myself?" Or is it missing that?

Ben: Right, good question. Essentially, people ask that question. They have a little bit of misunderstanding about what we do. That was an instinct that you had right at the beginning of our conversation is, it's similar to what people are doing which is they're going out sourcing their own data, sending out mail, or sending out stuff like that. That's a very rudimentary version of what we do. The answer to that question is, I guess, the data is so concise, so aggressively filtered, that makes your marketing very efficient, and enables you to do certain things that you never would have time or money to do otherwise.

Now, campaign is being an excellent example. The sales cycle for property management is so long. We're not selling toothbrushes. If you ask somebody, "Hey, you want to buy this toothbrush?" They can say, "Yes," and it's done; the sale is done and the service is done. Property management has such a long sales cycle where you get somebody on the phone and you say, "I would love to manage your units." And they say, "Well, it's got a 12-18 month lease on it. I'm not interested unless it's vacant. 12 months from now, call me." I'm being able to keep track on that and being able to keep track of how many times you've mailed to somebody is another really important part of that process. It's integrated into the system right now. People are able to track their leads, they're able to keep track of how many times they've mailed to somebody, keep notes on phone calls that they've had.

The other aspect of that is that the data updates. I don't know if you've ever spoken to somebody who has actually tried to implement a long-term mail campaign, but the data, six months out, has changed. People buy properties, they sell property. How do they correlate whether they've mailed to somebody already? Whether they've called somebody already? How do they just track that change over time to be able to spend their time with one person long enough for them to close them given that property management has such a long sales cycle? That's part of the advantage of using a system like ours to do your prospecting and data sourcing. We keep it up to date. The data is updated monthly. The phone numbers, you click the lookup button and it does lookup immediately right then. Very, very fresh data which you're not going to be able to find yourself.

Who has time for that anyway? You're going to be managing 200 properties and you're going to be spending time in a big Excel spreadsheet trying to correlate [...]. Absolutely not. I saw as a huge way to be much more effective and to really spend my money where it's going to make the most effect, given that I knew that people have multiple units, and they were units I wanted to manage. I can pursue the market that I want rather than shotgunning a mail campaign or something out in the world and seeing if I got anything I wanted.

Jason: Tell us a little bit about some of the early adopters. What sort of experience have they had? Is there a case study or an example you can share with us?

Ben: I'll start with myself. I was the first case study. If we go back to that origin story of DoorsUp, I asked my broker, "Where do I find these people?" He said, "I have no idea. No one has any idea." We developed this raw prototype of the system. I got this report. It's so embarrassing to even look at now, it’s this ugly Excel spreadsheet, but it was our prototype. It was the name, phone number, and address of every person in my market who owned rental property. How many rentals they owned, the value of their portfolio, and the addresses of all of their rentals. It was ridiculous to me. To me, it felt like magic.

I got straight down and called through that list. After wasting three months getting four or five units, in two months, we were managing about 45 units. I was just bogged down. It was crazy. We grew too fast. I discovered that I didn't want to be a property manager, so I went into software.

Jason: Yeah. A lot of people were like, "Why don't you do it, Jason?" I'm like, "Then I can't help everybody else do well." Then, I'll be competing with everybody. I don't think anybody wants that. You're no longer doing that, but you had a really rapid growth initially. I love creating that problem for clients, by the way. I love when they come to me and they're like, "Man, my biggest problem is adding doors and getting doors." Then I say, "Great. Let's get you to problem number two which is how you deal with the growth. Now, you've got doors coming in and you're in pain because you have so much growth." I love creating that problem.

Well, anything else they should know about this? If not, how can they get in touch? How can they find out more about DoorsUp?

Ben: Yeah. I guess, I'll end with this thought, this is kind of the thesis behind DoorsUp. This is why we got into this space and try to solve this problem. My thesis is, essentially, that property management has a serious marketing problem. I listen to your show a lot and I feel like I didn't steal that idea from you—I sure hope I didn't—but you've taught me a lot about that, but I experienced that myself. People cannot find a sustainable, reliable way, to grow their door count. Profitability aside, that's important. That's very, very important, but top line revenue growth is the thing that we are focusing on helping people to.

We don't have, in our industry, any sort of enabling data or service or company like other industries do. For example, if somebody in property management really wanted to spend all day everyday prospecting, if they wanted to do Grant Cardone 10X, they want to not talk to seven new landlords a week, they want to talk to 75 new landlords a week. How would they do that? They would go to Rotary Club and hope that a landlord was there. They would go to BNI, Business Network International, and hope that a landlord is there. Or they'll take a realtor to lunch and pray that he'll give him a referral. How does an aggressively-minded property management company grow quickly? They just need these leads.

Whereas in real estate sales, real estate sales and other industries, we've got Cole Realty Resource, we've got SmartZip, we've got the REDX. We've got all these prospecting tools. Property management industry just does not have that, which has made it impossible for property managers to pursue this blue ocean, 70% of self-managed landlords. There's no way for them to contact them. They have no visibility into that market.

Just from a very macro perspective, that's what we're trying to provide the industry. To be able to turn the focus from just closing hand razors, people who go on Google and raise their hands and say, "We want your service," to be able to aggressively pursue that market instead of just waiting for leads to come to them. That's what we see. That's my thesis is that there's a problem in property management that they need this data and we can provide it. We're still proving and testing that thesis. But we're very excited to get out there and be able to offer that to people. We've seen some success.

If people want to contact me, there are plenty of ways on our website. You can go ahead and email me. My personal email address is ben.r.atkin@gmail.com. That's probably the easiest way to reach out to me personally. Though, I'm also tuned in on the website if you chat with us. It'll be an actual person who answers that. If you're in Utah and Nevada, go online, signup for a free trial. We’d love to have you start using the system. We do a two-week, 30 lead, free trial. Other than that, just reach out to me. I'd love to chat about it, and jive about property management, and see if we can help this industry grow from the 30% penetration to 40% or 50% or 60%. I see there needs to be some sort of change in order to be able to do that.

Jason: Cool. Ben, where are you based out of?

Ben: I'm in St. George, Utah. Just an hour North of Las Vegas, Nevada.

Jason: Got it. I know where it is. I was born in Utah. Alright. We'll connect, I think that I have a lot of clients are at the point where they're ready to be able to leverage their service like this. I think a lot of property managers are not. I think a lot of them really are just not ready to leverage something like this, unfortunately. If that's the case, reach out to DoorGrow. Then they'll see if you're ready. "You're ready. You have the bandwidth to do these kind of things and grow your business. Let's get you connected to DoorsUp." I look forward to watching what you guys do, seeing the progress, and growth of your company.

Ben: Thanks, it's a pleasure.

Jason: Thanks for coming in this show.

Ben: Hopefully, we'll see you at NARPM. Anybody else, hopefully, we'll see in there. Thanks!

Jason: Alright. Very cool. If you are a property management entrepreneur, and you are wanting to grow your business, and you want to grow without SEO, without pay-per-click, without content marketing, without social media marketing, without uncomfortable videos, without pay-per-lead services, and they're having phenomenal growth, they're easily adding in a year 100 doors to their business, they're adding $100,000 in revenue to their business annually and you want to do that, maybe you're one of these companies that, right now, is losing more doors than you're getting on right now because it's difficult to try to outpace the market when doors are selling off because the market's good with marketing then reach out to DoorGrow. Let's optimize your business, let's get you ready to use a service like this, and some other strategies, and tactics that we have, that can help you grow your business. Check us out at doorgrow.com. We would love to help you out.

We want, like what I say in the intro, we want to impact this industry, and we're excited to find like-minded entrepreneurs like Ben and others that are helping to make this industry great. I think it has massive potential. I believe that property management industry can be as big as the real estate industry; I think it has the potential to really grow here in the US. Let's make that happen, everybody.

Make sure, if you're a property management entrepreneur, you join our Facebook group doorgrowclub.com. Get inside the community. Connect with us. This is a group for property management business owners. Get with your tribe. Connect with us, and we'll probably see you in person at some of these NARPM events because I'm hitting as many as I can lately. Hopefully, I'll be connecting with you guys in person and inside the DoorGrow Club.

Thanks everybody for tuning in to DoorGrow Show. Until next time, to our mutual growth. Bye, everyone.

Download this Episode

Jul 30, 2019

Have no fear, when it comes to social media. Share your opinions and what you know. Not everyone will like what you post, but that’s ok. Personal and professional Social media opportunities let you connect with others, build relationships, and post content to attract new business.

Today, I am talking to Katie Lance, CEO and co-founder of Katie Lance Consulting. She helps real estate agents and brokers use social media to grow their businesses. Also, Katie is the author of #GetSocialSmart and founder of #GetSocialSmart Academy. She was named one of the most 100 influential people in real estate by Inman News and is a frequent contributor to The Huffington Post.

You’ll Learn...

[02:40] Marketing Nerd: Katie didn't go to school for social media because there was no Facebook when she was in college.

[06:40] Social Media Challenge: Audience doesn’t care about property management.

[07:32] Don’t be Vanilla: Be engaging, interesting, unique, and authentic voice for what’s happening in your industry and market.

[10:08] Love vs. Hate: Share your opinions, and attract your tribe through polarity.

[12:20] People don’t buy what you do (property management), but why you do it.

[13:18] Warning: Don’t outsource all your social media, or you’ll lose your voice.

[15:59] Avoid anxiety and conquer fear of social media by creating a system or strategy.

[17:27] Day-in-the-Life of You: Done is better than perfect.

[22:05] Consistency and Batch Creating Content: The more you do it, the more comfortable you get.

[26:21] Repurposing Content: One piece can be posted on multiple platforms.

[27:15] Platform of Choice: Depends on your target audience.

[28:40] Future of Social Media: Instagram TV and video is where it’s at.

[31:54] Personal and Professional Social Media Opportunities: Connect with others, build relationships, and post content to attract new business.

Tweetables

Be you, instead of your business on social media.

Done is better than perfect.

Comment, Connect, and Create Content

Don’t suffer from analysis paralysis.

Resources

Katie Lance Consulting

Katie Lance on Instagram

Katie Lance on Facebook

#GetSocialSmart

#GetSocialSmart Academy

Inman News

The Huffington Post

Simon Sinek

National Association of Residential Property Managers (NARPM)

Instagram TV

TikTok

DGS 88: Managing Tenants More Effectively with Dave Spooner of Innago 0

Transcript

At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show, and today's guest, I'm hanging out with Katie Lance from Katie Lance Consulting. Hi, Katie.

Katie: Hi, Jason. Thanks for having me here today.

Jason: I am glad to have you. Katie, we’re going to be so social today.

Katie: That would be a lot of fun.

Jason: [...] social media and we're on social media right now. We're doing it. Katie, help everybody understand your background. Can I read some of your bio?

Katie: Sure, go ahead.

Jason: It’s really well written. Katie is the CEO and co-founder of Katie Lance Consulting. Katie is a nationally known keynote speaker at conferences and events. For the past 10 years, Katie has been working with real estate agents and brokers to help them get smarter about how to use social media to grow their business. Her specialty is in helping real estate agents and brokers achieve big results using social media without spending a ton of time.

She is also the author of the best-selling book, #GetSocialSmart and the founder of #GetSocialSmart Academy. Katie has been named one of the most 100 influential people in real estate by Inman News and is a frequent contributor to The Huffington Post. She lives in the San Francisco Bay Area with her husband and two beautiful boys.

Katie, welcome to the show. Tell us how did you get into social media? How did this come about for you?

Katie: I’ve always loved social media. I've always been a marketing nerd. I’ve always been one of those people to just really love marketing and didn't necessarily go to school for social media, and probably dating myself, but there was no Facebook when I was in college. I fell in love with social media and probably about 10 or 12 years ago.

I got my first job in real estate. I was hired as a marketing director for a local real estate company and that was really when social media was starting to come to the forefront. I just remember having this epiphany and thinking this is so perfect for real estate. I had seen so many agents and brokers spending so much money on traditional marketing, which, a lot of it still works. I don't necessarily think social media replaces traditional marketing, if that's working for you, but it can be so expensive. And I thought, what a great opportunity.

That's really where I fell in love with it. I worked at that real estate company for a while, then I went to work for In The News for quite some time, ran their social media, and grew their social presence. Then about 2012 I decided, “You know? I'm going to go out on my own,” and got that entrepreneurial bug and haven't looked back since. It's been quite a journey.

Jason: What caused you to take that leap? It's a risky leap. To preface this, I didn't realize I was an entrepreneur. Even though I was the guy that started a band in college, created big events, going door-to-door pre-selling CDs so I could pay for an album at college girls dorms with a guitar and a clipboard, I didn’t realize I was an entrepreneur. I thought I needed a job, but what pushed me over the edge to jump into entrepreneurism was a divorce and needing to take care and wanting to have time with my kids. Out of necessity, I had to do it.

What caused you to take the leap? That's a pretty big leap. People don’t just go, “I've got a job that’s going pretty well. I’m just going to throw it to the wind and go do something on my own.”

Katie: I think there’s a couple of things. I’ve always had an entrepreneurial spirit. Any job I've ever had, I've always treated it as if it were my company. It was always very hard for me to just “work a 9–5 and turn the off button off.” I guess I always had that attitude for anywhere I've ever worked and I had a great job [...]. I've worked there for many years and for a lot of people, you get to a point in your career where you have that itchy feeling, like what's that next thing.

Jason: Something more.

Katie: Yeah, there's something more and quietly started to explore other options. It just became really clear to me that I don't necessarily want to work for anyone else. I want to work for myself and I want to be able to help not just one company but lots of different people, lots of different companies, lots of different organizations. And it was scary. It's a whole another ballgame.

I'm happily married, we have mortgage, we have kids, so it's not necessarily the easiest leap. The hardest part was just making that decision. Then you make the decision and it was pretty much smooth sailing from there. I also had a really supportive husband, which makes a big difference, too.

Jason: I was going to ask about that. If a spouse is not in support as an entrepreneur, there's a lot of friction, right?

Katie: Yes.

Jason: And a lot of times as entrepreneurs, we tend to pair up with people that want safety and certainty. They're our balance and our opposite.

Katie: Yes. Actually, he ended up quitting his corporate job about 2½ years ago, so now we run our company side-by-side and it's been a great journey.

Jason: So you converted him?

Katie: I think I did, yes.

Jason: [...] to a job, right?

Katie: Yes.

Jason: Perfect, love it. Let's get into the topic at hand, which is how people can grow social media. I tend to be upfront and honest. A lot of my listeners have heard me say, probably at different times, that the challenge that property managers face with social media is that their target audience does not care about property management.

They don't care at all and when they ask me, “Should I spend a bunch of time and energy doing social media?” my general response is, “How much time are you spending time following and listening to plumbers? Plumbers want your business. They want your attention. Why aren't you subscribing to their newsletters and following them on social media?” and they're like, “Because I don't care about plumbing.” I’m like, “Your audience don't care about property management.” What should they be doing? I'm excited to get into this.

Katie: I think social media is relevant for obviously a lot of business owners, a lot of entrepreneurs and whether you're in property management or you're a plumber or whatever business you're in, that is the default response. “Well, who really cares? Is this really interesting to a lot of people?”

At the end of the day, one of the ways to get traction on social media is to be that unique voice, that authentic voice of what's happening in your industry, what's happening in the market. People tend to follow you and engage with you, not necessarily for just facts and information that you're spewing out there, but because they connect with who you are and your personality.

It's amazing about the management or real estate, and a lot of it's so done through word-of-mouth. A lot of it is still done through those connections that we make. That's what I think there's a lot of value in social media. It's funny you mentioned plumbers because there's actually a plumber who's killing it on YouTube, because of exactly what you said, because most people don't think like, “Oh, who's going to put out that type of content?” But his content is engaging, it's interesting, it's valuable, but it's also with his voice.

That's the thing that property management. You could talk about renting or whoever and all these different topics when it comes to property management. But you can insert your own opinion, your voice and not be afraid to just be really truly who you are. Some people won’t like it and that’s okay. Those aren’t your people.

Jason: I’m going to rephrase what you just said and sum it up. It's more important on social media to be you than to be your business.

Katie: Absolutely.

Jason: That's really what's going to attract and get people to resonate and connect with you as if you're willing to put it out there and be you, weirdness and all, and that's something. People follow me on social media, no. I'm putting out random stuff all the time about my life and who I am, and I figure that some people are just not gonna like me.

Katie: Yeah, and that’s okay.

Jason: There are definitely people that don’t like me.

Katie: Sometimes, we try to want to be really professional and we don't offend anybody. I'm certainly not saying start offending people on social media. But there's that risk of becoming just really vanilla and really boring. If you think about as an end user, somebody uses Facebook or Instagram, what do you click like on? What do you comment on? What do you share? Typically, it's things that are funny, or poignant, or interesting, or they move you in some emotion, you get angry.

There's nothing wrong with having an opinion. That's where I think in real estate and property management, really for any entrepreneur, that's where the magic is because most people are not putting up that type of content. If they are, they're not doing it on a consistent basis. That's a big thing that can make a huge difference.

Jason: People should have an opinion and share their opinion on Facebook and let their freak flag fly, right?

Katie: Yes, and be comfortable with the fact when you do that, there’s going to be people that watch you and say, I don’t like that guy or girl. You have to be okay with that because with the opposite, which will happen, is that you will start to attract the people who go, “I really like that guy. He's doing a podcast? What other podcasts? I got to catch up on all of his podcast episodes.” That's what happens with video. When you start putting out especially episodic video or episodic podcast content, people start defining you. They’re like, “What else does she put out there?” and you search who attract your tribe. That's what can turn to business down the road. It just takes time just like anything else.

Jason: I’ve always thought this is very in align with what I think and feel, is that if you are not creating polarity, if there's no polarity, then you can’t be attractive. A magnet without polarity is not a magnet anymore. It's not attract anything. Nothing will be pulled towards it. Electricity without polarity doesn't exist anymore if you remove the polarity. There has to be polarity and that means you have to be willing to polarize someone there.

I've probably been a little too polarizing in some instances; let's be honest. But I've noticed that when you are willing to just be you and polarize and put it out there, yes, you're going to have people that don't like you. You’re going to get flack for that, people are not going to attract you, but you now are attracting the right people. You’re attracting people that like you the way that you are. They like the way you communicate, they like the way that you coach, they like the way that you run your business, they like your philosophy.

Just like Simon Sinek said, “People don't buy what you do.” They don't buy what you do. They don’t buy property management, they don’t property management coaching/consulting from me, they don't buy what you do, they don't buy social media, whatever from you. They really buy why we do it. That's really what they're buying into is they believe in Katie, they believe in Jason, they believe in the property manager, they believe in you and they share values. What you do is really an afterthought compared to that. So, they need to create polarity.

This is a great question everybody listening can ask is am I creating polarity? Have I offended anybody in the last month? And have I attracted anybody in the last month? Did anybody say, “Hell yes, I agree to that,” or, “That totally rubs me the wrong way,” but that's you, so thanks for sharing.

Katie: Absolutely.

Jason: We don't want to be vanillas. What’s maybe the next thing that we should take away?

Katie: Like I said, don't be vanilla. I've often said, “Lean into who you are and who you're not.” It goes hand in hand with that idea of not being vanilla. I also think a big part of your social media strategy is not outsourcing it completely. There's this feeling even still in 2019 of, “Oh, my gosh. I don’t have time to do this. It's one more thing. Who can I hire to do it?” It's a little bit of a slippery slope because I do think that there's value in hiring certain people. For example, we have a video editor on our team because my value is being on camera but I don't need to learn video editing, I really don't need it. For one or two, that's fine, but I don't have desire.

Jason: That’s not your dream and goal in life is to edit videos and stare at videos on the screen for hours a day.

Katie: Exactly, it’s not my dream. I’d rather put my eye out, honestly.

Jason: Me neither.

Katie: Similar with podcast. My value is in the content and the education I can bring, not necessarily in can I edit something. I think there's value in bringing at some point, maybe not in the beginning, people on who could help you with either editing, for example video or podcast editing, or copywriting if you enjoy writing, or something as a blogger or graphic designer, but to totally hand out who are personally is really risky and there's lots of businesses out there that are selling this idea. “You're too busy. Let us do it for you.” I would just caution anyone to be just be careful when you do that because you're handing off who you are. It's like having a dinner party with your 10 most important clients, and instead of you being there, you have your assistant run the whole thing.

I just think it's a basic tip, but it's also something that is important to address because time is all we have. It's our most precious asset. I don't think you need to spend all day on social media. I'm in the business of social media and I'm certainly not on social media all day long, but it comes down to having a smart system, and making sure you're inserting yourself and your personality into what you do. I think that's really valuable.

Jason: This makes a lot of sense. I think there's so many parallels to this. There's so many situations in which we would not outsource. I wouldn't outsource to somebody to be the dad of my kids. I'm really single again after two decades, so I wouldn't outsource somebody else to use swiping on dating apps for me. They just don’t know what I’m into.

There's a lot of things we just should not outsource. And yet, being the face of our business, we will a lot of times as business owners, want to just outsource that, like some company can just come in and post a bunch of memes and garbage, and we're suddenly going to get business from it and then we wonder why it's not working.

What about those business owners that are not charismatic, they don't have personality, they're better behind the scenes, they just feel really awkward putting anything out there. How do you deal with that? Some of the listeners avoid social media. Social is like an anxiety-inducing word to them.

Katie: For a lot of people who are anxious or feel a little overwhelmed with social media, I would imagine part of it is because you don't have a system for, and it feels like this thing that's out there, that you have to do, that you don't really know how to do it right, and everybody saying that you have to do it, but you don't really have a plan. It just becomes sort of the snowball. The thing is, anytime you're trying something new, especially with technology, it can feel ridiculously annoying. You feel like, “Oh, my God. What am I? How do I not know how to do this?” and it's just like anything else.

We work with a lot of agents and brokers. I always say, “Imagine when you first got your real estate license. You took the test, you went through the courses, but you didn't really know what you're doing until you had your first client. And then you really learn. And then you learn again and again and again.” Part of it is just getting over and putting yourself out there. Sometimes we're so concerned with who am I, who cares what people think, I don't know, I don't like how I look or how I sound, I don't know how to do it, so I’m not going to do it. I always like to say, “Done is better than perfect.”

Jason: Oh, my gosh. I [...] that, too. I love that.

Katie: I’d love to say I made that up. I did not make that up. I’ve heard it somewhere and probably from you.

Jason: Maybe not. I think I got it from my business coach. I’m sure he got it from somewhere, too.

Katie: You just start today. So if you’re listening to this, start today. Go on Facebook and connect with three or four people at Facebook today. Don’t just like a bunch of stuff, but go on engage with a few people. Wish somebody a happy birthday. Start today. Then you can move on from there.

Part of it is just getting a system together, getting a process together. One quick thing I'll mention real fast for anyone who's feeling a little bit overwhelmed, I would encourage you to think about all the things that you do on a day-to-day basis, all the questions you get asked, all the topics of conversation that come up. Get a notebook, get a pen, and just start brainstorming things that happen a day in the life of you. I would imagine you're going to come up with 10, 20, 30 different topics of things that you could potentially talk about, whether that's through video or on Facebook or whatever it might be. Just go to start. “Just do it,” like Nike says.

Jason: I love the concept of done is better than perfect. I put that because a lot of times we're trying to get clients to launch their websites, we're trying to get them to take action and moving themselves forward on different things, and they just stay analyze really hard about something and they want it to be so perfect. I just iterate over and over again, done is better than perfect because once it's done, it can do its job in making money. You can go back and change it later, you can improve it later, but get something done because until you have something there, until you have the website up, or until you have this launch, or until you've done something, it's nothing to do anything for you.

The other mantra that I'll share with everybody listening, if you're in that state of overwhelm, you’re feeling scared, whatever, just remember that that's how you start everything. One of my favorite mantras is, we all start at level suck. That's where you start in everything. You start at level suck. That is the level you started everything. My first YouTube video was two minutes long and had 30 uhms and and so's in it, and I had to edit them out. The video looked choppy and it was awful. It was so awful. I tried to get perfect lighting, I have my little mic clip thing, an uncomfortable shirt with a collar, and I was trying to be what I thought I needed to be in order to do a video and look good. I'd probably spent hours making a two-minute video. Here's the ironic thing for everybody listening. You think it has to be so perfect? I've made way more money by doing really crappy, shaky, jittery, selfie style videos, walking around outside, than any of those videos were I was uncomfortable behind a desk or in a shirt or whatever in front of a whiteboard.

Don't think it has to be perfect. People will crave reality nowadays because there's so much BS. They’re really craving reality. The other thing I point out to clients, is that they are talking to people all day, every day and it's really the same thing. You just look at a device and pretend you're talking to a person, you just say exactly what you would say and talk the same way. You don't have to think, “What am I going to do with my hands?” What do you do with your hands normally when you talk to people? “How’s my face supposed to like?” How does your face normally look? Just talk. You have the thing like you're talking to a person. So, just start noticing when you're talking to people and pretend they're a camera or a phone and just realize they're not that scary or awkward.

Katie: Absolutely. To your point, it doesn't have to be perfect. What a lot of people don't realize that maybe they forget is the lifetime of a post is pretty short. Let’s say you create a video, you put it on Facebook, that video will disappear in a couple hours. You put it on Twitter, tweet disappears in a matter of seconds. YouTube has a longer shelf life and certain content certainly has a longer shelf life. But generally speaking, we live in a world with so much noise, I often feel like I'm standing on the side of the freeway just watching cars fly by.

If it's not your best performance, it doesn't have to be Oscar-worthy. As you said, just get it out there and especially with video, it's like a muscle. I will say the more you do it, the more comfortable you get. I don't know if I'm ever totally comfortable hearing myself and seeing myself, but what I am comfortable with are the results. That's what you have to think about. When you put yourself out there over the course of time consistently, that's when the magic happens. It's literally like a snowball and the consistency part is a huge part of it. Do you mind if I share a quick tip?

Jason: Go ahead. Give us all the tips you want to. We want some free Katie Lance Consulting right now.

Katie: Perfect. One of the things I always share with our GetSocialSmart Academy members is this idea of batch-creating your content. I love batch creating because for me, if I'm going to sit down, do my hair and makeup, and record one video, I might as well sit down and record four or five. We've been doing that the last couple years and that's made a huge difference. We'll set aside a couple hours once a month where I do the hair, get the camera set up, whatever. To be honest with you, the first 99 episodes were shot on my phone. So, it doesn't have to be anything fancy.

This idea of getting into a system and batch-creating your content, that way you're done, you're locked and loaded. When we do that, then we're able to drip out those episodes once a week for the next month, but it gets you into that rhythm. When you're publishing at the same day and time every single week, people who start to follow you, as we talked about earlier, they start to notice that. It's just like your favorite TV show, you may not watch your favorite TV show Thursday night at 9:00 PM or Monday at 8:00 PM, but you know it's on and you set your DVR. It's the same thing with content. Once you start to put it out there regularly, if you can start doing it consistently, it can make a big difference.

Jason: Absolutely. That's one of the reasons I really like my assistant; made this show finally somewhat consistent. We're getting about two episodes done a week now. Consistency is huge because as soon as you disappear for a week or two, people are wondering if you're gone. You lose the engagement, you lose the momentum, so done is better than perfect, but consistency is better than anything, really, probably.

Katie: People wonder what's the best day. There's no best day. What day is good for you? Just pick a day. I remember when I first started sending out and email newsletters, it’s like, “Well, let's do it on a Saturday. I don't know. That sounds like a good day.” Seven years later, we're still sending our email newsletters out on Saturday, and people are like, “Oh, I love it. Get it every Saturday morning.” It's just consistency. So, pick a day.

Jason: Love it. I love the idea of batching tasks, and you can apply that to so many different things. I just did a post on this on social media about this and I showed my pill case. I hate going and digging through all my supplement bottles every single meal, trying to figure out what I'm supposed to be taking. So, I got this pill case. It’s literally the size of a notebook. It's got every day of the week, four times a day, and I fill it once a week. If I travel I can take it with me. It's done, I can just take these supplements. That's how I'm able to be so sharp and so crazy all day long. No, I’m just kidding.

Batching tasks reduces the decision-making that has to go into and the thought that has to go into it every day. You don't have to sit there, stress out, and “What should I talk about today? Oh, my gosh. I need to do a post. I haven't done it for a couple days,” and thinking about it. I love the idea of batch the tasks and we've got a pile of them waiting. Even with this podcast, we've got several episodes in the can. We're releasing them to iTunes and dripping them out because we want to have a little bit of padding.

There's an advantage to having some things in the can, especially if you want to keep the consistency. What if you want to travel? I'm going to Austin this week to meet with my business coach. Next week, I'm going to Phoenix to talk to the NARPM Chapter in Phoenix. We’ll still be able to release some episodes while I'm gone.

Katie: That's awesome. What you're doing which is so smart is you're repurposing your content. We're streaming this live, it's getting shared on social media, but you're going to put it on YouTube, at some point, you're going to put it on iTunes. That's really where the magic can happen because instead of feeling like you have to post something every single day, why not invest in one great piece of content like this podcast you're creating.

That's what we try to do, too. It's one piece of great content, and then it can get sliced and diced a dozen different ways. You can turn it into an Instagram story or an Instagram post today and a post some two or three weeks, especially when you create content that's somewhat timeless. It's not just relevant on what's happening in the market, but it's going back to sharing things that are informative, that are really helping your audience, that have a voice, have an opinion, and that repurposing, there's a lot of magic in that.

Jason: Let's talk about platform then. How do people pick? Because they're like, “Should I be on Instagram? Should I be doing LinkedIn? Should I be doing Facebook? Should I be on Twitter?” What's your recommendation when people are like, “What platform should I be on?”

Katie: It depends on a couple things. Number one, where your audience is. Right now, typically, Facebook is still the number one platform for a lot of people in property management or real estate or even as an entrepreneur. But I also think that's changing as well. Instagram is growing by leaps and bounds. A lot of people have started to leave Facebook and go over to Instagram, even though Instagram is owned by Facebook, because Instagram is such an aspirational platform, lots of pretty pictures, there's not as many political posts and noise on Instagram right now. I think those are two big ones to watch.

I do think for LinkedIn, though, it's important to at least have your profile updated. Make sure that's up to date. LinkedIn is not as fun as Facebook or Instagram, but if you get googled or your company gets googled, typically, one of the first things that pops up is LinkedIn. Just making sure that's up to date, that's professional social network. Outside of LinkedIn, I do think Facebook and Instagram are two big platforms to connect with people, stay in touch with people, and then also to post relevant content and to repurpose some of the content you're creating.

Jason: What do you think is coming new in social media? I'm sure you're always paying attention. What do you think coming up that's hot, that probably the teenagers are using that we’ll eventually be using?

Katie: Good question. Snapchat was getting a lot of buzz a year or two ago, that a lot of folks in real estate were jumping on that. I think a lot of people realize it's still for the kids.

Jason: I think the Instagram stories and Facebook stories killed it.

Katie: I agree. I think a big opportunity right now is definitely Instagram. Instagram is spending a lot of money and resources for people to stay on their platform. Especially Instagram TV right now is a big opportunity. That launched about a year or two ago. It’s doing so-so and then Instagram made some really big changes pretty recently to Instagram TV.

When you're uploading a video to Instagram TV—if you don't know, you can upload a video up to 10 minutes—when you upload it to Instagram TV, you now share a one minute preview over to your newsfeed on Instagram, which shows up on your page, it shows up in your newsfeed, which is more likely that it shows up in the explore button.

We found that for whatever reason, Instagram wants you to spend more time on Instagram TV. Our posts on Instagram TV are getting a much higher reach, likes, and engagement than just about any of our other posts. As of right now, as of the recording this podcast, that's definitely one to watch. It just reinforces a lot of what we're talking about with video.

Jason: I will have to start doing those. When they started doing it, I was like, “This isn’t getting any attention,” but I have noticed, I have watched a few videos on Instagram, and I've hit that button that says, “Keep watching.”

Katie: Yeah, it definitely keeps you engaged. We used to just beginning a couple of hundred views on our videos and now we’re consistently getting thousands of views on our videos. It's nothing really different that we've done other than just be consistent with putting up that content, sharing it over to our news feed. I think, ultimately, video is worth that. If you’re not creating original video content in your business, you’re missing a really big opportunity.

Facebook even recently just came out over the last couple weeks and said, “Video has one of the highest rates in the Facebook newsfeed, original video content versus content that’s shared from somebody else.” If there was ever a time to get over, “How do I look?” or, “How do I sound?” or, “I have nothing to say,” now's the time to do it.

Jason: Just do it. Nike.

Katie: Just do it, yes.

Jason: I'll just throw this out there because somebody is going to mention it later. If they have teenagers, I think TikTok right now is the thing.

Katie: It is, yes.

Jason: My teenager’s really into this TikTok thing. I don't know if that will somehow eventually translate to business, but let’s see where it gets.

Katie: It might. It's fun to watch. It’s entertaining.

Jason: It’s like the new Vine. It’s ridiculous.

Katie: Exactly.

Jason: Any other tips or takeaways we can squeeze out of Katie Lance before we let you go?

Katie: If you are in real estate in any capacity or an entrepreneur, I really can't emphasize enough. There's two big opportunities with social. The personal side of it, being intentional, taking just 5 or 10 minutes a day to connect with people, wish people happy birthday, don’t just be a drive-by liker, actually be a person, connect. That relationship-building piece is so important. Then, that other piece is putting out new content, which is going to attract new business.

I just would encourage anybody who's listening to really think about it. I love using techniques like time blocking where you're setting aside time, a couple of times a week, maybe it's just 15 minute blocks of time, or a couple times a month, to really get a system together. If you think about the areas of your business you’re most successful in, most likely there's some sort of system or process. Whether or not you're working with us or anybody else, that's my biggest tip. Get the system, get a process together, and don't wait. Don't suffer from analysis paralysis. Just do it.

Jason: All right. Awesome. I love it. So, commenting and connecting, and then content and creation are things we need to build our social network, and we need to create social media. Two different things. Katie, if people are wanting to get a plan, get organized, figure this stuff out, be interesting, and learn social media, how can they get in touch with you?

Katie: The best way is through our website, people can go to katielance.com. We have a free content grid that anyone can sign up for. It's a great planning guide. So, if you're listening to this going, “Okay, I’m stuck when it comes to putting a system together,” you can download that content grid for free right on our website. We have hundreds of free resources on our website, as well. Of course, I'm Katie Lance kon just about every social media platform. You can find me on Instagram or Facebook also.

Jason: Awesome. Cool. And then anybody listening can also connect with me. I’m King Jason Hull on all social media. There we go, we were just very social, sharing ideas about social media. Katie, I really appreciate you coming on the show. Thanks for being here.

Katie: Thank you so much for having me.

Jason: Really cool. Check her out at katielance.com. If you are a property management entrepreneur that wants to add doors and make a difference, as I said in the intro, be sure to reach out, connect with DoorGrow, we would love to help you figure out how to grow your business. If you feel stuck or frustrated, you feel like you're trying to do a bunch of marketing, pay per click, SEO, content marketing, social media marketing, and it's not working for some reason. You may have some blind spots. We can help you organize, sort out those blind spots, and get some clarity on the business, to help you focus on the growth side of your business. We would love to help you do that.

If you want to see a big blind spot, you can start with a very public one, your website. Take our website quiz by going to doorgrow.com/quiz and grade your website. This will give you a letter grade for your website. Most websites fail going through this and this quiz will grade your website as to how effective it is at making your money, at creating conversions, at attracting leads. Go ahead and fill that out and then we'll be in touch with you.

Thanks everybody for tuning in to the DoorGrow Show. Until next time to our mutual growth. Bye, everyone.

Download this Episode

Jul 23, 2019

Are you tired of dorm food and want to avoid the mad rush of finding a place to live off campus before next semester? There’s got to be an easier way for students to rent houses and apartments. It’s a problem that many entrepreneurs have tried to solve.

Today, I am talking to Dave Spooner of Innago. There are few incentives for landlords to digitize their rentals. Landlord demand for a listing platform is low, but there definitely is high demand for better tools to effectively manage and communicate with tenants.

You’ll Learn...

[02:50] Tenant Management Software: Making landlords lives easier with online rental payments, tracking payments, basic accounting, lease signing, and tenant screening.

[04:14] Understanding Innago: Flexible, effective, simple, and intuitive software for landlords and property managers.

[06:05] Learning Curve: Competitors’ software requires expertise and certification.

[07:32] Who wants to waste time adopting ugly software?

[08:58 #1 Priority: Intuitiveness in software; speed is love language.

[10:20] Different portals for different people to be more productive.

[12:16] Find balance, and avoid too fast feature creep.

[13:14] Possible future integration with Zapier and other third-party tools?

[14:22] FAQs: Access permissions and pricing for landlords and tenants.

[17:25] Innago offers unique and unmatched level of support.

Tweetables

Innago software is flexible, effective, simple, and intuitive.

You shouldn't need a certification to use property management software.

Choose features that matter, and get the biggest bang for your buck.

Big believers in early success begets future success.

Resources

Jason Fried of Basecamp

DGS 62: Property Management Accounting with Taylor Hou

DGS 87: Strategies for Growth into Multiple Markets with Bryan Jenkins and Jonathan Cook of AHI Properties 0

Transcript

Jason: Welcome DoorGrow Hackers to another DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the unique challenges, daily variety, and freedom that property management brings. Many in real estate think you're crazy for doing it, you think they're crazy for not, because you realize that property management is the ultimate high trust gateway to real estate deals, relationships, and residual income.

At DoorGrow, we are on a mission to transform property management businesses, and their owners. We want to transform the industry, eliminate the BS, build awareness, change the perception, expand the market, and help the best property management entrepreneurs win. I'm your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.

Today's guest, I'm hanging out here with Dave Spooner of Innago’s. Dave, welcome to the DoorGrow Show.

Dave: Hi Jason, thanks so much for having me.

Jason: It's great to have you. Dave, we always like to get into our guest first, help us understand who Dave is, and how you kind of got into the space that you're in, and give us a little background.

Dave: Yeah, absolutely, I'd be happy to, and thanks for the intro. I graduated from university in 2013. I kind of already had that entrepreneur spirit. Me and a couple other folks got together and we wanted to solve the problem of finding a place to live. We're not the first people to try to solve it, and I'm sure we won't be the last to try to solve it, but we want to make it easier for students to rent houses and apartments off campus. A lot of those markets are still mostly or fully offline, and there's usually a mad rush to try and find a place to live. We recognize those issues and we tried to solve them.

As we were going about doing that, we kind of quickly realized that there's not a lot of incentives for landlords to digitize their portfolio. There's not a lot of incentives for landlords in student housing to really do a whole heck of a lot, but helps the students out because they're already going to fill other properties, which is really high occupancy in student housing.

We kind of pivoted, and listened to the market, and realized that there wasn't a huge demand on the landlord side for this listing platform, but there was a lot of demand for better tools to manage tenants, and better tools to manage and communicate with those tenants, and to manage their businesses. That's kind of how I got my foundation. I worked on that listing platform for a few years, learned a lot about the market, and then myself and the CTO of that company started and founded Innago in 2017, and we've been hard at work trying to make lives easier for landlords ever since.

Jason: How do you make lives easier for landlords?

Dave: Innago is tenant management software, and we call it tenant management software instead of property management software because we really believe that the focus should be on managing tenants, managing those relationships, and managing those personalities. Innago, of course, includes a lot of your classic property management tools like online rental payments, tracking payments, basic accounting, online lease signing, tenant screening, etcetera. But at its heart, it's a communication platform. It's something that makes it easier to interact with and manage those tenants. We believe that having that, having that foundation enables landlords to become better landlords, and property managers become better property managers.

Jason: I haven't heard of the software before, is this something that there's a good amount of property managers already using? Is this geared towards landlords, or is this geared towards property management businesses? Help me and the listeners understand Innago here.

Dave: Yeah, absolutely. We work with both. We work with landlords as small as one unit, and landlords in the thousands of units. The software is really flexible, it’s effective, but it's also simple and intuitive for somebody who just owns some properties on the side, works a normal nine-to-five, and then manages at nights and on weekends, and for a landlord or property manager that's fully dedicated. We work with both property managers and landlords. We predominantly work in the residential space. We do a lot of student housing landlords, given my background, and my partner's background. We also have some commercial landlords as well. It's a really powerful, and flexible tool, and we work with all sorts of different clients.

Jason: Cool, that's exciting. Help people understand, because a lot of the listeners in our audience probably already have a property management software, I mean, probably likely. They're probably already with Buildium, AppFolio, Propertyware, maybe Rent Manager. They're probably with one of these guys. But nobody's ever fully happy with their property management.

Dave: Right, of course.

Jason: So help those listening, how can they see where you fit into the market in relation to these?

Dave: Well, yeah, it's funny you say that. I was actually listening to one of your earlier podcasts with Taylor, and he has the accounting services, the consulting accounting services, and one of the things that he mentioned, they work exclusively with AppFolio users, and kind of what they said is, “We only hire people that have worked at AppFolio, and we will only work with AppFolio at this stage because that's the only thing that we're comfortable with,” because it's this monolithic behemoth that you need expertise to even navigate, right?

Jason: Right.

Dave: That's definitely true for AppFolio, and it's true for a lot of the other software. There's a huge learning curve there. The first time we hire somebody on Innago, we always sit them down, and we jump on LinkedIn, and we do a little exercise, or research the companies. We're not looking for employees of those companies, or even their company page, we’re actually looking for employees at property management companies that their job title, their role is like the AppFolio expert on T, because you need certification to understand how to use it.

That was kind of the initial kernel Innago came out of is, you shouldn't need a certification to use property management software. It should be like picking up Gmail for the first time, or picking up iPhone for the first time. It should be intuitive, and simple, and elegant, and powerful, and flexible to work with a lot of different users in a lot of ways. That's really our difference, in the way that we're approaching the market, putting a lot of time, and thought into the features, and the way that they interact, and the way that the user interacts with those features.

We're really proud of the features that we do have. It is an ongoing product, and we're constantly adding more. I think for a lot of property managers, and landlords on the higher end, they're going to find at this stage that it might not be a perfect fit, but for those folks with small to mid size portfolios, it's got a lot of really great stuff that it will work well for them.

Jason: Yeah, I'm in total agreement. When it comes to software, the number one challenge tends to be adoption, and ease of use is right there. If something is intuitive, that's the biggest challenge, and hurdle.

Dave: Right.

Jason: I don't even like them using software that's ugly.

Dave: Right.

Jason: I just can't bring myself to do it. Maybe it's the designer in me. I don't know, but if I'm going to be living in something, I don't want it to be ugly. That's why I use Apple products because they just…

Dave: Right, absolutely. Clean design.

Jason: I was around my mom just yesterday, and she had a computer and she was like, “I clicked on Chrome, and it's not loading, and nothing's happening coming up,” and I'm like, “I don't know, that's a PC. I've never had that problem on a Mac.” I just don't have that problem. I just think it's funny. I was like, “I don't know, good luck.”

Dave: Yeah absolutely, and a lot of property managers and landlords—many are very tech savvy, there's also many that aren't so tech savvy. It's equally, if not more important, to have something that's not incredibly complex, and incredibly challenging, and opaque, and difficult to enter into.

Jason: I'm incredibly tech savvy, and I probably could’ve figured out my mom's computer thing, but it probably would’ve wasted an hour or two of my time and I don't want to waste time figuring out my software at every step of the turn and teaching my team members how to figure out software at every step of the turn. Intuitiveness in software is my number one priority. A lot of people build their whole set up internally in their business, trying to find one piece of software that can do everything, and it's usually really awful at everything in a lot of instances, instead of finding the easiest, and best, and fastest tools.

Speed is my love language, I think in business, and I want it to be fast, and want it to be simple, and intuitive. I love that that's kind of a foundational goal with your software, because I don't believe that any of the other property management software, that was their foundational goal, ease of use, and to be intuitive. If it was, they've gotten long far away from it.

Dave: Right, yeah, I think you're right.

Jason: Yeah, and some are much worse than others, and some of them, they can do everything. They're like the ultimate Swiss army knife. Like I've joked in the past, you're not going to see a handy man carrying around a multi tool to try and do all this hard jobs.

Dave: Right.

Jason: He's going to have a nice tool box with the best tools. The software’s more intuitive, the software is really easy for people to use, and now you're saying on all parties for like the owners, they want to maybe check reports, is there an owners portal?

Dave: There is.

Jason: Tenants that want to pay rent, and do their stuff, there's tenant portal. And then for the property manager, they can manage and see their portfolio pretty easily, and know what's available, and vacant. Does this have marketing stuff connected to it yet for listing, and the getting the properties out there in the marketplace?

Dave: Yeah, great question. We do not currently have marketing. We plan to roll that out, but as you mentioned, I think one of the problems that's happened with other software packages, the feature creep went too fast. They wanted to get all the features that any landlord could ever ask for out as quickly as possible, and that has not been our approach. We have said let's do this methodically, let's think about ways to integrate this into the way that the rest of the software works. Let's make sure that it's easy to use.

We are constantly adding features but we're not necessarily rolling out everything that everybody wants, all at the same time. Market syndication is what we call it. The marketing piece is definitely on its way, but it'll probably be another three or fours months before we have that out there.

Jason: Yeah, feature creep is a real issue. I'm a big fan of Jason Fried. He's the CEO of Basecamp. I got to hang out with him on a Skype call for 90 minutes. He cut my staffing costs in half overnight, no doubt. I'm a big fan of him. By saying he cut my staffing costs in half, I should say he doubled our productivity. I didn't just fire everybody. We just became that much more productive because he helped me understand how we had so many interruptions, we had so many things that weren't intuitive, and he changed how we communicate as a company.

He has a similar philosophy when he talks about creating their softwares. Basecamp doesn't do a whole lot compared to a lot of other software, it’s pretty limited in its feature set, but it's consistently always at the top of the tools and resources people mention for project management even though I really don't believe Basecamp is a project management tool, I believe it's a communication platform for internal communication, that's how we use it.

Everyone's going to ask for features, you have to really be picky in choosing about what are the features that are really going to matter the most and get the biggest bang for your buck and really make a difference without it becoming overly crazy, too cumbersome, unintuitive, and difficult to do. There's always that balance of managing all of the features.

Do you see that you guys will be doing any sort of Zapier integration so that people can create zaps and start connecting and integrating with third party tools? No software has come out with this yet.

Dave: Yeah. That’s a really good idea. That is not our road map but I love Zapier. We use it for all sorts of other things, whether it's connecting Wordpress to HubSpot or whatever. It’s a really cool platform. That’s an interesting thought. We hadn’t gotten that far. We might still…

Jason: Add it to your list and be the first. I'm waiting to see who is the first property management software the adds Zapier integration because everyone's been asking for it. All these people want it connected to their automation. They want to connect it to their process street processes, or they want to connect it to whatever. I think this would be a really cool thing.

Dave: We’ll let you know when we do.

Jason: I keep throwing that out usually to property management software that I have on my show and I'm waiting to see who's the first to have Zapier integration. Some people call it [zey-pier], but I think [zey-pier] is weird because it creates [zaps], people, so it’s Zapier. You're not [zey-ping] your business.

What else should people know about this software? What are some of the most common questions that a property management business owner might ask that they're concerned about?

Dave: Well, one you hit on was the sub users. Enabling not just the head property manager from accessing the platform, but also giving out who has access to which permissions, who has access to which features. Maybe it's Bob, you want him to handle these categories for these properties, or you want your property owners to log in and be able to handle it themselves.

Jason: There's the ability for vendors to leverage and use the system as well?

Dave: Not vendors, that would be like a maintenance person that you either have on staff or you have on retainer 1099 or whatever. We do not have a vendor portal at this time. That’s a big one and then the other really common question we get is of course the pricing because of the sector that we’re in, that's at the top of our base mind.

Jason: Do you want to tell pricing now? If you're planning on changing, don’t. Tell them to go to your website.

Dave: No, I'd be more than happy to jump into pricing. Now it’s pretty unique, we're 100% free to use for landlords. There’s no monthly fee, yearly fee, setup fee, there’s no contract. There's absolutely no cost. Everything that I've mentioned is included. Instead, when a tenant pays rent online, we charge them $2 for an ACH transaction. We charge them $2.75 for a credit or debit card, and that's it.

Jason: Totally reasonable. I've been saying for at least over a year to people who have listened to some of my older podcast episodes that free property management software will come and there will be the day that somebody's going to offer it, just like people aren't paying for Gmail, people aren't paying for this sort of stuff and it's making money. It manifested, here it is.

Dave: That’s right, we did it. It's 100% free for the landlord. Some landlords see the value in an online payment, they see it so highly to pay actually choose to incur a cost and we allow them to do that if they want to, but for most landlords 90% plus, they're not paying a dime to use Innago.

Jason: Very cool, that's really interesting. This would be fantastic then for startup PM's, startup property managers. A question that my team would care about is for the rental listings, the vacant properties, do you have some way of listing the vacant properties in some web based fashion? If they're putting properties into their system, is there some sort of code that we can embed on a website to show their available rentals?

Dave: Again, there's nothing on the marketing side just yet. Everything is cotntained within Innago but we certainly see the value in that.

Jason: Maybe in the future then. What else should people know about Innago? Anything else you want to throw out there?

Dave: Well, we offer particularly in our sector where you do have some of the lower cost platforms out there or some of the simpler platforms out there I suppose. Oftentimes, they don't offer any sort of support beyond a 48-hour email window. With Innago, we’re a little different, we offer full phone support. We also have embedded videos and help section to ease landlords along in the system as they get started and learn the platform. We’re really big believers in early success begets future success. We want to make sure that we’re hand holding for your first month, two months on the platform, and ensuring that you understand how to use it. You can use it effectively and can leverage it to improve your business. Once you do that, then you're off to the races and in really good shape. We offer a unique level of support that many others can't really match.

Jason: What platform are you using for support?

Dave: We use Freshdesk, and we use HubSpot, and we use Zapier to connect certain things to other things.

Jason: Cool. We use intercom for anyone listening, because property managers need some sort of support desk too. Dave, this sounds really neat. How could somebody demo this if they're curious to check out your software and how should they get in touch?

Dave: Yeah. They can go to innago.com and they can request access to a free account. We’ll get in touch with them shortly after just to make sure they're a good fit, that we're going to solve some problems for them. We don't want them to waste any time fooling around on a platform that is really not going to work for them. If they request access, we’ll shortly be in touch, and we'll get them into the platform, and they can start playing around with it.

Jason: Where does the name Innago come from? I'm a branding guy, I'm always curious. Explain Innago.

Dave: We like to think of it as a strong three-syllable word, that's about the extent of it. It's really kind of like Google or Yahoo, there's not a whole lot behind it.

Jason: Okay. Maybe we’ll have to make up the story sometime together about it.

Dave: Yeah. We’ve thought about it, but we'll take any suggestions.

Jason: When did you guys launch this? How new is this software?

Dave: We launched the company in January of 2017. We had the product out in the market, kind of like an alpha stage really in March of that year. We've been coming along ever since. As far as a product, we're a little over two years now.

Jason: Awesome. How many companies are using this right now?

Dave: We have thousands of landlords on the platform and it's growing every day. I would nail that hard number, but it probably changes by the minute.

Jason: Yeah. It's probably pretty tempting and pretty easy if it's free. I would imagine you guys will have some success and you guys are making enough money you think to stay healthy just through the transactions?

Dave: Yeah. As you know, there's a lot of landlords out there. The majority of them are still self managed or not using any kind of software. There's a lot of tenants that want to pay online. Only about 30% of the market currently pays rent online. That's a huge giant blue ocean that’s ready to be captured.

Jason: Yeah. There's a lot of blue ocean that are self managing. If you really want to super attract property management business owners, if you can figure out a way to help connect these self managers so that they can get that professional managers to take over stuff, and partner, maybe create some partners, I think you’ve got a winning affiliate business going on right there that’s good for your company.

Dave: Absolutely.

Jason: I know there's lots of people listening that would like to get connected to those that are self managing and work with them. Dave, super cool to have you on the show. I wish you lots of success. It would be cool to have you come back maybe in the future after you've come out with even more features if you’ve got something really cool to share. I wish you guys a lot of success with the free software. I've been talking about this for a while. I think it's long overdue. This is really great.

Dave: Awesome. Thanks so much, Jason. I really appreciate it, my pleasure being on the show.

Jason: Yeah, thanks for coming on.

You heard it everybody, free property management software that is intuitive. If they are really intuitive, they're going to have a lot of natural success and growth, and if they're free, they're going to have a lot of growth. If they can make the numbers work which sounds like it would be pretty easy with all the transactions that are going to be occurring, it could be a game changer.

I think other property management software, they're a little bit greedy, and there's too much of that feature creep. I think this will be a competitor. It’d be interesting to watch. Let’s keep our eyes tuned, our eyes peeled and stay tuned to see what they do.

Anyway, this is Jason Hull of the DoorGrow Show. If you are wanting to know if your property management website is leaking money because every website is probably leaking money. If you want to see that it’s leaking money because you don't want it to be leaking deals and leads anymore and you want to make more money and cash from your business, test your website out by going to doorgrow.com/quiz and take our DoorGrow Score Quiz that’s going to grade your website on how effective it is at creating conversions.

Some of the questions are tricky. There's a lot of people taking the test and then make a bunch of changes to their website, some of them are false positive, so be careful if you're going to do that. Do that quiz and then maybe talk to our team and we can help you improve your website piece because I really don't believe that anybody's better at creating websites that make money than DoorGrow for property managers. Alright, we'll talk to all of you guys soon. Until next time, to our mutual growth.

Download this Episode

Jul 16, 2019

If you enjoy unique challenges, daily variety, learning new things, finding opportunities, and experiencing freedom, then you would probably be successful in property management. Entrepreneurs would rather work 80 hours a week for themselves, than for someone else. You don’t have to do it all on your own. Be willing to take some risks, and connect with like-minded people. Let your entrepreneurial spirit fly!

Today, I am talking to Bryan Jenkins and Jonathan Cook of AHI Properties. They share strategies that consistently grow their business and add doors in multiple markets.

You’ll Learn...

[02:00] Keep on Growing: Corporate housing to single-family homes to property management.

[05:25] Real Estate Market Crash: Created shift in income and dealing with investors, despite technology.

[07:20] Love it, or Hate it: Learn something new every day in property management.

[08:05] When’s the right time to grow and expand? Adding doors in multiple markets.

[09:42] Sand Traps: Think outside the box to grow property management business.

[11:15] Educate Clients with Market Knowledge: Direct investors into markets where they can make money and purchase more doors for AHI to manage.

[12:03] Game Changer: Diversifying existing portfolio and dealing with accidental landlords who leave when it’s a good time to sell.

[13:40] Recipe for Success: Gain momentum and referrals by building partnerships and relationships with sister companies, third-party providers, and contractors.

[19:57] Four Ds to Revenue: Deals, Doors per deal, Duration, and Dollars.

[24:30] Focus on Funnel: Multiple sources serve as supply line for incoming clients.

[26:07] Strategies and Approaches: How to expand and operate in multiple markets.

[27:13] False Scarcity: There’s plenty of opportunity to create business and follow up because 70% self-manage single-family residential properties.

[29:10] Remember Me? Make sure to have a Customer Relationship Management (CRM) strategy to keep track of clients and properties.

[36:07] Bryan’s Biggest Piece of Advice: Keep an open mind, don’t be afraid, but focus on multiple funnels and opportunities to develop client relations.

[38:03] Generational Change in Property Management Profession: Think about technology, bring awareness, and open people’s minds.

Tweetables

Let your entrepreneurial spirit fly.

Recipe for Success: Gain momentum and referrals by building partnerships.

Four Ds to Revenue: Deals, Doors per deal, Duration, and Dollars.

Resources

AHI Properties

AHI Properties Email

National Association of Residential Property Managers (NARPM)

MLS

U.S. Department of Housing and Urban Development (HUD)

IMN

Five Star Conference

Roofstock

Deb Newell of Real-Time Leasing

Matthew Whitaker of GKHouses

DGS 75: Bridging the Gap Between Inside and Outside Sales with Jennifer Stoops of Park Avenue Properties